LOAN AGREEMENT
CITY OF GARY, INDIANA
and
THE MILLER PARTNERSHIP, L.P.
-----------------------------------
RELATING TO
$20,540,000
CITY OF GARY, INDIANA
ADJUSTABLE RATE ECONOMIC DEVELOPMENT
REVENUE REFUNDING BONDS, SERIES 1996 A
(THE MILLER PARTNERSHIP, L.P. PROJECT)
AND
$1,680,000
CITY OF GARY, INDIANA
TAXABLE ADJUSTABLE RATE ECONOMIC DEVELOPMENT
REVENUE REFUNDING BONDS, SERIES 1996 B
(THE MILLER PARTNERSHIP, L.P. PROJECT)
DATED
AS OF
MARCH 1, 1996
Ice Miller Donadio & Ryan
Bond Counsel
TABLE OF CONTENTS
Page
----
ARTICLE I. DEFINITIONS.................................................. 2
Section 1.1. Use of Defined Terms.......................................... 2
Section 1.2. Definitions................................................... 2
Section 1.3. Interpretation................................................ 4
Section 1.4. Captions and Headings......................................... 5
ARTICLE II. REPRESENTATIONS, WARRANTIES AND COVENANTS..................... 6
Section 2.1. Representations, Warranties and Covenants of the Issuer....... 6
Section 2.2. Representations, Warranties and Covenants of the Borrower..... 7
Section 2.3. Entire Agreement with Bank.................................... 8
ARTICLE III. ISSUANCE OF THE REFUNDING BONDS............................... 10
Section 3.1. Issuance of the Refunding Bonds; Application of Proceeds...... 10
Section 3.2. Disbursements from the Project Fund; Construction
Account Disbursements......................................... 10
Section 3.3. Investment of Fund Moneys..................................... 13
Section 3.4. Rebate Fund................................................... 13
Section 3.5. Arbitrage Covenants........................................... 13
ARTICLE IV. LOAN BY ISSUER; REPAYMENT OF THE LOAN; LOAN
PAYMENTS AND ADDITIONAL PAYMENTS.............................. 15
Section 4.1. Loan Repayment; Delivery of Notes and Letter of Credit........ 15
Section 4.2. Additional Payments........................................... 16
Section 4.3. Place of Payments............................................. 16
Section 4.4. Obligations Unconditional..................................... 16
Section 4.5. Assignment of Agreement and Revenues.......................... 17
Section 4.6. Letter of Credit.............................................. 17
- i -
ARTICLE V. ADDITIONAL AGREEMENTS AND COVENANTS........................... 18
Section 5.1. Right of Inspection........................................... 18
Section 5.2. Sale, Lease or Grant of Use by Borrower....................... 18
Section 5.3. Indemnification............................................... 18
Section 5.4. Borrower Not to Adversely Affect Exclusion from Gross
Income of Interest on Refunding Bonds......................... 20
Section 5.5. Assignment by Issuer.......................................... 20
Section 5.6. Borrower's Performance Under Indenture........................ 20
Section 5.7. Maintenance of Project........................................ 20
Section 5.8. Continued Existence........................................... 20
ARTICLE VI. REDEMPTION OF REFUNDING BONDS................................. 21
Section 6.1. Optional Redemption........................................... 21
Section 6.2. Extraordinary Optional Redemption............................. 21
Section 6.3. Mandatory Redemption of Refunding Bonds....................... 22
Section 6.4. Actions by Issuer............................................. 23
Section 6.5. Required Deposits for Optional Redemption..................... 23
ARTICLE VII. EVENTS OF DEFAULT AND REMEDIES................................ 24
Section 7.1. Events of Default............................................. 24
Section 7.2. Remedies on Default........................................... 25
Section 7.3. No Remedy Exclusive........................................... 26
Section 7.4. Agreement to Pay Attorneys' Fees and Expenses................. 26
Section 7.5. No Waiver..................................................... 26
Section 7.6. Notice of Default............................................. 26
Section 7.7. Remedies Subject to Bank's Direction.......................... 26
ARTICLE VIII. MISCELLANEOUS................................................. 28
Section 8.1. Term of Agreement............................................. 28
Section 8.2. Notices....................................................... 28
Section 8.3. Extent of Covenants of the Issuer; No Personal Liability...... 28
Section 8.4. Binding Effect................................................ 28
Section 8.5. Amendments and Supplements.................................... 28
Section 8.6. Execution Counterparts........................................ 29
Section 8.7. Severability.................................................. 29
Section 8.8. Governing Law................................................. 29
- ii -
Section 8.9. Amounts Remaining in Funds.................................... 29
- iii -
THIS LOAN AGREEMENT is made and entered into as of March 1, 1996 between
the City of Gary, Indiana, a municipal corporation and political subdivision
existing under the laws of the State of Indiana (the "Issuer"), and The Miller
Partnership, L.P., an Illinois limited partnership (the "Borrower"), under the
circumstances summarized in the following recitals (the capitalized terms not
defined above or in the recitals being used therein as defined in or pursuant to
Article I hereof):
A. The Issuer is authorized and empowered by the provisions of Indiana
Code 36-7-11.9 and -12 and Indiana Code 5-1-5 (collectively, the "Act") to
issue bonds for the purpose of refinancing the cost of acquiring, repairing,
restoring, reconditioning, refinancing or constructing "economic development
facilities," as defined in the Act, and to loan the proceeds of such bonds
pursuant to a Loan Agreement to a "user," as defined in the Act, to be used for
such purposes, which loan agreement shall provide for the repayment of such loan
by such user and which may provide for such loan to be secured or evidenced by
one or more notes, debentures, bonds or other secured or unsecured debt
obligations of such user.
B. The Borrower and the Issuer have full right and lawful authority to
enter into this Agreement and to perform and observe the provisions hereof on
their respective parts to be performed and observed.
NOW, THEREFORE, in consideration of the premises and the mutual covenants
herein contained, the parties hereto covenant, agree and bind themselves as
follows (provided that any obligation of the Issuer created by or arising out of
this Agreement shall not be a general debt on its part but shall be payable
solely out of the Revenues):
ARTICLE I.
DEFINITIONS
Section 1.1. USE OF DEFINED TERMS. Words and terms defined in the Indenture
shall have the same meanings when used herein, unless the context or use clearly
indicates another meaning or intent. In addition, the words and terms set forth
in Section 1.2 hereof shall have the meanings set forth therein unless the
context or use clearly indicates another meaning or intent.
Section 1.2. DEFINITIONS AS USED HEREIN:
"Additional Payments" means the amounts required to be paid by the Borrower
pursuant to the provisions of Section 4.2 hereof.
"Agreement" means this Loan Agreement, as amended or supplemented from time
to time.
"Authorized Borrower Representative" means the President or any Vice
President of the general partner of the Borrower.
"Engineer" means an individual or firm and qualified to practice the
profession of engineering or architecture under the laws of the State.
"Event of Default" means any of the events described as an Event of Default
in Section 7.1 hereof.
"Force Majeure" means any of the causes, circumstances or events described
as constituting Force Majeure in Section 7.1 hereof.
"Indenture" means the Trust Indenture, dated as of even date herewith,
between the Issuer and the Trustee, as amended or supplemented from time to
time.
"Loan" means the loan by the Issuer to the Borrower of the proceeds
received from the sale of the Refunding Bonds.
"Loan Payment Date" means any date on which any of the Loan Payments are
due and payable, whether at maturity, upon acceleration, call for redemption or
prepayment, or otherwise.
"Loan Payments" means the amounts required to be paid by the Borrower in
repayment of the Loan pursuant to the provisions of the Notes and of Section 4.1
hereof.
"Notes" means the Refunding Notes and any Additional Notes.
- 2 -
"Notice Address" means:
(a) As to the Issuer: City of Gary, Indiana
City Building
Gary, Indiana 46402
Attention: Clerk
(b) As to the Borrower: The Miller Partnership, L.P.
401 N. Michigan Avenue
Suite 3000
Chicago, Illinois 60611
Attention: Paul Fisher
(c) As to the Trustee: Fifth Third Bank of Central Indiana
251 N. Illinois Street, Suite 1000
Indianapolis, Indiana 46204
Attention: Corporate Trust Department
(d) As to the Bank: The Royal Bank of Scotland plc,
acting through its New York Branch
Wall Street Plaza, 26th Floor
88 Pine Street
New York, New York 10005-1801
Attention: Derek I. Bonnar
(e) As to the Co-Remarket-
ing Agent, at: Gates Capital Corporation
100 Park Avenue
New York, New York 10017
Attention: Ameilia A. Recio
(f) As to the Paying Agent
Authenticating Agent
or Registrar, at: The Fifth Third Bank
38 Fountain Square Plaza
Cincinnati, Ohio 45263
Attention: Corporate Trust Department
(g) As to the
- 3 -
Remarketing Agent: Everen Securities, Inc.
77 W. Wacker Drive, 28th Floor
Chicago, Illinois 60601-1994
Attention: Felicia Flowers-Smith
or such additional or different address, notice of which is given under Section
8.2 hereof.
"Prior Bonds Loan Agreement" means, collectively, the Loan Agreement,
Mortgage, Security Agreement, Assignment of Rents and Leases and Financing
Statement dated as of April 1, 1991, among the Issuer, the Borrower and The
Royal Bank of Scotland plc, Acting Through its New York Branch, as amended by
the First Supplemental Loan Agreement, Mortgage, Security Agreement, Assignment
of Rents and Leases and Financing Statement dated as of September 1, 1993.
"Project" means the Project as described on Exhibit B attached hereto.
"Refunding Bonds" means, collectively, the City of Gary, Indiana Adjustable
Rate Economic Development Revenue Refunding Bonds, Series 1996 A (The Miller
Partnership, L.P. Project) authorized in the Indenture in the original principal
amount of $20,540,000, and the City of Gary, Indiana Taxable Adjustable Rate
Economic Development Revenue Refunding Bonds, Series 1996 B (The Miller
Partnership, L.P. Project) authorized in the Indenture in the original principal
amount of $1,680,000.
"Refunding Notes" means the Note, Series 1996 A in the principal amount of
$20,540,000 and the Note, Series 1996 B of the Borrower in the principal amount
of $1,680,000, each dated as of even date with the Refunding Bonds, in the forms
attached hereto as Exhibit A evidencing the obligation of the Borrower to make
Loan Payments.
"Remarketing Agreement" means the Remarketing Agreement of even date
herewith between the Borrower and Everen Securities, Inc., as Remarketing Agent,
as amended and supplemented from time to time.
"Tax Certificate" means the Tax Representation Certificate of the Borrower
delivered in connection with the initial issuance and delivery of the Refunding
Bonds.
"Tax Regulatory Agreement" means the Tax Regulatory Agreement, dated as of
March 1, 1996, among the Borrower, the Issuer and the Trustee.
"Trustee" means the Trustee at the time acting as such under the Indenture,
originally Fifth Third Bank of Central Indiana, as Trustee, and any successor
Trustee as determined or designated under or pursuant to the Indenture.
- 4 -
"Unassigned Issuer's Rights" means all of the rights of the Issuer to
receive Additional Payments under Section 4.2 hereof, to be held harmless and
indemnified under Section 5.3 hereof, to be reimbursed for attorney's fees and
expenses under Section 7.4 hereof, and to give or withhold consent to
amendments, changes, modifications, alterations and termination of this
Agreement under Section 8.5 hereof.
Section 1.3. INTERPRETATION. Any reference herein to the Issuer, to the
Issuing Authority or to any member or officer of either includes entities or
officials succeeding to their respective functions, duties or responsibilities
pursuant to or by operation of law or lawfully performing their respective
functions.
Any reference to a section or provision of the Constitution of the State or
the Act, or to a section, provision or chapter of the Indiana Code or to any
statute of the United States of America, includes that section, provision,
chapter or statute as amended, modified, revised, supplemented or superseded
from time to time; provided, that no amendment, modification, revision,
supplement or superseding Section, provision, chapter or statute shall be
applicable solely by reason of this provision if it constitutes in any way an
impairment of the rights or obligations of the Issuer, the Holders, the Trustee,
the Bank or the Borrower under this Agreement.
Unless the context indicates otherwise, words importing the singular number
include the plural number, and vice versa; the terms "hereof,""hereby,"
"herein," "hereto," "hereunder" and similar terms refer to this Agreement as a
whole; and the term "hereafter" means after, and the term "heretofore" means
before, the date of delivery of the Refunding Bonds. Words of any gender
include the correlative words of the other genders, unless the sense indicates
otherwise.
Section 1.4. CAPTIONS AND HEADINGS. The captions and headings in this
Agreement are solely for convenience of reference and in no way define, limit
or describe the scope or intent of any Articles, Sections, subsections,
paragraphs, subparagraphs or clauses hereof.
(End of Article I)
- 5 -
ARTICLE II.
REPRESENTATIONS, WARRANTIES AND COVENANTS
Section 2.1. REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE ISSUER. The
Issuer represents and warrants that:
(a) It is a duly organized and validly existing municipality and
political subdivision existing under the laws of the State.
(b) It has full legal right, power and authority pursuant to the
Act to finance the Project through the issuance of the Refunding Bonds;
has made the necessary findings of public purpose, has given any
necessary notices and has taken all other steps and followed all
procedures required by the Constitution and laws of the State (including
the Act) in connection therewith; and has full legal right, power and
authority to (i) enter into this Agreement, the Bond Purchase Agreement,
the Letter of Representations and the Indenture, (ii) issue, sell and
deliver the Refunding Bonds and (iii) carry out and consummate all other
transactions contemplated by this Agreement, the Bond Purchase
Agreement, the Letter of Representations and the Indenture.
(c) It has duly authorized (i) the execution, delivery and
performance of this Agreement, the Refunding Bonds, the Bond Purchase
Agreement, the Letter of Representations and the Indenture, and (ii) the
taking of any and all such actions as may be required on the part of the
Issuer to carry out, give effect to and consummate the transactions
contemplated by such instruments.
(d) This Agreement, the Bond Purchase Agreement, the Letter of
Representations and the Indenture constitute legal, valid and binding
obligations of the Issuer, enforceable in accordance with their
respective terms; this Agreement, the Bond Purchase Agreement, the
Letter of Representations and the Indenture have been duly authorized,
executed and delivered by the Issuer; and, when authenticated by the
Trustee in accordance with the provisions of the Indenture, the
Refunding Bonds will have been duly authorized, executed, issued and
delivered and will constitute legal, valid and binding special
obligations of the Issuer in conformity with the provisions of the Act
and the Constitution of the State.
(e) There is no action, suit, proceeding, inquiry, or investigation
at law or in equity or before or by any court, public board or body,
pending or, to the best of the knowledge of the Issuer, threatened
against the Issuer, nor to the best of the knowledge of the Issuer is
there any basis therefor, which in any manner questions the validity of
the Act, the powers of the Issuer referred to in paragraph (b) above or
the validity of any proceedings taken by the Issuer in connection with
the issuance of the Refunding Bonds
- 6 -
or wherein any unfavorable decision, ruling or finding could materially
adversely affect the transactions contemplated by this Agreement or
which, in any way, would adversely affect the validity or enforceability
of the Refunding Bonds, the Indenture, the Letter of Representations,
the Bond Purchase Agreement or this Agreement (or of any other
instrument required or contemplated for use in consummating the
transactions contemplated thereby and hereby).
(f) The execution and delivery by the Issuer of this Agreement, the
Refunding Bonds, the Letter of Representations, the Bond Purchase
Agreement and the Indenture in compliance with the provisions of each of
such instruments will not conflict with or constitute a breach of, or
default under, any material commitment, Agreement or other instrument to
which the Issuer is a party or by which it is bound, or under any
provision of the Act, the Constitution of the State or any existing law,
rule, regulation, ordinance, judgment, order or decree to which the
Issuer is subject.
(g) The Issuer will do or cause to be done all things necessary, so
far as lawful, to preserve and keep in full force and effect its existence
or to assure the assumption of its obligations under this Agreement, the
Letter of Representations, the Indenture and the Refunding Bonds by any
successor public body.
Section 2.2. REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE BORROWER.
The Borrower represents, warrants and covenants that:
(a) The Borrower is a limited partnership duly organized and validly
existing in full force and effect under the laws of the State of
Illinois, is authorized to transact business under the laws of the State
of Indiana, and has full power and authority to execute, deliver and
perform this Agreement, the Bond Purchase Agreement, the Reimbursement
Agreement, the Remarketing Agreement and the Refunding Notes and to
enter into and carry out the transactions contemplated by those
documents. That execution, delivery and performance does not, and will
not violate any provision of law applicable to the Borrower or its
Agreement of Limited Partnership and does not, and will not conflict
with or result in a default under any Agreement or instrument to which
the Borrower is a party or by which the Borrower is bound. This
Agreement, the Bond Purchase Agreement, the Reimbursement Agreement, the
Remarketing Agreement and the Refunding Notes, by proper action, have
been duly authorized, executed and delivered by the Borrower and are
valid and binding obligations of the Borrower.
(b) CenterPoint Properties Corporation, a Maryland corporation, is the
general partner of the Borrower and has a 99% ownership interest in the
Borrower. CenterPoint Realty Services Corporation, an Illinois
corporation, is a limited partner of the Borrower, and has a 1%
ownership interest in the Borrower.
- 7 -
(c) The Project has been acquired, constructed, equipped and
installed, and is being operated, as required by the Prior Bonds Loan
Agreement. The Project is and will be operated and maintained in such
manner as to conform in all material respects with all applicable
zoning, planning, building, health, environmental and other applicable
governmental rules and regulations and such operation and maintenance
will be consistent with the Act.
(d) The representations contained in the Tax Certificate (which is
incorporated herein by this reference thereto) are true and correct and
the Borrower will observe the covenants contained therein as fully as if
set forth herein.
(e) The Borrower will not use, or cause any of the funds provided
by the Issuer hereunder to be used in such manner as to, or take or omit
to take any action, in violation of any provision of the Loan Agreement
or of the Tax Regulatory Agreement which would impair the exclusion from
gross income of interest on the Series 1996 A Bonds for federal income
tax purposes.
(f) Neither the Borrower nor CenterPoint is in default in the
payment of principal of, or interest on, any of the its respective
indebtedness for borrowed money, or in default under any instrument
under which, or subject to which, any indebtedness has been incurred,
and no event has occurred and is continuing under the provisions of any
Agreement involving the Borrower or CenterPoint that, with the lapse of
time or the giving of notice, or both, would constitute an event of
default thereunder.
(g) No litigation at law or in equity nor any proceeding before any
governmental agency or other tribunal involving the Borrower or
CenterPoint is pending or, to the knowledge of the Borrower, threatened,
in which any liability of the Borrower or CenterPoint is not adequately
covered by insurance or in which any judgment or order would have a
material and adverse effect upon the business or assets of the Borrower
or CenterPoint or would materially and adversely affect the operation of
the Project, the validity of this Agreement, the Bond Purchase
Agreement, the Reimbursement Agreement, the Remarketing Agreement and
the Refunding Notes or the performance of the Borrower's or
CenterPoint's respective obligations thereunder or the transactions
contemplated hereby.
(h) Neither the Borrower nor CenterPoint has made or will make any
changes to the Project or to the operation thereof which would affect
the qualification of the Project under the Act or impair the exclusion
from gross income for federal income tax purposes of the interest on the
Refunding Bonds.
Section 2.3. ENTIRE AGREEMENT WITH BANK.
- 8 -
(a) The Borrower hereby represents to the Issuer that the
Reimbursement Agreement and the Mortgage (as defined in the
Reimbursement Agreement) and any other loan documents relating to the
Reimbursement Agreement constitute the entire Agreement between the
Borrower and the Bank respecting the loan of any funds to the Borrower.
The Borrower represents that there is no other agreement, either oral or
written, between the Borrower, on the one hand, or the Bank on the other
hand respecting the loan of any funds to the Borrower.
(b) The Borrower hereby covenants to the Issuer that it will not
take any action, directly or indirectly (including, but not limited to,
any amendment to Article II of the Reimbursement Agreement), nor fail to
take any action, directly or indirectly, which would cause any payment
under the Letter of Credit from the Bank to the Trustee to be a voidable
preference under Section 547 of Title 11 of the United States Code, 11
U.S.C. Section 101 ET SEQ. (the "Bankruptcy Code") which is recoverable
under Section 550(a) of the Bankruptcy Code in the event of the filing
of a petition in bankruptcy by or against the Borrower or the Issuer.
(End of Article II)
- 9 -
ARTICLE III.
ISSUANCE OF THE REFUNDING BONDS
Section 3.1. ISSUANCE OF THE REFUNDING BONDS; APPLICATION OF PROCEEDS. To
provide funds to make the loan for purposes of refunding the Prior Bonds, the
Issuer will issue, sell and deliver the Refunding Bonds as required by the
provisions of the Bond Purchase Agreement. The Refunding Bonds will be issued
pursuant to the Indenture in the aggregate principal amount, will bear interest,
will mature and will be subject to redemption as set forth therein. The
Borrower hereby approves the terms and conditions of the Indenture and the
Refunding Bonds, and the terms and conditions under which the Refunding Bonds
will be issued, sold and delivered.
The proceeds from the sale of the Refunding Bonds shall be loaned to the
Borrower by depositing such proceeds with the Trustee which shall deposit them
in the Refunding Fund and thereafter disburse them as provided herein and in the
Indenture.
At the request of the Borrower, and for the purposes and upon fulfillment
of the conditions specified in the Indenture, the Issuer, in its sole
discretion, may provide for the issuance, sale and delivery of Additional Bonds
and loan the proceeds from the sale thereof to the Borrower.
Section 3.2. DISBURSEMENTS FROM THE REFUNDING FUND; REDEMPTION OF PRIOR
BONDS; REFUNDING ACCOUNT DISBURSEMENTS.
(a) The proceeds of the Refunding Bonds will be used to reimburse the
Bank for a draw on Letter of Credit no. LCA 09039300407NY, the purpose
of such draw being to provide funds for the redemption of the Prior Bonds.
Such refunding shall be accomplished by effecting the redemption of all
Prior Bonds in whole on April 1, 1996. The Issuer at the direction of the
Borrower hereby calls such Prior Bonds for redemption in whole on April 1,
1996, at the redemption price of 100% of the outstanding principal amount
thereof plus accrued interest to the redemption date. The Issuer has
heretofore directed the Prior Bonds Trustee to give notice of such
redemption pursuant to the provisions of the Prior Bonds Indenture and to
effect such redemption in accordance with the provisions of this Section.
(b) Upon receipt of the proceeds of the Refunding Bonds and deposit
thereof to the Refunding Fund, the Trustee shall immediately transfer the
entire amount of the proceeds in the Refunding Fund to the Prior Bonds
Trustee for deposit in the Bond Fund established pursuant to the Prior
Indenture.
Section 3.3. INVESTMENT OF FUND MONEYS. At the written or oral request
(promptly confirmed in writing) of the Authorized Borrower Representative, any
moneys held as part of the Bond Fund, the Refunding Fund or the Rebate Fund
shall be invested or reinvested by the Trustee
- 10 -
in Eligible Investments. In the absence of written direction from the Borrower
with respect to investment of moneys held in the Funds, the Trustee is hereby
directed without further authorization to invest funds in money market mutual
funds of the Trustee or its affiliates that qualify as Eligible Investments
under the definition thereof. The Issuer and the Borrower each hereby covenants
that it will restrict that investment and reinvestment and the use of the
proceeds of the Refunding Bonds in such manner and to such extent, if any, as
may be necessary, after taking into account reasonable expectations at the time
of delivery of and payment for the Series 1996 A Bonds, so that the Refunding
Bonds will not constitute arbitrage bonds under Section 148 of the Code.
The Borrower shall provide the Issuer with, and the Issuer may base its
certifications as authorized by the Bond Ordinance on, a certificate of the
Borrower for inclusion in the transcript of proceedings for the Refunding Bonds,
setting forth the reasonable expectations of the Borrower on the date of
delivery of and payment for the Refunding Bonds regarding the amount and use of
the proceeds of the Refunding Bonds and the facts, estimates and circumstances
on which those expectations are based.
Section 3.4. REBATE FUND. The Borrower agrees to make such payments to the
Trustee as are required of it under Section 5.11 of the Indenture. The
obligation of the Borrower to make such payments shall remain in effect and be
binding upon the Borrower notwithstanding the release and discharge of the
Indenture.
Section 3.5. ARBITRAGE COVENANTS. The Borrower and the Issuer each covenants
to the owners of the Refunding Bonds that, notwithstanding any other provision
of this Agreement or any other instrument, it shall take no action, nor shall
the Borrower direct the Trustee to take or approve the Trustee's taking any
action or direct the Trustee to make or approve the Trustee's making any
investment or use of proceeds of the Refunding Bonds or any other moneys which
may arise out of or in connection with this Agreement, the Indenture or the
project, which would cause the Series 1996 A Bonds to be treated as "arbitrage
bonds" within the meaning of Section 148 of the Code. In addition, the Borrower
covenants and agrees to comply with the requirements of Section 148(f) of the
Code as it may be applicable to the Series 1996 A Bonds or the proceeds derived
from the sale of the Refunding Bonds or any other moneys which may arise out of,
or in connection with, this Agreement, the Indenture or the Project throughout
the term of the Refunding Bonds. No provision of this Agreement shall be
construed to impose upon the Trustee any obligation or responsibility for
compliance with arbitrage regulations, except as provided in the Indenture.
(End of Article III)
- 11 -
ARTICLE IV.
LOAN BY ISSUER; REPAYMENT OF THE LOAN;
LOAN PAYMENTS AND ADDITIONAL PAYMENTS
Section 4.1. LOAN REPAYMENT; DELIVERY OF NOTES AND LETTER OF CREDIT.
Upon the terms and conditions of this Agreement, the issuer will make the
Loan to the Borrower. In consideration of and in repayment of the loan, the
Borrower shall make, as Loan Payments, payments sufficient in time and amount
to pay when due all Bond Service Charges, all as more particularly provided
in the Refunding Notes and any Additional Note. The Refunding Notes shall be
executed and delivered by the Borrower concurrently with the execution and
delivery of this Agreement. All Loan Payments shall be paid to the Trustee
in accordance with the terms of the Notes for the account of the Issuer and
shall be held and applied in accordance with the provisions of the Indenture
and this Agreement. To the extent of payments made with respect to Bond
Service Charges pursuant to draws upon the Letter of Credit, the Borrower
shall receive a credit against its obligation to make loan payments under
this Agreement and the Refunding Notes.
In connection with the issuance of any Additional Bonds permitted by the
Bank, the Borrower shall execute and deliver to the Trustee one or more
Additional Notes in a form substantially similar to the form of the Refunding
Notes. All such Additional Notes shall:
(a) provide for payments of interest equal to the payments of
interest on the corresponding Additional Bonds;
(b) require payments of principal and prepayments and any premium
equal to the payments of principal, redemption payments and sinking fund
payments and any premium on the corresponding Additional Bonds;
(c) require all payments on any such Additional Notes to be made no
later than the due dates for the corresponding payments to be made on
the corresponding Additional Bonds; and
(d) contain by reference or otherwise optional and mandatory
prepayment provisions and provisions in respect of the optional and mandatory
acceleration or prepayment of principal and any premium corresponding with the
redemption and acceleration provisions of the corresponding Additional Bonds.
All Notes shall secure equally and ratably all outstanding Bonds, except
that, so long as no Event of Default described in paragraph (a), (b), (c), (g)
or (h) of Section 7.01 of the Indenture has occurred and is continuing, payments
by the Borrower on the Refunding Notes shall be used by the Trustee to reimburse
the Bank for drawings on the Letter of Credit used to pay Bond Service Charges
on the Refunding Bonds.
- 12 -
Upon payment in full, in accordance with the Indenture, of the Bond Service
Charges on any series of Bonds, whether at maturity or by redemption or
otherwise, or upon provision for the payment thereof having been made in
accordance with the provisions of the Indenture, (i) the Notes issued
concurrently with those corresponding Bonds, of the same maturity, bearing the
same interest rate and in an amount equal to the aggregate principal amount of
the Bonds so surrendered and canceled or for the payment of which provision has
been made, shall be deemed fully paid, the obligations of the Borrower
thereunder shall be terminated, and any such Notes shall be surrendered by the
Trustee to the Borrower, and shall be canceled by the Borrower, or (ii) in the
event there is only one of those Notes, an appropriate notation shall be
endorsed thereon by the Trustee evidencing the date and amount of the principal
payment or prepayment equal to the Bonds so paid, or with respect to which
provision for payment has been made, and that Note shall be surrendered by the
Trustee to the Borrower for cancellation if all Bonds shall have been paid (or
provision made therefor) and canceled as aforesaid. Unless the Borrower is
entitled to a credit under express terms of this Agreement or the Notes, all
payments on each of the Notes shall be in the full amount required thereunder.
Except for such interest of the Borrower and the Bank as may hereafter
arise pursuant to Section 5.07 or 5.08 of the Indenture, the Borrower and the
Issuer each acknowledge that neither the Borrower nor the Issuer has any
interest in the Bond Fund and any moneys deposited therein shall be in the
custody of and held by the Trustee in trust for the benefit of the Holders and,
to the extent of amounts due under the Reimbursement Agreement, the Bank.
Section 4.2. ADDITIONAL PAYMENTS. The Borrower shall pay to the Issuer, as
Additional Payments hereunder, any and all costs and expenses incurred or to be
paid by the Issuer in connection with the issuance and delivery of the Refunding
Bonds and Additional Bonds or otherwise related to actions taken by the Issuer
under this Agreement or the Indenture.
The Borrower shall pay to the Trustee, the Registrar and any Paying Agent
or Authenticating Agent, their customary fees, charges and reasonable expenses
for acting as such under the Indenture.
The Borrower also shall pay the Remarketing Agent remarketing fees in
respect of the Refunding Bonds as provided in the Remarketing Agreement.
Any payments under this Section not paid when due shall bear interest at
the Interest Rate for Advances.
Section 4.3. PLACE OF PAYMENTS. The Borrower shall make all Loan Payments
directly to the Trustee in immediately available funds at its principal
corporate trust office in Indianapolis, Indiana. Additional Payments shall be
made directly to the person or entity to whom or to which they are due.
- 13 -
Section 4.4. OBLIGATIONS UNCONDITIONAL. The obligations of the Borrower to
make Loan Payments, Additional Payments and any payments required of the
Borrower under Section 5.11 or Section 6.03 of the Indenture shall be absolute
and unconditional, and the Borrower shall make such payments without abatement,
diminution or deduction regardless of any cause or circumstances whatsoever
including, without limitation, any defense, set-off, recoupment or counterclaim
which the Borrower may have or assert against the Issuer, the Trustee, any
Paying Agent or Authenticating Agent, the Remarketing Agent, the Bank or any
other Person; provided that the Borrower may contest or dispute the amount of
any such obligation (other than Loan Payments) so long as such contest or
dispute does not result in an Event of Default under the Indenture.
Section 4.5. ASSIGNMENT OF AGREEMENT AND REVENUES. To secure the payment of
Bond Service Charges, the Issuer shall assign to the Trustee, by the Indenture,
all its right, title and interest in and to the Revenues, the Agreement (except
for Unassigned Issuer's Rights) and the Refunding Notes. The Borrower hereby
agrees and consents to that assignment.
Section 4.6. LETTER OF CREDIT. Simultaneously with the initial delivery of
the Refunding Bonds pursuant to the Indenture and the Bond Purchase Agreement,
the Borrower shall cause the bank to issue and deliver the Letter of Credit to
the Trustee. The Letter of Credit may be replaced by an Alternate Letter of
credit complying with the provisions of Section 5.09 of the Indenture and shall
be in substantially the form attached to the Reimbursement Agreement and made a
part thereof. The Borrower shall take whatever action may be necessary to
maintain the Letter of Credit or an Alternate Letter of Credit in full force and
effect during the period required by the Indenture, and shall pay to the Bank
all amounts due and payable under the Reimbursement Agreement.
(End of Article IV)
- 14 -
ARTICLE V.
ADDITIONAL AGREEMENTS AND COVENANTS
Section 5.1. RIGHT OF INSPECTION. Subject to reasonable security and safety
regulations and upon reasonable notice, the Issuer, the Bank and the Trustee,
and their respective agents, shall have the right during normal business hours
to inspect the project.
Section 5.2. SALE, LEASE OR GRANT OF USE BY BORROWER. With the written
consent of the Bank, and subject to any lease or other Agreement to which the
Borrower is a party or by which it is bound, including in particular tenant
leases, the Borrower may sell, lease or grant the right to occupy and use the
project, in whole or in part, to others, provided that:
(a) No lease or grant shall relieve the Borrower from the Borrower's
obligations under this Agreement or the Notes and in the case of a sale of the
Project, the purchaser shall assume all of the obligations of the Borrower under
this Agreement and the Notes and an Alternate Letter of Credit shall have been
issued to secure the Refunding Bonds;
(b) In connection with any lease or grant the Borrower shall retain such
rights and interests as will permit the Borrower to comply with the Borrower's
obligations under this Agreement and the Notes;
(c) There is provided to the Issuer and the Trustee an opinion of
nationally recognized bond counsel that any such sale, lease or grant will not
impair materially the purposes of the Act to be accomplished by operation of the
Project as herein provided or adversely affect the exclusion from gross income
for federal income tax purposes of the interest on the Series 1996 A Bonds.
Section 5.3. INDEMNIFICATION. The Borrower releases the Issuer and the
Trustee from, agrees that the Issuer and the Trustee shall not be liable for,
and shall indemnify the Issuer and the Trustee against, all liabilities, claims,
costs and expenses, including attorneys fees and expenses, imposed upon,
incurred or asserted against the Issuer on account of: (a) any loss or damage to
property or injury to or death of or loss by any person that may be occasioned
by any cause whatsoever pertaining to the construction, maintenance, operation
and use of the Project; (b) any breach or default on the part of the Borrower in
the performance of any covenant or Agreement of the Borrower under this
Agreement, the Reimbursement Agreement, the Refunding Notes or any related
document, or arising from any act or failure to act by the Borrower, or any of
the Borrower's agents, contractors, servants, employees or licensees; (c) the
authorization, issuance, sale, trading, redemption or servicing of the Refunding
Bonds, and the provision of any information or certification furnished in
connection therewith concerning the Refunding Bonds, the Project or the Borrower
including, without limitation, the Preliminary Official Statement and the
Official Statement (each as defined in the Bond Purchase Agreement), any
information furnished by the Borrower for, and included in, or used as a basis
for preparation of, any certifications, information statements or reports
furnished by the Issuer, and any other information
- 15 -
or certification obtained from the Borrower to assure the exclusion of the
interest on the Refunding Bonds from gross income of the Holders thereof for
federal income tax purposes; (d) the Borrower's failure to comply with any
requirement of this Agreement or the Code pertaining to such exclusion of that
interest, including the covenants in Section 5.4 hereof; and (e) any claim,
action or proceeding brought with respect to the matters set forth in (a), (b),
(c) or (d) above.
The Borrower agrees to indemnify the Trustee for, and to hold it harmless
against, all liabilities, claims, costs and expenses incurred without negligence
or willful misconduct on the part of the Trustee on account of any action taken
or omitted to be taken by the Trustee in accordance with the terms of this
Agreement, the Bonds, the Reimbursement Agreement, the Letter of Credit, the
Notes or the Indenture, or any action taken at the request of or with the
consent of the Borrower, including the costs and expenses of the Trustee in
defending itself against any such claim, action or proceeding brought in
connection with the exercise or performance of any of its powers or duties under
this Agreement, the Bonds, the Indenture, the Reimbursement Agreement, the
Letter of Credit or the Notes.
In case any action or proceeding is brought against the Issuer or the
Trustee in respect of which indemnity may be sought hereunder, the party seeking
indemnity promptly shall give notice of that action or proceeding to the
Borrower, and the Borrower upon receipt of that notice shall have the obligation
and the right to assume the defense of the action or proceeding; provided, that
failure of a party to give that notice shall not relieve the Borrower from any
of the Borrower's obligations under this Section unless that failure materially
prejudices the defense of the action or proceeding by the Borrower and then,
only to the extent of such prejudice to the Borrower. At the Borrower's
expense, an indemnified party may, upon delivery of written notice to, and the
prior written consent of the Borrower, employ separate counsel and participate
in the defense. The Borrower shall not be liable for any settlement made
without the Borrower's consent.
If the Borrower shall not have employed counsel to have charge of the
defense of the action, claim or proceeding, or if an indemnified party shall
have concluded reasonably that there may be a defense available to it or to any
other indemnified party which is different from or in addition to those
available to the Borrower or to any other indemnified party or if an indemnified
party shall have reasonably concluded that counsel representing other
indemnified parties cannot fairly represent such indemnified party because of a
conflict of interest, (i) the Borrower shall not have the right to direct the
defense of the action, claim or proceeding on behalf of that indemnified party
and (ii) legal and other expenses incurred by the indemnified party (including
without limitation, to the extent permitted by law, reasonable attorney's fees
and expenses) shall be borne by the Borrower.
The indemnification set forth above is intended to and shall include the
indemnification of all affected officials, directors, officers and employees of
the Issuer and the Trustee, respectively. That indemnification is intended to
and shall be enforceable by the Issuer and the Trustee, respectively, to the
full extent permitted by law.
- 16 -
Section 5.4. BORROWER NOT TO ADVERSELY AFFECT EXCLUSION FROM GROSS INCOME
OF INTEREST ON SERIES 1996 A BONDS. The Borrower hereby represents that the
Borrower has taken and caused to be taken, and covenants that the Borrower will
take and cause to be taken, all actions that may be required of the Borrower,
alone or in conjunction with the Issuer, for the interest on the Series 1996 A
Bonds to be and remain excluded from gross income for federal income tax
purposes, and represents that the Borrower has not taken or permitted to be
taken on the Borrower's behalf, and covenants that the Borrower will not take or
permit to be taken on the Borrower's behalf, any actions that would adversely
affect such exclusion under the provisions of the Code.
If the Borrower becomes aware that any actions or facts have caused or will
cause the interest on the Series 1996 A Bonds to be includable in gross income
for federal income tax purposes, the Borrower promptly shall take such steps as
are necessary to cause redemption of the Refunding Bonds in whole at the
earliest practicable date.
Section 5.5. ASSIGNMENT BY ISSUER. Except for the assignment of this
Agreement to the Trustee, the Issuer shall not attempt to further assign,
transfer or convey its interest in the Revenues or this Agreement or create
any pledge or lien of any form or nature with respect to the Revenues or the
payments hereunder.
Section 5.6. BORROWER'S PERFORMANCE UNDER INDENTURE. The Borrower has
examined the Indenture and approves the form and substance of, and agrees to
be bound by, its terms. The Borrower, for the benefit of the Issuer and each
Bondholder, shall do and perform all acts and things required or contemplated
in the Indenture to be done or performed by the Borrower. The Borrower is a
third party beneficiary of certain provisions of the Indenture, and Section
8.05 of the Indenture is hereby incorporated herein by reference.
Section 5.7. MAINTENANCE OF PROJECT. The Borrower shall keep and
maintain or make arrangements with others to maintain the Project in good
order and condition and in rentable and tenantable state of repair, and will
make or make arrangements with others to make, as and when necessary, all
repairs, renewals and replacements, structural and nonstructural, exterior
and interior, ordinary and extraordinary, foreseen and unforeseen.
Section 5.8. CONTINUED EXISTENCE. Except as otherwise provided in or
permitted pursuant to the Reimbursement Agreement, the Borrower shall maintain
its existence and continue to be a limited partnership, duly formed, validly
existing and in full force and effect under the laws of the State of Illinois
and duly authorized to transact business in the State.
Section 5.9. TAX REGULATORY AGREEMENT. The Tax Regulatory Agreement is
incorporated herein by reference and is made a part hereof as if fully set
forth. The Borrower agrees to comply with the covenants and Agreements int he
Tax Regulatory Agreement.
(End of Article V)
- 17 -
ARTICLE VI.
REDEMPTION OF REFUNDING BONDS
Section 6.1. OPTIONAL REDEMPTION. Provided no Event of Default shall have
occurred and be continuing, at any time and from time to time, the Borrower with
the consent of the Bank, may deliver moneys to the Trustee in addition to Loan
Payments or Additional Payments required to be made and direct the Trustee in
writing to use the moneys so delivered for the purpose of purchasing Refunding
Bonds or of reimbursing the Bank for drawings on the Letter of Credit used to
redeem Refunding Bonds called for optional redemption in accordance with the
applicable provisions of the Indenture.
Section 6.2. EXTRAORDINARY OPTIONAL REDEMPTION. The Borrower, with the
written consent of the Bank (except with respect to paragraph (c) of this
Section 6.2, as to which the consent of the Bank is not required), shall have,
subject to the conditions hereinafter imposed, the option to direct the
redemption of the entire unpaid principal balance of the Refunding Bonds in
accordance with the applicable provisions of the Indenture upon the occurrence
of any of the following events:
(a) The Project shall have been damaged or destroyed to such an
extent that (1) it cannot reasonably be expected to be restored, within a
period of three months, to the condition thereof immediately preceding such
damage or destruction or (2) its normal use and operation is reasonably
expected to be prevented for a period of three consecutive months;
(b) Title to, or the temporary use of, all or a significant part of
the Project shall have been taken under the exercise of the power of
eminent domain (1) to such extent that the Project cannot reasonably be
expected to be restored within a period of three months to a condition of
usefulness comparable to that existing prior to the taking or (2) as a
result of the taking, normal use and operation of the Project is reasonably
expected to be prevented for a period of three consecutive months;
(c) As a result of any changes in the Constitution of the State, the
constitution of the United States of America, or state or federal laws, or
as a result of legislative or administrative action (whether state or
federal) or by final decree, judgment or order of any court or
administrative body (whether state or federal) entered after the contest
thereof by the Issuer, the Trustee or the Borrower in good faith, this
Agreement shall have become void or unenforceable or impossible of
performance in accordance with the intent and purpose of the parties as
expressed in this Agreement;
(d) If unreasonable burdens or excessive liabilities shall have been
imposed with respect to the Project or the operation thereof, including,
without limitation, federal, state
- 18 -
or other ad valorem, property, income or other taxes not being imposed on
the date of this Agreement other than ad valorem taxes presently levied
upon privately owned property used for the same general purpose as the
Project; or
(e) Changes in the economic availability of raw materials, operating
supplies, energy sources or supplies, or facilities (including, but not
limited to, facilities in connection with the disposal of industrial
wastes) necessary for the operation of the Project shall have occurred or
technological or other changes shall have occurred which the Borrower
cannot reasonably overcome or control and which in the Borrower's reasonable
judgment render the operation of the Project uneconomic.
The Borrower also shall have the option, with the consent of the Bank, in
the event that title to or the temporary use of a portion of the Project shall
be taken under the exercise of the power of eminent domain, even if the taking
is not of such nature as to permit the exercise of the redemption option upon an
event specified in clause (b) above, to direct the redemption, at a redemption
price of 100% of the principal amount thereof prepaid, plus accrued interest to
the redemption date, of that part of the outstanding principal balance of the
Refunding Bonds as may be payable from the proceeds received by the Borrower
(after the payment of costs and expenses incurred in the collection thereof) in
the eminent domain proceeding, provided that the Borrower shall furnish to the
Issuer and the Trustee a certificate of an Engineer stating that (1) the
property comprising the part of the Project taken is not essential to continued
operations of the Project in the manner existing prior to that taking, (2) the
Project has been restored to a condition substantially equivalent to that
existing prior to the taking, or (3) other improvements have been acquired or
made which are suitable for the continued operation of the Project. In the
event that the amount of such proceeds received by the Borrower in the eminent
domain proceeding is insufficient to effect a redemption pursuant to Section
4.02 of the Indenture, such amount shall be transferred to the Bond Fund and
applied pursuant to Section 5.03 of the Indenture.
To exercise any option under this Section, the Borrower within 90 days
following the event authorizing the exercise of that option, or at any time
during the continuation of the condition referred to in clause (e) of the first
paragraph of this Section, shall give notice to the Issuer and to the Trustee,
together with a copy of the Bank's consent, specifying the date of redemption,
which date shall be not more than ninety days from the date that notice is
mailed, and shall make arrangements satisfactory to the Trustee for the giving
of the required notice of redemption.
The rights and options granted to the Borrower in this Section may be
exercised whether or not the Borrower is in default hereunder; provided, that
such default will not relieve the Borrower from performing those actions which
are necessary to exercise any such right or option granted hereunder. The
Borrower (with the written consent of the Bank, except with respect to clause
(c)) shall have the sole responsibility and authority to make the determinations
required in clauses (a), (b), (c), (d) and (e) of the first paragraph of this
Section. Neither the Issuer nor the Trustee shall have any duty or authority to
verify or determine the occurrence of any of the event
- 19 -
described in said clauses, but shall rely conclusively on the Borrower's
representations and determinations with respect to such occurrences.
Section 6.3. MANDATORY REDEMPTION OF REFUNDING BONDS. If, as provided in
the Refunding Bonds and the Indenture, the Refunding Bonds become subject to
mandatory redemption as a result of a Determination of Taxability with
respect to the Series 1996 A Bonds or termination of the Letter of Credit or
any alternate Letter of Credit, the Borrower shall deliver to the Trustee,
upon the date requested by the Trustee, moneys sufficient to pay in full the
Refunding Bonds in accordance with the mandatory redemption provisions
relating thereto set forth in the Indenture.
Section 6.4. ACTIONS BY ISSUER. At the request of the Borrower or the
Trustee, the Issuer shall take all steps required of it under the applicable
provisions of the Indenture or the Bonds to effect the redemption of all or a
portion of the Bonds pursuant to this Article VI.
Section 6.5. REQUIRED DEPOSITS FOR OPTIONAL REDEMPTION. All amounts paid by
the Borrower pursuant to this article which are used to pay principal of,
premium, if any, or interest on the Bonds, or to reimburse the Bank for moneys
drawn under the Letter of Credit and used for such purposes, shall constitute
prepaid Loan Payments.
(End of Article VI)
- 20 -
ARTICLE VII.
EVENTS OF DEFAULT AND REMEDIES
Section 7.1. EVENTS OF DEFAULT. Each of the following shall be an Event of
Default:
(a) The Borrower shall fail to pay when due any payment under any
Note;
(b) The Borrower shall fail to observe and perform any Agreement,
term or condition contained in this Agreement, and the continuation of such
failure for a period of 30 days after notice thereof shall have been given
to the Borrower by the Issuer or the Trustee, or for such longer period as
the Issuer and the Trustee may agree to in writing; provided, that if the
failure is other than the payment of money and is of such nature that it
can be corrected but not within the applicable period, that failure shall
not constitute an Event of Default so long as the Borrower institutes
curative action within the applicable period and diligently pursues that
action to completion within 150 days after the initial 30-day cure period;
and provided further that no such failure shall constitute an Event of
Default solely because it results in a Determination of Taxability;
(c) The Borrower shall: (i) admit in writing its inability to pay its
debts generally as they become due; (ii) have an order for relief entered
in any case commenced by or against it under the federal bankruptcy laws,
as now or hereafter in effect; (iii) commence a proceeding under any other
federal or state bankruptcy, insolvency, reorganization or similar law, or
have such a proceeding commenced against it and either have an order of
insolvency or reorganization entered against it or have the proceeding
remain undismissed and unstayed for 90 days; (iv) make an assignment for
the benefit of creditors; or (v) have a receiver or Trustee appointed for
it or for the whole or any substantial part of its property;
(d) There shall occur an "Event of Default" as defined in Section
7.01 of the Indenture.
Notwithstanding the foregoing, if, by reason of Force Majeure, the Borrower
is unable to perform or observe any Agreement, term or condition hereof
which would give rise to an Event of Default under subSection (b) hereof,
other than the payment of money, the Borrower shall not be deemed in
default during the continuance of such inability. However, the Borrower
shall promptly give notice to the Trustee and the Issuer of the existence
of an event of Force Majeure and shall use its best efforts to remove the
effects thereof; provided that the settlement of strikes or other
industrial disturbances shall be entirely within the Borrower's discretion.
The term Force Majeure shall mean, without limitation, the following:
- 21 -
(i) acts of God; strikes; lockouts or other industrial disturbances;
acts of public enemies; orders or restraints of any kind of the government
of the United States of America or of the State or any of their
departments, agencies, political subdivisions or officials, or any civil or
military authority; insurrections; civil disturbances; riots; epidemics;
landslides; lightning; earthquakes; fires; hurricanes; tornados; storms;
droughts; floods; arrests; restraint of government and people; explosions;
breakage, malfunction or accident to facilities, machinery, transmission
pipes or canals; partial or entire failure of utilities; shortages of
labor, materials, supplies or transportation; or
(ii) any cause, circumstance or event not reasonably within the
control of the Borrower.
The declaration of an Event of Default under subSection (c) above, and the
exercise of remedies upon any such declaration, shall be subject to any
applicable limitations of federal bankruptcy law affecting or precluding that
declaration or exercise during the pendency of or immediately following any
bankruptcy, liquidation or reorganization proceedings.
Section 7.2. REMEDIES ON DEFAULT. Whenever an Event of Default shall have
happened and be continuing, any one or more of the following remedial steps may
be taken:
(a) If and only if acceleration of the principal amount of the Bonds
has been declared pursuant to Section 7.03 of the Indenture, the Trustee
shall declare all Loan Payments and Notes to be immediately due and
payable, whereupon the same shall become immediately due and payable;
(b) The Bank and the Trustee may have access to, inspect, examine and
make copies of the books, records, accounts and financial data of the
Borrower pertaining to the Project; and
(c) The Issuer or the Trustee may pursue all remedies now or
hereafter existing at law or in equity to collect all amounts then due and
thereafter to become due under this Agreement, the Letter of Credit or the
Notes or to enforce the performance and observance of any other obligation
or Agreement of the Borrower under those instruments.
Notwithstanding the foregoing, the Issuer shall not be obligated to take
any step which in its opinion will or might cause it to expend time or money or
otherwise incur liability unless and until a satisfactory indemnity bond has
been furnished to the Issuer at no cost or expense to the Issuer. Any amounts
collected as Loan Payments or applicable to Loan Payments and any other amounts
which would be applicable to payment of Bond Service Charges collected pursuant
to action taken under this Section shall be paid into the Bond Fund and applied
in accordance with the provisions of the Indenture or, if the outstanding Bonds
have been paid and discharged in
- 22 -
accordance with the provisions of the Indenture, shall be paid as provided in
Section 5.08 of the Indenture for transfers of remaining amounts in the Bond
Fund.
The provisions of this Section are subject to the further limitation that
the rescission by the Trustee of its declaration that all of the Bonds are
immediately due and payable also shall constitute an annulment of any
corresponding declaration made pursuant to paragraph (a) of this Section and
a waiver and rescission of the consequences of that declaration and of the
Event of Default with respect to which that declaration has been made,
provided that no such waiver or rescission shall extend to or affect any
subsequent or other default or impair any right consequent thereon.
Section 7.3. NO REMEDY EXCLUSIVE. No remedy conferred upon or reserved
to the Issuer or the Trustee by this Agreement is intended to be exclusive of
any other available remedy or remedies but each and every such remedy shall
be cumulative and shall be in addition to every other remedy given under this
Agreement, the Letter of Credit or any Note, or now or hereafter existing at
law, in equity or by statute. No delay or omission to exercise any right or
power accruing upon any default shall impair that right or power or shall be
construed to be a waiver thereof, but any such right and power may be
exercised from time to time and as often as may be deemed expedient. In
order to entitle the Issuer or the Trustee to exercise any remedy reserved to
it in this Article, it shall not be necessary to give any notice, other than
any notice required by law or for which express provision is made herein.
Section 7.4. AGREEMENT TO PAY ATTORNEYS' FEES AND EXPENSES. If an Event of
Default should occur and the Issuer or the Trustee should incur expenses,
including attorneys' fees, in connection with the enforcement of this Agreement,
the Letter of Credit or any Note or the collection of sums due thereunder, the
Borrower shall reimburse the Issuer and the Trustee, as applicable, for the
reasonable expenses so incurred upon demand.
Section 7.5. NO WAIVER. No failure by the Issuer or the Trustee to
insist upon the strict performance by the Borrower of any provision hereof
shall constitute a waiver of their right to strict performance and no express
waiver shall be deemed to apply to any other existing or subsequent right to
remedy the failure by the Borrower to observe or comply with any provision
hereof.
Section 7.6. NOTICE OF DEFAULT. The Borrower and the Issuer shall notify
the Trustee and the bank immediately if it becomes aware of the occurrence of
any Event of Default hereunder or of any fact, condition or event which, with
the giving of notice or passage of time or both, would become an Event of
Default.
Section 7.7. REMEDIES SUBJECT TO BANK'S DIRECTION. Except in the case of an
Event Default pursuant to Section 7.01(g) or (h) of the Indenture, the Bank
shall have the right to direct the
- 23 -
remedies to be exercised by the Trustee and the Issuer, whether under Article
VII of this Agreement or under Article VII of the Indenture.
(End of Article VII)
- 24 -
ARTICLE VIII.
MISCELLANEOUS
Section 8.1. TERM OF AGREEMENT. This Agreement shall be and remain in full
force and effect from the date of initial delivery of the Refunding Bonds until
such time as all of the Bonds shall have been fully paid (or provision made for
such payment) pursuant to the Indenture and all other sums payable by the
Borrower under this Agreement and the Notes shall have been paid, except for
obligations of the Borrower under Sections 3.4, 4.2, 5.3 and 7.4 hereof, which
shall survive any termination of this Agreement.
Section 8.2. NOTICES. All notices, certificates, requests or other
communications hereunder shall be in writing and shall be deemed to be
sufficiently given when mailed by first class mail, postage prepaid, and
addressed to the appropriate Notice Address. A duplicate copy of each notice,
certificate, request or other communication given hereunder to the Issuer, the
Borrower, the Bank, the Remarketing Agent or the Trustee shall also be given to
the others. The Borrower, the Issuer, the bank, the remarketing agent, and the
Trustee, by notice given hereunder, may designate any further or different
addresses to which subsequent notices, certificates, requests or other
communications shall be sent.
Section 8.3. EXTENT OF COVENANTS OF THE ISSUER; NO PERSONAL LIABILITY.
All covenants, obligations and Agreements of the Issuer contained in this
Agreement or the Indenture shall be effective to the extent authorized and
permitted by applicable law. No such covenant, obligation or Agreement shall
be deemed to be a covenant, obligation or Agreement of any present or future
member, officer, agent or employee of the Issuer in other than his or her
official capacity, and neither the members of the Legislative Authority of
the Issuer nor any official executing the Bonds shall be liable personally on
the bonds or be subject to any personal liability or accountability by reason
of the issuance thereof or by reason of the covenants, obligations or
Agreements of the Issuer contained in this Agreement or in the Indenture.
Section 8.4. BINDING EFFECT. This Agreement shall inure to the benefit
of and shall be binding in accordance with its terms upon the Issuer, the
Borrower and their respective successors and assigns; provided that this
Agreement may not be assigned by the Borrower (except in connection with a
sale, lease or grant of use pursuant to Section 5.2 hereof) and may not be
assigned by the Issuer except to the Trustee pursuant to the Indenture or as
otherwise may be necessary to enforce or secure payment of Bond Service
Charges. This Agreement may be enforced only by the parties, their assignees
and others who may, by law, stand in their respective places.
Section 8.5. AMENDMENTS AND SUPPLEMENTS. Except as otherwise expressly
provided in this Agreement, any note or the Indenture, subsequent to the
issuance of the Refunding Bonds and prior to all conditions provided for in the
Indenture for release of the Indenture having been met,
- 25 -
this Agreement or any Note may not be effectively amended, changed, modified,
altered or terminated except in accordance with the applicable provisions of
Article XI of the Indenture.
Section 8.6. EXECUTION COUNTERPARTS. This Agreement may be executed in any
number of counterparts, each of which shall be regarded as an original and all
of which shall constitute but one and the same instrument.
Section 8.7. SEVERABILITY. If any provision of this Agreement, or any
covenant, obligation or Agreement contained herein, is determined by a court of
competent jurisdiction to be invalid or unenforceable, that determination shall
not affect any other provision, covenant, obligation or Agreement, each of which
shall be construed and enforced as if the invalid or unenforceable portion were
not contained herein. That invalidity or unenforceability shall not affect any
valid and enforceable application thereof, and each such provision, covenant,
obligation or Agreement shall be deemed to be effective, operative, made,
entered into or taken in the manner and to the full extent permitted by law.
Section 8.8. GOVERNING LAW. This Agreement shall be deemed to be a contract
made under the laws of the State and for all purposes shall be governed by and
construed in accordance with the laws of the State of Indiana.
Section 8.9. AMOUNTS REMAINING IN FUNDS. Any amounts in the Bond Fund
remaining unclaimed by the Holders of Bonds for four years after the due date
thereof (whether at stated maturity, by redemption or pursuant to any mandatory
sinking fund requirements or otherwise), shall be paid to the Borrower; provided
that if the Trustee shall have drawn on the Letter of Credit, and the bank is
owed any amount by the Borrower pursuant to the Reimbursement Agreement, such
amounts remaining in the Bond Fund shall belong and be paid first to the Bank to
the extent of such unpaid amounts. With respect to that principal of and any
premium and interest on the Bonds to be paid from moneys paid to the Borrower or
the Bank pursuant to the preceding sentence, the Holders of the Bonds entitled
to those moneys shall look solely to the Borrower for the payment of those
moneys.
Further, any amounts remaining in the Bond Fund (subject to any limitations
in the Indenture) and any other special funds or accounts (other than the
Remarketing Reimbursement Fund and the Rebate Fund) created under this Agreement
or the Indenture after all of the outstanding Bonds shall be deemed to have been
paid and discharged under the provisions of the Indenture and all other amounts
required to be paid under this Agreement, the Notes and the Indenture have been
paid, shall be paid (to the extent that those moneys are in excess of the
amounts necessary to effect the payment and discharge of the outstanding Bonds)
first, to the Bank to the extent that any amount is owed by the Borrower to the
Bank under the terms of the Letter of Credit or Reimbursement Agreement, and
then to the Borrower.
(End of Article VIII)
- 26 -
IN WITNESS WHEREOF, the Issuer and the Borrower have executed this Loan
Agreement, all as of the date first above written.
CITY OF GARY, INDIANA
By:
-----------------------------------
Scott L. King, Mayor
ATTEST:
- ------------------------------------
Katie Hall, Clerk
- 27 -
THE MILLER PARTNERSHIP, L.P.
