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Exhibit 10.2.3
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Execution Copy
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TRUST INDENTURE
BETWEEN
NEW YORK STATE ENERGY RESEARCH
AND DEVELOPMENT AUTHORITY
AND
THE BANK OF NEW YORK,
as Trustee
Dated as of June 1, 2001
-relating to-
$224,600,000 Facilities Revenue Bonds, Series 2001A
(Consolidated Edison Company of New York, Inc. Project)
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TABLE OF CONTENTS
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ARTICLE I
DEFINITIONS; COMPUTATIONS; CERTIFICATES
AND OPINIONS; EVIDENCE OF ACTION BY AUTHORITY
SECTION 1.01. Definitions of Specific Terms ............................ I-1
SECTION 1.02. Definitions of General Terms ............................ I-26
ARTICLE II
AUTHORIZATION OF BONDS
SECTION 2.01. Limitation on Issuance of Bonds ......................... II-1
SECTION 2.02. Authorization of Bonds .................................. II-1
SECTION 2.03. Global Form; Securities Depository ...................... II-2
SECTION 2.04. Limitations on Transfer ................................. II-4
SECTION 2.05. Application of Bond Proceeds ............................ II-5
SECTION 2.06. Delivery of the Bonds ................................... II-5
ARTICLE III
INTEREST ON BONDS
SECTION 3.01. Interest on Bonds-General .............................. III-1
SECTION 3.02. Commercial Paper Rate .................................. III-4
SECTION 3.03. Auction Rate Period - Auction Rate: Auction Period -
General .............................................. III-5
SECTION 3.04. Auction Rate Period - Auction Rate Bonds: Change of
Auction Period by Authority .......................... III-5
SECTION 3.05. Auction Rate Period - Auction Rate Bonds: Change of
Auction Date by Remarketing Agent .................... III-7
SECTION 3.06. Auction Rate Period - Auction Rate Bonds: Orders by
Beneficial Owners and Potential Beneficial Owners .... III-7
SECTION 3.07. Auction Rate Period - Auction Rate Bonds: Submission of
Orders by Broker-Dealers to Auction Agent ............ III-9
SECTION 3.08. Auction Rate Period - Auction Rate Bonds: Determination
of Sufficient Clearing Bids, Winning Bid Rate and
Auction Rate ........................................ III-12
SECTION 3.09. Auction Rate Period - Auction Rate Bonds: Acceptance
and Rejection of Submitted Bids and Submitted Sell
Orders and Allocation of Auction Rate Bonds ......... III-13
(i)
SECTION 3.10. Auction Rate Period - Auction Rate Bonds: Adjustment
in Percentage ....................................... III-16
ARTICLE IV
CHANGES IN THE INTEREST RATE MODE
SECTION 4.01. Optional Conversion to an Adjustable Rate by Authority .. IV-1
SECTION 4.02. Optional Conversion to a Fixed Rate ..................... IV-3
SECTION 4.03. Conversion Generally .................................... IV-5
ARTICLE V
REDEMPTION AND PURCHASE OF BONDS
SECTION 5.01. Optional Redemption ...................................... V-1
SECTION 5.02. [Reserved] ............................................... V-2
SECTION 5.03. Tender for and Purchase upon Election of Holder .......... V-2
SECTION 5.04. Mandatory Tender for Purchase upon Change in the
Interest Rate Mode or on Business Day Following Certain
Calculation Periods .................................... V-3
SECTION 5.05. Extraordinary Optional Redemption ........................ V-4
SECTION 5.06. Special Tax Redemption Provisions ........................ V-4
SECTION 5.07. Redemption at Demand of the State ........................ V-6
SECTION 5.08. Mandatory Tender for Purchase Upon Expiration of any
Support Facility or Upon Delivery of an Alternate
Support Facility ....................................... V-6
SECTION 5.09. Mandatory Tender Upon Occurrence of any Terminating
Event .................................................... V-7
SECTION 5.10. General Provisions Applicable to Mandatory and Optional
Tenders for Purchase of Bonds .......................... V-7
SECTION 5.11. Selection of Bonds to be Redeemed ........................ V-8
SECTION 5.12. Notice of Redemption ..................................... V-9
SECTION 5.13. Bonds purchased for account of Liquidity Facility
Issuer ................................................ V-10
SECTION 5.14. Effect of Redemption .................................... V-10
SECTION 5.15. Cancellation of Redeemed Bonds .......................... V-11
ARTICLE VI
SUPPORT FACILITY
SECTION 6.01. Support Facility - General .............................. VI-1
SECTION 6.02. Alternate Support Facility .............................. VI-1
SECTION 6.03. Trustee not Responsible for Enforcement of Support
Facility .............................................. VI-2
(ii)
ARTICLE VII
GENERAL TERMS AND PROVISIONS OF BONDS
SECTION 7.01. Execution and Authentication of Bonds .................. VII-1
SECTION 7.02. Books of Registry ...................................... VII-1
SECTION 7.03. Transfer, Registration and Exchange of Bonds ........... VII-1
SECTION 7.04. Mutilated, Lost, Stolen, or Destroyed Bonds ............ VII-2
SECTION 7.05. Temporary Bonds ........................................ VII-3
SECTION 7.06. Disposition of Bonds ................................... VII-4
ARTICLE VIII
ESTABLISHMENT OF THE PROJECT FUND
SECTION 8.01. Project Fund .......................................... VIII-1
ARTICLE IX
CREATION OF SPECIAL FUNDS AND ACCOUNTS;
APPLICATION AND INVESTMENT OF REVENUES
SECTION 9.01. Creation of Funds and Accounts .......................... IX-1
SECTION 9.02. Deposit of Note Payments ................................ IX-1
SECTION 9.03. Application of Monies in the Bond Fund .................. IX-3
SECTION 9.04 Investment of Funds ..................................... IX-5
ARTICLE X
PARTICULAR COVENANTS OF THE AUTHORITY
SECTION 10.01. Payment of Principal of and Interest and Redemption
Premium on Bonds ....................................... X-1
SECTION 10.02. Performance of Covenants ................................. X-1
SECTION 10.03. Further Instruments ...................................... X-1
SECTION 10.04. Inspection of Project Books .............................. X-1
SECTION 10.05. No Extension of Time of Payment of Interest .............. X-1
SECTION 10.06. Trustee's, Auction Agent's, Remarketing Agent's,
Broker-Dealers' Registrar and Paying Agent's and
Indexing Agent's Fees, Charges and Expenses ............ X-1
SECTION 10.07. Agreement of the State of New York ....................... X-2
(iii)
SECTION 10.08. Recording and Filing ..................................... X-2
SECTION 10.09. Rights Under the Participation Agreement and the Note .... X-2
ARTICLE XI
CONCERNING THE TRUSTEE; APPOINTMENT OF
REGISTRAR AND PAYING AGENT, REMARKETING AGENT,
AUCTION AGENT AND INDEXING AGENT
SECTION 11.01. Appointment of Trustee .................................. XI-1
SECTION 11.02. Indemnification of Trustee as Condition for Remedial
Action ................................................ XI-1
SECTION 11.03. Trustee Not Liable for Failure of the Authority or
Company to Act ........................................ XI-1
SECTION 11.04. Certain Duties and Responsibilities of the Trustee ...... XI-2
SECTION 11.05. Limitations on Obligations and Responsibilities of
Trustee ............................................... XI-4
SECTION 11.06. Compensation and Indemnification of Trustee ............. XI-4
SECTION 11.07. Statements from Trustee ................................. XI-4
SECTION 11.08. Notice of Default ....................................... XI-5
SECTION 11.09. Trustee May Deal in Bonds ............................... XI-5
SECTION 11.10. Trustee Not Responsible For Recitals .................... XI-5
SECTION 11.11. Qualification of the Trustee ............................ XI-5
SECTION 11.12. Resignation and Removal of Trustee ...................... XI-6
SECTION 11.13. Successor Trustee ....................................... XI-7
SECTION 11.14. Appointment of Remarketing Agent ........................ XI-7
SECTION 11.15. Appointment of Registrar and Paying Agent ............... XI-8
SECTION 11.16. General Provisions Regarding Registrar and Paying
Agent ................................................. XI-8
SECTION 11.17. Payment of Registrar and Paying Agent;
Indemnification ....................................... XI-9
SECTION 11.18. Registrar and Paying Agent's Performance; Duty of
Care .................................................. XI-9
SECTION 11.19. Qualifications of Registrar and Paying Agent ........... XI-10
SECTION 11.20. Resignation or Removal of Registrar and Paying Agent
and Successor to Registrar and Paying Agent;
Termination of Registrar and Paying Agent's
Obligations .......................................... XI-10
SECTION 11.21. Appointment of Auction Agent; Qualifications of Auction
Agent, Resignation; Removal .......................... XI-11
SECTION 11.22. Appointment of Broker-Dealers .......................... XI-11
SECTION 11.23. Appointment of Additional Paying Agents; Each Paying
Agent to Hold Money in Trust ......................... XI-11
SECTION 11.24. Appointment and Duties of Indexing Agents .............. XI-11
SECTION 11.25. Qualifications of Indexing Agents ...................... XI-12
ARTICLE XII
EVENTS OF DEFAULT; REMEDIES UPON
OCCURRENCE THEREOF
(iv)
SECTION 12.01. Events of Default ...................................... XII-1
SECTION 12.02. Notice to Holders and Others Upon Occurrence of an
Event of Default or a Failure to Deposit ............. XII-2
SECTION 12.03. Declaration of Principal and Interest As Due ........... XII-2
SECTION 12.04. Action by Trustee Upon Occurrence of Event of
Default .............................................. XII-3
SECTION 12.05. Powers of Trustee With Respect to Participation
Agreement and Other Agreements ....................... XII-4
SECTION 12.06. Disposition of Monies in Event of Insufficiencies
in Funds and Accounts ................................ XII-5
SECTION 12.07. Effect of Delay or Omission; Waiver of Default;
Direction of Remedial Proceedings by the Holders ..... XII-7
SECTION 12.08. Suits or Actions by Holders; Any Holder May Enforce
Overdue Payment of His or Her Bond or Interest
Thereon .............................................. XII-7
SECTION 12.09. Remedies Not Exclusive ................................. XII-8
SECTION 12.10. Effect of Abandonment of Proceedings on Default ........ XII-8
SECTION 12.11. Interest on Overdue Amounts ............................ XII-8
ARTICLE XIII
EXECUTION OF INSTRUMENTS BY BONDHOLDERS AND
OWNERSHIP OF BONDS; EXCLUSION OF BONDS
OWNED BY THE AUTHORITY OR THE COMPANY
SECTION 13.01. Execution of Requests, Directions and Consents and
Other Instruments and Proof of Same; Ownership of
Bonds and Proof of Same ............................. XIII-1
SECTION 13.02. Meetings of Holders ................................... XIII-2
SECTION 13.03. Exclusion of Bonds Held by or for the Authority, the
Company and of Bonds No Longer Deemed Outstanding
Hereunder ........................................... XIII-3
ARTICLE XIV
AMENDING AND SUPPLEMENTING THE INDENTURE,
THE PARTICIPATION AGREEMENT, THE REMARKETING AGREEMENT,
AUCTION AGENCY AGREEMENT, BROKER-DEALER AGREEMENTS,
BOND PURCHASE TRUST AGREEMENT
SECTION 14.01. Amending and Supplementing Indenture Without Consent
of Holders ........................................... XIV-1
SECTION 14.02. Amending and Supplementing Indenture with Consent of
Holders .............................................. XIV-2
SECTION 14.03. Notation upon Bonds; New Bonds Issued upon
Amendments ........................................... XIV-3
SECTION 14.04. Effectiveness of Supplemental Indentures ............... XIV-3
SECTION 14.05. Supplemental Indenture Affecting Support Facility
Provider ............................................. XIV-4
(v)
SECTION 14.06. Supplemental Participation Agreements Not Requiring
the Consent of the Holders ........................... XIV-4
SECTION 14.07. Notice and Consent for Supplemental Participation
Agreements Requiring the Consent of the Holders ...... XIV-4
SECTION 14.08. Effectiveness of Supplemental Participation
Agreement ............................................ XIV-5
SECTION 14.09. Amending and Supplementing the Remarketing Agreement,
Auction Agency Agreement, Broker-Dealer Agreements
or Bond Purchase Trust Agreement ..................... XIV-6
ARTICLE XV
DEFEASANCE; MONEYS HELD FOR PAYMENT OF
DEFEASED BONDS
SECTION 15.01. Discharge of Liens and Pledges; Bonds No Longer Deemed
to be Outstanding Hereunder ........................... XV-1
SECTION 15.02. Release of Indenture, Termination of Right, Title and
Interest of Trustee ................................... XV-2
SECTION 15.03. Bonds Not Presented for Payment When Due; Monies Held
for the Bonds after Due Date of Bonds ................. XV-2
ARTICLE XVI
FORM OF BONDS
AND ENDORSEMENT AND ASSIGNMENT PROVISIONS
SECTION 16.01. Form of Bonds and Endorsement and Assignment
Provisions ........................................... XVI-1
ARTICLE XVII
MISCELLANEOUS
SECTION 17.01. Benefits of Indenture Limited to Authority, Company,
Trustee, Registrar and Paying Agent and Auction Agent
and Holders of the Bonds ............................ XVII-1
SECTION 17.02. Indenture a Contract; Indenture Binding Upon Successors
or Assigns of the Authority ......................... XVII-1
SECTION 17.03. Notice to Holders of Bonds ............................ XVII-1
SECTION 17.04. Waiver of Notice ...................................... XVII-1
SECTION 17.05. Effect of Saturdays, Sundays and Non-Business Days .... XVII-2
SECTION 17.06. Partial Invalidity .................................... XVII-2
SECTION 17.07. Law and Place of Enforcement of Indenture ............. XVII-2
SECTION 17.08. Requests, Approvals and Directions of Authority ....... XVII-2
(vi)
SECTION 17.09. Notices, Demands; Requests ............................ XVII-2
SECTION 17.10. Effect of Article and Section Headings and Table of
Contents ............................................ XVII-4
SECTION 17.11. Indenture May be Executed in Counterparts;
Effectiveness of Indenture .......................... XVII-4
SECTION 17.12. Liability of Authority Limited to Revenues ............ XVII-4
SECTION 17.13 Waiver of Personal Liability .......................... XVII-4
APPENDIX A Form of Bonds ............................................ A-1
EXHIBIT A Notice of Change in the Interest Rate Mode ............. A-1-1
EXHIBIT B Certificate Pursuant to Section 4.01.3(a)(ii) or
4.02.3(a)(ii) of the Indenture ......................... B-1
EXHIBIT C Certificate Pursuant to Section 4.01.3(b) or
4.02.3(b)(ii) of the Indenture ......................... C-1
EXHIBIT D Notice of Failure of Conditions .......................... D-1
EXHIBIT E Notice of Election to Tender ............................. E-1
EXHIBIT F Notice of Mandatory Tender upon Expiration, Termination,
or Substitution of Support Facility .................... F-1
(vii)
THIS TRUST INDENTURE, made and dated as of the first day of June 1,
2001, by and between New York State Energy Research and Development Authority
(the "Authority"), a body corporate and politic, constituting a public benefit
corporation, and The Bank of New York, as trustee (the "Trustee"), a corporation
organized and existing under and by virtue of the laws of the State of New York
with its principal corporate trust office located in The City of New York.
W I T N E S S E T H T H A T:
WHEREAS, pursuant to special act of the Legislature of the State of
New York (Title 9 of Article 8 of the Public Authorities Law of New York, as
from time to time amended and supplemented, herein called the "Act"), the
Authority has been established as a body corporate and politic, constituting a
public benefit corporation; and
WHEREAS, pursuant to the Act, the Authority is empowered to contract
with any power company to participate in the construction of facilities to be
used for the furnishing of electric energy to the extent required by the public
interest in development, health, recreation, safety, conservation of natural
resources and aesthetics; and
WHEREAS, pursuant to the Act, the Authority has also been empowered
to extend credit and make loans from bond and note proceeds to any person for
the construction, acquisition and installation of, or for the reimbursement to
any person for costs not limited to, any land, works, system, building or other
improvement, and all real and personal properties of any nature or any interest
in any of them which are suitable for or related to the furnishing, generation
or production of energy or the conversion of oil-burning facilities to alternate
fuel; and
WHEREAS, the Authority is also authorized under the Act to borrow
money and issue its negotiable bonds and notes to provide sufficient monies for
achieving its corporate purposes including the refunding of outstanding
obligations of the Authority; and
WHEREAS, the Authority is also authorized under the Act to enter
into any contracts and to execute all instruments necessary or convenient for
the exercise of its corporate powers and the fulfillment of its corporate
purposes; and
WHEREAS, contemporaneously with the execution hereof, Consolidated
Edison Company of New York, Inc. (the "Company") and the Authority have entered
into a Participation Agreement of even date herewith (herein referred to as the
"Participation Agreement"), providing for the refunding of 7 1/2% Electric
Facilities Revenue Bonds, Series 1991 A (Consolidated Edison Company of New
York, Inc. Project) and 6 3/4% Facilities Revenue Bonds, Series 1992 A
(Consolidated Edison Company of New York, Inc. Project) (collectively, the
"Prior Bonds") of the Authority which were issued to finance the acquisition,
construction and installation of certain additional facilities for the
furnishing of electric energy within the Company's service area and as part of
such participation, that the Authority issue bonds pursuant to the Act to
provide funds to refund the Prior Bonds; and
WHEREAS, the Participation Agreement provides that the Authority
will issue its bonds and make the proceeds of such bonds available to the
Company to refund the Prior Bonds; and
WHEREAS, simultaneously with the issuance and delivery of such
bonds, the Company will execute and deliver a promissory note dated the date of
issuance of such bonds (the "Note") as evidence of its obligation to make
payments required by the Participation Agreement; and
WHEREAS, pursuant to Resolution No. 979 adopted January 22, 2001,
the Authority has determined to issue its Facilities Revenue Bonds, Series 2001A
(Consolidated Edison Company of New York, Inc. Project) in an aggregate amount
not exceeding $228,150,000 (the "Bonds") for the purpose of paying a portion of
the redemption price of the Prior Bonds; and
WHEREAS, all acts, conditions and things necessary or required by
the Constitution and statutes of the State of New York, or otherwise, to exist,
happen, and be performed as prerequisites to the passage of this Indenture, do
exist, have happened, and have been performed; and
WHEREAS, the Trustee has accepted the trusts created by this Trust
Indenture and in evidence thereof has joined in the execution hereof;
NOW, THEREFORE, THIS TRUST INDENTURE WITNESSETH:
That in order to declare the terms and conditions upon which the
Bonds are authenticated, issued and delivered, and in consideration of the
premises and the acceptance by the Trustee of the trusts hereby created and of
the purchase and acceptance of the Bonds by the Holders thereof, and for other
good and valuable consideration, the receipt of which is hereby acknowledged,
and in order to secure payment of the principal of and premium, if any, and
interest on the Bonds according to their tenor and effect and the performance
and observance by the Authority of all covenants, agreements and conditions
herein and in the Bonds contained, the Authority has acknowledged, executed,
signed and delivered this Indenture and hereby assigns, confirms, pledges with
and sets over and entrusts to the Trustee hereunder, its successors in trust and
assigns, subject to the provisions of this Indenture (the following being called
the "Trust Estate"): (1) the Revenues (as hereinafter defined); (2) the
Participation Agreement and the Note and all rights, remedies and interest of
the Authority under the Participation Agreement and the Note, and any other
agreement relating to the Project (exclusive of the Authority's rights with
respect to (a) administrative compensation, attorney's fees and indemnification,
(b) the receipt of notices, opinions, reports, copies of instruments and other
items of a similar nature required to be delivered to the Authority under the
Participation Agreement, (c) granting approvals and consents and making
determinations when required under the Participation Agreement, (d) making
requests for information and inspections in accordance with the Participation
Agreement, (e) Article III and Sections 4.02(f), 4.14 and 5.08 of the
Participation Agreement and, insofar as the obligations of the Company under
Section 4.12 relate to taxes and assessments imposed upon the Authority and not
the Trustee, Section 4.12 thereof, and (f) the right to amend the Participation
Agreement); (3) the Tax Regulatory Agreement, and all rights, remedies and
interest of the Authority thereunder, subject to the provisions of the Tax
Regulatory Agreement relating to the amendment thereof and to a reservation by
the Authority of the right to enforce the obligations of the
-2-
Company thereunder independently of the Trustee; (4) all other monies, rights
and properties held by the Trustee or other depositary under this Indenture
including, but only for the benefit of the persons specified herein, the
proceeds of any draw, borrowing or payment under any Credit Facility (as
hereinafter defined), and the securities (and the interest, income and profits
therefrom) in which such monies may from time to time be invested (exclusive of
the proceeds of a Liquidity Facility (as hereinafter defined) or the Project
Fund (as hereinafter defined)); and (5) any and all other real or personal
property of every nature from time to time hereafter by delivery or by writing
of any kind specially mortgaged, pledged, or hypothecated, as and for additional
security hereunder, by the Company in favor of the Trustee or the Authority
which are hereby authorized to receive any and all such property at any and all
times and to hold and apply the same subject to the terms hereof.
TO HAVE AND TO HOLD, all and singular of said Trust Estate unto the
Trustee, its successors in trust and assigns, forever, in trust, nevertheless,
to inure to the use and benefit of the Holders of all the Bonds, for the
securing of the observance or performance of all the terms, provisions and
conditions therein and herein contained and for the equal and proportionate
benefit and security of all and singular the present and future Holders of the
Bonds, without preference, priority, prejudice or distinction as to lien or
otherwise of any Bond over any other Bond, to the end that each Holder of a Bond
shall have the same rights, privileges and lien under and by virtue of this
Trust Indenture, except as hereinafter otherwise specifically provided;
AND UPON THE CONDITION THAT, if the Authority shall cause to be paid
fully and promptly and indefeasibly when due all of its indebtedness,
liabilities, obligations and sums at any time secured hereby, including
interest, its Trustee's fees and reasonable expenses (including its reasonable
attorneys' fees and expenses), and shall promptly, faithfully and strictly keep,
perform and observe, or cause to be kept, performed and observed, all of its
covenants, obligations, warranties and agreements contained herein, then and in
such event, this Trust Indenture shall be and become void and of no further
force and effect, otherwise the same shall remain in full force and effect.
THIS TRUST INDENTURE FURTHER WITNESSETH, and it is expressly
declared, that all Bonds issued and secured hereunder are to be issued,
authenticated and delivered and all said income and Revenues hereby pledged are
to be dealt with and disposed of under, upon and subject to the terms,
conditions, stipulations, covenants, agreements, trusts, uses and purposes as
hereinafter expressed, and the Authority has agreed and covenanted, and does
hereby agree and covenant, with the Trustee and with the respective Holders,
from time to time, of the said Bonds, or any part thereof, as follows (provided
that in the performance of the agreements of the Authority herein contained any
obligation it may thereby incur for the payment of money shall never constitute
a general or moral obligation of the State of New York or any political
subdivision thereof within the meaning of any state constitutional provision or
statutory limitation, and shall not be secured directly or indirectly by the
full faith and credit, the general credit or any revenue or taxes of the State
of New York or any political subdivision thereof, but shall be payable solely
out of the income and Revenues derived under the Participation Agreement and the
Note and from drawings under the Credit Facility, if any, and other monies,
rights and properties of the Trust Estate), that is to say:
-3-
ARTICLE I
DEFINITIONS; COMPUTATIONS; CERTIFICATES
AND OPINIONS; EVIDENCE OF ACTION BY AUTHORITY
SECTION 1.01. Definitions of Specific Terms. Unless the context
shall clearly indicate some other meaning or may otherwise require, the terms
defined in this Section shall, for all purposes of this Indenture and of any
indenture, resolution or other instrument amendatory hereof or supplemental
hereto and of any certificate, opinion, instrument or document herein or therein
mentioned, have the meanings herein specified, with the following definitions to
be equally applicable to both the singular and plural forms of any terms herein
defined and vice versa.
"Act" shall mean the New York State Energy Research and Development
Authority Act, Title 9 of Article 8 of the Public Authorities Law of the State
of New York, as from time to time amended and supplemented.
"Additional Payments" shall mean the Additional Payments as defined
in Section 4.02(f) of the Participation Agreement.
"Adjustable Rate" shall mean any of the following types of interest
rates: a Commercial Paper Rate, an Auction Rate, a Daily Rate, a Weekly Rate, a
Monthly Rate, a Semi-annual Rate and a Term Rate.
"Administration Fees" shall mean the amounts payable by the Company
to the Authority pursuant to Section 4.02(f) of the Participation Agreement to
defray a portion of the expenses incurred by the Authority in conducting and
administering its special energy project programs and the amount payable as
state bond issuance charge pursuant to Section 4.02(f) of the Participation
Agreement.
"Affiliate" shall mean any person known to the Auction Agent to be
controlled by, in control of or under common control with the Company; provided
that no Broker-Dealer controlled by, in control of or under common control with
the Company shall be an Affiliate nor shall any corporation or any person
controlled by, in control of or in common control with such corporation be an
Affiliate solely because a director or executive officer of such Broker-Dealer
is also a director of the Company.
"After-Tax Equivalent Rate" on any date of determination shall mean
with respect to Auction Rate Bonds, the interest rate per annum equal to the
product of (x) Commercial Paper/Treasury Rate on such date and (y) (1.00 minus
the Statutory Corporate Tax Rate on such date).
"Agent Member" shall mean a member of, or participant in, the
Securities Depository.
"All Hold Rate" shall mean on any date of determination with respect
to Auction Rate Bonds the rate per annum equal to 85% (as such percentage may be
adjusted pursuant to Section 3.10)
I-1
of the lesser of (i) the BMA Index on such date and (ii) the After-Tax
Equivalent Rate on such date provided, however, that in no event shall such All
Hold Rate exceed the Maximum Allowed Rate.
"Alternate Support Facility" shall mean any Support Facility
obtained pursuant to the provisions of Section 6.02 in replacement of an
existing Support Facility.
"Applicable Percentage" on any date of determination shall mean the
percentage determined as set forth below (as such percentage may be adjusted for
Auction Rate Bonds pursuant to Section 3.10) based on the prevailing long-term
rating of the Auction Rate Bonds in effect at the close of business on the
Business Day immediately preceding such date of determination:
Applicable
Prevailing Rating Percentage
----------------- ----------
AAA/"Aaa" 175%
AA/"Aa" 175%
A/"A" 175%
BBB/"Baa" 200%
Below BBB/"Baa" 265%
For purposes of this definition, the "prevailing rating" of the
Auction Rate Bonds will be (a) AAA/"Aaa," if the Auction Rate Bonds, have a
rating of AAA or better by S&P and a rating of "Aaa" by Moody's, or the
equivalent of such ratings by a substitute rating agency or agencies selected as
provided below, (b) if not AAA/"Aaa," then AA/"Aa" if the Auction Rate Bonds
have a rating of AA- or better by S&P and a rating of "Aa3" or better by
Moody's, or the equivalent of such ratings by a substitute rating agency or
agencies selected as provided below, (c) if not AAA/"Aaa" or AA/"Aa," then A/"A"
if the Auction Rate Bonds have a rating of A- or better by S&P and a rating of
"A3" or better by Moody's, or the equivalent of such ratings by a substitute
rating agency or agencies selected as provided below, (d) if not AAA/"Aaa,"
AA/"Aa" or A/"A," then BBB/"Baa," if the Auction Rate Bonds have a rating of
BBB- or better by S&P and a rating of "Baa3" or better by Moody's, or the
equivalent of such ratings by a substitute rating agency or agencies selected as
provided below, and (e) if not AAA/"Aaa," AA/"Aa", A/"A" or BBB/"Baa," then
below BBB/"Baa," whether or not the Auction Rate Bonds are rated by any
securities rating agency.
If (x) the Auction Rate Bonds, are rated by a rating agency or
agencies other than Moody's or S&P and (y) the Company has delivered on behalf
of the Authority to the Trustee and the Auction Agent an instrument designating
one or two of such rating agencies to replace Moody's or S&P, or both, then for
purposes of the definition of "prevailing rating" Moody's or S&P, or both, will
be deemed to have been replaced in accordance with such instrument; provided,
however, that such instrument must be accompanied by the consent of the
Remarketing Agent. For purposes of this definition, S&P's rating categories of
AAA, AA-, A- and BBB-, and Moody's rating categories of "Aaa," "Aa3," "A3" and
"Baa3," refer to and include the respective rating categories correlative
thereto in the event that either or both of such rating agencies have changed or
modified their generic rating categories. If the prevailing ratings for
I-2
the Bonds are split between the categories set forth above, the lower rating
will determine the prevailing rating.
"Auction" shall mean each periodic implementation of the Auction
Procedures for Auction Rate Bonds.
"Auction Agency Agreement" shall mean the Auction Agency Agreement
to be entered into between the Company and the Auction Agent with respect to the
Auction Rate Bonds, as from time to time amended and supplemented.
"Auction Agent" shall mean any entity appointed as such pursuant to
Section 11.21 and its successors and assigns.
"Auction Date" shall mean with respect to each Auction Period, the
last Thursday of the immediately preceding Auction Period (or such other day
that the Remarketing Agent shall establish as the Auction Date therefor pursuant
to Section 3.05); provided, that if such day is not a Business Day, the Auction
Date shall be the next succeeding Business Day.
"Auction Period" shall mean, after a Change in the Interest Rate
Mode to an Auction Rate, until the effective date of a Change in the Interest
Rate Mode or the Stated Maturity, each period from and including the last
Interest Payment Date for the immediately preceding Auction Period or
Calculation Period, as the case may be, to and including the next succeeding
Auction Date or, in the event of a Change in the Interest Rate Mode, to but
excluding the effective date of such change, provided, if any day that would be
the last day of any such period does not immediately precede a Business Day,
such period shall end on the next day which immediately precedes a Business Day.
"Auction Procedures" shall mean with respect to the Auction Rate
Bonds the procedures set forth in Sections 3.06 through 3.09.
"Auction Rate" shall mean with respect to Auction Rate Bonds and
each Auction Period for such Auction Rate Bonds (other than an initial Auction
Period after a Change in the Interest Rate Mode to an Auction Rate Period), the
rate of interest per annum determined for the Bonds pursuant to Article III.
"Auction Rate Bonds" shall mean with respect to an Auction Rate
Period, any Bonds or subseries of Bonds which bear the Auction Rate determined
pursuant to Article III.
"Auction Rate Bonds Period Record Date" shall mean, with respect to
each Interest Payment Date during an Auction Rate Period, the Business Day next
preceding such Interest Payment Date.
"Auction Rate Period" shall mean any period during which the Auction
Rate Bonds bear interest at an Auction Rate determined pursuant to the
implementation of Auction Procedures established under Article III, which period
shall commence on the Closing Date if the Bonds initially are offered as
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Auction Rate Bonds or on the effective date of a Change in the Interest Rate
Mode to an Auction Rate and shall extend through the day immediately preceding
the earlier of (a) the effective date of a Change in the Interest Rate Mode or
(b) the Stated Maturity.
"Authority" shall mean New York State Energy Research and
Development Authority, the public benefit corporation created by the Act, and
its successors and assigns.
"Authorized Company Representative" shall mean any officer or other
employee of the Company at the time designated to act on behalf of the Company
by written certificate furnished to the Authority and the Trustee containing the
specimen signature of such person and signed on behalf of the Company by its
Chairman, President or a Vice President and its Secretary or an Assistant
Secretary.
"Authorized Officer" shall mean the Chair, Vice-Chair, President,
Vice President, Treasurer, Assistant Treasurer or Secretary of the Authority.
"Available Auction Rate Bonds" shall mean with respect to the
Auction Rate Bonds, Available Auction Rate Bonds as defined in Section 3.08.
"Beneficial Owner" shall mean with respect to the Auction Rate
Bonds, a customer of a Broker-Dealer who is listed on the records of that
Broker-Dealer (or, if applicable, the Auction Agent) as a holder of the Auction
Rate Bonds.
"Bid" shall mean with respect to the Auction Rate Bonds, Bid as
defined in Section 3.06.
"Bidder" shall mean with respect to the Auction Rate Bonds, Bidder
as defined in Section 3.06.
"BMA Index" shall mean The Bond Market Association Municipal Swap
Index released by Municipal Market Data to its subscribers; provided, however,
that if the BMA Index is unavailable, references to the BMA Index shall be
replaced by the After-Tax Equivalent Rate.
"Bond Counsel" shall mean an attorney or firm or firms of attorneys,
satisfactory to the Authority and the Trustee, nationally recognized and
experienced in matters relating to tax exemption of interest on bonds issued by
states and their political subdivisions.
"Bond Fund" shall mean the special trust fund of the Authority
designated as "Consolidated Edison Company of New York, Inc. Project Bond Fund"
created and established under, and to be held and administered by the Trustee as
provided in, Section 9.01 and, unless the context shall clearly indicate
otherwise, shall include the "Interest Account," the "Principal Account," and
the "Redemption Account" created and established therein.
"Bond Purchase Agreement" shall mean the Bond Purchase Agreement,
dated June 5, 2001, among the Authority, the Company and the underwriters named
therein.
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"Bond Purchase Fund" shall mean the Bond Purchase Fund established
pursuant to the Bond Purchase Trust Agreement.
"Bond Purchase Trust Agreement" shall mean the Bond Purchase Trust
Agreement dated as of the date hereof between the Authority and the Registrar
and Paying Agent, as from time to time amended or supplemented.
"Bond Year" shall have the meaning set forth in the Tax Regulatory
Agreement.
"Bondholder", "Holder of a Bond" or "Holder" shall mean any
registered owner of a Bond.
"Bonds" shall mean, the "Facilities Revenue Bonds, Series 2001A
(Consolidated Edison Company of New York, Inc. Project)" presently to be issued
as authorized in Section 2.02 at any time Outstanding.
"Broker-Dealer" shall mean any broker-dealer (as defined in the
Securities Exchange Act), commercial bank or other entity permitted by law to
perform the functions required of a Broker-Dealer set forth in the Auction
Procedures (i) that is an Agent Member (or an affiliate of an Agent Member),
(ii) that has been selected by the Auction Agent and the Company with the
consent of the Authority, and (iii) that has entered into a Broker-Dealer
Agreement with the Auction Agent and the Company that remains effective.
"Broker-Dealer Agreement" shall mean each agreement applicable to
the Auction Rate Bonds, between a Broker-Dealer, the Company and the Auction
Agent pursuant to which the Broker-Dealer, among other things, agrees to
participate in Auctions as set forth in the Auction Procedures, as from time to
time amended and supplemented.
"Business Day" shall mean any day other than a Saturday, Sunday or
other day on which the New York Stock Exchange or banks are authorized or
obligated by law or executive order to close in New York, New York, or any city
in which is located the principal corporate trust office of the Trustee or the
office of an issuer of a Support Facility at which demands for a draw on, or
borrowing or payment under, the Support Facility will be made.
"Calculation Period" shall mean (a) during any Commercial Paper Rate
Period following a Change in the Interest Rate Mode to a Commercial Paper Rate
Period, the period from and including the effective date of the Change in the
Interest Rate Mode to a Commercial Paper Rate Period to but not including any
day not more than 270 days thereafter which is a day immediately preceding a
Business Day established by the Remarketing Agent pursuant to Section 3.02 and,
thereafter, any Calculation Period established by the Remarketing Agent pursuant
to Section 3.02 which shall end on a day not later than 270 days from the
commencement thereof; (b) during any Daily Rate Period, the period from and
including a Business Day to but not including the next succeeding Business Day;
(c) during the first Weekly Rate Period, the period from and including the date
of issuance of the Bonds to and including the following Tuesday, and thereafter
the period from and including Wednesday of each week to and including the
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following Tuesday and during any other Weekly Rate Period following a Change in
the Interest Rate Mode to a Weekly Rate, the period from and including the
effective date of the Change in the Interest Rate Mode to and including the
following Tuesday, and, thereafter, the period from and including Wednesday of
each week to and including the following Tuesday; (d) during any Monthly Rate
Period following a Change in the Interest Rate Mode to a Monthly Rate, the
period from and including the effective date of the Change in the Interest Rate
Mode to but excluding the first Business Day of the following month, and,
thereafter each period from and including the first Business Day of the month to
but excluding the first Business Day of the following month; (e) during any
Semi-annual Rate Period following a Change in the Interest Rate Mode to a
Semi-annual Rate, the period from and including the effective date of the Change
in the Interest Rate Mode to but excluding the next succeeding Interest Payment
Date and, thereafter, each period from and including the day following the end
of the last Calculation Period to but excluding the next succeeding Interest
Payment Date; (f) during any Term Rate Period, any period of not less than 365
days from and including a Business Day to and including any day (established by
the Remarketing Agent pursuant to Section 4.01.1) not later than the day prior
to the Stated Maturity; and (g) during any Fixed Rate Period following a Change
in the Interest Rate Mode to a Fixed Rate, the period from and including the
effective date of the Change in the Interest Rate Mode through the day
immediately preceding the earlier of (x) the effective date of another Change in
the Interest Rate Mode, or (y) the Stated Maturity.
"Change in the Interest Rate Mode" shall mean any change in the type
of interest rate borne by the Bonds pursuant to Section 4.01 or Section 4.02.
"Change of Preference Law" shall mean any amendment to the Code or
other statute enacted by the Congress of the United States or any temporary,
proposed or final regulation promulgated by the United States Treasury, after
the date hereof which (a) changes or would change any deduction, credit or other
allowance allowable in computing liability for any federal tax with respect to,
or (b) imposes, or would impose, reduces or would reduce, or increases or would
increase any federal tax (including, but not limited to, preference or excise
taxes) upon, any interest earned by any holder of bonds the interest on which is
excluded from federal gross income under Section 103 of the Code.
"Closing Date" shall mean the date on which the Note becomes legally
effective, the same being the date on which the Bonds are paid for by and
delivered to the original purchasers thereof.
"Code" shall mean the Internal Revenue Code of 1986, as amended from
time to time. Each reference to a section of the Code herein shall be deemed to
include the United States Treasury Regulations proposed or in effect thereunder
and applied to the Bonds or the use of proceeds thereof, and also includes all
amendments and successor provisions unless the context clearly requires
otherwise.
"Commercial Paper Dealers" means the commercial paper dealers
specified by the Authority at the request of the Company at the time of any
Change in the Interest Rate Mode to an Auction Rate, or in lieu of any thereof,
their respective affiliates or successors, provided that any such entity is a
commercial paper dealer.
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"Commercial Paper Period Record Date" shall mean, with respect to
each Interest Payment Date during a Commercial Paper Rate Period, the Business
Day next preceding such Interest Payment Date.
"Commercial Paper Rate" shall mean with respect to each Calculation
Period during a Commercial Paper Rate Period, a rate or rates of interest equal
to the rate or rates of interest per annum established and certified to the
Trustee (with a copy to the Authority, the Registrar and Paying Agent and the
Company) by the Remarketing Agent no later than 12:00 noon (New York City time)
on and as of the Determination Date as the minimum rate or rates of interest per
annum which, in the opinion of the Remarketing Agent, would be necessary on and
as of such day to remarket Bonds in a secondary market transaction at a price
equal to the principal amount thereof; provided that such rate or rates of
interest shall not exceed the lesser of 110% of the Commercial Paper Rate Index
on and as of such date and the Maximum Allowed Rate.
"Commercial Paper Rate Index" shall mean with respect to the
Determination Date of each Calculation Period during a Commercial Paper Rate
Period, the average of yield evaluations at par, determined by the Indexing
Agent, of securities (whether or not actually issued) all of which shall have a
term as near as practicable to such Calculation Period or which are subject to
optional or mandatory tender by the owner thereof at the end of a term as near
as practicable to such Calculation Period, the interest on which is not included
in gross income for federal income tax purposes, of no fewer than ten Component
Issuers selected by the Indexing Agent, including issuers of commercial paper,
project notes, bond anticipation notes and tax anticipation notes, computed by
the Indexing Agent on and as of such day. If the Bonds are rated by a Rating
Agency in its highest note or commercial paper rating category or one of its two
highest long-term debt rating categories, each Component Issuer must (a) have
outstanding securities rated by a Rating Agency in its highest note or
commercial paper rating category or (b) not have outstanding notes or commercial
paper rated by a Rating Agency but have outstanding securities rated by a Rating
Agency in one of its two highest long-term debt rating categories. If the Bonds
are rated by a Rating Agency in a rating category that is lower than its highest
note or commercial paper rating category or its two highest long-term debt
rating categories (and the Bonds are not rated in one of such categories by the
other Rating Agency), each Component Issuer must (a) have outstanding securities
rated by a Rating Agency in its note or commercial paper rating category which
is the same or correlative, in the Indexing Agent's judgment, to the note or
commercial paper rating category or the long-term debt rating category of the
Bonds or (b) have outstanding securities rated by a Rating Agency in the same
long-term debt rating category as the Bonds are rated by that Rating Agency and
not have any outstanding notes or commercial paper rated by such Rating Agency.