By:CenterPoint Properties Corporation,
its General Partner
By
-----------------------------------
Paul S. Fisher, Executive Vice
President
- 28 -
EXHIBIT A
NOTE, SERIES 1996 A
$20,540,000 April 1, 1996
The Miller Partnership, L.P., an Illinois limited partnership (the
"Borrower"), for value received, promises to pay to Fifth Third Bank of Central
Indiana, as Trustee (the "Trustee") under the Indenture hereinafter referred to,
the principal sum of
TWENTY MILLION FIVE HUNDRED FORTY THOUSAND DOLLARS
($20,540,000)
and to pay (i) interest on the unpaid balance of such principal sum from and
after the date of this Note at the interest rate borne by the Series 1996 A
Bonds from time to time and (ii) interest on overdue principal, and to the
extent permitted by law, on overdue interest, at the interest rate provided
under the terms of the Series 1996 A Bonds.
This Note has been executed and delivered by the Borrower pursuant to a
certain Loan Agreement (the "Agreement"), dated as of March 1, 1996, between the
City of Gary, Indiana (the "Issuer") and the Borrower. Capitalized terms used
but not defined herein shall have the meanings ascribed to such terms in the
Agreement and the Indenture, as defined below.
Under the Agreement, the Issuer has loaned the Borrower the proceeds
received from the sale of the $20,540,000 aggregate principal amount of City of
Gary, Indiana Adjustable Rate Economic Development Revenue Refunding Bonds,
Series 1996 A (The Miller Partnership, L.P. Project), dated the date of their
initial delivery (the "Series 1996 A Bonds"), to be applied to the refunding of
the Series 1991 A Bonds and the Series 1993 A Bonds. The Borrower has agreed to
repay such loan by making Loan Payments at the times and in the amounts set
forth in this Note. The Series 1996 A Bonds have been issued, concurrently with
the execution and delivery of this Note, pursuant to, and are secured by, the
Trust Indenture (the "Indenture"), dated as of March 1, 1996, between the Issuer
and the Trustee.
To provide funds to pay the Bond Service Charges on the Series 1996 A Bonds
as and when due, or to reimburse the Bank for draws under the Letter of Credit
to make such payments, the Borrower hereby agrees to and shall make Loan
Payments as follows: on each Interest Payment Date the amount equal to interest
due on the Series 1996 A Bonds on such Interest Payment Date, and on any date
upon which principal of the Series 1996 A Bonds is due, the amount equal to the
principal due and payable on the Series 1996 A Bonds on such date and on any
redemption date, the amount equal to the principal due and payable on the Series
1996 A Bonds pursuant to any mandatory redemption of the Series 1996 A Bonds
(each such day being
A-1
a "Loan Payment Date"). In addition, to provide funds to pay the Bond Service
Charges on the Series 1996 A Bonds as and when due at any other time, the
Borrower hereby agrees to and shall make Loan Payments on any other date on
which any Bond Service Charges on the Series 1996 A Bonds shall be due and
payable, whether at maturity, upon acceleration, call for redemption, tender for
purchase or otherwise.
If payment or provision for payment in accordance with the Indenture is
made in respect of the Bond Service Charges on the Series 1996 A Bonds from
moneys other than Loan Payments, this Note shall be deemed paid to the extent
such payments or provision for payment of Bond Service Charges has been made.
The Borrower shall receive a credit against its obligation to make Loan Payments
hereunder to the extent of the moneys delivered to the Trustee under and
pursuant to the Letter of Credit and any other amounts on deposit in the Bond
Fund and available to pay Bond Service Charges on the Series 1996 A Bonds
pursuant to the Indenture. Subject to the foregoing, all Loan Payments shall be
in the full amount required hereunder.
All Loan Payments shall be payable in immediately available funds and shall
be made to the Trustee at its corporate trust office in Indianapolis, Indiana
for the account of the Issuer, deposited in the Bond Fund and used as provided
in the Indenture.
The obligation of the Borrower to make the payments required hereunder
shall be absolute and unconditional and the Borrower shall make such payments
without abatement, diminution or deduction regardless of any cause or
circumstances whatsoever including, without limitation, any defense, set-off,
recoupment or counterclaim which the Borrower may have or assert against the
Issuer, the Trustee, the Remarketing Agent, the Bank or any other person.
This Note is subject to optional, extraordinary optional and mandatory
prepayment, in whole or in part upon the same terms and conditions, on the same
dates and at the same prepayment prices, as the Series 1996 A Bonds are subject
to optional, extraordinary optional and mandatory redemption. Any optional,
extraordinary optional and mandatory prepayment is also subject to satisfaction
of any applicable notice, deposit or other requirements set forth in the
Agreement or the Indenture.
Whenever an Event of Default under Section 7.01 of the Indenture shall have
occurred and, as a result thereof, the principal of and any premium on all
Series 1996 A Bonds then outstanding, and interest accrued thereon shall have
been declared to be immediately due and payable pursuant to Section 7.03 of the
Indenture, the unpaid principal amount of and any premium and accrued interest
on this Note also shall be due and payable on the date on which the principal of
and premium and interest on the Series 1996 A Bonds have been declared due and
payable; provided that the annulment of a declaration of acceleration of the
Series 1996 A Bonds shall also constitute an annulment of any corresponding
declaration with respect to this Note.
A-2
IN WITNESS WHEREOF, the Borrower has signed this Note on April 1, 1996.
THE MILLER PARTNERSHIP, L.P.
By
-------------------------------------
A-3
NOTE, SERIES 1996 B
$1,680,000 April 1, 1996
The Miller Partnership, L.P., an Illinois limited partnership (the
"Borrower"), for value received, promises to pay to Fifth Third Bank of Central
Indiana, as Trustee (the "Trustee") under the Indenture hereinafter referred to,
the principal sum of
ONE MILLION SIX HUNDRED EIGHTY THOUSAND DOLLARS
($1,680,000)
and to pay (i) interest on the unpaid balance of such principal sum from and
after the date of this Note at the interest rate borne by the Series 1996 B
Bonds from time to time and (ii) interest on overdue principal, and to the
extent permitted by law, on overdue interest, at the interest rate provided
under the terms of the Series 1996 B Bonds.
This Note has been executed and delivered by the Borrower pursuant to a
certain Loan Agreement (the "Agreement"), dated as of March 1, 1996, between the
City of Gary, Indiana (the "Issuer") and the Borrower. Capitalized terms used
but not defined herein shall have the meanings ascribed to such terms in the
Agreement and the Indenture, as defined below.
Under the Agreement, the Issuer has loaned the Borrower the proceeds
received from the sale of the $1,680,000 aggregate principal amount of City of
Gary, Indiana Taxable Adjustable Rate Economic Development Revenue Refunding
Bonds, Series 1996 B (The Miller Partnership, L.P. Project), dated the date of
their initial delivery (the "Series 1996 B Bonds"), to be applied to the
refunding of the Series 1991 B Bonds and the Series 1993 B Bonds. The Borrower
has agreed to repay such loan by making Loan Payments at the times and in the
amounts set forth in this Note. The Series 1996 B Bonds have been issued,
concurrently with the execution and delivery of this Note, pursuant to, and are
secured by, the Trust Indenture (the "Indenture"), dated as of March 1, 1996,
between the Issuer and the Trustee.
To provide funds to pay the Bond Service Charges on the Series 1996 B Bonds
as and when due, or to reimburse the Bank for draws under the Letter of Credit
to make such payments, the Borrower hereby agrees to and shall make Loan
Payments as follows: on each Interest Payment Date the amount equal to interest
due on the Series 1996 B Bonds on such Interest Payment Date, and on any date
upon which principal of the Series 1996 B Bonds is due, the amount equal to the
principal due and payable on the Series 1996 B Bonds on such date and on any
redemption date, the amount equal to the principal due and payable on the Series
1996 B Bonds pursuant to any mandatory redemption of the Series 1996 B Bonds
(each such day being a "Loan Payment Date"). In addition, to provide funds to
pay the Bond Service Charges on the Series 1996 B Bonds as and when due at any
other time, the Borrower hereby agrees
A-4
to and shall make Loan Payments on any other date on which any Bond Service
Charges on the Series 1996 B Bonds shall be due and payable, whether at
maturity, upon acceleration, call for redemption, tender for purchase or
otherwise.
If payment or provision for payment in accordance with the Indenture is
made in respect of the Bond Service Charges on the Series 1996 B Bonds from
moneys other than Loan Payments, this Note shall be deemed paid to the extent
such payments or provision for payment of Bond Service Charges has been made.
The Borrower shall receive a credit against its obligation to make Loan Payments
hereunder to the extent of the moneys delivered to the Trustee under and
pursuant to the Letter of Credit and any other amounts on deposit in the Bond
Fund and available to pay Bond Service Charges on the Series 1996 B Bonds
pursuant to the Indenture. Subject to the foregoing, all Loan Payments shall be
in the full amount required hereunder.
All Loan Payments shall be payable in immediately available funds and shall
be made to the Trustee at its corporate trust office in Indianapolis, Indiana
for the account of the Issuer, deposited in the Bond Fund and used as provided
in the Indenture.
The obligation of the Borrower to make the payments required hereunder
shall be absolute and unconditional and the Borrower shall make such payments
without abatement, diminution or deduction regardless of any cause or
circumstances whatsoever including, without limitation, any defense, set-off,
recoupment or counterclaim which the Borrower may have or assert against the
Issuer, the Trustee, the Remarketing Agent, the Bank or any other person.
This Note is subject to optional, extraordinary optional and mandatory
prepayment, in whole or in part upon the same terms and conditions, on the same
dates and at the same prepayment prices, as the Series 1996 B Bonds are subject
to optional, extraordinary optional and mandatory redemption. Any optional,
extraordinary optional and mandatory prepayment is also subject to satisfaction
of any applicable notice, deposit or other requirements set forth in the
Agreement or the Indenture.
Whenever an Event of Default under Section 7.01 of the Indenture shall have
occurred and, as a result thereof, the principal of and any premium on all
Series 1996 B Bonds then outstanding, and interest accrued thereon shall have
been declared to be immediately due and payable pursuant to Section 7.03 of the
Indenture, the unpaid principal amount of and any premium and accrued interest
on this Note also shall be due and payable on the date on which the principal of
and premium and interest on the Series 1996 B Bonds have been declared due and
payable; provided that the annulment of a declaration of acceleration of the
Series 1996 B Bonds shall also constitute an annulment of any corresponding
declaration with respect to this Note.
A-5
IN WITNESS WHEREOF, the Borrower has signed this Note on April 1, 1996.
THE MILLER PARTNERSHIP, L.P.
By
-------------------------------------
A-6
EXHIBIT B
The Project
The Project consists of the 14-building, 682 unit multi-family housing
project, located at 415 North Lake Street, in the City of Gary, Indiana.
B-1
TRUST INDENTURE
between
CITY OF GARY, INDIANA
and
FIFTH THIRD BANK OF CENTRAL INDIANA
as Trustee
------------------------------
Securing:
$20,540,000
CITY OF GARY, INDIANA
ADJUSTABLE RATE ECONOMIC
DEVELOPMENT REVENUE REFUNDING BONDS,
SERIES 1996 A
(THE MILLER PARTNERSHIP, L.P. PROJECT)
AND
$1,680,000
CITY OF GARY, INDIANA
TAXABLE ADJUSTABLE RATE ECONOMIC
DEVELOPMENT REVENUE REFUNDING BONDS,
SERIES 1996 B
(THE MILLER PARTNERSHIP, L.P. PROJECT)
Dated as of March 1, 1996
------------------------------------------
------------------------------------------
Ice Miller Donadio & Ryan
Bond Counsel
TABLE OF CONTENTS
PAGE
ARTICLE I DEFINITIONS. . . . . . . . . . . . . . . . . . . . . . . . . 4
Section 1.01. Definitions. . . . . . . . . . . . . . . . . . . . . . . . . 4
Section 1.02. Interpretation . . . . . . . . . . . . . . . . . . . . . . .18
Section 1.03. Captions and Headings. . . . . . . . . . . . . . . . . . . .19
ARTICLE II AUTHORIZATION AND TERMS OF REFUNDING
BONDS; ADDITIONAL BONDS. . . . . . . . . . . . . . . . . .20
Section 2.01. Authorized Amount of Bonds . . . . . . . . . . . . . . . . .20
Section 2.02. Issuance of Refunding Bonds. . . . . . . . . . . . . . . . .20
Section 2.03. Maturity and Interest. . . . . . . . . . . . . . . . . . . .21
Section 2.04. Tender Options . . . . . . . . . . . . . . . . . . . . . . .24
Section 2.05. Mandatory Tender Upon Conversion to a New Interest
Rate Mode . . . . . . . . . . . . . . . . . . . . . . . . .26
Section 2.06. Mandatory Tender Upon Delivery of an Alternate Letter
of Credit . . . . . . . . . . . . . . . . . . . . . . . . .27
Section 2.07. Delivery of the Refunding Bonds. . . . . . . . . . . . . . .28
Section 2.08. Issuance and Delivery of Additional Bonds. . . . . . . . . .29
ARTICLE III TERMS OF BONDS GENERALLY . . . . . . . . . . . . . . . . . .31
Section 3.01. Form of Bonds. . . . . . . . . . . . . . . . . . . . . . . .31
Section 3.02. Variable Terms . . . . . . . . . . . . . . . . . . . . . . .31
Section 3.03. Execution and Authentication of Bonds. . . . . . . . . . . .32
Section 3.04. Source of Payment of Bonds . . . . . . . . . . . . . . . . .32
Section 3.05. Payment and Ownership of Bonds . . . . . . . . . . . . . . .32
Section 3.06. Transfer and Exchange of Bonds . . . . . . . . . . . . . . .33
Section 3.07. Mutilated, Lost, Wrongfully Taken or Destroyed Bonds . . . .35
Section 3.08. Cancellation of Bonds. . . . . . . . . . . . . . . . . . . .35
ARTICLE IV REDEMPTION OF BONDS. . . . . . . . . . . . . . . . . . . . .37
Section 4.01. Terms of Redemption of Refunding Bonds . . . . . . . . . . .37
Section 4.02. Partial Redemption . . . . . . . . . . . . . . . . . . . . .38
Section 4.03. Issuer's Election to Redeem. . . . . . . . . . . . . . . . .39
Section 4.04. Notice of Redemption . . . . . . . . . . . . . . . . . . . .39
Section 4.05. Payment of Redeemed Bonds. . . . . . . . . . . . . . . . . .41
Section 4.06. Variation of Redemption Provisions . . . . . . . . . . . . .42
- i -
ARTICLE V PROVISIONS AS TO FUNDS, PAYMENTS, PROJECT
AND AGREEMENT. . . . . . . . . . . . . . . . . . . . . . .43
Section 5.01. Creation of Refunding Fund . . . . . . . . . . . . . . . . .43
Section 5.02. Disbursements From and Records of Refunding Fund . . . . . .43
Section 5.03. Creation of Bond Fund; Letter of Credit. . . . . . . . . . .44
Section 5.04. Creation of Remarketing Reimbursement Fund . . . . . . . . .47
Section 5.05. Investment of Bond Fund, Refunding Fund, Rebate Fund
and Remarketing Reimbursement Fund . . . . . . . . . . . .47
Section 5.06. Moneys to be Held in Trust . . . . . . . . . . . . . . . . .48
Section 5.07. Nonpresentment of Bonds. . . . . . . . . . . . . . . . . . .48
Section 5.08. Repayment to the Bank or the Borrower from the Bond Fund . .48
Section 5.09. Extension of Letter of Credit; Alternate Letter of Credit. .49
Section 5.10. Compliance with Section 148 of the Code. . . . . . . . . . .50
Section 5.11. Rebate Fund. . . . . . . . . . . . . . . . . . . . . . . . .50
ARTICLE VI THE TRUSTEE, REGISTRAR, PAYING AGENTS AUTHENTICATING
AGENTS AND REMARKETING AGENT . . . . . . . . . . . . . . .52
Section 6.01. Trustee's Acceptance and Responsibilities. . . . . . . . . .52
Section 6.02. Certain Rights and Obligations of the Trustee. . . . . . . .53
Section 6.03. Fees, Charges and Expenses of Trustee, Registrar,
Paying Agents and Authenticating Agents. . . . . . . . . .56
Section 6.04. Intervention by Trustee. . . . . . . . . . . . . . . . . . .57
Section 6.05. Successor Trustee. . . . . . . . . . . . . . . . . . . . . .57
Section 6.06. Appointment of Co-Trustee. . . . . . . . . . . . . . . . . .57
Section 6.07. Resignation by the Trustee . . . . . . . . . . . . . . . . .58
Section 6.08. Removal of the Trustee . . . . . . . . . . . . . . . . . . .58
Section 6.09. Appointment of Successor Trustee . . . . . . . . . . . . . .58
Section 6.10. Adoption of Authentication . . . . . . . . . . . . . . . . .60
Section 6.11. Registrars . . . . . . . . . . . . . . . . . . . . . . . . .60
Section 6.12. Designation and Succession of Paying Agents. . . . . . . . .61
Section 6.13. Designation and Succession of Authenticating Agents. . . . .62
Section 6.14. Dealing in Bonds . . . . . . . . . . . . . . . . . . . . . .63
Section 6.15. Representations, Agreements and Covenants of Trustee . . . .63
Section 6.16. [RESERVED] . . . . . . . . . . . . . . . . . . . . . . . . .63
Section 6.17. Concerning the Remarketing Agent . . . . . . . . . . . . . .63
Section 6.18. Qualifications of Remarketing Agent. . . . . . . . . . . . .64
Section 6.19. Remarketing of Refunding Bonds . . . . . . . . . . . . . . .65
Section 6.20. Delivery of Purchased Refunding Bonds and Remarketing
of Pledged Bonds . . . . . . . . . . . . . . . . . . . . . .66
- ii -
ARTICLE VII DEFAULT PROVISIONS AND REMEDIES OF TRUSTEE
AND HOLDERS. . . . . . . . . . . . . . . . . . . . . . . . .69
Section 7.01. Defaults; Events of Default. . . . . . . . . . . . . . . . .69
Section 7.02. Notice of Default. . . . . . . . . . . . . . . . . . . . . .70
Section 7.03. Acceleration . . . . . . . . . . . . . . . . . . . . . . . .70
Section 7.04. Other Remedies; Rights of Holders. . . . . . . . . . . . . .71
Section 7.05. Right of Holders to Direct Proceedings . . . . . . . . . . .72
Section 7.06. Application of Moneys. . . . . . . . . . . . . . . . . . . .72
Section 7.07. Remedies Vested in Trustee . . . . . . . . . . . . . . . . .74
Section 7.08. Rights and Remedies of Holders . . . . . . . . . . . . . . .74
Section 7.09. Termination of Proceedings . . . . . . . . . . . . . . . . .75
Section 7.10. Waivers of Events of Default . . . . . . . . . . . . . . . .75
ARTICLE VIII SUPPLEMENTAL INDENTURES. . . . . . . . . . . . . . . . . . .76
Section 8.01. Supplemental Indentures Generally. . . . . . . . . . . . . .76
Section 8.02. Supplemental Indentures Not Requiring Consent of Holders . .76
Section 8.03. Supplemental Indentures Requiring Consent of Holders . . . .77
Section 8.04. Acceptance of Supplemental Credit Facility . . . . . . . . .79
Section 8.05. Consent of Borrower and Bank . . . . . . . . . . . . . . . .79
Section 8.06. Authorization to Trustee; Effect of Supplement . . . . . . .80
Section 8.07. Opinion of Counsel . . . . . . . . . . . . . . . . . . . . .80
Section 8.08. Modification by Unanimous Consent. . . . . . . . . . . . . .80
ARTICLE IX DEFEASANCE . . . . . . . . . . . . . . . . . . . . . . . . .82
Section 9.01. Release of Indenture . . . . . . . . . . . . . . . . . . . .82
Section 9.02. Payment and Discharge of Bonds . . . . . . . . . . . . . . .82
Section 9.03. Survival of Certain Provisions . . . . . . . . . . . . . . .83
ARTICLE X COVENANTS AND AGREEMENTS OF THE ISSUER . . . . . . . . . . .85
Section 10.01. Covenants and Agreements of the Issuer . . . . . . . . . . .85
Section 10.02. Observance and Performance of Covenants, Agreements,
Authority and Actions. . . . . . . . . . . . . . . . . . .86
ARTICLE XI AMENDMENTS TO THE AGREEMENT, THE NOTE AND THE
LETTER OF CREDIT . . . . . . . . . . . . . . . . . . . . .88
Section 11.01. Amendments Not Requiring Consent of Holders. . . . . . . . .88
Section 11.02. Amendments Requiring Consent of Holders. . . . . . . . . . .88
- iii -
ARTICLE XII MEETINGS OF HOLDERS. . . . . . . . . . . . . . . . . . . . .90
Section 12.01. Purposes of Meetings . . . . . . . . . . . . . . . . . . . .90
Section 12.02. Call of Meetings . . . . . . . . . . . . . . . . . . . . . .90
Section 12.03. Voting . . . . . . . . . . . . . . . . . . . . . . . . . . .90
Section 12.04. Meetings . . . . . . . . . . . . . . . . . . . . . . . . . .91
Section 12.05. Miscellaneous. . . . . . . . . . . . . . . . . . . . . . . .91
ARTICLE XIII MISCELLANEOUS. . . . . . . . . . . . . . . . . . . . . . . .92
Section 13.01. Limitation of Rights . . . . . . . . . . . . . . . . . . . .92
Section 13.02. Severability . . . . . . . . . . . . . . . . . . . . . . . .92
Section 13.03. Notices. . . . . . . . . . . . . . . . . . . . . . . . . . .92
Section 13.04. Suspension of Mail . . . . . . . . . . . . . . . . . . . . .94
Section 13.05. Payments Due on Saturdays, Sundays and Holidays. . . . . . .94
Section 13.06. Instruments of Holders . . . . . . . . . . . . . . . . . . .94
Section 13.07. Priority of this Indenture . . . . . . . . . . . . . . . . .95
Section 13.08. Extent of Covenants; No Personal Liability . . . . . . . . .95
Section 13.09. Rating Categories. . . . . . . . . . . . . . . . . . . . . .95
Section 13.10. Binding Effect . . . . . . . . . . . . . . . . . . . . . . .95
Section 13.11. Counterparts . . . . . . . . . . . . . . . . . . . . . . . .96
Section 13.12. Governing Law. . . . . . . . . . . . . . . . . . . . . . . .96
- iv -
TRUST INDENTURE
THIS TRUST INDENTURE (the "Indenture") dated as of March 1, 1996 by and
between the City of Gary, Indiana, a municipal corporation and political
subdivision existing under the laws of the State of Indiana (the "Issuer"), and
Fifth Third Bank of Central Indiana, a state banking association organized and
existing under the laws of the United States of America and duly authorized to
exercise corporate trust powers, as trustee (the "Trustee"), under the
circumstances summarized in the following recitals (the capitalized terms not
defined in the recitals and granting clauses being used therein as defined in
Article I hereof):
A. By virtue of the authority of the laws of the State of Indiana, and
particularly the Indiana Constitution and Title 36, Article 7, Chapters 11.9 and
12, and Title 5, Article 1, Chapter 5 of the Indiana Code, as supplemented and
amended (collectively, the "Act") and pursuant to the Bond Legislation referred
to below, the Issuer is authorized to enter into this Indenture and to do or
cause to be done all the acts and things herein provided or required to be done,
to issue the Refunding Bonds, and to use the proceeds of the Refunding Bonds to
make a loan that will provide moneys to assist in financing the refunding of the
Prior Bonds, the proceeds of which were used to finance the costs of the
Project, which Project creates or preserves jobs and employment opportunities
and improves the economic welfare of the people of the State of Indiana and the
costs of issuance of the Prior Bonds;
B. The Issuer has determined to issue and sell the Refunding Bonds in the
aggregate principal amount of $22,220,000 for the purpose described above and to
enter into this Indenture and secure the Bonds by the pledge and assignment of
the Revenues;
C. All acts and conditions required to happen, exist and be performed
precedent to and in the issuance of the Refunding Bonds and the execution and
delivery of this Indenture have happened, exist and have been performed, or at
the delivery of the Refunding Bonds will exist, will have happened and will have
been performed (i) to make the Refunding Bonds, when issued, delivered and
authenticated, valid obligations of the Issuer in accordance with the terms
hereof and (ii) to make this Indenture a valid, binding and legal trust
agreement for the security of the Bonds in accordance with its terms; and
D. The Trustee has accepted the trusts created by this Indenture, and in
evidence thereof has joined in the execution hereof;
NOW, THEREFORE, THIS INDENTURE WITNESSETH, that to secure the payment of
Bond Service Charges on the Bonds according to their true intent and meaning, to
secure the performance and observance of all of the covenants, agreements,
obligations and conditions contained therein and herein, and to declare the
terms and conditions upon and subject to which the Bonds are and are intended to
be issued, held, secured and enforced, and in consideration of the premises and
the acceptance by the Trustee of the trusts created herein and of the purchase
and
acceptance of the Refunding Bonds by the Holders, and for other good and
valuable consideration, the receipt of which is acknowledged, the Issuer has
executed and delivered this Indenture and absolutely assigns hereby to the
Trustee, and to its successors in trust, and its and their assigns, all right,
title and interest of the Issuer in and to (i) the Revenues, including, without
limitation, all Loan Payments and other amounts receivable by or on behalf of
the Issuer under the Agreement in respect of repayment of the Loan; (ii) the
Agreement, except for the Unassigned Issuer's Rights; and (iii) the Notes.
TO HAVE AND TO HOLD unto the Trustee and its successors in trust and its
and their assigns forever.
BUT IN TRUST, NEVERTHELESS, and subject to the provisions hereof,
(a) except as provided otherwise herein, for the equal and proportionate
benefit, security and protection of all present and future Holders of the Bonds
issued or to be issued under and secured by this Indenture,
(b) for the enforcement of the payment of the principal of and interest
and any premium on the Bonds, when payable, according to the true intent and
meaning thereof and of this Indenture, and
(c) to secure the performance and observance of and compliance with the
covenants, agreements, obligations, terms and conditions of this Indenture;
in each case, without preference, priority or distinction, as to lien or
otherwise, of any one Bond over any other by reason of designation, number, date
of the Bonds or of authorization, issuance, sale, execution, authentication,
delivery or maturity thereof, or otherwise, so that each Bond and all Bonds
shall have the same right, lien and privilege under this Indenture and shall be
secured equally and ratably hereby, it being intended that the lien and security
of this Indenture shall take effect from the date hereof, without regard to the
date of the actual issue, sale or disposition of the Bonds, as though upon that
date all of the Bonds were actually issued, sold and delivered to purchasers for
value; provided, however, that moneys drawn under the Letter of Credit shall be
applied only to the payment of the principal of and interest on the Refunding
Bonds or the purchase price of Refunding Bonds or Beneficial Ownership
Interests; and provided further however, that
(i) if the principal of the Bonds and the interest due or to become
due thereon together with any premium required by redemption of any of the
Bonds prior to maturity shall be well and truly paid, at the times and in
the manner to which reference is made in the Bonds, according to the true
intent and meaning thereof, or the outstanding Bonds shall have been paid
and discharged in accordance with Article IX hereof, and
- 2 -
(ii) if all of the covenants, agreements, obligations, terms and
conditions of the Issuer under this Indenture shall have been kept,
performed and observed and there shall have been paid (or provided for) to
the Trustee, the Bank, the Registrar, the Paying Agents and the
Authenticating Agents all sums of money due or to become due to them in
accordance with the terms and provisions hereof,
this Indenture and the rights assigned hereby shall cease, determine and be
void, except as provided in Section 9.03 hereof with respect to the survival of
certain provisions hereof; otherwise, this Indenture shall be and remain in full
force and effect.
It is declared that all Bonds issued hereunder and secured hereby are to be
issued, authenticated and delivered, and that all Revenues assigned hereby are
to be dealt with and disposed of under, upon and subject to, the terms,
conditions, stipulations, covenants, agreements, obligations, trusts, uses and
purposes provided in this Indenture. The Issuer has agreed and covenanted, and
agrees and covenants with the Trustee and with each and all Holders, as follows:
- 3 -
ARTICLE I.
DEFINITIONS
DEFINITIONS. In addition to the words and terms defined elsewhere in this
Indenture, the words and terms defined in this Section shall have the meanings
herein specified unless the context or use clearly indicates another or
different meaning or intent. Those words and terms not expressly defined herein
and used herein with initial capitalization where rules of grammar do not
otherwise require capitalization, or which are otherwise defined terms under the
Agreement, as hereinafter defined, shall have the meanings assigned to them in
the Agreement.
"Act" means, collectively, Title 36, Article 7, Chapters 11.9 and 12 and
Title 5, Article 1, Chapter 5 of the Indiana Code, as supplemented and amended.
"Additional Bonds" means Bonds which may be issued under Section 2.08 of
this Indenture.
"Additional Notes" means any non-negotiable promissory note or notes, in
addition to the Refunding Notes, delivered by the Borrower to the Trustee in
connection with the issuance of Additional Bonds, as provided in the Agreement.
"Adjustable Rate" means any interest rate to be borne on the Refunding
Bonds other than the Fixed Interest Rate.
"Agreement" means the Loan Agreement dated as of even date with this
Indenture, between the Issuer and the Borrower, as amended or supplemented from
time to time.
"Alternate Letter of Credit" means an irrevocable letter of credit
authorizing drawings thereunder by the Trustee issued by a bank, a trust company
or other financial institution and meeting the requirements of Section 5.09
hereof.
"Authenticating Agent" means the Registrar for the Bonds and any bank,
trust company or other Person designated as an Authenticating Agent for the
Bonds by or in accordance with Section 6.13 of this Indenture, each of which
shall be a transfer agent registered in accordance with Section 17(A) of the
Securities Exchange Act of 1934, as amended.
"Authorized Borrower Representative" means (i) the President or any Vice
President of the general partner of the Borrower or (ii) any other the person
designated at the time pursuant to the Agreement to act on behalf of the
Borrower by written instrument furnished to the Issuer and the Trustee,
containing the specimen signature of such person and signed by any officer of
the Borrower. Such instrument may designate an alternate or alternates.
- 4 -
"Bank" means The Royal Bank of Scotland plc, acting through its New York
Branch, and its successors and assigns. Upon issuance and effectiveness of any
Alternate Letter of Credit, "Bank" shall mean the issuer thereof and its
successors and assigns.
"Beneficial Owner" means with respect to a Refunding Bond, a Person owning
the Beneficial Ownership Interest therein, as evidenced to the satisfaction of
the Trustee.
"Beneficial Ownership Interest" means the right to receive payments and
notices with respect to the Refunding Bonds which are held by the Depository
under a book entry system.
"Bond Counsel" means an attorney-at-law or firm of attorneys (other than an
employee of the Borrower but including any law firm serving as counsel to the
Borrower) satisfactory to the Trustee and the Bank and nationally recognized as
experienced in matters relating to the tax exemption of interest on bonds of
states and political subdivisions.
"Bond Fund" means the Bond Fund created in Section 5.03 hereof.
"Bond Purchase Agreement" means, as to the Refunding Bonds, the Bond
Purchase Agreement dated as of or after the date hereof but on or prior to the
date of initial delivery of the Refunding Bonds, among the Issuer, the
Underwriter and the Borrower and, as to any Additional Bonds, the bond placement
agreement provided for in the Bond Legislation providing for the issuance of the
Additional Bonds.
"Bond Purchase Date" means any Bond Purchase Date as defined and provided
for in Section 2.04, 2.05 or 2.06 hereof.
"Bond Legislation" or "Bond Ordinance" means (a) when used with reference
to the Refunding Bonds, the ordinance providing for their issuance and approving
the Agreement, this Indenture, the Bond Purchase Agreement and related matters;
(b) when used with reference to an issue of Additional Bonds, the ordinance
providing for the issuance of the Refunding Bonds, to the extent applicable, and
the legislation providing for the issuance of the Additional Bonds and approving
any amendment or supplement to the Agreement, any Supplemental Indenture and
related matters; and (c) when used with reference to Bonds when Additional Bonds
are outstanding, the ordinance providing for the issuance of the Refunding Bonds
and the ordinance providing for the issuance of the then outstanding and the
then to be issued Additional Bonds; in each case as amended or supplemented from
time to time. The Bond Legislation is incorporated herein by reference.
"Bond Service Charges" means, for any series of Bonds, the principal of,
premium, if any, and interest on such Bonds for any period or payable at any
time, whether due on an Interest Payment Date, at maturity or upon acceleration,
redemption or upon tender for purchase.
"Bonds" means the Refunding Bonds and any Additional Bonds.
- 5 -
"Book entry form" or "Book entry system" means, with respect to the
Refunding Bonds, a form or system, as applicable, under which (i) the Beneficial
Ownership Interests may be transferred only through a book entry and (ii)
physical Refunding Bond certificates in fully registered form are registered
only in the name of a Depository or its nominee as Holder, with the physical
Refunding Bond certificates "immobilized" in the custody of the Depository. The
book entry system maintained by and the responsibility of the Depository and not
maintained by or the responsibility of the Issuer or the Trustee is the record
that identifies, and records the transfer of the interests of, the owners of
book entry interests in the Refunding Bonds.
"Borrower" means The Miller Partnership, L.P., an Illinois limited
partnership, and its successors and assigns.
"Business Day" means a day of the year, other than a Saturday or Sunday, on
which commercial banks located in the city or cities in which the principal
corporate trust office of the Paying Agent, the principal corporate trust office
of the Registrar, the principal office of the Remarketing Agent, and the
principal office of the Bank are located, are not required or authorized to
remain closed and on which The New York Stock Exchange is not closed.
"CenterPoint" means CenterPoint Properties Corporation, a Maryland
corporation.
"Closing Date" means, with respect to the Refunding Bonds, the date of
delivery of and payment for the Refunding Bonds.
"Code" means the Internal Revenue Code of 1986, as amended from time to
time. Reference to the Code and Sections of the Code include relevant
applicable regulations and proposed regulations thereunder (and under the
related provisions of the Internal Revenue Code of 1954, as amended) and any
successor provisions to those Sections, regulations or proposed regulations.
"Depository" means any securities depository that is a clearing agency
under federal law operating and maintaining, with its participants or otherwise,
a book entry system to record ownership of book entry interests in bonds, and to
effect transfers of book entry interests in bonds in book entry form, and
includes and means initially The Depository Trust Company (a limited purpose
trust company), New York, New York.
"Determination of Taxability" means and shall occur when, (i) the Trustee
receives written notice from the Borrower, supported by an opinion of Bond
Counsel, that interest on the Series 1996 A Bonds is includable in the gross
income of Holders of the Series 1996 A Bonds for federal income tax purposes or
(ii) the Internal Revenue Service shall claim in writing that interest on the
Series 1996 A Bonds is includable in the gross income of Holders of the Series
1996 A Bonds for federal income tax purposes; provided, that such a claim shall
not be deemed a Determination of Taxability unless the Borrower is afforded
reasonable opportunity (at the Borrower's sole expense
- 6 -
and for a period not to exceed 2 years) to pursue any judicial or administrative
remedy available to the Borrower with respect to such claim.
"Direct Participant" means a Participant as defined in the Letter of
Representations.
"Eligible Funds" means amounts on deposit in the Bond Fund (other than
funds derived from a draw on the Letter of Credit) for a continuous period of
(i) 91 consecutive days or (ii) such shorter period if an opinion of counsel
acceptable to the Bank and the Trustee is delivered to the Issuer, the Bank and
the Trustee stating that such shorter period will not result in voidable
preferences, during which period there shall not have occurred the filing of a
voluntary or involuntary petition in bankruptcy under the United States
Bankruptcy Code, 11 U.S.C. Sections 101 ET. SEQ., or the commencement of a
proceeding under any other applicable laws concerning insolvency, reorganization
or bankruptcy, by or against the Borrower or the Issuer.
"Eligible Investments" means:
(i) Government Obligations;
(ii) Federal Home Loan Mortgage Corporation (FHLMC) and Farm Credit
Banks (Federal Land Banks, Federal Intermediate Credit Banks and Banks for
Cooperatives) participation certificates and senior debt obligations which
bear interest at a fixed rate and are fully amortizing;
(iii) Federal National Mortgage Association's (FNMA) mortgage backed
securities and senior debt obligations which bear interest at a fixed rate
and are fully amortizing;
(iv) Student Loan Marketing Association (Sallie Mae) letter of
credit backed issues and senior debt obligations;
(v) Federal funds, certificates of deposits, time deposits and
bankers' acceptances (having original maturities of not more than 365 days)
of any bank (including the Trustee and any of its affiliates) the
unsecured, uninsured and unguaranteed debt obligations of which (or, in the
case of a bank subsidiary in a bank holding company, debt obligations of
the bank holding company) are at all times rated at least "AA" or "A-1" or
its equivalent by either Rating Service;
(vi) commercial paper (having original maturities of not more than
270 days) rated at least "A-1" or its equivalent by either Rating Service;
(vii) obligations rated at least "AA" or "A-1" or its equivalent by
either Rating Service, or unrated general obligations of any Person which
has outstanding other
- 7 -
unsecured, uninsured and unguaranteed obligations which are so rated by
either Rating Service;
(viii) repurchase agreements with any institution the unsecured,
uninsured and unguaranteed debt obligations of which (or, in the case of a
bank subsidiary in a bank holding company, debt obligations of the bank
holding company) are rated at least "AA" or its equivalent by either Rating
Service;
(ix) tax-exempt obligations of any state of the United States of
America or any political subdivision or other instrumentality of any such
state and such obligations are rated in either of the two highest rating
categories (i.e., "AA" or higher) of either Rating Service and are not
"specified private activity bonds" as defined in Section 57(a)(5)(C) of the
Code;
(x) tax-exempt money market funds (including those of the Trustee
or any of its affiliates) which are "qualified regulated investment
companies" within the meaning of IRS Notice 87-22, dated October 25, 1987,
and which meet the other requirements of IRS Notice 87-22 and any
subsequent regulation necessary to exempt investments in such funds from
the definition of "investment property" under Section 148 of the Code whose
assets are solely invested in obligations rated in either of the two
highest rating categories by either Rating Service;
(xi) money market funds (including those of the Trustee or any of
its affiliates) the assets of which are obligations of or guaranteed by the
United States of America and which funds are rated "Am" or "Am-G" or higher
by S&P; and
(xii) obligations approved in writing by the Bank;
provided, however, that "Eligible Investments" with respect to any proceeds
resulting from a draw under the Letter of Credit shall mean only Government
Obligations maturing as needed to pay principal of and interest on the Bonds on
a timely basis, and in no event more than thirty days after purchase. In
addition, moneys in the Remarketing Reimbursement Fund may be invested only in
Government Obligations which mature no later than the Bond Purchase Date next
following the date of such investment.
"Event of Default" means an Event of Default hereunder as described in
Section 7.01 hereof.
"Executive" means the Mayor of the Issuer or in his or her absence any
official or member thereof.
"Extraordinary Services" and "Extraordinary Expenses" means all services
rendered and all reasonable expenses properly incurred by the Trustee, Paying
Agent, Authenticating Agents
- 8 -
and Registrar under this Indenture, other than Ordinary Services and Ordinary
Expenses. Extraordinary Services and Extraordinary Expenses shall specifically
include services rendered or expenses incurred by the Trustee in connection
with, or in contemplation of, an Event of Default.
"First Optional Redemption Date" means the earlier to occur of the April 1
occurring in the year which is (i) at least ten (10) full years after the Fixed
Interest Rate Commencement Date or (ii) a number of years after the Fixed
Interest Rate Commencement Date equal to the number of full years between the
Fixed Interest Rate Commencement Date and the maturity date of the Refunding
Bonds, multiplied by 1/2 and rounded up to the nearest whole number.
"Fiscal Officer" means the Clerk of the Issuer.
"Five Year Interest Rate" means (a) the rate of interest per annum
determined by the Remarketing Agent, on the Interest Rate Determination Date
immediately preceding the applicable Interest Rate Adjustment Date, to be the
interest rate necessary, during the Interest Rate Period commencing on the
applicable Interest Rate Adjustment Date and ending on the March 31 or September
30 nearest to but not later than the date which is five years from the Interest
Rate Adjustment Date, in the judgment of the Remarketing Agent (taking into
consideration current transactions and comparable securities with which the
Remarketing Agent is involved or of which it is aware and prevailing financial
market conditions) to produce as nearly as practical a par bid for the Refunding
Bonds on the Interest Rate Determination Date or (b) in the event that the
Remarketing Agent has been removed or has resigned and no successor has been
appointed or the Remarketing Agent has failed to determine the Five Year
Interest Rate for whatever reason, or the Five Year Interest Rate cannot be
determined pursuant to clause (a) for whatever reason, the interest rate then in
effect with respect to the Refunding Bonds, without adjustment; provided that in
no event shall the Five Year Interest Rate exceed the Maximum Rate.
"Fixed Interest Rate" means (a) the fixed rate of interest per annum
determined by the Remarketing Agent, on the Interest Rate Determination Date
immediately preceding the applicable Interest Period Reset Date, to be the
interest rate necessary, from the Interest Period Reset Date to the final
maturity date of the Refunding Bonds, in the judgment of the Remarketing Agent
(taking into consideration current transactions and comparable securities with
which the Remarketing Agent is involved or of which it is aware and prevailing
financial market conditions) to produce as nearly as practical a par bid for the
Refunding Bonds on the Interest Rate Determination Date or (b) in the event that
the Remarketing Agent has been removed or has resigned and no successor has been
appointed or the Remarketing Agent has failed to determine the Fixed Interest
Rate for whatever reason, or the Fixed Interest Rate cannot be determined
pursuant to clause (a) for whatever reason, the interest rate then in effect
with respect to the Refunding Bonds, without adjustment; provided that in no
event shall the Fixed Interest Rate exceed the Maximum Rate.
- 9 -
"Fixed Interest Rate Commencement Date" means the Interest Period Reset
Date from and after which the Refunding Bonds shall bear interest at the Fixed
Interest Rate, as that date shall be established as provided in Section 2.03
hereof.
"Government Obligations" means (a) direct obligations of the United States
of America for the payment of which the full faith and credit of the United
States of America is pledged, (b) obligations issued by a person controlled or
supervised by and acting as an instrumentality of the United States of America,
the payment of the principal of, premium, if any, and interest on which is fully
guaranteed as a full faith and credit obligation of the United States of America
(including any securities described in (a) or (b) issued or held in book-entry
form on the books of the Department of Treasury of the United States of America
or Federal Reserve Bank), and (c) money market funds (including those of the
Trustee or its affiliates), rated in the highest rating category by Moody's,
which invest solely in the obligations described in (a) and (b) above.
"Holder" or "Holder of a Bond" or "Bondholder" means the Person in whose
name a Bond is registered on the Register.
"Indenture" means this Trust Indenture, as amended or supplemented from
time to time.
"Indirect Participant" means a person utilizing the Book Entry System of
the Depository by directly or indirectly clearing through or maintaining a
custodial relationship with a Direct Participant.
"Instructions to Sell" means the Notice of Exercise of Tender Option --
Instructions to Sell, the form of which is attached to the forms of Series 1996
Bonds attached hereto as Exhibits A and B.
"Interest Payment Date" or "Interest Payment Dates" means, (a) as to the
Refunding Bonds, (i) while the Refunding Bonds bear interest at the Six Month
Interest Rate, the One Year Interest Rate, the Five Year Interest Rate or the
Fixed Interest Rate, the first day of each April and October, and (ii) while the
Refunding Bonds bear interest at the Weekly Interest Rate, the One Month
Interest Rate, or the Three Month Interest Rate, the first Business Day of each
month commencing the first Business Day of May, 1996, and (b) as to Additional
Bonds, each date or dates designated as an Interest Payment Date or Dates in the
applicable Supplemental Indenture or Bond Legislation.
"Interest Period Reset Date" means the date on which the interest rate on
the Refunding Bonds converts from the Interest Rate Mode applicable to the
Refunding Bonds prior to such date to a new Interest Rate Mode. An Interest
Period Reset Date shall be the first Business Day of a month; provided that upon
conversion from a Six Month, One Year or Five Year Interest Rate Mode, an
Interest Period Reset Date shall be the first day of a month; and provided
further, that except when converting from a Weekly Interest Rate Mode, an
Interest Period Reset Date may not occur prior to the end of the preceding
Interest Rate Period.
- 10 -
"Interest Rate Adjustment Date" means any date on which the interest rate
on the Refunding Bonds may be adjusted, either as the result of the conversion
of the interest rate on the Refunding Bonds to a different Interest Rate Mode,
or by adjustment of the interest rate on the Refunding Bonds within the
applicable Interest Rate Mode. Except as otherwise provided with respect to an
Interest Rate Adjustment Date which is also an Interest Period Reset Date, an
Interest Rate Adjustment Date shall be the first day of the first month of the
Interest Rate Period if the Refunding Bonds bear interest at the Six Month, One
Year or Five Year Interest Rates; the first Business Day of a month if the
Refunding Bonds bear interest at the One Month or Three Month Interest Rates;
and if the Refunding Bonds bear interest at the Weekly Interest Rate, then the
Interest Rate Adjustment Date shall be Thursday of each week.
"Interest Rate Determination Date" means (i) with respect to the Three
Month Interest Rate, the Six Month Interest Rate, the One Year Interest Rate,
the Five Year Interest Rate and the Fixed Interest Rate, the tenth Business Day
preceding an Interest Rate Adjustment Date, (ii) with respect to the One Month
Interest Rate, the seventh Business Day preceding an Interest Rate Adjustment
Date, and (iii) with respect to the Weekly Interest Rate, not later than 2:00
p.m. according to local time at the principal corporate trust office of the
Registrar on Wednesday of each week, or the next preceding Business Day if such
Wednesday is not a Business Day; provided that upon any conversion to the Weekly
Interest Rate from a different Interest Rate Mode, the first Interest Rate
Determination Date shall mean not later than 2:00 p.m. according to the local
time at the principal corporate trust office of the Registrar on the Business
Day next preceding the Interest Period Reset Date.
"Interest Rate for Advances" means a rate per annum which is equal to two
percent (2.00%) per annum plus the Prime Rate.
"Interest Rate Mode" means any of those modes of interest with respect to
the Refunding Bonds permitted by this Indenture, specifically, the Weekly
Interest Rate, the One Month Interest Rate, the Three Month Interest Rate, the
Six Month Interest Rate, the One Year Interest Rate, the Five Year Interest Rate
and the Fixed Interest Rate.
"Interest Rate Period" means that period of time for which the interest
rate with respect to the Refunding Bonds has been determined by the Remarketing
Agent or otherwise as provided in the definition of the applicable Interest Rate
Mode, commencing on the applicable Interest Rate Adjustment Date, and
terminating on the day immediately preceding the following Interest Rate
Adjustment Date.
"Issuer" means the City of Gary, Indiana, a municipality and political
subdivision of the State of Indiana.
"Issuing Authority" or "Legislative Authority" means the Common Council of
the Issuer.
- 11 -
"Letter of Credit" means (A) the irrevocable letter of credit to be issued
by the Bank and delivered to the Trustee on the same date as the initial
delivery of the Refunding Bonds and being an irrevocable obligation to make
payment to the Trustee of up to the amounts therein specified with respect to
(a) the principal amount of the Refunding Bonds outstanding to enable the
Trustee to pay (i) the principal amount of the Refunding Bonds when due at
maturity or upon redemption or acceleration, and (ii) an amount equal to the
principal portion of the purchase price of any Refunding Bonds or Beneficial
Ownership Interests tendered for purchase by the Holders or Beneficial Owners
thereof, plus (b) the amount of interest due on the Refunding Bonds but not to
exceed 56 days' accrued interest at 12% per annum to enable the Trustee to pay
(i) interest on the Refunding Bonds when due and (ii) an amount equal to the
interest portion, if any, of the purchase price of any Refunding Bonds or
Beneficial Ownership Interests tendered for purchase by the Holder or Beneficial
Owner thereof; as the same may be transferred, reissued, extended, amended to
change the interest coverage period as contemplated in Section 2.03 hereof, or
replaced in accordance with this Indenture and the Letter of Credit and (B) upon
the issuance and effectiveness thereof, any Alternate Letter of Credit.
"Letter of Credit Termination Date" means the expiration date of the Letter
of Credit (presently April 15, 2001) or of any Alternate Letter of Credit.
"Letter of Representations" means the Letter of Representations from the
Issuer, the Trustee, the Registrar, the Paying Agent and the Remarketing Agent
to the Depository in connection with the issuance of the Refunding Bonds in a
book entry system, as supplemented and amended from time to time.
"Loan" means the loan by the Issuer to the Borrower of the proceeds
received from the sale of the Bonds.
"Loan Payments" means the amounts required to be paid by the Borrower in
repayment of the Loan pursuant to the provisions of the Notes and Article IV of
the Agreement.
"Maximum Rate" means the lesser of twelve percent (12%) per annum or the
maximum rate permitted by law.
"Moody's" means Moody's Investors Service, Inc., a Delaware corporation,
and its successors and assigns.
"Notes" means the Refunding Notes and any Additional Notes.
"One Month Interest Rate" means (a) the rate of interest per annum
determined by the Remarketing Agent, on the Interest Rate Determination Date
immediately preceding the applicable Interest Rate Adjustment Date, to be the
interest rate necessary, during the Interest Rate Period commencing on the
applicable Interest Rate Adjustment Date to and including the day preceding the
first Business Day of the next month, in the judgment of the Remarketing Agent
(taking into
- 12 -
consideration current transactions and comparable securities with which the
Remarketing Agent is involved or of which it is aware and prevailing financial
market conditions) to produce as nearly as practical a par bid for the Refunding
Bonds on the Interest Rate Determination Date or (b) in the event that the
Remarketing Agent has been removed or has resigned and no successor has been
appointed, or the Remarketing Agent has failed to determine the One Month
Interest Rate for whatever reason, or the One Month Interest Rate cannot be
determined pursuant to clause (a) for whatever reason, the interest rate then in
effect with respect to the Refunding Bonds, without adjustment; provided that in
no event shall the One Month Interest Rate exceed the Maximum Rate.
"One Year Interest Rate" means (a) the rate of interest per annum
determined by the Remarketing Agent, on the Interest Rate Determination Date
immediately preceding the applicable Interest Rate Adjustment Date, to be the
interest rate necessary, during the Interest Rate Period commencing on the
applicable Interest Rate Adjustment Date and ending on the March 31 or September
30 nearest to but not later than the date which is one year from the Interest
Rate Adjustment Date, in the judgment of the Remarketing Agent (taking into
consideration current transactions and comparable securities with which the
Remarketing Agent is involved in of which it is aware and prevailing financial
market conditions) to produce as nearly as practical a par bid for the Refunding
Bonds on the Interest Rate Determination Date or (b) in the event that the
Remarketing Agent has been removed or has resigned and no successor has been
appointed, or the Remarketing Agent has failed to determine the One Year
Interest Rate for whatever reason, or the One Year Interest Rate cannot be
determined pursuant to clause (a) for whatever reason, the interest rate then in
effect with respect to the Refunding Bonds, without adjustment; provided that in
no event shall the One Year Interest Rate exceed the Maximum Rate.
"Ordinary Services" and "Ordinary Expenses" means those services normally
rendered, and those expenses normally incurred, by a trustee, paying agent,
authenticating agent or registrar under instruments similar to this Indenture.
"Outstanding Bonds" or "Bonds outstanding" means, as of the applicable
date, all Bonds which have been authenticated and delivered, or which are being
delivered by the Registrar under this Indenture, except:
(a) Bonds canceled upon surrender, exchange or transfer, or canceled
because of payment or redemption on or prior to that date;
(b) Bonds, or the portion thereof, the payment, redemption or purchase for
cancellation of which sufficient money has been deposited and credited with the
Trustee or any Paying Agents pursuant to this Indenture on or prior to that date
for that purpose (whether upon or prior to the maturity or redemption date of
those Bonds); provided, that if any of those Bonds are to be redeemed prior to
their maturity, notice of that redemption shall have been given or arrangements
satisfactory to the Trustee shall have been made for giving notice of that
redemption, or waiver
- 13 -
by the affected Holders of that notice satisfactory in form to the Trustee shall
have been filed with the Trustee;
(c) Bonds, or the portion thereof, which are deemed to have been paid and
discharged or caused to have been paid and discharged pursuant to the provisions
of this Indenture;
(d) Bonds in lieu of which others have been authenticated under Section
3.07 of this Indenture; and
(e) Bonds which are tendered or deemed to have been tendered pursuant to
Sections 2.04, 2.05 or 2.06 hereof;
provided that, in determining whether the Holders of the requisite percentage of
Bonds have concurred in any demand, direction, request, notice, consent, waiver
or other action under this Indenture, Bonds that are owned by the Borrower or
any Person directly or indirectly controlling or controlled by or under direct
or indirect common control with the Borrower shall be regarded and deemed not to
be outstanding for the purpose of any such determination; provided that for the
purposes of determining whether the Trustee shall be protected in relying on any
such direction, consent or waiver, only such Bonds which the Trustee knows are
so owned shall be disregarded. Bonds so owned that have been pledged in good
faith may be regarded as Outstanding for such purpose, if the pledgee shall
establish to the satisfaction of the Trustee the pledgee's right to vote such
Bonds and the pledgee is not a Person directly or indirectly controlling or
controlled by or under direct or indirect common control with the Borrower. In
case of a dispute as to such right, any decision by the Trustee taken upon the
advice of counsel shall be full protection to the Trustee.
"Paying Agent" means, initially, The Fifth Third Bank of Central Indiana,
located in Cincinnati, Ohio, any bank or trust company designated as a Paying
Agent by or in accordance with Section 6.12 of this Indenture.
"Person" or words importing persons means firms, associations,
corporations, partnerships (including without limitation, general and limited
partnerships), joint ventures, societies, estates, trusts, limited liability
companies, public or governmental bodies, other legal entities and natural
persons.
"Pledged Bonds" means Refunding Bonds or Beneficial Ownership Interests
registered or recorded in the name of the Bank and securing obligations of the
Borrower under the Reimbursement Agreement as provided in Section 6.20 hereof.
"Predecessor Bond" of any particular Bond means every previous Bond
evidencing all or a portion of the same debt as that evidenced by the particular
Bond. For the purposes of this definition, any Bond authenticated and delivered
under Section 3.07 of this Indenture in lieu of
- 14 -
a lost, stolen or destroyed Bond shall, except as otherwise provided in Section
3.07, be deemed to evidence the same debt as the lost, stolen or destroyed Bond.
"Prior Bonds" means collectively the Series 1991 A Bonds, the Series 1991 B
Bonds, the Series 1993 A Bonds and the Series 1993 B Bonds.
"Prior Bonds Trustee" means LaSalle National Bank, Chicago, Illinois, as
trustee under the Prior Indenture.
"Prior Indenture" means, collectively, the Trust Indenture dated as of
April 1, 1991, as supplemented by the First Supplemental Trust Indenture dated
as of September 1, 1993, among the Issuer, LaSalle National Bank, as Trustee and
Mercantile National Bank of Indiana, as Co-Trustee, pursuant to which the Prior
Bonds were issued.
"Prime Rate" means a variable per annum rate of interest equal at all times
to the rate of interest established and quoted by the Bank as its "Prime Rate,"
such rate to change contemporaneously with each change in such established and
quoted rate, provided that it is understood that the Prime Rate shall not
necessarily be representative of the rate of interest actually charged by the
Bank on any loan or class of loans.
"Project" means the Project as defined in the Loan Agreement.
"Rating Service" means either Moody's or S & P.
"Rebate Fund" means the Rebate Fund created pursuant to Section 5.11
hereof.
"Refunding Bonds" means, collectively, the Series 1996 A Bonds and the
Series 1996 B Bonds, in the aggregate principal amount of $22,220,000 authorized
in the Bond Legislation and Section 2.02 hereof.
"Refunding Fund" means the Refunding Fund created pursuant to Section 5.01
hereof.
"Refunding Notes" means, collectively, the Note, Series 1996 A in the
principal amount of $20,540,00 and the Note, Series 1996 B in the principal
amount of $1,680,000 of the Borrower, dated as of even date with the Refunding
Bonds initially issued, in the forms attached to the Agreement as Exhibit A
evidencing the obligation of the Borrower to make Loan Payments.
"Register" means the books kept and maintained by the Registrar for
registration and transfer of Bonds pursuant to Section 3.06 hereof.
"Registrar" means The Fifth Third Bank, located in Cincinnati, Ohio, until
a successor Registrar shall have become such pursuant to applicable provisions
of this Indenture.
- 15 -
"Regular Record Date" means, with respect to any Bond, the fifth Business
Day next preceding an Interest Payment Date applicable to that Bond; provided,
however, that so long as the Bonds bear interest at the Fixed Interest Rate,
"Regular Record Date" means the fifteenth day next preceding an Interest Payment
Date applicable to that Bond.
"Reimbursement Agreement" means the Reimbursement Agreement dated as of
March 1, 1996, by and among the Bank, the Borrower and CenterPoint, as amended
and supplemented from time to time. Upon the issuance of any Alternate Letter
of Credit, "Reimbursement Agreement" shall mean the reimbursement or similar
agreement relating to such Alternate Letter of Credit, entered into between the
Borrower and the issuer of such Alternate Letter of Credit.
"Remarketing Agent" means, initially, Everen Securities, Inc. and any
Person meeting the qualifications of Section 6.18 hereof and designated from
time to time to act as Remarketing Agent under Section 6.17 hereof.
"Remarketing Reimbursement Fund" means the Remarketing Reimbursement Fund
created in Section 5.04 hereof.
"Revenues" means (a) the Loan Payments, (b) all of the moneys received or
to be received by the Issuer or the Trustee in respect of repayment of the Loan,
(c) all moneys and investments in the Bond Fund, including without limitation
moneys received by the Trustee under or pursuant to the Letter of Credit, (d)
any moneys and investments in the Refunding Fund, and (e) all income and profit
from the investment of the foregoing moneys.
"S&P" means Standard & Poor's Ratings Group, a division of McGraw-Hill and
its successors and assigns.
"Series 1991 A Bonds" means the City of Gary, Indiana Economic Development
Revenue Bonds, Series 1991 A (The Miller Partnership, L.P. Project) issued in
the original principal amount of $14,500,000.
"Series 1991 B Bonds" means the City of Gary, Indiana Taxable Economic
Development Revenue Bonds, Series 1991 B (The Miller Partnership, L.P. Project)
issued in the original principal amount of $1,000,000.
"Series 1993 A Bonds" means the City of Gary, Indiana Economic Development
Revenue Bonds, Series 1993 A (The Miller Partnership, L.P. Project) issued in
the original principal amount of $6,040,000.
"Series 1993 B Bonds" means the City of Gary, Indiana Taxable Economic
Development Revenue Bonds, Series 1993 B (The Miller Partnership, L.P. Project)
issued in the original principal amount of $1,460,000.
- 16 -
"Series 1996 A Bonds" means the City of Gary, Indiana Adjustable Rate
Economic Development Revenue Refunding Bonds, Series 1996 A (The Miller
Partnership, L.P. Project) issued in the original principal amount of
$20,540,000, which are being issued to refund the Series 1991 A Bonds and the
Series 1993 A Bonds.
"Series 1996 B Bonds" means the City of Gary, Indiana Taxable Adjustable
Rate Economic Development Revenue Refunding Bonds, Series 1996 B (The Miller
Partnership, L.P. Project) issued in the original principal amount of
$1,680,000, which are being issued to refund the Series 1991 B Bonds and the
Series 1993 B Bonds.
"Six Month Interest Rate" means (a) the rate of interest per annum
determined by the Remarketing Agent, on the Interest Rate Determination Date
immediately preceding the applicable Interest Rate Adjustment Date, to be the
interest rate necessary, during the Interest Rate Period commencing on the
applicable Interest Rate Adjustment Date and ending on the March 31 or September
30 nearest to but not later than the date which is six months from the Interest
Rate Adjustment Date, in the judgment of the Remarketing Agent (taking into
consideration current transactions and comparable securities with which the
Remarketing Agent is involved or of which it is aware and prevailing financial
market conditions) to produce as nearly as practical a par bid for the Refunding
Bonds on the Interest Rate Determination Date or (b) in the event that the
Remarketing Agent has been removed or has resigned and no successor has been
appointed, or the Remarketing Agent has failed to determine the Six Month
Interest Rate for whatever reason, or the Six Month Interest Rate cannot be
determined pursuant to clause (a) for whatever reason, the interest rate then in
effect with respect to the Refunding Bonds, without adjustment; provided that in
no event shall the Six Month Interest Rate exceed the Maximum Rate.
"Special Record Date" means, with respect to any Bond, the dated
established by the Trustee in connection with the payment of overdue interest on
that Bond pursuant to Section 3.05 hereof.
"State" means the State of Indiana.
"Supplemental Credit Facility" means a credit facility, agreement or
arrangement in addition to the Letter of Credit, including, without limitation,
a bond insurance policy, collateral arrangement, surety bond, standby placement
agreement or similar arrangement the purpose of which is to enhance the credit
of the Refunding Bonds in order to obtain or maintain a rating on the Refunding
Bonds.
"Supplemental Indenture" means any indenture supplemental to this Indenture
entered into between the Issuer and the Trustee in accordance with Article VIII
hereof.
"Three Month Interest Rate" means (a) the rate of interest per annum
determined by the Remarketing Agent, on the Interest Rate Determination Date
immediately preceding the applicable Interest Rate Adjustment Date, to be the
interest rate necessary, during the Interest Rate Period
- 17 -
commencing on the applicable Interest Rate Adjustment Date to and including the
day preceding the first Business Day of the January, April, July or October,
nearest to but not later than the date which is three months from the Interest
Rate Adjustment Date, in the judgment of the Remarketing Agent (taking into
consideration current transactions and comparable securities with which the
Remarketing Agent is involved or of which it is aware and prevailing financial
market conditions) to produce as nearly as practical a par bid for the Refunding
Bonds on the Interest Rate Determination Date or (b) in the event that the
Remarketing Agent has been removed or has resigned and no successor has been
appointed, or the Remarketing Agent has failed to determine the Three Month
Interest Rate for whatever reason, or the Three Month Interest Rate cannot be
determined pursuant to clause (a) for whatever reason, the interest rate then in
effect with respect to the Refunding Bonds, without adjustment; provided that in
no event shall the Three Month Interest Rate exceed the Maximum Rate.
"Trustee" means the Trustee at the time acting as such under this
Indenture, originally Fifth Third Bank of Central Indiana, as Trustee,
Indianapolis, Indiana, and any successor Trustee as determined or designated
under or pursuant to this Indenture.
"Unassigned Issuer's Rights" means the Unassigned Issuer's Rights as
defined in the Agreement.
"Underwriter" means Everen Securities, Inc.
"Weekly Interest Rate" means (a) the rate of interest per annum determined
by the Remarketing Agent on the Interest Rate Determination Date immediately
preceding the applicable Interest Rate Adjustment Date, to be the interest rate
necessary during the Interest Rate Period of one week (or less in the case of
any such Interest Rate Period commencing on an Interest Period Reset Date which
is not a Thursday or ending on the day preceding an Interest Period Reset Date)
commencing on the applicable Interest Rate Adjustment Date, in the judgment of
the Remarketing Agent (taking into consideration current transactions and
comparable securities with which the Remarketing Agent is involved or of which
it is aware and prevailing financial market conditions) to produce as nearly as
practical a par bid (plus accrued interest, if any) for the Refunding Bonds on
the Interest Rate Determination Date or (b) in the event that the Remarketing
Agent has been removed or has resigned and no successor has been appointed, or
the Remarketing Agent has failed to determine the Weekly Interest Rate for
whatever reason, or the Weekly Interest Rate cannot be determined pursuant to
clause (a) for whatever reason, the interest rate then in effect with respect to
the Refunding Bonds, without adjustment; provided that in no event shall the
Weekly Interest Rate exceed the Maximum Rate.
Section 1.02. INTERPRETATION. Any reference herein to the Issuer or to
any officer, employee or official thereof includes entities, officers, employees
or officials succeeding to their respective functions, duties or
responsibilities pursuant to or by operation of law or who are lawfully
performing their functions.
- 18 -
Any reference to a section or provision of the Indiana Constitution or the
Act, or to a section, provision or chapter of the Indiana Code, or to any
statute of the United States of America, includes that section, provision or
chapter as amended, modified, revised, supplemented or superseded from time to
time; provided, that no amendment, modification, revision, supplement or
superseding section, provision or chapter shall be applicable solely by reason
of this paragraph, if it constitutes in any way an impairment of rights or
obligations of the Issuer, the Holders, the Trustee, the Registrar, the Bank,
the Remarketing Agent, any Paying Agent, any Authenticating Agent or the
Borrower under this Indenture, the Bond Legislation, the Bonds, the Letter of
Credit, the Reimbursement Agreement, the Bond Purchase Agreement, the Notes or
any other instrument or document entered into in connection with any of the
foregoing, including without limitation, any alteration of the obligation to pay
Bond Service Charges in the amount and manner, at the times, and from the
sources provided in the Bond Legislation and this Indenture, except as permitted
herein.
Unless the context indicates otherwise, words importing the singular number
include the plural number, and vice versa. The terms "hereof," "hereby,"
"herein," "hereto," "hereunder," "hereinafter" and similar terms refer to this
Indenture; and the term "hereafter" means after, and the term "heretofore" means
before, the date of delivery of this Indenture. Words of any gender include the
correlative words of the other genders, unless the sense indicates otherwise.
Section 1.03. CAPTIONS AND HEADINGS. The captions and headings in this
Indenture are solely for convenience of reference and in no way define, limit or
describe the scope or intent of any Articles, Sections, subsections, paragraphs,
subparagraphs or clauses hereof.
(End of Article I)
- 19 -
ARTICLE II.
AUTHORIZATION AND TERMS OF REFUNDING BONDS;
ADDITIONAL BONDS
Section 2.01. AUTHORIZED AMOUNT OF BONDS. No Bonds may be issued under
the provisions of this Indenture except in accordance with this Article. The
total authorized principal amount of Refunding Bonds which shall be issued under
the provisions of this Indenture is $22,500,000. The Issuer may issue, sell and
deliver one or more series of Additional Bonds for the purposes, upon
satisfaction of the conditions and in the manner provided herein..
Section 2.02. ISSUANCE OF REFUNDING BONDS. It is determined to be
necessary to, and the Issuer shall, issue, sell and deliver $22,220,000
principal amount of Refunding Bonds to provide funds to refinance the costs of
the Project and to refinance certain costs of issuance of the Prior Bonds. The
Refunding Bonds shall be designated the "City of Gary, Indiana Adjustable Rate
Economic Development Revenue Refunding Bonds, Series 1996 A (The Miller
Partnership, L.P. Project)", in the principal amount of $20,540,000 to refinance
the costs of the Project, and the "City of Gary, Indiana Taxable Adjustable Rate
Economic Development Revenue Refunding Bonds, Series 1996 B (The Miller
Partnership, L.P. Project)", in the principal amount of $1,680,000 to refinance
the costs of issuance of the Prior Bonds and a portion of the costs of the
Project. The Refunding Bonds shall be issuable, unless a Supplemental Indenture
shall have been executed and delivered pursuant to Section 8.02(g) hereof, only
in fully registered form, substantially as set forth in Exhibit A to this
Indenture; shall be numbered A-1 and upward (with respect to the Series 1996 A
Bonds) and B-1 and upward (with respect to the Series 1996 B Bonds); shall be in
the denominations of $100,000 and integral multiples of $5,000 in excess
thereof; shall be subject to optional and mandatory redemption in the amounts,
upon the conditions, and at the times and prices set forth herein; and shall be
dated as of the date of their initial delivery. Upon any exchange or transfer
and surrender of any Refunding Bond in accordance with the provisions hereof,
the Issuer shall execute and the Authenticating Agent shall authenticate and
deliver one or more new Refunding Bonds in exchange therefor as provided herein.
The Refunding Bonds shall be originally issued only to a Depository to be
held in a book entry system and: (i) the Refunding Bonds shall be registered in
the name of the Depository or its nominee, as Bondholder, and immobilized in the
custody of the Depository; (ii) unless otherwise requested by the Depository,
there shall be a single Bond certificate for each Bond maturity; and (iii) the
Refunding Bonds shall not be transferable or exchangeable, except for transfer
to another Depository or another nominee of a Depository, without further action
by the Issuer. The owners of beneficial interests in the Refunding Bonds shall
not have any right to receive Refunding Bonds in the form of physical
certificates.
So long as a Book Entry System is in effect for the Refunding Bonds, except
as 71
- 20 -
hereinafter provided with respect to Beneficial Ownership Interests, the Issuer,
the Trustee, the Registrar and the Paying Agent shall recognize and treat the
Depository, or its nominee, as the Holder of the Refunding Bonds for all
purposes, including payment of Bond Service Charges, giving of notices, and
enforcement of remedies. The crediting of payments of Bond Service Charges on
the Refunding Bonds and the transmittal of notices and other communications by
the Depository to Beneficial Owners or to the Direct Participants in whose
depository account the interests of such Beneficial Owners are recorded and such
credit and transmittal by the Direct Participants to Indirect Participants and
by Indirect Participants to Beneficial Owners shall be the responsibility of the
Depository or the respective Indirect Participant or Direct Participant and are
not the responsibility of the Issuer, the Paying Agent or the Trustee; provided,
however, that the Issuer, the Paying Agent, the Registrar and the Trustee
understand that neither the Depository or its nominee shall provide any consent
requested of Holders of Refunding Bonds pursuant to this Indenture, and that the
Depository will mail an omnibus proxy (including a list identifying the Direct
Participants of the book entry interests in the Refunding Bonds) to the Issuer
which assigns the Depository's, or its nominee's, voting rights to the Direct
Participants of the book entry interests in the Refunding Bonds (as credited to
the accounts at the Depository as of the record date for mailing of requests for
such consents). Upon receipt of such omnibus proxy, the Issuer shall promptly
provide such omnibus proxy (including the list identifying the Direct
Participants of the interests in the Refunding Bonds attached thereto) to the
Registrar, who shall then treat such Direct Participants as Holders of the
Refunding Bonds for purposes of obtaining any consents pursuant to the terms of
this Indenture.
As long as the Refunding Bonds are registered in the name of a Depository,
or its nominee, the Trustee, the Registrar and the Paying Agent agree to comply
with the terms and provisions of the Letter of Representations including the
provisions of the Letter of Representations with respect to any delivery of the
Refunding Bonds to the Trustee, which provisions shall supersede the provisions
of this Indenture with respect thereto.
If any Depository determines not to continue to act as a Depository for the
Refunding Bonds held in a book entry system, the Issuer may attempt to have
established a securities depository/book entry system relationship with another
Depository under this Indenture. If the Issuer does not or is unable to do so,
the Issuer and the Trustee, after the Trustee has made provision for
notification of the owners of book entry interests by appropriate notice to the
then Depository, shall permit withdrawal of the Refunding Bonds from the
Depository and shall cause to be authenticated and delivered Refunding Bond
certificates in fully registered form to the assignees of the Depository or its
nominee. Such withdrawal, authentication and delivery shall be at the cost and
expense (including costs of printing or otherwise preparing and delivering such
replacement Refunding Bonds) of the Borrower. Such replacement Refunding Bonds
shall be in the denominations specified in the first paragraph of this Section
2.02, with a minimum denomination of $100,000.
Section 2.03. MATURITY AND INTEREST. The Refunding Bonds shall bear
interest from the most recent date to which interest has been paid or duly
provided for or, if no interest has been.
- 21 -
paid or provided for, from their date of initial delivery, payable on the first
Business Day of May, 1996 and thereafter on each Interest Payment Date. The
Refunding Bonds shall bear interest at an Adjustable Rate or the Fixed Rate all
as more specifically set forth hereinafter. The Refunding Bonds shall mature on
March 1, 2031, subject to prior redemption as set forth in Section 4.01 hereof,
unless converted to the Fixed Interest Rate in which case the principal amount
thereof shall mature pursuant to either mandatory sinking fund provisions or
serial maturity requirements which would cause the outstanding principal amount
thereof to be reduced as nearly as possible in level principal amounts on April
1 of each year over the remaining term of the Refunding Bonds in increments of
$100,000 or more.
From the date of their initial delivery through April 3, 1996, the interest
rate on the Refunding Bonds shall be that rate per annum, not to exceed the
Maximum Rate, as shall be established in the Bond Purchase Agreement.
Thereafter, except as provided in this Section 2.03, the Refunding Bonds shall
bear interest at the Weekly Interest Rate and, for each succeeding Weekly
Interest Rate Period, the interest rate on the Refunding Bonds shall be the
Weekly Interest Rate for such Weekly Interest Rate Period as established on the
Interest Rate Determination Date immediately preceding the commencement of such
Weekly Interest Rate Period.
On June 1, 1996, and on any Interest Period Reset Date thereafter, the
interest rate on the Refunding Bonds may be converted to a different Interest
Rate Mode upon receipt by the Trustee, the Paying Agent, the Registrar and the
Remarketing Agent of a written direction from the Borrower, approved in writing
by the Bank, given on behalf of the Issuer, not less than 45 days prior to such
Interest Period Reset Date, to convert the interest rate on the Refunding Bonds
to an Interest Rate Mode other than the Interest Rate Mode then in effect.
Except when converting from the Weekly Interest Rate Mode, no Interest Period
Reset Date shall be earlier than the day after the end of the last Interest Rate
Period for the Interest Rate Mode in effect on the date of such direction from
the Borrower, the end of such Interest Rate Period to be determined as if such
direction had not been given. Such direction to convert the interest rate on
the Refunding Bonds to a different Interest Rate Mode shall be accompanied by
(a) an opinion of Bond Counsel selected by the Borrower delivered to the Issuer,
the Trustee, the Registrar, the Bank and the Remarketing Agent, stating that
such conversion to the specified Interest Rate Mode will not adversely affect
the exclusion of the interest on the Series 1996 A Bonds from gross income for
federal income tax purposes, and (b) a written certificate of the Remarketing
Agent stating that the interest coverage period provided by the Letter of Credit
is appropriate for the Interest Rate Mode directed to be in effect and that the
Letter of Credit Termination Date is no earlier than 15 days after the end of
the new Interest Rate Period, or if the conversion is to the Fixed Interest
Rate, that the termination date of the Letter of Credit is no earlier than 15
days after the First Optional Redemption Date (or 15 days after the final
maturity date of the Refunding Bonds, if earlier). If the Refunding Bonds bear
interest at the Weekly Interest Rate, the One Month Interest Rate or the Three
Month Interest Rate, the interest coverage period for the Letter of Credit shall
be at least 56 days of interest at the Maximum Rate. If the Refunding Bonds
bear interest at the Six Month Interest Rate, the One Year Interest Rate, the
Five Year Interest Rate or the Fixed Interest Rate, then the interest coverage
period for the Letter of Credit shall be at least 195 days of interest at
- 22 -
the Maximum Rate. The Borrower shall be required to provide a Letter of Credit
or an Alternate Letter of Credit which will provide the appropriate interest
coverage. Notwithstanding any provision of this paragraph, no conversion shall
be effective (i) if the proposed conversion is to a One Year Interest Rate, Five
Year Interest Rate or Fixed Interest Rate and the Borrower makes an election on
or prior to the day immediately succeeding any Interest Rate Determination Date
not to proceed with the proposed conversion or (ii) the Trustee and the
Registrar have not received on the effective date of such conversion an opinion
of Bond Counsel to the same effect as described in clause (a) of this paragraph
above. In either such event, the Interest Rate Mode for the Refunding Bonds
will remain as the Interest Rate Mode then in effect for the Refunding Bonds
without regard to any proposed conversion. The Refunding Bonds will continue to
be subject to tender for purchase on the scheduled effective date of the
proposed conversion without regard to the failure of such proposed conversion.
If the Registrar shall have sent any notice to Holders regarding the proposed
conversion then in the event of a failure of such conversion, as specified
above, the Registrar shall promptly notify all Holders of such failure, of the
reason for such failure, and of the continuation of the Interest Rate Mode then
in effect.
On each Interest Rate Determination Date, the Remarketing Agent shall give
the Trustee, the Borrower, the Registrar and Paying Agent telephonic notice
(immediately confirmed in writing) of the interest rate to be borne by the
Refunding Bonds for the following Interest Rate Period; provided that if the
interest rate is determined pursuant to clause (b) of the definition of the
applicable Interest Rate Mode, on the Interest Rate Determination Date, the
Paying Agent shall give notice to the Borrower and the Bank as above provided.
Nothing contained in this Indenture shall be deemed or construed to require the
Trustee to determine any interest rate pursuant to clause (a) of the definition
of the applicable Interest Rate.
If the interest rate on the Refunding Bonds is converted to a different
Interest Rate Mode, at least 30 days prior to the Interest Period Reset Date the
Registrar shall use its best efforts to notify the Holders of all outstanding
Refunding Bonds by telephone (to the extent their telephone numbers have been
provided in writing to the Registrar), immediately confirmed by first class mail
to all Holders, that upon such Interest Period Reset Date the Refunding Bonds
shall be converted to a different Interest Rate Mode, which Interest Rate Mode
shall be specified, and that all Refunding Bonds shall be subject to a mandatory
tender pursuant to Section 2.05 hereof, subject to the right of the Holders to
affirmatively elect to waive the mandatory tender and retain their Refunding
Bonds.
Interest shall be calculated on the basis of a 360-day year of twelve 30-
day months so long as interest is payable at the Six Month Interest Rate, the
One Year Interest Rate, the Five Year Interest Rate or the Fixed Interest Rate.
Interest shall be calculated on the basis of a year of 365 or 366 days, as
applicable, for the number of days actually elapsed so long as interest is
payable at the Weekly Interest Rate, the One Month Interest Rate or the Three
Month Interest Rate. Interest shall be payable on each Interest Payment Date
for the period commencing on the immediately preceding Interest Payment Date and
to and including the day immediately preceding such payment date. Any
calculation of the interest rate to be borne by the Refunding Bonds shall
- 23 -
be rounded to the nearest one-hundredth of one percent (0.01%). The computation
of the interest rate on the Refunding Bonds by the Remarketing Agent shall be
binding and conclusive upon the Borrower, the Bank and the Holders of the
Refunding Bonds.
Notwithstanding anything to the contrary in this Indenture, nothing in this
Indenture shall require the Bank to extend the expiry date of the Letter of
Credit provided at the Closing Date or to increase the interest component of the
amount of the Letter of Credit.
Section 2.04. TENDER OPTIONS.
(a) While the Refunding Bonds bear interest at the One Month Interest
Rate, the Three Month Interest Rate, the Six Month Interest Rate, the One Year
Interest Rate or the Five Year Interest Rate, on each Interest Rate Adjustment
Date (each a "Bond Purchase Date") each Holder and each Beneficial Owner shall
have the option to tender for purchase at 100% of the principal amount thereof
plus accrued interest to the Bond Purchase Date, all of the Refunding Bonds
owned by such Holder, or all Beneficial Ownership Interests owned by such
Beneficial Owner, as applicable, or (in either case) such lesser principal
amount thereof (in denominations of $100,000 or integral multiples of $5,000 in
excess thereof, provided that the untendered portion of any Refunding Bond or
Beneficial Ownership Interest shall be $100,000 or more in principal amount) as
such Holder or Beneficial Owner, as applicable, may specify in accordance with
the terms, conditions and limitations hereinafter set forth. The purchase price
for each such Refunding Bond or Beneficial Ownership Interest, or portion
thereof, shall be payable in lawful money of the United States of America by
check or draft, shall equal the principal amount, or such portion thereof, to be
purchased, plus accrued interest to the Bond Purchase Date, and shall be paid in
full on the applicable Bond Purchase Date.
(b) While the Refunding Bonds bear interest at the Weekly Interest Rate,
each Holder and each Beneficial Owner shall have the option to tender for
purchase, at 100% of the principal amount thereof plus accrued interest to the
purchase date (a "Bond Purchase Date"), all of the Refunding Bonds owned by such
Holder, or all Beneficial Ownership Interests owned by such Beneficial Owner, as
applicable, or (in either case) such lesser principal amount thereof (in
denominations of $100,000 or integral multiples of $5,000 in excess thereof,
provided that the untendered portion of any Refunding Bond or Beneficial
Ownership Interest shall be $100,000 or more in principal amount) as such Holder
of Beneficial Owner, as applicable, may specify in accordance with the terms,
conditions and limitations hereafter set forth. The purchase price of each such
Refunding Bond or Beneficial Ownership Interest shall be payable in lawful money
of the United States of America, and shall be paid in full on the applicable
Bond Purchase Date.
(c) To exercise the option granted in Section 2.04(a) hereof, the Holder
or Beneficial Owner, as applicable, shall (l) no earlier than fifteen days
before the Bond Purchase Date and no later than 11:00 a.m. according to the
local time at the principal corporate trust office of the Registrar on the
eighth Business Day prior to the Bond Purchase Date, or in the event the
Refunding Bonds bear interest at the One Month Interest Rate, the fifth Business
Day prior to the
- 24 -
Bond Purchase Date, give notice to the Registrar by telecopy or in writing which
states (i) the name and address of the Holder or Beneficial Owner, as
applicable, (ii) the principal amount, CUSIP number and Bond numbers of the
Refunding Bonds or Beneficial Ownership Interests to be purchased, (iii) that
such Refunding Bonds or Beneficial Ownership Interests are to be purchased on
such Bond Purchase Date pursuant to the terms hereof, and (iv) that such notice
is irrevocable; and (2) in the case of a Beneficial Owner, provide the Registrar
with evidence satisfactory to the Registrar of such Beneficial Owner's
Beneficial Ownership Interest; (3) in the case of a Holder no later than 10:00
a.m. according to the local time at the principal corporate trust office of the
Registrar on the seventh day preceding such Bond Purchase Date (or the next
preceding Business Day if such seventh day is not a Business Day), or in the
event the Refunding Bonds bear interest at the One Month Interest Rate, the
fourth day preceding such Bond Purchase Date (or the next preceding Business Day
if such fourth day is not a Business Day), deliver to the principal corporate
trust office of the Registrar the Refunding Bonds to be purchased in proper
form, accompanied by fully completed and executed Instructions to Sell, the form
of which shall be printed on the Refunding Bonds; and (4) in the case of a
Beneficial Owner no later than 10:00 a.m. (according to the local time at the
principal corporate trust office of the Registrar) on the Bond Purchase Date
cause the transfer of the Beneficial Owner's Beneficial Ownership Interest on
the records of the Depository, in accordance with the instructions of the
Trustee.
To exercise the option granted in Section 2.04(b) hereof, the Holder or
Beneficial Owner, as applicable shall (1) give notice to the Registrar and the
Trustee by telecopy or in writing which states (i) the name and address of the
Holder or Beneficial Owner, as applicable, (ii) the principal amount, CUSIP
number and Bond numbers of the Refunding Bonds or Beneficial Ownership Interests
to be purchased, (iii) the date on which such Refunding Bonds or Beneficial
Ownership Interests are to be purchased, which Bond Purchase Date shall be a
Business Day not prior to the seventh (7th) day and not later than the fifteenth
(15th) day next succeeding the date of giving of such notice to the Registrar
and, if the interest rate on the Refunding Bonds is to be converted from the
Weekly Interest Rate to a new Interest Rate Mode, is a date prior to the
Interest Period Reset Date with respect to the new Interest Rate Mode, and (iv)
that such notice is irrevocable; (2) in the case of a Beneficial Owner, provide
the Registrar with evidence satisfactory to the Registrar of such Beneficial
Owner's Beneficial Ownership Interest; (3) in the case of a Holder, no later
than 10:00 a.m. according to the local time at the principal corporate trust
office of the Registrar on the second Business Day immediately preceding the
applicable Bond Purchase Date, deliver to the principal corporate trust office
of the Registrar the Refunding Bonds to be purchased in proper form, accompanied
by fully completed and executed Instructions to Sell, the form of which shall be
printed on the Refunding Bonds; and (4) in the case of a Beneficial Owner, no
later than 10:00 a.m. (according to the local time at the principal corporate
trust office of the Registrar) on the Bond Purchase Date, cause the transfer of
the Beneficial Owner's Beneficial Ownership Interest on the records of the
Depository in accordance with the instructions of the Trustee. In the case of a
Refunding Bond or Beneficial Ownership Interest or portion thereof to be
purchased prior to an Interest Payment Date and after the Record Date in respect
thereof, the Holder or Beneficial Owner, as applicable, shall deliver a due-bill
check, in form satisfactory to the Registrar, for interest due on such Interest
Payment Date.
- 25 -
Any Refunding Bonds or Beneficial Ownership Interests for which a notice of
tender has been given by the Holder or Beneficial Owner, as the case may be,
shall be deemed to be tendered for remarketing notwithstanding, in the case of
Refunding Bonds, any failure of delivery of such Refunding Bonds to the
Registrar and notwithstanding, in the case of Beneficial Ownership Interests,
failure of a Beneficial Owner to cause the transfer of the Beneficial Owner's
Beneficial Ownership Interests on the records of the Depository. Subject to the
right of such Holders or Beneficial Owners to receive the purchase price of such
Refunding Bonds or Beneficial Ownership Interests and interest accrued thereon
to the day preceding the applicable Bond Purchase Date subject to the conditions
set forth in Section 3.07 hereof, such Refunding Bonds or Beneficial Ownership
Interests shall be null and void and the Trustee shall cause to be authenticated
and delivered new Refunding Bonds (or new Beneficial Ownership Interests shall
be created) in replacement thereof pursuant to the remarketing of such Refunding
Bonds or Beneficial Ownership Interests or the pledge of such Refunding Bonds or
Beneficial Ownership Interests to the Bank in lieu of remarketing such Refunding
Bonds or Beneficial Ownership Interests as described in Section 6.20 hereof.
(d) Upon the giving of the notice pursuant to Section 2.04(c) hereof with
respect to Refunding Bonds or Beneficial Ownership Interests or portions of
either, the Holder's tender of such Refunding Bonds or portions thereof or the
Beneficial Owner's tender of Beneficial Ownership Interests or portions thereof
shall be irrevocable. Upon receipt of the Refunding Bonds, the Registrar shall
determine whether Instructions to Sell have been properly submitted and its
determination shall be binding. If less than all of a Refunding Bond so
delivered or deemed tendered is to be purchased, the Trustee shall, pursuant to
this Indenture, cause to be authenticated one or more Refunding Bonds in
exchange therefor, registered in the name of such Holder, having the aggregate
principal amount being retained by such Holder, and shall deliver such
authenticated Refunding Bond or Refunding Bonds to such Holder.
(e) While tendered Refunding Bonds are in the custody of the Registrar
pending purchase pursuant hereto, the tendering Holders thereof shall be deemed
the owners thereof for all purposes, and interest accruing on tendered Refunding
Bonds through the day preceding the applicable Bond Purchase Date is to be paid
from the Bond Fund as if such Refunding Bonds had not been tendered for
purchase.
(f) Notwithstanding anything herein to the contrary, any Bond or
Beneficial Ownership Interest or portion thereof tendered under Sections 2.04,
2.05 or 2.06 hereof will not be purchased if such Bond or portion thereof
matures or is redeemed on or prior to the applicable Bond Purchase Date.
Section 2.05. MANDATORY TENDER UPON CONVERSION TO A NEW INTEREST RATE
MODE. If at any time the Issuer at the direction of the Borrower shall convert
the interest rate on the Refunding Bonds to a different Interest Rate Mode in
accordance with the provisions of Section 2.03 hereof, on the Interest Period
Reset Date upon which such conversion is effective, all Refunding Bonds and
Beneficial Ownership Interests shall be subject to mandatory tender by the
Holders thereof
- 26 -
for purchase on the Interest Period Reset Date (a "Bond Purchase Date") at the
applicable purchase price provided for in Section 2.04 hereof. Notwithstanding
such mandatory tender, any Holder or Beneficial Owner may elect to retain its
Refunding Bonds or Beneficial Ownership Interests by delivering to the Registrar
a written notice no later than 11:00 a.m. according to the local time at the
principal corporate trust office of the Registrar on the eighth Business Day
prior to such Interest Period Reset Date or by 11:00 a.m. according to the local
time at the principal corporate trust office of the Registrar on the fifth
Business Day prior to such Interest Period Reset Date if the Interest Rate Mode
is to be converted to the One Month Interest Rate, which notice shall state that
(a) such Holder or Beneficial Owner realizes that the Refunding Bonds are being
converted to bear interest at the applicable Interest Rate Mode, (b) unless the
interest rate on the Refunding Bonds or Beneficial Ownership Interests is being
converted to the Weekly Interest Rate, such Holder or Beneficial Owner realizes
that the next Bond Purchase Date upon which the Refunding Bonds or Beneficial
Ownership Interests may be tendered for purchase is the next Interest Rate
Adjustment Date or, if such Refunding Bonds are being converted to the Fixed
Interest Rate, that such Refunding Bonds or Beneficial Ownership Interests may
no longer be tendered for purchase, (c) such Holder or Beneficial Owner realizes
that any securities rating on the Refunding Bonds may be withdrawn or lowered as
a result of the conversion to a different Interest Rate Mode, and (d) such
Holder or Beneficial Owner affirmatively elects to hold his Refunding Bonds or
Beneficial Ownership Interests and receive interest at the applicable Interest
Rate Mode.
Refunding Bonds or Beneficial Ownership Interests with respect to which the
Registrar shall not have received the election required by the preceding
paragraph shall be deemed to have been tendered for purposes of this Section
2.05 whether or not the Holders thereof shall have delivered such Refunding
Bonds to the Registrar and whether or not the Beneficial Owners shall have
caused the transfer of such Beneficial Ownership Interests on the records of the
Depository according to the instructions of the Trustee, and subject to the
right of the Holders or Beneficial Owners of such Refunding Bonds or Beneficial
Ownership Interests to receive the purchase price of such Refunding Bonds or
Beneficial Ownership Interests and interest accrued thereon to the Interest
Period Reset Date (subject to the conditions set forth in Section 3.07 hereof),
such Refunding Bonds or Beneficial Ownership Interests shall be null and void
and the Trustee shall cause to be authenticated and delivered new Refunding
Bonds in replacement thereof or new Beneficial Ownership Interests shall be
created pursuant to the remarketing of such Refunding Bonds or Beneficial
Ownership Interests or the pledge of such Refunding Bonds or Beneficial
Ownership Interests to the Bank in lieu of remarketing such Refunding Bonds or
Beneficial Ownership Interests as described in Section 6.20 hereof.
Section 2.06. MANDATORY TENDER UPON DELIVERY OF AN ALTERNATE LETTER OF
CREDIT. If at any time the Borrower shall provide for the delivery to the
Trustee of an Alternate Letter of Credit in accordance with the provisions of
Section 5.09 hereof, on the date that precedes the Replacement Date (as defined
in Section 5.09 hereof) by at least five Business Days (a "Bond Purchase Date"),
all Refunding Bonds or Beneficial Ownership Interests shall be subject to
mandatory tender by the Holders or Beneficial Owners, as applicable, for
purchase at the
- 27 -
applicable purchase price provided for in Section 2.04 hereof. At least 30 days
prior to the Bond Purchase Date the Registrar shall use its best efforts to
notify the Holders of all outstanding Refunding Bonds by telephone (to the
extent their telephone numbers have been provided in writing to the Registrar),
immediately confirmed by first class mail to all Holders, that an Alternate
Letter of Credit is to be delivered by the Borrower to the Trustee. Such notice
shall advise the Holders of the financial institution providing the Alternate
Letter of Credit and shall advise the Holders of the requirements of Section
5.09 and confirm that such requirements of Section 5.09 have been met, and that
all Refunding Bonds and Beneficial Ownership Interests shall be subject to
mandatory tender pursuant to this Section 2.06, subject to the right of the
Holders and Beneficial Owners to affirmatively elect to waive the mandatory
tender and retain the Refunding Bonds or Beneficial Ownership Interests.
Notwithstanding such mandatory tender, any Holder or Beneficial Owner may
elect to retain its Refunding Bonds or Beneficial Ownership Interests by
delivering to the Registrar a written notice no later than 11:00 a.m. according
to the local time at the principal corporate trust office of the Registrar on
the eighth Business Day prior to such Replacement Date which notice shall state
that (a) such Holder or Beneficial Owner has received notice of and realizes
that the Borrower is delivering an Alternate Letter of Credit to the Trustee
pursuant to Section 5.09, (b) such Holder or Beneficial Owner realizes that any
securities rating on the Refunding Bonds may be withdrawn or lowered as a result
of the delivery of the Alternate Letter of Credit, and (c) such Holder or
Beneficial Owner affirmatively elects to retain its Refunding Bonds or
Beneficial Ownership Interests.
Refunding Bonds or Beneficial Ownership Interests with respect to which the
Registrar shall not have received the election required by the preceding
paragraph shall be deemed to have been tendered for purposes of this Section
2.06 whether or not the Holders thereof shall have delivered such Refunding
Bonds to the Registrar and whether or not the Beneficial Owners shall have
caused the transfer of such Beneficial Ownership Interests on the records of the
Depository according to the instructions of the Trustee, and subject to the
right of the Holders or Beneficial Owners of such Refunding Bonds or Beneficial
Ownership Interests to receive the purchase price of such Refunding Bonds or
Beneficial Ownership Interests and interest accrued thereon to the Replacement
Date (subject to the conditions set forth in Section 3.07 hereof), such
Refunding Bonds or Beneficial Ownership Interests shall be null and void and the
Trustee shall cause to be authenticated and delivered new Refunding Bonds in
replacement thereof, or new Beneficial Ownership Interests shall be created,
pursuant to the remarketing of such Refunding Bonds or Beneficial Ownership
Interests or the pledge of such Refunding Bonds or Beneficial Ownership
Interests to the Bank in lieu of remarketing such Refunding Bonds or Beneficial
Ownership Interests as described in Section 6.20 hereof.
Section 2.07. DELIVERY OF THE REFUNDING BONDS. Upon the execution and
delivery of this Indenture, and satisfaction of the conditions established by
the Issuer in the Bond Legislation and in the Bond Purchase Agreement for
delivery of the Refunding Bonds, the Issuer shall execute the Refunding Bonds
and deliver them to the Authenticating Agent. Thereupon, the Authenticating
- 28 -
Agent shall authenticate the Refunding Bonds and deliver them to the Depository,
as directed by the Issuer in accordance with this Section 2.07.
Before the Authenticating Agent delivers any Refunding Bonds, the Trustee
shall have received a request and authorization to the Trustee on behalf of the
Issuer, signed by the Executive or Fiscal Officer, to cause to be authenticated
and delivered the Refunding Bonds to the Depository, upon payment to the Trustee
of the amount specified therein, which amount shall be deposited as provided in
Sections 5.01 and 5.03 hereof.
Section 2.08. ISSUANCE AND DELIVERY OF ADDITIONAL BONDS. At the request
of the Borrower, and subject to the prior written consent of the Bank, the
Issuer may issue Additional Bonds from time to time for any purpose permitted by
the Act.
Any Additional Bonds shall be secured by an Alternate Letter of Credit and
shall be on a parity with the Refunding Bonds (except with respect to any moneys
drawn by the Trustee on the Letter of Credit) and any Additional Bonds
theretofore or thereafter issued and outstanding as to the assignment to the
Trustee of the Issuer's right, title and interest in the Revenues, the Agreement
and the Refunding Notes to provide for payment of Bond Service Charges on the
Bonds; provided, that nothing herein shall prevent payment of Bond Service
Charges on any series of Additional Bonds from (i) being otherwise secured and
protected from sources or by property or instruments not applicable to the
Refunding Bonds and any one or more series of Additional Bonds, or (ii) not
being secured or protected from sources or by property or instruments applicable
to the Refunding Bonds or one or more series of Additional Bonds.
Before the Authenticating Agent shall authenticate and deliver any
Additional Bonds, the Trustee shall receive the following items:
(a) Original executed counterparts of any amendments or supplements to the
Agreement and the Indenture entered into in connection with the issuance of the
Additional Bonds, which are necessary or advisable, in the opinion of Bond
Counsel, to provide that the Additional Bonds will be issued in compliance with
the provisions of this Indenture.
(b) One or more Additional Notes, as required by the Agreement, in an
aggregate principal amount equal to the aggregate principal amount of the
Additional Bonds.
(c) A copy of the written request from the Borrower to the Issuer for
issuance of the Additional Bonds.
(d) A copy of the Bond Ordinance, certified by the Fiscal Officer of the
Issuing Authority.
(e) A request and authorization to the Authenticating Agent on behalf of
the Issuer, signed by the Executive, to authenticate and deliver the Additional
Bonds to, or on the order of,
- 29 -
the purchaser thereof upon payment to the Trustee of the amount specified
therein (including without limitation, any accrued interest), which amount shall
be deposited as provided in the applicable Bond Legislation or Supplemental
Indenture.
(f) The written opinion of counsel, who may be counsel for the Issuer,
reasonably satisfactory to the Trustee, to the effect that: (i) the documents
submitted to the Trustee in connection with the request then being made comply
with the requirements of this Indenture; (ii) the issuance of the Additional
Bonds has been duly authorized; (iii) all filings required to be made under
Section 10.01 of this Indenture have been made; and (iv) all conditions
precedent to the delivery of the Additional Bonds have been fulfilled.
(g) A written opinion of Bond Counsel (who also may be the counsel to
which reference is made in paragraph f), to the effect that: (i) when executed
for and in the name and on behalf of the Issuer and when authenticated and
delivered by the Authenticating Agent, those Additional Bonds will be valid and
legal limited obligations of the Issuer in accordance with their terms and will
be secured hereunder equally and on a parity (except with respect to any moneys
drawn by the Trustee under the Letter of Credit) with all other Bonds at the
time outstanding hereunder as to the assignment to the Trustee of the Issuer's
right, title and interest in the Revenues, the Agreement, the Refunding Fund and
the Bond Fund (except as to and any provision made by or pursuant to Sections
4.05, 5.06 or 5.07 hereof) and the moneys and investments therein to provide for
payment of Bond Service Charges on the Bonds; and (ii) the issuance of the
Additional Bonds will not result in the interest on the Series 1996 A Bonds
outstanding immediately prior to that issuance becoming includable in gross
income for purposes of federal income taxation.
(h) A written opinion of counsel to the Borrower, reasonably satisfactory
to the Trustee, to the effect that the amendments or supplements to each of the
Agreement and any Additional Notes have been duly authorized, executed and
delivered by the Borrower, and that the Agreement, as amended or supplemented,
and any Additional Notes constitute legal, valid and binding obligations of the
Borrower, in accordance with their respective terms, subject to exceptions
reasonably satisfactory to the Trustee for bankruptcy, insolvency and similar
laws and the application of equitable principles.
(i) The written approval of the Bank to the issuance and delivery of the
Additional Bonds.
(j) An Alternate Letter of Credit in form, substance and amount acceptable
to the Trustee.
When (i) the documents listed above have been received by the Trustee, and
(ii) the Additional Bonds have been executed and authenticated, the
Authenticating Agent shall deliver the Additional Bonds to or on the order of
the purchaser thereof but only upon payment to the
- 30 -
Trustee of the specified amount (including without limitation, any accrued
interest) set forth in the request and authorization to which reference is made
in paragraph (e) above.
(End of Article II)
- 31 -
ARTICLE III.
TERMS OF BONDS GENERALLY
Section 3.01. FORM OF BONDS. The Bonds, the certificate of
authentication, the form of assignment and the Instructions to Sell shall be
substantially in the respective forms thereof set forth in Exhibit A to this
Indenture with, in the case of Additional Bonds, any omissions, insertions and
variations which may be authorized or permitted by the Bond Legislation
authorizing, or the Supplemental Indenture entered into in connection with,
those Additional Bonds, all consistent with this Indenture.
All Bonds, unless a Supplemental Indenture shall have been executed and
delivered pursuant to Section 8.02(g) hereof, shall be in fully registered form,
and, except as provided in Section 3.05 hereof and as provided in Sections 2.02,
2.04, 2.05, 2.06, 6.19 and 6.20 with respect to Beneficial Ownership Interests,
the Holder of a Bond shall be regarded as the absolute owner thereof for all
purposes of this Indenture.
The Bonds of one series shall bear any designations which may be necessary
or advisable to distinguish them from Bonds of any other series. The Bonds
shall be negotiable instruments in accordance with the Act, and shall express
the purpose for which they are issued and any other statements or legends which
may be required by law. Each Bond of the same series shall be of a single
maturity.
Bonds of any maturity may be initially issued in temporary form
exchangeable for definitive Bonds of the same maturity when ready for delivery.
The temporary Bonds shall be of such denomination or denominations, without
coupons, as may be determined by the Issuer, and may contain such reference to
any of the provisions of this Indenture as may be appropriate. Every temporary
Bond shall be executed by the Issuer and be authenticated by the Authenticating
Agent upon the same conditions and in substantially the same manner as the
definitive Bonds. If the Issuer issues temporary Bonds it will execute and
furnish definitive Bonds at the Borrower's expense (and without cost to the
owners of such temporary Bonds), and thereupon the temporary Bonds may be
surrendered for cancellation in exchange therefor at the principal corporate
trust office of the Registrar, and the Authenticating Agent shall authenticate
and deliver in exchange for such temporary Bonds an equal aggregate principal
amount of definitive registered Bonds, without coupons, of the same series and
maturity of authorized denominations. Until so exchanged, the temporary Bonds
shall be entitled to the same benefits under this Indenture as definitive Bonds
authenticated and delivered hereunder.
Section 3.02. VARIABLE TERMS. Subject to the provisions of this
Indenture, each series of Bonds shall be dated, shall mature in the years and
the amounts, shall bear interest at the rate or rates per annum, shall be
payable on the dates, shall have the Registrar, Paying Agents and Authenticating
Agents, shall be of the denominations, shall be subject to redemption on the
terms
- 32 -
and conditions and shall have any other terms which are set forth or provided
for in this Indenture in the case of the Refunding Bonds, and in this Indenture,
the applicable Bond Legislation and the Supplemental Indenture, in the case of
any issue of Additional Bonds.
Section 3.03. EXECUTION AND AUTHENTICATION OF BONDS. Unless otherwise
provided in the applicable Bond Legislation, each Bond shall be signed by the
Executive of the Issuing Authority (provided that such signature may be
facsimile), attested to by the Fiscal Officer of the Issuing Authority and may
bear the seal of the Issuer (or the Fiscal Officer) or a facsimile thereof. In
case any officer whose signature or a facsimile of whose signature appears on
any Bond shall cease to be that officer before the issuance of the Bond, the
officer's signature or the facsimile thereof nevertheless shall be valid and
sufficient for all purposes, the same as if he or she had remained in office
until that time. Any Bond may be executed on behalf of the Issuer by an officer
who, on the date of execution is the proper officer, although on the date of the
Bond that person was not the proper officer.
No Bond shall be valid or become obligatory for any purpose or shall be
entitled to any security or benefit under this Indenture unless and until a
certificate of authentication, substantially in the form set forth in Exhibit A
to this Indenture, has been signed by the Authenticating Agent for that series
on behalf of the Trustee. The authentication by an Authenticating Agent upon
any Bond shall be conclusive evidence that the Bond so authenticated has been
duly authenticated and delivered hereunder and is entitled to the security and
benefit of this Indenture. The certificate of an Authenticating Agent may be
executed by any person authorized by the Authenticating Agent, but it shall not
be necessary that the same authorized person sign the certificates of
authentication on all of the Bonds of a series.
Section 3.04. SOURCE OF PAYMENT OF BONDS. To the extent provided in and
except as otherwise permitted by this Indenture, (i) the Bonds shall be limited
obligations of the Issuer and the Bond Service Charges thereon shall be payable
equally and ratably solely from the Revenues, (ii) the payment of Bond Service
Charges on the Bonds shall be secured by the assignment of Revenues hereunder
and by this Indenture, and (iii) payments due on the Bonds also shall be secured
by the assignment of the Notes, provided, however, that payment of Bond Service
Charges on any series of Additional Bonds may be otherwise secured and protected
from sources or by property or instruments not applicable to the Refunding Bonds
and any one or more series of Additional Bonds, or not secured and protected
from sources or by property or instruments applicable to the Refunding Bonds or
one or more series of Additional Bonds. The Bonds and the interest payable
thereon do not constitute a debt or liability of the Issuer, the State or any
political subdivision thereof within the meaning of the provisions of the
Constitution or the statutes of the State, or a pledge of the faith and credit
or the taxing power of the Issuer, the State or any political subdivision
thereof, but shall be payable solely from the funds pledged therefor in
accordance with this Indenture.
Section 3.05. PAYMENT AND OWNERSHIP OF BONDS. The principal of and any
premium on any Bond shall be payable when due to a Holder upon presentation and
surrender of such Bond
- 33 -
at the principal corporate trust office of the Paying Agent. Interest on any
Bond shall be paid on each Interest Payment Date by check or draft which the
Paying Agent shall cause to be mailed on that date to the person in whose name
the Bond (or one or more Predecessor Bonds) is registered at the close of
business on the Regular Record Date applicable to that Interest Payment Date on
the Register at the address appearing therein. Notwithstanding the foregoing
and while the Bonds are held by a Depository interest on any Bond in the
denomination of $100,000 or more shall be paid by wire transfer in immediately
available funds to the bank account number and address filed in writing with the
Registrar by such Holder, which account number and address shall be filed with
the Registrar at least two (2) Business Days prior to that Interest Payment
Date. If and to the extent, however, that the Issuer shall fail to make payment
or provision for payment of interest on any Bond on any Interest Payment Date,
that interest shall cease to be payable to the Person who was the Holder of that
Bond (or of one or more Predecessor Bonds) as of the applicable Regular Record
Date; when moneys become available for payment of the interest, (a) the Paying
Agent shall, pursuant to Section 7.06(d) hereof, establish a Special Record Date
for the payment of that interest which shall be not more than 15 nor fewer than
10 days prior to the date of the proposed payment, and (b) the Registrar shall
cause notice of the proposed payment and of the Special Record Date to be mailed
by first class mail, postage prepaid, to such Holder at its address as it
appears on the Register no fewer than 10 days prior to the Special Record Date
and, thereafter, the interest shall be payable to the Persons who are the
Holders of such Bonds (or their respective Predecessor Bonds) at the close of
business on the Special Record Date. Bond Service Charges shall be payable in
lawful money of the United States of America without deduction for the services
of the Trustee or any Paying Agent.
Notwithstanding anything herein to the contrary, when any Bond is
registered in the name of a Depository or its nominee, the principal and
redemption price of and interest on such Bond shall be payable in federal funds
delivered or transmitted to the Depository or its nominee.
Subject to the foregoing, each Bond delivered under this Indenture upon
transfer thereof, or in exchange for or in replacement of any other Bond, shall
carry the rights to interest accrued and unpaid, and to accrue on that Bond, or
which were carried by that Bond.
Except as provided in (i) Sections 2.02, 2.04, 2.05, 2.06, 6.19 and 6.20
with respect to Beneficial Ownership Interests and (ii) this Section 3.05 and
the first paragraph of Section 3.07 hereof, (x) the Holder of any Bond shall be
deemed and regarded as the absolute owner thereof for all purposes of this
Indenture, (y) payment of or on account of the Bond Service Charges on any Bond
shall be made only to or upon the order of that Holder or its duly authorized
attorney in the manner permitted by this Indenture, and (z) neither the Issuer,
the Trustee, the Registrar nor any Paying Agent or Authenticating Agent shall,
to the extent permitted by law, be affected by notice to the contrary. All of
those payments shall be valid and effective to satisfy and discharge the
liability upon that Bond, including without limitation, the interest thereon, to
the extent of the amount or amounts so paid.
- 34 -
Section 3.06. TRANSFER AND EXCHANGE OF BONDS. So long as any of the Bonds
remain outstanding, the Issuer will cause books for the registration and
transfer of Bonds, as provided in this Indenture, to be maintained and kept at
the designated office of the Registrar.
Subject to the provisions of Section 2.02 hereof, unless otherwise provided
in the applicable Bond Legislation or Supplemental Indenture, Bonds may be
exchanged, at the option of their Holder, for Bonds of the same series and in
denominations of $100,000 and integral multiples of $5,000 in excess thereof,
and bearing interest at the same rate and maturing on the same date or dates as,
the Bonds being exchanged. The exchange shall be made upon presentation and
surrender of the Bonds being exchanged at the designated office of the Registrar
or at the designated office of any Authenticating Agent for that series of
Bonds, together with an assignment duly executed by the Holder or its duly
authorized attorney in any form which shall be satisfactory to the Registrar or
the Authenticating Agent, as the case may be.
Subject to the provisions of Section 2.02 hereof, any Bond may be
transferred upon the Register, upon presentation and surrender thereof at the
designated office of the Registrar or the designated office of any
Authenticating Agent for the series thereof together with an assignment duly
executed by the Holder or its duly authorized attorney in any form which shall
be satisfactory to the Registrar or the Authenticating Agent, as the case may
be. Upon transfer of any Bond and on request of the Registrar or the
Authenticating Agent, the Issuer shall execute in the name of the transferee,
and the Registrar or the Authenticating Agent, as the case may be, shall
authenticate and deliver, a new Bond or Bonds of the same series, in
denominations of $100,000 and integral multiples of $5,000 in excess thereof in
an aggregate principal amount equal to the unmatured and unredeemed principal
amount of, and bearing interest at the same rate and maturing on the same date
or dates as, the Bonds presented and surrendered for transfer.
In all cases in which Bonds shall be exchanged or transferred hereunder,
the Registrar or any Authenticating Agent, as the case may be, shall
authenticate and deliver Bonds in accordance with the provisions of this
Indenture. The exchange or transfer shall be made without charge; provided that
the Issuer and the Registrar or the Authenticating Agent, as the case may be,
may make a charge for every exchange or transfer of Bonds sufficient to
reimburse them for any tax or excise required to be paid with respect to the
exchange or transfer. The charge shall be paid before a new Bond is delivered.
All Bonds issued upon any transfer or exchange of Bonds shall be the valid
obligations of the Issuer, evidencing the same debt, and entitled to the same
benefits under this Indenture, as the Bonds surrendered upon transfer or
exchange. None of the Issuer, the Registrar or any Authenticating Agent, as the
case may be, shall be required to make any exchange or transfer of a Bond during
a period beginning at the opening of business 15 days before the day of the
mailing of a notice of redemption of Bonds of such series and ending at the
close of business on the day of such mailing or to transfer or exchange any
Bonds selected for redemption, in whole or in part; PROVIDED, HOWEVER, the
foregoing provisions shall not preclude an exchange or transfer of a Bond in the
case of an optional or mandatory tender under Sections 2.04, 2.05 or 2.06
hereof.
- 35 -
In case any Bond is redeemed in part only, on or after the redemption date
and upon presentation and surrender of the Bond, the Issuer shall cause
execution of, and the Registrar or any Authenticating Agent for the series of
that Bond shall authenticate and deliver, a new Bond or Bonds of the same series
in denominations of $100,000 and integral multiples of $5,000 in excess thereof
in an aggregate principal amount equal to the unmatured and unredeemed portion
of, and bearing interest at the same rate and maturing on the same date or dates
as, the Bond redeemed in part. Notwithstanding the foregoing, however, if a
Depository is the sole Bondholder, a notation of partial redemption of Bonds
shall be made by the Depository on the Bond certificates partially redeemed in
such manner as is mutually agreed upon by the Registrar and the Depository.
Section 3.07. MUTILATED, LOST, WRONGFULLY TAKEN OR DESTROYED BONDS. If
any Bond is mutilated, lost, wrongfully taken or destroyed, in the absence of
written notice to the Issuer and the Registrar that a lost, wrongfully taken or
destroyed Bond has been acquired by a bona fide purchaser, the Registrar shall
authenticate and deliver a new Bond of like date, maturity and denomination and
of the same series as the Bond mutilated, lost, wrongfully taken or destroyed;
provided, that (i) in the case of any mutilated Bond, the mutilated Bond first
shall be surrendered to the Registrar, and (ii) in the case of any lost,
wrongfully taken or destroyed Bond, there first shall be furnished to the
Registrar evidence of the loss, wrongful taking or destruction satisfactory to
the Registrar, together with indemnity satisfactory to the Borrower, Bank,
Issuer and Trustee.
If any lost, wrongfully taken or destroyed Bond shall have matured, instead
of issuing a new Bond, the Authorized Borrower Representative may direct the
Paying Agent to pay that Bond without surrender thereof upon the furnishing of
satisfactory evidence and indemnity as in the case of issuance of a new Bond.
The Issuer, the Registrar and the Trustee may charge the Holder of a mutilated,
lost, wrongfully taken or destroyed Bond their reasonable fees and expenses in
connection with their actions pursuant to this Section.
Every new Bond issued pursuant to this Section by reason of any Bond being
lost, wrongfully taken or destroyed (i) shall constitute, to the extent of the
outstanding principal amount of the Bond lost, taken or destroyed, an additional
contractual obligation of the Issuer, regardless of whether the lost, wrongfully
taken or destroyed Bond shall be enforceable at any time by anyone and
(ii) shall be entitled to all of the benefits of this Indenture equally and
proportionately with any and all other Bonds issued and outstanding hereunder.
All Bonds shall be held and owned on the express condition that the
foregoing provisions of this Section are exclusive with respect to the
replacement or payment of mutilated, lost, wrongfully taken or destroyed Bonds
and, to the extent permitted by law, shall preclude any and all other rights and
remedies with respect to the replacement or payment of negotiable instruments or
other investment securities without their surrender, notwithstanding any law or
statute to the contrary now existing or enacted hereafter.
- 36 -
Section 3.08. CANCELLATION OF BONDS. Except as provided in Section 3.06
hereof, any Bonds surrendered pursuant to this Article for the purpose of
payment or retirement or for exchange, replacement or transfer shall be canceled
upon presentation and surrender thereof to the Registrar, the Trustee or any
Paying Agent or Authenticating Agent. Any Bond canceled by the Trustee or a
Paying Agent or Authenticating Agent shall be transmitted promptly to the
Registrar by the Trustee, Paying Agent, or Authenticating Agent.
The Issuer, or the Borrower on behalf of the Issuer, may deliver at any
time to the Registrar for cancellation any Bonds previously authenticated and
delivered hereunder, which the Issuer or the Borrower may have acquired in any
manner whatsoever. All Bonds so delivered shall be canceled promptly by the
Registrar. Certification of the surrender and cancellation shall be made to the
Issuer, the Bank and the Trustee by the Registrar at least once each calendar
year. Those canceled bonds shall be destroyed by the Registrar by shredding or
incineration. The Registrar shall provide certificates describing the
destruction of canceled Bonds to the Issuer, the Trustee, the Borrower and the
Bank.
(End of Article III)
- 37 -
ARTICLE IV.
REDEMPTION OF BONDS
Section 4.01. TERMS OF REDEMPTION OF REFUNDING BONDS. The Refunding Bonds
are subject to redemption prior to stated maturity as follows:.
(a) MANDATORY REDEMPTION UPON A DETERMINATION OF TAXABILITY. Upon the
occurrence of a Determination of Taxability with respect to the Series 1996 A
Bonds, the Refunding Bonds are subject to mandatory redemption in whole at a
redemption price equal to 100% of the outstanding principal amount thereof, plus
interest accrued to the redemption date, at the earliest practicable date
selected by the Trustee, after consultation with the Borrower, but in no event
later than 45 days following receipt by the Trustee and Registrar of notice of
the Determination of Taxability. The occurrence of a Determination of
Taxability with respect to the Series 1996 A Bonds will not constitute an Event
of Default under this Indenture. No increase in the interest payable with
respect to the Series 1996 A Bonds will occur in the event a Determination of
Taxability occurs.
Within five Business Days after receipt by the Trustee of written notice of
a Determination of Taxability, the Registrar shall give written notice thereof
to the Holders of all Series 1996 A Bonds then outstanding, as shown by the
Register, and shall also give written notice to the Borrower, the Issuer and the
Bank.
(b) MANDATORY REDEMPTION UPON EXPIRATION OF LETTER OF CREDIT. The
Refunding Bonds are subject to mandatory redemption in whole on the Interest
Payment Date which next precedes the date which is five (5) days prior to the
Letter of Credit Termination Date, at a redemption price of 100% of the
outstanding principal amount thereof plus accrued interest to the redemption
date unless, at least 45 days prior to any such Interest Payment Date, (a) the
Bank shall have agreed in writing to an extension or further extension of the
Letter of Credit Termination Date to a date not earlier than one year from the
Letter of Credit Termination Date being extended or (b) pursuant to Section 5.09
hereof, the Borrower shall have obtained and delivered to the Trustee an
Alternate Letter of Credit with a termination date not earlier than one year
from the Letter of Credit Termination Date of the Letter of Credit it replaces.
(c) OPTIONAL REDEMPTION. Unless previously redeemed, the Refunding Bonds
are subject to redemption at the option of the Issuer, upon the written
direction of the Borrower with the written consent of the Bank (subject to
compliance with Section 4.03 hereof), (1) if the Refunding Bonds do not bear
interest at the Fixed Interest Rate, in whole or in part (in integral multiples
of $5,000, provided that the unredeemed portion of any Bond redeemed in part
shall be $100,000 or more) on any Interest Rate Adjustment Date at the
redemption price of 100% of the principal amount redeemed plus accrued interest
thereon to the redemption date, or (2) after the Fixed Interest Rate
Commencement Date and on or after the First Optional Redemption Date, in whole
or in part (in integral multiples of $5,000, provided that the unredeemed
portion of any
- 38 -
Bond redeemed in part shall be $100,000 or more) at any time at a redemption
price equal to the following percentages of the principal amount redeemed, plus
in each case accrued interest to the date fixed for redemption.