The Indexing Agent may change the Component Issuers from time to time in its
discretion, subject to the foregoing requirements. In addition, at the request
of the Company and upon delivery to the Trustee of an Opinion of Bond Counsel
that such action will not adversely affect the exclusion of interest on the
Bonds from gross income of the owners thereof for federal income tax purposes,
the Authority, with the consent of the Company, may designate a new method of
setting the Commercial Paper Rate Index in the event any of the above-described
methods are determined by the Authority to be unavailable, impracticable or
unrealistic in the market place.
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"Commercial Paper Rate Period" shall mean any period during which
the Bonds bear interest at a Commercial Paper Rate or Rates, which period shall
commence on the effective date of a Change in the Interest Rate Mode to a
Commercial Paper Rate or Rates, as the case may be, and extend through the day
immediately preceding the earlier of (a) the effective date of another Change in
the Interest Rate Mode or (b) the Stated Maturity.
"Commercial Paper/Treasury Rate" on any date of determination shall
mean with respect to Auction Rate Bonds (i) in the case of any Auction Period of
less than 49 days, the interest equivalent of the 30-day rate, (ii) in the case
of any Auction Period of 49 days or more and but less than 70 days, the interest
equivalent of the 60-day rate, (iii) in the case of any Auction Period of 70
days or more but less than 85 days, the arithmetic average of the interest
equivalent of the 60-day and 90-day rates, (iv) in the case of any Auction
Period of 85 days or more but less than 99 days, the interest equivalent of the
90-day rate; (v) in the case of any Auction Period of 99 days or more but less
than 120 days, the arithmetic average of the interest equivalent of the 90-day
and 120-day rates, (vi) in the case of any Auction Period of 120 days or more
but less than 141 days, the interest equivalent of the 120-day rate, (vii) in
the case of any Auction Period of 141 days or more but less than 162 days, the
arithmetic average of the interest equivalent of the 120-day and 180-day rates,
(viii) in the case of any Auction Period of 162 days or more but less than 183
days, the interest equivalent of the 180-day rate, and (ix) in the case of any
Auction Period of 183 days or more, the Treasury Rate for such Auction Period.
The foregoing rates shall in all cases, except with respect to the Treasury
Rate, be rates on commercial paper placed on behalf of issuers whose corporate
bonds are rated "AA" by S&P, or the equivalent of such rating by Moody's, as
made available on a discount basis or otherwise by the Federal Reserve Bank of
New York for the Business Day immediately preceding such date of determination,
or in the event that the Federal Reserve Bank of New York does not make
available any such rate, then the arithmetic average of such rates, as quoted on
a discount basis or otherwise, by the Commercial Paper Dealers, to the Auction
Agent for the close of business on the Business Day immediately preceding such
date of determination.
If any Commercial Paper Dealer does not quote a commercial paper rate required
to determine the Commercial Paper/Treasury Rate, the Commercial Paper/Treasury
Rate shall be determined on the basis of a commercial paper quotation or
quotations furnished by the remaining Commercial Paper Dealer or Commercial
Paper Dealers and any Substitute Commercial Paper Dealer or Substitute
Commercial Paper Dealers selected by the Authority at the request of the Company
to provide such quotation or quotations not being supplied by any Commercial
Paper Dealer or Commercial Paper Dealers, as the case may be, or if the
Authority does not select any such Substitute Commercial Paper Dealer or
Substitute Commercial Paper Dealers, by the remaining Commercial Paper Dealer or
Commercial Paper Dealers. For purposes of this definition, the "interest
equivalent" of a rate stated on a discount basis (a "discount rate") for
commercial paper of a given day's maturity shall be equal to the product of (A)
100 times (B) the quotient (rounded upwards to the next higher one-thousandth
(.001) of 1%) of (x) the discount rate (expressed in decimals) divided by (y)
the difference between (1) 1.00 and (2) a fraction the numerator of which shall
be the product of the discount rate (expressed in decimals) times the number of
days in which such commercial paper matures and the denominator of which shall
be 360.
"Commission" shall mean the Securities and Exchange Commission.
I-8
"Company" shall mean Consolidated Edison Company of New York, Inc.,
and any surviving, resulting or transferee corporation as provided in Section
5.17 of the Participation Agreement.
"Component Issuers" shall mean issuers of securities, the interest
on which is excluded from gross income for federal income tax purposes, selected
by the Indexing Agent.
"Computation Date" shall mean each date which is one (1) Business
Day prior to any Determination Date.
"Computation Period" shall have the meaning set forth in the Tax
Regulatory Agreement.
"Credit Facility" shall mean any Support Facility which provides for
the payments referred to in clause (ii) of the definition thereof.
"Credit Facility Issuer" shall mean any bank or banks or other
financial institution or institutions, having issued any Credit Facility.
"Current Adjustable Rate" shall mean the interest rate borne by
Bonds immediately prior to a Change in the Interest Rate Mode or the
establishment of a Fixed Rate.
"Daily Period Record Date" shall mean, with respect to each Interest
Payment Date during a Daily Rate Period, the Business Day next preceding such
Interest Payment Date.
"Daily Rate" shall mean with respect to each Calculation Period
during a Daily Rate Period, a rate of interest equal to the rate of interest per
annum established and certified to the Trustee (with a copy to the Authority,
the Registrar and Paying Agent and the Company) by the Remarketing Agent no
later than 12:00 noon (New York City time) on and as of the Determination Date
as the minimum rate of interest per annum which, in the opinion of the
Remarketing Agent, would be necessary on and as of such day to remarket Bonds in
a secondary market transaction at a price equal to the principal amount thereof
plus accrued interest thereon; provided that such rate of interest shall not
exceed the lesser of 110% of the Daily Rate Index on and as of such day and the
Maximum Allowed Rate.
"Daily Rate Index" shall mean with respect to the Determination Date
of each Calculation Period during a Daily Rate Period, the average of one-day
yield evaluations at par, determined by the Indexing Agent, of securities
(whether or not actually issued), the interest on which is not included in gross
income for federal income tax purposes, of no fewer than ten Component Issuers
selected by the Indexing Agent and which have redemption or tender provisions
comparable to the then applicable provisions of the Bonds, computed by the
Indexing Agent on and as of the Determination Date. If the Bonds are rated by a
Rating Agency, each Component Issuer must have outstanding securities rated by a
Rating Agency in a short-term debt rating category which is the same as the
short-term debt rating category in which the Bonds are rated. The specific
issuers included in the Component Issuers may be changed from time to time by
the Indexing Agent in its discretion and shall be issuers whose securities, in
the judgment of the Indexing Agent, have characteristics similar to the Bonds.
In addition, at the request of the Company and upon
I-9
delivery to the Trustee of an Opinion of Bond Counsel that such action will not
adversely affect the exclusion of interest on the Bonds from gross income of the
owners thereof for federal income tax purposes, the Authority, with the consent
of the Company, may designate a new method of setting the Daily Rate Index in
the event any of the above-described methods are determined by the Authority to
be unavailable, impracticable or unrealistic in the market place.
"Daily Rate Period" shall mean any period during which Bonds bear
interest at a Daily Rate which period shall commence on the effective date of
the Change in the Interest Rate Mode to a Daily Rate and shall extend through
the day immediately preceding the earlier of (a) the effective date of a Change
in the Interest Rate Mode or (b) the Stated Maturity.
"Determination Date" shall mean, for any Calculation Period, the
first Business Day occurring during such Calculation Period; provided, however,
with respect to Bonds which bear interest at the Weekly Rate, for the
Calculation Period commencing on the Closing Date, the Determination Date shall
mean the Business Day immediately preceding such Closing Date, and thereafter,
each Wednesday or, if such Wednesday is not a Business Day, the Business Day
next preceding such Wednesday.
"Direct-Pay Credit Facility" shall mean any Credit Facility which by
its terms permits the Trustee to draw moneys thereunder for deposit in the Bond
Fund.
"Event of Default" shall mean Event of Default as defined in Section
12.01.
"Existing Holder" shall mean with respect to Auction Rate Bonds a
Broker-Dealer that is listed as the holder of Auction Rate Bonds in the records
of the Auction Agent.
"Failure to Deposit" shall mean any failure to make the deposit
required by Section 9.02(a)(i) or 9.02(b)(i) by the time specified therein.
"Fiscal Year" shall mean the fiscal year of the Company as
established from time to time by the Company which as of the Closing Date is the
twelve-month period commencing on January 1 of each calendar year and ending on
December 31 of the next calendar year.
"Fitch" shall mean Fitch, Inc. and its successor or successors, and
if such corporation shall for any reason no longer perform the functions of a
securities rating agency or shall be replaced by some other nationally
recognized rating agency by the Authority at the request of the Company, "Fitch"
shall be deemed to refer to such other nationally recognized rating agency
designated by the Authority at the request of the Company.
"Fixed Rate" shall mean, with respect to a Fixed Rate Period, the
rate of interest per annum established and certified to the Trustee (with a copy
to the Authority, the Registrar and Paying Agent and the Company) by the
Remarketing Agent no later than 12:00 noon (New York City time) on and as of
such date as the minimum rate of interest per annum which, in the opinion of the
Remarketing Agent, would be necessary on and as of such date to remarket the
Bonds in a secondary market transaction at a price equal
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to 100% of the Outstanding principal amount thereof; provided that such rate of
interest shall not exceed the lesser of 110% of the Fixed Rate Index on and as
of such date and 18% per annum;
"Fixed Rate Conversion Date" shall have the meaning set forth in
Section 4.02.
"Fixed Rate Index" shall mean with respect to a Fixed Rate
Conversion Date, the average of the yield evaluations (on the basis of full
coupon securities trading at par with a term approximately equal to the Fixed
Rate Period) of securities (whether or not actually issued), the interest on
which is not included in gross income for federal income tax purposes, of no
fewer than ten Component Issuers selected by the Indexing Agent and which have a
long-term rating by a Rating Agency in the same rating category as the Bonds are
rated at the time by such Rating Agency or, if no such bonds are so rated, shall
be debt which, in the judgment of the Indexing Agent, is of credit quality
comparable to that of the Bonds, computed by the Indexing Agent on and as of the
Fixed Rate Conversion Date. In the event that the Indexing Agent fails to
compute the Fixed Rate Index and no other qualified municipal securities
evaluation service can be appointed Indexing Agent by the Authority, the Fixed
Rate Index shall be determined by the Remarketing Agent and shall be 90% of the
average yield shown for the most recent calendar month for United States
Treasury notes or bonds having the same number of years to maturity as the
number of 12-month periods (or months if the Fixed Rate Period is less than one
year) in the Fixed Rate Period, as published in the Federal Reserve Bulletin in
the last issue before the Fixed Rate Conversion Date. If that issue does not
contain such a yield, the Fixed Rate Index will be determined by linear
interpolation between the yields shown in that issue for United States Treasury
notes and bonds having the next shorter and next longer number of years (or
months) to maturity. In addition, at the request of the Company and upon
delivery to the Trustee of an Opinion of Bond Counsel that such action will not
adversely affect the exclusion of interest on the Bonds from gross income of the
owners thereof for federal income tax purposes, the Authority, with the consent
of the Company, may designate a new method of setting the Fixed Rate Index in
the event any of the above-described methods are determined by the Authority to
be unavailable, impracticable or unrealistic in the market place.
"Fixed Rate Period" shall mean any period during which Bonds bear
interest at a Fixed Rate, which period shall commence on the effective date of a
Change in the Interest Rate Mode to a Fixed Rate, and shall extend through the
day immediately preceding the earlier of (a) the effective date of another
Change in the Interest Rate Mode, or (b) the Stated Maturity.
"Fixed Rate Record Date" shall mean, with respect to each Interest
Payment Date during a Fixed Rate Period, the fifteenth day of the month next
preceding such Interest Payment Date, or, if such day shall not be a Business
Day, the next preceding Business Day.
"Governmental Obligations" shall mean any of the following which are
non-callable:
(a) direct general obligations of, or obligations the payment of the
principal of and interest on which is unconditionally guaranteed by, the
United States of America; and
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(b) bonds, debentures or notes issued by Government National
Mortgage Association, Federal Financing Bank, Federal Farm Credit Bank,
Federal Land Bank, Federal Home Loan Bank, Farmers Home Administration,
Federal Home Mortgage Association or any other comparable federal agency
hereafter created to the extent that said obligations are unconditionally
guaranteed by the United States of America.
"Hold Order" shall mean with respect to the Auction Rate Bonds, Hold
Order as defined in Section 3.06.
"Indenture" shall mean this Trust Indenture dated as of June 1, 2001
between the Authority and the Trustee, as the same may be amended or
supplemented.
"Indexing Agent" shall mean the Indexing Agent appointed in
accordance with Section 11.24.
"Initial Support Facility" shall mean the Letter of Credit dated
June 6, 2001 issued by the Initial Support Facility Issuer. The Initial Support
Facility shall constitute a Liquidity Facility, a Credit Facility and a
Direct-Pay Credit Facility within the meaning of this Indenture.
"Initial Support Facility Issuer" shall mean Barclays Bank PLC.
"Interest Payment Date" shall mean:
(a) during each Commercial Paper Rate Period, the Business Day
immediately succeeding the last day of any Calculation Period;
(b) during an Auction Rate Period (i) for an Auction Period of 91
days or less, the Business Day immediately succeeding such Auction Period
and (ii) for an Auction Period of more than 91 days, each succeeding 91st
day after the first day of such Auction Period and the Business Day
immediately succeeding the last day of such Auction Period;
(c) during each Daily Rate Period, the first Business Day of each
month thereof;
(d) (i) during the initial Weekly Rate Period, on July 2, 2001 and
on the first Business Day of each month thereafter, and (ii) during each
Weekly Rate Period other than the initial Weekly Rate Period, the first
Business Day of each month thereof;
(e) during each Monthly Rate Period, the first Business Day of each
month thereof;
(f) during each Semi-annual Rate Period, (i) the first Business Day
of the sixth calendar month following the month in which the first day of
such Semi-annual Rate Period occurred, (ii) each anniversary of the date
so determined, and (iii) each anniversary of the first day of the first
month of such Semi-annual Rate Period;
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(g) during each Term Rate Period, (i) the first Business Day of the
sixth calendar month following the month in which the first day of such
Term Rate Period occurred, (ii) each anniversary of the date so
determined, (iii) each anniversary of the first day of the first month of
such Term Rate Period, and (iv) the Business Day immediately succeeding
such Term Rate Period;
(h) the June 1 or December 1 next succeeding a Fixed Rate Conversion
Date and each June 1 and December 1 thereafter; provided, however, that if
the June 1 or December 1 next succeeding a Fixed Rate Conversion Date
occurs less than twenty-one (21) days after such Fixed Rate Conversion
Date, the first Interest Payment Date shall be the second such date
following such Fixed Rate Conversion Date;
(i) a Fixed Rate Conversion Date;
(j) any day on which Bonds are subject to mandatory tender for
purchase pursuant to Section 5.04, 5.08 or 5.09 or redemption in whole
pursuant to Section 5.01, 5.05, 5.06 or 5.07; and
(k) the Stated Maturity;
provided, however, that if any such date determined in any of the foregoing
clauses is not a Business Day, the Interest Payment Date shall be the next
succeeding day which is a Business Day.
"Investment Securities" shall mean any of the following which at the
time are legal investments under the laws of the State of New York for the
monies held hereunder:
(a) any obligation issued or guaranteed by, or backed by the full
faith and credit of, the United States of America (including any
certificates or any other evidence of an ownership interest in any such
obligation or in specified portions thereof, which may consist of
specified portions of the principal thereof or the interest thereon);
(b) deposit accounts in, or certificates of deposit issued by, and
bankers acceptance of, any bank, trust company or national banking
association which is a member of the Federal Reserve System (which may
include the Trustee), having capital stock and surplus aggregating not
less than $50,000,000;
(c) deposit accounts in, or certificates of deposit issued by and
bankers acceptances of, any bank or trust company having capital stock and
surplus aggregating not less than $50,000,000 and whose obligations are
rated not less than "A" or equivalent by Moody's or S&P;
(d) obligations issued or guaranteed by any person controlled or
supervised by and acting as an instrumentality of the United States of
America pursuant to the authority granted by the Congress of the United
States;
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(e) commercial paper rated in the highest investment grade or next
highest investment grade by Moody's or S&P;
(f) obligations rated not less than "A" or equivalent by Moody's or
S&P issued or guaranteed by any state of the United States or the District
of Columbia, or any political subdivision, agency or instrumentality of
any such state or District, or issued by any corporation;
(g) obligations of a public housing authority fully secured by
contracts with the United States;
(h) repurchase agreements with any bank or trust company organized
under the laws of any state of the United States of America or any
national banking association (including the Trustee) or any government
bond dealer reporting to, trading with and recognized as a primary dealer
by, the Federal Reserve Bank of New York with respect to any of the
foregoing obligations or securities. Any repurchase agreement entered into
pursuant to this Indenture shall, by its terms, permit the Trustee to sell
the related obligations or securities if the other party to such
repurchase agreement shall fail to repurchase promptly such obligation or
security on the day required by the repurchase agreement. All such
repurchase agreements shall also provide for the delivery of the related
obligations or securities to the Trustee or a depositary of the Trustee;
(i) money market or bond mutual funds, which funds have a composite
investment grade rated not less than "A" or equivalent by Moody's or S&P;
or
(j) investment agreements with any bank or trust company organized
under the laws of any state of the United States of America or any
national banking association (including the Trustee) or any governmental
bond dealer reporting to, trading with and recognized as a primary dealer
by, the Federal Reserve Bank of New York, which has, or the parent company
of which has, long-term debt rated at least "A" or its equivalent by S&P
or Moody's, with respect to any of the obligations or securities specified
in (a), (d), (e), (f) and (g) above. Any investment agreement entered into
pursuant to this Indenture shall, by its terms provide that (i) the
invested funds are available for withdrawal without penalty or premium, at
any time upon not more than seven days' prior notice (which notice may be
amended or withdrawn at any time prior to the specified withdrawal date),
and (ii) the investment agreement is the unconditional and general
obligation of, and is not subordinated to any other obligation of, the
provider thereof.
Any such Investment Securities may be held by the Trustee in book entry form,
whereby certificated securities are held by an independent custodian and the
Trustee is the beneficial owner of all or a portion of such certificated
securities.
"Liquidity Facility" shall mean a Support Facility which provides
for the payments referred to in clause (i) of the definition thereof.
I-14
"Liquidity Facility Issuer" shall mean any bank or banks or other
financial institution or institutions, having issued any Liquidity Facility.
"Maximum Allowed Rate" shall mean as of any date 15% per annum, or
if lower, the rate specified as such in any Support Facility then in effect,
provided, however, that such Maximum Allowed Rate shall not exceed the maximum
rate, if any, permitted by applicable law.
"Maximum Auction Rate" shall mean on any date of determination with
respect to Auction Rate Bonds the lesser of the Maximum Allowed Rate or the
following: (i) in all cases other than as provided in (ii) or (iii) below, the
interest rate per annum equal to Applicable Percentage of the higher of the
After-Tax Equivalent Rate determined on such date with respect to a Standard
Auction Period and the BMA Index, (ii) with respect to any change in an Auction
Period and/or the Standard Auction Period pursuant to Section 3.04, including
any automatic reversion to a Standard Auction Period pursuant to Section 3.03,
the interest rate per annum equal to the highest of (a) the Applicable
Percentage of the higher of the After-Tax Equivalent Rate determined on such
date with respect to a Standard Auction Period, and the BMA Index, (b) the
Applicable Percentage of the higher of the After-Tax Equivalent Rate determined
on such date with respect to the Auction Period which is proposed to be
established and the BMA Index, and (c) the Applicable Percentage of the higher
of the After-Tax Equivalent Rate determined on such date with respect to the
Auction Period in effect immediately prior to such proposed change in the
Auction Period and the BMA Index, or (iii) with respect to any Change in the
Interest Rate Mode from an Auction Rate pursuant to Section 4.01 or any change
from an Auction Rate to a Fixed Rate pursuant to Section 4.02, the interest rate
per annum equal to the higher of (a) the Applicable Percentage of the higher of
the After-Tax Equivalent Rate determined on such date with respect to a Standard
Auction Period and the BMA Index, and (b) the Applicable Percentage of the
higher of the After-Tax Equivalent Rate determined on such date with respect to
the Auction Period in effect immediately prior to such proposed change and the
BMA Index.
"Monthly Period Record Date" shall mean, with respect to each
Interest Payment Date during a Monthly Period, the Business Day next preceding
such Interest Payment Date.
"Monthly Rate" shall mean with respect to each Calculation Period
during a Monthly Rate Period, a rate of interest equal to the rate of interest
per annum established and certified to the Trustee (with a copy to the
Authority, the Registrar and Paying Agent, and the Company) by the Remarketing
Agent no later than 12:00 noon (New York City time) on and as of the
Determination Date as the minimum rate of interest per annum which, in the
opinion of the Remarketing Agent, would be necessary on and as of such day to
remarket Bonds in a secondary market transaction at a price equal to the
principal amount thereof; provided that such rate of interest shall not exceed
the lesser of 110% of the Monthly Rate Index on and as of such date and the
Maximum Allowed Rate.
"Monthly Rate Index" shall mean with respect to the Determination
Date of each Calculation Period during a Monthly Rate Period, the average of
30-day yield evaluations at par, determined by the Indexing Agent, of securities
(whether or not actually issued), the interest on which is not included in gross
income for federal income tax purposes, of no fewer than ten Component Issuers
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selected by the Indexing Agent, including issuers of commercial paper, project
notes, bond anticipation notes and tax anticipation notes, computed by the
Indexing Agent on and as of such day. If the Bonds are rated by a Rating Agency
in its highest note or commercial paper rating category or one of its two
highest long-term debt rating categories, each Component Issuer must (a) have
outstanding securities rated by a Rating Agency in its highest note or
commercial paper rating category or (b) not have outstanding notes or commercial
paper rated by a Rating Agency but have outstanding securities rated by a Rating
Agency in one of its two highest long-term debt rating categories. If the Bonds
are rated by a Rating Agency in a rating category that is lower than its highest
note or commercial paper rating category or its two highest long-term debt
rating categories (and the Bonds are not rated in one of such categories by the
other Rating Agency), each Component Issuer must (a) have outstanding securities
rated by a Rating Agency in its note or commercial paper rating category which
is the same or correlative, in the Indexing Agent's judgment, to the note or
commercial paper rating category or the long-term debt rating category of the
Bonds or (b) have outstanding securities rated by a Rating Agency in the same
long-term debt rating category as the Bonds are rated by that Rating Agency and
not have any outstanding notes or commercial paper rated by such Rating Agency.
The Indexing Agent may change the Component Issuers from time to time in its
discretion, subject to the foregoing requirements. In addition, at the request
of the Company and upon delivery to the Trustee of an Opinion of Bond Counsel
that such action will not adversely affect the exclusion of interest on the
Bonds from gross income of the owners thereof for federal income tax purposes,
the Authority, with the consent of the Company, may designate a new method of
setting the Monthly Rate Index in the event any of the above-described methods
are determined by the Authority to be unavailable, impracticable or unrealistic
in the market place.
"Monthly Rate Period" shall mean any period during which Bonds bear
interest at a Monthly Rate which period shall commence with the effective date
of the Change in the Interest Rate Mode to a Monthly Rate and shall extend
through the day immediately preceding the earlier of (a) the effective date of
another Change in the Interest Rate Mode or (b) the Stated Maturity.
"Moody's" shall mean Moody's Investors Service, Inc., a corporation
organized and existing under the laws of the State of Delaware and its successor
or successors, and if such corporation shall for any reason no longer perform
the functions of a securities rating agency or if Moody's shall be replaced,
subject to the definition of "prevailing rating" in the definition of Applicable
Percentage, by some other nationally recognized rating agency by the Authority
at the request of the Company, "Moody's" shall be deemed to refer to such other
nationally recognized rating agency designated by the Authority at the request
of the Company.
"Note" shall mean the promissory note of the Company executed by the
Company and delivered to the Trustee, to evidence the obligations of the Company
to repay the loan to be made by the Authority pursuant to the Participation
Agreement.
"Note Payments" shall mean the portion of the Payments required to
be made pursuant to Section 4.02 of the Participation Agreement and the Note to
be applied to the payment of principal of, premium, if any, and interest on the
Bonds.
I-16
"Notice of Election to Tender" shall mean the notice given by a
Holder of Bonds pursuant to Section 5.03.
"Opinion of Bond Counsel" shall mean a written opinion of Bond
Counsel.
"Option to Convert" shall mean the Authority's right and option to
convert the rate of interest payable on the Bonds from an Adjustable Rate to a
Fixed Rate as provided in Section 4.02.
"Order" shall mean with respect to Auction Rate Bonds, an Order as
defined in Section 3.06.
"Outstanding", whether appearing in upper or lower case, when used
with respect to any Bond shall mean, as of any date, any Bond theretofore or
thereupon being authenticated and delivered pursuant to this Indenture, except:
1. a Bond cancelled by the Trustee or delivered to the Trustee for
cancellation at or prior to such date;
2. a Bond in lieu of or in substitution for which another Bond shall
have been issued under Sections 5.10, 5.11, 7.03 , 7.04 or 7.05; and
3. a Bond or portion thereof deemed to have been paid in accordance
with Section 15.01;
provided, however, that with respect to Auction Rate Bonds for the purposes of
the Auction Procedures on any Auction Date, Auction Rate Bonds as to which the
Company or any person known to the Auction Agent to be an Affiliate of the
Company is the Existing Holder thereof shall be disregarded and deemed not to be
Outstanding.
"Overdue Rate" shall mean on any date of determination 265% of the
BMA Index on such date of determination; provided that in no event shall the
Overdue Rate exceed the Maximum Allowed Rate.
"Participation Agreement" shall mean the Participation Agreement
dated as of the date hereof, between the Authority and the Company, as amended
and supplemented by Supplemental Participation Agreements from time to time.
"Payments" shall mean collectively the Note Payments and the
Additional Payments.
"Potential Beneficial Owner" shall mean with respect to any Auction
Rate Bonds, a customer of a Broker-Dealer that is not a Beneficial Owner but
that wishes to purchase Auction Rate Bonds, or that is a Beneficial Owner that
wishes to purchase an additional principal amount of Auction Rate Bonds.
I-17
"Potential Holder" shall mean a Broker-Dealer that is not an
Existing Holder or that is an Existing Holder that wishes to become an Existing
Holder of an additional principal amount of Auction Rate Bonds.
"Principal Corporate Trust Office" shall mean the office of the
Trustee at which at any particular time its corporate trust business shall be
principally administered, which office at the date hereof is located at 101
Barclay Street - 8W, New York, New York 10286
"Project" shall mean any acquisition, purchase, construction,
reconstruction, improvement, betterment, extension and equipping, as described
in Exhibit A and Exhibit B to the Participation Agreement as the same may be
revised from time to time to reflect any changes or substitutions therein,
additions thereto, or deletions therefrom permitted by the Participation
Agreement.
"Project Fund" shall mean the special trust fund designated as
"Consolidated Edison Company of New York, Inc. Series 2001A Project Fund"
created and established under, and to be held and administered by the Trustee as
provided in, Section 8.01.
"Purchase Price" shall mean the purchase price of Bonds tendered or
deemed tendered for purchase pursuant to Section 5.03, 5.04, 5.08 or 5.09,
consisting of the principal amount of such Bonds together with any accrued and
unpaid interest plus, in the event Bonds bearing interest at a Term Rate or a
Fixed Rate are subject to tender for purchase pursuant to Section 5.04, any
premium which would have been required to be paid as part of redemption price on
any date on which such Bonds are subject to tender for purchase if such Bonds
were subject to optional redemption pursuant to Section 5.01 on such date. With
respect to Bonds tendered for purchase on an Interest Payment Date, Purchase
Price shall include any accrued interest on such Bonds which is not otherwise
being paid pursuant to Section 9.03(a).
"Purchaser's Letter" shall mean a letter substantially in the form
required by the Auction Agency Agreement, addressed to, among others, the
Authority, the Auction Agent and a Broker-Dealer.
"rate index" means the Daily Rate Index, the Fixed Rate Index, the
Commercial Paper Rate Index, the Monthly Rate Index, the Semi-annual Rate Index,
the Term Rate Index, or the Weekly Rate Index.
"Rating Agency" means Moody's, if the Bonds are then rated by
Moody's, S&P, if the Bonds are then rated by S&P, and Fitch, if the Bonds are
then rated by Fitch.
"rating category" shall mean one of the generic rating categories of
a Rating Agency, without regard to any refinement or gradation of such rating
category by a numerical modifier, plus or minus sign, or otherwise.
"Record Date", at any time, shall mean each Commercial Paper Period
Record Date during a Commercial Paper Rate Period, each Auction Rate Bonds
Period Record Date during an Auction Rate Period, each Daily Period Record Date
during a Daily Rate Period, each Weekly Period Record Date
I-18
during a Weekly Rate Period, each Monthly Period Record Date during a Monthly
Rate Period, each Semi-annual Period Record Date during a Semi-annual Rate
Period, each Term Period Record Date during a Term Rate Period and each Fixed
Rate Record Date during a Fixed Rate Period.
"Registrar and Paying Agent" shall mean The Bank of New York in its
separate capacity as Registrar and Paying Agent for the Bonds, or its successors
or assigns.
"Remarketing Agent" shall mean the Remarketing Agent or Remarketing
Agents appointed pursuant to Section 11.14, its or their successors or assigns,
including without limitation any "market agent" appointed in connection with
Auction Rate Bonds.
"Remarketing Agreement" shall mean the Remarketing Agreement among
the Company and the Remarketing Agents dated the Closing Date and any similar
agreement or agreements between the Company and one or more successor
Remarketing Agents, as from time to time amended.
"Revenues" shall mean and include all income, revenues and monies
derived by the Authority under the Participation Agreement and the Note (except
administrative compensation and indemnification payable under the Participation
Agreement), and, without limiting the generality of the foregoing, shall include
to the extent provided in this Indenture, earnings on the investment of monies
held under this Indenture and the proceeds of the sale of any such investments.
The term "Revenues" shall not include monies received as proceeds from the sale
of the Bonds or any other bonds, notes or evidences of indebtedness or as grants
or gifts.
"S&P" shall mean Standard & Poor's Ratings Services, a division of
The McGraw-Hill Companies and its successor or successors, and if such
corporation shall for any reason no longer perform the functions of a securities
rating agency or if S&P shall be replaced, subject to the definition of
"prevailing rating" in the definition of Applicable Percentage, by some other
nationally recognized rating agency by the Authority at the request of the
Company, "S&P" shall be deemed to refer to such other nationally recognized
rating agency designated by the Authority at the request of the Company.
"Securities Depository" shall mean The Depository Trust Company and
its successors and assigns or if (i) the then Securities Depository resigns from
its functions as depository of the Bonds or (ii) the Authority discontinues use
of the then Securities Depository pursuant to Section 2.03, any other securities
depository, which agrees to follow the procedures required to be followed by a
Securities Depository in connection with the Bonds and which is selected by the
Authority, with the consent of the Company, the Trustee, the Auction Agent and
the Remarketing Agent pursuant to Section 2.03.
"Securities Exchange Act" shall mean the Securities Exchange Act of
1934, as amended.
"Sell Order" shall mean with respect to Auction Rate Bonds, Sell
Order as defined in Section 3.06.
I-19
"Semi-annual Period Record Date" shall mean, with respect to each
Interest Payment Date during a Semi-annual Rate Period, the fifteenth day of the
calendar month next preceding such Interest Payment Date.
"Semi-annual Rate" shall mean with respect to each Calculation
Period during a Semi-annual Rate Period, a rate of interest equal to the rate of
interest per annum established and certified to the Trustee (with a copy to the
Authority, the Registrar and Paying Agent and the Company) by the Remarketing
Agent no later than 12:00 noon (New York City time) on and as of the
Determination Date as the minimum rate of interest per annum which, in the
opinion of the Remarketing Agent, would be necessary on and as of such day to
remarket Bonds in a secondary market transaction at a price equal to the
principal amount thereof; provided that such rate of interest shall not exceed
the lesser of 110% of the Semi-annual Rate Index on and as of such date and the
Maximum Allowed Rate.
"Semi-annual Rate Index" shall mean with respect to the
Determination Date of each Calculation Period during a Semi-annual Rate Period,
the average of six-month yield evaluations at par, determined by the Indexing
Agent, of securities (whether or not actually issued), the interest on which is
not included in gross income for federal income tax purposes, of no fewer than
ten Component Issuers selected by the Indexing Agent, including issuers of
commercial paper, project notes, bond anticipation notes and tax anticipation
notes, computed by the Indexing Agent on and as of such day. If the Bonds are
rated by a Rating Agency in its highest note or commercial paper rating category
or one of its two highest long-term debt rating categories, each Component
Issuer must (a) have outstanding securities rated by a Rating Agency in its
highest note or commercial paper rating category or (b) not have outstanding
notes or commercial paper rated by a Rating Agency but have outstanding
securities rated by a Rating Agency in one of its two highest long-term debt
rating categories. If the Bonds are rated by a Rating Agency in a rating
category that is lower than its highest note or commercial paper rating category
or its two highest long-term debt rating categories (and the Bonds are not rated
in one of such categories by the other Rating Agency), each Component Issuer
must (a) have outstanding securities rated by a Rating Agency in its note or
commercial paper rating category which is the same or correlative, in the
Indexing Agent's judgment, to the note or commercial paper rating category or
the long-term debt rating category of the Bonds or the other debt obligations
supported by support facilities issued by the issuer of a Support Facility or
(b) have outstanding securities rated by a Rating Agency in the same long-term
debt rating category as the Bonds are rated by that Rating Agency and not have
any outstanding notes or commercial paper rated by such Rating Agency. The
Indexing Agent may change the Component Issuers from time to time in its
discretion, subject to the foregoing requirements. In addition, at the request
of the Company and upon delivery to the Trustee of an Opinion of Bond Counsel
that such action will not adversely affect the exclusion of interest on the
Bonds from gross income of the owners thereof for federal income tax purposes,
the Authority, with the consent of the Company, may designate a new method of
setting the Semi-annual Rate Index in the event any of the above-described
methods are determined by the Authority to be unavailable, impracticable or
unrealistic in the market place.
"Semi-annual Rate Period" shall mean any period during which Bonds
bear interest at a Semi-annual Rate, which period shall commence on the
effective date of a Change in the Interest Rate
I-20
Mode to a Semi-annual Rate, and shall extend through the day immediately
preceding the earlier of (a) the effective date of another Change in the
Interest Rate Mode, or (b) the Stated Maturity.
"Standard Auction Period" shall mean an Auction Period of 35 days
unless a different Standard Auction Period is established pursuant to Section
3.04.
"Stated Maturity," with respect to each series of Bonds shall mean
June 1, 2036, provided that, subject to the next sentence, in any case where the
date of maturity of, or payment of premium on, interest on, or principal of, the
Bonds or the date fixed for redemption of any Bonds shall be on a day other than
a Business Day, then payment of interest, principal and premium, if any, need
not be made on such date but may be made (without additional interest) on the
next succeeding Business Day, with the same force and effect as if made on the
date of maturity or the date fixed for redemption. Notwithstanding anything in
this Indenture to the contrary, in no event shall the final maturity date of the
Bonds extend beyond 35 years from the Closing Date, and the length of any
Auction Period shall be reduced at the discretion of the Authority to the extent
necessary to ensure compliance with the provisions of this sentence.
"Statutory Corporate Tax Rate" shall mean as of any date of
determination the highest tax rate bracket (expressed in decimals) now or
hereafter applicable in each taxable year on the taxable income of every
corporation as set forth in Section 11 of the Code or any successor section
without regard to any minimum additional tax provision or provisions regarding
changes in rates during a taxable year, which on the date hereof is .35. Any
change in the Statutory Corporate Tax Rate shall be evidenced by a certificate
of the Company.
"Submission Deadline" shall mean 3:00 p.m., New York City time, on
the Business Day preceding any Auction Date or such other time on the Business
Day preceding any Auction Date by which Broker-Dealers are required to submit
Orders to the Auction Agent as specified by the Auction Agent from time to time.
"Submitted Bid" shall mean with respect to Auction Rate Bonds,
Submitted Bid as defined in Section 3.08.
"Submitted Hold Order" shall mean with respect to Auction Rate
Bonds, Submitted Hold Order as defined in Section 3.08.
"Submitted Order" shall mean with respect to Auction Rate Bonds,
Submitted Order as defined in Section 3.08.
"Submitted Sell Order" shall mean with respect to Auction Rate
Bonds, Submitted Sell Order as defined in Section 3.08.
"Substitute Commercial Paper Dealers" shall mean the commercial
paper dealers specified by the Authority at the request of the Company at the
time of any Change in the Interest Rate Mode to an Auction Rate or their
respective affiliates or successors, if any such person is a commercial paper
dealer,
I-21
provided that none of such persons nor any of their affiliates or successors
shall be a Commercial Paper Dealer.
"Substitute U.S. Government Securities Dealer" shall mean the dealer
or dealers in U.S. government securities specified by the Authority at the
request of the Company at the time of a Change in the Interest Rate Mode to an
Auction Rate, or their respective affiliates or successors, if any such person
is a dealer in U.S. government securities, provided that none of such persons
nor any of their affiliates or successors shall be a U.S. Government Securities
Dealer.
"Sufficient Clearing Bids" shall mean with respect to Auction Rate
Bonds, Sufficient Clearing Bids as defined in Section 3.08.
"Supplemental Indenture" shall mean any indenture between the
Trustee and the Authority entered into pursuant to and in compliance with the
provisions of Article XIV hereof amending or supplementing the provisions of
this Indenture as originally executed or as theretofore amended or supplemented.
"Supplemental Participation Agreement" shall mean an agreement
supplementing or amending the Participation Agreement.
"Support Facility" shall mean any instrument satisfactory to the
Authority entered into or obtained in connection with the Bonds, such as a
letter of credit, committed line of credit, insurance policy, surety bond or
standby bond purchase agreement, or any combination of the foregoing, and issued
by a bank or banks, other financial institution or institutions, or any
combination of the foregoing which provides for the payment of (i) the Purchase
Price on Bonds tendered for purchase pursuant to the provisions hereof and the
Bond Purchase Trust Agreement and/or (ii) principal of and interest on all Bonds
coming due and payable during the term thereof.
"Support Facility Issuer" shall mean any bank or banks, or other
financial institution or institutions which is the issuer of any Support
Facility.
"Tax Regulatory Agreement" shall mean the Tax Regulatory Agreement,
dated the Closing Date, between the Authority and the Company, and any and all
modifications, alterations, amendments and supplements thereto.
"Term Period Record Date" shall mean, with respect to each Interest
Payment Date during a Term Rate Period, the fifteenth day of the month next
preceding such Interest Payment Date.
"Term Rate" shall mean with respect to each Calculation Period
during a Term Rate Period, a rate of interest equal to the rate of interest per
annum established and certified to the Trustee (with a copy to the Authority,
the Registrar and Paying Agent and the Company) by the Remarketing Agent no
later than 12:00 noon (New York City time) on and as of the Determination Date
as the minimum rate of interest per annum which, in the opinion of the
Remarketing Agent, would be necessary on and as of such day to remarket such
Bonds in a secondary market transaction at a price equal to the principal amount
thereof;
I-22
provided that such rate of interest shall not exceed the lesser of 110% of the
Term Rate Index on and as of such date and the Maximum Allowed Rate.
"Term Rate Index" shall mean with respect to the Determination Date
of each Calculation Period during a Term Rate Period, the average of the yield
evaluations at par, determined by the Indexing Agent, of securities (whether or
not actually issued), having a term approximately equal to the Term Rate Period
or which are subject to optional or mandatory tender by the owner thereof at the
end of a term approximately equal to the Term Rate Period, the interest on which
is not included in gross income for federal income tax purposes, of no fewer
than ten Component Issuers selected by the Indexing Agent, computed by the
Indexing Agent on and as of such day. If the Bonds are rated by a Rating Agency
in one of its two highest long-term debt rating categories, each Component
Issuer must have outstanding securities rated by a Rating Agency in one of its
two highest long-term debt rating categories. If the Bonds are rated by a Rating
Agency in a rating category that is lower than its two highest long-term debt
rating categories (and the Bonds are not rated in one of the two highest such
categories by the other Rating Agency), each Component Issuer must have
outstanding securities rated by a Rating Agency in the same long-term debt
rating category as the Bonds are rated by that Rating Agency. The Indexing Agent
may change the Component Issuers from time to time in its discretion, subject to
the foregoing requirements. In addition, at the request of the Company and upon
delivery to the Trustee of an Opinion of Bond Counsel that such action will not
adversely affect the exclusion of interest on the Bonds from gross income of the
owners thereof for federal income tax purposes, the Authority, with the consent
of the Company, may designate a new method of setting the Term Rate Index in the
event any of the above-described methods are determined by the Authority to be
unavailable, impracticable or unrealistic in the market place.
"Term Rate Period" shall mean any period during which Bonds bear
interest at a Term Rate which period shall commence with the effective date of
the Change in the Interest Rate Mode to a Term Rate and shall extend through the
day immediately preceding the earlier of (a) the effective date of another
Change in the Interest Rate Mode or (b) the Stated Maturity.