Redemption Date Optional Redemption Price
--------------- -------------------------
First Optional Redemption
Date, through the following
last day of March 103%
First Anniversary of the First
Optional Redemption Date,
through the following
last day of March 102%
Second Anniversary of the
First Optional Redemption
Date, through the following
last day of March 101%
Third Anniversary of the First
Optional Redemption Date and
thereafter 100%
(d) EXTRAORDINARY OPTIONAL REDEMPTION. The Refunding Bonds are also
subject to redemption by the Issuer in the event of the exercise by the Borrower
of its option (subject to compliance with Section 4.03 hereof) with the written
consent of the Bank (except for an extraordinary optional redemption pursuant to
Section 6.2(c) of the Agreement) to direct that redemption upon occurrence of
any of the events described in Section 6.2 of the Agreement, (a) at any time in
whole, or (b) at any time in part upon the occurrence of the events permitting
such partial redemption, as provided in Section 6.2 of the Agreement, in each
case at a redemption price of 100% of the principal amount redeemed, plus
interest accrued to the redemption date. Neither the Issuer nor the Trustee
shall have any duty or authority to verify or determine the occurrence of any of
the events described in clauses (a) through (d) of Section 6.2 of the Agreement,
but shall rely conclusively on the Borrower's representations and determinations
with respect to such occurrences.
(e) USE OF CERTAIN FUNDS TO REDEEM REFUNDING BONDS. Except as provided in
Section 9.02 hereof, the Paying Agent shall pay the redemption price on all
Refunding Bonds redeemed under this Section 4.01 in the same manner and from the
same sources as provided in Section 5.03 hereof for the payment of Bond Service
Charges.
Section 4.02. PARTIAL REDEMPTION. If fewer than all of the outstanding
Bonds of a series that are stated to mature on different dates are called for
redemption at one time, those Bonds.
- 39 -
which are called shall be called in inverse order of the maturities of the Bonds
of that series to be redeemed. If fewer than all of the Bonds of a single
maturity are to be redeemed, the selection of Bonds to be redeemed, or portions
thereof, in amounts equal to $5,000 or integral multiples thereof shall be made
by lot by the Trustee in any manner which the Trustee may determine; provided
that the Trustee shall select Refunding Bonds for redemption so as to assure
that after such redemption no Holder shall retain Bonds in an aggregate amount
less than $100,000 and that any aggregate partial redemption shall be $100,000
or more; and provided further that, if less than all of an outstanding Bond of
one maturity in a book entry system is to be called for redemption, the Trustee
shall give notice to the Depository or the nominee of the Depository that is the
Holder of such Bond, and the selection of the beneficial interests in that Bond
to be redeemed shall be at the sole discretion of the Depository and its
participants. In the case of a partial redemption of Bonds by lot, each unit of
face value of principal thereof equal to $5,000 (each such $5,000 unit is
hereinafter referred to as a "Unit") shall be treated as though it were a
separate Bond in the amount of such Unit. If it is determined that one or more,
but not all of the Units represented by a Bond are to be called for redemption,
then upon notice of redemption of a Unit or Units of Bonds, the Holder of that
Bond shall surrender the Bond to the Registrar (a) for payment of the redemption
price of the Unit or Units of Bonds called for redemption (including without
limitation, the interest accrued to the date fixed for redemption and any
premium), and (b) for issuance, without charge to the Holder thereof, of a new
Bond or Bonds of the same series, in denominations of $100,000 and integral
multiples of $5,000 in excess thereof, aggregating a principal amount equal to
the unmatured and unredeemed portion of, and bearing interest at the same rate
and maturing on the same date as, the Bond surrendered.
Notwithstanding anything in this Section 4.02 to the contrary, any Pledged
Bonds (or Beneficial Ownership Interests therein) shall be selected for
redemption pursuant to this Section 4.02 prior to the selection of any other
Refunding Bonds.
Section 4.03. ISSUER'S ELECTION TO REDEEM. Except in the case of
redemption pursuant to any mandatory redemption provisions hereof, Bonds shall
be redeemed only by written notice from the Issuer to the Trustee and the Bank,
given at the direction of the Borrower, or by written notice from the Borrower
to the Trustee and the Bank on behalf of the Issuer. That notice shall specify
the redemption date and the principal amount of each maturity of Bonds to be
redeemed, and shall be given at least 45 days prior to the redemption date.. In
the case of any optional redemption of Refunding Bonds pursuant to Section
4.01(c) or (d) hereof, prior to the giving of the notice required by Section
4.04 hereof, there shall be (i) except with the prior written consent of the
Bank, Eligible Funds on deposit with the Trustee in an amount which will be
sufficient to redeem at the redemption price thereof, plus interest accrued to
the redemption date, all of the Refunding Bonds for which notice of redemption
is to be given and (ii) delivered to the Trustee the written consent of the Bank
to such redemption.
Section 4.04. NOTICE OF REDEMPTION. Unless waived by any Holder of Bonds
to be redeemed, official notice of any such redemption shall be given by the
Registrar on behalf of the Issuer by mailing a copy of an official redemption
notice by telecopy or first class mail at least.
- 40 -
30 days and not more than 60 days prior to the date fixed for redemption (except
in the case of a Section 4.01(a) redemption, in which case such notice shall be
given at least 5 days and not more than 15 days prior to the date fixed for
redemption) to the registered owner of the Bond or Bonds to be redeemed at the
address shown on the Register or at such other address as is furnished in
writing by such registered owner to the Registrar.
All official notices of redemption shall be dated and shall state:
(1) the redemption date,
(2) the redemption price,
(3) if less than all outstanding Bonds are to be redeemed, the
identification by designation, letters, numbers or other distinguishing marks
(and, in the case of partial redemption, the respective principal amounts) of
the Bonds to be redeemed,
(4) that on the redemption date the redemption price will become due and
payable upon each such Bond or portion thereof called for redemption, and that
interest thereon shall cease to accrue from and after said date, and
(5) the place where such Bonds are to be surrendered for payment of the
redemption price, which place of payment shall be the principal corporate trust
office of the Registrar.
In addition to the foregoing notice, further notice shall be given by the
Registrar as set out below, but no defect in said further notice nor any failure
to give all or any portion of such further notice shall in any manner defeat the
effectiveness of a call for redemption if notice thereof is given as above
prescribed.
1. Each further notice of redemption given hereunder shall contain the
information required above for an official notice of redemption plus (i) the
CUSIP numbers of all Bonds being redeemed; (ii) the date of issue of the Bonds
as originally issued; (iii) the rate of interest borne by each Bond being
redeemed; (iv) the maturity date of each Bond being redeemed; and (v) any other
descriptive information needed to identify accurately the Bonds being redeemed.
2. Each further notice of redemption shall be sent at least 30 days
before the redemption date by telecopy, registered or certified mail or
overnight delivery service to all registered securities depositories then in the
business of holding substantial amounts of obligations of types comprising the
Bonds (such depositories now being The Depository Trust Company of New York, New
York, Pacific Securities Depository Trust Company of San Francisco, California
and Philadelphia Depository Trust Company of Philadelphia, Pennsylvania) and to
one or more national information services that disseminate notices of redemption
of obligations such as the Bonds.
3. Upon the payment of the redemption price of Bonds being redeemed, each
check or other transfer of funds issued for such purpose shall bear the CUSIP
number (if any) identifying, by issue and maturity, the Bonds being redeemed
with the proceeds of such check or other transfer.
- 41 -
Failure to receive notice by mailing or any defect in that notice regarding
any Bond, however, shall not affect the validity of the proceedings for the
redemption of any other Bond.
Notice of any redemption hereunder with respect to Bonds held under a book
entry system shall be given by the Registrar only to the Depository, or its
nominee, as the Holder of such Bonds. Selection of book entry interests in the
Bonds called for redemption is the responsibility of the Depository and any
failure of any Direct Participant, Indirect Participant, or Beneficial Owner to
receive such notice and its contents or effect will not affect the validity or
such notice or any proceedings for the redemption of such Bonds.
Section 4.05. PAYMENT OF REDEEMED BONDS. Notice having been sent to the
registered owner of the Bond or Bonds to be redeemed in the manner provided in
Section 4.04 hereof, and, in the event of optional redemption pursuant to
Section 4.01(c) or (d) hereof, upon money being deposited as and if required by
Section 4.03 hereof, the Bonds and portions thereof called for redemption shall
become due and payable on the redemption date, and upon presentation and
surrender thereof at the place or places specified in that notice, shall be paid
at the redemption price, including interest accrued to the redemption date. The
Trustee shall use Eligible Funds which have been deposited with the Trustee
pursuant to Section 4.03 hereof or shall make a drawing under the Letter of
Credit, to pay the principal of and interest due on the Bonds being redeemed.
Any moneys received by the Trustee from the Borrower which are available to be
applied toward the payment of such principal and interest, shall be paid to the
Bank to reimburse the Bank for any drawing made under the Letter of Credit to
pay such principal and interest.
Subject to the provisions of Section 13.05 hereof, if money for the
redemption of all of the Bonds and portions thereof to be redeemed, together
with interest accrued thereon to the redemption date, is held by the Trustee or
any Paying Agent on the redemption date, so as to be available therefor on that
date and if notice of redemption has been sent to the registered owner of the
Bond or Bonds to be redeemed as aforesaid, then from and after the redemption
date those Bonds and portions thereof called for redemption shall cease to bear
interest and no longer shall be considered to be outstanding hereunder. If
those moneys shall not be so available on the redemption date, or that notice
shall not have been sent as aforesaid, those Bonds and portions thereof shall
continue to bear interest, until they are paid, at the same rate or rates as
they would have borne had they not been called for redemption.
All moneys deposited in the Bond Fund and held by the Trustee or a Paying
Agent for the redemption of particular Bonds shall be held in trust for the
account of the Holders thereof and shall be paid to them, respectively, upon
presentation and surrender of those Bonds, except as provided in Section 3.06
hereof.
- 42 -
Section 4.06. VARIATION OF REDEMPTION PROVISIONS. The provisions of this
Article IV, insofar as they apply to issuance of any series of Additional Bonds,
may be varied by the Supplemental Indenture providing for that series.
(End of Article IV)
- 43 -
ARTICLE V.
PROVISIONS AS TO FUNDS,
PAYMENTS, PROJECT AND AGREEMENT
Section 5.01. CREATION OF REFUNDING FUND. There is created by the Issuer
and ordered maintained as a separate fund (except when invested as provided
hereinafter) in the custody of the Trustee, a trust fund designated "City of
Gary, Indiana - The Miller Partnership, L.P. Refunding Fund." There is hereby
created within the Refunding Fund separate accounts to be designated the "Series
1996 A Bonds Refunding Account" and the "Series 1996 B Bonds Refunding Account."
The proceeds of the Series 1996 A Bonds shall be deposited in immediately
available funds in the Series 1996 A Bonds Refunding Account and the proceeds of
the Series 1996 B Bonds shall be deposited in immediately available funds in the
Series 1996 B Bonds Refunding Account; provided, however, any proceeds
representing accrued interest on the Refunding Bonds shall be deposited in the
Bond Fund. Unless otherwise set forth in the applicable Bond Legislation or
Supplemental Indenture relating to the issuance of a series of Additional Bonds,
there shall be deposited in appropriate accounts established in the Refunding
Fund the proceeds of the sale of any Additional Bonds, other than any proceeds
representing accrued interest which shall he deposited in the Bond Fund pursuant
to Section 5.03 hereof..
If the unexpended proceeds of a prior issue of Bonds remain in the
Refunding Fund upon the issuance of any Additional Bonds, the Trustee shall
establish a separate subaccount within the Refunding Fund, for accounting
purposes, for the deposit of the proceeds of the issue of Additional Bonds in
accordance with this Section.
Pending disbursement pursuant to the Agreement, the moneys and Eligible
Investments to the credit of the Refunding Fund shall constitute a part of the
Revenues assigned to the Trustee as security for the payment of the Bond Service
Charges.
Section 5.02. DISBURSEMENTS FROM AND RECORDS OF REFUNDING FUND. Moneys
deposited in the Series 1996 A Bonds Refunding Account and the Series 1996 B
Bonds Refunding Account of the Refunding Fund shall be transferred immediately
to the Prior Bonds Trustee for deposit in the Bond Fund established pursuant to
the Prior Indenture. Such moneys shall be disbursed in accordance with the
terms of the Loan Agreement and this Indenture in connection with the refunding
of the Prior Bonds. The Trustee shall have no responsibility to see to any
disbursements of such moneys by the Prior Bonds Trustee..
The Trustee shall cause to be kept and maintained adequate records
pertaining to the Refunding Fund and all disbursements therefrom. If requested
by the Bank, the Issuer or the Borrower, the Trustee shall file copies of the
records pertaining to the Refunding Fund and all disbursements from such fund
with the Bank, the Issuer and the Borrower.
- 44 -
Upon the occurrence and continuance of an Event of Default hereunder
because of which the principal amount of the Bonds has been declared to be due
and payable immediately pursuant to Section 7.03 hereof, any moneys remaining in
the Refunding Fund shall be promptly transferred by the Trustee to the Bond
Fund.
Section 5.03. CREATION OF BOND FUND; LETTER OF CREDIT. There is created
by the Issuer and ordered maintained as a separate fund in the custody of the
Trustee a trust fund to be designated "City of Gary, Indiana - The Miller
Partnership, L.P. Bond Fund." Unless otherwise set forth in the applicable Bond
Legislation or Supplemental Indenture relating to the issuance of a series of
Additional Bonds, there shall be deposited in the Bond Fund (and credited, if
required by this Indenture or the Agreement to appropriate accounts therein),
from the proceeds of the sale of the Bonds, any accrued interest paid by the
purchasers of the Bonds..
Except as otherwise provided herein, the Trustee shall deposit in the Bond
Fund upon receipt all Revenues, including all moneys received upon drawings made
under the Letter of Credit (except as otherwise provided in Section 6.19 hereof)
and any other amounts which, under the terms of this Indenture, the Notes, the
Agreement, the Reimbursement Agreement, or the Letter of Credit are to be
applied to the payment of Bond Service Charges. Except as provided herein, the
Bond Fund (and accounts therein for which provision is made herein or in the
Agreement) and the moneys and Eligible Investments therein shall be used solely
and exclusively for the payment of Bond Service Charges as they fall due at
stated maturity, or by redemption or pursuant to any mandatory sinking fund
requirements or upon acceleration, all as provided herein and in the Agreement.
Except as provided in Section 5.08 hereof, neither the Issuer nor the Borrower
shall have any interest in the Bond Fund, its accounts or subaccounts or the
moneys and Eligible Investments therein, all of which shall be held in trust by
the Trustee for the sole benefit of the Holders.
The Trustee shall establish separate accounts within the Bond Fund for each
separate series of Bonds. The Trustee shall establish separate subaccounts
within each separate series account in the Bond Fund for each source of deposit
(including any investment income thereon) made into the Bond Fund so that the
Trustee may at all times ascertain the date of deposit, the amounts, and the
source of the funds in each subaccount. Moneys received for the payment of the
principal of and interest on the Bonds from drawings upon the Letter of Credit
and any investment earnings thereon shall be separate from and never commingled
with moneys from any other source.
Moneys in the Bond Fund shall be used to pay Bond Service Charges with
respect to the Refunding Bonds and for the redemption of Refunding Bonds prior
to maturity and as otherwise provided in this Indenture only in the following
order:
FIRST: Amounts drawn by the Trustee under the Letter of Credit and
deposited into a separate account in the Bond Fund;
SECOND: Any Eligible Funds on deposit in the Bond Fund;
- 45 -
THIRD: Any other amounts available in the Bond Fund.
The Issuer hereby authorizes and directs the Trustee to draw on the Letter
of Credit pursuant to its terms, in the amounts and at the times necessary to
pay Bond Service Charges on the Refunding Bonds (excluding any premium) pursuant
to this Section 5.03.
The Trustee shall draw upon the Letter of Credit in accordance with the
terms thereof under the following circumstances:
(a) On or before 11:00 a.m., local time at the principal office of the
Bank, on the Business Day prior to any Interest Payment Date (or the maturity
date or any date set for a redemption of Refunding Bonds which is not an
Interest Payment Date), and on or before 10:30 a.m. local time at the principal
office of the Bank, on each Bond Purchase Date, the Trustee shall determine the
amount necessary to make all required payments of principal and interest on the
Refunding Bonds or purchase price payments on the next succeeding Interest
Payment Date, maturity date, other redemption date or such Bond Purchase Date,
and shall present (which presentation may be by tested Telex) a sight draft to
the Bank (together with the required certificates under the Letter of Credit) in
such amount, so as to permit the timely transfer of funds from the Bank to the
Trustee for payment of interest on the Bonds on each Interest Payment Date, for
payment of the principal and interest on the Refunding Bonds when due, whether
at maturity or upon prior redemption, or the payment of the purchase price of
Refunding Bonds when due on the applicable Bond Purchase Date.
(b) Upon acceleration of the Refunding Bonds upon the occurrence of an
Event of Default under Section 7.01 hereof, the Trustee, on or before 11:00
a.m., local time at the principal office of the Bank, on the Business Day prior
to the date on which principal and interest shall be due and payable pursuant to
the declaration of the acceleration of the Refunding Bonds pursuant to Section
7.03 hereof, shall present (which presentation may be by tested Telex) a sight
draft to the Bank (together with required certificates under the Letter of
Credit) for payment of the entire amount due pursuant to Section 7.03 hereof
with respect to the Refunding Bonds.
In no circumstances shall the Trustee use moneys drawn on the Letter of
Credit to pay Bond Service Charges on any Additional Bonds or Pledged Bonds, or
to pay the premium, if any, on Refunding Bonds.
The Trustee shall promptly notify the Borrower by oral or telephonic
communication confirmed in writing if the Bank has not transferred funds in
accordance with the Letter of Credit upon the presentment of any such draft.
In calculating the amount to be drawn on the Letter of Credit for the
payment of principal of and interest on the Refunding Bonds, whether on an
Interest Payment Date, at maturity or upon redemption or acceleration, the
Trustee shall not take into account the receipt or potential receipt of funds
from the Borrower under the Agreement, or the existence of any other moneys in
the
- 46 -
Refunding Fund or Bond Fund (other than accrued interest, if any received at the
time of the issuance and delivery of the Refunding Bonds), but shall draw on the
Letter of Credit for the full amount of principal and interest coming due on the
Refunding Bonds. If sufficient moneys are available in the Remarketing
Reimbursement Fund to pay the purchase price of the Refunding Bonds and
Beneficial Ownership Interests tendered for purchase, the Trustee shall not draw
on the Letter of Credit but shall forward such amounts directly to the tendering
Holder or Beneficial Owner. The Trustee shall draw on the Letter of Credit to
pay the purchase price of Refunding Bonds and Beneficial Ownership Interests
tendered for purchase only to the extent that moneys in the Remarketing
Reimbursement Fund are insufficient to purchase the Refunding Bonds so tendered.
In calculating the amount, if any, to be drawn on the Letter of Credit for the
purchase of Refunding Bonds and Beneficial Ownership Interests, the Trustee
shall take into account funds received from the purchasers of tendered Refunding
Bonds and Beneficial Ownership Interests or from the Remarketing Agent by 10:00
a.m. local time at the principal office of the Bank on such Bond Purchase Date
with respect to the remarketing of such Refunding Bonds and Beneficial Ownership
Interests or otherwise, and by 10:30 a.m. local time at the principal office of
the Bank on the applicable Bond Purchase Date shall draw on the Letter of Credit
only such amounts as may be necessary to purchase such Refunding Bonds and
Beneficial Ownership Interests after taking into account all funds received by
10:00 a.m. local time at the principal office of the Bank on such date which are
attributable to the remarketing of such Refunding Bonds and Beneficial Ownership
Interests. The Trustee shall give the Bank telephonic notice that the Trustee
expects to draw on the Letter of Credit by 10:00 a.m. local time at the
principal office of the Bank on such Bond Purchase Date. Upon receipt of such
moneys from the Bank, the Trustee shall deposit the amount representing a draw
on the Letter of Credit for the payment of principal and interest on the
Refunding Bonds in a separate account in the Bond Fund and apply the same only
to the payment of such principal and interest when due on the Refunding Bonds,
shall deposit the amount representing a draw on the Letter of Credit for the
purchase of Refunding Bonds in the Remarketing Reimbursement Fund and disburse
said amount only to the tendering Holders and Beneficial Owners of Refunding
Bonds and Beneficial Ownership Interests being purchased and, so long as there
does not exist an Event of Default described in Section 7.01(g) herein, and
subject to the prior satisfaction of all Bond Service Charges then due or on
account of which funds shall have been paid to the Trustee by the Borrower or
shall have been obtained by the Trustee by a drawing or drawings on the Letter
of Credit, by wire transfer shall pay, on behalf of the Borrower, but only from
and to the extent of Loan Payments or any other moneys available in the
Refunding Fund, the Bond Fund or the Remarketing Reimbursement Fund any amounts
due and payable to the Bank under the Reimbursement Agreement for any drawing
made on the Letter of Credit.
The Trustee shall transmit to any Paying Agent, as appropriate, from moneys
in the Bond Fund applicable thereto, amounts sufficient to make timely payments
of principal of, interest and any premium on the Refunding Bonds to be made by
the Paying Agent then due and payable. The Issuer authorizes and directs the
Trustee to cause withdrawal of moneys from the Bond Fund which are available for
the purpose of paying, and are sufficient to pay, the principal of, interest and
any premium on the Refunding Bonds as they become due and payable (whether at
stated
- 47 -
maturity or by redemption), for the purposes of paying or transferring moneys to
the Paying Agent which are necessary to pay such principal, interest and
premium.
The provisions of this Section are subject to the provisions of Section
9.02 hereof.
Section 5.04. CREATION OF REMARKETING REIMBURSEMENT FUND. There is
created by the Issuer and ordered maintained as a separate fund in the custody
of the Trustee a trust fund to be designated "City of Gary, Indiana - The Miller
Partnership, L.P. Remarketing Reimbursement Fund." The Remarketing
Reimbursement Fund shall not be considered a part of the Revenues but shall be
used solely in connection with the remarketing of Refunding Bonds as set forth
in Section 6.19 hereof. Certain provisions regarding the Remarketing
Reimbursement Fund are set forth in Section 5.03..
Section 5.05. INVESTMENT OF BOND FUND, REFUNDING FUND, REBATE FUND AND
REMARKETING REIMBURSEMENT FUND. Except as hereinafter provided, moneys in the
Bond Fund, the Refunding Fund, the Rebate Fund and the Remarketing Reimbursement
Fund shall be invested and reinvested by the Trustee in Eligible Investments at
the oral or written direction of the Authorized Borrower Representative, but if
oral, confirmed promptly in writing. Investment of moneys in the Bond Fund
shall mature or be redeemable without penalty at the times and in the amounts
necessary to provide moneys to pay Bond Service Charges as they become due at
stated maturity, by redemption or pursuant to any mandatory sinking fund
requirements. Each investment of moneys in the Refunding Fund, the Bond Fund,
the Rebate Fund, and the Remarketing Reimbursement Fund shall mature or be
redeemable without penalty at such time as may be necessary to make payments
when necessary from such fund. In the absence of adequate direction from the
Authorized Borrower Representative, the Trustee shall invest such moneys in a
money market fund for Government Obligations maintained by the Trustee or an
affiliate of the Trustee.
Subject to any written directions from the Authorized Borrower
Representative with respect thereto, and any restrictions contained in Section
5.11 hereof relating to the Rebate Fund, from time to time, the Trustee may sell
Refunding Fund, Remarketing Reimbursement Fund, Rebate Fund and Bond Fund
investments and reinvest the proceeds therefrom in Eligible Investments maturing
or redeemable as aforesaid. Any of those investments may be purchased from or
sold to the Trustee, the Registrar, an Authenticating Agent, a Paying Agent, a
Remarketing Agent or any bank, trust company or savings and loan association
affiliated with any of the foregoing. The Trustee shall sell or redeem
investments credited to the Bond Fund to produce sufficient moneys applicable
hereunder to and at the times required for the purposes of paying Bond Service
Charges or reimbursing the Bank for a drawing on the Letter of Credit when due
as aforesaid, and shall do so without necessity for any order on behalf of the
Issuer and without restriction by reason of any order. An investment made from
moneys credited to the Bond Fund, the Refunding Fund, the Rebate Fund, or the
Remarketing Reimbursement Fund shall constitute part of that respective fund,
and each respective fund shall be credited with all proceeds of sale and income
from investment of moneys credited thereto. For purposes of this Indenture,
- 48 -
those investments shall be valued at face amount or market value, whichever is
less. The Trustee shall not be liable for any losses sustained as a result of
any investments.
Moneys drawn on the Letter of Credit and deposited in the Bond Fund shall
be deposited in a separate account in the Bond Fund, shall be invested at the
written direction of the Borrower in Eligible Investments approved in writing by
the Bank and shall be held in such account pending application pursuant to the
terms of Section 5.03 or Section 6.19 hereof. Notwithstanding any inconsistent
or contrary provision hereof, such funds shall be applied only to the
satisfaction of the specific Bond Service Charges for which they were drawn and
any funds not so applied together with any earnings derived from the investment
of any funds drawn under the Letter of Credit shall be paid to the Bank.
Section 5.06. MONEYS TO BE HELD IN TRUST. Except where moneys have been
deposited with or paid to the Trustee pursuant to an instrument restricting
their application to particular Bonds, all moneys required or permitted to be
deposited with or paid to the Trustee or any Paying Agent under any provision of
this Indenture, the Agreement or the Letter of Credit, and to be used to pay
Bond Service Charges, or the Notes, and any investments thereof, shall be held
by the Trustee or that Paying Agent in trust. Except (i) for moneys deposited
with or paid to the Trustee or any Paying Agent for the redemption of Bonds,
notice of the redemption of which shall have been duly given, (ii) for moneys
held by the Trustee pursuant to Section 5.07 hereof, (iii) for moneys in the
Remarketing Reimbursement Fund, and (iv) for moneys held in the Rebate Fund, all
moneys described in the preceding sentence held by the Trustee or any Paying
Agent shall be subject to the lien hereof while so held..
Section 5.07. NONPRESENTMENT OF BONDS. In the event that any Bond shall
not be presented for payment when the principal thereof becomes due in whole or
in part, either at stated maturity, by redemption or pursuant to any mandatory
sinking fund requirements, or a check or draft for interest is uncashed, if
moneys sufficient to pay the principal and premium, if any, then due on that
Bond or to pay such check or draft shall have been made available to the Trustee
for the benefit of its Holder, all liability of the Issuer to that Holder for
such payment of the principal and premium, if any, then due on the Bond or
interest on such Bond represented by such check or draft thereupon shall cease
and be discharged completely. Thereupon, it shall be the duty of the Trustee to
hold those moneys, without liability for interest thereon, in a separate account
for the exclusive benefit of the Holder, who shall be restricted thereafter
exclusively to those moneys for any claim of whatever nature on its part under
this indenture or on, or with respect to, the principal and premium, if any,
then due on that Bond or interest on such Bond represented by such check or
draft..
Any of those moneys which shall be so held by the Trustee, and which remain
unclaimed by the Holder of a Bond not presented for payment or check or draft
not cashed for a period of four years after the due date thereof, shall be paid
to the Bank free of any trust or lien unless the Bank shall have confirmed to
the Trustee in writing that no moneys are then due under the Reimbursement
Agreement in which case such moneys shall be paid to the Borrower. Thereafter,
- 49 -
the Holder of that Bond shall look only to the Borrower for payment and then
only to the amounts so received by the Borrower or paid to or on behalf of the
Borrower (including to the Bank pursuant to this paragraph), without any
interest thereon, and the Trustee shall not have any responsibility with respect
to those moneys.
Section 5.08. REPAYMENT TO THE BANK OR THE BORROWER FROM THE BOND FUND.
Except as provided in Section 5.07 hereof, any amounts remaining in the Bond
Fund (i) after all of the outstanding Bonds shall be deemed paid and discharged
under the provision of this Indenture, and (ii) after payment of all fees,
charges and expenses of the Trustee, the Registrar and any Paying Agent or
Authenticating Agent and of all other amounts required to be paid under this
Indenture, the Agreement and the Notes, shall be paid to the Bank unless the
Bank shall have confirmed to the Trustee in writing that no moneys are then due
under the Reimbursement Agreement in which case such moneys shall be paid to the
Borrower, to the extent that those amounts are in excess of those necessary to
effect the payment and discharge of the outstanding Bonds..
Section 5.09. EXTENSION OF LETTER OF CREDIT; ALTERNATE LETTER OF CREDIT.
The Letter of Credit expires April 15, 2001, or earlier as provided therein,
unless extended from time to time in accordance with the terms thereof..
If the Refunding Bonds are bearing interest at other than the Fixed
Interest Rate, the Borrower may, at its option, provide for the delivery to the
Trustee of an Alternate Letter of Credit to take effect on a date selected by
the Borrower (the "Replacement Date"). If the Refunding Bonds are bearing
interest at the Weekly Interest Rate, the Replacement Date may be any date
selected by the Borrower. If the Refunding Bonds are bearing interest at the
One Month Interest Rate, Three Month Interest Rate, Six Month Interest Rate, One
Year Interest Rate or Five Year Interest Rate, the Replacement Date shall be the
Interest Rate Adjustment Date or the Fixed Interest Rate Commencement Date if
the Bonds are to bear interest at the Fixed Interest Rate. If the Borrower is
providing an Alternate Letter of Credit in connection with the conversion of the
interest rate on the Refunding Bonds to the Fixed Interest Rate, the expiration
date on the Alternate Letter of Credit shall be not earlier than the earlier of
fifteen (15) days after the First Optional Redemption Date or ten (10) years and
fifteen (15) days after the date of issuance of the Alternate Letter of Credit.
Prior to the replacement of a Letter of Credit with an Alternate Letter of
Credit, the Trustee shall give notice to the Holders and, if the Refunding Bonds
are then rated by a Rating Service, to each Rating Service which then has a
rating on the Refunding Bonds of such event, and shall have received the
following, not less than forty-five (45) days prior to the Replacement Date:
(A) an opinion of counsel for the issuer of the Alternate Letter of
Credit that it constitutes a legal, valid and binding obligation of the
issuer in accordance with its terms;
(B) an opinion of counsel acceptable to the Trustee to the effect
that payments under the Alternate Letter of Credit will not constitute
voidable preferences in the event of a bankruptcy of the Borrower;
- 50 -
(C) an opinion of Bond Counsel that such replacement will not cause
interest on the Series 1996 A Bonds to become includable in gross income
for federal income tax purposes; and
(D) the Alternate Letter of Credit.
If the Refunding Bonds are bearing interest at the Fixed Interest Rate, the
Borrower shall provide for the delivery to the Trustee of an Alternate Letter of
Credit to take effect on a date selected by the Borrower (the "Replacement
Date"). Prior to such replacement, the Trustee shall give notice to the Holders
of such event, and shall have received the following, not less than forty-five
(45) days prior to the Replacement Date:
(A) An opinion of counsel for the issuer of the Alternate Letter of
Credit that it constitutes a legal, valid and binding obligation of the
issuer in accordance with its terms;
(B) An opinion of counsel acceptable to the Trustee to the effect
that payments under the Alternate Letter of Credit will not constitute
voidable preferences in the event of a bankruptcy of the Borrower;
(C) an opinion of Bond Counsel that such replacement will not cause
interest on the Series 1996 A Bonds to become includable in gross income
for federal income tax purposes; and
(D) the Alternate Letter of Credit.
Section 5.10. COMPLIANCE WITH SECTION 148 OF THE CODE. The Trustee shall
cause to be kept and maintained adequate records pertaining to investment of all
proceeds of the Bonds sufficient to permit the Borrower, on behalf of the
Issuer, to determine the amount of rebate, if any, required to be paid to the
United States of America pursuant to Section 148 of the Code..
Section 5.11. REBATE FUND.
(a) The Trustee shall establish and maintain so long as any Series 1996 A
Bonds are Outstanding and are subject to a requirement of the Code that
arbitrage profits be rebated to the United States of America, a rebate fund
designated "City of Gary, Indiana - The Miller Partnership, L.P. Rebate Fund."
The Trustee shall make information regarding the Bonds and investments hereunder
available to the Borrower. The Trustee shall make deposits and disbursements
from the Rebate Fund in accordance with the written instructions received from
the Borrower, shall invest the amounts held in the Rebate Fund pursuant to
written instructions from the Borrower and shall deposit income from such
investments immediately upon receipt thereof in the Rebate Fund. Anything in
this Indenture to the contrary notwithstanding, the immediately preceding
sentence of this Indenture and Subsections (b) and (c) hereof may be superseded
or
- 51 -
amended by new instructions delivered by the Borrower and accompanied by an
opinion of Bond Counsel addressed to the Trustee to the effect that the use of
the new instructions will not cause interest on the Series 1996 A Bonds to be
included in gross income for federal income tax purposes.
(b) If a deposit to the Rebate Fund is required as a result of the
computations made or caused to be made by the Borrower, the Trustee shall upon
receipt of written direction from the Borrower accept such payment for the
benefit of the Borrower. If amounts in excess of that required to be rebated to
the United States of America accumulate in the Rebate Fund, the Trustee shall
upon written direction from the Borrower transfer such amount to the Borrower.
Records of the determinations required by this Section and the instructions must
be retained by the Trustee until six (6) years after the Series 1996 A Bonds are
no longer outstanding.
(c) Not later than thirty (30) days after March 1, 2001 (or such other
date as the Borrower may choose, provided the Borrower receives an opinion of
Bond Counsel that such change will not cause interest on the Series 1996 A Bonds
to be included in gross income for federal income tax purposes) and every five
(5) years thereafter until final retirement of the Series 1996 A Bonds, upon
written direction from the Borrower, the Trustee shall pay to the United States
of America ninety percent (90%) of the amount required to be on deposit in the
Rebate Fund as of such payment date. Not later than thirty (30) days after the
final retirement of the Series 1996 A Bonds, upon written direction from the
Borrower the Trustee shall pay to the United States of America one hundred
percent (100%) of the balance of the amount required to be on deposit in the
Rebate Fund or such lesser amount as the Borrower shall direct.
(End of Article V)
- 52 -
ARTICLE VI.
THE TRUSTEE, REGISTRAR, PAYING AGENTS
AUTHENTICATING AGENTS AND REMARKETING AGENT
Section 6.01. TRUSTEE'S ACCEPTANCE AND RESPONSIBILITIES. The Trustee
accepts the trusts imposed upon it by this Indenture, and agrees to observe and
perform those trusts, but only upon and subject to the terms and conditions set
forth in this Article, to all of which the parties hereto and the Holders
agree:.
(a) Prior to the occurrence of a default or an Event of Default (as
defined in section 7.01 hereof) of which the Trustee has been notified, as
provided in paragraph (f) of Section 6.02 hereof, or of which by that paragraph
the Trustee is deemed to have notice, and after the cure or waiver of all
defaults or Events of Default which may have occurred,
(i) the Trustee undertakes to perform only those duties and
obligations which are set forth specifically in this Indenture, and no
duties or obligations shall be implied to the Trustee;
(ii) in the absence of bad faith on its part, the Trustee may rely
conclusively, 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
required specifically 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.
(b) In case a default or an Event of Default has occurred and is
continuing hereunder (of which the Trustee has been notified, or is deemed to
have notice), and subject to Section 7.05 herein, the Trustee shall exercise
those rights and powers vested in it by this Indenture and shall use the same
degree of care and skill in their exercise, as a prudent person acting as a
fiduciary would exercise or use under the circumstances.
(c) No provisions of this Indenture shall be construed to relieve the
Trustee from liability for its own grossly negligent action, its own grossly
negligent failure to act, or its own willful misconduct, except that:
(i) this Subsection shall not be construed to affect the limitation
of the Trustee's duties and obligations provided in subparagraph (a)(i) of
this Section or the Trustee's right to rely on the truth of statements and
the correctness of opinions as provided in subparagraph (a)(ii) of this
Section;
- 53 -
(ii) 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 established
that the Trustee was grossly negligent in ascertaining the pertinent facts;
(iii) 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 Bank or the Holders of at least a majority in aggregate
principal amount of the Bonds then outstanding relating to the time, method
and place of conducting any proceeding for any remedy available to the
Trustee, or exercising any trust or power conferred upon the Trustee, under
this Indenture, as provided in Sections 7.04 and 7.05 hereof; and
(iv) no provision of this Indenture shall require the Trustee to
expend or risk its own funds or otherwise incur any financial liability in
the performance of any of its duties hereunder, or in the exercise of any
of its rights or powers if it shall have reasonable grounds for believing
that payment of such funds or adequate indemnity against such risk or
liability is not reasonably assured to it.
(d) Whether or not therein expressly so provided, every provision of this
Indenture relating to the conduct or affecting the liability of or affording
protection to the Trustee shall be subject to the provisions of this Section
6.01.
Section 6.02. CERTAIN RIGHTS AND OBLIGATIONS OF THE TRUSTEE. Except as
otherwise provided in Section 6.01 hereof:.
(a) The Trustee (i) may execute any of the trusts or powers hereof and
perform any of its duties by or through attorneys, agents, receivers or
employees (but shall be answerable therefor only in accordance with the standard
specified above), (ii) shall be entitled to the advice of counsel concerning all
matters of trusts hereof and duties hereunder, and (iii) may pay reasonable
compensation in all cases to all of those attorneys, agents, receivers and
employees reasonably employed by it in connection with the trusts hereof. The
Trustee may act upon the opinion or advice of any attorney (who may be the
attorney or attorneys for the Issuer or the Borrower) approved by the Trustee in
the exercise of reasonable care. The Trustee shall not be responsible for any
loss or damage resulting from any action taken or omitted to be taken in good
faith in reliance upon that opinion or advice.
(b) Except for its certificate of authentication, as Authenticating Agent,
on the Bonds, the Trustee shall not be responsible for:
(i) any recital in this Indenture or in the Bonds,
(ii) the validity, priority, recording, rerecording, filing or re-
filing of this Indenture or any Supplemental Indenture,
- 54 -
(iii) any instrument or document of further assurance or collateral
assignment,
(iv) any financing statements or amendments thereto,
(v) insurance of the Project or collection of insurance moneys,
(vi) the validity of the execution by the Issuer of this Indenture,
any Supplemental Indenture or instruments or documents of further
assurance,
(vii) the sufficiency of the security for the Bonds issued hereunder
or intended to be secured hereby,
(viii) the value of or title to the Project, or
(ix) the maintenance of the security hereof,
except that, in the event that the Trustee enters into possession of any
property pursuant to any provision of any instrument or document, the Trustee
shall use due diligence in preserving that property. The Trustee shall not be
bound to ascertain or inquire as to the observance or performance of any
covenants, agreements, or obligations on the part of the Issuer or the Borrower
under the Agreement except as set forth herein; but the Trustee may require of
the Issuer or the Borrower full information and advice as to the observance or
performance of those covenants, agreements any obligations. Except as otherwise
provided in Section 7.04 hereof, the Trustee shall have no obligation to observe
or perform any of the duties of the Issuer under the Agreement.
(c) The Trustee shall not be accountable for the application by the
Borrower, the Prior Bonds Trustee or any other Person of the proceeds of any
Bonds authenticated or delivered hereunder.
(d) The Trustee shall be protected, in the absence of bad faith on its
part, in acting upon any notice, request, consent, certificate, order,
affidavit, letter, telegram, or other paper or document reasonably believed by
it to be genuine and correct and to have been signed or sent by the proper
Person or Persons. Any action taken by the Trustee pursuant to this Indenture
upon the request or authority or consent of the Bank or any Person who is the
Holder of any Bonds at the time of making the request or giving the authority or
consent, shall be conclusive and binding upon all future Holders of the same
Bond and of Bonds issued in exchange therefor or in place thereof.
(e) As to the existence or nonexistence of any fact for which the Issuer,
the Borrower or the Bank may be responsible or as to the sufficiency or validity
of any instrument, document, report, paper or proceeding, the Trustee, in the
absence of bad faith on its part, shall be entitled to rely upon a certificate
signed on behalf of the Issuer, the Bank or the Borrower by an officer
- 55 -
or representative thereof as sufficient evidence of the facts recited therein.
Prior to the occurrence of a default or Event of Default hereunder of which the
Trustee has been notified, as provided in paragraph (f) of this Section, or of
which by that paragraph the Trustee is deemed to have notice, the Trustee may
accept a similar certificate to the effect that any particular dealing,
transaction or action is necessary or expedient; provided, that the Trustee in
its discretion may require and obtain any further evidence which it deems to be
necessary or advisable; and, provided further, that the Trustee shall not he
bound to secure any further evidence. The Trustee may accept a certificate of
the officer, or an assistant thereto, having charge of the appropriate records,
to the effect that legislation has been enacted or adopted by the Issuer in the
form recited in that certificate, as conclusive evidence that the legislation
has been duly enacted or adopted and is in full force and effect.
(f) The Trustee shall not be required to take notice, and shall not be
deemed to have notice, of any default or Event of Default hereunder, except
Events of Default described in paragraphs (a), (b), (c) and (g) of Section 7.01
hereof, unless the Trustee shall be notified specifically of the default or
Event of Default in a written instrument or document delivered to it by the
Issuer, the Bank, or by the Holders of at least twelve percent (12%) of the
aggregate principal amount of the Bonds then outstanding. In the absence of
delivery of a notice satisfying those requirements, the Trustee may assume
conclusively that there is no default or Event of Default, except as noted
above.
(g) At any reasonable time, the Trustee and its duly authorized agents,
attorneys, experts, engineers, accountants and representatives (i) may inspect
and copy fully all books, papers and records of the Issuer pertaining to the
Project, the Letter of Credit and the Bonds, and (ii) may take any memoranda
from and in regard thereto as the Trustee may desire.
(h) The Trustee shall not be required to give any bond or surety with
respect to the execution of these trusts and powers or otherwise in respect of
the premises.
(i) Notwithstanding anything contained elsewhere in this Indenture, the
Trustee may demand any showings, certificates, reports, opinions, appraisals and
other information, and any corporate, limited liability company or partnership
action and evidence thereof, in addition to that required by the terms hereof,
as a condition to the authentication of any Bonds or the taking of any action
whatsoever within the purview of this Indenture, if the Trustee deems it to be
desirable for the purpose of establishing the right of the Issuer to the
authentication of any Bonds or the right of any Person to the taking of any
other action by the Trustee; provided, that the Trustee shall not be required to
make that demand.
(j) Before taking action hereunder pursuant to Section 6.04 or Article VII
hereof (with the exception of any action required to be taken under Sections
7.02 or 7.03 hereof, with respect to drawings made under the Letter of Credit,
and with the declaration of a mandatory tender or mandatory redemption), the
Trustee may require that a satisfactory indemnity bond be furnished to it for
the reimbursement of all expenses which it may incur and to protect it against
all liability
- 56 -
by reason of any action so taken, except liability which is adjudicated to have
resulted from its negligence or willful misconduct. The Trustee may take action
without that indemnity, and in that case, the Borrower shall reimburse the
Trustee for all of the Trustee's expenses pursuant to Section 6.03 hereof.
(k) Unless otherwise provided herein, all moneys received by the Trustee
under this Indenture shall be held in trust for the purpose for which those
moneys were received, until those moneys are used, applied or invested as
provided herein; provided, that those moneys need not be segregated from other
moneys, except to the extent required by this Indenture or by law. The Trustee
shall not have any liability for interest on any moneys received hereunder,
except to the extent expressly provided herein.
(l) Any legislation enacted or adopted by the Issuer, and any opinions,
certificates and other instruments and documents for which provision is made in
this Indenture, may be accepted by the Trustee, in the absence of bad faith on
its part, as conclusive evidence of the facts and conclusions stated therein and
shall be full warrant, protection and authority to the Trustee for its actions
taken hereunder.
(m) The Trustee shall be entitled conclusively to rely upon the
determination of the interest rates made and delivered to the Trustee by the
Remarketing Agent.
Section 6.03. FEES, CHARGES AND EXPENSES OF TRUSTEE, REGISTRAR, PAYING
AGENTS AND AUTHENTICATING AGENTS. The Trustee, the Registrar and any Paying
Agent or Authenticating Agent shall be entitled to payment or reimbursement by
the Borrower, as provided in the Agreement, for customary fees for their
respective Ordinary Services rendered hereunder and for all advances, counsel
fees and other Ordinary Expenses reasonably and necessarily paid or incurred by
them in connection with the provision of Ordinary Services. For purposes
hereof, fees for Ordinary Services provided for by their respective standard fee
schedules shall be considered customary. In the event that it should become
necessary for any of them to perform Extraordinary Services, they shall be
entitled to customary extra compensation therefor and to reimbursement for
reasonable and necessary Extraordinary Expenses incurred in connection
therewith.
Without creating a default or an Event of Default hereunder, however, the
Borrower may contest in good faith the necessity for any Extraordinary Service
and Extraordinary Expense and the amount of any fee, charge or expense.
The Trustee, the Registrar and any Paying Agent or Authenticating Agent
shall not be entitled to compensation or reimbursement for Extraordinary
Services or Extraordinary Expenses occasioned by their neglect or willful
misconduct. The payment to which the Trustee, the Registrar and any Paying
Agent and Authenticating Agent are entitled hereunder shall be made only from
(i) the Additional Payments made by the Borrower pursuant to the Agreement, or
(ii) from other moneys available therefor. Any amounts payable to the Trustee,
the Registrar or any
- 57 -
Paying Agent or Authenticating Agent pursuant to this Section 6.03 shall be
payable upon demand and shall bear interest from the date of demand therefor at
the Interest Rate for Advances.
Section 6.04. INTERVENTION BY TRUSTEE. The Trustee may intervene on
behalf of the Holders, and shall intervene if requested to do so in writing by
the Holders of at least twenty-five percent (25%) of the aggregate principal
amount of Bonds then outstanding, in any judicial proceeding to which the
Issuer, the Bank or the Borrower is a party and which in the opinion of the
Trustee and its counsel has a substantial bearing on the interests of Holders of
the Bonds. The rights and obligations of the Trustee under this Section are
subject to the approval of that intervention by a court of competent
jurisdiction. The Trustee may require that a satisfactory indemnity bond be
provided to it in accordance with Sections 6.01 and 6.02 hereof before it takes
action under this Section..
Section 6.05. SUCCESSOR TRUSTEE. Anything herein to the contrary
notwithstanding,.
(a) any corporation or association (i) into which the Trustee may be
converted or merged, (ii) with which the Trustee or any successor to it may be
consolidated or (iii) to which it may sell or transfer its assets and trust
business as a whole or substantially as a whole, or any corporation or
association resulting from any such conversion, merger, consolidation, sale or
transfer, IPSO FACTO, shall be and become successor Trustee hereunder and shall
be vested with all of the title to the whole property or trust estate hereunder;
and
(b) that corporation or association shall be vested further, as was its
predecessor, with each and every trust, property, remedy, power, right, duty,
obligation, discretion, privilege, claim, demand, cause of action, immunity,
estate, title, interest and lien expressed or intended by this Indenture to be
exercised by, vested in or conveyed to the Trustee, without the execution or
filing of any instrument or document or any further act on the part of any of
the parties hereto.
Any successor Trustee, however, shall be a trust company or a commercial bank
having the powers of a trust company authorized to exercise trust powers in the
State, and shall have a reported capital and surplus of not less than
$50,000,000.
Section 6.06. APPOINTMENT OF CO-TRUSTEE. It is the purpose of this
Indenture that there shall be no violation of any law of any jurisdiction
(including without limitation, the laws of the State) denying or restricting the
right of banks or trust companies to transact business as trustees in that
jurisdiction, it is recognized that, (a) if there is litigation under this
Indenture or other instruments or documents relating to the Bonds and the
Project, and in particular, in case of the enforcement hereof or thereof upon a
default or an Event of Default, or (b) if the Trustee should deem that, by
reason of any present or future law of any jurisdiction, it may not (i) exercise
any of the powers, rights or remedies granted herein to the Trustee, (ii) hold
title to the properties, in trust, as granted herein, or (iii) take any action
which may be desirable or necessary in connection therewith, it may be necessary
that the Trustee appoint an individual or additional
- 58 -
institution as a co-Trustee. The following provisions of this Section are
adopted to these ends.
In the event that the Trustee appoints an individual or additional
institution as a co-Trustee, each and every trust, property, remedy, power,
right, duty, obligation, discretion, privilege, claim, demand, cause of action,
immunity, estate, title, interest and lien expressed or intended by this
Indenture to be exercised by, vested in or conveyed to the Trustee shall be
exercisable by, vest in and be conveyed to that co-Trustee, but only to the
extent necessary for it to be so vested and conveyed and to enable that co-
Trustee to exercise it. Every covenant, agreement and obligation necessary to
the exercise thereof by that co-Trustee shall run to and be enforceable by it.
Should any instrument or document in writing from the Issuer reasonably be
required by the co-Trustee so appointed by the Trustee for vesting and conveying
more fully and certainly in and to that co-Trustee those trusts, properties,
remedies, powers, rights, duties, obligations, discretions, privileges, claims,
demands, causes of action, immunities, estates, titles, interests and liens,
that instrument or document shall be executed, acknowledged and delivered, but
not prepared, by the Issuer. In case any co-Trustee or a successor to it shall
die, become incapable of acting, resign or be removed, all of the trusts,
properties, remedies, powers, rights, duties, obligations, discretions,
privileges, claims, demands, causes of action, immunities, estates, titles,
interests and liens of the co-Trustee shall be exercised by, vest in and be
conveyed to the Trustee, to the extent permitted by law, until the appointment
of a successor to the co-Trustee.
Section 6.07. RESIGNATION BY THE TRUSTEE. The Trustee may resign at any
time from the trusts created hereby by giving written notice of the resignation
to the Issuer, the Borrower, the Bank, the Remarketing Agent, the Registrar, any
Paying Agent and any Authenticating Agent and the Underwriter of the Bonds then
outstanding and by mailing written notice of the resignation to the Holders as
their names and addresses appear on the Register at the close of business
fifteen (15) days prior to the mailing. The resignation shall take effect upon
the appointment of, and acceptance by, a successor Trustee.
Section 6.08. REMOVAL OF THE TRUSTEE. The Trustee may be removed at any
time by an instrument or document or concurrent instruments or documents in
writing delivered to the Trustee, with copies thereof mailed to the Issuer, the
Registrar, the Bank, the Remarketing Agent, any Paying Agent, any Authenticating
Agent and the Borrower, and signed by or on behalf of the Bank or the Holders of
at least a majority in aggregate principal amount of the Bonds then outstanding.
The Trustee also may be removed at any time for any breach of trust or for
acting or proceeding in violation of, or for failing to act or proceed in
accordance with, any provision of this Indenture with respect to the duties and
obligations of the Trustee by any court of competent jurisdiction upon the
application of the Issuer, the Bank or the Holders of not less than twenty
percent (20%) in aggregate principal amount of the Bonds then outstanding under
this Indenture.
- 59 -
Any removal of the Trustee shall take effect upon the appointment of a
successor Trustee.
Section 6.09. APPOINTMENT OF SUCCESSOR TRUSTEE. If (i) the Trustee shall
resign, shall be removed, shall be dissolved, or shall become otherwise
incapable of acting hereunder, (ii) the Trustee shall be taken under the control
of any public officer or officers, or (iii) a receiver shall be appointed for
the Trustee by a court, then a successor Trustee shall be appointed by the
Issuer, with the written consent of the Bank and the Borrower; provided, that if
a successor Trustee is not so appointed within ten (10) days after (a) a notice
of resignation or an instrument or document of removal is received by the
Issuer, as provided in Section 6.07 and 6.08 hereof, respectively, or (b) the
Trustee is dissolved, taken under control, becomes otherwise incapable of acting
or a receiver is appointed, in each case, as provided above, then, so long as
the Issuer shall not have appointed a successor Trustee, the Bank and the
Holders of at least a majority in aggregate principal amount of Bonds then
outstanding may designate a successor Trustee by an instrument or document or
concurrent instruments or documents in writing signed by or on behalf of those
Holders. If no appointment of a successor Trustee shall be made pursuant to the
foregoing provisions of this Section, the Holder of any Bond outstanding
hereunder, the Bank or any retiring Trustee may apply to any court of competent
jurisdiction to appoint a successor Trustee. Such court may thereupon, after
such notice, if any, as such court may deem proper and prescribe, appoint a
successor Trustee.
Every successor Trustee and Co-Trustee appointed pursuant to this Section
shall be a trust company or a bank having the powers of a trust company in the
State and shall have a reported capital and surplus of not less than
$50,000,000, shall be willing to accept the trusteeship under the terms and
conditions of this Indenture, and shall be reasonably acceptable to the Bank.
Every successor Trustee and Co-Trustee appointed hereunder shall execute
and acknowledge, and shall deliver to its predecessor, the Issuer, the Bank, the
Remarketing Agent and the Borrower, an instrument or document in writing
accepting the appointment. Thereupon, without any further act, the successor
shall become vested with all of the trusts, properties, remedies, powers,
rights, duties, obligations, discretions, privileges, claims, demands, causes of
action, immunities, estates, titles, interests and liens of its predecessor.
Upon the written request of its successor, the Issuer, the Bank or the Borrower
and payment of all fees and expenses owed to it, the predecessor Trustee (i)
shall execute and deliver an instrument or document transferring to its
successor all of the trusts, properties, remedies, powers, rights, duties,
obligations, discretions, privileges, claims, demands, causes of action,
immunities, estates, titles, interests and liens of the predecessor Trustee
hereunder, and (ii) shall take any other action necessary to duly assign,
transfer and deliver to its successor all property (including without
limitation, all securities and moneys) held by it as Trustee. Should any
instrument or document in writing from the Issuer be requested by any successor
Trustee for vesting and conveying more fully and certainly in and to that
successor the trusts, properties, remedies, powers, rights, duties, obligations,
discretions, privileges, claims, demands, causes of action, immunities, estates,
titles, interests and liens vested or conveyed or intended to be vested or
conveyed hereby in or to the predecessor Trustee, the Issuer shall execute,
acknowledge and deliver that instrument or document.
- 60 -
Prior to the acceptance by a successor trustee of the trusts hereunder, the
Letter of Credit shall be transferred to the successor trustee in accordance
with the terms of the Letter of Credit.
In the event of a change in the Trustee, the predecessor Trustee shall
cease to be custodian of any moneys which it may hold pursuant to this Indenture
and shall cease to be Registrar, Authenticating Agent and a Paying Agent for any
of the Bonds, to the extent it served in any of those capacities. The successor
Trustee shall become custodian and, if applicable, Registrar, Authenticating
Agent and a Paying Agent.
Section 6.10. ADOPTION OF AUTHENTICATION. In case any of the Bonds shall
have been authenticated, but shall not have been delivered, any successor
Trustee, Registrar or Authenticating Agent may adopt the certificate of
authentication of any predecessor Trustee, Registrar or Authenticating Agent and
may deliver those Bonds so authenticated as provided herein. In case any Bonds
shall not have been authenticated, any successor Trustee, Registrar or
Authenticating Agent may authenticate those Bonds either in the name of any
predecessor or in its own name. In all cases, the certificate of authentication
shall have the same force and effect as provided in the Bonds or in this
Indenture with respect to the certificate of authentication of the predecessor
Trustee, Registrar or Authenticating Agent.
Section 6.11. REGISTRARS.
(a) INITIAL APPOINTMENT AND SUCCESSION. The Fifth Third Bank, is hereby
appointed Registrar under this Indenture. Anything herein to the contrary
notwithstanding, any corporation or association (i) into which a Registrar may
be converted or merged, (ii) with which a Registrar or any successor to it may
be consolidated, or (iii) to which it may sell or transfer its assets as a whole
or substantially as a whole, or any corporation or association resulting from
any such conversion, merger, consolidation, sale or transfer, IPSO FACTO, shall
be and become successor Registrar to that Registrar hereunder and shall be
vested with each and every power, right, duty, obligation, discretion and
privilege expressed or intended by this Indenture to be exercised by or vested
in the predecessor Registrar, without the execution or filing of any instrument
or document or any further act on the part of any of the parties hereto.
(b) RESIGNATION. A Registrar may resign at any time by giving written
notice of its resignation to the Issuer, the Borrower, the Trustee, the Bank,
the Remarketing Agent, and to each Paying Agent and Authenticating Agent for
those series of Bonds for which it is Registrar, at least sixty (60) days before
the resignation is to take effect. The resignation shall take effect
immediately, however, upon the appointment of a successor Registrar, if the
successor Registrar is appointed and accepts that appointment before the time
stated in the notice.
(c) REMOVAL. The Registrar may be removed at any time by the Trustee or
by an instrument or document or concurrent instruments or documents in writing
delivered to the Registrar, with copies thereof mailed to the Issuer, the
Trustee, the Bank, the Remarketing Agent,
- 61 -
and the Borrower, and signed by or on behalf of the Holders of at least a
majority in aggregate principal amount of the Bonds then outstanding for which
it is Registrar.
(d) APPOINTMENT OF SUCCESSORS. If (i) a Registrar shall resign, shall
be removed, shall be dissolved, or shall become otherwise incapable of acting
hereunder, (ii) a Registrar shall be taken under the control of any public
officer or officers, (iii) a receiver shall be appointed for a Registrar by a
court, or (iv) a Registrar shall have an order for relief entered in any case
commenced by or against it under the federal bankruptcy laws or commence a
proceeding under any federal or state bankruptcy, insolvency, reorganization or
similar law, or have such a proceeding commenced against it and either have an
order of insolvency or reorganization entered against it or have the proceeding
remain undismissed and unstayed for ninety (90) days, then a successor Registrar
shall be appointed by the Executive of the Issuer with the written consent of
the Bank, the Borrower and the Trustee; provided, that if a successor Registrar
is-not so appointed within ten (10) days after (a) a notice of resignation or an
instrument or document of removal is received by the Issuer, as provided above,
or (b) the Registrar is dissolved, taken under control, becomes incapable of
acting or a receiver is appointed, in each case, as provided above, then, if the
Executive of the Issuer shall not have appointed a successor Registrar, the
Trustee or the Holders of at least a majority in aggregate principal amount of
the Bonds then outstanding for which it is Registrar may designate a successor
Registrar by an instrument or document or concurrent instruments or documents in
writing signed by the Trustee, or in the case of the Holders, by or on behalf of
those Holders.
Every successor Registrar appointed hereunder shall execute and acknowledge
and shall deliver to its predecessor, the Issuer, the Bank, the Trustee, the
Remarketing Agent, any Authenticating Agents, any Paying Agents and the
Borrower, an instrument or document in writing accepting the appointment.
Thereupon, without any further act, the successor shall become vested with all
of the properties, remedies, powers, rights, duties, obligations, discretions,
privileges, claims, demands, causes of action, immunities, titles and interests
of its predecessor. Upon the written request of its successor, the Issuer, the
Bank or the Borrower, a predecessor Registrar (i) shall execute and deliver an
instrument or document transferring to its successor all of the properties,
remedies, powers, rights, duties, obligations, provisions, privileges, claims,
demands, causes of action, immunities, titles and interests of it as predecessor
Registrar hereunder, and (ii) shall take any other action necessary to duly
assign, transfer and deliver to its successor all property and records
(including without limitation, the Register and any canceled Bonds) held by it
as Registrar. Should any instrument or document in writing from the Issuer be
requested by any successor Registrar for vesting and conveying more fully and
certainly in and to that successor the properties, remedies, powers, rights,
duties, obligations, discretions, privileges, claims, demands, causes of action,
immunities, titles and interests vested or conveyed or intended to be vested or
conveyed hereby in or to a predecessor Registrar, the Issuer shall execute,
acknowledge and deliver that instrument or document.