"Terminating Event" shall mean:
(a) Any event or events under the terms of a Support Facility or any
agreement providing for the issuance of such Support Facility which would
cause the termination of such Support Facility but would specifically
allow for the mandatory tender of Bonds pursuant to Section 5.09 with a
draw on or borrowing or payment under such Support Facility prior to such
termination; or
(b) Receipt by the Trustee of written notice from the financial
institution providing any Credit Facility following a draw on or borrowing
or payment under such Credit Facility for payment of interest on the Bonds
that the amount so drawn, borrowed or paid has not been reinstated in the
amount of such drawing.
"Treasury Rate" on any date, shall mean (i) the yield, calculated in
accordance with prevailing industry convention, of the rate on the most recently
auctioned direct obligations of the U.S.
I-23
Government having a maturity at the time of issuance of 364 days or less with a
remaining maturity closest to the length of such Auction Period, as quoted in
The Wall Street Journal on such date for the Business Day next preceding such
date; or (ii) in the event that any such rate is not published in The Wall
Street Journal, then the bond equivalent yield, calculated in accordance with
prevailing industry convention, as calculated by reference to the arithmetic
average of the bid price quotations of the most recently auctioned direct
obligation of the U.S. Government having a maturity at the time of issuance of
364 days or less with a remaining maturity closest to the length of such Auction
Period, based on bid price quotations on such date obtained by the Auction Agent
from a U.S. Government Securities Dealer. If any U.S. Government Securities
Dealer does not quote a rate required to determine the Treasury Rate, the
Treasury Rate shall be determined on the basis of the quotation or quotations
furnished by the remaining U.S. Government Securities Dealer or Dealers and any
Substitute U.S. Government Securities Dealer or Dealers selected by the
Authority at the request of the Company to provide such rate or rates not being
supplied by any U.S. Government Securities Dealer or U.S. Government Securities
Dealers, as the case may be, or, if the Authority does not select any such
Substitute U.S. Government Securities Dealer or Substitute U.S. Government
Securities Dealers, by the remaining U.S. Government Securities Dealer or U.S.
Government Securities Dealers.
"Trust Estate" shall mean the meaning assigned to such term in the
first paragraph following the recitals herein.
"Trustee" shall mean the corporation having trust powers appointed
by the Authority as Trustee hereunder and serving as such hereunder, and any
surviving, resulting or transferee corporation as provided in Section 11.13.
References to principal office of the Trustee shall mean the Principal Corporate
Trust Office of the Trustee.
"U.S. Government" shall mean the federal government of the United
States of America.
"U.S. Government Securities Dealers" shall mean the Remarketing
Agents for any Auction Rate Bonds, or, in lieu of any thereof, their respective
affiliates or successors, provided that any such entity is a U.S. Government
securities dealer.
"Weekly Period Record Date" shall mean, with respect to each
Interest Payment Date during a Weekly Rate Period, the Business Day next
preceding such Interest Payment Date.
"Weekly Rate" shall mean with respect to each Calculation Period
during a Weekly Rate Period, a rate of interest equal to the rate of interest
per annum established and certified to the Trustee (with a copy to the
Authority, the Registrar and Paying Agent and the Company) by the Remarketing
Agent no later than 12:00 noon (New York City time) on and as of the
Determination Date as the minimum rate of interest per annum which, in the
opinion of the Remarketing Agent, would be necessary on and as of such day to
remarket Bonds in a secondary market transaction at a price equal to the
principal amount thereof plus accrued interest thereon; provided that such rate
of interest shall not exceed the lesser of 110% of the Weekly Rate Index on and
as of such date and the Maximum Allowed Rate.
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"Weekly Rate Index" shall mean with respect to the Determination
Date of each Calculation Period during a Weekly Rate Period, the average of
30-day yield evaluations at par, determined by the Indexing Agent, of securities
(whether or not actually issued), the interest on which is not included in gross
income for federal income tax purposes, of no fewer than ten Component Issuers
selected by the Indexing Agent, including issuers of commercial paper, project
notes, bond anticipation notes and tax anticipation notes, computed by the
Indexing Agent on and as of such day. If the Bonds are rated by a Rating Agency
in its highest note or commercial paper rating category or one of its two
highest long-term debt rating categories, each Component Issuer must (a) have
outstanding securities rated by a Rating Agency in its highest note or
commercial paper rating category or (b) not have outstanding notes or commercial
paper rated by a Rating Agency but have outstanding securities rated by a Rating
Agency in one of its two highest long-term debt rating categories. If the Bonds
are rated by a Rating Agency in a rating category that is lower than its highest
note or commercial paper rating category or its two highest long-term debt
rating categories (and the Bonds are not rated in one of such categories by the
other Rating Agency), each Component Issuer must (a) have outstanding securities
rated by a Rating Agency in its note or commercial paper rating category which
is the same or correlative, in the Indexing Agent's judgment, to the note or
commercial paper rating category or the long-term debt rating category of the
Bonds or (b) have outstanding securities rated by a Rating Agency in the same
long-term debt rating category as the Bonds are rated by that Rating Agency and
not have any outstanding notes or commercial paper rated by such Rating Agency.
The Indexing Agent may change the Component Issuers from time to time in its
discretion, subject to the foregoing requirements. In addition, at the request
of the Company and upon delivery to the Trustee of an Opinion of Bond Counsel
that such action will not adversely affect the exclusion of interest on the
Bonds from gross income of the owners thereof for federal income tax purposes,
the Authority, with the consent of the Company, may designate a new method of
setting the Weekly Rate Index in the event any of the above-described methods
are determined by the Authority to be unavailable, impracticable or unrealistic
in the market place.
"Weekly Rate Period" shall mean any period during which the Bonds
bear interest at a Weekly Rate; the first such period shall commence on the date
of initial issuance of the Bonds and shall extend through the day immediately
preceding the earlier of (a) the effective date of a Change in the Interest Rate
Mode or (b) the Stated Maturity.
"Winning Bid Rate" shall mean with respect to Auction Rate Bonds,
Winning Bid Rate as defined in Section 3.08.
SECTION 1.02. Definitions of General Terms. Whenever in this
Indenture any governmental unit including the Authority or any official,
officer, director or department of a governmental unit, is defined or referred
to, such definition or reference shall be deemed to include the governmental
unit or official, officer, board, agency, commission, body or department
succeeding to or in whom or which is vested, the functions, rights, powers,
duties and obligations of such governmental unit, official, officer, director or
department, as the case may be, encompassed by this Indenture.
Unless the context shall clearly indicate otherwise or may otherwise
require, in this Indenture words importing persons include firms, partnerships,
associations, corporations (public and
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private), public bodies and natural persons, and also include executors,
administrators, trustees, receivers or other representatives.
Unless the context shall clearly indicate otherwise or may otherwise
require computation on other than an annual basis, in this Indenture whenever
any interest rate or rate of interest is defined or referred to, such rate shall
be a rate per annum.
Unless the context shall clearly indicate otherwise or may otherwise
require, in this Indenture (not including in such term wherever used in this
paragraph any Supplemental Indenture): (i) references to articles, sections and
other subdivisions, whether by number or letter or otherwise, are to the
respective or corresponding articles, sections and subdivisions of this
Indenture, as such articles, sections or subdivisions may be amended from time
to time; (ii) the terms "herein," "hereunder," "hereby," "hereto," "hereof," and
any similar terms, refer to this Indenture and to this Indenture as a whole and
not to any particular article, section or subdivision hereof; and (iii) the word
"heretofore" means before the time of effectiveness of this Indenture; and the
word "hereafter" means after the time of effectiveness of this Indenture.
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ARTICLE II
AUTHORIZATION OF BONDS
SECTION 2.01. Limitation on Issuance of Bonds. No Bonds may be
issued under the provisions of this Indenture except in accordance with the
provisions of this Article.
SECTION 2.02. Authorization of Bonds. 1. There is hereby created and
established under this Indenture one issue of revenue bonds of the Authority,
limited to $224,600,000 in aggregate principal amount, of "Facilities Revenue
Bonds, Series 2001A (Consolidated Edison Company of New York, Inc. Project)". In
order to distinguish between Bonds which are subject to different interest rate
determination methods and other features and to distinguish the portion of the
Bonds to be remarketed by any particular Remarketing Agent, the Bonds may be
designated and redesignated from time to time by the Authority in such a way as
to identify one or more subseries of the Bonds. Such subseries may be designated
as subseries A-1, subseries A-2, or subseries A-3, as the case may be, or may be
further redesignated as subseries A-1-1, subseries A-2-1, or subseries A-3-1, as
the case may be, and so forth. Each Bond shall bear upon the face thereof such
designation or redesignation, if any. In the event any series of Bonds is
designated as one or more subseries, all references to a series of the Bonds in
this Indenture shall refer to each such subseries unless the context otherwise
requires. The Bonds, upon original issuance, shall be issued in three separate
subseries designated as "2001A-1" in the principal amount of $74,900,000 (the
"Series 2001A-1 Bonds"), "2001A-2" in the principal amount of $74,900,000 (the
"Series 2001A-2 Bonds") and "2001A-3" in the principal amount of $74,800,000
(the "Series 2001A-3 Bonds").
2. The Bonds shall be secured by the Trust Estate. The lien, pledge,
charge and assignment of the Trust Estate created hereby shall be valid and
binding from the time of the effectiveness of this Indenture, as set forth in
Section 17.11, and the Note Payments made under the Note and the Participation
Agreement shall be immediately subject thereto upon receipt by the Trustee.
3. The Bonds are limited obligations of the Authority payable solely
from payments to be made by the Company pursuant to the Note and the
Participation Agreement and the other monies, rights and properties pledged
hereunder including the proceeds of the Support Facility, if any, hereafter
obtained with respect thereto and secured by a pledge from the Authority to the
Trustee of the Participation Agreement and the Note. The Bonds shall not be a
debt of the State of New York, and the State of New York shall not be liable
thereon.
4. The covenants and agreements herein set forth to be performed by
the Authority shall be for the benefit, security and protection of any Holder of
the Bonds.
5. Neither the Trustee nor any Holder of the Bonds shall be required
to see that the monies derived from such Bonds are applied to the purpose or
purposes for which such Bonds are issued.
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6. The Bonds shall be issued under this Indenture for the purpose of
paying a portion of the redemption price of the Prior Bonds.
7. The Bonds bearing a Commercial Paper Rate, a Daily Rate, a Weekly
Rate or a Monthly Rate shall be fully registered Bonds in the denomination of
$100,000 or any integral multiple thereof. The Bonds bearing an Auction Rate
shall be fully registered Bonds in the denomination of $50,000 or any integral
multiple thereof. The Bonds bearing a Semi-annual Rate, a Term Rate or a Fixed
Rate shall be fully registered Bonds in the denomination of $5,000 or any
integral multiple thereof.
8. The Bonds shall be numbered consecutively from "2001 A- [insert
"1, 2 or 3", as appropriate]-1" upwards as issued, or as otherwise provided by
the Registrar and Paying Agent. If the Bonds are redesignated to identify one or
more additional subseries, the Bonds shall be numbered in accordance with their
subseries designation. The Bonds shall mature on the Stated Maturity.
9. The Bonds shall be initially issued in fully registered form,
without coupons, and dated their date of first authentication and delivery.
10. Upon any Change in the Interest Rate Mode to an Auction Rate for
an Auction Rate Period, there shall be Outstanding an aggregate principal amount
of not less than $20,000,000 of Auction Rate Bonds and in the applicable
denominations set forth in Section 2.02.7.
SECTION 2.03. Global Form; Securities Depository. 1. Except as
otherwise provided in this Section 2.03, the Bonds in the form of one separate
global bond for each subseries shall be registered in the name of the Securities
Depository or its nominee and ownership thereof shall be maintained in book
entry form by the Securities Depository for the account of the Agent Members
thereof.
Except as provided in subsections (3) and (4) of this Section 2.03,
the Bonds of any subseries may be transferred, in whole but not in part, only to
the Securities Depository or a nominee of the Securities Depository, or to a
successor Securities Depository selected or approved by the Authority, with the
consent of the Company, the Trustee, the Auction Agent (if any) and the
Remarketing Agent for such subseries, or to a nominee of such successor
Securities Depository. Each global certificate for the Bonds shall bear a legend
substantially to the following effect: "Except as otherwise provided in Section
2.03 of the Indenture, this global bond may be transferred, in whole but not in
part, only to the Securities Depository as defined in the Indenture or a nominee
of the Securities Depository or to a successor Securities Depository or to a
nominee of a successor Securities Depository."
2. The Authority, the Company, the Trustee, the Registrar and Paying
Agent, the Auction Agent (if any) and the Remarketing Agent shall have no
responsibility or obligation with respect to:
(a) the accuracy of the records of the Securities Depository or any
Agent Member with respect to any beneficial ownership interest in the
Bonds;
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(b) the delivery to any Agent Member, beneficial owner of the Bonds
or other person, other than the Securities Depository or its nominee as
registered owner, of any notice with respect to the Bonds;
(c) the payment to any Agent Member, beneficial owner of the Bonds
or other person, other than the Securities Depository or its nominee as
registered owner, of any amount with respect to the principal or premium,
if any, or interest on the Bonds;
(d) its acceptance of any consent given by the Securities Depository
or other action taken by the Securities Depository as registered owner; or
(e) the selection by the Securities Depository or any Agent Members
of any beneficial owners to receive payment in the event of a partial
redemption of Bonds, except for the Trustee's obligations under Section
5.12.
So long as the certificates for the Bonds of any subseries issued under the
Indenture are not issued pursuant to subsection (4) of this Section 2.03, the
Authority, the Company, the Trustee, the Auction Agent (if any), the Remarketing
Agent and the Registrar and Paying Agent may treat the Securities Depository as,
and deem the Securities Depository to be, the absolute owner of such series or
subseries of Bonds for all purposes whatsoever, including without limitation:
(a) the payment of principal and premium, if any, and interest on
such series or subseries of the Bonds;
(b) giving notices of redemption and other matters with respect to
such series or subseries of the Bonds; and
(c) registering transfers with respect to such series or subseries
of the Bonds.
Payment by the Trustee of principal or redemption price, if any, of
and premium, if any, and interest on such Bonds to or upon the order of the
Securities Depository or its nominee during any period when it is the registered
owner of such Bonds shall be valid and effective to satisfy and discharge fully
the Authority's obligation with respect to the amounts so paid.
3. (a) The Authority may discontinue the use of a Securities
Depository for the Bonds at the time of a Change in the Interest Rate
Mode.
(b) Registered ownership of the Bonds may be transferred on the
registration books of the Authority maintained by the Registrar and Paying
Agent and the Bonds may be delivered in physical form to the following:
(i) any successor Securities Depository or its nominee; or (ii) any
person, upon (A) the resignation of the Securities Depository or (B) the
termination by the Authority of the use of the Securities Depository from
its functions as depository as set forth in this
II-3
section, or (C) upon any Change in the Interest Rate Mode to any
Adjustable Rate other than an Auction Rate.
(c) Upon any Change in the Interest Rate Mode to an Auction Rate,
the Registrar and Paying Agent shall register the Auction Rate Bonds in
the name of the Securities Depository or its nominee and on the effective
date of such change provide the Company with a list of the Existing
Holders of the Auction Rate Bonds.
4. If at any time the Securities Depository notifies the Authority
and the Company that it is unwilling or unable to continue as Securities
Depository with respect to the Bonds or if at any time the Securities Depository
shall no longer be registered or in good standing under the Securities Exchange
Act or other applicable statute or regulation and a successor Securities
Depository is not appointed by the Authority with the consent of the Company,
the Trustee, the Auction Agent (if any) and the Remarketing Agent, within 90
days after the Authority and the Company receive notice or become aware of such
condition, as the case may be, this Section shall no longer be applicable and
the Authority shall execute and the Trustee shall authenticate and deliver
certificates representing the Bonds of such series or subseries as provided
below. In addition, the Authority may determine at any time, at the request of
the Remarketing Agent, that the Bonds shall no longer be represented by global
bonds and that the provisions of subsections (1) and (2) above shall no longer
apply to such series or subseries of Bonds. In any such event the Authority
shall execute and the Trustee shall authenticate and deliver certificates
representing the Bonds of such series or subseries as provided below.
Certificates for the Bonds of any series or subseries issued in exchange for a
global bond pursuant to this subsection shall be registered in such names in
authorized denominations as the Securities Depository, pursuant to instructions
from the Agent Members or otherwise, shall instruct the Authority and the
Trustee. The Trustee shall deliver such certificates representing the Bonds of
such series or subseries to the persons in whose names such Bonds are so
registered on the Business Day immediately preceding the first day of an Auction
Period (with respect to Auction Rate Bonds during any Auction Rate Period), or
the effective date of a Change in the Interest Rate Mode (with respect to any
other Change in the Interest Rate Mode), as the case may be.
5. The Authority and the Trustee are hereby authorized to enter into
any arrangements determined necessary or desirable with any Securities
Depository in order to effectuate this Section and both of them shall act in
accordance with this Indenture and any such agreement. Without limiting the
generality of the foregoing, any such arrangements may alter the manner of
effecting delivery of Bonds and the transfer of funds for the payment of Bonds
to the Securities Depository.
SECTION 2.04. Limitations on Transfer. So long as the ownership of
the Auction Rate Bonds is maintained in book-entry form by the Securities
Depository, a beneficial owner or an Existing Holder may sell, transfer or
otherwise dispose of Auction Rate Bonds only pursuant to a Bid or Sell Order
placed in an Auction or to a Broker-Dealer, provided, however, that (a) sale,
transfer or other disposition of Auction Rate Bonds from a customer of a
Broker-Dealer who is listed on the records of that Broker-Dealer as the holder
of such Auction Rate Bonds to that Broker-Dealer or another customer of that
Broker-Dealer shall not be deemed to be a sale, transfer or other disposition
for purposes of this Section 2.04 if such Broker-Dealer remains the Existing
Holder of the Auction Rate Bonds so sold, transferred or
II-4
disposed of immediately after such sale, transfer or disposition and (b) in the
case of all transfers other than pursuant to Auctions such Broker-Dealer to whom
such transfer is made shall advise the Auction Agent of such transfer.
SECTION 2.05. Application of Bond Proceeds. The proceeds of sale of
the Bonds shall be deposited with the Trustee for deposit in the Project Fund to
be paid out in accordance with Section 8.01.
SECTION 2.06. Delivery of the Bonds. The Bonds shall be executed by
the Authority substantially in the form prescribed by Section 16.01 and in the
manner herein set forth and shall be deposited with the Trustee for
authentication, but before the Bonds shall initially be delivered by the
Trustee, there shall be filed with the Trustee the following:
(a) an order executed by an Authorized Officer directing the
authentication and delivery of the Bonds to or upon the order of the
Securities Depository or its nominee, upon payment to the Trustee of the
purchase price therein set forth;
(b) a fully executed counterpart of this Indenture;
(c) a fully executed counterpart of the Participation Agreement;
(d) a fully executed counterpart of the Remarketing Agreement;
(e) the fully executed Initial Support Facility;
(f) a fully executed counterpart of the Bond Purchase Trust
Agreement;
(g) the fully executed Note;
(h) a fully executed counterpart of the Tax Regulatory Agreement;
(i) an opinion of Counsel to the Company, addressed to the
Underwriters (as defined in the Bond Purchase Agreement), with reliance
letter addressed to the Authority, the Trustee and the Initial Support
Facility Issuer, substantially to the effect, and dated as, required by
Section 7(d)(6)(ii) of the Bond Purchase Agreement;
(j) opinion of counsel to the Initial Support Facility Issuer,
addressed to the Initial Support Facility Issuer and the Company, which
opinion authorizes the Underwriters (as defined in the Bond Purchase
Agreement), the Authority, the Trustee, the Registrar and Paying Agent and
the Rating Agencies to rely thereon as though such opinion were addressed
to them, substantially to the effect required by Section 7(d)(6)(iv) of
the Bond Purchase Agreement;
II-5
(k) Opinion of Bond Counsel to the Authority and the Trustee (i) as
to the validity of the Bonds and (ii) that all conditions precedent to the
issuance of the Bonds have been met.
When the documents mentioned in clauses (a) to (k), inclusive, of
this Section shall have been filed with the Trustee, and when the Bonds shall
have been executed and authenticated as required by this Indenture, the Trustee
shall deliver the Bonds to the Securities Depository, but only upon payment to
the Trustee of the purchase price of the Bonds specified in said order.
II-6
ARTICLE III
INTEREST ON BONDS
SECTION 3.01. Interest on Bonds-General. 1. Interest accruing on Bonds
bearing interest at a Commercial Paper Rate, a Daily Rate, a Weekly Rate, a
Monthly Rate or a Semi-annual Rate, shall be computed on the basis of a 365 or
366-day year, as applicable, for the number of days actually elapsed. Interest
accruing on Bonds bearing interest at a Term Rate or a Fixed Rate shall be
computed on the basis of a 360-day year, consisting of twelve (12) thirty (30)
day months. Interest accruing on Bonds bearing interest at an Auction Rate shall
be computed on the basis of a 360-day year for the number of days actually
elapsed. Bonds shall bear interest from the date of issuance thereof payable in
arrears on each Interest Payment Date. The Bonds issued upon transfers or
exchanges of Bonds shall bear interest from the Interest Payment Date next
preceding their date of authentication, unless the date of authentication is an
Interest Payment Date in which case such Bonds shall bear interest from such
date, or unless the date of authentication is after the Record Date next
preceding the next succeeding Interest Payment Date, in which case such Bonds
shall bear interest from such next succeeding Interest Payment Date.
2. The Bonds shall initially bear interest at a Weekly Rate during a
Weekly Rate Period. Each of the Series of Bonds shall bear interest at 2.25% for
the period from and including the Closing Date to and including the following
Tuesday. From and after any Change in the Interest Rate Mode pursuant to Section
4.01 or 4.02, the Bonds with respect to which such change is effective shall
bear interest determined in accordance with the provisions of this Indenture
pertaining to the new Adjustable Rate or the Fixed Rate, as the case may be.
Bonds shall bear interest for each Calculation Period, Auction Period or Fixed
Rate Period, as the case may be, at the rate of interest per annum for such
Calculation Period, Auction Period or Fixed Rate Period established in
accordance with this Indenture. Interest shall be payable on each Interest
Payment Date by check mailed to the registered owner at his or her address as it
appears on the registration books kept by the Registrar and Paying Agent
pursuant to the Indenture at the close of business on the applicable Record
Date; provided, that (i) while the Securities Depository is the registered owner
of the Bonds, all payments of principal of, premium, if any, and interest on the
Bonds shall be paid to the Securities Depository or its nominee by wire
transfer, (ii) prior to and including a Fixed Rate Conversion Date, interest on
the Bonds shall be payable to any registered owner of at least one million
dollars ($1,000,000) in aggregate principal amount of Bonds by wire transfer,
upon written notice received by the Registrar and Paying Agent at least five
days prior to the applicable Record Date, from such registered owner containing
the wire transfer address (which shall be in the continental United States) to
which such registered owner wishes to have such wire directed and (iii) during a
Commercial Paper Rate Period, interest shall be payable on the Bonds only upon
presentation and surrender thereof to the Registrar and Paying Agent upon
purchase thereof pursuant to Section 5.03 and if such presentation and surrender
is made by 2:00 p.m. (New York City time) such payment shall be by wire
transfer. If and to the extent that there shall be a default in the payment of
the interest due on any Interest Payment Date, such interest shall cease to be
payable to the person in whose name each Bond of such series was registered on
such applicable Record Date and shall be payable, when and if paid to the person
in whose name each Bond of such series is registered at the close of business on
the record date fixed therefor by the Trustee, which shall be the fifth Business
Day next preceding the date of the proposed payment. Except as provided above,
payment of the principal of and premium, if any, on all Bonds shall be made upon
the
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presentation and surrender of such Bonds at the principal office of the
Registrar and Paying Agent as the same shall become due and payable. The
principal of and premium, if any, and interest on the Bonds shall be payable in
lawful money of the United States of America.
3. Not less than one Business Day prior to each Computation Date and
two Business Days prior to a Fixed Rate Conversion Date, the Indexing Agent
shall establish and provide to the Remarketing Agent the related rate index as
set forth in the definition of such rate index in Section 1.01; provided that,
for each Calculation Period during a Daily Rate Period, the Indexing Agent shall
establish and provide the related rate index to the Remarketing Agent on each
Determination Date; and provided further that, for each Calculation Period
during a Monthly Rate Period, the Indexing Agent shall establish and provide the
related rate index to the Remarketing Agent not later than each Computation
Date. Notwithstanding the foregoing, in the event that the Remarketing Agent, in
its sole judgment, shall determine on a Determination Date that any Daily Rate
Index, Weekly Rate Index or any Commercial Paper Rate Index so established is
sufficiently non-representative of current market conditions that the Bonds may
not be remarketed at par if such rate is set at a rate not greater than 110% of
the applicable rate index, the Remarketing Agent may establish a new rate index
on a Determination Date in accordance with the procedures and standards
described in the definition of such rate index and for purposes of such rate
index so established, all references to Indexing Agent in this Indenture shall
be deemed to refer to the Remarketing Agent. On any date when any Weekly Rate
Index or any Commercial Paper Rate Index is established by the Remarketing Agent
pursuant to this paragraph, such rate index shall have the respective meaning
set forth in Section 1.01 (except as otherwise provided in the preceding
sentence); provided that for any Commercial Paper Rate Index, the Remarketing
Agent shall select securities (whether or not actually issued) having a term
approximately equal to the applicable Commercial Paper Rate Period or which are
subject to optional or mandatory tender by the owner thereof at the end of a
term approximately equal to (or as close thereto as is practicably available)
the applicable Commercial Paper Rate Period.
4. By 12:00 noon (New York City time) on each Determination Date or
by 3:00 p.m. (New York City time) on each Auction Date, as the case may be, the
Remarketing Agent or the Auction Agent, as the case may be, shall make available
to the Authority, the Trustee, the Registrar and Paying Agent, any issuer of a
Support Facility, the Company, any Broker-Dealer or any registered owner of a
Bond the interest rate or rates determined on such Determination Date or Auction
Date.
5. If for any reason on any Determination Date (A) any rate of
interest for a Calculation Period is not determined by the Remarketing Agent,
(B) no Remarketing Agent is serving as such hereunder or (C) the rate so
determined is held to be invalid or unenforceable by a final judgment of a court
of competent jurisdiction, (i) during any Daily Rate Period, the interest rate
for the next succeeding Calculation Period shall be the last interest rate in
effect, or, if a Daily Rate is not determined by the Remarketing Agent hereunder
for five or more consecutive Business Days on the next and each succeeding
Determination Date, the Daily Rate shall be a rate per annum equal to 80% of the
latest 30-day dealer taxable commercial paper rate published by the Federal
Reserve Bank of New York on or immediately before such Determination Date, (ii)
during any Weekly Rate Period, the interest rate for the next succeeding
Calculation Period shall be the last interest rate in effect, or, if a Weekly
Rate is not determined by the Remarketing Agent for two or more consecutive
Calculation Periods, the Weekly Rate shall be equal to 85% of the latest 30-day
dealer taxable commercial paper rate published by the Federal Reserve
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Bank of New York on or before the day next preceding such Determination Date,
(iii) during any Monthly Rate, Semi-annual Rate or Term Rate Period, the
interest rate per annum for the next succeeding Calculation Period shall be
equal to 85% of the rate listed in the table most recently circulated by the
United States Treasury Department known as "Table [applicable dates shown on the
most recent Table], Maximum Interest Rate Payable on United States Treasury
Certificates of Indebtedness, Notes and Bonds-State and Local Government Series
Subscribed for During Period [applicable dates shown on the most recent Table]"
or any substantially equivalent table circulated by the United States Treasury
Department for the maturity most closely approximating the Calculation Period,
and (iv) during any Commercial Paper Rate Period, the next succeeding
Calculation Period shall be a Calculation Period which shall consist of the
period from and including the prior Interest Payment Date to but excluding the
first Business Day of the following calendar month and the Commercial Paper Rate
shall be equal to 85% of the interest rate applicable to 90-day United States
Treasury Bills determined on the basis of the average per annum discount rate at
which such 90-day Treasury Bills shall have been sold at the most recent
Treasury auction within the 30 days next preceding such Calculation Period, or
if there shall have been no such auction within the 30 days next preceding such
Calculation Period, the Commercial Paper Rate shall be equal to the rate of
interest borne by such Bond during the next preceding Calculation Period for
such Bond. The rate of interest or Calculation Period and related Commercial
Paper Rate shall be established pursuant to this subsection 5 until the
Remarketing Agent again determines the rates of interest or Calculation Periods
and related Commercial Paper Rates in accordance with this Indenture. The
Trustee shall, upon the direction of the Company, select any person otherwise
meeting the qualifications of Section 11.14 to obtain, calculate and prepare any
of the information required by this subsection 5.
6. The determination of any rate of interest by the Remarketing
Agent in accordance with this Indenture or by the Auction Agent in accordance
with the Auction Procedures applicable to Auction Rate Bonds, or the
establishment of Calculation Periods or Auction Periods by the Remarketing Agent
as provided in this Indenture shall be conclusive and binding upon the
Authority, the Company, the Trustee, the Registrar and Paying Agent, the
Remarketing Agent, the Auction Agent, any issuer of a Support Facility, all
Broker-Dealers and the registered or beneficial owners of the Bonds. Failure of
the Remarketing Agent, the Trustee, the Registrar and Paying Agent, the Auction
Agent or the Securities Depository or any Securities Depository participant to
give any of the notices described in this Indenture, or any defect therein,
shall not affect the interest rate to be borne by any of the Bonds nor the
applicable Calculation Period or Auction Period nor in any way change the rights
of the registered owners of the Bonds to tender their Bonds for purchase or to
have them redeemed in accordance with this Indenture.
7. No transfer or exchange of Bonds shall be required to be made by
the Registrar and Paying Agent after a Record Date until the next succeeding
Interest Payment Date.
8. Except as otherwise provided in this subsection 8, the Trustee
shall calculate and notify the Registrar and Paying Agent of the amount of
interest due and payable on each Interest Payment Date or date on which a Bond
is subject to purchase by 10:00 a.m. on the Business Day next preceding such
Interest Payment Date or date set for purchase, as the case may be, unless such
date is a date on which the interest rate is determined, in which case the
amount of interest due and payable shall be calculated by 12:15 p.m. on such
date. In preparing such calculation the Trustee may conclusively rely on
calculations or other services provided by the Auction Agent, the Remarketing
Agent, the Company or any
III-3
person or persons selected by the Trustee in its discretion. During a Commercial
Paper Rate Period, the Remarketing Agent shall notify the Trustee, the Registrar
and Paying Agent and the Company of the amount of interest due and payable on
each Interest Payment Date by 10:00 a.m. on the Business Day next preceding such
Interest Payment Date. During an Auction Rate Period, the Auction Agent shall
notify the Trustee and the Registrar and Paying Agent at least seven days prior
to each Interest Payment Date of the Auction Rate and the aggregate amount of
interest payable on such Interest Payment Date.
9. Anything herein to the contrary notwithstanding, in no event
shall the interest rate borne by any Bond exceed the maximum rate allowable by
applicable law.
SECTION 3.02. Commercial Paper Rate. 1. During any Commercial Paper
Rate Period, at or prior to 12:00 noon (New York City time) on each
Determination Date, the Remarketing Agent shall establish Calculation Periods
and related Commercial Paper Rates. In determining Calculation Periods, the
Remarketing Agent shall take the following factors into account: (i) existing
short-term taxable and tax-exempt market rates and indices of such short-term
rates, (ii) the existing market supply and demand for short-term tax-exempt
securities, (iii) existing yield curves for short-term and long-term tax-exempt
securities or obligations having a credit rating that is comparable to the
Bonds, (iv) general economic conditions, (v) economic and financial factors
present in the securities industry that may affect or that may be relevant to
the Bonds and (vi) any information available to the Remarketing Agent pertaining
to the Company regarding any events or anticipated events which could have a
direct impact on the marketability of or interest rates on the Bonds. The
Remarketing Agent shall select the Calculation Periods and the applicable
Commercial Paper Rates that, together with all other Calculation Periods and
related Commercial Paper Rates, in the sole judgment of the Remarketing Agent,
will result in the lowest overall borrowing cost on the Bonds or are otherwise
in the best financial interests of the Company, as determined in consultation
with the Company. Any Calculation Period established hereunder may not extend
beyond the second Business Day next preceding the expiration date of the Support
Facility or the day prior to the Stated Maturity.
2. The Authority, at the request of the Company, may place such
limitations upon the establishment of Calculation Periods pursuant to subsection
1 hereof as may be set forth in a written direction from the Authority, which
direction must be received by the Trustee and the Remarketing Agent prior to
10:00 a.m. (New York City time) on the day prior to any Determination Date to be
effective on such date, but only if the Trustee receives an Opinion of Bond
Counsel to the effect that such action is authorized by this Indenture, is
permitted under the Act and will not have an adverse effect on the exclusion of
interest on the Bonds from gross income for federal income tax purposes.
SECTION 3.03. Auction Rate Period - Auction Rate: Auction Period -
General. 1. During any Auction Rate Period, the Auction Rate Bonds shall bear
interest at the Auction Rate determined as set forth in this Section 3.03 and
Sections 3.04 through 3.10. The Auction Rate for any initial Auction Period
immediately after any Change in the Interest Rate Mode to an Auction Rate for an
Auction Rate Period, shall be the rate of interest per annum determined and
certified to the Trustee (with a copy to the Authority, the Registrar and Paying
Agent and the Company) by the Remarketing Agent on a date not later than the
effective date of such Change in the Interest Rate Mode as the minimum rate of
interest which, in the opinion of the Remarketing Agent, would be necessary as
of such date to market
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Auction Rate Bonds in a secondary market transaction at a price equal to the
principal amount thereof; provided that such interest rate shall not exceed the
Maximum Allowed Rate. For any other Auction Period, the Auction Rate shall be
the rate of interest per annum that results from implementation of the Auction
Procedures. If on any Auction Date the Auction Agent shall fail to take any
action necessary to determine, or take any action which effectively prevents the
determination of, a rate of interest pursuant to the Auction Procedures, the
Auction Rate for the next succeeding Auction Period shall equal the Maximum
Auction Rate as provided in clause (i) of the definition thereof on and as of
such Auction Date. Determination of the Auction Rate pursuant to the Auction
Procedures shall be suspended upon a Change in the Interest Rate Mode, the
occurrence of a Failure to Deposit or the occurrence of an Event of Default.
Upon the occurrence of a Failure to Deposit on any Auction Date, no Auction will
be held, all Submitted Bids and Submitted Sell Orders shall be rejected, the
existence of Sufficient Clearing Bids shall be of no effect and the Auction Rate
for the next succeeding Auction Period shall equal the Maximum Auction Rate on
and as of such Auction Date. The Auction Rate for any Auction Period or
remaining portion thereof following the occurrence of an Event of Default shall
be equal to the Overdue Rate as determined on and as of the immediately
preceding Auction Date. The Overdue Rate shall be redetermined by the
Remarketing Agent on each Auction Date.
2. Auction Periods may be established pursuant to Section 3.04 at
any time unless a Failure to Deposit or an Event of Default has occurred and has
not been cured or waived. Each Auction Period shall be a Standard Auction Period
unless a different Auction Period is established pursuant to Section 3.04 and
each Auction Period which immediately succeeds a non-Standard Auction Period
shall be a Standard Auction Period unless a different Auction Period is
established pursuant to Section 3.04.
SECTION 3.04. Auction Rate Period - Auction Rate Bonds: Change of
Auction Period by Authority. 1. During an Auction Rate Period the Authority, at
the request of the Company, may change the length of a single Auction Period or
the Standard Auction Period by means of a written notice delivered at least 10
days prior to the Auction Date for such Auction Period to the Trustee, the
Remarketing Agent, the Auction Agent, the Company and the Securities Depository
in substantially the form furnished to the Trustee and the Auction Agent at the
time of a Change in the Interest Rate Mode to an Auction Rate. Any Auction
Period or Standard Auction Period established by the Authority pursuant to this
Section 3.04 may not exceed 365 days in duration. If such Auction Period will be
of less than 28 days, such notice shall be effective only if it is accompanied
by a written statement of the Registrar and Paying Agent, the Trustee, the
Remarketing Agent and the Auction Agent to the effect that they are capable of
performing their duties hereunder and under the Remarketing Agreement and the
Auction Agency Agreement with respect to such Auction Period. If such notice
specifies a change in the length of the Standard Auction Period, such notice
shall be effective only if it is accompanied by the written consent of the
Remarketing Agent to such change. The length of an Auction Period or the
Standard Auction Period may not be changed pursuant to this Section 3.04 unless
Sufficient Clearing Bids existed at both the Auction immediately preceding the
date the notice of such change was given and the Auction immediately preceding
such changed Auction Period.
2. The change in length of an Auction Period or the Standard Auction
Period shall take effect only if (A) the Trustee and the Auction Agent receive,
by 11:00 a.m. (New York City time) on the Business Day immediately preceding the
Auction Date for such Auction Period, a certificate from the
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Authority, on behalf of the Company, by telecopy or similar means in
substantially the form furnished to the Trustee and the Auction Agent at the
time of a Change in the Interest Rate Mode to an Auction Rate authorizing the
change in the Auction Period or the Standard Auction Period, which shall be
specified in such certificate, and confirming that Bond Counsel expects to be
able to give an Opinion of Bond Counsel on the first day of such Auction Period,
(B) the Trustee shall not have delivered to the Auction Agent by 12:00 noon (New
York City time) on the Auction Date for such Auction Period notice that a
Failure to Deposit has occurred, (C) Sufficient Clearing Bids exist at the
Auction on the Auction Date for such Auction Period, and (D) the Trustee and the
Auction Agent receive by 9:30 a.m. (New York City time) on the first day of such
Auction Period, an opinion of Bond Counsel to the effect that the change in the
Auction Period or the Standard Auction Period is authorized by this Indenture,
is permitted under the Act and will not have an adverse effect on the exclusion
of interest on such Bonds from gross income for federal income tax purposes. If
the condition referred to in (A) above is not met, the Auction Rate for the next
succeeding Auction Period shall be determined pursuant to the Auction Procedures
and the next succeeding Auction Period shall be a Standard Auction Period. If
any of the conditions referred to in (B), (C) or (D) above is not met, the
Auction Rate for the next succeeding Auction Period shall equal the Maximum
Auction Rate as determined as of such Auction Date.
3. On the effective date of any change in the length of the Auction
Period or Standard Auction Period, any Auction Rate Bonds which are not the
subject of a specific Order shall be deemed to be subject to a Sell Order.
4. In the event of a Change in the Interest Rate Mode to an Auction
Rate during an Auction Rate Period, the Authority, at the request of the
Company, shall determine the length of the initial Auction Period and may change
the length of a single or the Standard Auction Period by means of a written
notice delivered on or prior to the effective date of such Change in the
Interest Rate Mode to an Auction Rate during an Auction Rate Period to the
Trustee, the Remarketing Agent, the Auction Agent and the Credit Facility
Issuer. Notwithstanding anything to the contrary in paragraphs 1 and 2 of this
Section 3.04, the determination of the initial Auction Period shall take effect
on the effective date of such Change in the Interest Rate Mode to an Auction
Rate during an Auction Rate Period. Notwithstanding anything to the contrary in
paragraphs 1 and 2 of this Section 3.04, the change in the length of a single
Auction Period or the Standard Auction Period shall take effect only if the
Trustee, the Credit Facility Issuer and the Auction Agent receive on the
effective date of such Change in the Interest Rate Mode to an Auction Rate
during an Auction Rate Period, an opinion of Bond Counsel to the effect that the
change in the Auction Period or the Standard Auction Period is authorized by
this Indenture, is permitted under the Act and will not have an adverse effect
on the exclusion of interest on such Bonds from gross income for federal income
tax purposes.
SECTION 3.05. Auction Rate Period - Auction Rate Bonds: Change of
Auction Date by Remarketing Agent. During an Auction Rate Period the Remarketing
Agent, with the written consent of the Company, may change, in order to conform
with then-current market practice with respect to similar securities or to
accommodate economic and financial factors that may affect or be relevant to the
day of the week constituting an Auction Date, the Auction Date for all future
Auction Periods to a different day, so long as the first such Auction Date will
be a Business Day in the calendar week in which the next succeeding Auction Date
is then scheduled to occur. If a change in an Auction Date is undertaken in
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conjunction with a change in an Auction Period and the conditions for the
establishment of such change in Auction Period are not met, the Auction Date may
be, and the next succeeding Auction Period may be adjusted to end on, a Business
Day in the calendar week in which such Auction Date was scheduled to occur and
such Auction Period was scheduled to end to accommodate the change in the
Auction Date. The Remarketing Agent shall deliver a written notice of its
determination to change an Auction Date by means of a written notice delivered
at least 10 days prior to the Auction Date immediately preceding such Auction
Date, or with respect to a Change in the Interest Rate Mode to an Auction Rate
on or prior to the effective date of such Change in the Interest Rate Mode, to
the Authority, the Trustee, the Auction Agent, the Company and the Securities
Depository which shall state (i) the determination of the Remarketing Agent to
change the Auction Date, (ii) the new Auction Date and (iii) the date on which
such Auction Date shall be changed. If as a result of any proposed change in the
Auction Date any Auction Period would be less than 28 days in duration, such
notice shall be effective only if it is accompanied by a written statement of
the Auction Agent, the Registrar and Paying Agent and the Trustee to the effect
that they are capable of performing their duties hereunder and under the Auction
Agency Agreement with respect to any such Auction Period.