The Borrower shall pay to any Registrar from time to time customary
compensation as authorized in Section 6.03 hereof for its services.
- 62 -
The provisions of Section 3.05 and Subsection 6.02(d) hereof shall be
applicable to any Registrar.
Section 6.12. DESIGNATION AND SUCCESSION OF PAYING AGENTS. The Fifth
Third Bank is hereby appointed Paying Agent under this Indenture. With the
consent of the Issuer, the Trustee may appoint an additional Paying Agent or
Agents with power to act on its behalf and subject to its direction in the
payment of Bond Service Charges on the Bonds. It is the responsibility of the
Trustee to establish the duties and responsibilities of any Paying Agent for the
purposes of this Indenture, to the extent not specified herein.
Any corporation or association with or into which any Paying Agent may be
merged or converted or with which it may be consolidated, or any corporation or
association resulting from any merger, consolidation or conversion to which any
Paying Agent shall be a party, or any corporation or association succeeding to
the trust business of any Paying Agent, shall be the successor of that Paying
Agent hereunder, if that successor corporation or association is otherwise
eligible hereunder, without the execution or filing of any paper or any further
act on the part of the parties hereto or the Paying Agent or that successor
corporation or association.
Any Paying Agent may at any time resign by giving written notice of
resignation to the Trustee, to the Registrar, to the Bank and to the Borrower.
The Trustee may at any time terminate the agency of any Paying Agent by giving
written notice of termination to such Paying Agent, to the Registrar, to the
Bank and to the Borrower. Upon receiving such a notice of resignation or upon
such termination, or in case at any time any Paying Agent shall cease to be
eligible under this Section, the Trustee may appoint a successor Paying Agent.
The Trustee shall give written notice of appointment of a successor Paying Agent
to the Borrower, the Issuer, the Bank and the Registrar and shall mail, within
ten (10) days after that appointment, notice thereof to the Holders of such
Bonds for which such successor is Paying Agent as their names and addresses
appear on the Register on the date of that appointment.
Any successor Paying Agent shall be a trust company or a commercial bank
authorized to conduct business in the State, and shall have a reported capital
and surplus of not less than $50,000,000.
The Borrower shall pay to any Paying Agent from time to time customary
compensation as authorized in Section 6.03 hereof for its services.
The provisions of Section 3.05 and 3.06 and Subsection 6.02(d) hereof shall
be applicable to any Paying Agent.
Section 6.13. DESIGNATION AND SUCCESSION OF AUTHENTICATING AGENTS. The
Fifth Third Bank is hereby appointed Authenticating Agent for purposes of this
Indenture. With the consent of the Issuer, the Trustee may appoint an
Authenticating Agent or Agents, in addition to the Registrar, with power to act
on its behalf and subject to its direction in the authentication and delivery of
- 63 -
Bonds in connection with transfers and exchanges under Sections 3.06 and 4.02
hereof. For all purposes of this Indenture, the authentication and delivery of
Bonds by an Authenticating Agent pursuant to this Section shall be deemed to be
authentication and delivery of those Bonds by the Trustee.
Any corporation or association with or into which any Authenticating Agent
may be merged or converted or with which it may be consolidated, or any
corporation or association resulting from any merger, consolidation or
conversion to which any Authenticating Agent shall be a party, or any
corporation or association succeeding to the trust business of any
Authenticating Agent, shall be the successor of that Authenticating Agent
hereunder, if that successor corporation or association is otherwise eligible
hereunder, without the execution or filing of any paper or any further act on
the part of the parties hereto or the Authenticating Agent or such successor
corporation or association.
Any Authenticating Agent may at any time resign by giving written notice of
resignation to the Trustee, to the Registrar, to the Bank, to the Issuer and to
the Borrower. The Trustee may at any time terminate the agency of any
Authenticating Agent, by giving written notice of termination to such
Authenticating Agent, to the Issuer, to the Registrar, to the Bank and to the
Borrower. Upon receiving such a notice of resignation or upon such a
termination, or in case at any time any Authenticating Agent shall cease to be
eligible under this Section, the Trustee may appoint a successor Authenticating
Agent. The Trustee shall give written notice of appointment of a successor
Authenticating Agent to the Borrower, the Issuer, the Bank and the Registrar and
shall mail, within ten (10) days after that appointment, notice thereof to the
Holders of such Bonds for which such successor is Authenticating Agent as their
names and addresses appear on the Register on the date of that appointment.
The Borrower shall pay to any Authenticating Agent from time to time
customary compensation for its services.
The provisions of Section 3.05 and 3.06 and Subsections 6.02(b), (c), (d),
(h) and (i) hereof shall be applicable to any Authenticating Agent.
Section 6.14. DEALING IN BONDS. The Trustee, the Bank, a Registrar, a
Paying Agent and an Authenticating Agent, their affiliates, and any directors,
officers, partners, employees or agents thereof, in good faith, may become the
owners of Bonds secured hereby with the same rights which it or they would have
hereunder if the Trustee, the Registrar, the Bank, a Paying Agent or an
Authenticating Agent did not serve in those capacities.
Section 6.15. REPRESENTATIONS, AGREEMENTS AND COVENANTS OF TRUSTEE. The
Trustee hereby represents that it is an Indiana banking corporation duly
organized and validly existing under the laws of the State of Indiana and duly
authorized to exercise corporate trust powers in the State, and that it has an
unimpaired reported capital and surplus of not less than $50,000,000. The
Trustee covenants that it will take such action, if any, as is necessary to
remain duly authorized
- 64 -
to exercise corporate trust powers in the State and that it will maintain an
unimpaired reported capital and surplus of not less than $50,000,000. The
Trustee accepts and agrees to observe and perform the duties and obligations of
the Trustee to which reference is made in any instrument or document providing
security for any of the Bonds.
Section 6.16. INTERPLEADER. In the event of a dispute between any of the
parties hereto with respect to the disposition of any funds held by the Trustee
hereunder, or the Trustee received conflicting demands made upon the Trustee
with respect to the Trustee's duties hereunder or any other document related to
the Bonds, the Trustee shall be entitled to file a suit in interpleader in a
court of competent jurisdiction seeking to require the parties to interplead and
litigate in such court their several claims and rights among themselves. Upon
the filing of such a suit and the deposit of the applicable funds to such court,
the Trustee will IPSO FACTO be fully released and discharged from all
obligations to further perform any and all duties imposed hereunder or any other
document related to the Bonds regarding such matter and/or such funds that are
the subject of such interpleader suit. In the event that the Trustee remains as
Trustee under this Indenture and receives a court order, directive or other
request regarding the interpleader order, the Trustee shall be entitled to rely
upon such instruction without incurring any obligation or liability and the
parties hereto release, hold harmless and indemnify the Trustee for any
obligation or liability for so relying on such court instruction.
Section 6.17. CONCERNING THE REMARKETING AGENT. Everen Securities, Inc.
is hereby appointed the Remarketing Agent by the Issuer. Any subsequent
Remarketing Agent shall be appointed by the Issuer, with the approval of the
Borrower and the Bank and shall meet the qualifications set forth in this
Section and Section 6.18 hereof and shall act as the agent of the Issuer
pursuant to the provisions hereof. The Remarketing 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 Issuer, the Bank, the Borrower and the Trustee. In addition,
the Remarketing Agent will agree particularly to:
(a) compute the Weekly Interest Rate, the One Month Interest Rate, the
Three Month Interest Rate, the Six Month Interest Rate, the One Year Interest
Rate, the Five Year Interest Rate and the Fixed Interest Rate, as applicable,
and give notices of such computations to the Trustee on each applicable Interest
Rate Determination Date, all in accordance with this Indenture; and
(b) keep such records relating to its computations of interest rates for
the Refunding Bonds as shall be consistent with prudent industry practice and to
make such records available for inspection by the Issuer, the Trustee, the Bank
and the Borrower at all reasonable times.
The Remarketing Agent shall be entitled to advice of legal counsel on any
matter relating to the Remarketing Agent's obligations hereunder and shall be
entitled to act upon the opinion of such counsel in the exercise of reasonable
care in fulfilling such obligations.
- 65 -
The Remarketing Agent shall, with the consent of the Borrower, be entitled
to appoint additional co-Remarketing Agents to assist in the performance of the
Remarketing Agent's obligations under this Indenture, and any such appointment
shall be effective without any action by the Issuer or the Bank being necessary;
provided that any such co-Remarketing Agent, shall have a capitalization of at
least $5,000,000, or shall have a line of credit with a commercial bank in the
amount of at least $5,000,000, shall be in conformity with all standards and
requirements of the Municipal Securities Rulemaking Board and the Securities and
Exchange Commission, and shall be authorized by law to perform all the duties
imposed upon it by this Indenture. Gates Capital Corporation is hereby
appointed as an initial co-Remarketing Agent.
Section 6.18. QUALIFICATIONS OF REMARKETING AGENT. The Remarketing Agent
shall have a capitalization of at least $5,000,000, or have a line of credit
with a commercial bank in the amount of at least $5,000,000, and shall be
authorized by law to perform all the duties imposed upon it by this Indenture.
The Remarketing Agent may at any time resign and be discharged of the duties and
obligations created by this Indenture by giving at least thirty (30) days'
notice of such resignation to the Issuer, the Borrower, the Bank and the
Trustee. The Remarketing Agent may be removed at any time by the Issuer (on its
own or with the approval of the Borrower) and the written consent of the Bank.
To effect such removal, the Issuer shall give at least thirty (30) days' notice
of such removal to the Remarketing Agent, the Borrower, the Bank and the
Trustee.
Upon any resignation of the Remarketing Agent, the departing Remarketing
Agent shall pay over, assign and deliver any moneys and Refunding Bonds held by
it in such capacity to its successor or, if there be no successor, to the
Trustee.
In the event that the Remarketing Agent shall resign, or be removed or
dissolved, or if the property or affairs of the Remarketing Agent shall be taken
under the control of any state or federal court or administrative body because
of bankruptcy or insolvency, or for any other reason, and the Issuer shall not
have appointed a successor Remarketing Agent, the Trustee shall implement the
purchase of Refunding Bonds, tendered pursuant to the provisions of this
Indenture, pursuant to a draw on the Letter of Credit as provided for in Section
5.03 hereof.
The Trustee, within thirty (30) days of the resignation or removal of the
Remarketing Agent or the appointment of a successor Remarketing Agent, shall
give notice thereof by registered or certified mail to the applicable Rating
Service (if the Refunding Bonds have been rated) and to the registered Holders
of the Refunding Bonds.
Section 6.19. REMARKETING OF REFUNDING BONDS. No later than 3:00 p.m.
local time at the principal corporate trust office of the Registrar (a) on the
eighth Business Day prior to each Bond Purchase Date while the Refunding Bonds
bear interest at the Three Month Interest Rate, the Six Month Interest Rate, the
One Year Interest Rate or the Five Year Interest Rate, or (b) the sixth calendar
day prior to each Bond Purchase Date or the next succeeding Business Day if such
sixth day is not a Business Day while the Refunding Bonds bear interest at the
Weekly Interest Rate,
- 66 -
or (c) the fifth Business Day prior to each Bond Purchase Date while the
Refunding Bonds bear interest at the One Month Interest Rate, the Trustee shall
give notice to the Remarketing Agent by telephone or telecopy, confirmed on the
same day in writing, which states (i) the name and address of each Holder or
Beneficial Owner which has given notice of exercise of an option with respect to
such Bond Purchase Date as provided in paragraph (c) of Section 2.04 hereof, and
the principal amount of Refunding Bonds or Beneficial Ownership Interests to be
tendered by such Holder or Beneficial Owner or deemed tendered by such Holder or
Beneficial Owner, and (ii) the aggregate principal amount of Refunding Bonds or
Beneficial Ownership Interests which are deemed to be tendered pursuant to
Sections 2.05 or 2.06 hereof. Additionally, no later than 1:00 p.m. local time
at the principal corporate trust office of the Registrar on the eighth Business
Day or the fifth Business Day, whichever is applicable, prior to each Bond
Purchase Date upon which there is a mandatory tender of Refunding Bonds or
Beneficial Ownership Interests pursuant to Sections 2.05 or 2.06 hereof, the
Trustee shall give notice to the Remarketing Agent by telephone, telecopy or in
writing, which states the aggregate principal amount of Refunding Bonds or
Beneficial Ownership Interests with respect to which the Trustee has not
received an election to retain pursuant to Sections 2.05 or 2.06 hereof.
Based upon such notices from the Trustee, the Remarketing Agent shall use
its best efforts to sell all Refunding Bonds or Beneficial Ownership Interests,
as applicable, tendered pursuant to Sections 2.04, 2.05 and 2.06 hereof for
settlement on the applicable Bond Purchase Date, except if an Event of Default
has occurred and is continuing under this Indenture. Except as hereinafter
provided, any such sale shall be at such rate of discount or premium as, in the
judgment of the Remarketing Agent, having due regard to prevailing financial
market conditions, shall be necessary.
The Remarketing Agent shall have the right to remarket any Refunding Bonds
or Beneficial Ownership Interests (or portion thereof) tendered pursuant to
Sections 2.04, 2.05 or 2.06 hereof; provided, however, that no such Refunding
Bond or Beneficial Ownership Interest shall be remarketed at a price less than
100% of the principal thereof plus accrued interest (if any) without the prior
written consent of the Borrower and the Bank. The Remarketing Agent shall have
the right to purchase any Refunding Bond or Beneficial Ownership Interest
tendered or deemed tendered pursuant to Sections 2.04, 2.05 or 2.06 hereof at
100% of the principal amount thereof, and to thereafter sell such Refunding Bond
or Beneficial Ownership Interest. Any such purchase shall constitute a
remarketing hereunder.
The Remarketing Agent shall not remarket any Refunding Bond or Beneficial
Ownership Interest to the Issuer, the Borrower, any guarantor of the Bonds
(excluding the Bank) or any person which is an "insider" of the Borrower or any
such guarantor within the meaning of the United States Bankruptcy Code.
No later than 10:00 a.m. according to the local time at the principal
office of the Bank on each Bond Purchase Date, the Remarketing Agent shall pay
to the Trustee, in immediately available funds, the proceeds theretofore
received by the Remarketing Agent from the remarketing
- 67 -
of Refunding Bonds and the Beneficial Ownership Interests tendered for purchase
on such Bond Purchase Date; provided, that the Remarketing Agent may use its
best efforts to cause the purchasers of the remarketed Refunding Bonds and the
Beneficial Ownership Interests to pay the purchase price plus accrued interest
(if any) to the Trustee in immediately available funds no later than 10:00 a.m.
according to the local time at the principal office of the Bank on each Bond
Purchase Date. The proceeds from the remarketing of the Refunding Bonds and
Beneficial Ownership Interests shall be segregated from any funds of the
Borrower or the Issuer and shall in no case be considered to be, or be, assets
of the Borrower or the Issuer.
There shall be deposited in the Remarketing Reimbursement Fund, on each
Bond Purchase Date, the remarketing proceeds received by the Trustee pursuant to
this Section plus, if necessary, any moneys from a draw on the Letter of Credit
to be used to pay the purchase price of tendered Refunding Bonds and Beneficial
Ownership Interests. The Trustee shall use the amounts deposited in the
Remarketing Reimbursement Fund to pay the purchase price of tendered Refunding
Bonds and Beneficial Ownership Interests. If the Trustee fails to receive
moneys pursuant to a draw properly made on the Letter of Credit to pay the
purchase price of tendered Refunding Bonds or Beneficial Ownership Interests,
(a) any amount paid by the Bank on such draw shall be deposited in the Bond Fund
and (b) pursuant to Section 7.03 hereof, the Trustee shall declare all of the
outstanding the Bonds to be due and payable.
Section 6.20. DELIVERY OF PURCHASED REFUNDING BONDS AND REMARKETING OF
PLEDGED BONDS. No later than 11:00 a.m. or before the Business Day next
preceding each Bond Purchase Date, the Remarketing Agent, by telephonic advice,
shall notify the Trustee and the Bank of (i) the principal amount of Refunding
Bonds or Beneficial Ownership Interests to be sold by the Remarketing Agent
pursuant to Section 6.19 hereof and the purchase price, names, addresses and
social security numbers or other tax identification numbers of the proposed
purchasers thereof and (ii) the principal amount of Refunding Bonds or
Beneficial Ownership Interests tendered for purchase on such Bond Purchase Date
which will not be sold by the Remarketing Agent pursuant to Section 6.19 hereof.
Such telephonic advice shall be confirmed by written notice delivered or mailed
on the same date as the telephonic advice.
Refunding Bonds and Beneficial Ownership Interests purchased by the Trustee
on a Bond Purchase Date shall be delivered as follows:
(a) Refunding Bonds sold by the Remarketing Agent pursuant to Section
6.19 hereof shall be delivered to the purchasers thereof. With respect to
Beneficial Ownership Interests sold by the Remarketing Agent pursuant to Section
6.19 hereof, the Remarketing Agent and the Trustee shall take such actions as
may be necessary to reflect the transfer of such Beneficial Ownership Interests
to the purchasers thereof in the book entry system maintained by the Depository.
(b) Refunding Bonds and Beneficial Ownership Interests not sold by the
Remarketing Agent pursuant to Section 6.19 hereof which are purchased with the
proceeds of a drawing under
- 68 -
the Letter of Credit pursuant to Section 5.03 hereof shall be held as Pledged
Bonds, by the Trustee, as agent for the Bank, subject to any instructions from
the Bank to deliver the Pledged Bonds to the Bank and to the pledge in favor of
the Bank created pursuant to the provisions of the Reimbursement Agreement.
Pledged Bonds shall serve as collateral for the Borrower's obligations to the
Bank under the Reimbursement Agreement. Any Pledged Bonds held by the Trustee
shall not be released or transferred except to the Bank or to the Remarketing
Agent at the written direction of the Bank as provided in the last paragraph of
this Section.
Refunding Bonds or Beneficial Ownership Interests (other than Pledged
Bonds) delivered as provided in this Section shall be registered (or recorded
through the Depository) in the manner directed by the recipient thereof.
Pledged Bonds or Beneficial Ownership Interests shall be registered (or recorded
through the Depository) in the name of the Bank or its designee, as requested by
the Bank. In addition to the delivery of the Refunding Bonds or Beneficial
Ownership Interests to the recipients thereof as herein provided, the Trustee
shall deliver the due-bill checks, if any, received pursuant to Section 2.04
hereof, to the recipients of the Refunding Bonds or Beneficial Ownership
Interests.
The Trustee shall not release Pledged Bonds to the Remarketing Agent for
remarketing unless the Letter of Credit will be in an amount sufficient to pay
the principal of and the required days of interest for the applicable Interest
Rate Period at the Maximum Rate for all outstanding Refunding Bonds, including
the Pledged Bonds to be remarketed. The Remarketing Agent shall use its best
efforts to remarket Pledged Bonds, except if an Event of Default has occurred
and is continuing under this Indenture. Upon the remarketing of the Pledged
Bonds, the Remarketing Agent shall notify the Bank, the Trustee and the Borrower
of such remarketing, the name, address and social security or other tax
identification number of the purchaser, and the date (the "Placement Date") that
the purchaser shall deliver the purchase price to the Trustee or the Remarketing
Agent by 11:00 a.m. local time at the principal corporate trust office of the
Trustee. The Placement Date shall be at least two Business Days after the date
the notice of the purchase is given by the Remarketing Agent.
No later than 11:00 a.m. according to the local time at the principal
corporate trust office of the Registrar on each Placement Date, the Remarketing
Agent shall pay to the Trustee, in immediately available funds, the proceeds
theretofore received by the Remarketing Agent from the remarketing of Pledged
Bonds on such Placement Date; provided, that the Remarketing Agent may use its
best efforts to cause the purchasers of the remarketed Pledged Bonds to pay the
purchase price plus accrued interest (if any) directly to the Trustee in
immediately available funds no later than 11:00 a.m. according to the local time
at the principal corporate trust office of the Registrar on each Placement Date.
The proceeds from the remarketing of the Pledged Bonds shall be segregated from
any funds of the Borrower or the Issuer and shall in no case be considered to
be, or be, assets of the Borrower or the Issuer. The Trustee shall deposit such
funds in the Remarketing Reimbursement Fund and shall pay the Bank such funds by
wire transfer on the Placement Date. The Bank shall deliver any Pledged Bonds
held by the Bank which have been so remarketed to the Trustee against payment on
the Placement Date. With respect to any Pledged
- 69 -
Bonds not so held by the Bank, the Bank shall direct the Trustee to release such
Pledged Bonds which have been so remarketed to the Remarketing Agent against
payment therefor on the Placement Date. On the Placement Date, the Trustee
shall authenticate and deliver, if applicable, new Refunding Bonds in
replacement of the remarketed Pledged Bonds to the purchasers thereof.
Section 6.21. SURVIVAL OF CERTAIN PROVISIONS. The provisions of Sections
6.01 through 6.17 of this Indenture shall survive the release, discharge and
satisfaction of this Indenture.
Section 6.22. DELEGATION OF DUTIES. The Trustee shall have the authority
to delegate any duties, obligations or responsibilities hereunder to The Fifth
Third Bank.
(End of Article VI)
- 70 -
ARTICLE VII.
DEFAULT PROVISIONS AND REMEDIES
OF TRUSTEE AND HOLDERS
Section 7.01. DEFAULTS; EVENTS OF DEFAULT. The occurrence of any of the
following events is defined as and declared to be and to constitute an Event of
Default hereunder:.
(a) Failure to pay when due any interest on any Bond;
(b) Payment of the principal of or any premium on any Bond shall not be
made when and as that principal or premium shall become due and payable, whether
at stated maturity, by redemption, pursuant to any mandatory sinking fund
requirements, by acceleration or otherwise;
(c) Failure to pay on the Bond Purchase Date amounts due to the Holder
of any Refunding Bonds or the Beneficial Owner of any Beneficial Ownership
Interests tendered or deemed tendered to the Trustee pursuant to Section 2.04
hereof or deemed to be tendered to the Trustee pursuant to Section 2.05 or
Section 2.06 hereof;
(d) Failure by the Issuer to observe or perform any other covenant,
agreement or obligation on its part to be observed or performed contained in
this Indenture or in the Bonds, which failure shall have continued for a period
of 30 days after written notice, by registered or certified mail, to the Issuer,
the Bank and the Borrower specifying the failure and requiring that it be
remedied, which notice may be given by the Trustee in its discretion and shall
be given by the Trustee at the written request of the Bank or the Holders of not
less than 25 percent in aggregate principal amount of Bonds then outstanding;
(e) The occurrence and continuation of an Event of Default as defined in
Section 7.1 of the Agreement;
(f) Receipt by the Trustee of a written notice from the Bank that an
Event of Default has occurred and is continuing under the Reimbursement
Agreement and directing the Trustee to accelerate the maturity of the Refunding
Bonds;
(g) Failure of the Bank to honor any drawing in accordance with the
terms of the Letter of Credit;
(h) The Bank shall: (i) commence a proceeding under any Federal or
state insolvency, reorganization or similar law, or have such a proceeding
commenced against it and either have an order of insolvency or reorganization
entered against it or have the proceeding remain undismissed and unstayed for 90
days; or (ii) have a receiver, conservator, liquidator or trustee appointed for
it or for the whole or any substantial part of its property; and
- 71 -
(i) Receipt by the Trustee of written notice from the Bank by the
fifteenth day following the honoring of an interest drawing on the Letter of
Credit (including the interest portion of a drawing to pay the purchase price of
tendered Refunding Bonds) that the amount available to be drawn by the Trustee
under the Letter of Credit has not been reinstated to an amount not less than
100% of the outstanding principal of, plus 56 days' interest on the Refunding
Bonds (or 195 days' interest on the Refunding Bonds if the Interest Rate Mode on
the Refunding Bonds is six months or longer) computed at the Maximum Rate.
The term "default" or "failure" as used in this Article means (i) a default
or failure by the Issuer in the observance or performance of any of the
covenants, agreements or obligations on its part to be observed or performed
contained in this Indenture or in the Bonds, or (ii) a default or failure by the
Borrower under the Agreement, in either case, exclusive of any period of grace
or notice required to constitute a default or failure an Event of Default, as
provided above or in the Agreement.
The provisions of paragraph (h) above are subject to the conditions that
(l) none of the acts or circumstances specified therein shall constitute an
Event of Default if the Borrower, within sixty (60) days thereafter, provides an
Alternate Letter of Credit meeting the requirements of Section 5.09 hereof and
(2) the declaration of an Event of Default due to any of the acts or
circumstances specified therein, and the exercise of remedies upon any such
declaration, shall be subject to any applicable limitations of bankruptcy,
insolvency or receivership laws applicable to the Bank affecting or precluding
such declaration or exercise during the pendency of or immediately following any
bankruptcy, insolvency, receivership, liquidation or reorganization proceedings.
Section 7.02. NOTICE OF DEFAULT. If an Event of Default shall occur,
within five (5) days of obtaining notice of such Event of Default pursuant to
the terms of the Indenture, the Trustee shall give written notice of the Event
of Default, by registered or certified mail, to the Issuer, the Borrower, the
Bank, the Registrar, any Paying Agent and Authenticating Agent and the
Remarketing Agent for the Bonds..
Section 7.03. ACCELERATION. Upon the occurrence of an Event of Default as
specified in paragraphs (a), (b), (c), (f), (g), or (i) of Section 7.01 hereof,
the Trustee shall declare, by a notice in writing delivered to the Issuer and
the Borrower, the principal of all Bonds then outstanding (if not then due and
payable), together with interest accrued thereon, to be due and payable
immediately. Upon the occurrence of any other Event of Default (except an Event
of Default as specified in paragraph (h) of Section 7.01 hereof), the Trustee
shall, upon the written direction of the Bank so long as an Event of Default as
specified in paragraphs (g) or (h) of Section 7.01 hereof has not occurred and
is continuing, declare by a notice in writing delivered to the Issuer and the
Borrower the principal of all Bonds then outstanding (if not then due and
payable), together with interest accrued thereon, to be due and payable
immediately. Upon the occurrence of an Event of Default described in paragraph
(h) of Section 7.01 hereof, if there is
- 72 -
not then existing an Event of Default described in paragraphs (a), (b), (c),
(f), (g) or (i) of Section 7.01 hereof, then the Trustee, without the consent of
the Bank, may, and upon the written request of the Holders of not less than 25%
in aggregate principal amount of Bonds then outstanding shall, declare the
principal of all Bonds then outstanding, together with the interest accrued
thereon, to be due and payable immediately.
Any such declaration shall be by telephonic notice, immediately confirmed
by notice in writing, to the Issuer, the Holders (to the extent their telephone
numbers have been provided in writing to the Trustee), the Bank, the Remarketing
Agent and the Borrower, and, upon said declaration, principal and interest on
all Bonds shall become and be immediately due and payable. The Trustee
immediately upon such declaration shall give notice thereof in the same manner
as provided in Section 4.04 hereof with respect to the redemption of the Bonds.
Such notice shall specify the date on which payment of principal and interest
shall be tendered to the Holders of the Bonds. Interest shall accrue to the
payment date determined by the Trustee (which date shall be on or before seven
(7) days following the date the Trustee obtains knowledge of the Event of
Default, the occurrence of which led to the acceleration of the Bonds) pursuant
to such declaration. Upon any declaration of acceleration hereunder, the
Trustee shall immediately exercise such rights as it may have under the
Agreement and the Notes to declare all payments thereunder to be immediately due
and payable and, pursuant to paragraph (b) in Section 5.03 hereof, shall draw
upon the Letter of Credit to the full extent permitted by the terms thereof.
Section 7.04. OTHER REMEDIES; RIGHTS OF HOLDERS. With or without taking
action under Section 7.03 hereof, upon the occurrence and continuance of an
Event of Default, the Trustee may pursue any other available remedy to enforce
the payment of Bond Service Charges or the observance and performance of any
other covenant, agreement or obligation under this Indenture, the Agreement, the
Notes or any other instrument providing security, directly or indirectly, for
the Bonds, provided that the Trustee shall not pursue any such remedy without
the prior written consent of the Bank so long as no Event of Default described
in Section 7.01(g) or (h) has occurred and is continuing.
If, upon the occurrence and continuance of an Event of Default, the Trustee
is required so to do by the Holders of at least a majority in aggregate
principal amount of Bonds outstanding or by the Bank (if no Event of Default
under Section 7.01(g) or (h) has occurred and is continuing), the Trustee
(subject to the provisions of Sections 6.01 and 6.02 hereof and particularly
subparagraph 6.01(c)(iv) and Subsection 6.02(j) of those Sections) shall
exercise any rights and powers conferred by this Section and by Section 7.03
hereof. Anything in this or the next succeeding paragraph to the contrary
notwithstanding, so long as no Event of Default under Section 7.01(g) or (h)
hereof has occurred and is continuing, the Bank shall have the exclusive right
to give any such directions to the Trustee.
No remedy conferred upon or reserved to the Trustee (or to the Holders) by
this Indenture is intended to be exclusive of any other remedy. Each remedy
shall be cumulative and shall be
- 73 -
in addition to every other remedy given hereunder or otherwise to the Trustee or
to the Holders now or hereafter existing.
No delay in exercising or omission to exercise any remedy, right or power
accruing upon any default or Event of Default shall impair that remedy, right or
power or shall be construed to be a waiver of any default or Event of Default or
acquiescence therein. Every remedy, right and power may be exercised from time
to time and as often as may be deemed to be expedient.
No waiver of any default or Event of Default hereunder, whether by the
Trustee or by the Holders, shall extend to or shall affect any subsequent
default or Event of Default or shall impair any remedy, right or power
consequent thereon.
As the assignee of all right, title and interest of the Issuer in and to
the Agreement (except for the Unassigned Issuer's Rights), the Trustee is
empowered to enforce each remedy, right and power granted to the Issuer under
the Agreement. In exercising any remedy, right or power thereunder or
hereunder, the Trustee shall take any action which would best serve the
interests of the Holders in the judgment of the Trustee, applying the standards
described in Sections 6.01 and 6.02 hereof.
Section 7.05. RIGHT OF HOLDERS TO DIRECT PROCEEDINGS. Anything to the
contrary in this Indenture (other than clause (iv) below) notwithstanding, the
Holders of at least a majority in aggregate principal amount of Bonds then
outstanding shall have the right at any time to direct, by an instrument or
document or instruments or documents in writing executed and delivered to the
Trustee, the method and place of conducting all proceedings to be taken in
connection with the enforcement of the terms and conditions of this Indenture or
any other proceedings hereunder; provided, that (i) any direction shall not be
other than in accordance with the provisions of law and of this Indenture, (ii)
the Trustee shall be indemnified as provided in Sections 6.01 and 6.02 hereof,
(iii) the Trustee may take any other action which it deems to be proper and
which is not inconsistent with the direction, and (iv) anything in the foregoing
to the contrary notwithstanding, so long as no Event of Default under Section
7.01(g) or (h) hereof has occurred and is continuing, the Bank shall have the
exclusive right to give any such directions to the Trustee.
Section 7.06. APPLICATION OF MONEYS. All moneys received by the Trustee
after acceleration of the maturity of the Bonds and derived from any drawing
made upon the Letter of Credit or from the remarketing of Bonds, shall be
applied by the Trustee to and only to the payment of principal of or interest on
the Refunding Bonds. Subject to the foregoing, after payment of any costs,
expenses, liabilities and advances paid, incurred or made by the Trustee in the
collection of moneys pursuant to any right given or action taken under the
provisions of this Article or the provision of the Agreement or the Notes
(including without limitation, reasonable attorneys' fees and expenses, except
as limited by law or judicial order or decision entered in any action taken
under this Article VII) and all fees owing to the Trustee for Ordinary or
Extraordinary Services, all moneys received by the Trustee, shall be applied as
follows, subject to any provision made pursuant to Sections 4.05, 5.06 or 5.07
hereof:.
- 74 -
(a) Unless the principal of all of the Bonds shall have become, or shall
have been declared to be, due and payable, all of those moneys shall be
deposited in the Bond Fund and shall be applied:
First -- To the payment to the Holders entitled thereto of all installments
of interest then due on the Bonds, in the order of the dates of maturity of the
installments of that interest, beginning with the earliest date of maturity and
if the amount available is not sufficient to pay in full any particular
installment, then to the payment thereof ratably, according to the amounts due
on that installment, to the Holders entitled thereto, without any discrimination
or privilege, except as to any difference in the respective rates of interest
specified in the Bonds; and
Second -- To the payment to the Holders entitled thereto of the unpaid
principal of any of the Bonds which shall have become due (other than Bonds
previously called for redemption for the payment of which moneys are held
pursuant to the provisions of this Indenture), whether at stated maturity or
pursuant to any mandatory sinking fund requirements, in the order of their due
dates, beginning with the earliest due date, with interest on those Bonds from
the respective dates upon which they become due at the rates specified in those
Bonds, and if the amount available is not sufficient to pay in full all Bonds
due on any particular date, together with that interest, then to the payment
thereof ratably, according to the amounts of principal due on that date, to the
Holders entitled thereto, without any discrimination or privilege, except as to
any difference in the respective rates of interest specified in the Bonds.
(b) If the principal of all of the Bonds shall have become due or shall
have been declared to be due and payable pursuant to this Article, all of those
moneys shall be deposited into the Bond Fund and shall be applied to the payment
of the principal and interest then due and unpaid upon the Bonds, without
preference or priority of principal over interest, of interest over principal,
of any installment of interest over any other installment of interest, or of any
Bond over any other Bond, ratably, according to the amounts due respectively for
principal and interest, to the Holders entitled thereto, without any
discrimination or privilege, except as to any difference in the respective rates
of interest specified in the Bonds.
(c) If the principal of all of the Bonds shall have been declared to be
due and payable pursuant to this Article, and if that declaration thereafter
shall have been rescinded and annulled under the provisions of Section 7.10
hereof, subject to the provisions of paragraph (b) of this Section in the event
that the principal of all of the Bonds shall become due and payable later, the
moneys shall be deposited in the Bond Fund and shall be applied in accordance
with the provisions of Article V hereof.
(d) Whenever moneys are to be applied pursuant to the provisions of this
Section, those moneys shall be applied at such times, and from time to time, as
the Trustee shall determine, having due regard to the amount of moneys available
for application and the likelihood of additional moneys becoming available for
application in the future. Whenever the Trustee shall
- 75 -
direct the application of those moneys, it shall fix the date upon which the
application is to be made, and upon that date, interest shall cease to accrue on
the amounts of principal, if any, to be paid on that date, provided the moneys
are available therefor. The Trustee shall give notice of the deposit with it of
any moneys and of the fixing of that date, all consistent with the requirements
of Section 3.05 hereof for the establishment of, and for giving notice with
respect to, a Special Record Date for the payment of overdue interest. The
Trustee shall not be required to make payment of principal of and any premium on
a Bond to the Holder thereof, until the Bond shall be presented to the Trustee
for appropriate endorsement or for cancellation if it is paid fully, subject to
the provisions of Section 3.06 hereof.
Section 7.07. REMEDIES VESTED IN TRUSTEE. All rights of action (including
without limitation, the right to file proof of claims) under this Indenture or
under any of the Bonds may be enforced by the Trustee without the possession of
any of the Bonds or the production thereof in any trial or other proceeding
relating thereto. Any suit or proceeding instituted by the Trustee shall be
brought in its name as Trustee without the necessity of joining any Holders as
plaintiffs or defendants. Any recovery of judgment shall be for the benefit of
the Holders of the outstanding Bonds, subject to the provisions of this
Indenture.
Section 7.08. RIGHTS AND REMEDIES OF HOLDERS. A Holder shall not have any
right to institute any suit, action or proceeding for the enforcement of this
Indenture, for the execution of any trust hereof, or for the exercise of any
other remedy hereunder, unless:.
(a) there has occurred and be continuing an Event of Default of which
the Trustee has been notified, as provided in paragraph (f) of Section 6.02
hereof, or of which it is deemed to have notice under that paragraph,
(b) the Holders of at least twenty-five percent (25%) in aggregate
principal amount of Bonds then outstanding shall have made written request to
the Trustee and shall have afforded the Trustee reasonable opportunity to
proceed to exercise the remedies, rights and powers granted herein or to
institute the suit, action or proceeding in its own name, and shall have offered
indemnity to the Trustee as provided in Sections 6.01 and 6.02 hereof, and
(c) the Trustee thereafter shall have failed or refused to exercise the
remedies, rights and powers granted herein or to institute the suit, action or
proceeding in its own name.
At the option of the Trustee, that notification (or notice), request,
opportunity and offer of indemnity are conditions precedent in every case, to
the institution of any suit, action or proceeding described above. Anything in
the foregoing to the contrary notwithstanding, no Holder of any Bond shall have
any right to institute any suit, action or proceeding at law or in equity for
the enforcement of this Indenture or for the execution of any trust hereof or
for the appointment of a receiver or any other remedy hereunder unless an Event
of Default under Section 7.01(g) or (h) hereof shall have occurred and be
continuing.
- 76 -
No one or more Holders of the Bonds shall have any right to affect, disturb
or prejudice in any manner whatsoever the security or benefit of this Indenture
by its or their action, or to enforce, except in the manner provided herein, any
remedy, right or power hereunder. Any suit, action or proceedings shall be
instituted, had and maintained in the manner provided herein for the benefit of
the Holders of all Bonds then outstanding. Nothing in this Indenture shall
affect or impair, however, the right of any Holder to enforce the payment of the
Bond Service Charges on any Bond owned by that Holder at and after the maturity
thereof, at the place, from the sources and in the manner expressed in that
Bond.
Section 7.09. TERMINATION OF PROCEEDINGS. In case the Trustee shall have
proceeded to enforce any remedy, right or power under this Indenture in any
suit, action or proceedings, and the suit, action or proceedings shall have been
discontinued or abandoned for any reason, or shall have been determined
adversely to the Trustee; the Issuer, the Trustee, the Bank and the Holders
shall be restored to their former positions and rights hereunder, respectively,
and all rights, remedies and powers of the Trustee shall continue as if no suit,
action or proceedings had been taken.
Section 7.10. WAIVERS OF EVENTS OF DEFAULT. Except as hereinafter
provided, at any time, in its discretion, the Trustee, but only with the express
written consent of the Bank, other than in the case of an Event of Default
described in Section 7.01(a), (b), (c), (g) or (h) hereof, may waive any Event
of Default hereunder and its consequences and may rescind and annul any
declaration of maturity of principal of the Bonds. The Trustee shall do so upon
the written request of the Bank (other than in the case of an Event of Default
described in Section 7.01 (a), (b), (c), (g) or (h) hereof). Notwithstanding
the foregoing, prior to waiving any Event of Default described in Section
7.01(f) or (i) hereof, the Trustee shall have received written confirmation from
the Bank that (i) the Bank has annulled the declaration of maturity of principal
of the Bonds and (ii) the Letter of Credit has been reinstated to an amount not
less than 100% of the outstanding principal of, plus 56 days interest (or 195
days interest if the Interest Rate Mode on the Refunding Bonds is six months or
longer) on, the Refunding Bonds computed at the Maximum Rate. .
There shall not be so waived, however, any Event of Default described in
paragraphs (a), (b), (c), (g) or (h) of Section 7.01 hereof or any declaration
of acceleration in connection therewith rescinded or annulled except (i) if such
Event of Default shall have been cured and (ii) with the written consent of the
Holders of a majority in aggregate principal amount of all Bonds then
outstanding and of the Bank. In the case of the waiver or rescission and
annulment, or in case any suit, action or proceedings taken by the Trustee on
account of any Event of Default shall have been discontinued, abandoned or
determined adversely to it; the Issuer, the Trustee, the Bank and the Holders
shall be restored to their former positions and rights hereunder, respectively.
No
- 77 -
waiver or rescission shall extend to any subsequent or other Event of Default or
impair any right consequent thereon.
Section 7.11. EXPENSES AND SERVICES AFTER AN EVENT OF DEFAULT. When the
Trustee incurs expenses or renders services after the occurrence of an Event of
Default described in this Article VII, the expenses and compensation for
services are intended to constitute expenses of administration under any
bankruptcy law.
(End of Article VII)
- 78 -
ARTICLE VIII.
SUPPLEMENTAL INDENTURES
SECTION 8.01. SUPPLEMENTAL INDENTURES GENERALLY. The Issuer and the
Trustee may enter into indentures supplemental to this Indenture, as provided in
this Article and pursuant to the other provisions therefor in this Indenture.
Section 8.02. SUPPLEMENTAL INDENTURES NOT REQUIRING CONSENT OF HOLDERS.
Without the consent of, or notice to, any of the Holders, the Issuer and the
Trustee, but with the prior consent of the Borrower and the Bank (except if an
Event of Default as specified in paragraphs (g) or (h) of Section 7.01 hereof
shall have occurred and is continuing), may enter into indentures supplemental
to this Indenture which shall not, in the opinion of the Trustee, be
inconsistent with the terms and provisions hereof for any one or more of the
following purposes:.
(a) To cure any ambiguity, inconsistency or formal defect or omission in
this Indenture;
(b) To grant to or confer upon the Trustee for the benefit of the
Holders any additional rights, remedies, powers or authority that lawfully may
be granted to or conferred upon the Holders or the Trustee;
(c) To assign additional revenues under this Indenture;
(d) To accept additional security and instruments and documents of
further assurance with respect to the Project;
(e) To add to the covenants, agreements and obligations of the Issuer
under this Indenture, other covenants, agreements and obligations to be observed
for the protection of the Holders, or to surrender or limit any right, power or
authority reserved to or conferred upon the Issuer in this Indenture including,
without limitation, the limitation of rights of redemption so that in certain
instances Bonds of different series will be redeemed in some prescribed
relationship to one another for the protection of the Holders of a particular
series of Bonds;
(f) To evidence any succession to the Issuer and the assumption by its
successor of the covenants, agreements and obligations of the Issuer under this
Indenture, the Agreement and the Bonds;
(g) To permit the exchange of Bonds, at the option of the Holder or
Holders thereof, for coupon Bonds of the same series payable to bearer, in an
aggregate principal amount not exceeding the unmatured and unredeemed principal
amount of the Predecessor Bonds, bearing interest at the same rate or rates and
maturing on the same date or dates, with coupons attached
- 79 -
representing all unpaid interest due or to become due thereon if, in the opinion
of Bond Counsel selected by the Borrower and acceptable to the Trustee, that
exchange would not result in the interest on any of the Bonds outstanding
becoming subject to federal income taxation;
(h) To permit the Trustee to comply with any obligations imposed upon it
by law;
(i) To specify further the duties and responsibilities of, and to define
further the relationship among, the Trustee, the Registrar, the Remarketing
Agent and any Authenticating Agent or Paying Agent;
(j) To achieve compliance of this Indenture with any applicable federal
securities or tax law;
(k) To evidence the appointment of a new Remarketing Agent;
(l) To make necessary or advisable amendments or additions in connection
with the issuance of Additional Bonds in accordance with Section 2.08 hereof as
do not adversely affect the Holders of outstanding Bonds;
(m) To permit any other amendment which, in the judgment of the Trustee,
is not to the prejudice of the Trustee or the Holders including, but not limited
to, changes required in order to obtain or maintain a rating on any series of
Bonds from a Rating Service; and
(n) To accept a Supplemental Credit Facility as provided in Section 8.04
hereof.
The Trustee may also accept, without the consent of or notice to any of the
Holders, an Alternate Letter of Credit or any amendments to the Letter of Credit
necessary to continue the effectiveness of the Letter of Credit as originally
intended or which in the judgment of the Trustee are not to the prejudice of the
Holders.
The provisions of Subsections 8.02(h) and (j) hereof shall not be deemed to
constitute a waiver by the Trustee, the Registrar, the Issuer or any Holder of
any right which it may have in the absence of those provisions to contest the
application of any change in law to this Indenture or the Bonds.
Section 8.03. SUPPLEMENTAL INDENTURES REQUIRING CONSENT OF HOLDERS.
Exclusive of Supplemental Indentures to which reference is made in Section 8.02
hereof and subject to the terms, provisions and limitations contained in this
Section, and not otherwise, with the consent of the Holders of not less than a
majority in aggregate principal amount of the Bonds at the time outstanding,
evidenced as provided in this Indenture, with the consent of the Borrower and
the Bank (except if an Event of Default as specified in paragraphs (g) or (h) of
Section 7.01 hereof shall have occurred and is continuing), the Issuer and the
Trustee may execute and deliver Supplemental Indentures adding any provisions
to, changing in any manner or eliminating any of
- 80 -
the provisions of this Indenture or any Supplemental Indenture or restricting in
any manner the rights of the Holders. Nothing in this Section or Section 8.02
hereof shall permit, or be construed as permitting:
(a) without the consent of the Holder of each Bond so affected and the
consent of the Bank (except if an Event of Default as specified in paragraphs
(g) or (h) of Section 7.01 hereof shall have occurred and is continuing), (i) an
extension of the maturity of the principal of or the interest on any Bond, (ii)
a reduction in the principal amount of any Bond or the rate of interest or
premium thereon, or (iii) a reduction in the amount or extension of the time of
paying of any mandatory sinking fund requirements, or
(b) without the consent of the Holders of all Bonds then outstanding and
the consent of the Bank (except if an Event of Default as specified in
paragraphs (g) or (h) of Section 7.01 hereof shall have occurred and is
continuing), (i) the creation of a privilege or priority of any Bond or Bonds
over any other Bond or Bonds, or (ii) a reduction in the aggregate principal
amount of the Bonds required for consent to a Supplemental Indenture.
If the Issuer shall request that the Trustee execute and deliver any
Supplemental Indenture for any of the purposes of this Section, upon (i) being
satisfactorily indemnified with respect to its fees and expenses in connection
therewith, and (ii) receipt of the Borrower's and Bank's consent to the proposed
execution and delivery of the Supplemental Indenture, the Trustee shall cause
notice of the proposed execution and delivery of the Supplemental Indenture to
be mailed by first class mail, postage prepaid, to all Holders of Bonds then
outstanding at their addresses as they appear on the Register at the close of
business on the fifteenth day preceding that mailing.
The Trustee shall not be subject to any liability to any Holder by reason
of the Trustee's failure to mail, or the failure of any Holder to receive, the
notice required by this Section. Any failure of that nature shall not affect
the validity of the Supplemental Indenture when there has been consent thereto
as provided in this Section. The notice shall set forth briefly the nature of
the proposed Supplemental Indenture and shall state that copies thereof are on
file at the principal corporate trust office of the Trustee for inspection by
all Holders.
If the Trustee shall receive, within a period prescribed by the Issuer, of
not less than sixty (60) days, but not exceeding one year, following the mailing
of the notice, an instrument or document or instruments or documents, in form to
which the Trustee does not reasonably object, purporting to be executed by the
Holders of the required percentage in aggregate principal amount of the Bonds
then outstanding (which instrument or document or instruments or documents shall
refer to the proposed Supplemental Indenture in the form described in the notice
and specifically shall consent to the Supplemental Indenture in substantially
that form), the Trustee shall, but shall not otherwise, execute and deliver the
Supplemental Indenture in substantially the form to which reference is made in
the notice as being on file with the Trustee, without liability or
responsibility to any Holder, regardless of whether that Holder shall have
consented thereto.
- 81 -
Any consent shall be binding upon the Holder of the Bond giving the consent
and, anything herein to the contrary notwithstanding, upon any subsequent Holder
of that Bond and of any Bond issued in exchange therefor (regardless of whether
the subsequent Holder has notice of the consent to the Supplemental Indenture).
A consent may be revoked in writing, however, by the Holder who gave the consent
or by a subsequent Holder of the Bond by a revocation of such consent received
by the Trustee prior to the execution and delivery by the Trustee of the
Supplemental Indenture. At any time after the Holders of the required
percentage of Bonds shall have filed their consents to the Supplemental
Indenture, the Trustee shall make and file with the Issuer a written statement
that the Holders of the required percentage of Bonds have filed those consents.
That written statement shall be conclusive evidence that the consents have been
so filed.
If the Holders of the required percentage in aggregate principal amount of
Bonds outstanding shall have consented to the Supplemental Indenture, as
provided in this Section, no Holder shall have any right (a) to object to (i)
the execution or delivery of the Supplemental Indenture, (ii) any of the terms
and provisions contained therein, or (iii) the operation thereof, (b)to question
the propriety of the execution and delivery thereof, or (c) to enjoin or
restrain the Trustee or the Issuer from that execution or delivery or from
taking any action pursuant to the provisions thereof.
So long as an Event of Default as specified in paragraphs (g) or (h) of
Section 7.01 hereof shall not have occurred and is continuing, and the Bank
consents in writing to such Supplemental Indenture, consent of the Holders of
the Bonds will not be required under this Section 8.03 except for the consent
required under paragraphs (a) or (b) of this Section 8.03.
Section 8.04. ACCEPTANCE OF SUPPLEMENTAL CREDIT FACILITY. Upon the
request of the Borrower, the Trustee will accept a Supplemental Credit Facility
presented by the Borrower in order to obtain or maintain a rating on the Bonds,
provided the Trustee is provided with the following:.
(a) An opinion of Bond Counsel selected by the Borrower and acceptable
to the Trustee to the effect that acceptance of the proposed Supplemental Credit
Facility will not impair the exemption of interest on the Bonds from Federal
income taxation;
(b) Written evidence reasonably satisfactory to the Trustee, that upon
issuance and delivery of the Supplemental Credit Facility, the Bonds will be
rated by a Rating Agency in one of its three highest rating categories; and
(c) The written consent of the entity which will be the Bank after the
acceptance of such Supplemental Credit Facility.
Section 8.05. CONSENT OF BORROWER AND BANK. Anything contained herein to
the contrary notwithstanding, a Supplemental Indenture executed and delivered in
accordance with this Article VIII shall not become effective unless and until
the Borrower and the Bank (except if an Event
- 82 -
of Default as specified in paragraphs (g) or (h) of Section 7.01 hereof shall
have occurred and is continuing) shall consent in writing to the execution and
delivery of that Supplemental Indenture.
Section 8.06. AUTHORIZATION TO TRUSTEE; EFFECT OF SUPPLEMENT. The Trustee
is authorized to join with the Issuer in the execution and delivery of any
Supplemental Indenture in accordance with this Article and to make the further
agreements and stipulations which may be contained therein. Thereafter,.
(a) that Supplemental Indenture shall form a part of this Indenture;
(b) all terms and conditions contained in that Supplemental Indenture as
to any provision authorized to be contained therein shall be deemed to be a part
of the terms and conditions of this Indenture for any and all purposes;
(c) this Indenture shall be deemed to be modified and amended in
accordance with the Supplemental Indenture; and
(d) the respective rights, duties and obligations under this Indenture
of the Issuer, the Borrower, the Trustee, the Bank, the Registrar, any Paying
Agent, any Authenticating Agent, the Remarketing Agent and all Holders of Bonds
then outstanding shall be determined, exercised and enforced hereunder in a
manner which is subject in all respects to those modifications and amendments
made by the Supplemental Indenture.
Express reference to any executed and delivered Supplemental Indenture may
be made in the text of any Bonds issued thereafter, if that reference is deemed
necessary or desirable by the Trustee or the Issuer. A copy of any Supplemental
Indenture for which provision is made in this Article, shall be mailed by the
Trustee to the Registrar, the Bank, the Remarketing Agent, each Authenticating
Agent and Paying Agent. The Trustee shall not be required to execute any
Supplemental Indenture containing provisions adverse to the Trustee.
Section 8.07. OPINION OF COUNSEL. The Trustee shall be entitled to
receive, and shall be fully protected in relying upon, the opinion of any
counsel approved by it as conclusive evidence that (i) any proposed Supplemental
Indenture complies with the provisions of this Indenture, and (ii) it is proper
for the Trustee to join in the execution of that Supplemental Indenture under
the provisions of this Article. That counsel may be counsel for the Issuer or
the Borrower.
Section 8.08. MODIFICATION BY UNANIMOUS CONSENT. Notwithstanding anything
contained elsewhere in this Indenture, the rights and obligations of the Issuer
and of the Holders, and the terms and provisions of the Bonds and this Indenture
or any Supplemental Indenture, may be modified or altered in any respect with
the consent of (i) the Issuer, (ii) the Holders of all of the Bonds then
outstanding, (iii) the Bank (except if an Event of Default as specified in
paragraphs
- 83 -
(g) or (h) of Section 7.01 hereof shall have occurred and is continuing), (iv)
the Borrower, and (v) if such modifications or alterations contain provisions
adverse to the Trustee, the Trustee.
(End of Article VIII)
- 84 -
ARTICLE IX.
DEFEASANCE
Section 9.01. RELEASE OF INDENTURE. If (i) the Issuer shall pay all of
the outstanding Bonds, or shall cause them to be paid and discharged, or if
there otherwise shall be paid to the Holders of the outstanding Bonds all Bond
Service Charges due or to become due thereon, and (ii) provision also shall be
made for the payment of all other sums payable hereunder or under the Agreement
and the Notes, then this Indenture shall cease, determine and become null and
void (except for those provisions surviving by reason of Section 9.03 hereof in
the event the Bonds are deemed paid and discharged pursuant to Section 9.02
hereof), and the covenants, agreements and obligations of the Issuer hereunder
shall be released, discharged and satisfied..
Thereupon, and subject to the provisions of Section 9.03 hereof, if
applicable,
(i) the Trustee shall release this Indenture (except for those
provisions surviving by reason of Section 9.03 hereof), and shall execute
and deliver to the Issuer any instruments or documents in writing as shall
be requisite to evidence that release and discharge or as reasonably may be
requested by the Issuer, and
(ii) the Trustee and any other Paying Agents shall assign and
deliver to the Borrower any property subject at the time to the lien of
this Indenture which then may be in their possession, except amounts in the
Bond Fund required (a) to be paid to the Bank under Section 5.08 hereof, or
(b) to be held by the Trustee and the Paying Agents under Section 5.07
hereof or otherwise for the payment of Bond Service Charges.
Section 9.02. PAYMENT AND DISCHARGE OF BONDS. All or any part of the
Bonds shall be deemed to have been paid and discharged within the meaning of
this Indenture, including without limitation, Section 9.01 hereof, if:.
(a) the Trustee as paying agent and any Paying Agents shall have
received, in trust for and irrevocably committed thereto, sufficient moneys
which are Eligible Funds or the proceeds of drawings under the Letter of Credit
used to make such payment, or other moneys if accompanied by an opinion of
bankruptcy counsel in a form acceptable to the Trustee and the Rating Service
(if any) for the Bonds, or
(b) the Trustee shall have received, in trust for and irrevocably
committed thereto, noncallable Government Obligations (purchased with Eligible
Funds or the proceeds of drawings under the Letter of Credit, or other moneys if
accompanied by an opinion of bankruptcy counsel in a form acceptable to the
Trustee and the Rating Service (if any) for the Bonds) which are certified by an
independent public accounting firm of national reputation to be of such
maturities or redemption dates and interest payment dates, and to bear such
interest, as will be sufficient
- 85 -
together with any moneys to which reference is made in subparagraph (a) above,
without further investment or reinvestment of either the principal amount
thereof or the interest earnings therefrom (which earnings are to be held
likewise in trust and so committed, except as provided herein), for the payment
of all Bond Service Charges on those Bonds, on and to the next Interest Rate
Adjustment Date, maturity date or prior redemption date, as the case may be;
provided, if any of those Bonds are to be redeemed prior to the maturity
thereof, notice of that redemption shall have been duly given or irrevocable
provision satisfactory to the Trustee shall have been duly made for the giving
of that notice; and further provided that no Bonds, or any part thereof, shall
be deemed to have been paid and discharged within the meaning of this Section
9.02 (i) if the Interest Rate Mode of such Bonds is other than the Fixed
Interest Rate or the Weekly Interest Rate, unless such Bonds are to be redeemed
on or prior to the next Interest Rate Adjustment Date for such Bonds and notice
of that redemption shall have been duly given or irrevocable provision
satisfactory to the Trustee shall have been duly made for the giving of that
notice, or (ii) if the Interest Rate Mode of such Bonds is a Weekly Interest
Rate.
Notwithstanding anything herein to the contrary, if any Bonds are then
rated by a Rating Service, no such Bonds shall be deemed to have been paid and
discharged by reason of any deposit pursuant to paragraphs (a) and/or (b) above
(other than any deposit of moneys, or Government Obligations purchased with
moneys, which are the proceeds of drawings under the Letter of Credit) unless
each such Rating Service shall have confirmed in writing to the Trustee that its
rating will not be withdrawn or lowered as the result of any such deposit.
Any moneys held by the Trustee in accordance with the provisions of this
Section may be invested by the Trustee at the written direction of the Borrower
only in noncallable Government Obligations having maturity dates, or having
redemption dates which, at the option of the Holder of those obligations, shall
be not later than the date or dates at which moneys will be required for the
purposes described above. To the extent that any income or interest earned by,
or increment to, the investments held under this Section is determined from time
to time by an independent public accounting firm of national reputation to be in
excess of the amount required to be held by the Trustee for the purposes of this
Section, that income interest or increment shall be transferred at the time of
that determination in the manner provided in Section 5.08 hereof for transfers
of amounts remaining in the Bond Fund.
If any Bonds shall be deemed paid and discharged pursuant to this Section
9.02, then within fifteen (15) days after such Bonds are so deemed paid and
discharged the Trustee shall cause a written notice to be given to each Holder
thereof as shown on the Register on the date on which such Bonds are deemed paid
and discharged. Such notice shall state the numbers of the Bonds deemed paid
and discharged or state that all Bonds of a particular series are deemed paid
and discharged, set forth a description of the obligations held pursuant to
subparagraph (b) of the first paragraph of this Section 9.02 and specify any
date or dates on which any of the Bonds are to be called for redemption pursuant
to notice of redemption given or irrevocable provisions made for such notice
pursuant to the first paragraph of this Section 9.02.
- 86 -
Section 9.03. SURVIVAL OF CERTAIN PROVISIONS. Notwithstanding the
foregoing, any provisions of the Bond Legislation and this Indenture which
relate to the maturity of Bonds, interest payments and dates thereof, optional
and mandatory redemption provisions, credit against mandatory sinking fund
requirements, exchange, transfer and registration of Bonds, replacement of
mutilated, destroyed, lost or stolen Bonds, the safekeeping and cancellation of
Bonds, non-presentment of Bonds, the holding of moneys in trust, the Rebate
Fund, and repayments to the Bank from the Bond Fund, and the rights and duties
of the Trustee, the Remarketing Agent, the Registrar, any Authenticating Agents
and any Paying Agents, in connection with all of the foregoing, shall remain in
effect and be binding upon the Trustee, the Remarketing Agent, the Registrar,
the Authenticating Agents, any Paying Agents and the Holders notwithstanding the
release and discharge of this Indenture. The provisions of this Article shall
survive the release, discharge and satisfaction of this Indenture..
(End of Article IX)
- 87 -
ARTICLE X.
COVENANTS AND AGREEMENTS OF THE ISSUER
Section 10.01. COVENANTS AND AGREEMENTS OF THE ISSUER. In addition to any
other covenants and agreements of the Issuer contained in this Indenture or the
Bond Ordinance, the Issuer further covenants and agrees with the Holders and the
Trustee as follows:.
(a) PAYMENT OF BOND SERVICE CHARGES. The Issuer will pay all Bond
Service Charges, or cause them to be paid, solely from the sources provided
herein, on the dates, at the places and in the manner provided in this
Indenture.
(b) REVENUES AND ASSIGNMENT OF REVENUES. The Issuer will not assign the
Revenues or create or authorize to be created any debt, lien or charge thereon,
other than the assignment thereof under this Indenture.
(c) RECORDINGS AND FILINGS. At the direction and expense of the
Borrower, the Issuer will cause this Indenture, and any related instrument or
documents relating to the assignment made by it under this Indenture to secure
the Bonds, to be recorded and filed in the manner and in the places (if any)
which may be required by law in order to preserve and protect fully the security
of the Holders and the rights of the Trustee hereunder.
Not more than once every five (5) years the Trustee may reasonably request
an opinion of counsel, addressed to the Issuer and the Trustee stating that
based upon the law in effect on the date of such opinion no filing, registration
or recording and no refiling, reregistration or rerecording of any agreement or
instrument, including any financing statement or amendments thereto, or any
continuation statements or instruments of a similar character relating to the
pledges and assignments made by the Issuer or the Borrower to secure the Bonds,
is required by law, in order to fully preserve and protect the security of the
Trustee and the rights of the Trustee under the Indenture, or if such filing,
registration, recording, refiling, reregistration or rerecording is necessary,
setting forth the requirements in respect thereto. The Borrower, with such
assistance and cooperation from the Issuer as the Borrower may reasonably
request, shall take or cause to be taken all actions necessary to satisfy any
such requirements. Promptly after any filing, registration, recording,
refiling, reregistration or rerecording of any such agreement or instrument, the
Trustee may request an opinion of counsel on behalf of the Issuer and the
Trustee to the effect that such filing, registration, recording, refiling,
reregistration or rerecording has been duly accomplished and setting forth the
particulars thereof. The Borrower shall pay for the reasonable fees incurred in
connection with such opinions of counsel.
(d) INSPECTION OF BOOKS. All books, instruments and documents in the
Issuer's possession relating to the Project and the Revenues shall be open to
inspection and copying (at the expense of the Person making such copies) at all
times during the Issuer's regular business hours
- 88 -
by any accountants or other agents of the Trustee, the Borrower or the Bank
which the Trustee, the Borrower or the Bank may designate from time to time.
(e) REGISTER. At reasonable times and under reasonable regulations
established by the Registrar, the Register may be inspected and copied (at the
expense of the Person making such copies) by the Borrower, the Bank, the
Trustee, by Holders of twenty-five percent (25%) or more in aggregate principal
amount of the Bonds then outstanding, or a designated representative thereof.
(f) RIGHTS AND ENFORCEMENT OF THE AGREEMENT. The Trustee may enforce,
in its name or in the name of the Issuer, all rights for and on behalf of the
Holders, except for Unassigned Issuer's Rights, and may enforce all covenants,
agreements and obligations of the Borrower under and pursuant to the Agreement,
regardless of whether the Issuer is in default in the pursuit or enforcement of
those rights, covenants, agreements or obligations. The Issuer, however, will
do all things and take all actions on its part necessary to comply with
covenants, agreements, obligations, duties and responsibilities on its part to
be observed or performed under the Agreement, and will take all actions within
its authority to keep the Agreement in effect in accordance with the terms
thereof.
(g) FEDERAL TAX EXEMPTION. The Issuer will do all things necessary, to
the extent permitted by law and at the expense of the Borrower, to maintain the
exclusion from gross income from federal income taxation of interest on the
Series 1996 A Bonds.
Section 10.02. OBSERVANCE AND PERFORMANCE OF COVENANTS, AGREEMENTS,
AUTHORITY AND ACTIONS. The Issuer will observe and perform faithfully at all
times all covenants, agreements, authority, actions, undertakings, stipulations
and provisions to be observed or performed on its part under the Agreement, the
Indenture, the Bond Legislation and the Bonds which are executed, authenticated
and delivered under this Indenture, and under all proceedings of the Issuer
pertaining thereto.
The Issuer represents and warrants that:
(a) It is duly authorized by the laws of the State of Indiana,
particularly and without limitation the Act, to issue the Refunding Bonds, to
execute and deliver this Indenture, the Agreement and the Bond Purchase
Agreement and to provide the security for payment of the Bond Service Charges in
the manner and to the extent set forth in this Indenture.
(b) All actions required on its part to be performed for the issuance,
sale and delivery of the Refunding Bonds and for the execution and delivery by
the Issuer of this Indenture, the Agreement and the Bond Purchase Agreement have
been or will be taken duly and effectively.
- 89 -
(c) The Refunding Bonds will be valid and enforceable limited
obligations of the Issuer according to their terms.
(End of Article X)
- 90 -
ARTICLE XI.
AMENDMENTS TO THE AGREEMENT,
THE NOTE AND THE LETTER OF CREDIT
Section 11.01. AMENDMENTS NOT REQUIRING CONSENT OF HOLDERS. Without the
consent of or notice to the Holders, the Issuer and the Trustee, with the
written consent of the Bank, may consent to any amendment, change or
modification of the Agreement, a Note, or the Letter of Credit as may be
required (i) by the provisions of the Agreement, a Note, the Letter of Credit or
this Indenture, (ii) in connection with the issuance of any Additional Bonds
under this Indenture, (iii) for the purpose of curing any ambiguity,
inconsistency or formal defect or omission in the Agreement, a Note, the Letter
of Credit or the Indenture, (iv) in connection with an amendment or to effect
any purpose for which there could be an amendment of this Indenture pursuant to
Section 8.02 hereof, or (v) in connection with any other change therein which is
not to the prejudice of the Trustee or the Holders of the Bonds, in the judgment
of the Trustee; provided that if the Refunding Bonds are then rated by a Rating
Service, no amendment, change or modification of the Letter of Credit shall be
consented to by the Issuer or the Trustee unless such Rating Service shall have
confirmed in writing that such rating will not be reduced or withdrawn if such
amendment, change or modification is made.
Section 11.02. AMENDMENTS REQUIRING CONSENT OF HOLDERS. Except for the
amendments, changes or modifications contemplated by Section 11.01 hereof,
neither the Issuer nor the Trustee shall consent to:
(a) any amendment, change or modification of the Agreement, a Note, or
the Letter of Credit which would change the amount or times as of which Loan
Payments or drawings on the Letter of Credit are required to be paid, without
the giving of notice as provided in this Section of the proposed amendment,
change or modification and receipt of the written consent thereto of the Bank
and the Holders of all of the then outstanding Bonds affected by such amendment,
change or modification, or
(b) any other amendment, change or modification of the Agreement, a Note
or the Letter of Credit without the giving of notice as provided in this Section
of the proposed amendment, change or modification and receipt or the written
consent thereto of the Bank and the Holders of at least a majority in aggregate
principal amount of Bonds then outstanding affected by such amendment, change or
modification.
The consent of such Holders shall be obtained as provided in Section 8.03
hereof with respect to Supplemental Indentures.
If the Issuer and the Borrower shall request at any time the consent of the
Trustee to any proposed amendment, change or modification of the Agreement, a
Note or the Letter of Credit
- 91 -
contemplated in subparagraph (a) or (b), upon receipt of the written consent of
the Bank thereto and upon being indemnified satisfactorily with respect to
expenses, the Trustee shall cause notice of the proposed amendment, change or
modification to be provided in the manner which is required by Section 8.03
hereof with respect to notice of Supplemental Indentures. This notice shall set
forth briefly the nature of the proposed amendment, change or modification and
shall state that copies of the instrument or document embodying it are on file
at the principal corporate trust office of the Trustee for inspection by all
Holders.
(End of Article XI)
- 92 -
ARTICLE XII.
MEETINGS OF HOLDERS
Section 12.01. PURPOSES OF MEETINGS. A meeting of the Holders of Bonds
may be called at any time and from time to time pursuant to the provisions of
this Article XII, to the extent relevant to the Holders of all of the Bonds or
of Bonds of that series, as the case may be, to take any action (i) authorized
to be taken by or on behalf of the Holders of any specified aggregate principal
amount of the Bonds, or of that series, (ii) under any provision of this
Indenture or (iii) authorized or permitted by law.
Section 12.02. CALL OF MEETINGS. The Trustee may call at any time a
meeting of Holders pursuant to Section 12.01 hereof to be held at any reasonable
time and place the Trustee shall determine. Notice of such meeting, setting
forth the time, place and generally the subject thereof, shall be mailed by
first class mail, postage prepaid, not fewer than fifteen (15) nor more than
ninety (90) days prior to the date of the meeting to the Holders at their
addresses as they appear on the Register on the fifteenth day preceding such
mailing, which fifteenth day preceding the mailing shall be the record date for
the meeting.
If at any time the Issuer, the Borrower, the Bank or the Holders of at
least twenty-five percent (25%) in aggregate principal amount of the Bonds, or
if applicable, the affected series of Bonds, then outstanding, shall have
requested the Trustee to call a meeting of Holders, by written request setting
forth the purpose of the meeting, and the Trustee, after having received
indemnity to its satisfaction with respect to its fees and expenses shall not
have mailed the notice of the meeting within twenty (20) days after receipt of
the request, then the Issuer, the Borrower, the Bank or the Holders of Bonds in
the amount above specified making such request may determine the time and the
place of the meeting and may call the meeting to take any action authorized in
Section 12.01 hereof by mailing notice thereof as provided above.
Any meetings of Holders of Bonds affected by a particular matter shall be
valid without notice if the Holders of all Bonds, or if applicable, the affected
series of Bonds, then outstanding are present in person or by proxy, or if
notice is waived in writing before or after the meeting by the Holders of all
Bonds, or if applicable, the affected series of Bonds, outstanding who were not
so present at the meeting, and if the Issuer, the Borrower, the Bank and the
Trustee are either present by duly authorized representatives or have waived
notice, before or after the meeting.
Section 12.03. VOTING. To be entitled to vote at any meeting of Holders,
a Person shall (a) be a Holder of one or more outstanding Bonds, or if
applicable, of the affected series of Bonds, as of the record date for the
meeting as determined above, or (b) be a person appointed by an instrument or
document in writing as proxy by a person who is a Holder as of the record date
for the meeting, of one or more outstanding Bonds, or, if applicable, of the
affected series of Bonds.
- 93 -
Each Holder or proxy shall be entitled to one vote for each $5,000 principal
amount of Bonds held or represented by it.
The vote upon any resolution submitted to any meeting of Holders shall be
by written ballots on which shall be subscribed the signatures of the Holders of
Bonds or of their representatives by proxy and the identifying number or numbers
of the Bonds held or represented by them.
Section 12.04. MEETINGS. Notwithstanding any other provision of this
Indenture, the Trustee may make any reasonable regulations which it may deem to
be advisable for meetings of Holders, with regard to:
(a) proof of the holding of Bonds and of the appointment of proxies,
(b) the appointment and duties of inspectors of votes,
(c) recordation of the proceedings of those meetings,
(d) the execution, submission and examination of proxies and other
evidence of the right to vote, and
(e) any other matters concerning the conduct, adjournment or reconvening
of meetings which it may think fit.
The Trustee shall appoint a temporary chair of the meeting by an instrument
or document in writing, unless the meeting shall have been called by the Issuer,
the Borrower, the Bank or by the Holders, as provided in Section 12.02 hereof,
in which case the Issuer, the Bank, the Borrower or the Holders calling the
meeting, as the case may be, shall appoint a temporary chair in like manner. A
permanent chair and a permanent secretary of the meeting shall be elected by
vote of the Holders of at least a majority in principal amount of the Bonds
represented at the meeting and entitled to vote.
The only Persons who shall be entitled to be present or to speak at any
meeting of Holders shall be the Persons entitled to vote at the meeting and
their counsel, any representatives of the Trustee or Registrar and their
counsel, any representatives of the Issuer and its counsel, any representatives
of the Borrower and its counsel, any representatives of the Bank and its counsel
and any representatives of the Remarketing Agent and its counsel.
Section 12.05. MISCELLANEOUS. Nothing contained in this Article XII shall
be deemed or construed to authorize or permit any hindrance or delay in the
exercise of any right or rights conferred upon or reserved to the Trustee or to
the Holders under any of the provisions of this Indenture or of the Bonds by
reason of any call of a meeting of Holders or any right conferred expressly or
impliedly hereunder to make a call. Nothing contained in this Article XII shall
be
- 94 -
deemed or construed to require the Trustee to call, attend, participate in, or
take any action during or as a result of, any meeting of Holders unless the
Trustee shall have first received indemnity to its satisfaction with respect to
its fees and expenses (including reasonable attorney fees) in connection with
such meeting.
(End of Article XII)
- 95 -
ARTICLE XIII.
MISCELLANEOUS
Section 13.01. LIMITATION OF RIGHTS. With the exception of rights
conferred expressly in this Indenture, nothing expressed or mentioned in or to
be implied from this Indenture or the Bonds is intended or shall be construed to
give to any Person other than the parties hereto, the Registrar, the
Authenticating Agents, the Paying Agents, the Borrower, the Remarketing Agent,
the Bank and the Holders of the Bonds any legal or equitable right, remedy,
power or claim under or with respect to this Indenture or any covenants,
agreements, conditions and provisions contained herein. This Indenture and all
of those covenants, agreements, conditions and provisions are intended to be,
and are, for the sole and exclusive benefit of the parties hereto, the Borrower,
the Bank, the Remarketing Agent, the Registrar, the Authenticating Agents, the
Paying Agents and the Holders of the Bonds, as provided herein. Notwithstanding
any provisions hereof to the contrary, the Bank shall not have any rights
hereunder, including, without any limitation, any right to give any direction or
to give or withhold consent, unless (i) the Letter of Credit is in full force
and effect and no Event of Default has occurred and is continuing under
paragraphs (g) or (h) of Section 7.01 hereof or (ii) amounts are owed to the
Bank for reimbursement of drawings under the Letter of Credit.
Section 13.02. SEVERABILITY. In case any section or provision of this
Indenture, or any covenant, agreement, stipulation, obligation, act or action,
or part thereof, made, assumed, entered into or taken under this Indenture, or
any application thereof, is held to be illegal or invalid for any reason, or is
inoperable at any time, that illegality, invalidity or inoperability shall not
affect the remainder thereof or any other section or provision of this Indenture
or any other covenant, agreement stipulation, obligation, act or action, or part
thereof, made, assumed, entered into or taken under this Indenture, all of which
shall be construed and enforced at the time as if the illegal, invalid or
inoperable portion were not contained therein.
Any illegality, invalidity or inoperability shall not affect any legal,
valid or operable section, provision, covenant, agreement, stipulation,
obligation, act, action, part or application, all of which shall be deemed to be
effective, operative, made, assumed, entered into or taken in the manner and to
the full extent permitted by law from time to time.
Section 13.03. NOTICES. Except as provided in Section 7.02 hereof or
elsewhere herein, it shall be sufficient service or giving of any notice,
request, complaint, demand or other instrument or document, effective three days
after mailing if it is duly mailed by certified mail, return receipt requested,
or effective upon delivery if delivered by courier. Notices to the Issuer, the
Bank, the Borrower, the Remarketing Agent and the Trustee shall be addressed as
follows:
- 96 -
(a) If to the Issuer, at: City of Gary, Indiana
City Building
Gary, Indiana 46402
Attention: Clerk
(b) If to the Borrower, at: The Miller Partnership, L.P.
401 N. Michigan Avenue, Suite 3000
Chicago, Illinois 60611
Attention: Paul Fisher
(c) If to the Trustee, at: Fifth Third Bank of Central Indiana
251 N. Illinois Street, Suite 1000
Indianapolis, Indiana 46204
Attention: Corporate Trust Department
(d) If to the Bank, at: The Royal Bank of Scotland plc.
acting through its New York Branch
Wall Street Plaza, 26th Floor
88 Pine Street
New York, New York 10005-1801
Attention: Derek I. Bonnar
(e) If to the Remarketing
Agent, at: Everen Securities, Inc.
77 W. Wacker Drive, 28th Floor
Chicago, Illinois 60601-1994
Attention: Felicia Flowers-Smith
(f) If to the Co-Remarketing
Agent, at: Gates Capital Corporation
100 Park Avenue
New York, New York 10017
Attention: Ameilia A. Recio
(g) If to the Paying Agent,
Authenticating Agent or
Registrar, at: The Fifth Third Bank
38 Fountain Square Plaza
Cincinnati, Ohio 45263
Attention: Corporate Trust Department
Duplicate copies of each notice, request, complaint, demand or other instrument
or document given hereunder to any of such parties also shall be given to the
others. The foregoing parties
- 97 -
may designate, by written notice given hereunder, any further or different
addresses to which any subsequent notice, request, complaint, demand or other
instrument or document shall be sent. The Trustee shall designate, by notice to
the Issuer, the Borrower, the Remarketing Agent and the Bank the addresses to
which notices or copies thereof shall be sent to the Registrar, the
Authenticating Agents and the Paying Agents.
In connection with any notice mailed pursuant to the provisions of this
Indenture, a certificate of the Trustee, the Issuer, the Registrar, the
Authenticating Agents, the Paying Agents, the Bank, the Borrower, the
Remarketing Agent or the Holders of the Bonds, whichever or whoever mailed that
notice, that the notice was so mailed shall be conclusive evidence of the proper
mailing of the notice.
The Trustee shall provide notice of the following events to Moody's
Investors Service: change in Trustee or Remarketing Agent; any change in the
terms of the Letter of Credit or Indenture; expiration, extension, termination
or substitution of the Letter of Credit; and mode conversion, redemption,
mandatory tender or acceleration of the Bonds. Such notice shall be by first-
class mail to: Moody's Investors Service, 99 Church Street, New York, New York
10007, Attention: Structured Finance.
Section 13.04. SUSPENSION OF MAIL. If because of the suspension of
delivery of first class mail, or for any other reason, the Trustee or any other
Person shall be unable to mail by the required class of mail any notice required
to be mailed by the provisions of this Indenture, the Trustee or any other
Person shall give such notice in such other manner as in the judgment of the
Trustee or such Person shall most effectively approximate mailing thereof, and
the giving of the notice in that manner for all purposes of this Indenture shall
be deemed to be in compliance with the requirement for the mailing thereof.
Except as otherwise provided herein the mailing of any notice shall be deemed
complete upon deposit of that notice in the mail and giving of any notice by any
other means of delivery shall be deemed complete upon receipt of the notice by
the delivery service.
Section 13.05. PAYMENTS DUE ON SATURDAYS, SUNDAYS AND HOLIDAYS. If any
Interest Payment Date, Bond Purchase Date, date of maturity of the principal of
any Bonds, or date fixed for the redemption of any Bonds is not a Business Day,
then payment of interest, principal and any redemption premium or purchase price
payment need not be made by the Trustee or any Paying Agent on that date, but
that payment may be made on the next succeeding Business Day with the same force
and effect as if that payment were made on the Interest Payment Date, Bond
Purchase Date, date of maturity or date fixed for redemption, and no interest
shall accrue for the period after that date; provided, however, if the Refunding
Bonds bear interest at any of the Weekly Interest Rate, the One Month Interest
Rate or the Three Month Interest Rate, interest shall accrue from the scheduled
date of any maturity or redemption due date of the Refunding Bonds until the
Business Day on which such payment is made.
- 98 -
Section 13.06. INSTRUMENTS OF HOLDERS. Any writing, including without
limitation, any consent, request, direction, approval, objection or other
instrument or document, required under this Indenture to be executed by any
Holder may be in any number of concurrent writings of similar tenor and may be
executed by that Holder in person or by an agent or attorney appointed in
writing. Proof of (i) the execution of any writing, including without
limitation, any consent, request, direction, approval, objection or other
instrument or document, (ii) the execution of any writing appointing any agent
or attorney, and (iii) the ownership of Bonds, shall be sufficient for any of
the purposes of this Indenture, if made on the following manner, and if so made,
shall be conclusive in favor of the Trustee with regard to any action taken
thereunder, namely:
(a) The fact and date of the execution by any person of any writing may
be proved by the certificate of any officer in any jurisdiction, who has power
by law to take acknowledgments within the jurisdiction, that the person signing
the writing acknowledged that execution before that officer, or by affidavit of
any witness to that execution;
(b) The fact of ownership of Bonds shall be proved by the Register
maintained by the Registrar.
Nothing contained herein shall be construed to limit the Trustee to the
foregoing proof, and the Trustee may accept any other evidence of the matters
stated therein which it deems to be sufficient. Any writing, including without
limitation, any consent, request, direction, approval, objection or other
instrument or document, of the Holder of any Bond shall bind every further
Holder of the same Bond, with respect to anything done or suffered to be done by
the Issuer, the Trustee, the Bank, the Borrower, the Remarketing Agent, the
Registrar or any Paying Agent or Authenticating Agent pursuant to that writing.
Section 13.07. PRIORITY OF THIS INDENTURE. The Indenture shall be
superior to any liens which may be placed upon the Revenues or any other funds
or accounts created pursuant to this Indenture.
Section 13.08. EXTENT OF COVENANTS; NO PERSONAL LIABILITY. All covenants,
stipulations, obligations and agreements of the Issuer contained in this
Indenture are and shall be deemed to be covenants, obligations and agreements of
the Issuer to the full extent authorized by the Act and permitted by the
Constitution of the State. No covenant, stipulation, obligation or agreement of
any present or future member, officer, agent or employee of the Issuer or the
Issuing Authority shall be enforceable against such member, officer, agent or
employee of the Issuer or the Issuing Authority in anything other than that
person's official capacity. Neither the members nor any official of the Issuer
or the Issuing Authority executing the Bonds, this Indenture, the Agreement or
any amendment or supplement hereto or thereto shall be liable personally on the
Bonds or subject to any personal liability or accountability by reason of the
issuance or execution hereof or thereof.
- 99 -
No recourse shall be had for the payment of the principal of or premium or
interest on any of the Bonds or for any claim based thereon or upon any
obligation, covenant or agreement in this Indenture contained against any past,
present or future officer, member, employee or agent of the Issuer or the
Issuing Authority, as such, either directly or through the Issuer or the Issuing
Authority, under any rule of law or equity, statute or constitution, or by the
enforcement of any assessment or penalty or otherwise, and all such liability of
any such officers, members, employees or agents as such is hereby expressly
waived and released as a condition of and consideration for the execution of
this Indenture and the issuance of such Bonds.
Section 13.09. RATING CATEGORIES. Except as otherwise expressly provided
herein, any reference herein to a rating category established by a Rating
Service shall mean such category without regard to any modification thereof by
the addition of a plus or minus sign or a number indicating relative standing
within such category.
Section 13.10. BINDING EFFECT. This Indenture shall inure to the benefit
of and shall be binding upon the Issuer and the Trustee and their respective
successors and assigns, subject, however, to the limitations contained herein..
Section 13.11. COUNTERPARTS. This Indenture may be executed in any number
of counterparts, each of which shall be regarded as an original and all of which
shall constitute but one and the same instrument.
Section 13.12. GOVERNING LAW. This Indenture and the Bonds shall be
deemed to be contracts made under the laws of the State and for all purposes
shall be governed by and construed in accordance with the laws of the State.
(End of Article XIII)
- 100 -
IN WITNESS WHEREOF, the Issuer and the Trustee have executed this Trust
Indenture all as of the date first above written.
CITY OF GARY, INDIANA
By: ________________________________
Scott L. King, Mayor
ATTEST:
___________________________________
Katie Hall, Clerk
- 101 -
FIFTH THIRD BANK OF CENTRAL INDIANA, as
Trustee
By: ___________________________________
ATTEST:
___________________________________
The undersigned, officers of The Fifth Third Bank, acknowledge on behalf of
said bank that they have reviewed the foregoing Trust Indenture and agree to
perform the duties and responsibilities assigned to the Registrar, Paying Agent
and Authenticating Agent.
THE FIFTH THIRD BANK
By: ___________________________________
ATTEST:
___________________________________
- 102 -
EXHIBIT A
FORM OF SERIES 1996 A BOND
UNITED STATES OF AMERICA
STATE OF INDIANA
CITY OF GARY, INDIANA
ADJUSTABLE RATE ECONOMIC DEVELOPMENT
REVENUE REFUNDING BOND, SERIES 1996 A
(THE MILLER PARTNERSHIP, L.P. PROJECT)
NO. A-1
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO ISSUER OR ITS AGENT
FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY CERTIFICATE ISSUED
IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY
AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO
SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY
TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON
IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST
HEREIN.
Maturity Date Cusip Number Date of Authentication
March 1, 2031 April 1, 1996
Date of Initial Delivery: April 1, 1996
Registered Owner: CEDE & CO.
Principal Amount:
The City of Gary, Indiana (the "Issuer"), a municipal corporation and
political subdivision validly existing under the laws of the State of Indiana,
for value received, promises to pay to the registered owner specified above or
registered assigns, but solely from the sources and in the manner referred to
herein, the principal amount specified above on the aforesaid Maturity Date,
A-1
unless this Bond is called for earlier redemption, and to pay from those sources
interest thereon at the rate per annum determined as described herein. Initial
interest on this Bond shall accrue from the Date of Initial Delivery of this
Bond. Interest on this Bond is payable on the first Business Day, as
hereinafter defined, of each month, as long as the interest rate hereon is
calculated pursuant to the Weekly Interest Rate, the One Month Interest Rate or
the Three Month Interest Rate (as such terms are hereinafter defined),
commencing the first Business Day of May, 1996, until the principal amount is
paid or duly provided for. For any period of time during which this Bond bears
interest at the Six Month Interest Rate, the One Year Interest Rate, the Five
Year Interest Rate or the Fixed Interest Rate (as such terms are hereinafter
defined) interest hereon shall be payable on the first day of each April and
October. Any date established for the payment of interest as described above is
hereinafter referred to as an "Interest Payment Date". The interest payable
hereon on each Interest Payment Date shall be for the period commencing on the
next preceding Interest Payment Date (or the Date of Initial Delivery of this
Bond with respect to the first Interest Payment Date) to and including the day
immediately preceding the Interest Payment Date on which payment is made.
Interest shall be calculated on the basis of a year of 365 days or 366 days, as
applicable, for the number of days actually elapsed, while the interest hereon
is payable at the Weekly Interest Rate, the One Month Interest Rate or the Three
Month Interest Rate. Otherwise, interest shall be calculated on the basis of a
360-day year consisting of twelve 30-day months.
The term "Business Day", as used herein, means any day, other than a
Saturday or Sunday, on which commercial banks located in the cities in which the
principal corporate trust office of the Paying Agent, the principal corporate
trust office of the Registrar, the principal office of the Remarketing Agent,
and the principal office of the Bank, as hereafter defined, are located are not
required or authorized to remain closed and on which the New York Stock Exchange
is not closed. This Bond will bear interest from the most recent date to which
interest has been paid or duly provided for or, if no interest has been paid or
duly provided for, from its date of initial delivery. If any Interest Payment
Date, date of maturity of this Bond, Bond Purchase Date (as hereinafter defined)
or date fixed for redemption of this Bond, is not a Business Day, then payment
of the applicable interest, principal, purchase price or redemption price may be
made on the next succeeding Business Day with the same force and effect as if
such payment were made on such Interest Payment Date, date of maturity, Bond
Purchase Date or date fixed for redemption and no interest shall accrue for the
period after such date; provided, however, if this Bond bears interest at any of
the Weekly Interest Rate, the One Month Interest Rate or the Three Month
Interest Rate, interest shall accrue from the scheduled date of any maturity or
redemption due date of this Bond until the Business Day on which such payment is
made.
The principal of and premium, if any, on this Bond is payable upon
presentation and surrender hereof at the principal corporate trust office of the
Paying Agent, presently The Fifth Third Bank (the "Paying Agent"), located in
Cincinnati, Ohio. Interest is payable on each Interest Payment Date by check or
draft mailed to the person in whose name this Bond (or one or more predecessor
bonds) is registered (the "Holder") at the close of business on the fifth
Business Day preceding such Interest Payment Date (the "Regular Record Date") on
the registration books for
A-2
this issue maintained by The Fifth Third Bank, located in Cincinnati, Ohio, as
Registrar, at the address appearing therein. Notwithstanding the foregoing,
interest on any Bond in the denomination of $100,000 or more shall be paid by
wire transfer in immediately available funds to the bank account number and
address filed in writing with the Registrar by such Holder, which account number
and address shall be filed with the Registrar at least two (2) Business Days
prior to that Interest Payment Date. Any interest which is not timely paid or
duly provided for shall cease to be payable to the Holder hereof (or of one or
more predecessor bonds) as of the Regular Record Date, and shall be payable to
the Holder hereof (or of one or more predecessor bonds) at the close of business
on a Special Record Date to be fixed by the Trustee for the payment of that
overdue interest. Notice of the Special Record Date shall be mailed to Holders
not less than ten days prior thereto. The principal and redemption price of and
interest on this Bond are payable in lawful money of the United States of
America, without deduction for the services of the Paying Agent.
Notwithstanding anything herein to the contrary, when this Bond is registered in
the name of a Depository (as defined in the Indenture hereinafter defined) or
its nominee, the principal and redemption price of and interest on this Bond
shall be payable in federal funds delivered or transmitted to the Depository or
its nominee.
THIS BOND DOES NOT REPRESENT OR CONSTITUTE A DEBT OR PLEDGE OF THE FAITH
AND CREDIT OF THE ISSUER, THE STATE OF INDIANA OR ANY POLITICAL SUBDIVISION
THEREOF. THE HOLDERS OR OWNERS OF THIS BOND HAVE NO RIGHT TO HAVE TAXES LEVIED
BY THE ISSUER, THE STATE OF INDIANA OR ANY POLITICAL SUBDIVISION THEREOF FOR THE
PAYMENT OF THE PRINCIPAL OF OR PREMIUM (IF ANY) OR INTEREST ON THIS BOND.
PRINCIPAL OF AND PREMIUM (IF ANY) AND INTEREST ON THIS BOND ARE PAYABLE SOLELY
FROM THE REVENUES PLEDGED PURSUANT TO THE INDENTURE (AS HEREINAFTER DEFINED).
This Bond shall not constitute the personal obligation, either jointly or
severally, of the members of the Common Council of the Issuer (the "Issuing
Authority"), its Economic Development Commission, or of any officer, employee or
official of the Issuer.
This Bond shall not be entitled to any security or benefit under the
Indenture or be valid or become obligatory for any purpose until the certificate
of authentication hereon shall have been duly signed.
GENERAL PROVISIONS
This Bond is one of a duly authorized issue the City of Gary, Indiana
Adjustable Rate Economic Development Revenue Refunding Bonds, Series 1996 A (The
Miller Partnership, L.P. Project) (the "Bonds"), issuable under the Trust
Indenture, dated as of March 1, 1996 (the "Indenture"), between the Issuer and
Fifth Third Bank of Central Indiana, as Trustee, aggregating in the principal
amount of $20,540,000 and issued for the purpose of making a loan (the "Loan")
to The Miller Partnership, L.P., an Illinois limited partnership (the
"Borrower"), to refund the
A-3
City of Gary, Indiana Economic Development Revenue Bonds, Series 1991 A (The
Miller Partnership, L.P. Project) and the City of Gary, Indiana Economic
Development Revenue Bonds, Series 1993 A (The Miller Partnership, L.P. Project),
which were issued for the purpose of financing of the Project, as defined in the
Loan Agreement, dated as of even date with the Indenture (the "Agreement"),
between the Issuer and the Borrower. The Bonds, together with any Additional
Bonds which may be issued on a parity therewith under the Indenture, are special
obligations of the Issuer, issued or to be issued under and are to be secured
and entitled equally and ratably to the protection given by the Indenture. The
Bonds are issued pursuant to Indiana Code 36-7-11.9 and 12, and Indiana Code 5-
1-5 (collectively, the "Act") and pursuant to an Ordinance duly adopted by the
Issuing Authority. The Bonds are issued on a parity with the City of Gary,
Indiana Taxable Adjustable Rate Economic Development Revenue Bonds, Series 1996
B (The Miller Partnership, L.P. Project).
Reference is made to the Indenture and the Agreement for a more complete
description of the Project, the provisions, among others, with respect to the
nature and extent of the security for the Bonds, the rights, duties and
obligations of the Issuer, the Trustee and the Holders of the Bonds and the
terms and conditions upon which the Bonds are issued and secured. All terms
used herein with initial capitalization where the rules of grammar or context do
not otherwise require shall have the meanings as set forth in the Indenture.
Each Holder assents, by its acceptance hereof, to all of the provisions of the
Indenture.
Pursuant to the Agreement, the Borrower has executed and delivered to the
Trustee the Borrower's Note, Series 1996 A dated as of even date with the Bonds
(the "Series 1996 A Note"), in the principal amount of $20,540,000. The
Borrower is required by the Agreement and the Note, Series 1996 A to make
payments to the Trustee in amounts and at times necessary to pay the principal
of and premium (if any) and interest on the Bonds (the "Bond Service Charges").
In the Indenture, the Issuer has assigned to the Trustee, to provide for the
payment of the Bond Service Charges on the Bonds and any Additional Bonds, the
Issuer's right, title and interest in and to the Series 1996 A Note and the
Agreement, except for Unassigned Issuer's Rights, as defined in the Agreement.
Pursuant to the Agreement, the Borrower has caused to be issued and
delivered to the Trustee by The Royal Bank of Scotland plc, acting through its
New York Branch (the "Bank") an irrevocable letter of credit (the "Letter of
Credit"), pursuant to which the Trustee is entitled to draw up to (a) the
principal amount of the Bonds outstanding to enable the Trustee to pay (i) the
principal amount of the Bonds when due at maturity or upon redemption or
acceleration on the occurrence of an event of default, and (ii) an amount equal
to the principal portion of the purchase price of any Bonds or Beneficial
Ownership Interests duly tendered by the Holders or Beneficial Owners thereof
for purchase pursuant to the Indenture, plus (b) the amount of interest accruing
on the Bonds, but not to exceed 56 days' accrued interest at the maximum rate of
12% per annum (the "Maximum Rate") to enable the Trustee to pay interest when
due on the Bonds and the interest portion (if any) of the purchase price of any
Bonds or Beneficial Ownership Interests duly tendered by the Holders or
Beneficial Owners thereof for purchase pursuant to the Indenture. In
A-4
connection with the issuance of the Letter of Credit, the Bank has entered into
a Reimbursement Agreement (the "Reimbursement Agreement") with the Borrower
pursuant to which the Borrower is obligated to reimburse the Bank for all draws
made under Letter of Credit. The Letter of Credit shall expire, subject to
provisions for earlier termination or extension, on April 15, 2001.
Subject to the provisions of the Indenture and the Agreement, the Letter of
Credit may be replaced from time to time by another letter of credit (an
"Alternate Letter of Credit"), in which case the term "Bank" shall mean the
financial institution issuing the Alternate Letter of Credit and the term
"Letter of Credit" shall mean the Alternate Letter of Credit.
Copies of the Indenture, the Agreement, the Letter of Credit, and the
Series 1996 A Note are on file in the principal corporate trust office of the
Trustee.
The Bond Service Charges on the Bonds are payable solely from the Revenues,
as defined and as provided for in the Indenture (being, generally, the amounts
payable under the Agreement in repayment of the Loan, any unexpended proceeds of
the Bonds and amounts deposited in the Refunding Fund and the Bond Fund as
defined and provided for in the Indenture, including amounts drawn pursuant to
the Letter of Credit), and are an obligation of the Issuer only to the extent of
the Revenues. The Bonds are not secured by a pledge of the faith and credit or
the taxing power of the Issuer, the State of Indiana or any political
subdivision thereof.
No recourse under or upon any obligation, covenant, acceptance or agreement
contained in the Indenture, or in any of the Bonds, or under any judgment
obtained against the Issuer, its Economic Development Commission or the Issuing
Authority, or by the enforcement of any assessment or by any legal or equitable
proceeding by virtue of any constitution or statute or otherwise, or under any
circumstances, shall be had against any member or officer, as such, past,
present, or future, of the Issuer, its Economic Development Commission or the
Issuing Authority, whether directly or through the Issuer, or otherwise, for the
payment for or to the Issuer or any receiver thereof, or for or to any Holder of
any Bond, or otherwise, of any sum that may be due and unpaid by the Issuer upon
any of the Bonds. Any and all personal liability of every nature, whether at
common law or in equity, or by statute or by constitution or otherwise, of any
such member or officer, as such, to respond by reason of any act or omission on
his or her part, or otherwise, for, directly or indirectly, the payment for or
to the Issuer or any receiver thereof, or for or to the owner or any Holder of
any Bond, or otherwise, of any sum that may remain due and unpaid upon any Bond,
shall be deemed to be and is hereby expressly waived and released as a condition
of and consideration for the execution and delivery of the Indenture and the
issuance of the Bonds.
The Bonds are issuable only as fully registered bonds in the denominations
of $100,000 or $5,000 multiples in excess thereof and shall be originally issued
only to a Depository to be held in a book entry system and: (i) the Bonds shall
be registered in the name of the Depository or its nominee, as Bondholder, and
immobilized in the custody of the Depository; (ii) unless otherwise requested by
the Depository, there shall be a single Bond certificate; and (iii) the Bonds
shall not
A-5
be transferable or exchangeable, except for transfer to another Depository or
another nominee of a Depository, without further action by the Issuer. While
the Bonds are in book entry only form, Bonds in the form of physical
certificates shall only be deposited with the Depository. The owners of
beneficial interests in the Bonds shall not have any right to receive Bonds in
the form of physical certificates. If any Depository determines not to continue
to act as a Depository for the Bonds for use in a book entry system, the Issuer
may attempt to have established a securities depository/book entry system
relationship with another qualified Depository under the Indenture. If the
Issuer does not or is unable to do so, the Issuer and the Trustee, after the
Trustee has made provision for notification to the owners of book entry
interests by the then Depository, shall permit withdrawal of the Bonds from the
Depository, and authenticate and deliver, or cause to be authenticated and
delivered, Bond certificates in fully registered form (in denominations of
$100,000 or $5,000 multiples in excess thereof) to the assignees of the
Depository or its nominee.
While a Depository is the sole holder of the Bonds, delivery or notation of
partial redemption or tender for purchase of Bonds shall be effected in
accordance with the provisions of the Letter of Representations, as defined in
the Indenture.
In addition to the words and terms defined elsewhere in this Bond, the
following terms shall have the following meanings:
"Beneficial Owner" means with respect to the Bonds, a person owning a
Beneficial Ownership Interest therein, as evidenced to the satisfaction of the
Trustee.
"Beneficial Ownership Interest" means the beneficial right to receive
payments and notices with respect to the Bonds which are held by the Depository
under a book entry system.
"book entry form" or "book entry system" means, with respect to the Bonds,
a form or system, as applicable, under which (i) the ownership of beneficial
interests in Bonds and Bond Service Charges may be transferred only through a
book entry and (ii) physical Bond certificates in fully registered form are
registered only in the name of a Depository or its nominee as Holder, with the
physical Bond certificates "immobilized" in the custody of the Depository. The
book entry system maintained by and the responsibility of the Depository and not
maintained by or the responsibility of the Issuer or the Trustee is the record
that identifies, and records the transfer of the interests of, the owners of
beneficial (book entry) interests in the Bonds.
"Depository" means any securities depository that is a clearing agency
under federal law operating and maintaining, with its participants or otherwise,
a book entry system to record ownership of book entry interests in Bonds, and to
effect transfers of book entry interests in Bonds, and includes and means
initially The Depository Trust Company (a limited purpose trust company), New
York, New York.
The Indenture permits certain amendments or supplements to the Agreement,
the Indenture, the Letter of Credit and the Series 1996 A Note not prejudicial
to the Holders to be
A-6
made with the consent of the Bank but without the consent of or notice to the
Holders, and other amendments or supplements thereto to be made with the consent
of the Bank and the Holders of at least a majority in aggregate principal amount
of the Bonds and any Additional Bonds then outstanding. So long as the Bank is
not in default under the Letter of Credit, and the Bank consents in writing to
such amendments, the consent of the Holders is not required for those amendments
to the Indenture, Agreement, Letter of Credit or Series 1996 A Note which
otherwise require the consent of only a majority in aggregate principal amount
of the Bonds and any Additional Bonds then outstanding.
DETERMINATION OF INTEREST RATE
The initial interest rate on this Bond shall be established and be in
effect until the first Interest Rate Adjustment Date. Thereafter, except as
provided below, for each succeeding period the interest rate on the Bonds shall
be the Weekly Interest Rate for such weekly period as established on the
Interest Rate Determination Date immediately preceding the commencement of such
weekly period.
On June 1, 1996, and on any Interest Period Reset Date thereafter, subject
to the conditions set forth in the Indenture, the interest rate on the Bonds may
be converted to a different Interest Rate Mode upon receipt by the Trustee, the
Paying Agent, the Registrar and the Remarketing Agent of a written direction
from the Borrower, given on behalf of the Issuer, not less than 45 days prior to
the Interest Period Reset Date, to convert the interest rate on the Bonds to an
Interest Rate Mode other than the Interest Rate Mode then in effect.
On each Interest Rate Determination Date, the Remarketing Agent shall give
the Trustee, the Registrar and Paying Agent telephonic notice (immediately
confirmed in writing) of the interest rate to be borne by the Bonds for the
following Interest Rate Period; provided that if the interest rate is determined
pursuant to clause (b) of the definition of the applicable Interest Rate Mode,
on the Interest Rate Determination Date, the Trustee shall give notice to the
Borrower and the Bank as above provided.
If the interest rate on the Bonds is converted to a different Interest Rate
Mode, at least 30 days prior to the Interest Period Reset Date the Registrar
shall use its best efforts to notify the Holders of all outstanding Bonds by
telephone (to the extent their telephone numbers have been provided in writing
to the Registrar), immediately confirmed by first class mail to all Holders,
that upon such Interest Period Reset Date the Bonds shall be converted to a
different Interest Rate Mode, which Interest Rate Mode shall be specified, and
that all Bonds shall be subject to a mandatory tender, subject to the right of
the Holders to affirmatively elect to waive the mandatory tender and retain
their Bonds.
Any calculation of the interest rate to be borne by the Bonds shall be
rounded to the nearest one-hundredth of one percent (0.01%). The computation of
the interest rate on the Bonds by the Remarketing Agent shall be binding and
conclusive upon the Holders of the Bonds.
A-7
"Five Year Interest Rate" means (a) the rate of interest per annum
determined by the Remarketing Agent, on the Interest Rate Determination Date
immediately preceding the applicable Interest Rate Adjustment Date, to be the
interest rate necessary, during the Interest Rate Period commencing on the
applicable Interest Rate Adjustment Date and ending on March 31 or September 30
nearest to but not later than the date which is five years from the Interest
Rate Adjustment Date, in the judgment of the Remarketing Agent (taking into
consideration current transactions and comparable securities with which the
Remarketing Agent is involved or of which it is aware and prevailing financial
market conditions) to produce as nearly as practical a par bid for the Bonds on
the Interest Rate Determination Date or (b) in the event that the Remarketing
Agent has been removed or has resigned and no successor has been appointed or
the Remarketing Agent has failed to determine the Five Year Interest Rate for
whatever reason, or the Five Year Interest Rate cannot be determined pursuant to
clause (a) for whatever reason, the interest rate then in effect with respect to
the Bonds, without adjustment; provided that in no event shall the Five Year
Interest Rate exceed the lesser of 12% per annum or the maximum rate permitted
by law (the "Maximum Rate").
"Fixed Interest Rate" means (a) the fixed rate of interest per annum
determined by the Remarketing Agent, on the Interest Rate Determination Date
immediately preceding the applicable Interest Period Reset Date, to be the
interest rate necessary, from the Interest Period Reset Date to the final
maturity date of the Bonds, in the judgment of the Remarketing Agent (taking
into consideration current transactions and comparable securities with which the
Remarketing Agent is involved or of which it is aware and prevailing financial
market conditions) to produce as nearly as practical a par bid for the Bonds on
the Interest Rate Determination Date or (b) in the event that the Remarketing
Agent has been removed or has resigned and no successor has been appointed or
the Remarketing Agent has failed to determine the Fixed Interest Rate for
whatever reason, or the Fixed Interest Rate cannot be determined pursuant to
clause (a) for whatever reason, the interest rate then in effect with respect to
the Bonds, without adjustment; provided that in no event shall the Fixed
Interest Rate exceed the Maximum Rate.
"Interest Period Reset Date" means the date on which the interest rate on
the Bonds converts from the Interest Rate Mode applicable to the Bonds prior to
such date to a new Interest Rate Mode. An Interest Period Reset Date shall be
the first Business Day of a month; provided that, upon conversion from a Six
Month, One Year or Five Year Interest Rate Mode, an Interest Period Reset Date
shall be the first day of a month; and provided further that, except when
converting from a Weekly Interest Rate Mode, an Interest Period Reset Date may
not occur prior to the end of the preceding Interest Rate Period.
"Interest Rate Adjustment Date" means any date on which the interest rate
on the Bonds is adjusted, either as the result of the conversion of the interest
rate on the Bonds to a different Interest Rate Mode or by adjustment of the
interest rate on the Bonds within the applicable Interest Rate Mode. Except as
otherwise provided with respect to an Interest Rate Adjustment Date which is
also an Interest Period Reset Date, an Interest Rate Adjustment Date shall be
the first day of the first month of the Interest Rate Period if the Bonds bear
interest at the Six Month, One Year
A-8
or Five Year Interest Rate; the first Business Day of the month if the Bonds
bear interest at the One Month or Three Month Interest Rate; and if the Bonds
bear interest at the Weekly Interest Rate, then the Interest Rate Adjustment
Date shall be Thursday of each week.
"Interest Rate Determination Date" means (i) with respect to the Three
Month Interest Rate, the Six Month Interest Rate, the One Year Interest Rate,
the Five Year Interest Rate and the Fixed Interest Rate, the tenth Business Day
preceding an Interest Rate Adjustment Date, (ii) with respect to the One Month
Interest Rate, the seventh Business Day preceding an Interest Rate Adjustment
Date, and (iii) with respect to the Weekly Interest Rate, not later than 2:00
p.m. according to local time at the principal corporate trust office of the
Registrar on Wednesday of each week, or the next preceding Business Day if such
Wednesday is not a Business Day; provided that upon any conversion to the Weekly
Interest Rate from a different Interest Rate Mode, the first Interest Rate
Determination Date shall mean not later than 2:00 p.m. according to the local
time at the principal corporate trust office of the Registrar on the Business
Day next preceding the Interest Period Reset Date.
"Interest Rate Mode" means any of those modes of interest with respect to
the Bonds permitted by the Indenture, specifically, the Weekly Interest Rate,
the One Month Interest Rate, the Three Month Interest Rate, the Six Month
Interest Rate, the One Year Interest Rate, the Five Year Interest Rate and the
Fixed Interest Rate.
"Interest Rate Period" means that period of time during which the interest
rate with respect to the Bonds has been determined by the Remarketing Agent or
otherwise as provided in the definition of the applicable Interest Rate Mode,
commencing on the applicable Interest Rate Adjustment Date, and terminating on
the day immediately preceding the following Interest Rate Adjustment Date.
"One Month Interest Rate" means (a) the rate of interest per annum
determined by the Remarketing Agent, on the Interest Rate Determination Date
immediately preceding the applicable Interest Rate Adjustment Date, to be the
interest rate necessary, during the Interest Rate Period commencing on the
applicable Interest Rate Adjustment Date to and including the day preceding the
first Business Day of the next month, in the judgment of the Remarketing Agent
(taking into consideration current transactions and comparable securities with
which the Remarketing Agent is involved or of which it is aware and prevailing
financial market conditions) to produce as nearly as practical a par bid for the
Bonds on the Interest Rate Determination Date or (b) in the event that the
Remarketing Agent has been removed or has resigned and no successor has been
appointed, or the Remarketing Agent has failed to determine the One Month
Interest Rate for whatever reason, or the One Month Interest Rate cannot be
determined pursuant to clause (a) for whatever reason, the interest rate then in
effect with respect to the Bonds, without adjustment; provided that in no event
shall the One Month Interest Rate exceed the Maximum Rate.
"One Year Interest Rate" means (a) the rate of interest per annum
determined by the Remarketing Agent, on the Interest Rate Determination Date
immediately preceding the applicable
A-9
Interest Rate Adjustment Date, to be the interest rate necessary, during the
Interest Rate Period commencing on the applicable Interest Rate Adjustment Date,
and ending on the March 31 or September 30 nearest to but not later than the
date which is one year from the Interest Rate Adjustment Date, in the judgment
of the Remarketing Agent (taking into consideration current transactions and
comparable securities with which the Remarketing Agent is involved or of which
it is aware and prevailing financial market conditions) to produce as nearly as
practical a par bid for the Bonds on the Interest Rate Determination Date or (b)
in the event that the Remarketing Agent has been removed or has resigned and no
successor has been appointed, or the Remarketing Agent has failed to determine
the One Year Interest Rate for whatever reason, or the One Year Interest Rate
cannot be determined pursuant to clause (a) for whatever reason, the interest
rate then in effect with respect to the Bonds, without adjustment; provided that
in no event shall the One Year Interest Rate exceed the Maximum Rate.
"Remarketing Agent" means, initially, Everen Securities, Inc. and any
successor Remarketing Agent appointed pursuant to the Indenture.
"Six Month Interest Rate" means (a) the rate of interest per annum
determined by the Remarketing Agent, on the Interest Rate Determination Date
immediately preceding the applicable Interest Rate Adjustment Date, to be the
interest rate necessary during the Interest Rate Period commencing on the
applicable Interest Rate Adjustment Date and ending on the March 31 or September
30 nearest to but not later than the date which is six months from the Interest
Rate Adjustment Date, in the judgment of the Remarketing Agent (taking into
consideration current transactions and comparable securities with which the
Remarketing Agent is involved or of which it is aware and prevailing financial
market conditions) to produce as nearly as practical a par bid for the Bonds on
the Interest Rate Determination Date or (b) in the event that the Remarketing
Agent has been removed or has resigned and no successor has been appointed, or
the Remarketing Agent has failed to determine the Six Month Interest Rate for
whatever reason, or the Six Month Interest Rate cannot be determined pursuant to
clause (a) for whatever reason, the interest rate then in effect with respect to
the Bonds, without adjustment; provided that in no event shall the Six Month
Interest Rate exceed the Maximum Rate.
"Three Month Interest Rate" means (a) the rate of interest per annum
determined by the Remarketing Agent, on the Interest Rate Determination Date
immediately preceding the applicable Interest Rate Adjustment Date, to be the
interest rate necessary during the Interest Rate Period commencing on the
applicable Interest Rate Adjustment Date to and including the day preceding the
first Business Day of the January, April, July or October, nearest to but not
later than the date which is three months from the Interest Rate Adjustment
Date, in the judgment of the Remarketing Agent (taking into consideration
current transactions and comparable securities with which the Remarketing Agent
is involved or of which it is aware and prevailing financial market conditions)
to produce as nearly as practical a par bid for the Bonds on the Interest Rate
Determination Date or (b) in the event that the Remarketing Agent has been
removed or has resigned and no successor has been appointed, or the Remarketing
Agent has failed to determine the Three Month Interest Rate for whatever reason,
or the Three Month Interest Rate cannot be determined pursuant to
A-10
clause (a) for whatever reason, the interest rate then in effect with respect to
the Bonds, without adjustment; provided that in no event shall the Three Month
Interest Rate exceed the Maximum Rate.
"Weekly Interest Rate" means (a) the rate of interest per annum determined
by the Remarketing Agent, on the Interest Rate Determination Date immediately
preceding the applicable Interest Rate Adjustment Date, to be the interest rate
necessary during the Interest Rate Period of one week (or less in the case of
any such Interest Rate Period commencing on an Interest Period Reset Date which
is not a Thursday, or ending on the day preceding an Interest Period Reset Date)
commencing on the applicable Interest Rate Adjustment Date, in the judgment of
the Remarketing Agent (taking into consideration current transactions and
comparable securities with which the Remarketing Agent is involved or of which
it is aware and prevailing financial market conditions) to produce as nearly as
practical a par bid for the Bonds on the Interest Rate Determination Date or (b)
in the event that the Remarketing Agent has been removed or has resigned and no
successor has been appointed, or the Remarketing Agent has failed to determine
the Weekly Interest Rate for whatever reason, or the Weekly Interest Rate cannot
be determined pursuant to clause (a) for whatever reason, the interest rate then
in effect with respect to the Bonds, without adjustment; provided that in no
event shall the Weekly Interest Rate exceed the Maximum Rate.
TENDER OPTION
A.1. TENDER OPTION WHILE BONDS BEAR INTEREST IN AN INTEREST RATE MODE
OTHER THAN THE WEEKLY INTEREST RATE. While the Bonds bear interest at the One
Month Interest Rate, the Three Month Interest Rate, the Six Month Interest Rate,
the One Year Interest Rate or the Five Year Interest Rate, on each Interest Rate
Adjustment Date (each a "Bond Purchase Date"), each Holder or Beneficial Owner,
as applicable, shall have the option to tender for purchase, at 100% of the
principal amount thereof, all of the Bonds owned by such Holder (or all
Beneficial Ownership Interests owned by such Beneficial Owner), or such lesser
principal amount thereof (in denominations of $5,000 or any integral multiple
thereof, provided that such Holder or Beneficial Owner tenders $100,000 or more
in principal amount and provided that the untendered portion of any Bond or
Beneficial Ownership Interest shall be $100,000 or more in principal amount) as
such Holder or Beneficial Owner may specify in accordance with the terms,
conditions and limitations hereinafter set forth. The purchase price for each
such Bond or Beneficial Ownership Interest shall be payable in lawful money of
the United States of America, shall equal the principal amount, or such portion
thereof, to be purchased and shall be paid in full on the applicable Bond
Purchase Date.
A.2. TENDER OPTION WHILE BONDS BEAR INTEREST AT THE WEEKLY INTEREST RATE.
While the Bonds bear interest at the Weekly Interest Rate, each Holder or
Beneficial Owner, as applicable, has the option to tender for purchase, at 100%
of the principal amount thereof plus accrued interest to the purchase date (a
"Bond Purchase Date"), all of the Bonds owned by such Holder (or all Beneficial
Ownership Interests owned by such Beneficial Owner), or such lesser principal
amount thereof (in denominations of $5,000 or any integral multiple thereof,
provided that such
A-11
Holder or Beneficial Owner tenders $100,000 or more in principal amount and
provided that the untendered portion of any Bond or Beneficial Ownership
Interest shall be $100,000 or more in principal amount) as such Holder or
Beneficial Owner may specify in accordance with the terms, conditions and
limitations hereafter set forth. The purchase price for each such Bond or
Beneficial Ownership Interest shall be payable in lawful money of the United
States of America and shall be paid in full on the applicable Bond Purchase
Date.
To exercise the option granted in paragraph A.1. above, the Holder or
Beneficial Owner, as applicable, shall (1) no earlier than 15 days prior to the
Bond Purchase Date and no later than 11:00 a.m. according to the local time at
the principal corporate trust office of the Registrar on the eighth Business Day
prior to the Bond Purchase Date, unless the Bonds bear interest at the One Month
Interest Rate, then on the fifth Business Day prior to the Bond Purchase Date,
give notice to the Registrar by telecopy or in writing which states (i) the name
and address of the Holder or Beneficial Owner, as applicable, (ii) the principal
amount, CUSIP number and bond numbers of the Bonds or Beneficial Ownership
Interests to be purchased, (iii) that such Bonds or Beneficial Ownership
Interests are to be purchased on such Bond Purchase Date pursuant to the terms
of the Indenture, and (iv) that such notice is irrevocable; (2) in the case of a
Beneficial Owner, provide the Registrar with evidence satisfactory to the
Registrar of such Beneficial Owner's Beneficial Ownership Interest; (3) in the
case of a Holder, no later than 10:00 a.m. according to the local time at the
principal corporate trust office of the Registrar on the seventh day preceding
such Bond Purchase Date, or the next preceding Business Day if such seventh day
is not a Business Day, unless the Bonds bear interest at the One Month Interest
Rate, then on the fourth day preceding such Bond Purchase Date, or the next
preceding Business Day if such fourth day is not a Business Day, deliver to the
principal corporate trust office of the Registrar the Bonds to be purchased in
proper form, accompanied by fully completed and executed Instructions to Sell,
the form of which is printed hereon; and (4) in the case of a Beneficial Owner,
no later than 10:00 a.m. (according to the local time at the principal corporate
trust office of the Registrar) on the Bond Purchase Date, cause the transfer of
the Beneficial Owner's Beneficial Ownership on the records of the Depository.
To exercise the option granted in paragraph A.2. above, the Holder or
Beneficial Owner, as applicable, shall (1) give notice to the Registrar by
telecopy or in writing, which states (i) the name and address of the Holder or
Beneficial Owner, (ii) the principal amount, CUSIP number and Bond numbers of
the Bonds or Beneficial Ownership Interests to be purchased, (iii) the date on
which such Bonds or Beneficial Ownership Interests are to be purchased, which
Bond Purchase Date shall be a Business Day not prior to the seventh day and not
later than the fifteenth day next succeeding the date of giving of such notice
to the Registrar and, if the interest rate on the Bonds is to be converted from
the Weekly Interest Rate to a new Interest Rate Mode, is a date no later than
the Interest Period Reset Date with respect to the new Interest Rate Mode, and
(iv) that such notice is irrevocable; (2) in the case of a Beneficial Owner,
provide the Trustee with evidence satisfactory to the Registrar of such
Beneficial Owner's Beneficial Ownership Interest; (3) in the case of a Holder,
no later than 10:00 a.m. according to the local time at the principal corporate
trust office of the Registrar on the second Business Day immediately preceding
the applicable
A-12
Bond Purchase Date, deliver to the principal corporate trust office of the
Registrar the Bonds to be purchased in proper form, accompanied by fully
completed and executed Instructions to Sell; and (4) in the case of a Beneficial
Owner, no later than 10:00 a.m. (according to the local time at the principal
corporate trust office of the Registrar) on the Bond Purchase Date cause the
transfer of the Beneficial Owner's Beneficial Ownership on the records of the
Depository. In the case of a Bond or Beneficial Ownership Interest or portion
thereof to be purchased prior to an Interest Payment Date and after the Record
Date in respect thereof, the Holder or Beneficial Owner, as applicable, shall
deliver a due-bill check, in form satisfactory to the Registrar, for interest
due on such Interest Payment Date.