SECTION 3.06. Auction Rate Period - Auction Rate Bonds: Orders by
Beneficial Owners and Potential Beneficial Owners. (a) Prior to the Submission
Deadline on each Auction Date during the Auction Rate Period, the following
orders may be submitted:
(i) each Beneficial Owner may submit to the Broker-Dealer by
telephone or otherwise information as to:
(A) the principal amount of Outstanding Auction Rate Bonds, if
any, held by such Beneficial Owner which such Beneficial Owner
desires to continue to hold without regard to the Auction Rate for
the next succeeding Auction Period;
(B) the principal amount of Outstanding Auction Rate Bonds, if
any, held by such Beneficial Owner which such Beneficial Owner
offers to sell if the Auction Rate for the next succeeding Auction
Period shall be less than the rate per annum specified by such
Beneficial Owner and/or
(C) the principal amount of Outstanding Auction Rate Bonds, if
any, held by such Beneficial Owner which such Beneficial Owner
offers to sell without regard to the Auction Rate for the next
succeeding Auction Period;
(ii) one or more Broker-Dealers may contact Potential Beneficial
Owners by telephone or otherwise to determine the principal amount of
Auction Rate Bonds which each such Potential Beneficial Owner offers to
purchase if the Auction Rate for the next succeeding Auction Period shall
not be less than the interest rate per annum specified by such Potential
Beneficial Owner.
For the purposes hereof, the communication to a Broker-Dealer of information
referred to in clause (i)(A), (i)(B) or (i)(C) or clause (ii) above is
hereinafter referred to as an "Order" and collectively as "Orders" and
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each Beneficial Owner and each Potential Beneficial Owner placing an Order is
hereinafter referred to as a "Bidder" collectively as "Bidders"; an Order
containing the information referred to in clause (i)(A) above is hereinafter
referred to as a "Hold Order" and collectively as "Hold Orders"; an Order
containing the information referred to in clause (i)(B) or clause (ii) above is
hereinafter referred to as a "Bid" and collectively as "Bids"; and an Order
containing the information referred to in clause (i)(C) above is hereinafter
referred to as a "Sell Order" and collectively as "Sell Orders". The submission
by a Broker-Dealer of an Order to the Auction Agent shall likewise be referred
to herein as an "Order" and collectively as "Orders" and an Existing Holder or
Potential Holder who places an Order with the Auction Agent or on whose behalf
an Order is placed with the Auction Agent shall likewise be referred to herein
as a "Bidder" and collectively as "Bidders".
Orders may be submitted in principal amounts of $50,000 or any
integral multiple thereof.
(b)(i)Subject to the provisions of Section 3.07, a Bid by a
Beneficial Owner or an Existing Holder shall constitute an irrevocable
offer to sell:
(A) the principal amount of Outstanding Auction Rate Bonds
specified in such Bid if the Auction Rate determined on such Auction
Date shall be less than the interest rate per annum specified
therein; or
(B) such principal amount or a lesser principal amount of
Outstanding Auction Rate Bonds to be determined as set forth in
subsection (a)(iv) of Section 3.09 if the Auction Rate determined on
such Auction Date shall be equal to the interest rate per annum
specified therein; or
(C) such principal amount or a lesser principal amount of
Outstanding Auction Rate Bonds to be determined as set forth in
subsection (b)(iii) of Section 3.09 if such specified rate shall be
higher than the Maximum Auction Rate and Sufficient Clearing Bids do
not exist.
(ii) Subject to the provisions of Section 3.07, a Sell Order by a
Beneficial Owner or an Existing Holder shall constitute an irrevocable
offer to sell:
(A) the principal amount of Outstanding Auction Rate Bonds
specified in such Sell Order; or
(B) such principal amount or a lesser principal amount of
Outstanding Auction Rate Bonds as set forth in subsection (b)(iii)
of Section 3.09 if Sufficient Clearing Bids do not exist.
(iii) Subject to the provisions of Section 3.07, a Bid by a
Potential Beneficial Owner or a Potential Holder shall constitute an
irrevocable offer to purchase:
III-8
(A) the principal amount of Outstanding Auction Rate Bonds
specified in such Bid if the Auction Rate determined on such Auction
Date shall be higher than the rate specified therein; or
(B) such principal amount or a lesser principal amount of
Outstanding Auction Rate Bonds as set forth in subsection (a)(v) of
Section 3.09 if the Auction Rate determined on such Auction Date
shall be equal to such specified rate.
SECTION 3.07. Auction Rate Period - Auction Rate Bonds: Submission
of Orders by Broker-Dealers to Auction Agent. (a) During an Auction Rate Period
each Broker-Dealer shall submit in writing to the Auction Agent prior to the
Submission Deadline on each Auction Date, all Orders obtained by such
Broker-Dealer, designating itself (unless otherwise permitted by the Company) as
(x) an Existing Holder in respect of the principal amount of Auction Rate Bonds
subject to Orders submitted or deemed submitted to it by Beneficial Owners or
(y) a Potential Holder in respect of the principal amount of the Auction Rate
Bonds subject to Orders submitted to it by Potential Beneficial Owners, and
shall specify with respect to each such Order:
(i) the name of the Bidder placing such Order (which shall be the
Broker-Dealer unless otherwise permitted by the Company);
(ii) the aggregate principal amount of Auction Rate Bonds that are
subject to such Order;
(iii) to the extent that such Bidder is an Existing Holder:
(A) the principal amount of Auction Rate Bonds, if any,
subject to any Hold Order placed by such Existing Holder;
(B) the principal amount of Auction Rate Bonds, if any,
subject to any Bid placed by such Existing Holder and the rate
specified in such Bid; and
(C) the principal amount of Auction Rate Bonds, if any,
subject to any Sell Order placed by such Existing Holder; and
(iv) to the extent such Bidder is a Potential Holder, the principal
amount of Auction Rate Bonds subject to any Bid placed by such Potential
Holder and the rate specified in such Bid.
(b) If any rate specified in any Bid contains more than three
figures to the right of the decimal point, the Auction Agent shall round such
rate up to the next highest one thousandth (.001) of 1%.
(c) If an Order or Orders covering all Outstanding Auction Rate
Bonds held by an Existing Holder is not submitted to the Auction Agent prior to
the Submission Deadline, the Auction Agent shall deem a Hold Order to have been
submitted on behalf of such Existing Holder covering the principal amount of
Outstanding Auction Rate Bonds held by such Existing Holder and not subject to
Orders
III-9
submitted to the Auction Agent; provided, however, that if there is a change in
the length of the Auction Period or Standard Auction Period and Orders have not
been submitted to the Auction Agent prior to the Submission Deadline covering
the aggregate principal amount of Auction Rate Bonds that are subject to such
change in the length of the Auction Period or Standard Auction Period, the
Auction Agent shall deem a Sell Order to have been submitted on behalf of such
Existing Holder covering the principal amount of Auction Rate Bonds subject to
such change and not subject to Orders submitted to the Auction Agent.
(d) Neither the Authority, the Company, the Trustee nor the Auction
Agent shall be responsible for any failure of a Broker-Dealer to submit an Order
to the Auction Agent on behalf of any Existing Holder, Beneficial Owner,
Potential Holder or Potential Beneficial Owner.
(e) If any Existing Holder submits through a Broker-Dealer to the
Auction Agent one or more Orders covering in the aggregate more than the
principal amount of Auction Rate Bonds held by such Existing Holder, such Orders
shall be considered valid as follows and in the following order of priority:
(i) all Hold Orders shall be considered valid, but only up to
and including the principal amount of Auction Rate Bonds held by such
Existing Holder, and, if the aggregate principal amount of Auction Rate
Bonds subject to such Hold Orders exceeds the aggregate principal amount
of Outstanding Auction Rate Bonds held by such Existing Holder, the
aggregate principal amount of Auction Rate Bonds subject to each such Hold
Order shall be reduced pro rata to cover the aggregate principal amount of
Outstanding Auction Rate Bonds held by such Existing Holder;
(ii) (A) any Bid shall be considered valid up to and including
the excess of the principal amount of Outstanding Auction Rate Bonds
held by such Existing Holder over the aggregate principal amount of
Auction Rate Bonds subject to any Hold Orders referred to in
paragraph (i) above;
(B) subject to clause (A) above, if more than one Bid
with the same rate is submitted on behalf of such Existing
Holder and the aggregate principal amount of Outstanding
Auction Rate Bonds subject to such Bids is greater than such
excess, such Bids shall be considered valid up to and
including the amount of such excess, and, the principal amount
of Auction Rate Bonds subject to each Bid with the same rate
shall be reduced pro rata to cover the principal amount of
Auction Rate Bonds equal to such excess;
(C) subject to clauses (A) and (B) above, if more than
one Bid with different rates is submitted on behalf of such
Existing Holder, such Bids shall be considered valid in the
ascending order of their respective rates until the highest
rate is reached at which such excess exists and then at such
rate up to and including the amount of such excess; and
(D) in any such event, the aggregate principal amount of
Outstanding Auction Rate Bonds, if any, subject to any portion
of Bids not valid under this
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paragraph (ii) shall be treated as the subject of a Bid by a
Potential Holder at the rate therein specified; and
(iii) all Sell Orders shall be considered valid up to and
including the excess of the principal amount of Outstanding Auction
Rate Bonds held by such Existing Holder over the aggregate principal
amount of Auction Rate Bonds subject to valid Hold Orders referred
to in paragraph (i) of this subsection (e) and valid Bids referred
to in paragraph (ii) of this subsection (e).
(f) If more than one Bid for Auction Rate Bonds is submitted on
behalf of any Potential Holder, each Bid submitted shall be a separate Bid for
Auction Rate Bonds with the rate and principal amount therein specified.
(g) Any Bid or Sell Order submitted by an Existing Holder covering
an aggregate principal amount of Auction Rate Bonds not equal to $50,000 or an
integral multiple thereof shall be rejected and shall be deemed a Hold Order.
Any Bid submitted by a Potential Holder covering an aggregate principal amount
of Auction Rate Bonds not equal to $50,000 or an integral multiple thereof shall
be rejected.
(h) Any Bid submitted by an Existing Holder or a Beneficial Owner
specifying a rate lower than the All Hold Rate, if any, shall be treated as a
Bid specifying the All Hold Rate, if any, and will not be accepted if submitted
by a Potential Beneficial Owner or a Potential Holder.
SECTION 3.08. Auction Rate Period - Auction Rate Bonds:
Determination of Sufficient Clearing Bids, Winning Bid Rate and Auction Rate.
(a) During an Auction Rate Period not earlier than the Submission Deadline on
each Auction Date, the Auction Agent shall assemble all valid Orders submitted
or deemed submitted to it by the Broker-Dealers (each such Order as submitted or
deemed submitted by a Broker-Dealer being hereinafter referred to as a
"Submitted Hold Order," a "Submitted Bid" or a "Submitted Sell Order," as the
case may be, or as a "Submitted Order") and shall determine:
(i) the excess of the total principal amount of Outstanding
Auction Rate Bonds over the aggregate principal amount of
Outstanding Auction Rate Bonds subject to Submitted Hold Orders
(such excess being hereinafter referred to as the "Available Auction
Rate Bonds"); and
(ii) from the Submitted Orders whether the aggregate principal
amount of Outstanding Auction Rate Bonds subject to Submitted Bids
by Potential Holders specifying one or more rates equal to or lower
than the Maximum Auction Rate exceeds or is equal to the sum of:
(A) the aggregate principal amount of Outstanding
Auction Rate Bonds subject to Submitted Bids by Existing
Holders specifying one or more rates higher than the Maximum
Auction Rate; and
III-11
(B) the aggregate principal amount of Outstanding
Auction Rate Bonds subject to Submitted Sell Orders
(in the event of such excess or such equality (other than because
the sum of the principal amounts of Auction Rate Bonds in clauses
(A) and (B) above is zero because all of the Outstanding Auction
Rate Bonds are subject to Submitted Hold Orders), such Submitted
Bids by Potential Holders are hereinafter referred to collectively
as "Sufficient Clearing Bids"); and
(iii) if Sufficient Clearing Bids exist, the lowest rate
specified in the Submitted Bids (the "Winning Bid Rate") which if:
(A)(I) each Submitted Bid from Existing Holders
specifying such lowest rate and (II) all other Submitted Bids
from Existing Holders specifying lower rates were rejected,
thus entitling such Existing Holders to continue to hold the
principal amount of Auction Rate Bonds that are the subject of
such Submitted Bids; and
(B)(I) each Submitted Bid from Potential Holders
specifying such lowest rate and (II) all other Submitted Bids
from Potential Holders specifying lower rates were accepted,
would result in such Existing Holders described in clause (A)
above continuing to hold an aggregate principal amount of
Outstanding Auction Rate Bonds which, when added to the
aggregate principal amount of Outstanding Auction Rate Bonds
to be purchased by such Potential Holders described in clause
(B) above, would equal not less than the Available Auction
Rate Bonds.
(b) Promptly after the Auction Agent has made the determinations
pursuant to subsection (a) of this Section 3.08, the Auction Agent, by
telecopy confirmed in writing, shall advise the Company and the Trustee
and the Broker-Dealers of the Maximum Auction Rate and the components
thereof on the Auction Date and, based on such determinations, the Auction
Rate for the next succeeding Auction Period as follows:
(i) if Sufficient Clearing Bids exist, the Auction Rate for
the next succeeding Auction Period therefor shall be equal to the
Winning Bid Rate so determined;
(ii) if Sufficient Clearing Bids do not exist (other than
because all of the Outstanding Auction Rate Bonds are the subject of
Submitted Hold Orders), the Auction Rate for the next succeeding
Auction Period therefor shall be equal to the Maximum Auction Rate;
and
(iii) if all of the Outstanding Auction Rate Bonds are subject
to Submitted Hold Orders, the Auction Rate for the next succeeding
Auction Period therefor shall be equal to the All Hold Rate.
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SECTION 3.09. Auction Rate Period - Auction Rate Bonds: Acceptance
and Rejection of Submitted Bids and Submitted Sell Orders and Allocation of
Auction Rate Bonds. During an Auction Rate Period Existing Holders shall
continue to hold the principal amounts of Auction Rate Bonds that are subject to
Submitted Hold Orders, and, based on the determinations made pursuant to
subsection (a) of this Section 3.09, the Submitted Bids and Submitted Sell
Orders shall be accepted or rejected, and the Auction Agent shall take such
other actions as are set forth below:
(a) If Sufficient Clearing Bids exist, all Submitted Sell Orders
shall be accepted and, subject to the provisions of paragraphs (e) and (f)
of this Section 3.09, Submitted Bids shall be accepted or rejected as
follows in the following order of priority and all other Submitted Bids
shall be rejected:
(i) Existing Holders' Submitted Bids specifying any rate that
is higher than the Winning Bid Rate shall be accepted, thus
requiring each such Existing Holder to sell the aggregate principal
amount of Auction Rate Bonds subject to such Submitted Bids;
(ii) Existing Holders' Submitted Bids specifying any rate that
is lower than the Winning Bid Rate shall be rejected, thus entitling
each such Existing Holder to continue to hold the aggregate
principal amount of Auction Rate Bonds subject to such Submitted
Bids;
(iii) Potential Holders' Submitted Bids specifying any rate
that is lower than the Winning Bid Rate shall be accepted, thus
requiring each such Potential Holder to purchase the aggregate
principal amount of Auction Rate Bonds subject to such Submitted
Bids;
(iv) each Existing Holder's Submitted Bid specifying a rate
that is equal to the Winning Bid Rate shall be rejected, thus
entitling such Existing Holder to continue to hold the aggregate
principal amount of Auction Rate Bonds subject to such Submitted
Bid, unless the aggregate principal amount of Outstanding Auction
Rate Bonds subject to all such Submitted Bids shall be greater than
the principal amount of Auction Rate Bonds (the "remaining principal
amount") equal to the excess of Available Auction Rate Bonds over
the aggregate principal amount of the Auction Rate Bonds subject to
Submitted Bids described in paragraphs (ii) and (iii) of this
subsection (a), in which event such Submitted Bid of such Existing
Holder shall be rejected in part, and such Existing Holder shall be
entitled to continue to hold the principal amount of Auction Rate
Bonds subject to such Submitted Bid, but only in an amount equal to
the principal amount of Auction Rate Bonds obtained by multiplying
the remaining principal amount by a fraction, the numerator of which
shall be the principal amount of Outstanding Auction Rate Bonds held
by such Existing Holder subject to such Submitted Bid and the
denominator of which shall be the sum of the principal amounts of
Auction Rate Bonds subject to such Submitted Bids made by all such
Existing Holders that specified a rate equal to the Winning Bid
Rate; and
(v) each Potential Holder's Submitted Bid specifying a rate
that is equal to the Winning Bid Rate shall be accepted but only in
an amount equal to the principal amount
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of Auction Rate Bonds obtained by multiplying the excess of the
Outstanding Available Auction Rate Bonds over the aggregate
principal amount of Auction Rate Bonds subject to Submitted Bids
described in paragraphs (ii), (iii) and (iv) of this subsection (a)
by a fraction the numerator of which shall be the aggregate
principal amount of Auction Rate Bonds subject to such Submitted Bid
of such Potential Holder and the denominator of which shall be the
sum of the principal amount of Outstanding Auction Rate Bonds
subject to Submitted Bids made by all such Potential Holders that
specified a rate equal to the Winning Bid Rate.
(b) If Sufficient Clearing Bids do not exist (other than because all
of the Outstanding Auction Rate Bonds are subject to Submitted Hold
Orders), subject to the provisions of subsection (e) of this Section 3.09,
Submitted Orders shall be accepted or rejected as follows in the following
order of priority and all other Submitted Bids shall be rejected:
(i) Existing Holders' Submitted Bids specifying any rate that
is equal to or lower than the Maximum Auction Rate shall be
rejected, thus entitling each such Existing Holder to continue to
hold the aggregate principal amount of Auction Rate Bonds subject to
such Submitted Bids;
(ii) Potential Holders' Submitted Bids specifying any rate
that is equal to or lower than the Maximum Auction Rate shall be
accepted, thus requiring each such Potential Holder to purchase the
aggregate principal amount of Auction Rate Bonds subject to such
Submitted Bids; and
(iii) each Existing Holder's Submitted Bid specifying any rate
that is higher than the Maximum Auction Rate and the Submitted Sell
Order of each Existing Holder shall be accepted, thus entitling each
Existing Holder that submitted any such Submitted Bid or Submitted
Sell Order to sell the Auction Rate Bonds subject to such Submitted
Bid or Submitted Sell Order, but in both cases only in an amount
equal to the aggregate principal amount of Auction Rate Bonds
obtained by multiplying the aggregate principal amount of Auction
Rate Bonds subject to Submitted Bids described in paragraph (ii) of
this subsection (b) by a fraction, the numerator of which shall be
the aggregate principal amount of Outstanding Auction Rate Bonds
held by such Existing Holder subject to such Submitted Bid or
Submitted Sell Order and the denominator of which shall be the
aggregate principal amount of Outstanding Auction Rate Bonds subject
to all such Submitted Bids and Submitted Sell Orders.
(c) If all Outstanding Auction Rate Bonds are subject to Submitted
Hold Orders, all Submitted Bids shall be rejected.
(d) If (i) the Auction Agent shall fail to take any action necessary
to determine, or take any action which effectively prevents the
determination of, an interest rate pursuant to the Auction Procedures or
(ii) the conditions set forth in subsection 2 of Section 3.04 to effect a
change in the
III-14
Auction Period are not met, all Submitted Bids and Submitted Sell Orders
shall be rejected and the existence of Sufficient Clearing Bids shall be
of no effect.
(e) If, as a result of the procedures described in subsection (a) or
(b) of this Section 3.09, any Existing Holder would be entitled or
required to sell, or any Potential Holder would be required to purchase, a
principal amount of Auction Rate Bonds that is not equal to $50,000 or an
integral multiple thereof, the Auction Agent shall, in such manner as, in
its sole discretion, it shall determine, round up or down the principal
amount of such Auction Rate Bonds to be purchased or sold by any Existing
Holder or Potential Holder so that the principal amount purchased or sold
by each Existing Holder or Potential Holder shall be equal to $50,000 or
an integral multiple thereof.
(f) If, as a result of the procedures described in subsection (a) of
this Section 3.09, any Potential Holder would be entitled or required to
purchase less than $50,000 in aggregate principal amount of Auction Rate
Bonds, the Auction Agent shall, in such manner as, in its sole discretion,
it shall determine, allocate Auction Rate Bonds for purchase among
Potential Holders so that only Auction Rate Bonds in principal amounts of
$50,000 or an integral multiple thereof are purchased by any Potential
Holder, even if such allocation results in one or more of such Potential
Holders not purchasing any Auction Rate Bonds.
(g) Based on the results of each Auction, the Auction Agent shall
determine the aggregate principal amounts of Auction Rate Bonds to be
purchased and the aggregate principal amounts of Auction Rate Bonds to be
sold by Potential Holders and Existing Holders and, with respect to each
Potential Holder and Existing Holder, to the extent that such aggregate
principal amount of Auction Rate Bonds to be sold differs from such
aggregate principal amount of Auction Rate Bonds to be purchased,
determine to which other Potential Holder(s) or Existing Holder(s) they
shall deliver, or from which other Potential Holder(s) or Existing
Holder(s) they shall receive, as the case may be, Auction Rate Bonds.
(h) None of the Authority, the Company or any Affiliate thereof may
submit an Order in any Auction except as set forth in the next sentence.
Any Broker-Dealer that is an Affiliate of the Company may submit Orders in
an Auction but only if such Orders are not for its own account, except
that if such affiliated Broker-Dealer holds Auction Rate Bonds for its own
account, it must submit a Sell Order on the next Auction Date with respect
to such Auction Rate Bonds.
SECTION 3.10. Auction Rate Period - Auction Rate Bonds: Adjustment
in Percentage. 1. During an Auction Rate Period the Remarketing Agent may adjust
the percentage used in determining the All Hold Rate and the Applicable
Percentages used in determining the Maximum Auction Rate if any such adjustment
is necessary, in the judgment of the Remarketing Agent, to reflect any Change of
Preference Law such that the All Hold Rate and Maximum Auction Rate shall have
substantially equal market values before and after such Change of Preference
Law. In making any such adjustment, the Remarketing Agent shall take the
following factors, as in existence both before and after such Change of
Preference Law, into account: (i) short-term taxable and tax-exempt market rates
and indices of such short-term rates, (ii) the market supply and demand for
short-term tax-exempt securities, (iii) yield curves
III-15
for short-term and long-term tax-exempt securities or obligations having a
credit rating that is comparable to the Bonds, (iv) general economic conditions
and (v) economic and financial factors present in the securities industry that
may affect or that may be relevant to the Bonds.
2. The Remarketing Agent shall communicate its determination to
adjust the percentage used in determining the All Hold Rate and the Applicable
Percentages used in determining the Maximum Auction Rate pursuant to subsection
1 hereof by means of a written notice delivered at least five days prior to the
Auction Date on which the Remarketing Agent desires to effect the change to the
Authority, the Trustee, the Auction Agent and the Company in substantially the
form attached to the Auction Agency Agreement. Such notice is required to state
the determination of the Remarketing Agent to change such percentage and the
date such adjustment is proposed to take effect (which date shall be an Auction
Date). Upon receiving approval of the Company (which approval shall not be
unreasonably withheld), by means of a written notice delivered at least 10 days
prior to the Auction Date on which the Remarketing Agent desires to effect the
change to the Trustee, the Authority and the Auction Agent in substantially the
form attached hereto as, or containing substantially the information contained
in, Exhibit E. Such notice is required to state the determination of the
Remarketing Agent to change such percentages and the date such adjustment is
proposed to take effect (which date shall be an Auction Date). Such notice shall
be effective only if it is accompanied by the form of opinion that Bond Counsel
expects to be able to give on such Auction Date to the effect that such
adjustment is authorized by this Indenture, is permitted under the Act and will
not have an adverse effect on the exclusion of interest on the Auction Rate
Bonds from gross income for federal income tax purposes. The Auction Agent is
required to mail notice thereof to the Existing Holders within two Business Days
of receipt thereof.
3. An adjustment in the percentage used in determining the All Hold
Rate and the Applicable Percentages used in determining the Maximum Auction Rate
shall take effect on an Auction Date only if (A) the Trustee and the Auction
Agent receive, by 11:00 a.m. (New York City time) on the Business Day
immediately preceding such Auction Date, a certificate from the Remarketing
Agent by telecopy or similar means, (i) authorizing the adjustment of the
percentage used in determining the All Hold Rate and the Applicable Percentages
used in determining the Maximum Auction Rate which shall be specified in such
authorization, and (ii) confirming that Bond Counsel expects to be able to give
an opinion on such Auction Date to the effect that the adjustment in the
percentage used in determining the All Hold Rate and the Applicable Percentages
used in determining the Maximum Auction Rate is authorized by this Indenture, is
permitted under the Act and will not have an adverse effect on the exclusion of
interest on the Auction Rate Bonds from gross income for federal income tax
purposes, and (B) the Trustee and the Auction Agent receive by 9:30 a.m. (New
York City time) on such Auction Date, an opinion of Bond Counsel to the effect
that the adjustment in the percentage used in determining the All Hold Rate and
the Applicable Percentages used in determining the Maximum Auction Rate is
authorized by this Indenture, is permitted under the Act and will not have an
adverse effect on the exclusion of interest on the Auction Rate Bonds from gross
income for federal income tax purposes. If the condition referred to in (A)
above is not met, the existing percentage used in determining the All Hold Rate
and the Applicable Percentages used in determining the Maximum Auction Rate
shall remain in effect and the Auction Rate for the next succeeding Auction
Period shall be determined pursuant to the Auction Procedures. If the condition
referred to in (B) above is not met, the existing percentage used in determining
the All Hold Rate and the Applicable Percentages used in determining the Maximum
Auction Rate shall remain in effect and the
III-16
Auction Rate for the next succeeding Auction Period shall equal the Maximum
Auction Rate as determined on such Auction Date.
III-17
ARTICLE IV
CHANGES IN THE INTEREST RATE MODE
SECTION 4.01. Optional Conversion to an Adjustable Rate by
Authority. 1. At the times specified below, the Bonds, in whole or in part,
shall cease to bear interest at the Adjustable Rate or the Fixed Rate then borne
by the Bonds and shall bear interest at such Adjustable Rate as shall be
specified by the Authority, at the request of the Company, in a written notice
delivered at least 30 days prior to the proposed effective date of the Change in
the Interest Rate Mode to the Trustee, the Remarketing Agent, the Registrar and
Paying Agent and the Company (and to the Auction Agent and the Securities
Depository if such Change in the Interest Rate Mode is to or from an Auction
Rate) in substantially the form attached hereto as, or containing substantially
the information contained in Exhibit A hereto. A Change in the Interest Rate
Mode may only be effected on a day on which the affected Bonds may be redeemed
at the option of the Authority. A notice of Change in the Interest Rate Mode
shall be effective only if it is accompanied by the form of opinion that Bond
Counsel expects to be able to give on the proposed effective date of such Change
in the Interest Rate Mode to the effect that such Change in the Interest Rate
Mode is authorized by this Indenture, is permitted under the Act and will not
have an adverse effect on the exclusion of interest on such Bonds from gross
income for federal income tax purposes.
In the case of any Change in the Interest Rate Mode to a Term Rate,
the notice required by this section shall specify the length of the Calculation
Period and, unless otherwise specified, such Calculation Period shall thereafter
apply to the Bonds until a Change in the Interest Rate Mode effected pursuant to
Section 4.01 or Section 4.02. Any change in the Calculation Period during a Term
Rate Period shall be deemed an optional conversion pursuant to this Section 4.01
and may not be made unless all the requirements of a conversion pursuant to this
Section 4.01 are met.
2. The Trustee shall mail, or cause the Registrar and Paying Agent
to mail, the notice received pursuant to subsection 1 of this Section 4.01 on or
before the third Business Day after receipt thereof to the Bondholders.
3. A Change in the Interest Rate Mode to an Adjustable Rate shall be
effective pursuant to Subsection 1 of this Section 4.01 only if
(A) with respect to any Change in the Interest Rate Mode from an
Auction Rate or from a Fixed Rate to an Adjustable Rate, the Trustee and the
Auction Agent (if any) shall receive:
(i) a certificate of an Authorized Company Representative by
no later than the tenth day prior to the effective date of such Change in
the Interest Rate Mode stating that a written agreement between the
Company and the Remarketing Agent to remarket the Bonds on such effective
date at a price of 100% of the principal amount thereof has been entered
into, which agreement (i) may be subject to such reasonable terms and
conditions agreed to by the Remarketing Agent which in the judgment of the
Remarketing Agent reflect the current market standards regarding
investment banking risk and (ii) must include a provision requiring
payment by the Remarketing Agent in same-day funds for any Bond tendered
or deemed tendered; and that
IV-1
a Liquidity Facility is in effect or has been obtained by the Company with
respect to the Bonds and shall be in effect prior to such Change in the
Interest Rate Mode and thereafter for a period of at least 364 days;
(ii) by 11:00 a.m. (New York City time) on the second Business
Day prior to the effective date of such Change in the Interest Rate Mode
by telecopy or other similar means, a certificate in substantially the
form attached hereto as, or containing substantially the information
contained in, Exhibit B hereto, from the Authority on behalf of the
Company (y) authorizing the establishment of the new Adjustable Rate and
(z) confirming that Bond Counsel has advised the Authority that it expects
to be able to give an opinion on the effective date of such Change in the
Interest Rate Mode to the effect that such Change in the Interest Rate
Mode is authorized by this Indenture, is permitted under the Act and will
not have an adverse effect on the exclusion of interest on the affected
Bonds from gross income for federal income tax purposes; and
(B) with respect to any Change in the Interest Rate Mode, the
Trustee (and the Auction Agent in the case of any Change in the Interest Rate
Mode to an Auction Rate), shall receive by 4:00 p.m., New York City time, on the
effective date of such Change in the Interest Rate Mode, a certificate in
substantially the form attached hereto as, or containing substantially the
information contained in, Exhibit C hereto, from an Authorized Company
Representative that all of the Bonds tendered or deemed tendered have been
purchased at a price equal to the principal amount thereof plus premium, if any,
plus any accrued and unpaid interest with funds provided from the remarketing of
such Bonds in accordance with the Remarketing Agreement, from the proceeds of a
Support Facility, or from funds deposited with the Trustee or the Registrar and
Paying Agent;
(C) with respect to any Change in the Interest Rate Mode, the
Trustee (and the Auction Agent in the case of any Change in the Interest Rate
Mode to or from an Auction Rate) shall receive, by 9:30 a.m. (New York City
time) on the effective date of such Change in the Interest Rate Mode, an Opinion
of Bond Counsel to the effect that such Change in the Interest Rate Mode is
authorized by this Indenture, is permitted under the Act and will not have an
adverse effect on the exclusion of interest on such Bonds from gross income for
federal income tax purposes; and
(D) with respect to any Change in the Interest Rate Mode to an
Adjustable Rate (other than to an Auction Rate), the Trustee shall receive a
Liquidity Facility meeting the requirements of this Indenture and the
Participation Agreement not less than one Business Day prior to the effective
date of such Change in the Interest Rate Mode which is, by its terms, in effect
prior to such effective date.
If any of the conditions referred to in (A)(i) or (ii) above is not
met with respect to any Change in the Interest Rate Mode from an Auction Rate,
the Auction Rate for the next succeeding Auction Period shall be determined
pursuant to the Auction Procedures applicable to the Auction Rate Bonds. If the
condition referred to in (B) above is not met with respect to any Change in the
Interest Rate Mode from an Auction Rate, the Auction Rate for the next
succeeding Auction Period shall be equal to the Maximum Auction Rate as
determined on such Auction Date. If any of the conditions referred to in (C) or
(D) above is not met with respect to any Change in the Interest Rate Mode from
an Auction Rate, the Auction Rate for the next succeeding Auction Period shall
equal the Maximum Auction Rate as determined on such
IV-2
Auction Date. If any of the conditions referred to in (B), (C) or (D) above is
not met with respect to any other Change in the Interest Rate Mode, the Bonds
shall continue to bear interest at the Current Adjustable Rate or the current
Fixed Rate, as the case may be, and be subject to the provisions of this
Indenture applicable thereto while the Bonds bear interest at such Current
Adjustable Rate or the current Fixed Rate, as the case may be; provided,
however, that notwithstanding the failure to meet such conditions, the Bonds
shall remain subject to mandatory tender for purchase in accordance with Section
5.04. If any of the foregoing conditions for a Change in the Interest Rate Mode
other than with respect to a Change in the Interest Rate Mode from an Auction
Rate is not met, the Trustee shall mail, or cause the Registrar and Paying Agent
to mail to the Authority, the Company and the Holders notice thereof in
substantially the form attached hereto as, or containing substantially the
information contained in, Exhibit D hereto within 3 Business Days after the
failure to meet any of such conditions.
SECTION 4.02. Optional Conversion to a Fixed Rate. 1. The Authority
reserves the right, at the request of the Company, to fix the rate of interest
per annum which Bonds will bear, in whole or in part, for the balance of the
term thereof or until the effective date of a Change in the Interest Rate Mode;
provided however, that the Authority shall not exercise such right and the
Company shall not request the Authority to exercise such right except on a day
on which the affected Bonds may be redeemed at the option of the Authority. In
the event the Authority, at the request of the Company, as herein provided,
exercises its Option to Convert, the Bonds so converted shall cease to bear
interest at the Adjustable Rate then borne by the Bonds and shall bear interest
at a Fixed Rate until maturity or until the effective date of a Change in the
Interest Rate Mode, subject to the terms and conditions hereof (the date on
which a Fixed Rate shall take effect being herein called a "Fixed Rate
Conversion Date"). The Option to Convert may be exercised at any time through a
written notice given by the Authority, at the direction of the Company, not less
than 30 nor more than 45 days prior to the proposed Fixed Rate Conversion Date
to the Trustee, the Registrar and Paying Agent, the Remarketing Agent (and the
Auction Agent and the Securities Depository in the case of any change to a Fixed
Rate from an Auction Rate), in substantially the form attached hereto as, or
containing substantially the information contained in, Exhibit A hereto. A
notice of conversion to a Fixed Rate shall be effective only if it is
accompanied by the form of opinion that Bond Counsel expects to give on a Fixed
Rate Conversion Date to the effect that the establishment of a Fixed Rate is
authorized by this Indenture, is permitted under the Act and will not have an
adverse effect on the exclusion of interest on such Bonds from gross income for
federal income tax purposes.
2. The Trustee shall mail, or cause the Registrar and Paying Agent
to mail, the notice received pursuant to subsection 1 of this Section 4.02 on or
before the third Business Day after receipt thereof to the Holders.
3. A Fixed Rate shall take effect only if
(A) with respect to a change to a Fixed Rate from an Auction Rate, the
Trustee and the Auction Agent shall receive:
(i) a certificate of an Authorized Company Representative by no
later than the tenth day prior to a Fixed Rate Conversion Date stating
that a written agreement has been entered into by the Company and the
Remarketing Agent to remarket the Bonds affected on a Fixed Rate
IV-3
Conversion Date at a price of not less than 100% of the principal amount
thereof, which written agreement (i) may be subject to reasonable terms
and conditions imposed by the Remarketing Agent which in the judgment of
the Remarketing Agent reflect current market standards regarding
investment banking risk and (ii) must include a provision requiring
payment by the Remarketing Agent in same-day funds for any Auction Rate
Bonds tendered or deemed tendered; and
(ii) by 11:00 a.m. (New York City time) on the second Business Day
prior to a Fixed Rate Conversion Date, by telecopy or other similar means,
a certificate in substantially the form attached hereto as, or containing
substantially the information contained in, Exhibit B hereto, from the
Authority (y) authorizing the establishment of a Fixed Rate and (z)
confirming that Bond Counsel expects to be able to give an opinion on a
Fixed Rate Conversion Date to the effect that the change to a Fixed Rate
is authorized by this Indenture, is permitted under the Act and will not
have an adverse effect on the exclusion of interest on the Bonds from
gross income for federal income tax purposes; and
(B) with respect to any change to a Fixed Rate the Trustee (and the
Auction Agent in the case of any change to a Fixed Rate from an Auction Rate)
receives on a Fixed Rate Conversion Date:
(i) by 9:30 a.m. (New York City time) an Opinion of Bond Counsel to
the effect that the conversion to a Fixed Rate is authorized by this
Indenture, is permitted under the Act and will not have an adverse effect
on the exclusion of interest on such Bonds from gross income for federal
income tax purposes; and
(ii) by 4:00 p.m. (New York City time) a certificate in
substantially the form attached hereto as, or containing substantially the
information contained in, Exhibit C hereto, from an Authorized Company
Representative that all of the Bonds tendered or deemed tendered have been
purchased at a price equal to the principal amount thereof plus premium,
if any, plus any accrued and unpaid interest with funds provided from the
remarketing of such Bonds in accordance with the Remarketing Agreement,
from the proceeds of a Support Facility, or from funds deposited with the
Trustee or the Registrar and Paying Agent;
If any of the conditions referred to in (A) above are not met with
respect to any change to a Fixed Rate from an Auction Rate, the Auction Rate for
the next succeeding Auction Period shall be determined pursuant to the Auction
Procedures applicable to the Auction Rate Bonds. If the condition referred to in
(B) above is not met with respect to any change to a Fixed Rate from an Auction
Rate, the Auction Rate for the next succeeding Auction Period shall be equal to
the Maximum Auction Rate as determined as of such Auction Date. If any of the
conditions referred to in (B) above are not met with respect to any change from
any other Adjustable Rate to a Fixed Rate, the Bonds shall continue to bear
interest at the Adjustable Rate then borne by the Bonds and be subject to the
provisions of this Indenture applicable thereto while the Bonds bear interest at
such Adjustable Rate. If any of the foregoing conditions to the establishment of
a Fixed Rate (other than with respect to any attempted change from an Auction
Rate to a Fixed Rate) are not met, the Trustee shall mail, or cause the
Registrar and Paying Agent to mail to the Authority, the Holders and the
Company, notice thereof in substantially the form attached hereto as, or
IV-4
containing substantially the information contained in, Exhibit D hereto within 3
Business Days after the failure to meet any of said conditions.
SECTION 4.03. Conversion Generally. 1. In the event of a Change in
the Interest Rate Mode on less than all the Bonds of a series or subseries to or
from an Auction Rate, the minimum aggregate principal amount of Bonds that
continue to bear, or are adjusted to bear interest at an Auction Rate for an
Auction Rate Period, shall not be less than $20,000,000 for such Auction Rate
Bonds.
2. Upon any Change in the Interest Rate Mode to an Auction Rate, the
Authority and the Trustee, shall take all steps necessary to comply with any
agreement entered into with a Securities Depository or its nominee pursuant to
Section 2.03(5) with respect to such Change in the Interest Rate Mode,
including, without limitation, the purchase and designation of sufficient CUSIP
numbers to comply with the requirements of such Securities Depository following
any such Change in the Interest Rate Mode.
3. If the interest rate on less than all Bonds is to be converted to
a new Adjustable Rate pursuant to Section 4.01 or to a Fixed Rate pursuant to
Section 4.02, the particular Bonds to be converted shall be chosen by the
Trustee, or the Trustee shall direct the Registrar and Paying Agent to so
choose, in such manner as the Trustee or Registrar and Paying Agent in its
discretion may deem proper; provided, however, that the portion of any Bond to
be converted shall be in the principal amount of $100,000 or any integral
multiple of such amount during a Commercial Paper Rate Period, a Daily Rate
Period, a Weekly Rate Period or a Monthly Rate Period, $50,000 or any integral
multiple thereof during an Auction Rate Period, or $5,000 or any integral
multiple thereof at any other time and that, in selecting Bonds for conversion,
the Trustee or Registrar and Paying Agent shall treat each Bond as representing
that number of Bonds which is obtained by dividing the principal amount of such
registered Bond in excess of $100,000 by $100,000 during a Commercial Paper Rate
Period, a Daily Rate Period, a Weekly Rate Period or a Monthly Rate Period,
$50,000 during an Auction Rate Period, and $5,000 at any other time (such
amounts being hereinafter referred to as the "applicable units of principal
amount"). If it is determined that one or more, but not all of the $100,000,
$50,000 or $5,000 units of principal amount represented by any such Bond is to
be converted, then upon notice of intention to convert such $100,000, $50,000 or
$5,000 unit or units pursuant to Sections 4.01 or 4.02, as the case may be, the
Holders of such Bonds shall forthwith surrender such Bonds to the Registrar and
Paying Agent for (1) payment of the purchase price (including the premium, if
any, and accrued and unpaid interest to the date fixed for conversion) of the
$100,000, $50,000 or $5,000 unit or units of principal amount called for
conversion and (2) exchange for a new Bond or Bonds in the aggregate principal
amount of the balance of the principal of such Bonds not subject to conversion.