Any Bonds not delivered by Holders following the giving of notice of tender
shall nevertheless be deemed tendered for remarketing. Subject to the right of
such nondelivering Holders to receive the purchase price of such Bonds and
accrued interest to the Bond Purchase Date, such Bonds shall be null and void,
and the Trustee shall cause to be authenticated and delivered new Bonds in
replacement thereof pursuant to the remarketing of such Bonds. After the giving
of a notice of tender Beneficial Owners shall be obligated to transfer their
Beneficial Ownership Interests on the records of the Depository in accordance
with the instructions of the Registrar.
The tender options granted to the Holders or Beneficial Owners and all
mandatory tenders of Bonds or Beneficial Ownership Interests are subject to the
additional condition that any tendered Bonds or Beneficial Ownership Interests
(or the applicable portions thereof) will not be purchased if such Bonds (or
applicable portions thereof) mature or are redeemed on or prior to the
applicable Bond Purchase Date.
MANDATORY TENDER
(a) If at any time the Issuer at the direction of the Borrower shall
convert the interest rate on the Bonds to a different Interest Rate Mode, on the
Interest Period Reset Date upon which such conversion is effective, all Bonds
and Beneficial Ownership Interests shall be subject to mandatory tender by the
Holders or Beneficial Owners thereof for purchase on the Interest Period Reset
Date (a "Bond Purchase Date") at the applicable purchase price provided for
above. Notwithstanding such mandatory tender, any Holder or Beneficial Owner
may elect to retain his or her Bonds or Beneficial Ownership Interests by
delivering to the Registrar a written notice no later than 11:00 a.m. according
to the local time at the principal corporate trust office of the Registrar on
the eighth Business Day prior to such Interest Period Reset Date or by 11:00
a.m. according to the local time at the principal corporate trust office of the
Registrar on the fifth Business Day prior to such Interest Period Reset Date if
the Interest Rate Mode is to be converted to the One Month Interest Rate, which
notice shall state that (a) such Holder or Beneficial Owner realizes that the
Bonds or Beneficial Ownership Interests are being converted to bear interest at
the applicable Interest Rate Mode, (b) unless the interest rate on the Bonds is
being converted to the Weekly Interest Rate, such Holder or Beneficial Owner
realizes that the next Bond Purchase Date upon which the Bonds or Beneficial
Ownership Interests may be tendered for purchase is the
A-13
next Interest Rate Adjustment Date or, if such Bonds are being converted to the
Fixed Interest Rate, that such Bonds may no longer be tendered for purchase, (c)
such Holder or Beneficial Owner realizes that any securities rating on the Bonds
may be withdrawn or lowered as a result of the conversion to a different
Interest Rate Mode, and (d) such Holder or Beneficial Owner affirmatively elects
to hold his or her Bonds and receive interest at the applicable Interest Rate
Mode.
Bonds or Beneficial Ownership Interests with respect to which the Registrar
shall not have received the election required by the preceding paragraph shall
be deemed to have been tendered whether or not the Holders thereof shall have
delivered such Bonds to the Registrar and without the need for further action of
the Beneficial Owners. Subject to the right of the Holders of such Bonds or
Beneficial Owners of such Beneficial Ownership Interests to receive the purchase
price of such Bonds or Beneficial Ownership Interests and to receive interest
accrued thereon to the Interest Period Reset Date, such Bonds or Beneficial
Ownership Interests shall be null and void and the Trustee shall cause to be
authenticated and delivered new Bonds in replacement thereof, or new Beneficial
Ownership Interests shall be created, pursuant to the remarketing of such Bonds
or Beneficial Ownership Interests.
(b) If at any time the Borrower shall provide for the delivery to the
Trustee of an Alternate Letter of Credit in accordance with the provisions of
Section 5.09 of the Indenture, on the date that precedes the Replacement Date by
at least five Business Days (a "Bond Purchase Date"), as defined in the
Indenture, all Bonds and Beneficial Ownership Interests shall be subject to
mandatory tender by the Holders or Beneficial Owners, as the case may be,
thereof for purchase at the applicable purchase price provided for above. At
least 30 days prior to the Bond Purchase Date the Registrar shall use its best
efforts to notify the Holders of all outstanding Bonds by telephone (to the
extent their telephone numbers have been provided in writing to the Registrar),
immediately confirmed by first class mail to all Holders, that such an Alternate
Letter of Credit is to be delivered by the Borrower to the Trustee. The notice
shall advise the Holders of the requirements of Section 5.09 of the Indenture
and confirm that such requirements have been met, and that all Bonds shall be
subject to mandatory tender pursuant to Section 2.06 of the Indenture, subject
to the right of the Holders or Beneficial Owners to affirmatively elect to waive
the mandatory tender and retain the Bonds or Beneficial Ownership Interests.
Notwithstanding such mandatory tender, any Holder or Beneficial Owner, as
applicable, may elect to retain its Bonds or Beneficial Ownership Interests by
delivering to the Registrar a written notice no later than 11:00 a.m. according
to the local time at the principal corporate trust office of the Registrar on
the eighth Business Day prior to such Replacement date which notice shall state
that (a) such Holder or Beneficial Owner realizes that the Borrower is
delivering an Alternate Letter of Credit to the Trustee pursuant to Section 5.09
of the Indenture, (b) such Holder or Beneficial Owner has received the notice
required by Section 2.06 of the Indenture, and (c) such Holder or Beneficial
Owner affirmatively elects to hold its Bonds or Beneficial Ownership Interests.
A-14
Bonds or Beneficial Ownership Interests with respect to which the Registrar
shall not have received the election required by the preceding paragraph shall
be deemed to have been tendered for purposes of Section 2.06 of the Indenture
whether or not the Holders thereof shall have delivered such Bonds to the
Registrar and without the need for further action by the Beneficial Owners.
Subject to the right of the Holders of such Bonds or Beneficial Owners of such
Beneficial Ownership Interests to receive the purchase price of such Bonds or
Beneficial Ownership Interests and interest accrued thereon to the Replacement
Date, such Bonds or Beneficial Ownership Interests shall be null and void and
the Trustee shall cause to be authenticated and delivered new Bonds in
replacement thereof or new Beneficial Ownership Interests shall be created
pursuant to the remarketing of such Bonds or Beneficial Ownership Interests or
the pledge of such Bonds or Beneficial Ownership Interests to the Bank in lieu
or remarketing such Bonds or Beneficial Ownership Interests as described in
Section 6.20 of the Indenture.
REDEMPTION
(a) MANDATORY REDEMPTION UPON A DETERMINATION OF TAXABILITY. Upon the
occurrence of a Determination of Taxability, as defined in the Indenture, the
Bonds are subject to mandatory redemption in whole at a redemption price equal
to 100% of the outstanding principal amount thereof, plus interest accrued to
the redemption date, at the earliest practicable date selected by the Trustee,
after consultation with the Borrower, but in no event later than 45 days
following the Trustee's notification of the Determination of Taxability. The
occurrence of a Determination of Taxability with respect to the Bonds will not
constitute an Event of Default under the Indenture. No increase in the interest
payable with respect to the Bonds will occur in the event a Determination of
Taxability occurs.
(b) MANDATORY REDEMPTION UPON EXPIRATION OF LETTER OF CREDIT. The Bonds
are subject to mandatory redemption in whole on the Interest Payment Date which
next precedes the Letter of Credit Termination Date, at a redemption price of
100% of the outstanding principal amount thereof plus accrued interest to the
redemption date unless, at least 45 days prior to any such Interest Payment
Date, (a) the Bank shall have agreed in writing to an extension or further
extension of the Letter of Credit Termination Date to a date not less earlier
than one year from the Letter of Credit Termination Date being extended or (b)
pursuant to Section 5.09 of the Indenture, the Borrower shall have obtained and
delivered to the Trustee an Alternate Letter of Credit with a termination date
not earlier than one year from the Letter of Credit Termination Date for the
Letter of Credit it replaces, in which case the Bonds will be subject to the
mandatory tender provisions set forth above.
(c) OPTIONAL REDEMPTION. Unless previously redeemed, the Bonds are
subject to redemption at the option of the Issuer, upon the written direction of
the Borrower (subject to compliance with Section 4.03 of the Indenture), (1) if
the Bonds do not bear interest at the Fixed Interest Rate, in whole or in part
(in integral multiples of $5,000, provided that the unredeemed portion of any
Bond redeemed in part shall be $100,000 or more) on any Interest Rate Adjustment
A-15
Date at the redemption price of 100% of the principal amount redeemed plus
accrued interest thereon to the redemption date, or (2) if the Bonds bear
interest at the Fixed Rate after the Fixed Interest Rate Commencement Date and
on or after the First Optional Redemption Date, in whole or in part (in integral
multiples of $5,000, provided that the unredeemed portion of any Bond redeemed
in part shall be $100,000 or more) at any time at a redemption price equal to
the following percentages of the principal amount redeemed, plus in each case
accrued interest to the date fixed for redemption:
Redemption Date Optional Redemption Price
--------------- -------------------------
First Optional Redemption
Date, through the following
last day of March 103%
First Anniversary of the First
Optional Redemption Date,
through the following
last day of March 102%
Second Anniversary of the
First Optional Redemption
Date, through the following
last day of March 101%
Third Anniversary of the First
Optional Redemption Date and
thereafter 100%
"First Optional Redemption Date" means the earlier to occur of the April 1
occurring in the year which is (i) at least ten (10) full years after the Fixed
Interest Rate Commencement Date or (ii) a number of years after the Fixed
Interest Rate Commencement Date equal to the number of full years between the
Fixed Interest Rate Commencement Date and the maturity date of the Bonds,
multiplied by 1/2 and rounded up to the nearest whole number.
"Fixed Interest Rate Commencement Date" means the Interest Period Reset
Date from and after which the Bonds shall bear interest at the Fixed Interest
Rate, as that date shall be established as provided in the Indenture.
(d) EXTRAORDINARY OPTIONAL REDEMPTION. The Bonds are also subject to
redemption by the Issuer in the event of the exercise by the Borrower of its
option to direct that redemption upon occurrence of any of the events described
in Section 6.2 of the Agreement (generally, substantial damage to, or
destruction or condemnation of the Project or changes in law causing the
Agreement to become void, unenforceable or impossible of performance or the
imposition of
A-16
unreasonable burdens or excessive liabilities with respect to the Project or its
operation), (1) at any time in whole, or (2) at any time in part in the event of
condemnation of part of the Project, as provided in Section 6.2 of the
Agreement, in each case at a redemption price of 100% of the principal amount
redeemed, plus interest accrued to the redemption date.
If less than all Bonds are to be redeemed at one time, the selection of
Bonds, or portions thereof (in integral multiples of $5,000) to be redeemed
shall be made by lot by the Trustee; provided, however, Bonds (or book entry
interests in Bonds) pledged to the Bank pursuant to the Reimbursement Agreement
shall be selected for redemption prior to the selection of any other Bonds. If
Bonds or portions thereof are called for redemption and if on the redemption
date moneys for the redemption thereof are held by the Trustee, thereafter those
Bonds or portions thereof to be redeemed shall cease to bear interest, and shall
cease to be secured by, and shall not be deemed to be outstanding under, the
Indenture.
Unless waived in writing by any Holder of Bonds to be redeemed, official
notice of any such redemption shall be given by the Registrar on behalf of the
Issuer by mailing a copy of an official redemption notice by first class mail at
least 30 days and not more than 60 days prior to the date fixed for redemption
(except in the case of a redemption under Section 4.01(a) of the Indenture, in
which case such notice shall be given at least 5 days and not more than 15 days
prior to the date fixed for redemption) to the registered owner of the Bond or
Bonds to be redeemed at the address shown on the Register or at such other
address as is furnished in writing by such registered owner to the Registrar.
It is certified and recited that there have been performed and have
happened in regular and due form, as required by law, all acts and conditions
necessary to be done or performed by the Issuer or to have happened (i)
precedent to and in the issuing of the Bonds in order to make them legal, valid
and binding special obligations of the Issuer, and (ii) precedent to and in the
execution and delivery of the Indenture and the Agreement; that payment in full
for the Bonds has been received; and that the Bonds do not exceed or violate any
constitutional or statutory limitation.
A-17
IN WITNESS OF THE ABOVE, the Issuer has caused this Bond to be executed in
the name of the Issuer by the manual or facsimile signatures of its duly
authorized officers, as of the date shown above.
CITY OF GARY, INDIANA
By: ___________________________________
Mayor
(Seal)
Attest:
___________________________________
Clerk
CERTIFICATE OF AUTHENTICATION
This Bond is one of the Bonds described in the within mentioned Indenture.
THE FIFTH THIRD BANK, as Authenticating
Agent
By: ___________________________________
Authorized Representative
ASSIGNMENT
For value received, the undersigned sells, assigns and transfers unto
______________ _______________________________ the within Bond and irrevocably
constitutes and appoints __________________________ attorney to transfer that
Bond on the books kept for registration thereof, with full power of substitution
in the premises.
A-18
Dated: ____________________________ _______________________________________
Signature
Signature Guaranteed:
___________________________________
NOTICE: Signature(s) must be NOTICE: The assignor's signature to
guaranteed by an eligible guarantor this assignment must correspond with the
institution participating in a name as it appears upon the face of the
Securities Transfer Association within Bond in every particular, without
recognized signature guarantee alteration or any change whatever.
program.
A-19
NOTICE OF EXERCISE OF TENDER OPTION
INSTRUCTIONS TO SELL
To: _______________________
Attention: Corporate Trust Department
RE: City of Gary, Indiana Adjustable Rate Economic Development
Revenue Refunding Bonds, Series 1996 A (The Miller
Partnership, L.P. Project)
Gentlemen:
The undersigned, as the Holder of the Bond annexed hereto ("Bond"), hereby
elects the option available to the undersigned pursuant to the Trust Indenture
relating to the above-captioned bond issue. In accordance with such option, the
undersigned hereby tenders:
check the appropriate box / / the entire Bond
/ / (increments of $5,000 with a minimum
tender of $100,000)
for purchase on the first Bond Purchase Date (as defined in the Bond) after the
date hereof, pursuant to the referenced Trust Indenture. In accordance with
such tender, the undersigned hereby irrevocably sells, assigns and transfers
such Bond or portion thereof at the purchase price set forth in the Trust
Indenture, and does hereby irrevocably constitute and appoint the Registrar as
attorney to transfer such Bond or portion thereof on the books of the Registrar,
with full power of substitution in the premises.
Dated: ____________________________ _______________________________________
Signature
_______________________________________
Signature Guaranteed:
NOTICE: Signature(s) must be guaranteed
by an eligible guarantor institution
participating in a Securities Transfer
Association recognized signature
guarantee program.
NOTICE: To exercise the option available to the Holder pursuant to the
referenced Trust Indenture, the Holder must notify the Registrar of
such exercise and deliver this Bond to the Registrar at the times and
in the manner set forth in this Bond. The signature to these
Instructions to Sell must correspond with the name as written upon the
face of this Bond in every particular, without alteration or
enlargement, or any change whatsoever.
FORM OF SERIES 1996 B BOND
UNITED STATES OF AMERICA
STATE OF INDIANA
CITY OF GARY, INDIANA
TAXABLE ADJUSTABLE RATE ECONOMIC DEVELOPMENT
REVENUE REFUNDING BOND, SERIES 1996 B
(THE MILLER PARTNERSHIP, L.P. PROJECT)
NO. B-1
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO ISSUER OR ITS AGENT
FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY CERTIFICATE ISSUED
IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY
AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO
SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY
TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON
IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST
HEREIN.
Maturity Date Cusip Number Date of Authentication
March 1, 2031 April 1, 1996
Date of Initial Delivery: April 1, 1996
Registered Owner: CEDE & CO.
Principal Amount:
The City of Gary, Indiana (the "Issuer"), a municipal corporation and
political subdivision validly existing under the laws of the State of Indiana,
for value received, promises to pay to the registered owner specified above or
registered assigns, but solely from the sources and in the manner referred to
herein, the principal amount specified above on the aforesaid Maturity Date,
unless this Bond is called for earlier redemption, and to pay from those sources
interest thereon at the rate per annum determined as described herein. Initial
interest on this Bond shall accrue
B-1
from the Date of Initial Delivery of this Bond. Interest on this Bond is
payable on the first Business Day, as hereinafter defined, of each month, as
long as the interest rate hereon is calculated pursuant to the Weekly Interest
Rate, the One Month Interest Rate or the Three Month Interest Rate (as such
terms are hereinafter defined), commencing the first Business Day of May, 1996,
until the principal amount is paid or duly provided for. For any period of time
during which this Bond bears interest at the Six Month Interest Rate, the One
Year Interest Rate, the Five Year Interest Rate or the Fixed Interest Rate (as
such terms are hereinafter defined) interest hereon shall be payable on the
first day of each April and October. Any date established for the payment of
interest as described above is hereinafter referred to as an "Interest Payment
Date". The interest payable hereon on each Interest Payment Date shall be for
the period commencing on the next preceding Interest Payment Date (or the Date
of Initial Delivery of this Bond with respect to the first Interest Payment
Date) to and including the day immediately preceding the Interest Payment Date
on which payment is made. Interest shall be calculated on the basis of a year
of 365 days or 366 days, as applicable, for the number of days actually elapsed,
while the interest hereon is payable at the Weekly Interest Rate, the One Month
Interest Rate or the Three Month Interest Rate. Otherwise, interest shall be
calculated on the basis of a 360-day year consisting of twelve 30-day months.
The term "Business Day", as used herein, means any day, other than a
Saturday or Sunday, on which commercial banks located in the cities in which the
principal corporate trust office of the Paying Agent, the principal corporate
trust office of the Registrar, the principal office of the Remarketing Agent,
and the principal office of the Bank, as hereafter defined, are located are not
required or authorized to remain closed and on which the New York Stock Exchange
is not closed. This Bond will bear interest from the most recent date to which
interest has been paid or duly provided for or, if no interest has been paid or
duly provided for, from its date of initial delivery. If any Interest Payment
Date, date of maturity of this Bond, Bond Purchase Date (as hereinafter defined)
or date fixed for redemption of this Bond, is not a Business Day, then payment
of the applicable interest, principal, purchase price or redemption price may be
made on the next succeeding Business Day with the same force and effect as if
such payment were made on such Interest Payment Date, date of maturity, Bond
Purchase Date or date fixed for redemption and no interest shall accrue for the
period after such date; provided, however, if this Bond bears interest at any of
the Weekly Interest Rate, the One Month Interest Rate or the Three Month
Interest Rate, interest shall accrue from the scheduled date of any maturity or
redemption due date of this Bond until the Business Day on which such payment is
made.
The principal of and premium, if any, on this Bond is payable upon
presentation and surrender hereof at the principal corporate trust office of the
Paying Agent, presently The Fifth Third Bank (the "Paying Agent"), located in
Cincinnati, Ohio. Interest is payable on each Interest Payment Date by check or
draft mailed to the person in whose name this Bond (or one or more predecessor
bonds) is registered (the "Holder") at the close of business on the fifth
Business Day preceding such Interest Payment Date (the "Regular Record Date") on
the registration books for this issue maintained by The Fifth Third Bank,
located in Cincinnati, Ohio, as Registrar, at the address appearing therein.
Notwithstanding the foregoing, interest on any Bond in the
B-2
denomination of $100,000 or more shall be paid by wire transfer in immediately
available funds to the bank account number and address filed in writing with the
Registrar by such Holder, which account number and address shall be filed with
the Registrar at least two (2) Business Days prior to that Interest Payment
Date. Any interest which is not timely paid or duly provided for shall cease to
be payable to the Holder hereof (or of one or more predecessor bonds) as of the
Regular Record Date, and shall be payable to the Holder hereof (or of one or
more predecessor bonds) at the close of business on a Special Record Date to be
fixed by the Trustee for the payment of that overdue interest. Notice of the
Special Record Date shall be mailed to Holders not less than ten days prior
thereto. The principal and redemption price of and interest on this Bond are
payable in lawful money of the United States of America, without deduction for
the services of the Paying Agent. Notwithstanding anything herein to the
contrary, when this Bond is registered in the name of a Depository (as defined
in the Indenture hereinafter defined) or its nominee, the principal and
redemption price of and interest on this Bond shall be payable in federal funds
delivered or transmitted to the Depository or its nominee.
THIS BOND DOES NOT REPRESENT OR CONSTITUTE A DEBT OR PLEDGE OF THE FAITH
AND CREDIT OF THE ISSUER, THE STATE OF INDIANA OR ANY POLITICAL SUBDIVISION
THEREOF. THE HOLDERS OR OWNERS OF THIS BOND HAVE NO RIGHT TO HAVE TAXES LEVIED
BY THE ISSUER, THE STATE OF INDIANA OR ANY POLITICAL SUBDIVISION THEREOF FOR THE
PAYMENT OF THE PRINCIPAL OF OR PREMIUM (IF ANY) OR INTEREST ON THIS BOND.
PRINCIPAL OF AND PREMIUM (IF ANY) AND INTEREST ON THIS BOND ARE PAYABLE SOLELY
FROM THE REVENUES PLEDGED PURSUANT TO THE INDENTURE (AS HEREINAFTER DEFINED).
This Bond shall not constitute the personal obligation, either jointly or
severally, of the members of the Common Council of the Issuer (the "Issuing
Authority"), its Economic Development Commission, or of any officer, employee or
official of the Issuer.
This Bond shall not be entitled to any security or benefit under the
Indenture or be valid or become obligatory for any purpose until the certificate
of authentication hereon shall have been duly signed.
GENERAL PROVISIONS
This Bond is one of a duly authorized issue the City of Gary, Indiana
Taxable Adjustable Rate Economic Development Revenue Refunding Bonds, Series
1996 B (The Miller Partnership, L.P. Project) (the "Bonds"), issuable under the
Trust Indenture, dated as of March 1, 1996 (the "Indenture"), between the Issuer
and Fifth Third Bank of Central Indiana, as Trustee, aggregating in the
principal amount of $1,680,000 and issued for the purpose of the Issuer making a
loan (the "Loan") to The Miller Partnership, L.P., an Illinois limited
partnership (the "Borrower") pursuant to the Loan Agreement, dated as of even
date with the Indenture (the "Agreement"), to refund the City of Gary, Indiana
Economic Development Revenue Bonds, Series 1991 B (The Miller
B-3
Partnership, L.P. Project) and the City of Gary, Indiana Economic Development
Revenue Bonds, Series 1993 B (The Miller Partnership, L.P. Project), which were
issued for the purpose of financing of the costs of issuance of such bonds. The
Bonds, together with any Additional Bonds which may be issued on a parity
therewith under the Indenture, are special obligations of the Issuer, issued or
to be issued under and are to be secured and entitled equally and ratably to the
protection given by the Indenture. The Bonds are issued pursuant to Indiana
Code 36-7-11.9 and 12, and Indiana Code 5-1-5 (collectively, the "Act") and
pursuant to an Ordinance duly adopted by the Issuing Authority. The Bonds are
issued on a parity with the City of Gary, Indiana Adjustable Rate Economic
Development Revenue Bonds, Series 1996 A (The Miller Partnership, L.P. Project)
(the "Series 1996 A Bonds").
Reference is made to the Indenture and the Agreement for a more complete
description of the Project, the provisions, among others, with respect to the
nature and extent of the security for the Bonds, the rights, duties and
obligations of the Issuer, the Trustee and the Holders of the Bonds and the
terms and conditions upon which the Bonds are issued and secured. All terms
used herein with initial capitalization where the rules of grammar or context do
not otherwise require shall have the meanings as set forth in the Indenture.
Each Holder assents, by its acceptance hereof, to all of the provisions of the
Indenture.
Pursuant to the Agreement, the Borrower has executed and delivered to the
Trustee the Borrower's Note, Series 1996 B dated as of even date with the Bonds
(the "Series 1996 B Note"), in the principal amount of $1,680,000. The Borrower
is required by the Agreement and the Series 1996 B Note to make payments to the
Trustee in amounts and at times necessary to pay the principal of and premium
(if any) and interest on the Bonds (the "Bond Service Charges"). In the
Indenture, the Issuer has assigned to the Trustee, to provide for the payment of
the Bond Service Charges on the Bonds and any Additional Bonds, the Issuer's
right, title and interest in and to the Series 1996 B Note and the Agreement,
except for Unassigned Issuer's Rights, as defined in the Agreement.
Pursuant to the Agreement, the Borrower has caused to be issued and
delivered to the Trustee by The Royal Bank of Scotland plc, acting through its
New York Branch (the "Bank") an irrevocable letter of credit (the "Letter of
Credit"), pursuant to which the Trustee is entitled to draw up to (a) the
principal amount of the Bonds outstanding to enable the Trustee to pay (i) the
principal amount of the Bonds when due at maturity or upon redemption or
acceleration on the occurrence of an event of default, and (ii) an amount equal
to the principal portion of the purchase price of any Bonds or Beneficial
Ownership Interests duly tendered by the Holders or Beneficial Owners thereof
for purchase pursuant to the Indenture, plus (b) the amount of interest accruing
on the Bonds, but not to exceed 56 days' accrued interest at the maximum rate of
12% per annum (the "Maximum Rate") to enable the Trustee to pay interest when
due on the Bonds and the interest portion (if any) of the purchase price of any
Bonds or Beneficial Ownership Interests duly tendered by the Holders or
Beneficial Owners thereof for purchase pursuant to the Indenture. In connection
with the issuance of the Letter of Credit, the Bank has entered into a
Reimbursement Agreement (the "Reimbursement Agreement") with the Borrower
pursuant to which the Borrower
B-4
is obligated to reimburse the Bank for all draws made under Letter of Credit.
The Letter of Credit shall expire, subject to provisions for earlier termination
or extension, on April 15, 2001.
Subject to the provisions of the Indenture and the Agreement, the Letter of
Credit may be replaced from time to time by another letter of credit (an
"Alternate Letter of Credit"), in which case the term "Bank" shall mean the
financial institution issuing the Alternate Letter of Credit and the term
"Letter of Credit" shall mean the Alternate Letter of Credit.
Copies of the Indenture, the Agreement, the Letter of Credit, and the
Series 1996 A Note are on file in the principal corporate trust office of the
Trustee.
The Bond Service Charges on the Bonds are payable solely from the Revenues,
as defined and as provided for in the Indenture (being, generally, the amounts
payable under the Agreement in repayment of the Loan, any unexpended proceeds of
the Bonds and amounts deposited in the Refunding Fund and the Bond Fund as
defined and provided for in the Indenture, including amounts drawn pursuant to
the Letter of Credit), and are an obligation of the Issuer only to the extent of
the Revenues. The Bonds are not secured by a pledge of the faith and credit or
the taxing power of the Issuer, the State of Indiana or any political
subdivision thereof.
No recourse under or upon any obligation, covenant, acceptance or agreement
contained in the Indenture, or in any of the Bonds, or under any judgment
obtained against the Issuer, its Economic Development Commission or the Issuing
Authority, or by the enforcement of any assessment or by any legal or equitable
proceeding by virtue of any constitution or statute or otherwise, or under any
circumstances, shall be had against any member or officer, as such, past,
present, or future, of the Issuer, its Economic Development Commission or the
Issuing Authority, whether directly or through the Issuer, or otherwise, for the
payment for or to the Issuer or any receiver thereof, or for or to any Holder of
any Bond, or otherwise, of any sum that may be due and unpaid by the Issuer upon
any of the Bonds. Any and all personal liability of every nature, whether at
common law or in equity, or by statute or by constitution or otherwise, of any
such member or officer, as such, to respond by reason of any act or omission on
his or her part, or otherwise, for, directly or indirectly, the payment for or
to the Issuer or any receiver thereof, or for or to the owner or any Holder of
any Bond, or otherwise, of any sum that may remain due and unpaid upon any Bond,
shall be deemed to be and is hereby expressly waived and released as a condition
of and consideration for the execution and delivery of the Indenture and the
issuance of the Bonds.
The Bonds are issuable only as fully registered bonds in the denominations
of $100,000 or $5,000 multiples in excess thereof and shall be originally issued
only to a Depository to be held in a book entry system and: (i) the Bonds shall
be registered in the name of the Depository or its nominee, as Bondholder, and
immobilized in the custody of the Depository; (ii) unless otherwise requested by
the Depository, there shall be a single Bond certificate; and (iii) the Bonds
shall not be transferable or exchangeable, except for transfer to another
Depository or another nominee of a Depository, without further action by the
Issuer. While the Bonds are in book entry only form,
B-5
Bonds in the form of physical certificates shall only be deposited with the
Depository. The owners of beneficial interests in the Bonds shall not have any
right to receive Bonds in the form of physical certificates. If any Depository
determines not to continue to act as a Depository for the Bonds for use in a
book entry system, the Issuer may attempt to have established a securities
depository/book entry system relationship with another qualified Depository
under the Indenture. If the Issuer does not or is unable to do so, the Issuer
and the Trustee, after the Trustee has made provision for notification to the
owners of book entry interests by the then Depository, shall permit withdrawal
of the Bonds from the Depository, and authenticate and deliver, or cause to be
authenticated and delivered, Bond certificates in fully registered form (in
denominations of $100,000 or $5,000 multiples in excess thereof) to the
assignees of the Depository or its nominee.
While a Depository is the sole holder of the Bonds, delivery or notation of
partial redemption or tender for purchase of Bonds shall be effected in
accordance with the provisions of the Letter of Representations, as defined in
the Indenture.
In addition to the words and terms defined elsewhere in this Bond, the
following terms shall have the following meanings:
"Beneficial Owner" means with respect to the Bonds, a person owning a
Beneficial Ownership Interest therein, as evidenced to the satisfaction of the
Trustee.
"Beneficial Ownership Interest" means the beneficial right to receive
payments and notices with respect to the Bonds which are held by the Depository
under a book entry system.
"book entry form" or "book entry system" means, with respect to the Bonds,
a form or system, as applicable, under which (i) the ownership of beneficial
interests in Bonds and Bond Service Charges may be transferred only through a
book entry and (ii) physical Bond certificates in fully registered form are
registered only in the name of a Depository or its nominee as Holder, with the
physical Bond certificates "immobilized" in the custody of the Depository. The
book entry system maintained by and the responsibility of the Depository and not
maintained by or the responsibility of the Issuer or the Trustee is the record
that identifies, and records the transfer of the interests of, the owners of
beneficial (book entry) interests in the Bonds.
"Depository" means any securities depository that is a clearing agency
under federal law operating and maintaining, with its participants or otherwise,
a book entry system to record ownership of book entry interests in Bonds, and to
effect transfers of book entry interests in Bonds, and includes and means
initially The Depository Trust Company (a limited purpose trust company), New
York, New York.
The Indenture permits certain amendments or supplements to the Agreement,
the Indenture, the Letter of Credit and the Series 1996 A Note not prejudicial
to the Holders to be made with the consent of the Bank but without the consent
of or notice to the Holders, and other amendments or supplements thereto to be
made with the consent of the Bank and the Holders of
B-6
at least a majority in aggregate principal amount of the Bonds and any
Additional Bonds then outstanding. So long as the Bank is not in default under
the Letter of Credit, and the Bank consents in writing to such amendments, the
consent of the Holders is not required for those amendments to the Indenture,
Agreement, Letter of Credit or Series 1996 A Note which otherwise require the
consent of only a majority in aggregate principal amount of the Bonds and any
Additional Bonds then outstanding.
DETERMINATION OF INTEREST RATE
The initial interest rate on this Bond shall be established and be in
effect until the first Interest Rate Adjustment Date. Thereafter, except as
provided below, for each succeeding period the interest rate on the Bonds shall
be the Weekly Interest Rate for such weekly period as established on the
Interest Rate Determination Date immediately preceding the commencement of such
weekly period.
On June 1, 1996, and on any Interest Period Reset Date thereafter, subject
to the conditions set forth in the Indenture, the interest rate on the Bonds may
be converted to a different Interest Rate Mode upon receipt by the Trustee, the
Paying Agent, the Registrar and the Remarketing Agent of a written direction
from the Borrower, given on behalf of the Issuer, not less than 45 days prior to
the Interest Period Reset Date, to convert the interest rate on the Bonds to an
Interest Rate Mode other than the Interest Rate Mode then in effect.
On each Interest Rate Determination Date, the Remarketing Agent shall give
the Trustee, the Registrar and Paying Agent telephonic notice (immediately
confirmed in writing) of the interest rate to be borne by the Bonds for the
following Interest Rate Period; provided that if the interest rate is determined
pursuant to clause (b) of the definition of the applicable Interest Rate Mode,
on the Interest Rate Determination Date, the Trustee shall give notice to the
Borrower and the Bank as above provided.
If the interest rate on the Bonds is converted to a different Interest Rate
Mode, at least 30 days prior to the Interest Period Reset Date the Registrar
shall use its best efforts to notify the Holders of all outstanding Bonds by
telephone (to the extent their telephone numbers have been provided in writing
to the Registrar), immediately confirmed by first class mail to all Holders,
that upon such Interest Period Reset Date the Bonds shall be converted to a
different Interest Rate Mode, which Interest Rate Mode shall be specified, and
that all Bonds shall be subject to a mandatory tender, subject to the right of
the Holders to affirmatively elect to waive the mandatory tender and retain
their Bonds.
Any calculation of the interest rate to be borne by the Bonds shall be
rounded to the nearest one-hundredth of one percent (0.01%). The computation of
the interest rate on the Bonds by the Remarketing Agent shall be binding and
conclusive upon the Holders of the Bonds.
B-7
"Five Year Interest Rate" means (a) the rate of interest per annum
determined by the Remarketing Agent, on the Interest Rate Determination Date
immediately preceding the applicable Interest Rate Adjustment Date, to be the
interest rate necessary, during the Interest Rate Period commencing on the
applicable Interest Rate Adjustment Date and ending on March 31 or September 30
nearest to but not later than the date which is five years from the Interest
Rate Adjustment Date, in the judgment of the Remarketing Agent (taking into
consideration current transactions and comparable securities with which the
Remarketing Agent is involved or of which it is aware and prevailing financial
market conditions) to produce as nearly as practical a par bid for the Bonds on
the Interest Rate Determination Date or (b) in the event that the Remarketing
Agent has been removed or has resigned and no successor has been appointed or
the Remarketing Agent has failed to determine the Five Year Interest Rate for
whatever reason, or the Five Year Interest Rate cannot be determined pursuant to
clause (a) for whatever reason, the interest rate then in effect with respect to
the Bonds, without adjustment; provided that in no event shall the Five Year
Interest Rate exceed the lesser of 12% per annum or the maximum rate permitted
by law (the "Maximum Rate").
"Fixed Interest Rate" means (a) the fixed rate of interest per annum
determined by the Remarketing Agent, on the Interest Rate Determination Date
immediately preceding the applicable Interest Period Reset Date, to be the
interest rate necessary, from the Interest Period Reset Date to the final
maturity date of the Bonds, in the judgment of the Remarketing Agent (taking
into consideration current transactions and comparable securities with which the
Remarketing Agent is involved or of which it is aware and prevailing financial
market conditions) to produce as nearly as practical a par bid for the Bonds on
the Interest Rate Determination Date or (b) in the event that the Remarketing
Agent has been removed or has resigned and no successor has been appointed or
the Remarketing Agent has failed to determine the Fixed Interest Rate for
whatever reason, or the Fixed Interest Rate cannot be determined pursuant to
clause (a) for whatever reason, the interest rate then in effect with respect to
the Bonds, without adjustment; provided that in no event shall the Fixed
Interest Rate exceed the Maximum Rate.
"Interest Period Reset Date" means the date on which the interest rate on
the Bonds converts from the Interest Rate Mode applicable to the Bonds prior to
such date to a new Interest Rate Mode. An Interest Period Reset Date shall be
the first Business Day of a month; provided that, upon conversion from a Six
Month, One Year or Five Year Interest Rate Mode, an Interest Period Reset Date
shall be the first day of a month; and provided further that, except when
converting from a Weekly Interest Rate Mode, an Interest Period Reset Date may
not occur prior to the end of the preceding Interest Rate Period.
"Interest Rate Adjustment Date" means any date on which the interest rate
on the Bonds is adjusted, either as the result of the conversion of the interest
rate on the Bonds to a different Interest Rate Mode or by adjustment of the
interest rate on the Bonds within the applicable Interest Rate Mode. Except as
otherwise provided with respect to an Interest Rate Adjustment Date which is
also an Interest Period Reset Date, an Interest Rate Adjustment Date shall be
the first day of the first month of the Interest Rate Period if the Bonds bear
interest at the Six Month, One Year
B-8
or Five Year Interest Rate; the first Business Day of the month if the Bonds
bear interest at the One Month or Three Month Interest Rate; and if the Bonds
bear interest at the Weekly Interest Rate, then the Interest Rate Adjustment
Date shall be Thursday of each week.
"Interest Rate Determination Date" means (i) with respect to the Three
Month Interest Rate, the Six Month Interest Rate, the One Year Interest Rate,
the Five Year Interest Rate and the Fixed Interest Rate, the tenth Business Day
preceding an Interest Rate Adjustment Date, (ii) with respect to the One Month
Interest Rate, the seventh Business Day preceding an Interest Rate Adjustment
Date, and (iii) with respect to the Weekly Interest Rate, not later than 2:00
p.m. according to local time at the principal corporate trust office of the
Registrar on Wednesday of each week, or the next preceding Business Day if such
Wednesday is not a Business Day; provided that upon any conversion to the Weekly
Interest Rate from a different Interest Rate Mode, the first Interest Rate
Determination Date shall mean not later than 2:00 p.m. according to the local
time at the principal corporate trust office of the Registrar on the Business
Day next preceding the Interest Period Reset Date.
"Interest Rate Mode" means any of those modes of interest with respect to
the Bonds permitted by the Indenture, specifically, the Weekly Interest Rate,
the One Month Interest Rate, the Three Month Interest Rate, the Six Month
Interest Rate, the One Year Interest Rate, the Five Year Interest Rate and the
Fixed Interest Rate.
"Interest Rate Period" means that period of time during which the interest
rate with respect to the Bonds has been determined by the Remarketing Agent or
otherwise as provided in the definition of the applicable Interest Rate Mode,
commencing on the applicable Interest Rate Adjustment Date, and terminating on
the day immediately preceding the following Interest Rate Adjustment Date.
"One Month Interest Rate" means (a) the rate of interest per annum
determined by the Remarketing Agent, on the Interest Rate Determination Date
immediately preceding the applicable Interest Rate Adjustment Date, to be the
interest rate necessary, during the Interest Rate Period commencing on the
applicable Interest Rate Adjustment Date to and including the day preceding the
first Business Day of the next month, in the judgment of the Remarketing Agent
(taking into consideration current transactions and comparable securities with
which the Remarketing Agent is involved or of which it is aware and prevailing
financial market conditions) to produce as nearly as practical a par bid for the
Bonds on the Interest Rate Determination Date or (b) in the event that the
Remarketing Agent has been removed or has resigned and no successor has been
appointed, or the Remarketing Agent has failed to determine the One Month
Interest Rate for whatever reason, or the One Month Interest Rate cannot be
determined pursuant to clause (a) for whatever reason, the interest rate then in
effect with respect to the Bonds, without adjustment; provided that in no event
shall the One Month Interest Rate exceed the Maximum Rate.
"One Year Interest Rate" means (a) the rate of interest per annum
determined by the Remarketing Agent, on the Interest Rate Determination Date
immediately preceding the applicable
B-9
Interest Rate Adjustment Date, to be the interest rate necessary, during the
Interest Rate Period commencing on the applicable Interest Rate Adjustment Date,
and ending on the March 31 or September 30 nearest to but not later than the
date which is one year from the Interest Rate Adjustment Date, in the judgment
of the Remarketing Agent (taking into consideration current transactions and
comparable securities with which the Remarketing Agent is involved or of which
it is aware and prevailing financial market conditions) to produce as nearly as
practical a par bid for the Bonds on the Interest Rate Determination Date or (b)
in the event that the Remarketing Agent has been removed or has resigned and no
successor has been appointed, or the Remarketing Agent has failed to determine
the One Year Interest Rate for whatever reason, or the One Year Interest Rate
cannot be determined pursuant to clause (a) for whatever reason, the interest
rate then in effect with respect to the Bonds, without adjustment; provided that
in no event shall the One Year Interest Rate exceed the Maximum Rate.
"Remarketing Agent" means, initially, Everen Securities, Inc., and any
successor Remarketing Agent appointed pursuant to the Indenture.
"Six Month Interest Rate" means (a) the rate of interest per annum
determined by the Remarketing Agent, on the Interest Rate Determination Date
immediately preceding the applicable Interest Rate Adjustment Date, to be the
interest rate necessary during the Interest Rate Period commencing on the
applicable Interest Rate Adjustment Date and ending on the March 31 or September
30 nearest to but not later than the date which is six months from the Interest
Rate Adjustment Date, in the judgment of the Remarketing Agent (taking into
consideration current transactions and comparable securities with which the
Remarketing Agent is involved or of which it is aware and prevailing financial
market conditions) to produce as nearly as practical a par bid for the Bonds on
the Interest Rate Determination Date or (b) in the event that the Remarketing
Agent has been removed or has resigned and no successor has been appointed, or
the Remarketing Agent has failed to determine the Six Month Interest Rate for
whatever reason, or the Six Month Interest Rate cannot be determined pursuant to
clause (a) for whatever reason, the interest rate then in effect with respect to
the Bonds, without adjustment; provided that in no event shall the Six Month
Interest Rate exceed the Maximum Rate.
"Three Month Interest Rate" means (a) the rate of interest per annum
determined by the Remarketing Agent, on the Interest Rate Determination Date
immediately preceding the applicable Interest Rate Adjustment Date, to be the
interest rate necessary during the Interest Rate Period commencing on the
applicable Interest Rate Adjustment Date to and including the day preceding the
first Business Day of the January, April, July or October, nearest to but not
later than the date which is three months from the Interest Rate Adjustment
Date, in the judgment of the Remarketing Agent (taking into consideration
current transactions and comparable securities with which the Remarketing Agent
is involved or of which it is aware and prevailing financial market conditions)
to produce as nearly as practical a par bid for the Bonds on the Interest Rate
Determination Date or (b) in the event that the Remarketing Agent has been
removed or has resigned and no successor has been appointed, or the Remarketing
Agent has failed to determine the Three Month Interest Rate for whatever reason,
or the Three Month Interest Rate cannot be determined pursuant to
B-10
clause (a) for whatever reason, the interest rate then in effect with respect to
the Bonds, without adjustment; provided that in no event shall the Three Month
Interest Rate exceed the Maximum Rate.
"Weekly Interest Rate" means (a) the rate of interest per annum determined
by the Remarketing Agent, on the Interest Rate Determination Date immediately
preceding the applicable Interest Rate Adjustment Date, to be the interest rate
necessary during the Interest Rate Period of one week (or less in the case of
any such Interest Rate Period commencing on an Interest Period Reset Date which
is not a Thursday, or ending on the day preceding an Interest Period Reset Date)
commencing on the applicable Interest Rate Adjustment Date, in the judgment of
the Remarketing Agent (taking into consideration current transactions and
comparable securities with which the Remarketing Agent is involved or of which
it is aware and prevailing financial market conditions) to produce as nearly as
practical a par bid for the Bonds on the Interest Rate Determination Date or (b)
in the event that the Remarketing Agent has been removed or has resigned and no
successor has been appointed, or the Remarketing Agent has failed to determine
the Weekly Interest Rate for whatever reason, or the Weekly Interest Rate cannot
be determined pursuant to clause (a) for whatever reason, the interest rate then
in effect with respect to the Bonds, without adjustment; provided that in no
event shall the Weekly Interest Rate exceed the Maximum Rate.
TENDER OPTION
A.1. TENDER OPTION WHILE BONDS BEAR INTEREST IN AN INTEREST RATE MODE
OTHER THAN THE WEEKLY INTEREST RATE. While the Bonds bear interest at the One
Month Interest Rate, the Three Month Interest Rate, the Six Month Interest Rate,
the One Year Interest Rate or the Five Year Interest Rate, on each Interest Rate
Adjustment Date (each a "Bond Purchase Date"), each Holder or Beneficial Owner,
as applicable, shall have the option to tender for purchase, at 100% of the
principal amount thereof, all of the Bonds owned by such Holder (or all
Beneficial Ownership Interests owned by such Beneficial Owner), or such lesser
principal amount thereof (in denominations of $5,000 or any integral multiple
thereof, provided that such Holder or Beneficial Owner tenders $100,000 or more
in principal amount and provided that the untendered portion of any Bond or
Beneficial Ownership Interest shall be $100,000 or more in principal amount) as
such Holder or Beneficial Owner may specify in accordance with the terms,
conditions and limitations hereinafter set forth. The purchase price for each
such Bond or Beneficial Ownership Interest shall be payable in lawful money of
the United States of America, shall equal the principal amount, or such portion
thereof, to be purchased and shall be paid in full on the applicable Bond
Purchase Date.
A.2. TENDER OPTION WHILE BONDS BEAR INTEREST AT THE WEEKLY INTEREST RATE.
While the Bonds bear interest at the Weekly Interest Rate, each Holder or
Beneficial Owner, as applicable, has the option to tender for purchase, at 100%
of the principal amount thereof plus accrued interest to the purchase date (a
"Bond Purchase Date"), all of the Bonds owned by such Holder (or all Beneficial
Ownership Interests owned by such Beneficial Owner), or such lesser principal
amount thereof (in denominations of $5,000 or any integral multiple thereof,
provided that such
B-11
Holder or Beneficial Owner tenders $100,000 or more in principal amount and
provided that the untendered portion of any Bond or Beneficial Ownership
Interest shall be $100,000 or more in principal amount) as such Holder or
Beneficial Owner may specify in accordance with the terms, conditions and
limitations hereafter set forth. The purchase price for each such Bond or
Beneficial Ownership Interest shall be payable in lawful money of the United
States of America and shall be paid in full on the applicable Bond Purchase
Date.
To exercise the option granted in paragraph A.1. above, the Holder or
Beneficial Owner, as applicable, shall (1) no earlier than 15 days prior to the
Bond Purchase Date and no later than 11:00 a.m. according to the local time at
the principal corporate trust office of the Registrar on the eighth Business Day
prior to the Bond Purchase Date, unless the Bonds bear interest at the One Month
Interest Rate, then on the fifth Business Day prior to the Bond Purchase Date,
give notice to the Registrar by telecopy or in writing which states (i) the name
and address of the Holder or Beneficial Owner, as applicable, (ii) the principal
amount, CUSIP number and bond numbers of the Bonds or Beneficial Ownership
Interests to be purchased, (iii) that such Bonds or Beneficial Ownership
Interests are to be purchased on such Bond Purchase Date pursuant to the terms
of the Indenture, and (iv) that such notice is irrevocable; (2) in the case of a
Beneficial Owner, provide the Registrar with evidence satisfactory to the
Registrar of such Beneficial Owner's Beneficial Ownership Interest; (3) in the
case of a Holder, no later than 10:00 a.m. according to the local time at the
principal corporate trust office of the Registrar on the seventh day preceding
such Bond Purchase Date, or the next preceding Business Day if such seventh day
is not a Business Day, unless the Bonds bear interest at the One Month Interest
Rate, then on the fourth day preceding such Bond Purchase Date, or the next
preceding Business Day if such fourth day is not a Business Day, deliver to the
principal corporate trust office of the Registrar the Bonds to be purchased in
proper form, accompanied by fully completed and executed Instructions to Sell,
the form of which is printed hereon; and (4) in the case of a Beneficial Owner,
no later than 10:00 a.m. (according to the local time at the principal corporate
trust office of the Registrar) on the Bond Purchase Date, cause the transfer of
the Beneficial Owner's Beneficial Ownership on the records of the Depository.
To exercise the option granted in paragraph A.2. above, the Holder or
Beneficial Owner, as applicable, shall (1) give notice to the Registrar by
telecopy or in writing, which states (i) the name and address of the Holder or
Beneficial Owner, (ii) the principal amount, CUSIP number and Bond numbers of
the Bonds or Beneficial Ownership Interests to be purchased, (iii) the date on
which such Bonds or Beneficial Ownership Interests are to be purchased, which
Bond Purchase Date shall be a Business Day not prior to the seventh day and not
later than the fifteenth day next succeeding the date of giving of such notice
to the Registrar and, if the interest rate on the Bonds is to be converted from
the Weekly Interest Rate to a new Interest Rate Mode, is a date no later than
the Interest Period Reset Date with respect to the new Interest Rate Mode, and
(iv) that such notice is irrevocable; (2) in the case of a Beneficial Owner,
provide the Trustee with evidence satisfactory to the Registrar of such
Beneficial Owner's Beneficial Ownership Interest; (3) in the case of a Holder,
no later than 10:00 a.m. according to the local time at the principal corporate
trust office of the Registrar on the second Business Day immediately preceding
the applicable
B-12
Bond Purchase Date, deliver to the principal corporate trust office of the
Registrar the Bonds to be purchased in proper form, accompanied by fully
completed and executed Instructions to Sell; and (4) in the case of a Beneficial
Owner, no later than 10:00 a.m. (according to the local time at the principal
corporate trust office of the Registrar) on the Bond Purchase Date cause the
transfer of the Beneficial Owner's Beneficial Ownership on the records of the
Depository. In the case of a Bond or Beneficial Ownership Interest or portion
thereof to be purchased prior to an Interest Payment Date and after the Record
Date in respect thereof, the Holder or Beneficial Owner, as applicable, shall
deliver a due-bill check, in form satisfactory to the Registrar, for interest
due on such Interest Payment Date.
Any Bonds not delivered by Holders following the giving of notice of tender
shall nevertheless be deemed tendered for remarketing. Subject to the right of
such nondelivering Holders to receive the purchase price of such Bonds and
accrued interest to the Bond Purchase Date, such Bonds shall be null and void,
and the Trustee shall cause to be authenticated and delivered new Bonds in
replacement thereof pursuant to the remarketing of such Bonds. After the giving
of a notice of tender Beneficial Owners shall be obligated to transfer their
Beneficial Ownership Interests on the records of the Depository in accordance
with the instructions of the Registrar.
The tender options granted to the Holders or Beneficial Owners and all
mandatory tenders of Bonds or Beneficial Ownership Interests are subject to the
additional condition that any tendered Bonds or Beneficial Ownership Interests
(or the applicable portions thereof) will not be purchased if such Bonds (or
applicable portions thereof) mature or are redeemed on or prior to the
applicable Bond Purchase Date.
MANDATORY TENDER
(a) If at any time the Issuer at the direction of the Borrower shall
convert the interest rate on the Bonds to a different Interest Rate Mode, on the
Interest Period Reset Date upon which such conversion is effective, all Bonds
and Beneficial Ownership Interests shall be subject to mandatory tender by the
Holders or Beneficial Owners thereof for purchase on the Interest Period Reset
Date (a "Bond Purchase Date") at the applicable purchase price provided for
above. Notwithstanding such mandatory tender, any Holder or Beneficial Owner
may elect to retain his or her Bonds or Beneficial Ownership Interests by
delivering to the Registrar a written notice no later than 11:00 a.m. according
to the local time at the principal corporate trust office of the Registrar on
the eighth Business Day prior to such Interest Period Reset Date or by 11:00
a.m. according to the local time at the principal corporate trust office of the
Registrar on the fifth Business Day prior to such Interest Period Reset Date if
the Interest Rate Mode is to be converted to the One Month Interest Rate, which
notice shall state that (a) such Holder or Beneficial Owner realizes that the
Bonds or Beneficial Ownership Interests are being converted to bear interest at
the applicable Interest Rate Mode, (b) unless the interest rate on the Bonds is
being converted to the Weekly Interest Rate, such Holder or Beneficial Owner
realizes that the next Bond Purchase Date upon which the Bonds or Beneficial
Ownership Interests may be tendered for purchase is the
B-13
next Interest Rate Adjustment Date or, if such Bonds are being converted to the
Fixed Interest Rate, that such Bonds may no longer be tendered for purchase, (c)
such Holder or Beneficial Owner realizes that any securities rating on the Bonds
may be withdrawn or lowered as a result of the conversion to a different
Interest Rate Mode, and (d) such Holder or Beneficial Owner affirmatively elects
to hold his or her Bonds and receive interest at the applicable Interest Rate
Mode.
Bonds or Beneficial Ownership Interests with respect to which the Registrar
shall not have received the election required by the preceding paragraph shall
be deemed to have been tendered whether or not the Holders thereof shall have
delivered such Bonds to the Registrar and without the need for further action of
the Beneficial Owners. Subject to the right of the Holders of such Bonds or
Beneficial Owners of such Beneficial Ownership Interests to receive the purchase
price of such Bonds or Beneficial Ownership Interests and to receive interest
accrued thereon to the Interest Period Reset Date, such Bonds or Beneficial
Ownership Interests shall be null and void and the Trustee shall cause to be
authenticated and delivered new Bonds in replacement thereof, or new Beneficial
Ownership Interests shall be created, pursuant to the remarketing of such Bonds
or Beneficial Ownership Interests.
(b) If at any time the Borrower shall provide for the delivery to the
Trustee of an Alternate Letter of Credit in accordance with the provisions of
Section 5.09 of the Indenture, on the date that precedes the Replacement Date by
at least five Business Days (a "Bond Purchase Date"), as defined in the
Indenture, all Bonds and Beneficial Ownership Interests shall be subject to
mandatory tender by the Holders or Beneficial Owners, as the case may be,
thereof for purchase at the applicable purchase price provided for above. At
least 30 days prior to the Bond Purchase Date the Registrar shall use its best
efforts to notify the Holders of all outstanding Bonds by telephone (to the
extent their telephone numbers have been provided in writing to the Registrar),
immediately confirmed by first class mail to all Holders, that such an Alternate
Letter of Credit is to be delivered by the Borrower to the Trustee. The notice
shall advise the Holders of the requirements of Section 5.09 of the Indenture
and confirm that such requirements have been met, and that all Bonds shall be
subject to mandatory tender pursuant to Section 2.06 of the Indenture, subject
to the right of the Holders or Beneficial Owners to affirmatively elect to waive
the mandatory tender and retain the Bonds or Beneficial Ownership Interests.
Notwithstanding such mandatory tender, any Holder or Beneficial Owner, as
applicable, may elect to retain its Bonds or Beneficial Ownership Interests by
delivering to the Registrar a written notice no later than 11:00 a.m. according
to the local time at the principal corporate trust office of the Registrar on
the eighth Business Day prior to such Replacement date which notice shall state
that (a) such Holder or Beneficial Owner realizes that the Borrower is
delivering an Alternate Letter of Credit to the Trustee pursuant to Section 5.09
of the Indenture, (b) such Holder or Beneficial Owner has received the notice
required by Section 2.06 of the Indenture, and (c) such Holder or Beneficial
Owner affirmatively elects to hold its Bonds or Beneficial Ownership Interests.
B-14
Bonds or Beneficial Ownership Interests with respect to which the Registrar
shall not have received the election required by the preceding paragraph shall
be deemed to have been tendered for purposes of Section 2.06 of the Indenture
whether or not the Holders thereof shall have delivered such Bonds to the
Registrar and without the need for further action by the Beneficial Owners.
Subject to the right of the Holders of such Bonds or Beneficial Owners of such
Beneficial Ownership Interests to receive the purchase price of such Bonds or
Beneficial Ownership Interests and interest accrued thereon to the Replacement
Date, such Bonds or Beneficial Ownership Interests shall be null and void and
the Trustee shall cause to be authenticated and delivered new Bonds in
replacement thereof or new Beneficial Ownership Interests shall be created
pursuant to the remarketing of such Bonds or Beneficial Ownership Interests or
the pledge of such Bonds or Beneficial Ownership Interests to the Bank in lieu
or remarketing such Bonds or Beneficial Ownership Interests as described in
Section 6.20 of the Indenture.
REDEMPTION
(a) MANDATORY REDEMPTION UPON A DETERMINATION OF TAXABILITY. Upon the
occurrence of a Determination of Taxability, as defined in the Indenture, with
respect to the Series 1996 A Bonds, the Bonds are subject to mandatory
redemption in whole at a redemption price equal to 100% of the outstanding
principal amount thereof, plus interest accrued to the redemption date, at the
earliest practicable date selected by the Trustee, after consultation with the
Borrower, but in no event later than 45 days following the Trustee's
notification of the Determination of Taxability. The occurrence of a
Determination of Taxability with respect to the Bonds will not constitute an
Event of Default under the Indenture. No increase in the interest payable with
respect to the Bonds will occur in the event a Determination of Taxability
occurs.
(b) MANDATORY REDEMPTION UPON EXPIRATION OF LETTER OF CREDIT. The Bonds
are subject to mandatory redemption in whole on the Interest Payment Date which
next precedes the Letter of Credit Termination Date, at a redemption price of
100% of the outstanding principal amount thereof plus accrued interest to the
redemption date unless, at least 45 days prior to any such Interest Payment
Date, (a) the Bank shall have agreed in writing to an extension or further
extension of the Letter of Credit Termination Date to a date not less earlier
than one year from the Letter of Credit Termination Date being extended or (b)
pursuant to Section 5.09 of the Indenture, the Borrower shall have obtained and
delivered to the Trustee an Alternate Letter of Credit with a termination date
not earlier than one year from the Letter of Credit Termination Date for the
Letter of Credit it replaces, in which case the Bonds will be subject to the
mandatory tender provisions set forth above.
(c) OPTIONAL REDEMPTION. Unless previously redeemed, the Bonds are
subject to redemption at the option of the Issuer, upon the written direction of
the Borrower (subject to compliance with Section 4.03 of the Indenture), (1) if
the Bonds do not bear interest at the Fixed Interest Rate, in whole or in part
(in integral multiples of $5,000, provided that the unredeemed portion of any
Bond redeemed in part shall be $100,000 or more) on any Interest Rate Adjustment
B-15
Date at the redemption price of 100% of the principal amount redeemed plus
accrued interest thereon to the redemption date, or (2) if the Bonds bear
interest at the Fixed Rate after the Fixed Interest Rate Commencement Date and
on or after the First Optional Redemption Date, in whole or in part (in integral
multiples of $5,000, provided that the unredeemed portion of any Bond redeemed
in part shall be $100,000 or more) at any time at a redemption price equal to
the following percentages of the principal amount redeemed, plus in each case
accrued interest to the date fixed for redemption:
Redemption Date Optional Redemption Price
--------------- -------------------------
First Optional Redemption
Date, through the following
last day of March 103%
First Anniversary of the First
Optional Redemption Date,
through the following
last day of March 102%
Second Anniversary of the
First Optional Redemption
Date, through the following
last day of March 101%
Third Anniversary of the First
Optional Redemption Date and
thereafter 100%
"First Optional Redemption Date" means the earlier to occur of the April 1
occurring in the year which is (i) at least ten (10) full years after the Fixed
Interest Rate Commencement Date or (ii) a number of years after the Fixed
Interest Rate Commencement Date equal to the number of full years between the
Fixed Interest Rate Commencement Date and the maturity date of the Bonds,
multiplied by 1/2 and rounded up to the nearest whole number.