If the Holders of any such Bond of a denomination greater than $100,000, $50,000
or $5,000 shall fail to present such Bond to the Registrar and Paying Agent, for
payment and exchange as aforesaid, such Bond shall, nevertheless, become due and
payable on the date fixed for conversion to the extent of the $100,000, $50,000
or $5,000 unit or units of principal amount subject to such conversion (and to
that extent only).
4. Notwithstanding anything in this Article IV to the contrary, the
Authority may not effect a Change in the Interest Rate Mode pursuant to Section
4.01 and the Authority may not exercise its option to convert to a Fixed Rate
pursuant to Section 4.02 if such action would require the payment of a premium
upon purchase of Bonds pursuant to Section 5.04 unless there shall have been
deposited the full
IV-5
amount of such premium in trust with the Trustee prior to any notification of a
change pursuant to Section 4.01 or 4.02.
IV-6
ARTICLE V
REDEMPTION AND PURCHASE OF BONDS
SECTION 5.01. Optional Redemption. The Bonds shall be subject to
redemption, in whole or in part, at the option of the Authority upon the request
of the Company, from related payments made by the Company pursuant to Section
6.02 of the Participation Agreement and any other monies held by the Trustee and
available to be applied to the redemption of Bonds as provided in this Section
5.01 and Section 9.03 hereof:
(a) During any Commercial Paper Rate Period, such Bonds shall be
subject to redemption on each Interest Payment Date, as a whole or in part, at
the principal amount thereof, at a redemption price equal to 100% of the
principal amount.
(b) During any Auction Rate Period, Auction Rate Bonds shall be
subject to redemption on the Business Day immediately preceding each Auction
Date, as a whole or in part, at a redemption price equal to 100% of the
principal amount thereof plus accrued and unpaid interest to the date fixed for
redemption.
(c) During any Daily Rate Period, such Bonds shall be subject to
redemption on any Business Day, as a whole or in part, at the principal amount
thereof, plus accrued and unpaid interest to the date fixed for redemption, if
any.
(d) During any Weekly Rate Period, such Bonds shall be subject to
redemption on any Business Day, as a whole or in part, at the principal amount
thereof, plus accrued and unpaid interest to the date fixed for redemption, if
any.
(e) During any Monthly Rate Period, such Bonds shall be subject to
redemption on each Interest Payment Date, as a whole or in part, at the
principal amount thereof.
(f) During any Semi-annual Rate Period, such Bonds shall be subject
to redemption on each Interest Payment Date, as a whole or in part, at the
principal amount thereof.
(g) During any Term Rate or Fixed Rate Period, such Bonds shall be
subject to redemption in whole at any time on any Business Day or in part on any
Interest Payment Date as follows: after the No-Call Period shown below, which
shall begin on the first day of the Calculation Period applicable to such Bonds
or on a Fixed Rate Conversion Date, as the case may be, at a redemption price
equal, initially, to the principal amount thereof, plus a premium equal to the
percentage of the principal amount to be redeemed shown in the Initial Premium
column, plus accrued and unpaid interest if paid on a Business Day other than an
Interest Payment Date. The premium percentage shall decline by the percentage
shown in the Reduction in Premium column on each anniversary of the date on
which such Bonds are first redeemable, if the Calculation Period or period
remaining to the Stated Maturity after a Fixed Rate Conversion Date is equal to
or greater than five years, and on each Interest Payment Date if the
V-1
Calculation Period or period remaining to the Stated Maturity after a Fixed Rate
Conversion Date is less than five years, until the Bonds shall be redeemable
without premium.
Calculation Period or Period to Maturity
- -----------------------------------------
Equal to or But Less No-Call Initial Reduction
Greater Than Than Period Premium in Premium
- ------------ ---- ------ ------- ----------
18 years N/A 10 Years 2 % 1/2%
12 years 18 Years 8 Years 1 1/2 1/2
7 Years 12 Years 6 Years 1 1/2
5 Years 7 Years 4 Years 1/2 1/2
4 Years 5 Years 3 Years 1/2 1/2
3 Years 4 Years 2 Years 1/2 1/2
0 Years 3 Years Not callable
If upon establishment of a Term Rate Period or a Fixed Rate Period, as the case
may be, the Remarketing Agent certifies to the Trustee, Bond Counsel and the
Authority in writing that the foregoing schedule is not consistent with
then-prevailing market conditions, the Authority at the request of the Company
may revise the foregoing Initial Premium, Reductions in Premium and No-Call
Periods without the approval of the Holders to reflect then-prevailing market
conditions, upon receipt of an opinion of Bond Counsel to the effect that any
revisions pursuant to this paragraph, either by itself or in conjunction with
the establishment of a Calculation Period or a Fixed Rate, as the case may be,
are made in accordance with this Indenture, is permitted under the Act and will
not adversely affect the exclusion of interest on the Bonds from gross income
for federal income tax purposes.
SECTION 5.02. [Reserved]
SECTION 5.03. Tender for and Purchase upon Election of Holder. 1.
During any Daily Rate Period or Weekly Rate Period, any Bond or portion thereof
in a principal amount equal to an authorized denomination (so long as the
principal amount not purchased is an authorized denomination) shall be purchased
on the demand of the Holder thereof on any Business Day at a price equal to the
principal amount thereof plus accrued and unpaid interest, if any, to the date
of purchase, upon delivery to the Registrar and Paying Agent and the Remarketing
Agent at their respective principal offices, by the close of business on any
Business Day of a Notice of Election to Tender in substantially the form
attached hereto as, or containing substantially the information contained in,
Exhibit E hereto; provided, however, that the substance of such Notice of
Election to Tender must also be given telephonically to the Remarketing Agent
prior to or simultaneously with delivery of such written Notice of Election to
Tender to the Remarketing Agent. The date on which such Bond shall be purchased
shall, at the request of the Holder thereof (i) if the Bond then bears interest
at a Daily Rate, be the date of delivery of such Notice of Election to Tender if
such Notice of Election to Tender is delivered to the Registrar and Paying Agent
and the Remarketing Agent by 10:00 a.m.(New York City time) on such date or may
be any Business Day thereafter, and (ii) if the Bond then bears interest at a
Weekly Rate, shall be a Business Day not prior to the 7th day next succeeding
the date of the delivery of such Notice of Election to Tender to the Registrar
and Paying Agent and the Remarketing Agent.
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2. During any Monthly Rate Period or Semi-annual Rate Period, any
Bond or portion thereof in a principal amount equal to an authorized
denomination (so long as the principal amount not purchased is an authorized
denomination) shall be purchased on the demand of the Holder thereof on the
first Business Day following each Calculation Period at a price equal to the
principal amount thereof, upon delivery to the Registrar and Paying Agent and
the Remarketing Agent, at their respective principal offices of a Notice of
Election to Tender in substantially the form attached hereto as or containing
substantially the information contained in Exhibit E on or prior to a Business
Day which is not less than 10 days, in the case of Bonds bearing interest at a
Semi-annual Rate, or 7 days, in the case of Bonds bearing interest at a Monthly
Rate, prior to the proposed date of purchase; provided, however, that the
substance of such Notice of Election to Tender must also be given telephonically
to the Remarketing Agent prior to or simultaneously with delivery of such
written Notice of Election to Tender to the Remarketing Agent.
3. Immediately upon receipt of a Notice of Election to Tender
delivered pursuant to the provisions of this Section 5.03, the Registrar and
Paying Agent shall notify, or cause to be notified, the Trustee, the Company,
the Authority and the Remarketing Agent, by telephone, promptly confirmed in
writing, of such receipt, specifying the contents thereof.
4. Any Notice of Election to Tender shall be irrevocable. If a
Holder fails to deliver the Bonds referred to in such notice to the Registrar
and Paying Agent, such Bonds shall nevertheless be deemed to have been purchased
on the date established for the purchase thereof, no interest shall accrue on
such Bonds from and after the date of purchase and such Holder shall have no
rights hereunder thereafter as the owner of such Bonds except the right to
receive the purchase price of such Bonds.
5. A Holder may not tender a Bond to the Registrar and Paying Agent
pursuant to this Section while such Bond bears interest at an Auction Rate,
Commercial Paper Rate, Term Rate or Fixed Rate.
SECTION 5.04. Mandatory Tender for Purchase upon Change in the
Interest Rate Mode or on Business Day Following Certain Calculation Periods. 1.
Upon a Change in the Interest Rate Mode, the Bonds shall be subject to mandatory
tender for purchase in accordance with the terms hereof, on the effective date
of such Change in the Interest Rate Mode at the Purchase Price.
2. During any Term Rate Period or Commercial Paper Rate Period, the
Bonds shall be subject to mandatory tender for purchase in accordance with the
terms hereof on the Business Day immediately following each Calculation Period,
each at a price equal to the Purchase Price.
3. Notice of mandatory tender for purchase upon a Change in the
Interest Rate Mode shall be in substantially the form attached hereto as, or
contain substantially the information contained in, Exhibit A hereto.
4. Any such notice of mandatory tender for purchase required by this
Section 5.04 shall be given by the Trustee, in the name of the Authority, or the
Trustee shall cause the Registrar and Paying Agent to give such notice (with
copies thereof to be given to the Remarketing Agent, the Registrar and Paying
Agent, the Company, and in the case of Auction Rate Bonds, the Auction Agent and
the
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Authority) by first-class mail to the Holders of the Bonds subject to purchase
at their addresses shown on the books of registry.
5. Bonds held by or for the account of the Company or the issuer of
a Support Facility are not subject to mandatory tender for purchase pursuant to
this Section 5.04.
SECTION 5.05. Extraordinary Optional Redemption. During any Term
Rate Period or Fixed Rate Period, the Bonds are also subject to redemption prior
to maturity in whole at any time at the option of the Authority, exercised at
the direction of the Company, upon notice given as provided in the Indenture, at
a redemption price equal to the principal amount thereof, together with unpaid
interest accrued thereon to the date fixed for redemption, in any of the
following events:
(i) All or substantially all of the Project shall have been
damaged or destroyed or title to, or the temporary use of, all or a
substantial portion of the Project shall have been taken under the
exercise of the power of eminent domain by any governmental
authority, or person, firm or corporation acting under governmental
authority, as in each case renders the Project unsatisfactory to the
Company for its intended use;
(ii) Unreasonable burdens or excessive liabilities shall have
been imposed upon the Authority or the Company with respect to all
or substantially all of the Project, including without limitation
the imposition of federal, state or other ad valorem property,
income or other taxes other than ad valorem taxes in effect on the
date of original issuance of the Bonds levied upon privately owned
property used for the same general purpose as the Project; or
(iii) Any court or regulatory or administrative body shall
enter or adopt, or fail to enter or adopt, a judgment, order,
approval, decree, rule or regulation, as a result of which the
Company elects to cease operation of all or substantially all of the
Project.
SECTION 5.06. Special Tax Redemption Provisions. 1. During any
Semi-annual Rate Period, Term Rate Period or Fixed Rate Period, the Bonds shall
be subject to mandatory redemption as a whole (provided, however, that the Bonds
shall be redeemed in part if the Company obtains an opinion of Bond Counsel to
the effect that, by redeeming such portion of the Bonds, the interest on the
remaining Bonds will not be included for Federal income tax purposes in the
gross income of any owner of the Bonds (other than an owner who is a
"substantial user" of the Project or a "related person" within the meaning of
Section 147(a)(1) of the Code)) at any time at a redemption price equal to 100%
of the principal amount thereof, together with unpaid interest accrued thereon
to the redemption date, if, in a published or private ruling of the Internal
Revenue Service or in a final, nonappealable judicial decision by a court of
competent jurisdiction (provided that the Company has been afforded the
opportunity to participate at its own expense in the proceeding resulting in
such ruling or in the litigation resulting in such decision, as the case may
be), it is determined that, as a result of a failure by the Company to observe
any covenant, agreement or representation in the Participation Agreement or the
Tax Regulatory Agreement, interest on the Bonds is included for Federal income
tax purposes in the gross income (as defined in Section 61 of the Code) of any
owner of a Bond (other than a "substantial user" of the Project or a "related
person" within the meaning
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of Section 147(a)(1) of the Code), and, in such event, the Bonds shall be
subject to such mandatory redemption not more than one hundred eighty (180) days
after receipt by the Trustee of notice of such published or private ruling or
judicial decision and a demand for redemption of the Bonds. The occurrence of an
event requiring the redemption of the Bonds under this paragraph does not
constitute an event of default under any Note or under the Indenture and the
sole obligation in such event shall be for the Company to prepay the Note in an
amount sufficient to redeem the Bonds to the extent required by this paragraph.
2. During any Semi-annual Rate Period, Term Rate Period or Fixed
Rate Period, the Bonds may be redeemed in whole or in part at any time at a
redemption price equal to 100% of the principal amount thereof, together with
accrued and unpaid interest thereon to the redemption date, if the Company has
determined, on the basis of the advice of Bond Counsel that, as a result of any
action taken or expected to be taken, or failure to take action, a reasonable
risk exists that interest on the bonds will not be excludable from gross income
for federal tax purposes. Such conclusion and certification shall be evidenced
by delivery to the Trustee of a written certificate of an Authorized Company
Representative to the effect that the Company has reached such conclusion,
together with a copy of such advice of Bond Counsel. The occurrence of an event
permitting the redemption of the Bonds under this paragraph does not constitute
an event of default under any Note or under the Indenture and the sole
obligation in such event shall be for the Company to prepay the Note in an
amount sufficient to redeem the Bonds to the extent required by this paragraph.
3. During any Semi-annual Rate Period, Term Rate Period or Fixed
Rate Period, the Bonds will also be subject to mandatory redemption at a
redemption price equal to one hundred three percent (103%) of the principal
amount thereof plus unpaid interest accrued thereon to the redemption date if
the Company reasonably concludes and certifies to the Trustee that the business,
properties, condition (financial or otherwise), operations or business prospects
of the Company will be materially and adversely affected unless the Company
takes or omits to take a specified action and that the Company has been advised
in writing by Bond Counsel that the specified action or omission would cause the
use of the Project to be such that, pursuant to Section 150 of the Code, the
Company would not be entitled to deduct the interest on the Bonds for purposes
of determining the Company's Federal taxable income, for a period of not less
than ninety (90) consecutive or nonconsecutive days during a twelve-month
period. Such conclusion and certification shall be evidenced by delivery to the
Trustee of a written certificate of an Authorized Company Representative to the
effect that the Company has reached such conclusion, together with a certified
copy of a resolution of the Board of Trustees of the Company authorizing such
certificate and a copy of such advice of Bond Counsel. In the event that the
Bonds become subject to redemption as provided in this paragraph, the Bonds will
be redeemed in whole unless redemption of a portion of the Bonds outstanding
would, in the opinion of Bond Counsel, have the result that interest payable on
the Bonds remaining outstanding after such redemption would be deductible for
purposes of determining the Federal taxable income of the Company, and, in such
event, the Bonds to be redeemed shall be selected (in the principal amount of
$5,000 or any integral multiple thereof) from time to time at random in such
manner as the Trustee shall determine in accordance with the Indenture, in such
amount as is necessary to accomplish that result. The occurrence of an event
requiring the redemption of the Bonds under this paragraph does not constitute
an event of default under any Note or under the Indenture and the sole
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obligation in such event shall be for the Company to prepay the Note in an
amount sufficient to redeem the Bonds to the extent required by this paragraph.
SECTION 5.07. Redemption at Demand of the State. In accordance with
the provisions of Section 1864 of the Act, the State of New York may, upon
furnishing sufficient funds therefor, require the Authority to redeem prior to
maturity, as a whole, the Bonds on any Interest Payment Date not less than
twenty years after the Closing Date. Any such redemption shall be at a
redemption price equal to the optional redemption price, if any, applicable on
such date set forth in Section 5.01 or if no such optional redemption price is
applicable at a redemption price of 105% of the principal amount thereof, in
either case, together with accrued and unpaid interest, if any, to the date
fixed for redemption, all in the manner provided in this Article V. The
Authority shall deposit any such funds received by it with the Trustee. During
any period during which no Direct-Pay Credit Facility is in effect, the Trustee
shall deposit any such funds in the Bond Fund and, upon notice published in the
manner provided in Section 1864 of the Act, shall apply such funds to the
redemption of the Bonds. During any period in which a Direct-Pay Credit Facility
is in effect, the Trustee shall deposit any such funds received by it in a
segregated sub-account in the Bond Fund, and upon notice published in the manner
provided in Section 1864 of the Act, shall draw monies under the related Credit
Facility pursuant to Article IX and apply such payment to the redemption of the
Bonds at the price and in the manner specified in the preceding sentence. Upon
the application of such Credit Facility payments, the Trustee shall pay the
funds furnished by the State to the issuer of the Credit Facility with
instructions to apply such funds to the reimbursement of the issuer of the
Credit Facility for such Credit Facility payment. Upon such redemption and
notwithstanding anything to the contrary in this Indenture, the Trustee shall
assign the Note relating to the Bonds to or as directed by the Authority.
SECTION 5.08. Mandatory Tender for Purchase Upon Expiration of any
Support Facility or Upon Delivery of an Alternate Support Facility. 1. Except as
otherwise set forth in the last sentence of this subsection 1, on the second
Business Day next preceding the date of expiration of any Support Facility, the
Bonds shall be subject to mandatory purchase at the Purchase Price, unless on or
prior to the 35th day prior to such date of expiration the Company on behalf of
the Authority has furnished to the Trustee an extension of such Support
Facility. The Bonds shall also be subject to mandatory purchase at the Purchase
Price, on the date there is delivered an Alternate Support Facility meeting the
requirements of Section 6.02. No tender for purchase of any Bonds shall be
required pursuant to this Section 5.08 during an Auction Rate Period or a Fixed
Rate Period.
2. Notice of the mandatory tender for purchase pursuant to this
Section 5.08 shall be given on or prior to the 30th day before the expiration
date of the expiring Support Facility or on or prior to the 30th day before the
delivery of any Alternate Support Facility, as the case may be, by the Trustee
in the name of the Authority (with copies thereof given to the Authority, the
Remarketing Agent, the issuer of a Support Facility, the Company and the
Registrar and Paying Agent) by first-class mail to the Holders of the Bonds
subject to mandatory tender for purchase at their addresses shown on the books
of registry. Such notice shall be in substantially the form attached hereto as,
or contain substantially the information contained in, Exhibit F hereto.
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3. Bonds held by or for the account of the Company or the issuer of
a Liquidity Facility are not subject to mandatory tender for purchase pursuant
to this Section 5.08.
SECTION 5.09. Mandatory Tender Upon Occurrence of any Terminating
Event. 1. Except as otherwise set forth in the last sentence of this subsection
1, upon the occurrence of any Terminating Event, the Bonds shall be subject to
mandatory tender for purchase at the Purchase Price on a Business Day selected
by the Trustee; provided, however, that (i) such mandatory tender shall not
occur later than the 5th day after receipt of notice of the Terminating Event by
the Trustee and (ii) such mandatory tender date shall be a Business Day. The
Bonds will not be subject to mandatory tender for purchase pursuant to this
Section 5.09 during any Auction Rate Period or any Fixed Rate Period.
2. Notice of the mandatory tender for purchase required by this
Section 5.09 shall be in substantially the form attached hereto as, or contain
substantially the information contained in, Exhibit F hereto and shall be given
to the Holders of the Bonds subject to mandatory tender for purchase at their
addresses shown on the books of registry on or before the first Business Day
after receipt of notice of a Terminating Event from the issuer of the Support
Facility by the Trustee, in the name of the Authority, or the Trustee shall
cause the Registrar and Paying Agent to give such notice, by first-class mail to
the Holders of the Bonds subject to purchase at their address shown on the books
of registry (with copies thereof given to the Authority, the Remarketing Agent,
the Company and the Registrar and Paying Agent).
3. Bonds held by or for the account of the Company or the issuer of
a Liquidity Facility are not subject to mandatory tender for purchase pursuant
to this Section 5.09.
SECTION 5.10. General Provisions Applicable to Mandatory and
Optional Tenders for Purchase of Bonds. 1. If interest has been paid on the
Bonds, or an amount sufficient to pay interest thereon has been deposited in the
Bond Fund, or an amount sufficient to pay accrued interest thereon, if any, has
been set aside in the Bond Purchase Fund held under the Bond Purchase Trust
Agreement, and the Purchase Price shall be available in the Bond Purchase Fund
for payment of Bonds subject to tender for purchase pursuant to Section 5.03,
5.04, 5.08 or 5.09, and if any Holder fails to deliver or does not properly
deliver the Bonds to the Registrar and Paying Agent for which a Notice of
Election to Tender has been properly filed or which are subject to mandatory
tender for purchase on the purchase date therefor, such Bonds shall nevertheless
be deemed tendered and purchased on the date established for the purchase
thereof, no interest shall accrue on such Bonds from and after the date of
purchase and such former Holders shall have no rights hereunder as the
registered owners of such Bonds, except the right to receive the Purchase Price
of and interest to the purchase date, if any, on such Bonds upon delivery
thereof to the Registrar and Paying Agent in accordance with the provisions
hereof. The purchaser of any such Bonds remarketed by the Remarketing Agent, or
the issuer of any Support Facility, to the extent Bonds are purchased with the
proceeds of a draw on, or borrowing or payment under, the Support Facility,
shall be treated as the registered owner thereof for all purposes of the
Indenture. The payment of Bonds pursuant to Section 5.03 shall be subject to
delivery of such Bonds duly endorsed in blank for transfer or accompanied by an
instrument of transfer thereof in form satisfactory to the Registrar and Paying
Agent executed in blank for transfer at the principal office of the Registrar
and Paying Agent at or prior to 10:00 a.m. (11:30 a.m. for Bonds bearing
interest at the Weekly Rate and 12:00 noon, for Bonds bearing interest at the
Daily Rate) (New York City time), on a specified purchase date. The Registrar
and Paying Agent
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may refuse to make payment with respect to any Bonds tendered for purchase
pursuant to Sections 5.03, 5.04, 5.08 or 5.09 not endorsed in blank or for which
an instrument of transfer satisfactory to the Registrar and Paying Agent has not
been provided.
2. The Purchase Price of Bonds subject to tender for purchase
pursuant to Section 5.03, 5.04, 5.08 or 5.09 in an aggregate principal amount of
at least one million dollars ($1,000,000) shall be payable in immediately
available funds or by wire transfer upon written notice from the Holder thereof
containing the wire transfer address (which shall be in the continental United
States) to which such Holder wishes to have such wire directed, if such written
notice is received by the Registrar and Paying Agent not less than five days
prior to the related purchase date.
3. Bonds subject to mandatory tender for purchase pursuant to
Sections 5.08 or 5.09 shall not be remarketed unless and until an Alternate
Support Facility meeting the requirements of Section 6.02 of the Indenture is in
full force and effect; provided, however, that Bonds may be remarketed and no
such Alternate Support Facility is required to be in effect if, at the time the
Bonds are sought to be remarketed, the Bonds bear interest at an Auction Rate or
a Fixed Rate.
4. In the event Bonds tendered for purchase pursuant to Section 5.03
or 5.04 shall be paid from a drawing under a Liquidity Facility, such Bonds
shall not be remarketed unless and until the Trustee or the Registrar and Paying
Agent has been notified by the Liquidity Facility Issuer and, upon receipt of
such notice, the Trustee or the Registrar and Paying Agent has notified the
Remarketing Agent that the amount available for a drawing under such Liquidity
Facility has been restored.
SECTION 5.11. Selection of Bonds to be Redeemed. A redemption of
Bonds shall be a redemption of the whole or of any part of the Bonds from any
funds available for that purpose in a principal amount equal to an authorized
denomination (so long as the principal amount not redeemed is an authorized
denomination). If less than all Bonds shall be redeemed, the particular Bonds to
be redeemed shall be chosen by the Trustee, or the Trustee shall direct the
Registrar and Paying Agent to so choose, as hereinafter provided. If less than
all the Bonds shall be called for redemption under any provision of this
Indenture permitting such partial redemption, the particular Bonds or portions
of Bonds to be redeemed shall be selected (a) first, from Bonds held or owned by
or for the issuer of a Support Facility pursuant to any Support Facility, (b)
second, from Bonds for which the Registrar and Paying Agent has received, prior
to such selection, a Notice of Election to Tender requiring the Registrar and
Paying Agent to purchase such Bonds on the date on which the Bonds being
selected are to be redeemed and (c) third, from all other Bonds then
Outstanding, by lot or on a pro rata basis by the Trustee or, upon direction of
the Trustee, the Registrar and Paying Agent, in such manner as the Trustee or
Registrar and Paying Agent in its discretion may deem proper; provided, however,
that the portion of any Bond to be redeemed shall be in the principal amount of
$100,000 or any integral multiple thereof during a Commercial Paper Rate Period,
a Daily Rate Period, a Weekly Rate Period or a Monthly Rate Period, $50,000 or
any integral multiple thereof during an Auction Rate Period, or $5,000 or any
integral multiple thereof at any other time and that, in selecting Bonds for
redemption, the Trustee or Registrar and Paying Agent shall treat each Bond as
representing that number of Bonds which is obtained by dividing the principal
amount of such registered Bond in excess of $100,000 by $100,000 during a
Commercial Paper Rate Period, a Daily Rate Period, a Weekly Rate Period or a
Monthly Rate Period, $50,000 during an Auction Rate Period, and $5,000 at any
other time
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(such amounts being hereinafter referred to as the "applicable units of
principal amount"). If it is determined that one or more, but not all of the
$100,000, $50,000 or $5,000 units of principal amount represented by any such
Bond is to be called for redemption, then upon notice of intention to redeem
such $100,000, $50,000 or $5,000 unit or units, the Holders of such Bonds shall
forthwith surrender such Bonds to the Registrar and Paying Agent for (1) payment
of the redemption price (including the redemption premium, if any, and accrued
interest to the date fixed for redemption) of the $100,000, $50,000 or $5,000
unit or units of principal amount called for redemption and (2) exchange for a
new Bond or Bonds of the aggregate principal amount of the unredeemed balance of
the principal of such Bonds. If the Holders of any such Bond of a denomination
greater than $100,000, $50,000 or $5,000 shall fail to present such Bond to the
Registrar and Paying Agent, for payment and exchange as aforesaid, such Bond
shall, nevertheless, become due and payable on the date fixed for redemption to
the extent of the $100,000, $50,000 or $5,000 unit or units of principal amount
called for redemption (and to that extent only).
SECTION 5.12. Notice of Redemption. 1. Notice of redemption shall be
given by the Trustee by mailing a copy of the redemption notice by first-class
mail at least 30 days prior to the date fixed for redemption to the Holders of
the Bonds to be redeemed at the addresses shown on the registration books
maintained by the Registrar and Paying Agent. Any redemption may be conditioned
on the receipt of moneys by the Registrar and Paying Agent sufficient to pay the
redemption price on the Redemption Date of Bonds called for redemption, if the
notice of redemption so states.
2. The Registrar and Paying Agent shall not be required to transfer
or exchange Bonds during any period beginning at the opening of business fifteen
(15) days before the day of mailing of a notice of redemption and ending at the
close of business on the day fixed for redemption; provided, however, that the
foregoing shall not apply during a Daily Rate Period, a Weekly Rate Period, a
Commercial Paper Rate Period or an Auction Rate Period.
3. Each notice of redemption shall state: (i) the full title of the
Bonds, the redemption date, the place of redemption and the redemption price
payable upon such redemption; (ii) that the interest on the Bonds, or on the
principal amount thereof to be redeemed, shall cease to accrue from and after
such redemption date and (iii) that on said date there will become due and
payable on the Bonds the principal amount thereof to be redeemed and the
interest accrued on such principal amount to the redemption date, if any, and
the premium, if any, thereon. Each notice of redemption mailed to the Holder of
the Bonds shall, if less than the entire principal sum thereof is to be
redeemed, also state the principal amount thereof and the distinctive numbers of
the Bonds to be redeemed and that such Bonds must be surrendered to the Trustee
in exchange for the payment of the principal amount thereof to be redeemed and
the issuance of a new Bond equaling in principal amount that portion of the
principal sum not to be redeemed of the Bonds to be surrendered. The failure to
give notice to any Holder of a Bond or any defects in such notice shall not
affect the proceedings for the redemption of the Bonds for which notice has been
properly given.
SECTION 5.13. Bonds purchased for account of Liquidity Facility
Issuer. Bonds subject to mandatory purchase pursuant to Section 5.03, 5.04, 5.08
or 5.09 shall be deemed to be purchased by the Company except to the extent the
Liquidity Facility expressly provides that the Bonds are to be purchased by the
issuer of the Liquidity Facility in which event such Bonds shall be deemed to be
purchased by the issuer of the Liquidity Facility in a principal amount equal to
the amount of a draw on,
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or borrowing or payment under, the Liquidity Facility for the payment of Bonds
subject to purchase, upon the deposit with the Registrar and Paying Agent of the
proceeds of such draw on, or borrowing or payment under, the Liquidity Facility
in an amount equal to the principal of such Bonds plus accrued interest thereon
to the purchase date, and such Bonds shall not be deemed paid and shall remain
outstanding hereunder until the issuer of the Liquidity Facility has been
reimbursed for such draws on, or borrowings or payments under, the Liquidity
Facility to pay such principal and interest. Unless the issuer of any Liquidity
Facility shall otherwise direct, any Bonds purchased by the issuer of the
Liquidity Facility shall be immediately registered in the name of the Company
except to the extent the Liquidity Facility expressly provides that the Bonds
are to be purchased by the issuer of the Liquidity Facility in which event such
Bonds shall be registered in the name of the issuer of the Liquidity Facility as
a Holder and the issuer of the Liquidity Facility shall have all rights of a
Holder of Bonds under this Indenture.
SECTION 5.14. Effect of Redemption. If the Bonds have been duly
called for redemption and notice of the redemption thereof has been duly given
or provided for as hereinbefore provided and if monies for the payment of the
Bonds (or of the principal amount thereof to be redeemed) and the interest to
accrue to the redemption date on the Bonds (or of the principal amount thereof
to be redeemed), if any, and the premium, if any, thereon are held for the
purpose of such payment by the Trustee, then the Bonds (or the principal amount
thereof to be redeemed) shall on the redemption date designated in such notice,
become due and payable and interest on the Bonds (or the principal amount
thereof to be redeemed) so called for redemption shall cease to accrue from such
date and the Holder thereof shall thereafter have no rights hereunder as the
Holder of such Bonds (or the principal amount thereof to be redeemed) except to
receive the principal amount thereof and premium (if any) thereon and interest
to the redemption date.
SECTION 5.15. Cancellation of Redeemed Bonds. Any Bonds surrendered
or redeemed pursuant to the provisions of this Article shall be cancelled by the
Registrar and Paying Agent.
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ARTICLE VI
SUPPORT FACILITY
SECTION 6.01. Support Facility - General. (1) The Company has
obtained the Initial Support Facility. Pursuant to the Participation Agreement,
the Company has agreed not to request that the interest rate mode applicable to
the Bonds be adjusted to an Adjustable Rate other than an Auction Rate unless
there shall be in effect, prior to the applicable Change in the Interest Rate
Mode, one or more Support Facilities which (i) meet the requirements of this
Article VI and (ii) permit the Bonds to be rated at least "A" by S&P, "A" by
Moody's or "A" by Fitch or its equivalent by any nationally recognized rating
agency. The Company has further agreed to maintain a Liquidity Facility meeting
the requirements of the Participation Agreement with respect to the Bonds at all
times, except with respect to Bonds bearing interest at an Auction Rate or a
Fixed Rate. A Liquidity Facility also must be in effect prior to (i) any Change
in the Interest Rate Mode from an Auction Rate to another Adjustable Rate, and
(ii) any Change in the Interest Rate Mode from a Fixed Rate to an Adjustable
Rate (other than a Change in the Interest Rate Mode to an Auction Rate Period).
The Trustee shall be furnished with a certified copy of any Support Facility
obtained pursuant to this Section 6.01.
Any Support Facility Issuer not located in New York State shall
provide the Trustee with a list of holidays on which it is closed through the
next succeeding January 1 at the beginning of the term of such Support Facility
and by January 1 of each year thereafter.
(2) Notwithstanding any other provision in this Indenture, upon the
occurrence of an Event of Default and so long as a Credit Facility is in full
force and effect and the Credit Facility Issuer is not in default under the
Credit Facility, then, in all such events, the Credit Facility Issuer shall be
deemed to be the sole Holder of the Bonds the payment of which such Credit
Facility supports when the approval, consent, direction or any other action of
the Holders of such Bonds is required or may be exercised under this Indenture,
including, without limitation, (i) the right to control and direct the
declaration of principal of and accrued interest on all the Bonds then
Outstanding to be due and payable immediately pursuant to Section 12.03, and
(ii) the right to rescind and annul any such declaration in clause (i) of this
paragraph and its consequences pursuant to Section 12.03.
(3) The Trustee shall not make a draw or borrowing under the Initial
Support Facility to pay principal of, premium, if any, or interest on Bonds or
to pay the Purchase Price of Bonds that bear interest at an Auction Rate with a
Standard Auction Period that exceeds one month in duration, a Commercial Paper
Rate, a Semi-annual Rate, a Term Rate or a Fixed Rate. The Trustee shall not
make a draw or borrowing under a Support Facility to pay the principal of,
premium, if any, or interest on Bonds that are held by or on behalf of the
Liquidity Facility Issuer or to pay the Purchase Price of Bonds that are held by
or on behalf of the Liquidity Facility Issuer.
SECTION 6.02. Alternate Support Facility. (1) At any time, the
Authority may, at the request of the Company, provide for the delivery to the
Trustee of an Alternate Support Facility. The
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termination date of such Alternate Support Facility shall be a date not earlier
than 364 days from its date of issuance, subject to earlier termination upon the
occurrence of (i) a Terminating Event or another event of default under the
related reimbursement agreement or other corresponding agreement relating to
such Alternate Support Facility, (ii) the issuance of a subsequent Alternate
Support Facility, (iii) payment in full of the Outstanding Bonds or (iv) a
Change in the Interest Rate Mode to an Auction Rate or a Fixed Rate. Any such
Alternate Support Facility shall specifically allow, in the case of the
occurrence of any event or events which under the terms of such Alternate
Support Facility or any agreement providing for the issuance thereof would cause
the termination or expiration of such Alternate Support Facility, for the
mandatory tender of Bonds pursuant to Section 5.09 with a draw on or borrowing
or payment under such Alternate Support Facility prior to such termination or
expiration. On or prior to the date of the delivery of an Alternate Support
Facility to the Trustee, the Company shall furnish to the Trustee on behalf of
the Authority (a) an opinion of Bond Counsel stating that the delivery of such
Alternate Support Facility to the Trustee is authorized under this Indenture and
complies with the terms hereof and (b) confirmation from S&P, if the Bonds are
then rated by S&P, from Moody's, if the Bonds are then rated by Moody's, from
Fitch, if the Bonds are then rated by Fitch, or another rating agency, if the
Bonds are then rated by such rating agency, to the effect that such rating
agency has reviewed the proposed Alternate Support Facility and that the
substitution of the proposed Alternate Support Facility for the Support Facility
will not, by itself, result in a reduction or withdrawal of its long or
short-term rating of the Bonds below the rating category of S&P, Moody's or
Fitch or such other rating agency, as the case may be, then in effect with
respect to the Bonds.
(2) Nothing contained herein shall prevent the Authority, at the
request of the Company, from delivering an Alternate Support Facility in
substitution for a Support Facility which will result in a decline in the
short-term or long-term rating or both assigned to such Bonds by Moody's, S&P or
Fitch or such other rating agency as a result of the Alternate Support Facility;
provided, that (i) the opinion of Bond Counsel referred to in the preceding
paragraph is obtained; provided that such opinion shall also be to the effect
that delivery of such Alternate Support Facility will not adversely affect the
exclusion from gross income of interest on the Bonds for federal income tax
purposes and (ii) all Outstanding Bonds are subject to mandatory tender for
purchase pursuant to Section 5.08 (unless the Bonds bear an Auction Rate or a
Fixed Rate). The Authority, or the Company on behalf of the Authority, shall
deliver notice to the Trustee of the substitution of an Alternate Support
Facility which will result in a decline in the short-term or long-term ratings
assigned to the Bonds pursuant to this subsection 2 of Section 6.02 at least
forty-five (45) days before the date of substitution.
SECTION 6.03. Trustee not Responsible for Enforcement of Support
Facility. The Trustee shall have no responsibility with respect to the
enforcement of any Support Facility obtained hereunder.
VI-2
ARTICLE VII
GENERAL TERMS AND PROVISIONS OF BONDS
SECTION 7.01. Execution and Authentication of Bonds. The Bonds shall
be executed on behalf of the Authority by the manual or facsimile signature of
its Chair, Vice-Chair, President, Treasurer or any Vice President and shall be
sealed with the seal of the Authority, or in lieu thereof shall bear a
lithographed, engraved or otherwise reproduced facsimile of such seal attested
by the manual or facsimile signature of its Vice President, Treasurer, Secretary
or an Assistant Secretary.
Bonds bearing the manual signature of the officer of the Authority
authorized to execute such Bonds in office on the date of such manual signing
thereof and Bonds bearing the facsimile signature of the officer of the
Authority authorized to execute such Bonds in office on the date of the
reproducing of such facsimile signature on such Bonds, shall be valid and
binding obligations in accordance with their terms, notwithstanding that before
the delivery thereof and payment therefor the person whose signature appears
thereon shall have ceased to be such officer.
Only Bonds having endorsed thereon a certificate of authentication
substantially in the form set forth in Article XVI, duly executed by the Trustee
shall be entitled to any right or benefit under this Indenture. No Bonds shall
be valid or obligatory for any purpose unless and until such certificate of
authentication shall have been duly executed by the Trustee, and such
certificate of the Trustee upon a Bond shall be conclusive evidence that such
Bond has been duly authenticated and delivered under this Indenture and that the
Holder thereof is entitled to the benefits of this Indenture. The Trustee's
certificate of authentication on any Bond shall be deemed to have been duly
executed if signed by an authorized officer of the Trustee.
SECTION 7.02. Books of Registry. The Registrar and Paying Agent
shall keep or cause to be kept at its principal office books (herein referred to
as the "books of registry" or "registration books") for the registration and
transfer of the Bonds. Upon presentation at its principal office for such
purpose the Registrar and Paying Agent, under such reasonable regulations as it
may prescribe, shall register or transfer, or cause to be registered or
transferred, on said books of registry, the Bonds as hereinafter set forth. The
books of registry shall at all times during business hours be open for
inspection by the Authority, the Company and the Trustee or their duly
authorized agents or representatives.
SECTION 7.03. Transfer, Registration and Exchange of Bonds. The
transfer of the Bonds may be registered only upon the books of registry required
to be kept pursuant to Section 7.02 upon surrender thereof to the Registrar and
Paying Agent, together with an assignment duly executed by the Holder thereof or
his or her duly authorized agent and accompanied by a guarantee of signature,
each in such form as shall be satisfactory to the Registrar and Paying Agent.
Upon any such registration of transfer the Authority shall execute and the
Trustee shall authenticate and deliver in exchange for such Bonds a new Bond or
Bonds registered in the name of the transferee or transferees for a like
aggregate principal amount, of any denomination or denominations authorized by
this Indenture. No transfer of any Bond shall be effective until entered on the
books of registry.
VII-1
Any Bond surrendered in any such registration of transfer shall
forthwith be cancelled by the Trustee. Any Bonds registered and transferred to a
new Holder pursuant to this Section shall be delivered to the Holder at the
principal office of the Registrar and Paying Agent or sent by first-class mail
to the Holder at his or her request, risk and expense.
Bonds, upon surrender thereof at the principal corporate trust
office of the Registrar and Paying Agent, together with an assignment duly
executed by the Holder or his or her authorized agent and accompanied by a
guarantee of signature, each in such form as shall be satisfactory to the
Registrar and Paying Agent, may, at the option of the Holder thereof, be
exchanged for an equal aggregate principal amount of Bonds of any denomination
or denominations authorized by this Indenture and in the same form as the Bonds
surrendered for exchange. All Bonds so surrendered pursuant to this Section
shall be cancelled by the Trustee.
Any Bonds to be delivered to the Holder upon any such exchange shall
be delivered to the Holder at the principal office of the Registrar and Paying
Agent or sent by first-class mail to the Holder thereof at his or her request,
risk and expense.
Any taxes or other governmental charges required to be paid with
respect to the registration of transfer or exchange of the Bonds shall be paid
by the Holder requesting registration of such transfer or exchange, as a
condition precedent to the exercise of such privilege. The Authority or the
Registrar and Paying Agent, or both, may charge the Company for every
registration of transfer or exchange sufficient to reimburse it for any and all
costs required to be paid in respect thereof.
SECTION 7.04. Mutilated, Lost, Stolen, or Destroyed Bonds. In the
event any Bond shall be lost, stolen, destroyed, wholly or in part, or so
defaced as to impair its value to the Holder, the Trustee shall, upon compliance
with the terms provided by law, authenticate and deliver a new Bond of like date
and tenor in exchange or replacement therefor against delivery for cancellation
of such mutilated Bond, or in lieu of and in replacement of a destroyed, stolen
or lost Bond, and upon payment by the Holder of the reasonable expenses of the
Registrar and Paying Agent and the Authority and the reasonable charges of the
Trustee and Registrar and Paying Agent in connection therewith and, in the event
that the Bond is destroyed, stolen or lost, the Holder's filing with the
Registrar and Paying Agent of evidence satisfactory to it that the Bond was
destroyed, stolen or lost, of the Holder's ownership thereof, and furnishing the
Registrar and Paying Agent and the Authority such security and indemnity as is
satisfactory to them. Any replacement Bond issued under the provisions of this
Section in exchange or substitution for the defaced, mutilated or partly
destroyed Bond or in substitution for the allegedly lost, stolen or wholly
destroyed Bond shall be entitled to the identical benefits under this Indenture
as was the original Bond in lieu of which such replacement Bond is issued. Each
such replacement Bond shall be prepared in substantially the same manner as the
original.
Notwithstanding the foregoing provisions of this Section, if the
lost, stolen, destroyed, defaced or mutilated Bond has matured or been called
for redemption and the date fixed for redemption thereof has arrived, at the
option of the Authority, payment of the amount due thereon may be made without
the issuance of any replacement Bond upon receipt of like evidence, indemnity,
security and payment of
VII-2
expenses and the surrender for cancellation of the defaced or mutilated or
partly destroyed Bond and upon such other conditions as the Trustee may
prescribe.
Except as provided in this sentence and as permitted in the
following paragraph, any replacement Bond shall be in the form of the Bond being
replaced, and be dated the date of its issuance and bear such number as shall be
assigned thereto by the Registrar and Paying Agent, with such subseries
designation, if any, as may be deemed appropriate by the Registrar and Paying
Agent. The Registrar and Paying Agent shall make an appropriate notation in the
books of registry that a replacement Bond has been issued in exchange or
substitution for the defaced, mutilated, lost, stolen, or wholly or partly
destroyed Bond.
There may be imprinted or affixed on the face and the panel portion
of any duplicate Bond a mark to identify such Bond as a replacement Bond.
Prior to arranging for the preparation or printing of a replacement
Bond, the Trustee and the Registrar and Paying Agent may require a deposit by
the Holder to secure the Trustee, the Registrar and Paying Agent and the
Authority for costs and expenses incurred by them in the preparation, printing,
execution and issuance of such replacement Bond.
Any amount of such deposit received by the Registrar and Paying
Agent in excess of the amount required to reimburse the Registrar and Paying
Agent, the Trustee or the Authority for costs and expenses shall be returned to
the party which made the deposit.
Any defaced, mutilated or partly destroyed Bond surrendered to the
Registrar and Paying Agent in substitution for a new Bond pursuant to this
Section shall be cancelled by the Trustee.
SECTION 7.05. Temporary Bonds. Pending the preparation of definitive
Bonds, interim receipts or certificates (herein referred to as "temporary
Bonds") may initially be issued, exchangeable for definitive Bonds when the
latter are ready for delivery. Such temporary Bonds may be printed, lithographed
or typewritten, shall be of such denomination or denominations as may be
determined by the Authority and may contain such references to any of the
provisions of this Indenture as may be appropriate. If temporary Bonds are
issued, the Authority will cause to be furnished duly executed definitive Bonds
without delay, and thereupon the temporary Bonds may be surrendered for
cancellation at the principal office of the Trustee in exchange for definitive
Bonds and without charge for such exchange, and the Registrar and Paying Agent
shall deliver in exchange for such temporary Bonds so surrendered an equal
aggregate principal amount of definitive duly executed Bonds, of authorized
denominations. Until so exchanged, the temporary Bonds shall be entitled to the
same benefits under this Indenture as definitive Bonds.
Nothing in this Indenture shall prevent the Authority from
delivering, and the Authority is hereby expressly permitted to deliver, Auction
Rate Bonds in typewritten form to the Securities Depository as registered owner
thereof.
VII-3
SECTION 7.06. Disposition of Bonds. Any Bond surrendered to the
Registrar and Paying Agent for payment shall be cancelled upon such payment by
the Trustee. The Trustee shall dispose of any cancelled Bond which has been paid
and which bears any date two (2) years prior to the date of disposition in
accordance with the Trustee's procedures in effect for the disposition of
cancelled securities as of the date of such disposition. When the Trustee shall
dispose of any Bond, it shall deliver a certificate of such disposition to the
Authority and the Company.
VII-4
ARTICLE VIII
ESTABLISHMENT OF THE PROJECT FUND
SECTION 8.01. Project Fund. 1. There is hereby created and
established a special trust fund to be designated "Consolidated Edison Company
of New York, Inc. Series 2001A Project Fund" (hereinafter referred to as the
"Project Fund") to be held by the Trustee. All income or gain on monies
deposited in the Project Fund shall be retained therein.
2. There shall be deposited into the Project Fund the proceeds of
the Bonds issued hereunder.
3. The monies on deposit from time to time in the Project Fund shall
be held under and subject to this Indenture, but shall not be subject to the
liens, pledges, charges, assignments and trusts created hereby for the security
and benefit of the Holders of the Bonds and shall not be available for the
payment of Bonds within the meaning of the Indenture, and shall be used and
applied solely for the purpose of refunding the Prior Bonds in accordance with
the remaining provisions of this Section.
4. The Trustee is authorized and directed to make payments from the
Project Fund to pay the redemption price of the Prior Bonds or costs incurred in
connection therewith, upon receipt of a letter or letters signed by an
Authorized Company Representative so directing.
VIII-1
ARTICLE IX
CREATION OF SPECIAL FUNDS AND ACCOUNTS;
APPLICATION AND INVESTMENT OF REVENUES
SECTION 9.01. Creation of Funds and Accounts. (a) The following fund
and the following accounts therein, which shall be a special fund and accounts
to be held by the Trustee, are hereby created and designated as set forth below:
Bond Fund
(a) Interest Account
(b) Principal Account
(c) Redemption Account
(d) Acceleration Account
The designation of each fund and account set forth above shall
include the term "Consolidated Edison Company of New York, Inc. Series 2001A,"
which term shall precede the designation as set forth above. Such fund and each
such account is, however, sometimes referred to herein as set forth above.
(b) The Bond Fund and the accounts therein shall be held in the
custody of the Trustee. All monies required to be deposited with or paid to the
Trustee under any provision of this Indenture shall be held by the Trustee in
trust and applied only in accordance with the provisions of this Indenture and
shall be trust funds for the purposes specified in this Indenture.
SECTION 9.02. Deposit of Note Payments. The Trustee shall deposit
the Note Payments or other money set forth below in the Bond Fund and credit the
Accounts set forth below in the order set forth below:
The Company shall pursuant to Sections 4.02, 4.03 and 4.04 of the
Participation Agreement deposit, or cause to be deposited, the following in
immediately available funds with the Trustee as the Note Payments become due or
are declared to be immediately due and payable under the Participation Agreement
and the Note unless sufficient amounts are then available in such Accounts to
make the required payments therefrom:
(a)(i) During an Auction Rate Period, no later than 12:00 noon (New
York City time) on the Business Day next preceding each Interest Payment Date,
into the Bond Fund for credit to the Interest Account an aggregate amount of
funds available on the next Business Day in The City of New York equal to the
aggregate amount required for the payment of the interest payable on the
Outstanding Auction Rate Bonds, on such Interest Payment Date. In the event such
deposit is not made in accordance with this paragraph (i), the Trustee shall
promptly send a certificate to the Auction Agent and to the registered owners of
each series of Bonds by telex, telecopy or similar means, in substantially the
form prescribed by the Auction Agency Agreement. If such deposit is made by the
Company within 3 Business
IX-1
Days of the Business Day immediately preceding the Interest Payment Date, the
Trustee shall promptly send a certificate to the Auction Agent and to the
registered owners of each series of Bonds by telex, telecopy or similar means in
substantially the form prescribed by the Auction Agency Agreement.
(ii) No later than 12:00 noon (New York City time) on each Interest
Payment Date, other than during an Auction Rate Period, into the Bond Fund for
credit to the Interest Account the amount required for the payment of the
interest payable on the Outstanding Bonds on such Interest Payment Date.
In the event a Direct-Pay Credit Facility is in place, amounts
required to be deposited in the Bond Fund for credit to the Interest Account
shall be derived solely from the following sources of funds in the priority
indicated and shall be so deposited and credited to the Interest Account on the
date indicated:
(I) First, on each Interest Payment Date, the proceeds of a
draw, borrowing or payment under the Direct-Pay Credit Facility in respect
of interest payable on such Interest Payment Date; and
(II) Second, on each Interest Payment Date, any other monies
provided by the Company pursuant to the preceding paragraph for such
purpose.
The Trustee shall deposit the proceeds of a draw, borrowing or
payment under a Direct-Pay Credit Facility in a segregated sub-account of the
Interest Account in the Bond Fund and such proceeds shall not be commingled with
moneys in any other Account or sub-account or derived from any other source.
(b)(i) During an Auction Rate Period, no later than 12:00 noon (New
York City time) on the second Business Day next preceding each Auction Date,
into the Bond Fund for credit to the Redemption Account an aggregate amount of
funds available on the next Business Day in The City of New York equal to the
aggregate amount required to pay the principal of and premium, if any, and
accrued interest on any Auction Rate Bonds, called for redemption; provided,
however if the scheduled date of such deposit to the Redemption Account by the
Company is not a Business Day then the date for such deposit to the Redemption
Account by the Company shall be the first Business Day immediately preceding the
scheduled date of such deposit to the Redemption Account by the Company. In the
event such deposit is not made in accordance with this paragraph (i), the
Trustee shall promptly send a certificate to the Auction Agent by telex,
telecopy or similar means, substantially in the form required by the Auction
Agency Agreement. If such deposit is made by the Company within 3 Business Days
of the second Business Day immediately preceding the Auction Date the Trustee
shall promptly send a certificate to the Auction Agent by telex, telecopy or
similar means, substantially in the form required by the Auction Agency
Agreement.
(ii) Other than during an Auction Rate Period, on the last Business
Day prior to the day on which any redemption is to occur or on the last Business
Day prior to the Stated Maturity, into the Bond Fund for credit to the
Redemption Account or the Principal Account, as appropriate, the amount required
to pay principal of and premium, if any, and accrued interest on any Bonds
called for redemption or at the Stated Maturity, the amount required to pay the
principal of the Bonds.
IX-2
In the event a Direct-Pay Credit Facility is in place, amounts
required to be deposited in the Bond Fund for credit to the Redemption Account
or the Principal Account, as appropriate, shall be derived solely from the
following sources of funds in the priority indicated and shall be so deposited
and credited in the Redemption Account or the Principal Account, as appropriate,
on the date indicated:
(I) First, on the date any redemption is scheduled to occur
and on the Stated Maturity, the proceeds of a draw, borrowing or payment
under the Direct-Pay Credit Facility in respect of the amounts described
in the preceding paragraph; and
(II) Second, on the date any redemption is scheduled to occur
and on the Stated Maturity, any other monies provided by the Company
pursuant to the preceding paragraph for such purpose.
The Trustee shall deposit the proceeds of a draw, borrowing or
payment under a Direct-Pay Credit Facility in a segregated sub-account of the
Redemption Account or Principal Account, as the case may be, in the Bond Fund
and such proceeds shall not be commingled with moneys in any other Account or
sub-account or derived from any other source.
If other monies are received by the Trustee as advance payments of
Note Payments to be applied to the redemption of all or a portion of the Bonds,
such monies shall be deposited in the Bond Fund for credit to the Redemption
Account therein.
(c) Immediately following the declaration of principal of and
accrued interest on the Bonds then Outstanding to be immediately due and payable
pursuant to Section 12.03, into the Bond Fund for credit to the Acceleration
Account, the amount required to pay principal of and accrued interest on such
Bonds.
In the event a Direct-Pay Credit Facility is in place, amounts
required to be deposited in the Bond Fund for credit to the Acceleration Account
shall be derived solely from the following sources of funds in the priority
indicated and shall immediately be so deposited and credited in the Acceleration
Account:
(I) First, the proceeds of a draw, borrowing or payment under
the Direct-Pay Credit Facility in respect of principal of and accrued
interest on the Bonds; and
(II) Second, any other monies provided by the Company pursuant
to the preceding paragraph for such purpose.
The Trustee shall deposit the proceeds of a draw, borrowing or
payment under a Direct-Pay Credit Facility in a segregated sub-account of the
Acceleration Account in the Bond Fund and such proceeds shall not be commingled
with moneys in any other Account or sub-account or derived from any other
source.
IX-3
SECTION 9.03. Application of Monies in the Bond Fund and the Bond
Purchase Fund. 1. The Bond Fund shall be used for the purpose of making
scheduled payments of principal of and interest on the Bonds, of making payments
of principal of and premium, if any, and accrued interest on Bonds then subject
to redemption in the manner herein provided and of making payments of principal
of and accrued interest on the Bonds then Outstanding that have been declared to
be immediately due and payable pursuant to Section 12.03. The monies in the Bond
Fund shall be applied as follows:
(a) Interest Account. Subject to the succeeding sentence, on each
Interest Payment Date, the Trustee shall apply the amount of monies then
credited to the Interest Account equal to the interest then payable on the Bonds
to the payment of such interest on such Interest Payment Date. In the event a
Direct-Pay Credit Facility is in place and payments are required to be made in
the order specified in Section 9.02 (a)(ii), the Trustee shall request a draw,
borrowing or payment under the Direct-Pay Credit Facility in accordance with the
terms thereof in an amount equal to the amount required to pay the interest
payable on the Outstanding Bonds on such Interest Payment Date and shall notify
the Company of the amount and date of such request. If sufficient funds are not
available under Section 9.02(a)(ii)(I) to pay such interest, the Trustee shall
apply funds, if any, available pursuant to Section 9.02(a)(ii)(II), to the
extent necessary, to such payment of interest. If the interest on the Bonds has
been paid in full when due and all payments required under the Direct-Pay Credit
Facility have been made, the Trustee shall apply remaining funds, if any,
available pursuant to Section 9.02(a)(ii)(II) in an amount not to exceed the
amount of the draw or borrowing under the Direct-Pay Credit Facility to
reimburse the Credit Facility Issuer for such draw or borrowing after such draw
or borrowing has been honored by the Credit Facility Issuer.
(b) Principal Account. Subject to the succeeding sentence, on the
Stated Maturity, the Trustee shall apply the amount of monies then credited to
the Principal Account equal to the principal amount of Bonds then payable to the
payment of such principal on such date. In the event a Direct-Pay Credit
Facility is in place, the Trustee shall request a draw, borrowing or payment
under the Direct-Pay Credit Facility in accordance with the terms thereof in the
amount required, to pay such principal amount and shall notify the Company of
the amount and date of such request. If sufficient funds are not available under
Section 9.02(b)(ii)(I) to pay such principal, the Trustee shall apply funds, if
any, available pursuant to Section 9.02(b)(ii)(II), to the extent necessary, to
such payment. If the principal of the Bonds has been paid in full when due and
all payments required under the Direct-Pay Credit Facility have been made, the
Trustee shall apply remaining funds, if any, available pursuant to Section
9.02(b)(ii)(II) in an amount not to exceed the amount of the draw or borrowing
under the Direct-Pay Credit Facility to reimburse the Credit Facility Issuer for
such draw or borrowing after such draw or borrowing has been honored by the
Credit Facility Issuer.
(c) Redemption Account. The Trustee shall redeem on the date set for
the redemption thereof, as provided in Article V of this Indenture, a principal
amount of Bonds then subject to redemption. Subject to the following sentence,
the Trustee shall apply an amount credited to the Redemption Account equal to
the principal amount and premium, if any, of Bonds then subject to redemption,
together with accrued interest thereon to the redemption date, to the payment of
such Bonds on the redemption date from funds described in Section 9.02(b).
IX-4
In the event a Direct-Pay Credit Facility is in place, the Trustee
shall request a draw under the Direct-Pay Credit Facility in accordance with the
terms thereof, in an amount equal to the amount required to pay the principal
amount and premium, if any, of Bonds then to be redeemed, together with accrued
interest thereon to the date set for redemption and shall notify the Company of
the date and amount of such request. If sufficient amounts to make such payment
are not available under Section 9.02(b)(ii)(I), the Trustee shall apply amounts,
if any, available pursuant to Section 9.02 (b)(ii)(II), to the extent necessary,
to such payment. Such redemption shall be made pursuant to the provisions of
Article V. If the redemption price of the Bonds equal to the principal amount of
Bonds then to be redeemed, together with premium, if any, and accrued interest
thereon has been paid in full on the redemption date and all payments required
under the Direct-Pay Credit Facility have been made, the Trustee shall apply
remaining funds, if any, available pursuant to Section 9.02(b)(ii)(II) in an
amount not to exceed the amount of the draw or borrowing under the Direct-Pay
Credit Facility to reimburse the Credit Facility Issuer for such draw or
borrowing after such draw or borrowing has been honored by the Credit Facility
Issuer.
Upon the retirement of any portion of the Bonds by redemption
pursuant to the provisions of this Section 9.03, the Trustee shall file with the
Authority and the Company a statement stating the amounts of the Bonds so
redeemed and setting forth the date of their redemption and the amount paid as
principal, premium and interest thereon. The expenses in connection with the
redemption of the Bonds shall be paid by the Company as Additional Payments.
All monies in the Redemption Account on the last Business Day prior
to the Stated Maturity shall be transferred to the Principal Account.
(d) Acceleration Account. The Trustee shall immediately apply an
amount credited to the Acceleration Account equal to the principal amount of and
accrued interest on the Bonds then Outstanding that have been declared to be
immediately due and payable pursuant to Section 12.03 from funds described in
Section 9.02(c).
In the event a Direct-Pay Credit Facility is in place, the Trustee
shall request a draw under the Direct-Pay Credit Facility in accordance with the
terms thereof, in an amount equal to the amount required to pay the principal
amount of and accrued interest of the Bonds then Outstanding that have been
declared to be immediately due and payable pursuant to Section 12.03 and shall
notify the Company of the date and amount of such request. If sufficient amounts
to make such payment are not available under Section 9.02(c)(I), the Trustee
shall apply amounts, if any, available pursuant to Section 9.02(c)(II), to the
extent necessary, to such payment. If the principal of and interest on the Bonds
has been paid in full after such Bonds have been declared to be immediately due
and payable and all payments required under the Direct-Pay Credit Facility have
been made, the Trustee shall apply remaining funds, if any, available pursuant
to Section 9.02(c)(II) in an amount not to exceed the amount of the draw or
borrowing under the Direct-Pay Credit Facility to reimburse the Credit Facility
Issuer for such draw or borrowing after such draw or borrowing has been honored
by the Credit Facility Issuer.
2. Bond Purchase Fund. Pursuant to Section 4.02(d) of the
Participation Agreement, the Company has agreed that the Company shall, to the
extent not paid from a draw or payment under a Liquidity Facility, pay an amount
to the Trustee for payment to, or directly to, the Registrar and Paying
IX-5
Agent for deposit in the Bond Purchase Fund and credit to the Company Account
therein established under the Bond Purchase Trust Agreement to be applied to the
payment of the Purchase Price of any Bond pursuant to the Bond Purchase Trust
Agreement to the extent not otherwise provided from the sources described in the
Bond Purchase Trust Agreement.
In the event sufficient funds are not available under Section
2.03(a)(i) of the Bond Purchase Trust Agreement to pay such Purchase Price on
the date of purchase of any Bonds pursuant to Section 5.03, 5.04, 5.08 or 5.09
hereof, the Registrar and Paying Agent on or prior to the time specified in the
Bond Purchase Trust Agreement direct the Trustee to request a draw or payment
under the Liquidity Facility in accordance with the terms thereof in the amount
required, together with amounts, if any, available under Section 2.03(a)(i) of
the Bond Purchase Trust Agreement, to pay the Purchase Price of such Bonds on
such date of purchase. The Trustee shall on or prior to the time specified in
the Bond Purchase Trust Agreement request such draw or payment under the
Liquidity Facility in accordance with the terms thereof and shall on or prior to
the time specified in the Bond Purchase Trust Agreement transfer the proceeds of
such draw or payment to the Registrar and Paying Agent, who shall cause the
proceeds of such draw or payment to be deposited in the Bond Purchase Fund under
the Bond Purchase Trust Agreement and credited to the Liquidity Facility
Proceeds Account therein. The Registrar and Paying Agent shall notify the
Company of the amount and date of such request.
The Remarketing Agent shall notify the Registrar and Paying Agent
and the Trustee, at or prior to 11:15 a.m. (New York City time) on a specified
purchase date, of the amount of the proceeds of the related remarketing, and
shall specify whether remarketing proceeds (excluding any such proceeds from the
Company, the Authority or an affiliate of either) equal to the full amount of
the Purchase Price payable on such purchase date are held by the Remarketing
Agent and will be available on such purchase date for the payment of such
Purchase Price, and, if the amount of such remarketing proceeds that will be
available on such purchase date for the payment of such Purchase Price shall not
be equal to the full amount of the Purchase Price payable on such purchase date,
such notice shall specify the amount of the deficiency. By 11:45 a.m. (New York
City time) on such purchase date, the Remarketing Agent shall pay to the
Registrar and Paying Agent, for deposit in the Bond Purchase Fund and credit to
the Remarketing Proceeds Account, an aggregate amount of such remarketing
proceeds equal to the amount stated in such notice to be available on such
purchase date for the payment of such Purchase Price.
SECTION 9.04. Investment of Funds. Monies in the Bond Fund and the
accounts in such fund shall be invested and reinvested by the Trustee, at the
written direction of the Company, so long as the Company is not in default
hereunder or under the Participation Agreement, to the extent reasonable and
practicable in Investment Securities selected by the Company and maturing in the
amounts and at the times as determined by the Company so that the payments
required to be made from such funds and accounts may be made when due and
subsequent to the occurrence of an Event of Default hereunder or under the
Participation Agreement, the Trustee shall hold monies in the Bond Fund
uninvested. Investment earnings shall be considered on deposit in any Fund or
Account as of the date they are actually received by the Trustee.
Notwithstanding the foregoing, so long as a Direct-Pay Credit Facility is in
effect, monies in the Bond Fund, except for proceeds of refunding bonds, shall
be held uninvested.
IX-6
Monies on deposit in the Project Fund shall be invested and
reinvested by the Trustee at the express direction of the Company, promptly
confirmed in writing, so long as the Company is not in default under the
Participation Agreement, to the extent reasonable and practicable, in Investment
Securities maturing in such amounts and at such times as it is anticipated by
the Company that such monies will be required to pay the redemption price of the
Prior Bonds.
The Trustee, with the consent of the Company, shall be authorized to
sell any investment when necessary to make the payments to be made from the
funds and accounts therein. All earnings on and income from monies in said funds
and accounts (other than the Project Fund) created hereby shall be considered to
be Revenues and shall be held in the respective account in the Bond Fund for use
and application as are all other monies deposited in such accounts. The Trustee
shall, in the statement required by Section 11.07, set forth the Investment
Securities held separately in, and the earnings realized on investment for, each
fund and account hereunder. The Trustee shall not be liable for any depreciation
in the value of the Investment Securities acquired hereunder or any loss
suffered in connection with any investment of funds made by it in accordance
herewith, including, without limitation, any loss suffered in connection with
the sale of any investment pursuant hereto.
The Trustee may make any such investments through its own investment
department upon written direction of the Company.
All Investment Securities shall constitute a part of the respective
fund and accounts therein from which the investment in Investment Securities was
made.
IX-7
ARTICLE X
PARTICULAR COVENANTS OF THE AUTHORITY
SECTION 10.01. Payment of Principal of and Interest and Redemption
Premium on Bonds. The Authority will promptly pay solely from the Note Payments
and other monies held by the Trustee and available therefor, the principal of,
and the interest on, every Bond issued under and secured by the Indenture and
any premium required to be paid for the retirement of said Bonds by redemption,
at the places, on the dates and in the manner specified in this Indenture and in
said Bonds according to the true intent and meaning thereof, subject, however,
to the provisions of Section 2.02.3.
SECTION 10.02. Performance of Covenants. The Authority will
faithfully perform at all times all covenants, undertakings, stipulations and
provisions contained in the Indenture, in any and every Bond and in all
proceedings of the Authority pertaining thereto.
SECTION 10.03. Further Instruments. The Authority will from time to
time execute and deliver such further instruments and take such further action
as may be reasonable and as may be required to carry out the purpose of the
Indenture; provided, however, that no such instruments or actions shall pledge
the credit of the Authority or the State of New York or the taxing power of the
State of New York or otherwise be inconsistent with the provisions of Section
2.02.3.
SECTION 10.04. Inspection of Project Books. All books and documents
in the possession of the Authority relating to the Project or the Participation
Agreement shall at all times be open to inspection by such accountants or other
agents as the Trustee may from time to time designate.
SECTION 10.05. No Extension of Time of Payment of Interest. In order
to prevent any accumulation of claims for interest after maturity, the Authority
will not directly or indirectly extend or assent to the extension of the time of
payment of any claims for interest on, any of the Bonds and will not directly or
indirectly be a party to or approve any such arrangement by purchasing such
claims for interest or in any other manner. In case any such claim for interest
shall be extended in violation hereof, such claim for interest shall not be
entitled, in case of any default hereunder, to the benefit or security of the
Indenture except subject to the prior payment in full of the principal of, and
premium, if any, on, all Bonds issued and outstanding hereunder, and of all
claims for interest which shall not have been so extended or funded.
SECTION 10.06. Trustee's, Auction Agent's, Remarketing Agent's,
Broker-Dealers' Registrar and Paying Agent's and Indexing Agent's Fees, Charges
and Expenses. Pursuant to the provisions of Section 4.02 of the Participation
Agreement, the Company has agreed to pay the fees and the expenses (including,
in the case of the Trustee, the Registrar and Paying Agent and the Remarketing
Agent, the reasonable fees and expenses of counsel and accountants) of the
Trustee, the Registrar and Paying Agent, Indexing Agent, and in the case of
Auction Rate Bonds, the Auction Agent, Remarketing Agent, and Broker-Dealers, in
the amounts set forth more fully therein, and the Authority shall have no
liability for the payment of any fees or expenses of the Trustee, the Registrar
and Paying Agent, Indexing Agent and in the case of Auction Rate Bonds, the
Auction Agent, Remarketing Agent, and Broker-Dealers.
X-1
SECTION 10.07. Agreement of the State of New York. In accordance
with the provisions of subdivision 11 of Section 1860 of the Act, the Authority,
on behalf of the State of New York, does hereby pledge to and agree with the
Bondholders that the State of New York will not limit or alter the rights and
powers vested by the Act in the Authority to fulfill the terms of any contract
made with Bondholders, or in any way impair the rights and remedies of such
Bondholders, until the Bonds, together with the premium and interest thereon,
with (to the extent permitted by law) interest on any unpaid installments of
interest, and all costs and expenses in connection with any action or proceeding
by or on behalf of such Bondholders, are fully met and discharged.
SECTION 10.08. Recording and Filing. Pursuant to the Participation
Agreement, the Company covenants that it will cause all financing statements
related to this Indenture and all supplements thereto and the Participation
Agreement and all supplements thereto, as well as such other security
agreements, financing statements and all supplements thereto and other
instruments as may be required from time to time to be kept, to be recorded and
filed in such manner and in such places as may from time to time be required by
law in order to preserve and protect fully the security of Holders and the
rights of the Trustee hereunder, and to take or cause to be taken any and all
other action necessary to perfect the security interest created by this
Indenture. The Company is obligated under Section 5.18 of the Participation
Agreement to file all such financing statements and other security agreements.
SECTION 10.09. Rights Under the Participation Agreement and the
Note. The Participation Agreement, a duly executed counterpart of which has been
filed with the Trustee, sets forth the covenants and obligations of the
Authority and the Company and reference is hereby made to the same for a
detailed statement of said covenants and obligations of the Company thereunder.
Subsequent to the issuance of Bonds and prior to their payment in full or
provision for payment thereof in accordance with the provisions hereof, neither
the Participation Agreement nor the Note may be effectively amended, changed,
modified, altered or terminated except in accordance with the provisions of
Article XIV hereof. The Authority agrees that the Trustee, in its name or in the
name of the Authority, may enforce all rights of the Authority and all
obligations of the Company under and pursuant to the Participation Agreement and
the Note for and on behalf of the Holders, whether or not the Authority is in
default hereunder. The Note heretofore delivered to the Trustee evidences the
obligations of the Company to make certain specified payments under the
Participation Agreement. Nothing herein contained shall be construed to prevent
the Authority from enforcing directly any or all of its rights to administrative
compensation or indemnification under the Participation Agreement.
X-2
ARTICLE XI
CONCERNING THE TRUSTEE; APPOINTMENT OF
REGISTRAR AND PAYING AGENT, REMARKETING AGENT,
AUCTION AGENT AND INDEXING AGENT
SECTION 11.01. Appointment of Trustee. The Bank of New York is
hereby appointed the Trustee hereunder and by the execution of this Indenture
accepts such appointment and without further act, deed or conveyance, shall be
fully vested with all the estate, properties, rights, powers, trusts, duties and
obligations of the Trustee hereunder.
The Trustee shall set up suitable accounts for the deposit of the
Note Payments and for the payment of the Bonds and the interest thereon and for
all other payments provided or required by this Indenture, including, without
limiting the generality of any of the foregoing, setting up of the Funds created
by Articles VIII and IX.
SECTION 11.02. Indemnification of Trustee as Condition for Remedial
Action. The Trustee shall be under no obligation to institute any suit, or to
take any remedial proceeding under this Indenture, or to enter any appearance or
in any way defend in any suit in which it may be made defendant, or to take any
steps in the execution of the trusts hereby created or in the enforcement of any
rights and powers hereunder, until it shall be indemnified to its satisfaction
against any and all costs and expenses, outlays and counsel fees and other
reasonable disbursements, and against all liability; the Trustee may,
nevertheless, begin suit, or appear in and defend suit, or do anything else in
its judgment proper to be done by it as such Trustee, without indemnity, and in
such case the Trustee shall be reimbursed from the Additional Payments required
to be made pursuant to the Participation Agreement for all costs and expenses,
outlays and counsel fees and other reasonable disbursements incurred in
connection therewith. If the Company shall fail to make such reimbursement, the
Trustee may reimburse itself from any monies in its possession under the
provisions of this Indenture and shall be entitled to a preference over the
Bonds; provided, however, that the proceeds of a Support Facility or of
remarketing of Bonds shall be applied solely as set forth elsewhere herein and
in such Support Facility and shall not be applied to the reimbursement set forth
in this Section 11.02. Notwithstanding the foregoing, the Trustee shall make all
payments of principal of and premium, if any, and interest on the Bonds then
Outstanding when due, when called for redemption or when declared to be
immediately due and payable pursuant to this Indenture and of the Purchase Price
of the Bonds in accordance with this Indenture.
SECTION 11.03. Trustee Not Liable for Failure of the Authority or
Company to Act. The Trustee shall not be liable or responsible because of the
failure of the Authority or the Company or any of their employees or agents to
make any collections or deposits or to perform any act herein required of the
Authority or the Company. The Trustee shall not be responsible for the
application of any of the proceeds of the Bonds or any other monies deposited
with it and paid out, withdrawn or transferred hereunder if such application,
payment, withdrawal or transfer shall be made in accordance with the provisions
of this Indenture. The immunities and exemptions from liability of the Trustee
hereunder shall extend to its directors, officers, employees and agents.
XI-1
SECTION 11.04. Certain Duties and Responsibilities of the Trustee.
(a) Except during the continuance of an Event of Default specified in Section
12.01 of which the Trustee has been notified or is deemed to have notice as
provided in Section 11.08,
(1) the Trustee shall undertake to perform such duties and only such
duties as are specifically set forth in this Indenture, and no implied
covenants or obligations shall be read into this Indenture against the
Trustee; and
(2) in the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the correctness
of the opinions expressed therein, upon certificates or opinions furnished
to the Trustee and conforming to the requirements of this Indenture; but
in the case of any such certificates or opinions which by any provision
hereof are specifically required to be furnished to the Trustee, the
Trustee shall be under a duty to examine the same to determine whether or
not they conform to the requirements of this Indenture (but need not
confirm or investigate the accuracy of mathematical calculations or other
facts stated therein).
(b) In case an Event of Default specified in Section 12.01 has
occurred and is continuing of which the Trustee has been notified or is deemed
to have notice as provided in Section 11.08, the Trustee shall exercise such of
the rights and powers vested in it by this Indenture, and use the same degree of
care and skill in such exercise, as a prudent person would exercise or use under
the circumstances in the conduct of his or her own affairs.
(c) None of the provisions of this Indenture shall be construed to
relieve the Trustee from liability for negligent action, negligent failure to
act, or willful misconduct, except that
(1) this subsection (c) shall not be construed to limit the effect
of subsection (a) of this Section;
(2) the Trustee shall not be liable for any error of judgment made
in good faith by any one of its officers, unless it shall be proved that
the Trustee was negligent;
(3) in the absence of bad faith on its part, the Trustee shall be
protected and shall incur no liability in acting or proceeding or in not
acting or not proceeding upon any resolution, order, notice, telegram,
request, consent, waiver, certificate, statement, affidavit, voucher
requisition, bond or other paper or document which the Trustee shall
believe to be genuine and to have been adopted or signed by the proper
board or person or to have been prepared and furnished pursuant to any of
the provisions of this Indenture, or upon the written opinion of any
attorney, engineer, accountant or other expert believed by the Trustee to
be qualified in relation to the subject matter, and the Trustee shall be
under no duty to make any investigation or inquiry as to any statements
contained or matters referred to in any such instrument but may accept and
rely upon the same as conclusive evidence of the truth and accuracy of
such statements;
(4) the Trustee shall not be liable with respect to any action taken
or omitted to be taken by it in good faith in accordance with the
direction of the Holders of not less than a majority
XI-2
in aggregate principal amount of the Outstanding Bonds relating to the
time, method and place of conducting any proceeding for any remedy
available to the Trustee, or exercising any trust or power conferred upon
the Trustee, under the provisions of this Indenture; and
(5) 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 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.
(d) Notwithstanding anything contained elsewhere in this Indenture,
the Trustee shall have the right to reasonably require, in respect of the
payment or withdrawal of any monies or the taking of any action whatsoever
within the purview of this Indenture, any showings, certificates, opinions,
appraisals or other information, or corporate action or evidence thereof, in
addition to that required by the terms hereof as a condition of such action by
the Trustee.
(e) The Trustee may execute any of the trusts or powers hereof and
perform any of its duties by or through attorneys, agents or receivers, and
shall not be responsible for any negligence or misconduct on the part of any
such attorney, agent or receiver appointed by it if the Trustee shall have
exercised due care and diligence in appointing or selecting such person, and
shall be entitled to advice of counsel concerning all matters of the trusts
hereof and the duties hereunder, and may in all cases pay such reasonable
compensation to all such attorneys, agents and receivers as may reasonably be
employed in connection with the trusts hereof. The Trustee may act upon the
opinion or advice of any attorney or attorneys (who may be the attorney or
attorneys for the Authority or the Company), approved by the Trustee in the
exercise of reasonable care, and the Trustee shall not be responsible for any
loss or damage resulting from any action or nonaction in good faith in reliance
upon such opinion or advice.
(f) Whenever in the administration of this Indenture the Trustee
shall deem it desirable that a matter be proved or established prior to taking,
suffering or omitting any action hereunder, the Trustee (unless other evidence
be herein specifically prescribed) may, in the absence of bad faith on its part,
conclusively rely upon a certificate of an Authorized Company Representative or
an Authorized Officer.
(g) The Trustee shall not be accountable for the use by the Company
of any proceeds of the Bonds authenticated or delivered hereunder.
(h) The Trustee shall not be required to give any bonds or surety in
respect of the execution of its trusts and powers hereunder.
(i) The Trustee may treat and deem the Holder of any Bonds as set
forth in the books of the registry hereunder as the absolute owner thereof.
SECTION 11.05. Limitations on Obligations and Responsibilities of
Trustee. The Trustee shall be under no obligation to effect or maintain
insurance or to renew any policies of insurance or to inquire as to the
sufficiency of any policies of insurance carried by the Company, or to report,
or make
XI-3
or file claims or proof of loss for, any loss or damage insured against or which
may occur, or to keep itself informed or advised as to the payment of any taxes
or assessments, or to require any such payment to be made. The Trustee, except
as to the acceptance of the trusts by its execution of this Indenture and the
performance of its responsibilities hereunder, shall have no responsibility in
respect of the validity, sufficiency, due execution or acknowledgment of this
Indenture, or in respect of the validity of the Bonds or the due execution or
issuance thereof. The Trustee shall be under no obligation to see that any
duties herein or in the Participation Agreement, the Remarketing Agreement, the
Auction Agency Agreement, the Broker-Dealer Agreement or any Support Facility
imposed upon the Authority, the Company, the issuer of any Support Facility, or
any party other than itself in its capacity as Trustee, or any covenants herein
contained on the part of any party other than itself in its capacity as Trustee
to be performed, shall be done or performed, and the Trustee shall be under no
obligation for failure to see that any such duties or covenants are so done or
performed.
SECTION 11.06. Compensation and Indemnification of Trustee. The
Company has agreed in the Participation Agreement (1) to pay to the Trustee from
time to time such compensation for all services rendered by it hereunder or
shall from time to time be agreed in writing (which compensation shall not be
limited by any provision of law in regard to the compensation of a trustee of an
express trust); (2) except as otherwise expressly provided herein, to reimburse
the Trustee upon its request for all reasonable expenses, disbursements and
advances incurred or made by the Trustee in accordance with any provision of
this Indenture (including the reasonable compensation and the expenses and
disbursements of its agents and counsel), except any such expense, disbursement
or advance as may be attributable to its negligence or bad faith; and (3) to
indemnify the Trustee for, and to hold it harmless against, any loss, liability
or expense incurred without negligence or bad faith on its part, arising out of
or in connection with the acceptance or administration of this trust, including
the costs and expenses of defending itself against any claim or liability in
connection with the exercise or performance of any of its powers or duties
hereunder.
SECTION 11.07. Statements from Trustee. It shall be the duty of the
Trustee, on or about the fifteenth (15th) day of each month, and at such other
reasonable time or times as may be determined by the Authority or the Company,
to file with the Authority, upon the written request thereof, and the Company a
statement setting forth in respect of the preceding calendar month:
(a) the amount withdrawn or transferred by it and the amount
received by it and held on account of each Fund under the provisions of
this Indenture;
(b) the amount on deposit with it at the end of such calendar month
to the credit of each such Fund or Account;
(c) a monthly account of reconciliation and income which includes a
brief description of all obligations held by it as an investment of monies
in each such Fund or Account;
(d) the amount applied to the redemption of the Bonds under the
provisions of Article V and Section 9.03 and the amount of the Bonds
remaining Outstanding; and
XI-4
(e) any other information which the Authority or the Company may
reasonably request.
All records and files pertaining to the Bonds and the Company in the
custody of the Trustee shall be open at all reasonable times upon prior notice
to the inspection of the Authority, the Company and their agents and
representatives.
SECTION 11.08. Notice of Default. Except upon the happening of any
Event of Default specified in clauses (a) through (d), inclusive, of Section
12.01, the Trustee shall not be obliged to take notice or be deemed to have
notice of any Event of Default hereunder, unless specifically notified in
writing of such Event of Default by the issuer of any Support Facility, the
Remarketing Agent, the Auction Agent or the Holders of not less than twenty-five
percent (25%) in aggregate principal amount of the Bonds Outstanding and such
written notice shall state that it is a "notice of default."
SECTION 11.09. Trustee May Deal in Bonds. The bank or trust company
acting as Trustee under this Indenture, and its directors, officers, employees
or agents, may in good faith buy, sell, own, hold and deal in the Bonds issued
under and secured by this Indenture, and may join in the capacity of a Holder of
a Bond in any action which any Holder of a Bond may be entitled to take with
like effect as if such bank or trust company were not the Trustee under this
Indenture.
SECTION 11.10. Trustee Not Responsible For Recitals. The recitals,
statements and representations contained herein and in the Bonds shall be taken
and construed as made by and on the part of the Authority, and not by the
Trustee, and the Trustee assumes, and shall be under, no responsibility for the
correctness of the same or for the recording or re-recording or filing or
refiling of the Indenture or any supplements thereto or any instruments of
further assurance (including financing statements) except as otherwise provided
herein. The Trustee makes no representations as to the value of any property
pledged hereunder to the payment of Bonds or as to the title of the Authority or
the Company thereto or as to the validity, sufficiency or adequacy of the
security afforded thereby or hereby or as to the validity of this Indenture, the
Note, the Participation Agreement, any Support Facility or of the Bonds.
SECTION 11.11. Qualification of the Trustee. There shall at all
times be a Trustee hereunder which shall be a bank and/or trust company, having
combined capital and unimpaired surplus of at least $50,000,000, duly authorized
to exercise corporate trust powers and subject to examination by federal or
state authority. The Trustee hereunder shall not be required to maintain, and
any successor Trustee shall not be required to have, an office in the city in
which the principal corporate trust office of the initial Trustee hereunder is
located.
If at any time the Trustee shall cease to be eligible in accordance
with the provisions of this Section 11.11, it shall resign immediately in the
manner and with the effect specified in Section 11.12.
SECTION 11.12. Resignation and Removal of Trustee. (a) No
resignation or removal of the Trustee and no appointment of a successor Trustee
pursuant to this Article shall become effective until the acceptance of
appointment by the successor Trustee under Section 11.13.
XI-5
(b) The Trustee may resign at any time by giving written notice
thereof to the Authority and the Company. If an instrument of acceptance by a
successor Trustee shall not have been delivered to the Trustee within thirty
(30) days after the giving of such notice of resignation, the retiring Trustee
may petition any court of competent jurisdiction for the appointment of a
successor Trustee.
(c) The Trustee may be removed at any time by demand of the Holders
of a majority in principal amount of the Bonds then Outstanding, signed in
person by such Holders or by their attorneys, legal representatives or agents
and delivered to such Trustee, the Authority and the Company (such demand to be
effective only when received by the Trustee, the Authority and the Company).
(d) If at any time:
(1) the Trustee shall cease to be eligible under Section 11.11
and shall fail to resign after written request by the Authority or by a
Holder who shall have been a bona fide Holder for at least six months, or
(2) the Trustee shall become incapable of acting or shall be
adjudged a bankrupt or insolvent or a receiver of the Trustee or of its
property shall be appointed, or any public officer shall take charge or
control of the Trustee or of its property or affairs for the purpose of
rehabilitation, conservation or liquidation,
then, in either such case, (i) the Authority may remove, and the Company may
request the Authority to remove, the Trustee, or (ii) any Holder who has been a
bona fide Holder for at least six months may, on behalf of herself and all other
similarly situated, petition any court of competent jurisdiction for the removal
of the Trustee and the appointment of a successor.
(e) If the Trustee shall resign, be removed or become incapable of
acting, or if a vacancy shall occur in the office of the Trustee for any cause,
the Authority shall promptly appoint a successor; the Company or the issuer of
any Support Facility or both of them, having the right to request the
appointment of a particular qualified institution as such successor. Within one
year after such resignation, removal or incapability, or the occurrence of such
vacancy, a successor Trustee may be appointed by an instrument or concurrent
instruments in writing executed by the Holders of a majority in principal amount
of the Bonds then Outstanding delivered to the Authority and the retiring
Trustee, and, upon such delivery, the successor Trustee so appointed shall,
forthwith upon its acceptance of such appointment, become the successor Trustee
and supersede the successor Trustee appointed by the Authority.
(f) The Authority shall give notice to the Trustee, the Company, the
Remarketing Agent, the Registrar and Paying Agent, the Auction Agent and the
Bondholders of each resignation and each removal of a Trustee and each
appointment of a successor Trustee in the manner set forth in Section 17.03 with
respect to Bondholders and Section 17.09 with respect to the Company, the
Auction Agent and the Remarketing Agent. Each notice shall include the name and
address of the Principal Corporate Trust Office of the successor Trustee.
XI-6
(g) The Trustee at any time other than during the continuance of an
Event of Default and for any reason may be removed by an instrument in writing,
executed by an Authorized Officer, appointing a successor, filed with the
Trustee so removed.
SECTION 11.13. Successor Trustee. Every successor Trustee appointed
hereunder shall execute, acknowledge and deliver to its predecessor, and also to
the Authority and the Company, an instrument in writing accepting such
appointment hereunder, and thereupon such successor Trustee, without any further
act, shall become fully vested with all the rights, immunities, powers and
trusts and subject to all the duties and obligations, of its predecessor; but
such predecessor shall, nevertheless, on written request of its successor or of
the Authority and upon payment of expenses, charges and other disbursements of
such predecessor which are payable pursuant to the provisions of Sections 11.02
and 11.06, execute and deliver an instrument transferring to such successor
Trustee all the rights, immunities, powers and trusts of such predecessor
hereunder; and every predecessor Trustee shall deliver all property and monies
held by it hereunder to its successor, subject, nevertheless, to its first lien
and preference provided for in Sections 11.02 and 11.06. Should any instrument
in writing from the Authority be required by any successor Trustee for more
fully vesting in such Trustee the rights, immunities, powers and trusts hereby
vested or intended to be vested in the predecessor Trustee, any such instrument
in writing shall and will, on request, be executed, acknowledged and delivered
by the Authority.
Notwithstanding any of the foregoing provisions of this Article, any
bank or trust company having power to perform the duties and execute the trusts
of this Indenture and otherwise qualified to act as Trustee hereunder with or
into which the bank or trust company acting as Trustee may be converted, merged
or consolidated, or to which the corporate trust business assets as a whole or
substantially as a whole of such bank or trust company may be sold, shall be
deemed the successor of the Trustee.
SECTION 11.14. Appointment of Remarketing Agent. Salomon Smith
Barney Inc., Morgan Stanley & Co. Incorporated and J.P. Morgan Securities Inc.
are hereby appointed by the Authority as the initial Remarketing Agents to serve
as such under the terms and provisions hereof and of the Remarketing Agreement
for the Series 2001A-1 Bonds, the Series 2001A-2 Bonds and the Series 2001A-3
Bonds, respectively. The Remarketing Agent for any subseries, including any
successor appointed pursuant hereto, shall be a member of the National
Association of Securities Dealers, Inc. having capitalization of at least
$25,000,000, and be authorized by law to perform all the duties imposed upon it
by this Indenture, the Bond Purchase Trust Agreement and the Remarketing
Agreement. The Remarketing Agent for any subseries of Bonds may be removed at
any time by the Authority, upon thirty (30) days' notice, acting at the written
direction of the Company by an instrument signed by the Authority and filed with
the Trustee, the Registrar and Paying Agent, the Remarketing Agent and the
Company. If there shall not be at least one Remarketing Agent serving as such
for any subseries of Bonds following the effective date of a proposed removal of
a Remarketing Agent for such subseries, no such removal shall take effect until
the appointment of a successor Remarketing Agent for such subseries of Bonds.
The Remarketing Agent for any subseries of Bonds may resign upon 30 days written
notice delivered to the Company, the Authority, the Trustee, the Registrar and
Paying Agent and the issuer of any Support Facility. The Company shall use its
best efforts to cause the Authority to appoint a successor Remarketing Agent
that is a qualified institution, effective as of the effectiveness of any such
resignation or removal. Each successor Remarketing Agent shall be a qualified
institution selected and appointed by the Authority, upon the written
XI-7
request and with the approval of the Company. If there shall be more than one
Remarketing Agent serving as such for a subseries of Bonds, the Authority, at
the request of the Company, shall designate one such Remarketing Agent as
"Remarketing Representative" to act on behalf of all Remarketing Agents for such
subseries, and each other Remarketing Agent shall agree in writing to accept the
determinations of such Remarketing Representative.
SECTION 11.15. Appointment of Registrar and Paying Agent. The Bank
of New York in New York, New York is hereby appointed by the Authority to serve
as the Registrar and Paying Agent hereunder. The Company shall have the right to
request the appointment of an institution meeting the requirements of Section
11.19 to serve as successor thereto in the event of the removal or resignation
of such Registrar and Paying Agent.
The Trustee hereby appoints any Registrar and Paying Agent appointed
hereunder as authenticating agent.
SECTION 11.16. General Provisions Regarding Registrar and Paying
Agent.
(a) The Registrar and Paying Agent shall:
(i) hold all Bonds delivered to it for purchase hereunder in trust
for the benefit of the respective Bondholders which shall have so
delivered such Bonds until monies representing the purchase price of such
Bonds shall have been delivered to or for the account of or to the order
of such Holders and deliver said Bonds in accordance with the provisions
of this Indenture;
(ii) hold all monies delivered to it for the purchase of Bonds, in
trust for the benefit of the person or entity who has delivered such
monies until the Bonds purchased with such monies have been delivered to
or for the account of such person or entity as provided in this Indenture;
(iii) maintain the books of registry and keep such books and records
as shall be consistent with prudent industry practice and make such books
and records available for inspection by the Trustee, the Remarketing
Agent, the Authority and the Company at all reasonable times;
(iv) perform the duties and undertake the obligations assigned to
them in Sections 7.02 through 7.06;
(b) The Registrar and Paying Agent may deem and treat the Holder of
any Bonds as set forth in the books of registry hereunder as the absolute owner
thereof;
(c) The Registrar and Paying Agent may in good faith hold any other
form of indebtedness issued by the Authority or any security issued by the
Company, or any affiliate of the Company; own, accept or negotiate any drafts,
bills of exchange, acceptances or obligations thereof; and make disbursements
therefor and enter into any commercial or business arrangement therewith; all
without any liability on the part of such Registrar and Paying Agent for any
real or apparent conflict of interest by reason of any such actions; and
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(d) The Registrar and Paying Agent agrees to cooperate with the
Trustee and the Company in preparing and conveying information necessary for
drawings under any Support Facility. To the extent that any other certificate to
be submitted by the Trustee to an issuer of a Support Facility in connection
with a drawing under the Support Facility requires the Trustee to state that the
Registrar and Paying Agent has certified certain information to the Trustee, the
Registrar and Paying Agent agrees to provide such certification to the Trustee
to the extent such information is known to it.
SECTION 11.17. Payment of Registrar and Paying Agent;
Indemnification. The Authority will cause the Company to agree in the
Participation Agreement to pay all reasonable fees, charges and expenses of the
Registrar and Paying Agent for acting under and pursuant to this Indenture. In
addition, the Authority will cause the Company to agree in the Participation
Agreement to indemnify the Registrar and Paying Agent and its directors,
officers and employees against and save them harmless from any and all losses,
costs, charges, expenses, judgments and liabilities incurred while carrying out
the transactions contemplated by this Indenture, except that said indemnity does
not apply to the extent that they are caused by the negligent action, negligent
failure to act or willful misconduct of the Registrar and Paying Agent or its
directors, officers, employees or agents.
SECTION 11.18. Registrar and Paying Agent's Performance; Duty of
Care. The duties and obligations of the Registrar and Paying Agent shall be
determined solely by the provisions of this Indenture. None of the provisions of
this Indenture shall be construed to relieve the Registrar and Paying Agent from
liability for negligent action, negligent failure to act or willful misconduct,
except that (a) the Registrar and Paying Agent shall not be liable except for
the performance of such duties and obligations as are specifically set forth in
this Indenture, and, in the absence of bad faith on the part of the Registrar
and Paying Agent, the Registrar and Paying Agent may conclusively rely, as to
the truth of the statements expressed therein, upon any document furnished to
the Registrar and Paying Agent and conforming to the requirements of this
Indenture and the Registrar and Paying Agent may conclusively rely and shall be
protected in acting upon any document believed by it to be genuine and to have
been signed or presented by the proper party or parties, provided that, in the
case of any such document which by any provision of this Indenture is
specifically required to be furnished to the Registrar and Paying Agent, the
Registrar and Paying Agent shall be under a duty to examine the same to
determine whether or not it conforms to the requirements of this Indenture, and
(b) no provisions of this Indenture shall require the Registrar and Paying Agent
to expend or risk its own funds or otherwise incur any financial liability in
the performance of any of its duties hereunder. The Registrar and Paying Agent
may act upon the opinion or advice of any attorney or attorneys (who may be the
attorney or attorneys for the Authority or the Company), approved by the Trustee
in the exercise of reasonable care, and the Registrar and Paying Agent shall not
be responsible for any loss or damage resulting from any action or nonaction in
good faith in reliance upon such opinion or advice.
SECTION 11.19. Qualifications of Registrar and Paying Agent. The
Registrar and Paying Agent, including any successor appointed pursuant to this
Indenture, shall be a corporation duly organized under the laws of the United
States of America or any state or territory thereof, having a combined capital
and unimpaired surplus of at least $50,000,000 and authorized by law to perform
all the duties imposed upon it by this Indenture. Unless the Bonds bear an
Auction Rate, or a Fixed Rate, the
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Registrar and Paying Agent shall have an office or agency in New York, New York
capable of performing its obligations hereunder.
SECTION 11.20. Resignation or Removal of Registrar and Paying Agent
and Successor to Registrar and Paying Agent; Termination of Registrar and Paying
Agent's Obligations. The Registrar and Paying Agent may at any time resign and
be discharged of the duties and obligations created hereunder and under the Bond
Purchase Trust Agreement by giving at least sixty days' notice to the Authority,
the Company, the Trustee and the Remarketing Agent. The Registrar and Paying
Agent may be removed at any time upon and pursuant to the request of the Company
by an instrument, signed by the Authority and filed with the Trustee and the
Registrar and Paying Agent and the Company, provided that such removal shall not
take effect until the appointment of a successor Registrar and Paying Agent. The
Authority at the request of the Company shall appoint a successor Registrar and
Paying Agent effective as of the effectiveness of any such resignation or
removal. Each successor Registrar and Paying Agent shall be a qualified
institution selected by the Company and, so long as a Support Facility is in
effect, the issuer of a Support Facility, and approved and appointed by the
Authority.
In the event of the resignation or removal of the Registrar and
Paying Agent, the Registrar and Paying Agent shall pay over and deliver any
monies and Bonds held by it in such capacity to its successor or, if there is no
successor, to the Trustee. In the event that there is no successor to the
Registrar and Paying Agent on the effective date of its resignation, the entity
acting as Trustee shall perform the functions of the Registrar and Paying Agent;
provided that monies held by the Trustee pursuant to this paragraph shall not be
deemed to be held by the Trustee in its capacity as Trustee.
SECTION 11.21. Appointment of Auction Agent; Qualifications of
Auction Agent, Resignation; Removal. (1) On or before the effective date of a
Change in the Interest Rate Mode to an Auction Rate, an Authorized Officer of
the Authority upon the written direction of an Authorized Company Representative
shall appoint an Auction Agent for the Bonds. The Auction Agent shall evidence
its acceptance of such appointment by entering into an Auction Agency Agreement
with the Company. The Auction Agent shall be (a) a bank or trust company duly
organized under the laws of the United States of America or any state or
territory thereof having its principal place of business in the Borough of
Manhattan, in The City of New York and having a combined capital stock, surplus
and undivided profits of at least $25,000,000 or (b) a member of the National
Association of Securities Dealers, Inc., having a capitalization of at least
$25,000,000 and, in either case, authorized by law to perform all the duties
imposed upon it under the Auction Agency Agreement. The Auction Agent may at any
time resign and be discharged of the duties and obligations created by this
Indenture by giving at least 90 days' notice to the Trustee, the Company, the
Authority, and in the case the Auction Agent is also serving as Trustee, to the
Remarketing Agent. During the Auction Rate Period, the Auction Agent may be
removed at any time by the Authority acting at the request of the Company by an
instrument signed by the Authority and filed with the Company, the Auction
Agent, the Remarketing Agent and the Registrar and Paying Agent upon at least 90
days' notice; provided that if required by the Remarketing Agent, an agreement
in substantially the form of the Auction Agency Agreement shall be entered into
with a successor Auction Agent.
SECTION 11.22. Appointment of Broker-Dealers. Prior to any change in
the Interest Rate Mode to an Auction Rate Period, the Company with the approval
of the Authority shall
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appoint an initial Broker-Dealer and any additional initial Broker-Dealers.
Thereafter, the Company may select, with the approval of the Authority and the
initial lead Broker-Dealer or any successor, from time to time one or more
additional persons to serve as Broker-Dealers under Broker-Dealer Agreements.
SECTION 11.23. Appointment of Additional Paying Agents; Each Paying
Agent to Hold Money in Trust. The Authority may at the request of the Company
appoint an additional Paying Agent or Paying Agents for the Bonds. Each such
Paying Agent shall hold in trust subject to the provisions of the Indenture for
the benefit of the Holders all sums held by such Paying Agent for the payment of
the principal of, premium, if any, and interest on the Bonds. Any such Paying
Agent may be any person or corporation authorized to perform such functions,
including to the extent permitted by law, the Company.
SECTION 11.24. Appointment and Duties of Indexing Agents. Standard &
Poor's J.J. Kenny is hereby appointed as Indexing Agent for the Bonds for the
purpose of calculating each rate index defined in Section 1.01. The Authority
may, with the approval of the Company, appoint additional or successor Indexing
Agents, subject to the conditions set forth in this Section. There may be
separate Indexing Agents for the purpose of calculating each rate index defined
in Section 1.01. The Indexing Agent shall designate to the Trustee its principal
office and signify its acceptance of the duties and obligations imposed upon it
hereunder by a written instrument of acceptance delivered to the Authority, the
Trustee, the Company and the Remarketing Agent under which the Indexing Agent
will agree, particularly:
(a) to compute the Daily Rate Index, the Commercial Paper Rate
Index, the Weekly Rate Index, the Monthly Rate Index, the Semi-annual Rate
Index, the Term Rate Index or the Fixed Rate Index, as the case may be,
pursuant to and in accordance with Section 3.01, and to give notice to the
Trustee, the Registrar and Paying Agent, the Remarketing Agent and the
Company of such rate index on the date of the computation thereof in
accordance with Section 3.01; and
(b) to keep such books and records as shall be consistent with
prudent industry practice and to make such books and records available for
inspection by the Authority, the Trustee, the Registrar and Paying Agent,
the Remarketing Agent and the Company at all reasonable times.
The Indexing Agent will perform the duties provided for in Section
3.01. Whenever the Indexing Agent makes a computation under that Section, it
will promptly notify the Trustee, the Registrar and Paying Agent, the Authority,
the Remarketing Agent (and during any Auction Rate Period, the Auction Agent),
and the Company of the results and date of computation. The Indexing Agent will
keep adequate records pertaining to the performance of its duties and allow the
Trustee, Registrar and Paying Agent, the Authority, the Remarketing Agent and
the Company (and, if appropriate, the Auction Agent) to inspect the records at
reasonable times.
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SECTION 11.25. Qualifications of Indexing Agents. Each Indexing
Agent shall be a commercial bank, a member of the National Association of
Securities Dealers, Inc. or a nationally recognized municipal securities
evaluation service authorized by law to perform all the duties imposed upon it
by the Indenture. Any Indexing Agent may at any time resign and be discharged of
the duties and obligations created by the Indenture by giving at least sixty
(60) days' notice to the Authority, the Company, the Remarketing Agent and the
Trustee. The Indexing Agent may be removed at any time, at the written direction
of the Company, by an instrument, signed by the Authority, filed with the
Company, the Indexing Agent, the Remarketing Agent, the Trustee, the Registrar
and Paying Agent and the issuer of a Support Facility, if any.
XI-12
ARTICLE XII
EVENTS OF DEFAULT; REMEDIES UPON
OCCURRENCE THEREOF
SECTION 12.01. Events of Default. Each of the following is hereby
defined as and declared to be and shall constitute an "Event of Default":
(a) Payment of the principal of and premium, if any, on any Bond
(whether by maturity, proceedings for redemption, purchase in accordance with
Article V hereof or the Remarketing Agreement, or otherwise) shall not be made
when the same shall become due and payable; or
(b) Payment of any installment of interest on any Bond shall not be
made when the same shall become due and payable and such nonpayment shall
continue for one (1) Business Day; or
(c) The Trustee shall receive written notice from the issuer of the
Support Facility of the occurrence of a Terminating Event under the Support
Facility, if applicable, or the agreement providing for the issuance thereof; or
(d) Receipt by the Trustee of written notice from the financial
institution providing any Credit Facility following a draw on or borrowing or
payment under such Credit Facility for the payment of interest on the Bonds that
the Credit Facility has not been reinstated in the amount so drawn, borrowed or
paid; or
(e) The Authority shall fail in the due and punctual performance of
any of the covenants, conditions, agreements, provisions or obligations, other
than as set forth in (a) and (b) above, contained in the Bonds or in this
Indenture or in any Supplemental Indenture on the part of the Authority to be
performed, and such failure shall continue for ninety (90) days after written
notice specifying such failure and requiring the same to be remedied shall have
been given to the Authority, the Company, the Governor, the Comptroller and the
Attorney General of the State of New York, by the Trustee or to the Trustee, the
Authority and the Company by the Holders of not less than twenty-five percent
(25%) in aggregate principal amount of the Bonds then Outstanding as provided
for in Section 12.08; provided that if any such failure shall be such that it
cannot be cured or corrected within such ninety (90) day period, it shall not
constitute an Event of Default hereunder if curative or corrective action is
instituted within such period and diligently pursued until the failure of
performance is cured or corrected; or
(f) The occurrence of an event of default as defined in Section 7.01
of the Participation Agreement.
SECTION 12.02. Notice to Holders and Others Upon Occurrence of an
Event of Default or a Failure to Deposit. 1. The Trustee shall give notice to
the Bondholders of all Events of Default within sixty (60) days after the
Trustee has been notified thereof or is deemedto have notice thereof as provided
in Section 11.08, unless the Event of Default shall have been cured before the
giving of such notice or unless the Trustee shall deem it in the best interest
of the Holders to defer or withhold notice under
XII-1
this Section; provided, however, that if a notice of an Event of Default is
given to any Bondholder, the Trustee shall concurrently therewith cause a copy
to be provided to all beneficial owners.
2. So long as ownership of the Auction Rate Bonds is maintained in
book-entry form by the Securities Depository, upon the occurrence of an Event of
Default, the Trustee shall immediately send a notice thereof in substantially
the form required by the Auction Agency Agreement to the Auction Agent and to
the registered Holders of each series of Bonds by telecopy or similar means.
3. So long as the ownership of the Auction Rate Bonds is maintained
in book- entry form by the Securities Depository, the Trustee shall immediately
send a notice in substantially the form required by the Auction Agency Agreement
to the Auction Agent and to the registered Holders of each series of Bonds by
telecopy or similar means if an Event of Default has been cured or waived in
accordance with this Article XII.
4. Upon the occurrence of a Failure to Deposit, or in the event such
failure to deposit is cured, the Trustee shall give the Auction Agent the
notices referred to in Section 9.02(a)(i) or (b)(i) hereof, as the case may be.
SECTION 12.03. Declaration of Principal and Interest As Due.
Notwithstanding the pendency of a mandatory tender under Section 5.09, upon the
occurrence of an Event of Default specified in clause (c) or (d) of Section
12.01 of which the Trustee has been notified by the issuer of the Support
Facility or the Credit Facility, as the case may be, then the Trustee shall upon
the written request or direction of such issuer of the Support Facility or the
Credit Facility, as the case may be, declare the principal of and accrued
interest on all the Bonds then Outstanding (if not then due and payable) to be
due and payable immediately, and upon such declaration the same shall become due
and be immediately due and payable and interest shall immediately cease to
accrue on such Bonds, anything contained in the Bonds or in this Indenture to
the contrary notwithstanding. Upon the occurrence and continuation of any Event
of Default, except for an Event of Default specified in clause (c) or (d) of
Section 12.01, of which the Trustee has been notified or is deemed to have
notice as provided in Section 11.08, then and in every case the Trustee by a
notice in writing to the Authority, the Company and (to addresses then specified
by the Authority) the Governor, the Comptroller and the Attorney General of the
State of New York may with the written consent of the issuer of the Credit
Facility, if any, and upon the written request or direction of the issuer of the
Credit Facility, if any, or, if a Credit Facility is not in effect or the issuer
of the Credit Facility is in default under the Credit Facility, upon the written
request or direction of the Holders of not less then twenty-five percent (25%)
in principal amount of the Bonds then Outstanding (determined in accordance with
the provisions of Section 13.03) shall, declare the principal of and accrued
interest on all the Bonds then Outstanding (if not then due and payable) to be
due and payable immediately, and upon such declaration the same shall become due
and be immediately due and payable, anything contained in the Bonds or in this
Indenture to the contrary notwithstanding. If, however, at any time after the
principal of the Bonds shall have been so declared to be due and payable, and
before the entry of final judgment or decree in any suit, action or proceeding
instituted on account of such Event of Default, or before the completion of the
enforcement of any other remedy under this Indenture, monies shall have
accumulated in the Bond Fund sufficient to pay the principal of and any premium
(or redemption price) on all Bonds (or portions of the principal amount thereof)
then or theretofore required to be redeemed pursuant to any
XII-2
provisions of this Indenture (excluding principal not then due except by reason
of the aforesaid declaration) and all arrears of interest and interest then due,
if any, upon Bonds then Outstanding and if the fees, compensation, expenses,
disbursements, advances and liabilities of the Trustee and all other amounts
then payable by the Company under the Participation Agreement and the Note shall
have been paid or a sum sufficient to pay the same shall have been deposited
with the Trustee, and every other Event of Default known to the Trustee in the
observance or performance of any covenant, condition or agreement contained in
the Bonds or in this Indenture (other than default in the payment of the
principal of such Bonds then due only because of a declaration under this
Section) shall have been remedied to the satisfaction of the Trustee or the
Company shall be taking, or shall be causing to be taken, appropriate action in
good faith to effect its cure, and all Events of Default have been rescinded and
annulled by the Trustee (or in the case of an Event of Default specified in
clause (c) or (d) of Section 12.01, by the issuer of the Credit Facility), and
to the extent a Credit Facility is in effect, the issuer of such Credit Facility
has delivered to the Trustee a notice to the effect that any amounts drawn,
borrowed or paid under such Credit Facility to pay accrued interest on the Bonds
have been reinstated in the amount of such draw, borrowing or payment, then and
in every such case the Trustee may with the written consent of the issuer of the
Credit Facility, if any, and upon the written request or direction of the issuer
of the Credit Facility, if any, or, if a Credit Facility is not in effect or the
issuer of the Credit Facility is in default under the Credit Facility, upon the
written request or direction of the Holders of not less than a majority in
principal amount of the Bonds (determined in accordance with the provisions of
Section 13.03) then Outstanding shall, by written notice to the Authority,
rescind and annul such declaration and its consequences; provided, however, that
notwithstanding any such rescission and annulment during an Auction Rate Period,
the Bonds shall continue to bear interest at the Overdue Rate for the applicable
period of time determined pursuant to Article III. No such rescission or
annulment pursuant to the next preceding sentence shall extend to or affect any
subsequent default or impair any right consequent thereto.
SECTION 12.04. Action by Trustee Upon Occurrence of Event of
Default. Upon the occurrence and continuation of an Event of Default the Trustee
(i) for and on behalf of the Holders of the Bonds, shall have the same rights
hereunder which are possessed by any Holders of the Bonds; (ii) shall be
authorized to proceed, in its own name and as trustee of an express trust; (iii)
may pursue any available remedy by action at law or suit in equity to enforce
the payment of the principal of and interest and premium, if any, on the Bonds;
(iv) may file such proofs of claim and other papers or documents as may be
necessary or advisable in order to have the claims of such Trustee and of the
Bondholders allowed in any judicial proceedings relative to the Company, its
creditors, its property or the Bonds; and (v) may, and upon the written request
or direction of the Holders of not less than twenty-five percent (25%) in
principal amount of the Bonds then Outstanding (determined in accordance with
the provisions of Section 13.03), with the prior written consent of the Credit
Facility Issuer, shall proceed to protect and enforce all rights of the Holders
and the Trustee under and as permitted by this Indenture and the laws of the
State of New York, by such means or appropriate judicial proceedings as shall be
suitable or deemed by it most effective in the premises, including the
appointment of temporary trustees and any actions, suits or special proceedings
at law or in equity or in bankruptcy or by proceedings in the office of any
board or officer having jurisdiction, or otherwise, whether for the specific
enforcement of any covenant or agreement contained in this Indenture, or in aid
of execution of any power granted in this Indenture or to enforce any other
legal or equitable right or remedy vested in the Holders of the Bonds or the
Trustee by this Indenture or by such laws, or for the appointment of a receiver.
All rights of action (including the right to file proofs
XII-3
of claim) under this Indenture or under any of the Bonds may be enforced by the
Trustee without the possession of any of the Bonds or the production thereof in
any trial or other proceedings relating thereto. Any such suit or proceeding
instituted by the Trustee shall be brought in its name and as trustee of an
express trust without the necessity of joining as plaintiffs or defendants any
Holders of the Bonds, and any recovery or judgment shall be for the equal
benefit of the Holders of the Outstanding Bonds.
In the enforcement of any remedy under this Indenture the Trustee
shall be entitled to sue for, enforce payment of and receive any and all
amounts, then or during any Event of Default becoming, and at any time
remaining, due from the Company and unpaid under the Participation Agreement and
the Note for principal, premium, interest or otherwise under any of the
provisions of this Indenture or of the Bonds, with interest on overdue payments
if such interest then is permitted by the laws of the State of New York,
together with any and all costs and expenses of collection and of all
proceedings hereunder and under such Bonds, without prejudice to any other right
or remedy of the Trustee or of the Holders, and to recover and enforce judgment
or decree against the Company which is in default of its respective obligations
under the Participation Agreement and the Note, but solely as provided herein
and in such Bonds, for any portion of such amounts remaining unpaid, with
interest, costs and expenses, and to collect in any manner provided by law, the
monies adjudged or decreed to be payable. Any such judgment shall be recovered
by the Trustee, in its own name and as trustee of an express trust.
SECTION 12.05. Powers of Trustee With Respect to Participation
Agreement and Other Agreements. If the payments required to be paid to the
Trustee under the Participation Agreement and the Note or other agreement
pledged and assigned hereunder, as the case may be, are not paid when due or
upon the happening and continuance of an Event of Default set forth in clause
(a) or (b) of Section 12.01, the Trustee, in its own name and as trustee of an
express trust, shall be entitled and empowered to institute any action or
proceedings at law or in equity for the collection of all payments due and
unpaid under the Participation Agreement and the Note or other agreement, as the
case may be, and required to be paid to the Trustee and may prosecute any such
action or proceedings to judgment or final decree, and may enforce any such
judgment or final decree against the Company or the obligor under any other
agreement, as the case may be, and collect in the manner provided by law out of
the property of the Company or such obligor wherever situated, the monies
adjudged or decreed to be payable.
In case there shall be pending proceedings for the bankruptcy or for
the reorganization of the Company under the Participation Agreement or an
obligor under any other agreement pledged and assigned hereunder, as the case
may be, under the Federal Bankruptcy Act or any other applicable law, or in case
a receiver or trustee shall have been appointed for the property of the Company
under the Participation Agreement and the Note or an obligor under any other
agreement pledged and assigned hereunder, as the case may be, the Trustee,
regardless of whether the principal of the Bonds shall then be due and payable
as therein expressed or by declaration or otherwise and regardless of whether
the Trustee shall have made any demand pursuant to the power vested in it by
this Indenture, shall be entitled and empowered, by intervention in such
proceedings or otherwise, to file and prove a claim or claims for the whole
amount owing and unpaid under the Participation Agreement and the Note by the
Company or under such other agreement by such obligor, as the case may be, and
to file such other papers or documents as may be necessary or advisable in order
to have the claims of the Trustee (including any claim for reasonable
compensation to the Trustee, its agents, attorneys and counsel, and for
reimbursement of all expenses and
XII-4
liabilities incurred, and all advances made, by the Trustee except as a result
of its negligence or bad faith) and of the Holders allowed in any such judicial
proceedings relative to the Company or other obligor, as the case may be, or to
the creditors or property of the Company or other obligor, as the case may be,
and to collect and receive any monies or other property payable or deliverable
on such claims, and to distribute in accordance with the provisions hereof all
amounts received with respect to the claims of the Holders and of the Trustee on
their behalf, and any receiver, assignee or trustee in bankruptcy or
reorganization is hereby authorized to make such payments to the Trustee.
Nothing herein contained shall be deemed to authorize the Trustee to
authorize or consent to or accept or adopt on behalf of any Holders any plan of
reorganization, arrangement, adjustment or composition affecting the Bonds or
the rights of any Holder thereof, or to authorize the Trustee to vote in respect
of the claim of any Holders in any such proceeding.
The provisions of this Section shall not be construed as in any way
limiting the powers of the Trustee, with respect to defaults by the Authority or
by the Company under the Participation Agreement and the Note, or an obligor
under any other agreement pledged and assigned hereunder, as the case may be,
whether such powers be expressly or implicitly granted to the Trustee elsewhere
in this Indenture or in the Participation Agreement or the Note or other
agreement, as the case may be, or as a denial that the Trustee has any such
other powers, but the powers granted to the Trustee by this Section shall be
supplemental, additional and cumulative to all other powers possessed by the
Trustee with respect to defaults under this Indenture or under the Participation
Agreement, the Note or other agreement pledged and assigned hereunder, as the
case may be.
SECTION 12.06. Disposition of Monies in Event of Insufficiencies in
Funds and Accounts. All monies (other than proceeds of any Support Facility)
received by the Trustee pursuant to any right given or action taken under the
provisions of this Article, after payment of the costs and expenses of the
proceedings resulting in the collection of such monies and of the expenses, fees
and advances incurred or made by the Trustee hereunder, shall be deposited in
the Bond Fund. If at any time the monies in the Bond Fund shall not be
sufficient to pay the interest or principal or premium, if any (or the
redemption price), of the Bonds as the same become due and payable (whether at
maturity or upon proceedings for the redemption thereof or by acceleration or
otherwise), the monies in such fund, together with any other monies then
available or thereafter becoming available for such purpose, whether through the
exercise of the remedies provided for in this Article XII or otherwise, shall be
applied as follows:
(a) Unless the principal of all the Bonds shall have become due and
payable or shall have been declared due and payable pursuant to the provisions
of Section 12.03, all such monies shall be applied:
First: to the payment to the persons entitled thereto of all
installments of interest then due, in the order of the maturity of the
installments of such interest, and if the amount available shall not be
sufficient to pay in full any particular installment, then to the payment
ratably, according to the amounts due on such installment, to the persons
entitled thereto, without any discrimination or preference; and
XII-5
Second: to the payment of the premium, if any, on and the principal
of the Bonds, to the purchase and retirement of Bonds and to the
redemption of Bonds, all in accordance with the provisions of this
Indenture.
(b) If the principal of all the Bonds shall have become due and
payable or shall have been declared due and payable pursuant to the provisions
of Section 12.03, all such monies shall be applied to the payment of the
principal and interest then due and unpaid, with interest on such principal as
aforesaid, without preference or priority of principal over interest or of
interest over principal, or of any installment of interest over any other
installment of interest, or of any Bond over any other Bond, according to the
amounts due respectively for principal and interest, to the persons entitled
thereto without any discrimination or preference except as to any difference in
the respective rates of interest specified in the Bonds.
(c) If the principal of all the Bonds shall have been declared due
and payable pursuant to the provisions of Section 12.03, and if such declaration
shall thereafter have been rescinded and annulled pursuant to the provisions of
such Section 12.03, then, subject to the provisions of subparagraph (b) above of
this paragraph in the event that the principal of all the Bonds shall later
become due and payable or be declared due and payable pursuant to the provisions
of Section 12.03, the monies then held in the Bond Fund shall be applied to the
payment of the principal of and premium (or redemption price) on all matured
Bonds and all Bonds (or portions of the principal amount thereof) then or
theretofore required to be redeemed pursuant to any provisions of this Indenture
(excluding principal not then due except by reason of such declaration) and all
arrears of interest and interest then due, if any, upon all Bonds then
Outstanding, and any monies thereafter deposited in the Bond Fund shall be
applied in accordance with the provisions of Article IX.
Whenever monies are to be applied by the Trustee pursuant to the
provisions of subparagraphs (a) and (b) of this Section, (i) such monies shall
be applied by the Trustee at such times, and from time to time, as the Trustee
in its sole discretion shall determine, having due regard to the amount of such
monies available for application and the likelihood of additional monies
becoming available for such application in the future; (ii) the deposit of such
monies, in trust for the proper purpose, shall constitute proper application by
the Trustee; and (iii) the Trustee shall incur no liability whatsoever to the
Authority, to any Holder or to any other person for any delay in applying any
such monies, so long as the Trustee acts with reasonable diligence, having due
regard to the circumstances, and ultimately applies the same in accordance with
such provisions of this Indenture as may be applicable at the time of
application by the Trustee. Whenever the Trustee shall exercise such discretion
in applying such monies, it shall fix the date (which shall be an Interest
Payment Date unless the Trustee shall deem another date more suitable) upon
which such application is to be made and upon such date interest on the amounts
of principal to be paid on such date shall cease to accrue. The Trustee shall
give such notice as it may deem appropriate of the fixing of any such date, and
shall not be required to make payment to the Holder of any unpaid Bond until
such Bond shall be surrendered to the Trustee for appropriate endorsement, or
for cancellation if fully paid.
SECTION 12.07. Effect of Delay or Omission; Waiver of Default;
Direction of Remedial Proceedings by the Holders. No delay or omission of the
Trustee or of any Holder of the Bonds to exercise any right or power accruing
upon any default or Event of Default shall impair any such right or power or
shall be construed to be a waiver of any such default or acquiescence therein.
XII-6
Anything in this Indenture to the contrary notwithstanding, the
Holders of not less than a majority in principal amount of the Bonds at the time
Outstanding (determined in accordance with the provisions of Section 13.03) with
the prior written consent of the Credit Facility Issuer shall be authorized and
empowered and have the right, by an instrument or concurrent instruments in
writing delivered to the Trustee on behalf of the Holders of the Bonds then
Outstanding to consent to the waiver of any Event of Default or its
consequences, and the Trustee shall waive any Event of Default and its
consequences upon the written request of the Holders of such majority; provided,
however, that there shall not be waived (i) any default in payment of principal
or premium when due or (ii) any default in payment when due of interest unless,
in either case, prior to such waiver all arrears in principal, premium, if any,
and interest, with additional interest, to the extent permitted by law, at the
rate then borne by the Bonds (which, in the case of Auction Rate Bonds shall be
the Overdue Rate), and all fees and expenses of the Trustee shall have been paid
or provided for; provided, however, that notwithstanding any such waiver, any
Auction Rate Bonds shall continue to bear interest at the Overdue Rate until
such Event of Default is cured. No such waiver shall extend to or affect any
other existing or subsequent default or Event of Default or impair any rights or
remedies consequent thereon.
Anything in this Indenture to the contrary notwithstanding, the
Holders of not less than twenty-five percent (25%) in principal amount of the
Bonds at the time Outstanding (determined in accordance with the provisions of
Section 13.03) with the prior written consent of the Credit Facility Issuer
shall be authorized and empowered and have the right, by an instrument or
concurrent instruments in writing delivered to the Trustee to direct the time
and method of conducting any proceeding for any remedy to be taken by the
Trustee or available to the Trustee or available to the Holders of the Bonds, or
exercising any trust or power conferred upon the Trustee hereunder provided: (1)
such direction shall not be in conflict with any rule of law or with this
Indenture or expose the Trustee to personal liability, or be unduly prejudicial
to Holders not joining therein, and (2) the Trustee may take any other action
deemed proper by the Trustee which is not inconsistent with such direction.
SECTION 12.08. Suits or Actions by Holders; Any Holder May Enforce
Overdue Payment of His or Her Bond or Interest Thereon. No Holder of any of the
Bonds shall have any right to institute any suit, action or proceeding in equity
or at law for the execution of any trust hereunder or for any other remedy
hereunder unless there shall have occurred an Event of Default of which the
Trustee has been notified or is deemed to have notice as provided in Section
11.08, and such Holder previously shall have given to the Trustee written notice
of the Event of Default on account of which such suit, action or proceeding is
to be instituted, and unless also the Holders of not less than twenty-five
percent (25%) in principal amount of the Bonds then Outstanding shall have made
written request of the Trustee after the right to exercise such powers or right
of action, as the case may be, shall have accrued, and shall have afforded the
Trustee a period of 60 days either to proceed to exercise the powers hereinabove
granted or to institute such action, suit or proceeding in its or their name,
the Trustee shall have been indemnified by Holders against the costs, expenses
and liabilities to be incurred in compliance with such request, and shall not
have received an inconsistent direction from the Holders of not less than
twenty-five percent (25%) in principal amount of the Bonds and the Trustee shall
have refused or neglected to comply with such request within a reasonable time.
It is understood and intended that no one or more Holders of the Bonds hereby
secured shall have any right in any manner whatever by the action of such Holder
or Holders to affect, disturb or prejudice the security of this Indenture, or to
enforce any right hereunder except in the manner
XII-7
herein provided; that all proceedings at law or in equity shall be instituted,
had and maintained in the manner herein provided and for the benefit of all
Holders of such Outstanding Bonds; and that any individual rights of action or
other right given to one or more of such Holders by law are restricted by this
Indenture to the rights and remedies herein provided. Notwithstanding the
foregoing and subject to Section 11.02, the Trustee shall be under no obligation
to exercise any of the rights or powers vested in it by this Indenture at the
request or direction of any of the Holders, unless such Holders shall have
offered to the Trustee reasonable security or indemnity against the costs,
expenses and liabilities which might be incurred by it in compliance with such
request or direction.
Notwithstanding any other provision of this Indenture, the right of
any Holder of a Bond to receive payment of the principal of, premium, if any,
and interest on such Bond, on or after the respective due dates expressed in
such Bond, or to institute suit for the enforcement of any such payment on or
after such respective dates, shall not be impaired or affected without the
consent of such Holder, except that no Holder of any such Bond shall have the
right to institute any such suit, if and to the extent that the institution or
prosecution thereof or the entry of judgment therein would, under applicable
law, result in the surrender, impairment, waiver, or loss of the lien of this
Indenture.
SECTION 12.09. Remedies Not Exclusive. No remedy by the terms of
this Indenture conferred upon or reserved to the Trustee or the Holders of the
Bonds is intended to be exclusive of any other remedy so conferred or reserved
or to be exclusive of other remedies now or hereafter existing at law or in
equity or by statute, and each and every such remedy shall be cumulative and
shall be in addition to any other remedy given hereunder to the Trustee or to
the Holders of the Bonds or now or hereafter existing at law or in equity or by
statute. Every such right, power and remedy given hereunder or by law or in
equity or by statute may be exercised from time to time and as often as may be
deemed expedient.
SECTION 12.10. Effect of Abandonment of Proceedings on Default. In
case any proceeding taken by the Trustee or the Holders of the Bonds on account
of any Event of Default shall have been discontinued or abandoned for any
reason, then and in every such case the Authority, the Trustee and the Holders
shall be restored to their former positions and rights hereunder, respectively,
and all rights, remedies, powers and duties of the Trustee shall continue as
though no such proceeding had been taken.
SECTION 12.11. Interest on Overdue Amounts. To the extent permitted
by law all amounts which are due and payable but which have not been so paid
under this Indenture shall bear interest at the then current rate of interest on
the Bonds until paid; provided, however, that during any Auction Rate Period all
amounts which are due and owing but unpaid hereunder shall bear interest at the
Overdue Rate until paid.
XII-8
ARTICLE XIII
EXECUTION OF INSTRUMENTS BY BONDHOLDERS AND
OWNERSHIP OF BONDS; EXCLUSION OF BONDS
OWNED BY THE AUTHORITY OR THE COMPANY
SECTION 13.01. Execution of Requests, Directions and Consents and
Other Instruments and Proof of Same; Ownership of Bonds and Proof of Same. Any
request, direction, consent or other instrument required by this Indenture to be
signed or executed by Holders of Bonds may be signed or executed by such Holders
in person or by agent or agents duly appointed in writing, and may be in any
number of concurrent writings of substantially similar tenor. Proof of the
execution of any such request, direction, consent or other instrument or of a
writing appointing any such agent, and of the holding or ownership of Bonds,
shall be sufficient for any purpose of this Indenture and shall be conclusive in
favor of the Trustee hereunder with regard to any action taken by it under such
request, direction, consent or other instrument or of a writing appointing any
such agent, if made in the following manner:
(a) the fact and date of the execution by any person of any such
request, direction, consent or other instrument in writing may be proved
in any reasonable manner which the Trustee deems sufficient;
(b) the ownership of Bonds shall be proved by the books of registry
kept under the provisions of this Indenture.
Any request, direction, consent or vote of the Holder of any Bond
shall bind and be conclusive upon the Holder of such Bond giving such request,
direction or consent or casting such vote and upon every future Holder of the
same Bond in respect of anything done or suffered to be done by the Trustee or
otherwise, or by the Holders of other Bonds, in pursuance of such request,
direction, consent or vote, and whether or not such future Holder has knowledge
of or information as to such request, direction, consent or vote; provided that
any request, direction, consent or vote of the Holder of a Bond required by any
of the provisions hereof may be revoked by the Holder giving such request,
direction, consent or vote or by a subsequent Holder if such revocation in
writing is filed with the Trustee, prior to the time when the request,
direction, consent or vote of the percentage of the Holders of the Bonds
required by such provision shall have been given and action taken by the Trustee
or otherwise, or by the Holders of other Bonds, under authority of such request,
direction, consent or vote.
The payment of or on account of principal to or upon the order of
the person in whose name the Bonds shall at the time be registered on said books
of registry and the payment of interest to or upon the order of any person in
whose name the Bonds shall at the time be registered on said books of registry,
shall be valid and effectual fully to satisfy and discharge all liability
hereunder or upon the Bonds to the extent of the sum or sums so paid.
The Authority at the request of the Company may establish a record
date for the taking of any action by the Holders.
XIII-1
SECTION 13.02. Meetings of Holders. The Trustee or the Holders of
not less than twenty percent (20%) in principal amount of the Bonds then
Outstanding may at any time call a meeting of the Holders of the Bonds for the
purpose of the consenting to, the approving, the requesting, or the directing by
the Holders of the Bonds of any action required to be consented to or approved
by them hereunder or which they may request or direct hereunder to be taken, or
for the making by the Holders of any appointments they may make hereunder, or
for the purpose of taking any other action which the Holders may take hereunder,
or for any other purpose concerning the payment and security of the Bonds
hereunder. Every such meeting shall be held at such place in The City of New
York, State of New York, as may be specified in the notice calling such meeting.
Written notice of such meeting, stating the place and time of the meeting and in
general terms the business to be submitted, shall be mailed to the Holders whose
names and addresses then appear upon the books of registry by the Registrar and
Paying Agent or the Holders calling such meeting, not less than 20 days nor more
than 60 days before such meeting. Any meeting of Holders shall, however, be
valid without notice if the Holders of all Bonds then Outstanding are present in
person or by proxy or if notice is waived before or within 30 days after the
meeting by those not so present.
Attendance and voting by Holders at meetings thereof may be in
person or by proxy. Holders of Bonds may, by an instrument in writing under
their hands, appoint any person or persons, with full power of substitution, as
their proxy to attend and vote at any meeting for them.
Persons named by the Trustee, or elected by the Holders of a
majority in principal amount of the Bonds represented at the meeting in person
or by proxy in the event the Trustee is not represented at such meeting, shall
act as temporary chairman and temporary secretary of any meeting of Holders. A
permanent chairman and a permanent secretary of such meeting shall be elected by
the Holders of a majority in principal amount of the Bonds represented at such
meeting in person or by proxy. The permanent chairman of the meeting shall
appoint two (2) inspectors of votes who shall count all votes cast at such
meeting, except votes on the election of chairman and secretary as aforesaid,
and who shall make and file with the secretary of the meeting and the Trustee
their verified report of all such votes cast at the meeting.
The Holders of not less than the principal amount of the Bonds
required by the provisions hereof to consent to, approve, request or direct any
action to be taken at a meeting of Holders, or required by the provisions hereof
to make any appointments to be made at such meeting, or required by the
provisions hereof to take any other action to be taken at such meeting, must be
present at such meeting in person or by proxy in order to constitute a quorum
for the transaction of such business. Less than a quorum, however, shall have
power to adjourn the meeting from time to time without notice of such
adjournment other than the announcement thereof at the meeting; provided,
however, that if such meeting is adjourned by less than a quorum for more than
ten (10) days, notice of such adjournment shall be given by the Trustee at least
five (5) days prior to the adjourned date of the meeting.
Any Holder of a Bond shall be entitled in person or by proxy to
attend and vote at such meeting as Holder of the Bond or Bonds registered in his
or her name without producing such Bond or Bonds. Such persons and their proxies
shall, if required, produce such proof of personal identity as shall be
satisfactory to the Secretary of the meeting.
XIII-2
All proxies presented at such meeting shall be delivered to the
Inspector of Votes and filed with the Secretary of the meeting. The right of a
proxy for a Holder to attend the meeting and act and vote thereat may be proved
(subject to the Trustee's right to require additional proof) by a written proxy
executed by such Holder as aforesaid.
The officers or nominees of the Trustee may be present or
represented at such meeting and take part therein, but shall not be entitled to
vote thereat, except for such officers or nominees who are Holders or proxies
for Holders (including the Trustee).
The vote at any such meeting of the Holder of any Bond, or his or
her proxy, entitled to vote thereat shall be binding upon such Holder and upon
every subsequent Holder of such Bond (whether or not such subsequent Holder has
notice thereof).
SECTION 13.03. Exclusion of Bonds Held by or for the Authority, the
Company and of Bonds No Longer Deemed Outstanding Hereunder. In determining
whether the Holders of the requisite aggregate principal amount of Bonds have
concurred in any demand, request, direction, consent, vote or waiver under this
Indenture, any Bonds which are owned by or on behalf of or for the account of
the Authority, the Company and, except for the purposes of Section 15.01, any
Bonds which are deemed no longer Outstanding hereunder shall be disregarded and
not included for the purpose of any such determination, and such Bonds shall not
be entitled to vote upon, consent to or concur in any action provided in this
Indenture, except that for the purposes of determining whether the Trustee shall
be protected in relying on any such demand, request, direction, consent, vote or
waiver only Bonds which the Trustee knows are owned as aforesaid shall be
disregarded. The Trustee may require each Holder of a Bond or Bonds, before such
Holder's demand, request, direction, consent, vote or waiver shall be deemed
effective, to reveal if the Bonds as to which such demand, request, direction,
consent, vote or waiver is made, granted, cast or given are disqualified as
provided in this Section.
XIII-3
ARTICLE XIV
AMENDING AND SUPPLEMENTING THE INDENTURE,
THE PARTICIPATION AGREEMENT, THE REMARKETING AGREEMENT,
AUCTION AGENCY AGREEMENT, BROKER-DEALER AGREEMENTS,
BOND PURCHASE TRUST AGREEMENT
SECTION 14.01. Amending and Supplementing Indenture Without Consent
of Holders. The Authority and the Trustee, from time to time and at any time and
without the consent or concurrence of any Holder, may enter into a Supplemental
Indenture, (i) to make any changes, modifications, amendments or deletions to
this Indenture that may be required to permit the Indenture to be qualified
under the Trust Indenture Act of 1939 of the United States of America or (ii)
for any one or more of the following purposes:
(a) (x) to make any changes or corrections in this Indenture or any
Supplemental Indenture as to which the Authority shall have been advised
by counsel that the same are required for the purpose of curing or
correcting any ambiguity or defective or inconsistent provision or
omission or mistake or manifest error contained in this Indenture or
Supplemental Indenture, or (y) to insert in this Indenture such provisions
clarifying matters or questions arising under this Indenture as are
necessary or desirable if such provisions shall not materially and
adversely affect the rights of the Holders;
(b) to add additional covenants and agreements of the Authority for
the purpose of further securing the payment of the Bonds;
(c) to surrender any right, power or privilege reserved to or
conferred upon the Authority by the terms of this Indenture;
(d) to confirm as further assurance any lien, pledge or charge, or
the subjection to any lien, pledge or charge, created or to be created by
the provisions of this Indenture or any Supplemental Indenture;
(e) to grant to or confer upon the Holders any additional rights,
remedies, powers, authority or security that lawfully may be granted to or
conferred upon them, or to grant to or to confer upon the Trustee for the
benefit of the Holders any additional rights, duties, remedies, power or
authority;
(f) to provide for the issuance of Bonds in book entry or coupon
form, if at the time permitted by applicable law;
(g) to provide for the substitution of rating agencies;
(h) to provide for any new administrative or procedural provisions
made necessary or desirable by the issuance of a Support Facility or an
Alternate Support Facility, other credit,
XIV-1
liquidity or support facility, including, but not limited to, any
amendment necessary to obtain a rating on the Bonds based upon such
facility; and
(i) to modify, amend or supplement the Indenture in such manner as
to permit the qualification of the Bonds for deposit with a Securities
Depository, and, in connection therewith, if they so determine, to add to
the Indenture, such other terms, conditions and provisions as may be
required to permit such qualification.
No Supplemental Indenture shall be entered into unless in the
opinion of Bond Counsel which shall be delivered to the Trustee (which opinion
may be combined with the opinion required by Section 14.04) the execution of
such Supplemental Indenture is permitted by the foregoing provisions of this
Section and the provisions of such Supplemental Indenture do not materially and
adversely affect the rights of the Holders of the Bonds and the Trustee may rely
on any such opinion.
SECTION 14.02. Amending and Supplementing Indenture with Consent of
Holders. With the consent of the Holders of a majority in principal amount of
the Bonds then Outstanding, the Authority and the Trustee from time to time and
at any time may enter into a Supplemental Indenture for the purpose of adding
any provisions to, or changing in any manner or eliminating any of the
provisions of, this Indenture, or modifying or amending the rights and
obligations of the Authority hereunder, or modifying or amending in any manner
the rights of the Holders; provided that, without the specific consent of the
Holders of all Bonds Outstanding which would be affected thereby no Supplemental
Indenture amending or supplementing the provisions hereof shall: (a) change the
fixed maturity date for the payment of the principal of any Bond, or the dates
for the payment of interest thereon or the terms of the purchase or redemption
thereof, or reduce the principal amount of any Bond or the rate of interest
thereon or the method of calculating the same except as otherwise provided in
this Indenture; or (b) reduce the aforesaid percentage of Bonds, the Holders of
which are required to consent to any Supplemental Indenture amending or
supplementing the provisions of this Indenture; or (c) give to any Bond any
preference over any other Bond secured hereby; or (d) authorize the creation of
any pledge of payments under the Participation Agreement or Note Payments prior
or superior to the pledge of a lien and charge thereon assigned herein for the
payment of the Bonds; or (e) effect any change in the purchase or redemption
provisions relating to the Bonds; or (f) deprive any Holders in any material
respect of the security afforded by this Indenture. A modification or amendment
of the provisions of Article IX hereof with respect to the Bond Fund or any
other Funds or Accounts established thereby shall not be deemed a change in the
terms of payment; provided that no such modification or amendment shall, except
upon the consent of the Holders of all Bonds Outstanding affected thereby,
reduce the amount or amounts required to be deposited in the Bond Fund. Nothing
in this paragraph contained, however, shall be construed as making necessary the
approval of the Holders of the execution of any Supplemental Indenture
authorized by the provisions of Section 14.01.
The proof of the giving of any consent by any Holder required by
this Section and of the holding of the Bonds for the purpose of giving consents
shall be made in accordance with the provisions of Article XIII. It shall not be
necessary that the consent of the Holders approve the particular form of wording
of the proposed supplemental amendment or supplement, but it shall be sufficient
if such consent approves the substance of the proposed amendment or supplement.
After the Holders of the required
XIV-2
percentage of Bonds shall have filed their consents to the amending or
supplementing hereof pursuant to this Section, the Authority shall mail a copy
of notice of such consent, postage prepaid, to each Holder at his or her address
as it appears upon the books of registry and to the Trustee. Nothing in this
paragraph contained, however, shall be construed as requiring the giving of
notice of any amending or supplementing of this Indenture authorized by this
Section. A record of the consents shall be filed with the Trustee, and shall be
proof of the matters therein stated until the contrary is proved. No action or
proceeding to set aside or invalidate such Supplemental Indenture or any of the
proceedings for its adoption shall be instituted or maintained unless such
action or proceeding is commenced within sixty (60) days after the mailing of
the notice required by this paragraph.
Notwithstanding anything in this Indenture to the contrary, the
consent of the Holders of the required amount of Bonds shall be deemed given
with respect to a Supplemental Indenture if:
(a) (i) the Supplemental Indenture takes effect on a date on which
all of the Bonds that are affected by such Supplemental Indenture are
subject to mandatory tender for purchase in accordance with this
Indenture, (ii) any modification or amendment effected thereby is
consented to in writing by the Remarketing Agent for such Bonds on or
prior to such effective date and is disclosed in the official statement or
other disclosure document pursuant to which such Bonds are remarketed and
(iii) the Bonds so tendered are purchased;
(b) (i) not less than 30 days before the effective date of the
Supplemental Indenture, the Trustee sends a notice of the proposed
modification or amendment to the Holders of the Bonds that are affected by
such Supplemental Indenture and the Holders of such Bonds have the right
to tender their Bonds for purchase pursuant to Section 5.03 hereof before
such effective date, (ii) the Remarketing Agent for such Bonds consents in
writing to the proposed modification or amendment on or prior to such
effective date and (iii) the Bonds so tendered are purchased; or
(c) (i) not less than 30 days before the effective date of the
Supplemental Indenture, the Trustee sends a notice of the proposed
modification or amendment to the Holders of the Auction Rate Bonds that
are affected by such Supplemental Indenture and the Auction Rate
determined for such Auction Rate Bonds at the Auction immediately
preceding such effective date is a Winning Bid Rate, and (ii) the
Broker-Dealer(s) for such Auction Rate Bonds consent in writing to the
proposed modification or amendment on or prior to such effective date;
provided, however, that, notwithstanding anything to the contrary in this
Indenture, any Auction Rate Bonds that are not the subject of a specific
Hold Order or Bid shall be deemed to be subject to a Sell Order at the
Auction immediately preceding such effective date.
SECTION 14.03. Notation upon Bonds; New Bonds Issued upon
Amendments. The Bonds delivered after the effective date of any action taken as
provided in this Article, if any, may and shall if required by the Trustee bear
a notation as to such action, by endorsement or otherwise and in form approved
by the Authority. In that case, upon demand of any Holder at such effective date
and upon presentation of Bonds at the principal office of the Trustee or other
transfer agent or registrar hereunder for such Bonds, and at such additional
offices, if any, as the Authority may select and designate for that purpose, a
suitable notation shall be made on the Bonds.
XIV-3
SECTION 14.04. Effectiveness of Supplemental Indentures. Upon the
execution pursuant to this Article by the Authority and the Trustee of any
Supplemental Indenture amending or supplementing the provisions of this
Indenture and the delivery to the Trustee of an opinion of Bond Counsel that
such Supplemental Indenture is permitted by the provisions of this Article XIV
and has been duly executed in accordance with the provisions hereof and
applicable law and that the provisions thereof are valid (upon which opinion the
Trustee, subject to the provisions of Section 11.04, shall be fully protected in
relying), or upon such later date as may be specified in such Supplemental
Indenture, (i) this Indenture and the Bonds shall be modified and amended in
accordance with such Supplemental Indenture; (ii) the respective rights,
limitations of rights, obligations, duties and immunities under this Indenture
of the Authority, the Trustee, and the Holders shall thereafter be determined,
exercised and enforced under this Indenture subject in all respects to such
modifications and amendments; and (iii) all of the terms and conditions of any
such Supplemental Indenture shall be a part of the terms and conditions of the
Bonds and of this Indenture for any and all purposes.
SECTION 14.05. Supplemental Indenture Affecting Support Facility
Provider. No Supplemental Indenture which takes effect while any Support
Facility is in effect may be entered into by the Authority and the Trustee or be
consented to by the Holders without written consent of the issuer of each
Support Facility Issuer.
SECTION 14.06. Supplemental Participation Agreements Not Requiring
the Consent of the Holders. The Authority and the Company may, with the written
consent of the Trustee but without notice to or consent of any Holder, from time
to time and at any time, agree to such supplemental agreements supplementing the
Participation Agreement or amendments to the Participation Agreement as shall
not be inconsistent with the terms and provisions of the Participation Agreement
or this Indenture and, in the opinion of the Authority, shall not be detrimental
to the interests of the Holders (which Supplemental Participation Agreements
shall thereafter form a part of the Participation Agreement):
(a) to cure any ambiguity or formal defect or omission in the
Participation Agreement or in any supplemental agreement;
(b) to grant to or confer upon the Trustee for the benefit of the
Holders any additional rights, remedies, powers, authority or security
that may lawfully be granted to or conferred upon the Holders or the
Trustee;
(c) to provide for any new administrative, security or procedural
provisions necessitated by the issuance of an Alternate Support Facility;
or
(d) to provide for or add any further changes or corrections that
are necessary or desirable to comply with any Supplemental Indenture
entered into pursuant to Section 14.01;
provided that no such Supplemental Participation Agreement which takes effect
while a Support Facility is in effect shall be effective prior to the receipt by
such parties of the written consent of each Support Facility Issuer.
XIV-4
SECTION 14.07. Notice and Consent for Supplemental Participation
Agreements Requiring the Consent of the Holders. Except for Supplemental
Participation Agreements or amendments provided for in Section 14.06, neither
the Authority nor the Trustee shall agree or consent, as the case may be, to any
Supplemental Participation Agreement or amendment to the Participation Agreement
unless notice of the proposed execution of such Supplemental Participation
Agreement or amendment shall have been given and the Holders shall have
consented to and approved the execution thereof in the same manner and form as
provided for in Section 14.02 in the case of Supplemental Indentures; provided
that no such Supplemental Participation Agreement which materially and adversely
affects any issuer of a Support Facility (so long as such Support Facility is in
effect) shall be effective prior to the receipt by such parties of the written
consent of the issuer of such Support Facility.
Notwithstanding anything in this Indenture to the contrary, the
consent of the Holders of the required amount of Bonds shall be deemed given
with respect to any Supplemental Participation Agreement or amendment to the
Participation Agreement if:
(a) (i) the Supplemental Participation Agreement or amendment to the
Participation Agreement takes effect on a date on which all of the Bonds
that are affected by such Supplemental Participation Agreement or
amendment to the Participation Agreement are subject to mandatory tender
for purchase in accordance with this Indenture, (ii) any modification or
amendment effected thereby is consented to in writing by the Remarketing
Agent for such Bonds on or prior to such effective date and disclosed in
the official statement or other disclosure document pursuant to which such
Bonds are remarketed and (iii) the Bonds so tendered are purchased;
(b) (i) not less than 30 days before the effective date of the
Supplemental Participation Agreement or amendment to the Participation
Agreement, the Trustee sends a notice of the proposed modification or
amendment to the Holders of the Bonds that are affected by such
modification or amendment and the Holders of such Bonds have the right to
tender their Bonds for purchase pursuant to Section 5.03 hereof before
such effective date, (ii) the Remarketing Agent for such Bonds consents in
writing to the proposed modification or amendment on or prior to such
effective date and (iii) the Bonds so tendered are purchased; or
(c) (i) not less than 30 days before the effective date of the
Supplemental Participation Agreement or amendment to the Participation
Agreement, the Trustee sends a notice of the proposed modification or
amendment to the Holders of the Auction Rate Bonds that are affected by
such Supplemental Participation Agreement or amendment to the
Participation Agreement and the Auction Rate determined for such Auction
Rate Bonds at the Auction immediately preceding such effective date is a
Winning Bid Rate, and (ii) the Broker-Dealer(s) for such Auction Rate
Bonds consent in writing to the proposed modification or amendment on or
prior to such effective date; provided, however, that, notwithstanding
anything to the contrary in this Indenture, any Auction Rate Bonds that
are not the subject of a specific Hold Order or Bid shall be deemed to be
subject to a Sell Order at the Auction immediately preceding such
effective date.
SECTION 14.08. Effectiveness of Supplemental Participation
Agreement. Upon the execution pursuant to this Article and of applicable law by
the Authority and the Company of any
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Supplemental Participation Agreement amending or supplementing the provisions of
the Participation Agreement and the delivery to the Trustee of an Opinion of
Bond Counsel that such Supplemental Participation Agreement is in due form, has
been duly executed in accordance with the provisions hereof and applicable law
and that the provisions thereof are valid (upon which opinion the Trustee,
subject to the provisions of Section 11.04, shall be fully protected in
relying), or upon such later date as may be specified in such Supplemental
Participation Agreement, (i) the Participation Agreement shall be modified and
amended in accordance with such Supplemental Participation Agreement; (ii) the
respective rights, limitations of rights, obligations, duties and immunities
thereunder of the Authority and the Company shall thereafter be determined,
exercised and enforced thereunder subject in all respects to such modifications
and amendments; and (iii) all of the terms and conditions of any such
Supplemental Participation Agreement shall be a part of the terms and conditions
thereof for any and all purposes.
SECTION 14.09. Amending and Supplementing the Remarketing Agreement,
Auction Agency Agreement, Broker-Dealer Agreements or Bond Purchase Trust
Agreement. Amendments of or supplements to the Remarketing Agreement, the
Auction Agency Agreement, any Broker-Dealer Agreement or the Bond Purchase Trust
Agreement shall be made only in accordance with the terms thereof.
XIV-6
ARTICLE XV
DEFEASANCE; MONEYS HELD FOR PAYMENT OF
DEFEASED BONDS
SECTION 15.01. Discharge of Liens and Pledges; Bonds No Longer
Deemed to be Outstanding Hereunder. Bonds purchased pursuant to Section 5.03,
5.04, 5.08 or 5.09 shall continue to be Outstanding hereunder until such Bonds
shall be cancelled in accordance with Section 5.15 or paid at maturity or
redeemed pursuant to Article V or otherwise defeased. The obligations of the
Authority under this Indenture and the liens, pledges, charges, trusts,
covenants and agreements of the Authority, herein made or provided for, shall
be, subject to the terms of Section 15.02, fully discharged and satisfied as to
the Bonds or portion thereof and the Bonds shall no longer be deemed to be
Outstanding hereunder:
(a) when the Bonds shall have been cancelled, or shall have been
surrendered for cancellation and are subject to cancellation, or shall have been
redeemed by the Trustee from monies held by it under this Indenture; or
(b) if the Bonds have not been cancelled or so surrendered for
cancellation or subject to cancellation, or so redeemed, when (1) payment of the
principal of and premium, if any, on the Bonds, plus interest on such principal
to the due date thereof (whether such due date be by reason of maturity or upon
redemption or prepayment, or otherwise) and of any Purchase Price which is or
may become due on such Bonds either (i) shall have been made or caused to be
made in accordance with the terms thereof, or (ii) shall have been provided for
by irrevocably depositing with the Trustee in trust, and irrevocably
appropriating and setting aside exclusively for such payments (A) monies
sufficient to make such payment, or (B) Governmental Obligations maturing as to
principal and interest in such amounts and at such times as will insure the
availability of sufficient and timely monies to make such payments when due, or
(C) a combination of both such monies and Governmental Obligations, whichever
the Authority deems to be in its best interest, (2) there shall have been
delivered to the Trustee (x) a letter addressed to the Trustee from a nationally
recognized firm of independent public accountants verifying the mathematical
accuracy of the sufficiency of the deposit made pursuant to (1)(ii) above, (y)
an opinion of Bond Counsel to the effect that upon the provision of payment on
the Bonds as described in (1)(ii) above, the Bonds are no longer deemed to be
Outstanding under the Indenture and (z) in the case of Bonds bearing interest at
a Daily Rate, a Weekly Rate, an Auction Rate, a Monthly Rate and a Semi-annual
Rate, written confirmation from S&P, if the Bonds are then rated by S&P, to the
effect that the deposit made pursuant to (1)(ii) above will not, by itself,
result in a reduction or withdrawal of its short-term or long-term rating of the
Bonds below the rating category of S&P then in effect with respect to the Bonds,
and (3) all necessary and proper fees, compensation and expenses of the Trustee
pertaining to the Bonds or portion thereof with respect to which such deposit is
made, shall have been paid or the payment thereof provided to the satisfaction
of the Trustee.
At such time as the Bonds shall be deemed to be no longer
Outstanding hereunder, as aforesaid, such Bonds shall cease to accrue interest
from the due date thereof (whether such due date occurs by reason of maturity,
or upon redemption or prepayment or otherwise) and, except for the purposes of
any such payment from such monies or Governmental Obligations and except, in the
case of
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Auction Rate Bonds, to the extent provided in the definition of Outstanding in
Article I shall no longer be secured by or entitled to the benefits of this
Indenture.
Any such monies so deposited with the Trustee as provided in this
Section may at the written direction of the Company also be invested and
reinvested in Governmental Obligations, maturing in the amounts and times as
hereinbefore set forth, and all income from all Governmental Obligations in the
hands of the Trustee pursuant to this Section which is not required for the
payment of the Bonds and interest thereon with respect to which such monies
shall have been so deposited shall be paid to the Company or if any Bonds are
then Outstanding, be deposited in the Bond Fund and credited to the Principal
Account as and when realized and collected, for use and application as are other
monies credited to such Account.
Anything in Article XV to the contrary notwithstanding, if monies or
Governmental Obligations have been deposited or set aside with the Trustee
pursuant to this Section for the payment of the Bonds, the Bonds shall be deemed
to have been paid in full. No amendment to the provisions of this Article shall
be made without the consent of the Holders of the Bonds affected thereby.
The Trustee shall promptly surrender any Support Facility (if
appropriate for the type of instrument or instruments then serving as Support
Facility) to the issuer of such Support Facility for cancellation or shall
otherwise take appropriate action to terminate the Support Facility following
any such defeasance.
SECTION 15.02. Release of Indenture, Termination of Right, Title and
Interest of Trustee. When the Bonds shall be deemed to be paid in accordance
with the provisions of Section 15.01, then and in the case all right, title and
interest of the Trustee under this Indenture shall thereupon cease, determine
and become void, and the Trustee in such case shall release this Indenture,
shall execute such documents to evidence such release as may be reasonably
required by the Authority and furnish the Authority with the same, and shall
turn over to the Company any surplus monies and balances remaining in any of the
Funds and Accounts created in or held under this Indenture, other than monies
and Governmental Obligations held by it pursuant to Section 15.01 or the
provisions of Section 15.03 for the redemption, payment or prepayment of the
Bonds; otherwise, this Indenture shall be, continue and remain in full force and
effect.
Notwithstanding the satisfaction and discharge of this Indenture,
the rights of the Trustee and the Registrar and Paying Agent under Sections
11.02, 11.06 and 11.17 shall survive defeasance of the Bonds hereunder.
SECTION 15.03. Bonds Not Presented for Payment When Due; Monies Held
for the Bonds after Due Date of Bonds. Subject to the provisions of the next
sentence of this paragraph, if the Bonds shall not be presented for payment when
the principal thereof shall become due, whether at maturity or at the date fixed
for the redemption thereof, or otherwise, and if monies or Governmental
Obligations shall at such due date be held by the Trustee in trust for that
purpose sufficient and available to pay the principal of and premium, if any, on
the Bonds, together with all interest due on such principal to the due date
thereof or to the date fixed for redemption thereof, all liability of the
Authority and the Company for
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such payment shall forthwith cease, determine and be completely discharged, and
thereupon it shall be the duty of the Trustee to hold said monies or
Governmental Obligations without liability to the Holders for interest thereon,
in trust for the benefit of the Holders, which thereafter shall be restricted
exclusively to said monies or Governmental Obligations for any claim of whatever
nature on its part on or with respect to the Bonds, including for any claim for
the payment thereof. Notwithstanding anything to the contrary in Section 9.04,
any monies or Governmental Obligations held by the Trustee for the Holders after
the principal of and premium, if any, and interest on the Bond or any portion
thereof with respect to which such monies or Governmental Obligations have been
so set aside has become due and payable (whether at maturity or upon redemption
or prepayment or otherwise) shall be either held uninvested as cash or at the
written direction of the Company invested and reinvested in Governmental
Obligations which mature on the next Business Day. Any such monies or
Governmental Obligations held by the Trustee for the Holders after the principal
of and premium, if any, and interest on the Bonds or any portion thereof with
respect to which such monies or Governmental Obligations have been so set aside
has become due and payable (whether at maturity or upon redemption or prepayment
or otherwise) shall be deemed abandoned property when such monies or
Governmental Obligations shall have remained unpaid or undelivered to the Holder
or Holders entitled thereto for three years from the date the principal of and
premium, if any, and interest on the Bonds or any portion thereof has become due
and payable and shall be subject to the laws of the State of New York relating
to disposition of unclaimed property.
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ARTICLE XVI
FORM OF BONDS
AND ENDORSEMENT AND ASSIGNMENT PROVISIONS
SECTION 16.01. Form of Bonds and Endorsement and Assignment
Provisions. The form of Bond, the form of the certificate of authentication
thereof, the form of endorsement to appear thereon and the form of assignment
thereof shall be substantially in the form set forth in Appendix A hereto.
XVI-1
ARTICLE XVII
MISCELLANEOUS
SECTION 17.01. Benefits of Indenture Limited to Authority, Company,
Trustee, Registrar and Paying Agent and Auction Agent and Holders of the Bonds.
With the exception of rights or benefits herein expressly conferred, nothing
expressed or mentioned in or to be implied from this Indenture or the Bonds is
intended or should be construed to confer upon or give to any person other than
the Authority, the Company, the Trustee, the Registrar and Paying Agent, the
Auction Agent and the Holders of the Bonds any legal or equitable right, remedy
or claim under or by reason of or in respect to this Indenture or any covenant,
condition, stipulation, promise, agreement or provision herein contained. Unless
otherwise expressly set forth herein, this Indenture and all of the covenants,
conditions, stipulations, promises, agreements and provisions hereof are
intended to be and shall be for and inure to the sole and exclusive benefit of
the Authority, the Company, the Trustee, the Registrar and Paying Agent, the
Auction Agent and the Holders of the Bonds as herein and therein provided.
SECTION 17.02. Indenture a Contract; Indenture Binding Upon
Successors or Assigns of the Authority. In consideration of the acceptance of
the Bonds by any person who shall hold the same from time to time, each of the
obligations, duties, limitations and restraints imposed by this Indenture upon
the Authority or any employee thereof shall be deemed to be a covenant between
the Authority and every Holder and this Indenture and every provision and
covenant hereof shall be a contract by the Authority with the Holders of the
Bonds issued hereunder to secure the full and final payment of the principal of,
premium, if any, of and the interest on the Bonds executed and delivered
hereunder. The provisions of the Act shall be a contract by the Authority with
the Holders and the duties of the Authority and any employee thereof under the
Act shall be enforceable by the Holders. This Indenture shall be enforceable by
the Holders, by mandamus or other appropriate suit, action or proceeding in any
court of competent jurisdiction. The covenants and agreements herein set forth
to be performed by the Authority and any employee thereof, shall be for the
benefit, security and protection of the Holders. All the terms, provisions,
conditions, covenants, warranties and agreements contained in this Indenture
shall be binding upon the assigns of the Authority, and shall inure to the
benefit of the Trustee, its successors or substitutes in trust and assigns, and
the Holders.
SECTION 17.03. Notice to Holders of Bonds. Except as is otherwise
provided in this Indenture, any provision for the mailing of a notice or other
paper to the Holders shall be fully complied with if it is mailed postage
prepaid, to the Holder of the Bonds at such Holder's address appearing upon the
books of registry kept pursuant to Article VII.
SECTION 17.04. Waiver of Notice. Whenever in this Indenture the
giving of notice by mail, publication, or otherwise is required, the giving of
such notice may be waived by the person entitled to receive such notice, and in
any case the giving or receipt of such notice shall not be a condition precedent
to the validity of any action taken in reliance upon such waiver.
SECTION 17.05. Effect of Saturdays, Sundays and Non-Business Days.
Except as otherwise specifically provided herein, whenever this Indenture
requires any action to be taken on a
XVII-1
Saturday, Sunday or other day which is not a Business Day, such action shall be
taken on the first Business Day occurring thereafter. Except as otherwise
specifically provided herein, whenever in this Indenture the time within which
any action is required to be taken or within which any right will lapse or
expire shall terminate on a Saturday, Sunday or other day which is not a
Business Day, such time shall continue to run until midnight on the next
succeeding Business Day.
SECTION 17.06. Partial Invalidity. If any one or more of the
covenants or agreements or portions thereof provided in this Indenture on the
part of the Authority or the Trustee to be performed should be determined by a
court of competent jurisdiction to be contrary to law, then such covenant or
covenants, or such agreement or agreements, or such portions thereof, shall be
deemed severable from the remaining covenants and agreements or portions thereof
provided in this Indenture and the invalidity thereof shall in no way affect the
validity of the other provisions of this Indenture or of the Bonds, but the
Holders shall retain all the rights and benefits accorded to them hereunder and
under any applicable provisions of law.
If any provisions of this Indenture shall be held or deemed to be or
shall, in fact, be inoperative or unenforceable or invalid in any particular
case in any jurisdiction or jurisdictions or in all jurisdictions, or in all
cases because it conflicts with any constitution or statute or rule of public
policy, or for any other reason, such circumstances shall not have the effect of
rendering the provision in question inoperative or unenforceable or invalid in
any other case or circumstance, or of rendering any other provision or
provisions herein contained inoperative or unenforceable or invalid to any
extent whatsoever.
SECTION 17.07. Law and Place of Enforcement of Indenture. This
Indenture shall be construed and interpreted in accordance with the laws of the
State of New York and all suits and actions arising out of this Indenture shall
be instituted in a court of competent jurisdiction in the State of New York.
SECTION 17.08. Requests, Approvals and Directions of Authority.
Whenever in this Indenture a request, approval, direction or other action is
required of the Authority, such request, approval, direction or other action
shall be in the form of and evidenced by a certificate of an Authorized Officer
of the Authority unless otherwise provided herein.
SECTION 17.09. Notices, Demands; Requests. Except as otherwise set
forth herein, all notices, demands, directions and requests to be given to or
made hereunder by the Company, the Authority, the Trustee, the Remarketing
Agent, the Auction Agent and the Registrar and Paying Agent shall be given or
made in writing and shall be deemed to be properly given or made if sent by
first class United States mail, postage prepaid, addressed as follows:
(a) As to the Company 4 Irving Place
New York, New York 10003
Attention: Secretary
(b) As to the Authority Corporate Plaza West
286 Washington Avenue Extension
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Albany, New York 12203
Attention: President
(c) As to the Trustee 101 Barclay Street - 8W
New York, New York 10286
Attention: Corporate Trust Trustee
Administration
(d) As to the Auction Agent at the address specified in the
Auction Agency Agreement
(e) As to the Remarketing Agents at the address specified in the applicable
Remarketing Agreement
(f) As to the Registrar 101 Barclay Street - 8W
and Paying Agent New York, New York 10286
Attention: Corporate Trust Trustee
Administration
Any such notice, demand, direction or request may also be
transmitted to the appropriate above-mentioned party by telegram, telecopy,
telex or similar means and shall be deemed to be properly given or made at the
time of such transmission if, and only if, such transmission of notice shall be
in writing and sent as specified above.
Any notice, demand, direction or request given or transmitted to the
Trustee or the Authority shall be effective only upon receipt.
Any of such addresses may be changed at any time upon written notice
of such change sent by first-class United States mail, postage prepaid, to the
other parties by the party affecting the change.
If the Bonds shall be rated by Moody's, the Trustee shall furnish to
Moody's at 99 Church Street, New York, New York, Attention: Corporate Department
Structured Finance Group or such other office as Moody's may designate to the
Trustee, if the Bonds shall be rated by S&P, the Trustee shall furnish to S&P at
55 Water Street, New York, New York 10041, Attention: Letter of Credit
Surveillance Group, and if the Bonds shall be rated by Fitch, the Trustee shall
furnish to Fitch, Inc. at One State Street Plaza, New York, New York 10004,
Attention: Municipal Structured Finance Group (i) a copy of each amendment to
the Indenture, Participation Agreement, Bond Purchase Trust Agreement, and each
Support Facility of which it has knowledge, (ii) notice of the termination,
extension or expiration of any Support Facility, (iii) notice of the payment of
all the Bonds (iv) notice of a Change in the Interest Rate Mode, and (v) notice
of any successor Trustee, Registrar and Paying Agent or Remarketing Agent;
provided, however, that failure by the Trustee to so notify Moody's, S&P or
Fitch shall not result in any liability on the part of the Trustee or affect the
validity of such documents or actions.
SECTION 17.10. Effect of Article and Section Headings and Table of
Contents. The heading or titles of the several Articles and Sections hereof, and
any table of contents appended hereto or
XVII-3
to copies hereof, shall be solely for convenience of reference and shall not
affect the meaning, construction, interpretation or effect of this Indenture.
SECTION 17.11. Indenture May be Executed in Counterparts;
Effectiveness of Indenture. This Indenture may be simultaneously executed in
counterparts. Each such counterpart so executed shall be deemed to be an
original, and all together shall constitute but one and the same instrument.
This Indenture shall take effect immediately upon the execution and delivery
hereof. Notwithstanding the actual date hereof, for convenience and purposes of
reference this Indenture shall be dated as of June 1, 2001 and may be cited and
referred to as the "Indenture dated as of June 1, 2001".
SECTION 17.12. Liability of Authority Limited to Revenues.
Notwithstanding anything in this Indenture or in the Bonds contained, the
Authority shall not be required to advance any monies derived from any source
other than the Revenues and other assets pledged under this Indenture for any of
the purposes in this Indenture mentioned, whether for the payment of the
principal or redemption price of or interest on the Bonds or for any other
purpose of this Indenture. Pursuant to Section 5.08 of the Participation
Agreement, the Company has agreed to indemnify and hold harmless the Authority
and the Trustee from all liability arising hereunder.
SECTION 17.13 Waiver of Personal Liability. No member, officer,
agent or employee of the Authority shall be individually or personally liable
for the payment of the principal of or premium, if any, or interest on the Bonds
or be subject to any personal liability or accountability by reason of the
issuance thereof; but nothing herein contained shall relieve any such member,
officer, agent or employee from the performance of any official duty provided by
law or by this Indenture.
[Signature Page of this Indenture Follows]
XVII-4
IN WITNESS WHEREOF, the Authority has caused this Indenture to be
executed by its President, Vice President or Treasurer and its corporate seal to
be hereunto affixed and attested by its Acting Secretary, and the Trustee has
caused this Indenture to be executed by its authorized officer, all as of the
date first above written.
NEW YORK STATE ENERGY RESEARCH
AND DEVELOPMENT AUTHORITY
By
-------------------------------
President
(SEAL)
Attest:
- ---------------------------------------
Acting Secretary
THE BANK OF NEW YORK
as Trustee,
By
----------------------
[Signature Page of Indenture]
XVII-6