"Fixed Interest Rate Commencement Date" means the Interest Period Reset
Date from and after which the Bonds shall bear interest at the Fixed Interest
Rate, as that date shall be established as provided in the Indenture.
(d) Extraordinary Optional Redemption. The Bonds are also subject to
redemption by the Issuer in the event of the exercise by the Borrower of its
option to direct that redemption upon occurrence of any of the events described
in Section 6.2 of the Agreement (generally, substantial damage to, or
destruction or condemnation of the Project or changes in law causing the
Agreement to become void, unenforceable or impossible of performance or the
imposition of
B-16
unreasonable burdens or excessive liabilities with respect to the Project or its
operation), (1) at any time in whole, or (2) at any time in part in the event of
condemnation of part of the Project, as provided in Section 6.2 of the
Agreement, in each case at a redemption price of 100% of the principal amount
redeemed, plus interest accrued to the redemption date.
If less than all Bonds are to be redeemed at one time, the selection of
Bonds, or portions thereof (in integral multiples of $5,000) to be redeemed
shall be made by lot by the Trustee; provided, however, Bonds (or book entry
interests in Bonds) pledged to the Bank pursuant to the Reimbursement Agreement
shall be selected for redemption prior to the selection of any other Bonds. If
Bonds or portions thereof are called for redemption and if on the redemption
date moneys for the redemption thereof are held by the Trustee, thereafter those
Bonds or portions thereof to be redeemed shall cease to bear interest, and shall
cease to be secured by, and shall not be deemed to be outstanding under, the
Indenture.
Unless waived in writing by any Holder of Bonds to be redeemed, official
notice of any such redemption shall be given by the Registrar on behalf of the
Issuer by mailing a copy of an official redemption notice by first class mail at
least 30 days and not more than 60 days prior to the date fixed for redemption
(except in the case of a redemption under Section 4.01(a) of the Indenture, in
which case such notice shall be given at least 5 days and not more than 15 days
prior to the date fixed for redemption) to the registered owner of the Bond or
Bonds to be redeemed at the address shown on the Register or at such other
address as is furnished in writing by such registered owner to the Registrar.
It is certified and recited that there have been performed and have
happened in regular and due form, as required by law, all acts and conditions
necessary to be done or performed by the Issuer or to have happened (i)
precedent to and in the issuing of the Bonds in order to make them legal, valid
and binding special obligations of the Issuer, and (ii) precedent to and in the
execution and delivery of the Indenture and the Agreement; that payment in full
for the Bonds has been received; and that the Bonds do not exceed or violate any
constitutional or statutory limitation.
B-17
IN WITNESS OF THE ABOVE, the Issuer has caused this Bond to be executed in
the name of the Issuer by the manual or facsimile signatures of its duly
authorized officers, as of the date shown above.
CITY OF GARY, INDIANA
By: ___________________________________
Mayor
(Seal)
Attest:
___________________________________
Clerk
CERTIFICATE OF AUTHENTICATION
This Bond is one of the Bonds described in the within mentioned Indenture.
THE FIFTH THIRD BANK, as Authenticating
Agent
By: ___________________________________
Authorized Representative
ASSIGNMENT
For value received, the undersigned sells, assigns and transfers unto
_____________________________________________ the within Bond and irrevocably
constitutes and appoints
B-18
__________________________ attorney to transfer that Bond on the books kept for
registration thereof, with full power of substitution in the premises.
Dated: ____________________________ _______________________________________
Signature
Signature Guaranteed:
___________________________________
NOTICE: Signature(s) must be NOTICE: The assignor's signature to
guaranteed by an eligible guarantor this assignment must correspond with the
institution participating in a name as it appears upon the face of the
Securities Transfer Association within Bond in every particular, without
recognized signature guarantee alteration or any change whatever.
program.
B-19
NOTICE OF EXERCISE OF TENDER OPTION
INSTRUCTIONS TO SELL
To: _______________________
Attention: Corporate Trust Department
RE: City of Gary, Indiana Adjustable Rate Economic Development
Revenue Refunding Bonds, Series 1996 B (The Miller
Partnership, L.P. Project)
Gentlemen:
The undersigned, as the Holder of the Bond annexed hereto ("Bond"), hereby
elects the option available to the undersigned pursuant to the Trust Indenture
relating to the above-captioned bond issue. In accordance with such option, the
undersigned hereby tenders:
check the appropriate box / / the entire Bond
/ / (increments of $5,000 with a minimum
tender of $100,000)
for purchase on the first Bond Purchase Date (as defined in the Bond) after the
date hereof, pursuant to the referenced Trust Indenture. In accordance with
such tender, the undersigned hereby irrevocably sells, assigns and transfers
such Bond or portion thereof at the purchase price set forth in the Trust
Indenture, and does hereby irrevocably constitute and appoint the Registrar as
attorney to transfer such Bond or portion thereof on the books of the Registrar,
with full power of substitution in the premises.
Dated: ____________________________ _______________________________________
Signature
_______________________________________
Signature Guaranteed:
NOTICE: Signature(s) must be guaranteed
by an eligible guarantor institution
participating in a Securities Transfer
Association recognized signature
guarantee program.
NOTICE: To exercise the option available to the Holder pursuant to the
referenced Trust Indenture, the Holder must notify the Registrar of
such exercise and deliver this Bond to the Registrar at the times and
in the manner set forth in this Bond. The signature to these
Instructions to Sell must correspond with the name as written upon the
face of this Bond in every particular, without alteration or
enlargement, or any change whatsoever.
B-20
BOND PURCHASE AGREEMENT
RELATING TO
$20,540,000
CITY OF GARY, INDIANA
ADJUSTABLE RATE ECONOMIC DEVELOPMENT
REVENUE REFUNDING BONDS, SERIES 1996 A
(THE MILLER PARTNERSHIP, L.P.
PROJECT)
AND
$1,680,000
CITY OF GARY, INDIANA
TAXABLE ADJUSTABLE RATE ECONOMIC DEVELOPMENT
REVENUE REFUNDING BONDS, SERIES 1996 B
(THE MILLER PARTNERSHIP, L.P.
PROJECT)
DATED AS OF
MARCH 1, 1996
CITY OF GARY, INDIANA
ADJUSTABLE RATE ECONOMIC DEVELOPMENT
REVENUE REFUNDING BONDS, SERIES 1996 A
AND TAXABLE ADJUSTABLE RATE ECONOMIC DEVELOPMENT
REVENUE REFUNDING BONDS, SERIES 1996 B
(THE MILLER PARTNERSHIP, L.P. PROJECT)
BOND PURCHASE AGREEMENT
March 28, 1996
City of Gary
Gary, Indiana
The undersigned, EVEREN Securities, Inc. (the "Underwriter"), offers
to enter into this Bond Purchase Agreement (the "Agreement") by and among the
Underwriter, the City of Gary, Indiana (the "Issuer"),and The Miller
Partnership, L.P. (the "Borrower"), which upon the acceptance of this offer by
the Issuer on or before 5:00 p.m., Central Standard Time on the 29th day of
March, 1996, will be binding upon the Issuer, the Borrower and the Underwriter.
Terms not otherwise defined herein shall have the same meanings assigned to such
terms in the Trust Indenture by and between the Issuer and NBD Bank, N.A.,
Indianapolis, Indiana, as Trustee (the "Trustee"), dated as of March 1, 1996
(the "Indenture").
Section 1. BACKGROUND.
(a) The Issuer proposes to issue $20,540,000 City of Gary,
Indiana Adjustable Rate Economic Development Revenue Refunding Bonds,
Series 1996 A (The Miller Partnership, L. P. Project) (the "Series
1996 A Bonds") and $1,680,000 City of Gary, Indiana Taxable Adjustable
Rate Economic Development Revenue Refunding Bonds, Series 1996 B (The
Miller Partnership, L. P. Project) (the "Series 1996 B Bonds") (the
Series 1996 A Bonds and the Series 1996 B Bonds being sometimes
collectively referred to herein as the "Series 1996 Bonds") and to
loan the proceeds of the Series 1996 Bonds to the Borrower to finance
the cost of refunding, when combined with other funds of the Borrower
or CenterPoint Properties Corporation, a Maryland corporation and
general partner of the Borrower ("CenterPoint") (the "Refunding"), the
$14,500,000 City of Gary, Indiana, Economic Development Revenue Bonds,
Series 1991 A (The Miller Partnership L.P. Project) and the $1,000,000
City of Gary, Indiana, Taxable Economic Development Revenue Bonds,
Series 1991 B (The Milller Partnership
L. P. Project) issued by the Issuer in 1991 and the $6,400,000 City of
Gary, Indiana, Economic Development Revenue Bonds, Series 1993 A (The
Miller Partnership L.P. Project) and the $1,460,000 City of Gary,
Indiana, Taxable Economic Development Revenue Bonds, Series 1993 B (The
Miller Partnership L.P. Project) (collectively, the "Prior Bonds"). The
proceeds of the Prior Bonds were loaned by Issuer to The Miller Partnership
L.P., a previously organized Illinois limited partnership, for the purpose
of financing the acquisition, renovation and redevelopment of a multi-
family rental housing project (the "Project").
(b) The Series 1996 Bonds will mature on March 1, 2031, subject
to the optional redemptions and other provisions as described in the
Official Statement (as hereinafter defined). The Series 1996 Bonds
will be issued pursuant to an ordinance (the "Bond Ordinance") adopted
on March 5, 1996, by the City Council of the Issuer (the "Issuing
Authority"), and will be secured under the Indenture for the holders
of the Series 1996 Bonds. The Series 1996 Bonds will be payable from
the Revenues. The Issuer will loan the proceeds of the Series 1996
Bonds to the Borrower for the purposes of financing the costs of the
Refunding pursuant to the Loan Agreement (the "Loan Agreement"), dated
as of March 1, 1996, between the Issuer and the Borrower. The loan to
the Borrower will be evidenced by the execution and delivery by the
Borrower to the Trustee of a promissory note in the amount of
$20,540,000 and a promissory note in the amount of $1,680,000
(collectively, the "Notes"). The proceeds of the Series 1996 Bonds
will be applied as provided in the Indenture and the Loan Agreement.
The principal of and up to 56 days interest (at the maximum interest
rate of 12%) on the Series 1996 Bonds also will be secured by an
irrevocable letter of credit (the "Letter of Credit"), dated as of the
date of initial delivery of the Series 1996 Bonds, to be issued by The
Royal Bank of Scotland plc, (the "Bank"), in favor of the Trustee.
Pursuant to a Reimbursement Agreement dated as of March 1, 1996, (the
"Reimbursement Agreement") between the Borrower and the Bank, the
Borrower will agree to reimburse the Bank for amounts drawn on the
Letter of Credit. The Borrower's obligations under the Reimbursement
Agreement will be secured by a mortgage and certain other collateral
documents from the Borrower to the Bank (collectively, the
"Mortgage"). Pursuant to the Indenture, holders of the Series 1996
Bonds initially will have certain options to tender Series 1996 Bonds
for purchase, which tendered Series 1996 Bonds will be purchased with
funds from the remarketing of the Series 1996 Bonds or drawings on the
Letter of Credit, as provided in the Indenture.
(c) It is intended that the Project and the Series 1996 Bonds
will conform with the provisions of Indiana Code 36-7-11.9 and 12 and
I.C. 5-1-5, as amended (collectively, the "Act"), that the proceeds of
the Series 1996 A Bonds will be expended so that the interest on the
Series 1996 A Bonds will not be
-2-
includable in gross income for the purposes of federal income taxation, and
that the Series 1996 Bonds may be purchased by the original purchasers
without registration of any security under the Securities Act of 1933, as
amended, or qualification of any indenture under the Trust Indenture Act of
1939.
(d) To induce the Issuer to enter into this Agreement and to
issue and deliver the Series 1996 Bonds, the Borrower has entered into
this Agreement.
(e) To provide for the remarketing of the Series 1996 Bonds
pursuant to the terms of the Indenture, the Issuer, the Borrower, and
EVEREN Securities, Inc., and Gates Capital Corporation as Co-
Remarketing Agents, will enter into a Remarketing Agreement dated as
of March 1, 1996 (the "Remarketing Agreement").
(f) Pursuant to the Indenture and the Letter of Representations
as defined therein, the Series 1996 Bonds are being issued in book-
entry only form, and the parties acknowledge that, where appropriate,
references herein to Series 1996 Bonds shall mean Beneficial Ownership
Interests.
Section 2. SALE AND PURCHASE OF BONDS. Upon the terms and conditions
and upon the basis of the respective representations, warranties and covenants
herein, the Underwriter hereby agrees to purchase from the Issuer, and the
Issuer hereby agrees to sell to the Underwriter all, but not less than all, of
the Series 1996 Bonds. The purchase price of the Series 1996 A Bonds shall be
$20,540,000 (representing the par amount of the Series 1996 A Bonds), and the
purchase price for the Series 1996 B Bonds shall be $1,680,000 (representing the
par amount of the Series 1996 B Bonds). The Underwriter shall be paid by the
Borrower on behalf of the Issuer a commission of $154,050 for the Series 1996 A
Bonds and a commission of $12,600 for the Series 1996 B Bonds.
Section 3. OFFICIAL STATEMENT. A Preliminary Official Statement
dated March 26, 1996, has been prepared on behalf of the Issuer relating to the
Series 1996 Bonds. A final Official Statement will be prepared on behalf of the
Issuer and delivered to the Underwriter within seven business days after the
execution of this Agreement (the Preliminary Official Statement and final
Official Statement are herein referred to as the "Official Statement").
The Series 1996 Bonds are more fully described in the Official
Statement.
Section 4. REPRESENTATIONS AND WARRANTIES OF THE ISSUER. The Issuer
represents and warrants to the Underwriter that:
(a) The Issuer is a municipal corporation and political
subdivision of the State of Indiana and has full power and authority
under the Act, among other
-3-
things, (i) to issue revenue bonds, such as the Series 1996 Bonds, and to
make the proceeds of such Series 1996 Bonds available to persons such as
the Borrower for the purposes described in the Indenture and the Loan
Agreement, payable from and secured by a pledge of the Revenues, and
(ii) to secure such Series 1996 Bonds in the manner contemplated by the
Indenture.
(b) The Issuer has full legal right, power and authority (i) to
pass the Bond Ordinance and enter into this Agreement, the Indenture,
the Letter of Representations (as defined in the Indenture) and the
Loan Agreement, (ii) to issue, sell and deliver the Series 1996 Bonds
as provided herein, and (iii) to carry out and consummate all other
transactions contemplated by each of the aforesaid documents, and the
Issuer has complied with all provisions of applicable law, including
the Act, in all matters relating to such transactions.
(c) The Issuer has duly authorized (i) the issuance, sale and
delivery of the Series 1996 Bonds upon the terms set forth herein and
in the Indenture, (ii) the execution, delivery and due performance of
this Agreement, the Series 1996 Bonds, the Indenture, the Letter of
Representations and the Loan Agreement, and (iii) the taking of any
and all such actions as may be required on the part of the Issuer to
carry out, give effect to and consummate the transactions contemplated
by such instruments.
(d) The Bond Ordinance has been duly passed by the Issuing
Authority and is in full force and effect. This Agreement when
executed and delivered constitutes, and the Indenture, the Letter of
Representations and the Loan Agreement, when executed and delivered,
will constitute legal, valid and binding obligations of the Issuer,
enforceable in accordance with their respective terms, except that
enforceability may be limited by laws relating to bankruptcy,
reorganization or other similar laws affecting the rights of
creditors, by the exercise of judicial discretion in accordance with
general principles of equity, and by matters of public policy.
(e) When duly authenticated by the Trustee, delivered to the
Depository (as defined in the Indenture) and paid for as provided
herein, the Series 1996 Bonds will have been duly authorized,
executed, issued and delivered and will constitute legal, valid and
binding special obligations of the Issuer in conformity with the laws
of the State of Indiana, including the Act, will be entitled to the
benefit and security of the Loan Agreement and the Indenture, and will
be enforceable in accordance with their terms, except that
enforceability may be limited by laws relating to bankruptcy,
reorganization or other similar laws affecting the rights of
creditors.
-4-
(f) To the best of the Issuer's knowledge neither the adoption
of the Bond Ordinance, the execution and delivery of this Agreement,
the Series 1996 Bonds, the Indenture, the Letter of Representations or
the Loan Agreement, nor the consummation of the transactions
contemplated therein or the compliance with the provisions thereof,
will conflict with, or constitute on the part of the Issuer a
violation of, or a breach of or default under, any statute, indenture,
mortgage, commitment, note or other agreement or instrument to which
the Issuer is a party or by which it is bound, or under any provision
of the Indiana Constitution or under any existing law, rule,
regulation, resolution, charter, judgment, order or decree to which
the Issuer is subject.
(g) Other than the Indenture and the Loan Agreement, the Issuer
has not entered into any contract or arrangement of any kind which
might give rise to any lien or encumbrance on the Revenues.
(h) To the best of the Issuer's knowledge, there is no action,
suit, proceeding, inquiry or investigation, at law or in equity,
before or by any court, public board or body, pending or threatened
against the Issuer, which in any way questions the powers of the
Issuer referred to in paragraph (a) above, or the validity of any
proceedings taken by the Issuer in connection with the issuance of the
Series 1996 Bonds, or wherein an unfavorable decision, ruling or
finding would materially adversely affect the transactions
contemplated by, or the validity or enforceability of, the Bond
Ordinance, the Indenture, the Loan Agreement, the Series 1996 Bonds,
the Letter of Representations or this Agreement.
(i) The Issuer hereby ratifies and authorizes the distribution
and use of the Preliminary Official Statement and the Official
Statement. The information contained in the Preliminary Official
Statement, and the Official Statement under the caption "THE ISSUER"
was or will be, as of their respective dates, and as of the Closing
Date will be, true, correct and complete in all material respects, and
such information in the Preliminary Official Statement and the
Official Statement does not and will not contain any untrue or
misleading statement of a material fact or omit to state any material
fact necessary to make the statements therein, in light of the
circumstances under which they are made, not misleading.
(j) Any certificate relating to the Series 1996 Bonds signed by
the Issuer and delivered to Ice Miller Donadio & Ryan, Karen Freeman-
Wilson, and Meyer, Lyles & Godshalk (collectively "Co-Bond Counsel")
or the Underwriter at or before the Closing Date shall be deemed a
representation and warranty by the Issuer to Co-Bond Counsel, and the
Underwriter, as to the truth of the statements therein contained.
-5-
Section 5. REPRESENTATIONS AND WARRANTIES OF THE BORROWER. The
Borrower represents and warrants:
(a) The Borrower is an Illinois limited partnership, duly
organized and validly existing in good standing under the laws of the
State of Illinois, and has full legal right, power and authority to
own the Borrower's properties and conduct the Borrower's business.
The Borrower has full legal right, power and authority to execute and
deliver this Agreement, the Notes, the Mortgage, the Loan Agreement,
the Reimbursement Agreement and the Remarketing Agreement, to
authorize the distribution and use of the Preliminary Official
Statement and the Official Statement, to provide for the operation and
management of the Project, and to take any and all such action as may
be required on its part to carry out, give effect to and consummate
the transactions contemplated by this Agreement, the Loan Agreement,
the Remarketing Agreement and the Reimbursement Agreement.
(b) The Borrower has duly authorized, executed and delivered
this Agreement, and on the Closing Date will have duly authorized,
executed and delivered the Notes, the Loan Agreement, the Mortgage,
the Remarketing Agreement and the Reimbursement Agreement, and has
taken or will take all such action as may be required on the part of
the Borrower to carry out, give effect to and consummate the
transactions contemplated by each of such documents. This Agreement
constitutes, and the Notes, the Mortgage, the Loan Agreement, the
Remarketing Agreement and the Reimbursement Agreement, when executed
and delivered, will constitute legal, valid and binding obligations of
the Borrower, enforceable in accordance with their respective terms,
except that enforceability may be limited by laws relating to
bankruptcy, reorganization or other similar laws affecting the rights
of creditors or by equitable principles which may affect the
availability of specific performance or other equitable remedies.
(c) Neither the execution and delivery of this Agreement, the
Notes, the Loan Agreement, the Mortgage, the Remarketing Agreement or
the Reimbursement Agreement, nor the consummation of the transactions
contemplated therein or the compliance with the provisions thereof,
will conflict with, or constitute on the part of the Borrower a
violation of, or a breach of or default under, the Borrower's
Agreement of Limited Partnership or any material indenture, mortgage,
commitment, note or other agreement or instrument to which the
Borrower is a party or by which the Borrower is bound, or any order,
rule or regulation of any court or governmental agency or body having
jurisdiction over the Borrower or any of its activities or properties.
All consents, approvals, authorizations and orders of governmental or
regulatory authorities which are required for the Borrower's execution
and delivery of, consummation of the transactions contemplated by and
compliance with the provisions of this
-6-
Agreement, the Notes, the Mortgage, the Loan Agreement, the Remarketing
Agreement and the Reimbursement Agreement have been obtained.
(d) There is no action, suit, proceeding, inquiry or
investigation, at law or in equity, before or by any court, public
board or body, pending or, to the best of the knowledge of the
Borrower, threatened, against the Borrower, or the actions taken or
contemplated to be taken by the Borrower, nor, to the best of the
knowledge of the Borrower, is there any basis therefor, which
reasonably would be expected to materially adversely affect the
business, financial condition or operations of the Borrower, or the
transactions contemplated by, or the validity or enforceability of,
this Agreement, the Notes, the Mortgage, the Loan Agreement, the
Remarketing Agreement or the Reimbursement Agreement, or which would
in any way jeopardize the tax-exempt status of the interest on the
Series 1996 A Bonds.
(e) No event has occurred and no condition exists which, upon
issuance of the Series 1996 Bonds, would constitute (or with the
giving of notice or lapse of time, or both, would constitute) an Event
of Default under the Loan Agreement or the Reimbursement Agreement.
(f) The Borrower is not in violation of any provisions of, or in
default under, its Agreement of Limited Partnership or any statute,
indenture, mortgage, commitment, note or other agreement or instrument
to which it is a party or by which it is bound, or any order, rule,
regulation or decision of any court or governmental agency or body
having jurisdiction over it or any of its activities or properties,
which violation would materially and adversely affect its business or
financial condition.
(g) The Borrower hereby ratifies and authorizes the distribution
and use of the Preliminary Official Statement and the Official
Statement. The information contained in the Preliminary Official
Statement and the Official Statement (except for the information and
statements under the captions "THE ISSUER" and "UNDERWRITING" and in
Appendix B and Appendix D thereto, as to which the Borrower makes no
representations) was or will be, as of their respective dates, and as
of the Closing Date will be, true, correct and complete in all
material respects, and the Preliminary Official Statement and the
Official Statement do not and will not contain any untrue or
misleading statement of a material fact or omit to state any material
fact necessary to make the statements therein, in light of the
circumstances under which they are made, not misleading.
(h) The Borrower will furnish such information, execute such
instruments, and cooperate with the Underwriter as the Underwriter may
-7-
reasonably request in order for the Underwriter (i) to qualify the Series 1996
Bonds, or perfect an exemption from registration, for offer and sale of the
Series 1996 Bonds under the Blue Sky or other securities laws and regulations of
such states and other jurisdictions of the United States as the Underwriter may
designate, and (ii) to determine the eligibility of the Series 1996 Bonds for
investment under the laws of such states and other jurisdictions, and the
Borrower will use its best effort to continue such exemption or qualification in
effect so long as required for distribution of the Series 1996 Bonds.
(i) Any certificate signed by any officer of the Borrower and
delivered to the Issuer, Co-Bond Counsel, the original purchasers of
the Series 1996 Bonds, the Underwriter or the Bank at or before the
Closing Date shall be deemed a representation and warranty by the
Borrower to the Issuer, Co-Bond Counsel, the original purchasers of
the Series 1996 Bonds, the Underwriter and the Bank as to the truth of
the statements therein contained.
Section 6. COVENANTS OF THE ISSUER. The Issuer covenants that it
will observe all covenants of the Issuer in the Indenture and the Loan Agreement
and will not issue or sell any bonds or obligations other than the Series 1996
Bonds (or any Additional Bonds issued pursuant to the Indenture), the principal
of, premium, if any, and interest on which are payable in whole or in part from
the Revenues or are to be secured by any lien on, or pledge of, the Revenues.
Section 7. COVENANTS OF THE BORROWER. The Borrower covenants as
follows:
(a) The Borrower will apply the proceeds of the Series 1996
Bonds as provided in and subject to all of the terms and provisions of
the Loan Agreement and will observe all covenants of the Borrower in
such instrument.
(b) The Borrower will take such action as may be reasonably
requested to facilitate the timely consummation of the transactions
contemplated by this Agreement.
(c) The Borrower will notify the Issuer, the Underwriter and the
Bank of any material adverse change in the business, properties or
financial condition of the Borrower occurring before the Closing Date.
(d) The Borrower will not take any action or permit any action
to be taken on its behalf or cause or permit any circumstance within
its control to arise or continue, if such action would adversely
affect the excludability from gross income for federal income tax
purposes of the interest on the Series 1996 A Bonds.
-8-
Section 8. CONDITIONS TO THE OBLIGATIONS OF THE UNDERWRITER. The
obligations of the Underwriter hereunder shall be subject to the accuracy in all
material respects of the representations and warranties on the part of the
Issuer and the Borrower contained herein as of the date hereof and as of the
Closing Date, to the accuracy in all material respects of the statements of the
Issuer, the Bank, and the Borrower made in any certificates or other documents
furnished pursuant to the provisions hereof, to the performance by the Issuer
and the Borrower of their respective obligations to be performed hereunder at or
prior to the Closing Date and to the following additional conditions:
(a) At the Closing Date, the Indenture, the Letter of
Representations, the Loan Agreement, the Notes, the Mortgage, the
Reimbursement Agreement and the Letter of Credit shall have been duly
authorized, executed and delivered by the respective parties thereto,
and the Official Statement shall have been delivered to the
Underwriter, and none of the foregoing agreements shall have been
amended, modified or supplemented so as to materially affect the
content thereof, except as may have been agreed to in writing by the
Underwriter, and there shall have been taken in connection therewith,
with the issuance of the Series 1996 Bonds, and with the transactions
contemplated thereby and by this Agreement, all such actions as Baker
& Daniels, counsel to the Underwriter ("Underwriter's Counsel"),
reasonably shall deem to be necessary and appropriate;
(b) At the Closing Date, the Official Statement shall not have
been amended, modified or supplemented, except as may have been agreed
to in writing by the Underwriter;
(c) At or prior to the Closing Date, no event shall have
occurred or information become known which, in the reasonable judgment
of the Underwriter, makes untrue in any material respect any statement
or information contained in the Official Statement or has the effect
that the Official Statement contains any untrue statement of a
material fact or omits to state a material fact required to be stated
therein or necessary to make the statements therein, in the light of
the circumstances under which they were made, not misleading.
(d) At or prior to the Closing Date, the Underwriter shall have
received an original or copies, where appropriate, of the following
documents, in each case satisfactory in form and substance to the
Underwriter and in each case conforming in all material respects with
any description thereof contained in the Official Statement:
(i) The Indenture, the Letter of Representations,
the Loan Agreement, the Series 1996 Bonds, the Reimbursement
Agreement, the Letter of Credit, the Mortgage, the
Remarketing
-9-
Agreement and the Notes, each duly executed and delivered by the
respective parties thereto, with such amendments, modifications or
supplements as may have been agreed to in writing by the Underwriter;
(ii) The opinion of Coffield Ungaretti & Harris,
counsel to the Borrower, dated the Closing Date, in
substantially the form attached hereto as Exhibit A;
(iii) The opinion of Seyfarth, Shaw, Fairweather &
Geraldson, counsel to the Bank, dated the Closing Date, in
substantially the form attached hereto as Exhibit B;
(iv) The opinions of Ice Miller Donadio & Ryan, Karen
Freeman-Wilson and Meyer, Lyles and Godshalk, Co-Bond
Counsel, dated the Closing Date, in substantially the form
attached hereto as Exhibit C;
(v) The opinion of Baker & Daniels, Underwriter's
Counsel, dated the Closing Date, in substantially the form
attached hereto as Exhibit D;
(vi) A certificate, dated the Closing Date, signed by
a duly authorized officer of the Bank, in substantially the
form attached hereto as Exhibit E;
(vii) A certificate, dated the Closing Date, signed by
a duly authorized official of the Issuer, in form
satisfactory to the Underwriter and the Underwriter's
Counsel, to the effect that the representations and
warranties of the Issuer set forth in Section 4 hereof are
true, correct and complete on the date thereof;
(viii) A certificate, dated the Closing Date, signed by
a duly authorized officer of the general partner of the
Borrower, in form satisfactory to the Underwriter and the
Underwriter's Counsel, to the effect that the
representations and warranties of the Borrower set forth in
Section 5 hereof are true, correct and complete on the date
thereof;
(ix) The Preliminary Official Statement and the
Official Statement signed by the Borrower;
-10-
(x) Such additional legal opinions, certificates,
proceedings, instruments and other documents as the
Underwriter or Underwriter's Counsel may reasonably request
to evidence compliance by the Bank, the Trustee or the
Borrower with legal requirements of closing, and to certify
the truth and accuracy, as of the Closing Date, of the
representations of the Issuer and the Borrower contained
herein and the due performance or satisfaction by the Issuer
and the Borrower at or prior to such time of all agreements
then to be performed and all conditions then to be satisfied
by each of them; and
(e) Upon the Closing Date, the Underwriter shall have been paid
by the Borrower on behalf of the Issuer, the commissions referred to
in Section 2 hereof for the Series 1996 Bonds.
If the Issuer and the Borrower shall be unable to satisfy the
conditions to the obligations of the Underwriter contained in this Agreement, or
if the obligations of the Underwriter to purchase and accept delivery of the
Series 1996 Bonds shall be terminated for any reason permitted by this
Agreement, this Agreement shall terminate and neither the Underwriter, the
Issuer nor the Borrower shall be under further obligation hereunder; except that
the respective obligations to pay expenses, as provided in Section 15 hereof,
shall continue in full force and effect.
Section 9. NO PECUNIARY LIABILITY OF ISSUER. No provision, covenant,
or agreement contained in this Agreement, and no obligation herein imposed upon
the Issuer, or the breach thereof, shall constitute an indebtedness of the
Issuer or the State of Indiana or any political subdivision thereof within the
meaning of any Indiana constitutional provision or statutory limitation or shall
constitute or give rise to a pecuniary liability of the Issuer or the State of
Indiana or any political subdivision thereof or a charge against its general
credit or taxing powers. In making the agreements, provisions and covenants set
forth in this Agreement, the Issuer has not obligated itself, except to the
extent that the Issuer is authorized to act pursuant to Indiana law and except
with respect to the Revenues. The Issuer and any of its officials, officers or
employees shall have no monetary liability arising out of the obligations of the
Issuer hereunder or in connection with any covenant, representation or warranty
made by the Issuer herein, and neither the Issuer nor its officials shall be
obligated to pay any amounts in connection with the transactions contemplated
hereby other than from the Revenues or other moneys received from the Borrower.
Section 10. CLOSING. The Series 1996 Bonds shall be delivered by the
Issuer to The Depository Trust Company in New York, New York, on behalf of the
Underwriter, at least twenty-four (24) hours in advance of April 1, 1996 (the
"Closing Date"). At such time on the Closing Date as it shall be confirmed that
all conditions to the obligations of the Underwriter
-11-
under Section 8 hereof have been satisfied or waived and the purchase price
specified in Section 2 has been tendered at the offices of the Trustee in funds
immediately available in Gary, Indiana, by wire transfer of such funds to or for
the account of the Issuer as directed by it, the Series 1996 Bonds shall be
released to the purchasers thereof.
Section 11. REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE
UNDERWRITER. The Underwriter represents, warrants and covenants that the Series
1996 Bonds will be offered and sold by the Underwriter in accordance with all
applicable laws.
Section 12. PERFORMANCE BY UNDERWRITER. The obligations of the
Issuer and the Borrower hereunder are subject to the performance by the
Underwriter of its obligations hereunder.
Section 13. THE UNDERWRITER'S RIGHT TO CANCEL. The Underwriter shall
have the right to cancel its obligations hereunder with respect to the Series
1996 Bonds (which cancellation shall not constitute a default hereunder) by
notifying the Issuer and Borrower in writing or by telegram of its election to
make such cancellation prior to the Closing if at any time between the date of
this Agreement and the Closing:
(a) A committee of the House of Representatives or the Senate of
the Congress of the United States (collectively, the "House" and the
"Senate") shall begin active consideration of legislation, or a
tentative decision with respect to legislation shall be reached by
such a committee, or legislation shall be favorably reported by such a
committee or be introduced, by amendment or otherwise, in or be passed
by the House or the Senate, or be recommended to the Congress of the
United States for passage by the President of the United States, or be
enacted by the Congress of the United States, which would have the
purpose or effect of imposing Federal income taxation upon revenues or
other income of the general character to be derived by the Issuer or
by any similar body or upon interest received on the Series 1996 A
Bonds or on obligations of the general character of the Series 1996 A
Bonds which, in the Underwriter's opinion, materially adversely
affects the market price of the Series 1996 A Bonds;
(b) A decision by a court established under Article III of the
Constitution of the United States or the Tax Court of the United
States shall be rendered, or a ruling, regulation or order of the
Treasury Department of the United States or the Internal Revenue
Service shall be made or proposed, or any other event shall have
occurred, which has the purpose or effect of imposing Federal income
taxation upon revenues or other income of the general character to be
derived by the Issuer or by any similar body or upon interest received
on the Series 1996 A Bonds or on obligations of the general character
of the Series 1996 A
-12-
Bonds which, in the Underwriter's opinion, materially adversely affects the
market price of the Series 1996 A Bonds;
(c) Any legislation, ordinance, rule or regulation shall be
introduced in or be enacted by the General Assembly of the State or by
any other governmental body, department or agency of the State, or a
decision by any court of competent jurisdiction within the State shall
be rendered which, in the Underwriter's opinion, materially adversely
affects the market price of the Series 1996 Bonds, or litigation
challenging the Act under which the Series 1996 Bonds are to be issued
shall be filed in any court in the State;
(d) A stop order, ruling, regulation or official statement by,
or on behalf of, the Securities and Exchange Commission or any other
governmental agency having jurisdiction of the subject matter shall be
issued or made to the effect that the issuance, offering or sale of
obligations of the general character of the Series 1996 Bonds, or the
issuance, offering or sale of the Series 1996 Bonds, including all
underlying obligations, as contemplated hereby or by the Official
Statement, is in violation or would be in violation of any provision
of the Federal securities laws, the Securities Act of 1933, as amended
and as then in effect, or the registration provisions of the
Securities Exchange Act of 1934, as amended and as then if effect, or
the qualification provisions of the Trust Indenture Act of 1939, as
amended and as then in effect;
(e) Legislation shall be enacted by the Congress of the United
States of America, or a decision by a court of the United State of
America shall be rendered, to the effect that obligations of the
general character of the Series 1996 Bonds, or Bonds, including all
the underlying obligations, are not exempt from registration under or
from other requirements of the Securities Act of 1933, as amended and
as then in effect, or the Securities Exchange Act of 1934, as amended
and as then in effect;
(f) Additional material restrictions not in force as of the date
hereof shall have been imposed upon trading in securities generally by
any governmental authority or by any national securities exchange;
(g) The New York Stock Exchange or any other national securities
exchange, or any governmental authority, shall impose, as to the
Series 1996 Bonds or obligations of the general character of the
Series 1996 Bonds, any material restrictions not now force, or
increase materially those now in force, with respect to the extension
of credit by, or the charge to the net capital requirements of, the
Underwriter;
-13-
(h) Any general banking moratorium shall have been established
by Federal, New York or Indiana authorities;
(i) A material default has occurred with respect to the
obligations of, or proceedings have been instituted under the Federal
bankruptcy laws or any similar state laws by or against, any state of
the United States or any city located in the United States having a
population in excess of one million persons or any entity issuing
obligations on behalf of such city or state which, in the
Underwriter's opinion, materially adversely affects the market price
of the Series 1996 Bonds;
(j) Any rating of any class of security of the Issuer shall have
been downgraded or withdrawn by a national rating service which, in
the Underwriter's opinion, materially adversely affects the market
price of the Series 1996 Bonds; or trading in any securities of the
Issuer shall have been suspended on any national securities exchange;
or any proceeding shall be pending or threatened by the Securities and
Exchange Commission against the Issuer;
(k) Any event shall have occurred, or information become known,
which, in the Underwriter's opinion, makes untrue in any material
respect any statement or information contained in the Official
Statement, or has the effect that the Official Statement contains an
untrue statement of a material fact or omits to state a material fact
necessary in order to make the statements made therein, in the light
of the circumstances under which they were made, not misleading;
(l) A war involving the United States shall have been declared,
or any conflict involving the armed forces of the United State shall
have escalated, or any other national emergency relating to the
effective operation of government or the financial community shall
have occurred, which, in the Underwriter's opinion, materially
adversely affects the market price of the Series 1996 Bonds;
(m) Any litigation shall be instituted, pending or threatened to
retain or enjoin the issuance or sale of the Series 1996 Bonds or in
any way contesting or affecting any authority for or the validity of
the Series 1996 Bonds, or the existence or powers of the Issuer; or
(n) Any proceeding shall be pending or threatened by the
Securities and Exchange Commission against the Issuer.
If the Underwriter terminates its obligations to purchase the Series
1996 Bonds because of any of the conditions specified in this Section or because
any of the conditions specified
-14-
in Section 8 shall have not been fulfilled at or before the Closing, such
termination shall not result in any liability on the part of the Underwriter.
Section 14. SURVIVAL OF REPRESENTATIONS, WARRANTIES, COVENANTS,
AGREEMENTS AND INDEMNITIES. All representations, warranties, covenants,
agreements and indemnities contained in this Agreement, or contained in the
certificates of members, officials, partners or officers of the Issuer or of the
Borrower submitted pursuant hereto, shall remain operative and in full force and
effect, regardless of any investigation by or on behalf of the Underwriter and
shall survive the closing.
Section 15. EXPENSES. All reasonable costs and expenses incident to
the performance of the Issuer's, the Underwriter's, and the Borrower's
obligations in connection with the authorization, issuance and sale of the
Series 1996 Bonds shall be paid by the Borrower, including the costs for
printing or reproducing the Preliminary Official Statement, the Official
Statement and the Series 1996 Bonds, The Depository Trust Company and CUSIP
Service Bureau charges (if any), fees and expenses of the Issuer, including
reasonable fees and expenses of its counsel, fees and expenses of the Bank,
including reasonable fees and expenses of its counsel, fees and expenses of the
Trustee, reasonable fees and expenses of Co-Bond Counsel, and reasonable fees
and expenses of the Underwriter and the Underwriter's Counsel. All such costs
and expenses shall be paid by the Borrower whether or not the Series 1996 Bonds
are actually issued and sold. To the extent statements for such costs and
expenses are available on the Closing Date, the Borrower shall pay such costs
and expenses on the Closing Date.
Section 16. INDEMNIFICATION.
(a) GENERAL. The Underwriter and the Borrower (each, an
"Indemnifying Party") each covenants and agrees to indemnify the other
parties hereto and their respective directors, officers, partners,
trustees, representatives and employees and each person, if any, who
controls any of such persons within the meaning of Section 15 of the
Securities Act of 1993 (collectively, the "Indemnified Parties") for,
and to hold each Indemnified Party harmless against, all liabilities,
claims, costs, losses and expenses (including without limitation, to
the extent permitted by law, reasonable attorneys' fees and expenses),
imposed upon or asserted against the Indemnified Parties:
(i) Under any statute or regulation, at law, in
equity or otherwise, insofar as those liabilities, claims,
costs, losses and expenses arise out of or are based upon
any untrue statement or alleged untrue statement of a
material fact with reference to the information referred to in
Section 11(c) hereof contained in the Preliminary Official Statement,
the Official Statement, or any amendment thereof or supplement
thereto, or which arise out of or
-15-
are based upon any omission or alleged omission to state
therein with reference to such information a material fact
which is required to be stated therein or which is
necessary to make the statements made therein, in light of the
circumstances under which they were made, not misleading;
(ii) Pursuant to any action, claim or proceeding
brought in connection with any of the foregoing; and
(iii) To the extent of the aggregate amount paid in
settlement of any actions, claims or proceedings, commenced
or threatened, based upon any untrue statement, alleged
untrue statement, omission or alleged omission described
above, if the settlement is effected with the written
consent of the Indemnifying Party;
and (unless the Indemnifying Party assumes the defense of the
applicable claim, suit, action or proceeding pursuant to paragraph (b)
below) shall reimburse any legal or other expenses incurred reasonably
by any Indemnified Party in connection with investigating and
defending any liability, claim, cost, loss, expense, action or
proceeding described above; provided, nothing herein shall require the
Indemnifying Party to pay for any losses, claims, damages, liabilities
or expenses resulting from the negligence or the willful misconduct of
an Indemnified Party. At the request and the expense of the
Indemnifying Party, each Indemnified Party shall cooperate in making
any investigation and defense of any action, claim or proceeding and
shall assert appropriately the rights, privileges and defenses which
are available to the Indemnified Party in connection therewith.
(b) PROCEDURE. The Indemnified Party shall, in the event of any
claim, suit, action or proceeding against it in respect of which
indemnity may be sought on account of any indemnity agreement by the
Indemnifying Parties contained herein, promptly give written notice
thereof to the appropriate Indemnifying Parties. When such notice is
given, the Indemnifying Party shall be entitled to participate at its
own expense in the defense of, or if it so elects, to assume the
defense of, such claim, suit, action or proceeding, in which event
such defense shall be conducted by counsel chosen by the Indemnifying
Party, but if the Indemnifying Party shall elect not to assume such
defense, it shall reimburse such Indemnified Party or Parties for the
reasonable fees and expenses of any counsel retained by them. The
foregoing notwithstanding, in the event that the Indemnifying Party
shall assume such defense and any Indemnified Party or Parties shall
be advised by independent legal counsel that counsel selected by the
Indemnifying Party is not fully and adequately protecting such party
or parties and
-16-
representing the interests of such party or parties, any such Indemnified
Party or Parties shall have the right to conduct its or their own defense
against any such claim, suit, action or proceeding in addition to or in
lieu of any defense conducted by the Indemnifying Party, and the
Indemnifying Party shall indemnify and hold harmless such Indemnified Party
or Parties against and from any and all suits, claims, damages, liabilities
or expenses whatsoever (including reasonable fees and expenses of counsel
selected by such Indemnified Party or Parties) incurred by and arising out
of or in connection with any such claim, suit, action or proceeding. An
Indemnifying Party shall not be liable for the settlement of any claim,
suit, action or proceeding effected without its consent, which consent
shall not be withheld unreasonably.
(c) INDEMNIFIED INFORMATION. The information as to which each
Indemnifying Party hereto indemnities the Indemnified Parties is as
follows:
(i) The Borrower as Indemnifying Party: the entire
Preliminary Official Statement and the entire Official
Statement, with the exception of the Appendix to each and
the information set forth in (ii) below; and
(ii) The Underwriter as Indemnifying Party:
information in the section of the Preliminary Official
Statement and the Official Statement captioned
"UNDERWRITING."
Section 17. PARTIES IN INTEREST. This Agreement is made solely for
the benefit of the Issuer, the Borrower and the Underwriter, their respective
successors and assigns and no other person, partnership, association or
corporation including any purchase of the Series 1996 Bonds shall acquire or
have any rights under or by virtue of this Agreement.
Section 18. NOTICES. Any notice or other communication to be given
to any party to this Agreement may be given by delivering the same in writing
and shall be deemed sufficiently given when personally delivered or when
deposited in the United States Mail, postage prepaid, certified or registered,
or when delivered to a nationally recognized overnight courier service with
guaranteed next business day delivery at the respective addresses set forth
below:
Issuer: CITY OF GARY
504 Broadway, Suite 625
Gary, Indiana 46402
Attn: Kennard B. Sloan
Borrower: THE MILLER PARTNERSHIP, L.P.
-17-
401 North Michigan Avenue, Suite 3000
Chicago, IL 60611
Attn: Paul Fisher
Underwriter: EVEREN SECURITIES, INC.
77 West Wacker Drive, 28th Floor
Chicago, IL 60601-1994
Attn: Felicia O. Flowers-Smith
Any notices required to be provided under this Agreement as provided herein
shall also be provided to:
THE ROYAL BANK OF SCOTLAND plc
Wall Street Plaza
88 Pine Street, 26th Floor
New York, New York 10005-1801
Attn: Derek I. Bonnar
Section 19. SEVERABILITY. If any provisions of this Agreement shall
be held or deemed to be or shall, in fact, be inoperative, invalid or
unenforceable as applied in any particular case in any jurisdiction or
jurisdictions or in all jurisdictions because it conflicts with any provisions
of any constitution, statute, rule or public policy, or any other reason, such
circumstance shall not have the effect of rendering the provision in question
inoperative or unenforceable in any other case or circumstance, or of rendering
any other provision or provisions of this Agreement invalid, inoperative or
unenforceable to any extent whatever.
Section 20. APPLICABLE LAW. This Agreement shall be governed by and
construed in accordance with the laws of the State of Indiana.
Section 21. COUNTERPARTS. This Agreement may be executed in several
counterparts, each of which shall be an original and all of which shall
constitute but one and the same instrument.
Very truly yours,
UNDERWRITER:
EVEREN SECURITIES, INC.
-18-
By:
--------------------------
Its:
--------------------------
-19-
Accepted: , 1996
---------------
ISSUER:
CITY OF GARY, INDIANA
By:
---------------------------
Printed:
----------------------
Its:
--------------------------
Attest:
By:
-----------------------
Printed:
------------------
Its:
-----------------------
BORROWER:
THE MILLER PARTNERSHIP, L.P.
By: CenterPoint Properties Corporation
Its General Partner
By:
---------------------------
Printed:
----------------------
Its:
--------------------------
-20-
APPENDIX A
THE MILLER PARTNERSHIP, L.P.
The Project is currently owned by The Miller Partnership, L.P., a
limited partnership organized and existing under the laws of the State of
Illinois (the "Borrower"). As of the date hereof, the following parties have
the following respective ownership interests in the Borrower:
OWNERSHIP
PARTY INTEREST HOLDING
----- -------- -------
CenterPoint Properties Corporation 99% General Partner
CenterPoint Realty Services Corporation 1% Limited Partner
The Borrower presently owns no real estate other than the Project.
The General Partner is CenterPoint Properties Corporation, a Maryland
corporation ("CenterPoint"), which was founded in 1984. CenterPoint is a self-
administered and self-managed real estate investment trust ("REIT") focused on
the acquisition, development, redevelopment, management and ownership of
warehouse/industrial property located in the metropolitan Chicago area (defined
as the area within a 100-mile radius of Chicago), which is the largest
warehouse/industrial market in the United States. As of December 31, 1995, in
addition to the Project, CenterPoint owned and managed a portfolio of 63
warehouse/industrial properties, containing approximately 9.8 million square
feet of space and believes it is the largest owner and operator of
warehouse/industrial property in the metropolitan Chicago area. CenterPoint
also owns and manages four retail properties. As of December 31, 1995,
CenterPoint's properties were 98% leased, with the warehouse/industrial
properties occupied by 120 tenants in diverse industries, with no tenant
accounting for the lease of more than 8% of the total square footage of
CenterPoint's warehouse/industrial portfolio. Substantially all of
CenterPoint's properties have been constructed or renovated during the past ten
years. CenterPoint's REIT election was filed with its 1994 federal income tax
return, and was effective January 1, 1994.
The Limited Partner is CenterPoint Realty Services Corporation (the
"Limited Partner"), an Illinois corporation, which was formed in 1995. The
Limited Partner is a non-consolidated subsidiary of the General Partner, which
has two classes of common stock, voting and non-voting. The General Partner
owns 1% of the voting common stock, and 100% of the non-voting common stock,
resulting in an aggregate equity interest of 99.01%. The remaining voting
common stock, representing a 0.99% equity interest, is owned by three officers
of the General Partner. The Limited Partner was formed to engage in certain
activities generating income in excess of amounts from such activities that the
General Partner, as a REIT, could earn directly.
The Project is comprised of 14 low to midrise apartment buildings
containing 682 units and one former one-story commercial building, each located
at 415 North Lake Street, located in Miller, a neighborhood in the City of Gary,
Indiana, known as Lakeshore Dunes Apartments. The Borrower presently owns no
real estate other than the Project.
APPENDIX B
THE ROYAL BANK OF SCOTLAND PLC
The Group is a diversified financial services group engaged in a wide
range of banking, financial and finance-related activities in the UK and
internationally. The Group's operations are principally centered in the UK.
At, and for the year ending September 30, 1995, based on domicile of customer,
no country outside the UK or the United States accounted for more than 10% of
total assets or net income available for ordinary shares of the Group. See
"Notes 47 and 50 in Consolidated Financial Statements." At September 30, 1995
the Group had total assets of L51.0 billion (1994 - L45.3 billion), total
deposits of L37.6 billion (1994 - L33.4 billion) and shareholders' equity of
L2,164 million (1994 - L1,896 million). At September 30, 1995 the Group
employed approximately 25,870 staff. The Group's audited financial statements
for the year ended September 30, 1995, are included on the Group's Annual Report
on Form 20-F filed with the Securities and Exchange Commission.
The Bank is the company's sole direct operating subsidiary and it
controls, directs and promotes the operations of the subsidiary companies. The
Bank is a major UK clearing bank, whose predecessors date back to 1727. At
September 30, 1995, the Bank had 369 branches in Scotland and 318 branches in
England and Wales. The Bank was created by the merger in 1985 of the former The
Royal Bank of Scotland plc, the largest of the Scottish clearing banks, and
Williams & Glyn's Bank plc, a wholly-owned English clearing bank subsidiary of
the company.
The Group has five operating divisions, each focusing on a key market
segment. These are the Branch Banking Division, which provides banking,
insurance and other related financial services to individuals and small to
medium-sized corporate clients through the Bank's branch network, certain
centralized banking services and various subsidiary companies; the Corporate and
Institutional Banking Division, which provides commercial banking services and
other financial services to the Bank's larger corporate and institutional
clients in the UK and internationally; the Direct Line Group, which provides
automobile and household insurance and to a more limited extent, other financial
services; Citizens Financial Group, Inc. ("CFG"), which constitutes the Bank's
North American Division; and the Operations Division, which provides central
administration, property and personnel services, information processing and
internal consultancy to the other divisions and certain of the Bank's money
transmission services. Operations Division is also responsible for all aspects
of credit and debit card services, including Style Financial Services. The UK
banking operating divisions are supported by central functions dealing with
finance, strategy, legal and regulatory matters, and external affairs.
On December 18, 1995, it was announced that the Group and Bank of
Ireland had agreed, subject to regulatory consents, to combine their US banking
operations in New England. This will be achieved through the merger of CFG and
Bank of Ireland First Holdings, the holding company of First NH Bank. The
merger will create a banking and financial services group with total assets in
excess of $14 billion. The business will be carried on under the CFG name.
The merger will make CFG the third largest commercial bank holding
company in New England as measured by total assets and will combine two
community banks which focus on consumer banking and lending to small and medium
size businesses.
Following the merger, the Bank will hold 76.5% of CFG's enlarged share
capital. The remaining 23.5% will be held by Bank of Ireland. These shares
will be issued in exchange for the entire issued share capital of Bank of
Ireland First Holdings. On the basis of an estimated value for the enlarged CFG
of $1.85 billion, the transaction values Bank of Ireland's 23.5% holding at
around $435 million.
As part of the transaction, it is expected that the Bank and Bank of
Ireland will receive cash or loan notes from CFG. CFG will return approximately
$50 million of capital to the Bank prior to completion, whilst Bank of Ireland
is expected to receive around $220 million in cash and loan notes from CFG at
completion. This $220 million principally represents surplus capital within
Bank of Ireland First Holdings and the value of certain tax losses which will be
available to CFG. Bank of Ireland will retain ownership of BancIreland/First
Financial, a small leasing subsidiary which will be transferred prior to closing
at a book value of around $24 million. In addition, Bank of
Ireland may receive up to $26 million if and when certain tax losses are
realized in the future. The actual amount and composition of all payments will
be determined at completion which is expected to take place in approximately six
months.
Central items include the Group associated undertakings, head office
department costs (excluding those recharged to other divisions) and income from
surplus capital less central financing costs.
At September 30, 1995, the Group employed approximately 25,870 people.
Certain of the Group's full-time employees in the United Kingdom are members of
a trade union recognized by the Group as representing the interests of such
employees. The Group considers its relations with its employees to be
satisfactory.
In November 1992, it was announced that investment in new technology
and changes to working practices in the Branch Banking Division network would
lead to a reduction of approximately 3,500 jobs over the next five years. The
company believes that this reduction will be achieved by 1997. The annual cost
of such a level of staff terminations has not been and is not expected to be
material in the context of the Group's total staff costs.
The following discussion is based on the Consolidated
Financial Statements prepared in accordance with UK GAAP,
which differ in certain significant respects from US GAAP.
The Group's income on ordinary activities before tax for the year
ended September 30, 1995 increased by 13% from L532 million to L602 million.
The increase was largely the result of lower loan loss provisions, which were at
a five year low, and from the effect of the acquisitions made by CFG. The
substantial fall in provisions for loan losses resulted from an improvement in
the quality of the Group's loan portfolio and from continuing economic recovery
in the UK. Profit before provisions for loan losses increased by 7% from L667
million to L716 million but excluding a non-recurring director's contract
variation payment of L21 million in the prior year ended September 30, 1994, the
underlying increase was 4%.
Group operating profit for the year ended September 30, 1995, amounted
to L602 million. This represented a 25% increase on the L480 million Group
operating profit achieved in the prior year. Growth in total income from the
Group's core banking and insurance activities arose from the generation of
increased business by all of the divisions and from the acquisitions by CFG in
1994 and 1995. Net interest income increased by 11% from L969 million to L1,076
million, principally due to the effect of the CFG acquisitions and loan volume
growth in the UK. There was a 16.8% increase in average interest earning
assets, reflecting growth in loans to banks, home mortgage loans and debt
securities. Non-interest income, less general insurance claims, increased by 4%
from L862 million to L899 million, principally due to a 3% increase in fees and
commissions receivable and a L22 million increase in dealing profits. Operating
expenses increased by 10% at Group level. The CFG acquisitions, further
expansion in Direct Line, plus the start up costs of new businesses led to the
increase in expenses. Higher costs in the UK banking divisions added 8% to
Group operating expenses. Operating expenses included an increase in staff
profit sharing from L25 million to L30 million. The rate of growth of operating
expenses slowed during the year with an increase of 14% in the first half of the
year dropping to 7% in the second half. Provisions for loan losses fell to L112
million compared with L182 million for the year ended September 30, 1994. The
cost:income ratio (operating expenses, excluding general insurance claims,
expressed as a percentage of local income, including general insurance premiums)
for the Group improved from 53.2% to 52.2%. The cost:income ratio for the UK
banking divisions was 64.9% compared with 63.4% for the year ended September 30,
1994. The Group's return on average ordinary shareholders' equity improved from
24.1% to 24.3%. Total assets increased by approximately L6 billion, or 13%,
compared with the prior year. This was largely the result of increases in loans
to other banks reflecting growth in treasury operations from new business and an
increase in capacity which produced growth in both foreign exchange and money
market volumes. There was also growth in loans to customers, principally
domestic home mortgage loans, which increased 11% from L5.6 billion at September
30, 1994 to L6.2 billion as the Bank offered a range of fixed rate
-2-
and capped rate products. There was also growth in the debt securities
portfolio. Average total assets grew by 16% to L45.8 billion.
-3-
APPENDIX C
FORM OF BOND COUNSEL OPINION
April 1, 1996
City of Gary, Indiana
Gary, Indiana
Fifth Third Bank of Central Indiana, as trustee
Indianapolis, Indiana
EVEREN Securities, Inc., as
Underwriter
Chicago, Illinois
Moody's Investors Service
New York, New York
Re: City of Gary, Indiana Adjustable Rate Economic Development Revenue
Refunding Bonds, Series 1996 A (The Miller Partnership, L.P. Project)
in the aggregate principal amount of $20,540,000 (the "Series A
Bonds"), and the City of Gary, Indiana Taxable Adjustable Rate
Economic Development Revenue Refunding Bonds, Series 1996 B (The
Miller Partnership, L.P. Project) in the aggregate principal amount of
$1,680,000 (the "Series B Bonds", and together with the Series A
Bonds, the "Bonds"), issued pursuant to the Trust Indenture, dated as
of March 1, 1996 (the "Indenture") between the City of Gary, Indiana
(the "Issuer") and NBD Bank, N.A., as Trustee (the "Trustee"), which
Indenture contains an assignment of the Issuer's rights under the Loan
Agreement, dated as of March 1, 1996 (the "Loan Agreement") between
the Issuer and The Miller Partnership L.P. (the "Borrower"), and the
Series 1996 A Note and Series 1996 B Note of the Borrower (the
"Notes")
Ladies and Gentlemen:
We have examined a certified transcript of proceedings relating to the (a)
creation and organization of the Issuer; (b) authorization, issuance and sale of
the Bonds; (c) authorization and execution of the Indenture, the Loan Agreement
and the Notes; (d) an opinion of Hamilton Carmouche, Esq., Gary, Indiana,
counsel for the Issuer; (e) an opinion of Coffield Ungaretti & Harris, Chicago,
Illinois, counsel for the Borrower; (f) executed counterparts of the Loan
Agreement and the Indenture; (g) a certificate of officers of the Issuer of even
date herewith,
City of Gary, Indiana
NBD Bank, N.A.
EVEREN Securities, Inc.
Moody's Investors Service
April, 1, 1996
Page 2
regarding the execution of the Bonds and showing no litigation pending or
threatened; (h) the Tax Regulatory Agreement (the "Tax Regulatory Agreement")
dated as of March 1, 1996 between the Borrower and the Issuer; (i) the executed
Notes; and (j) certificates of the Borrower, of even date herewith; and (k)
Internal Revenue Service Form 8038.
We have also examined Indiana Code 36-7-11.9 and -12, and Indiana Code 5-1-
5, as amended, and such other provisions of the constitution and laws of the
State of Indiana (the "State") as we have deemed relevant and necessary as a
basis for the opinions set forth herein.
In delivering our opinion, we have relied upon a certified transcript of
proceedings and other certificates and representations of the Borrower and the
Issuer, including the tax covenants and representations of the Borrower and the
Issuer (the "Tax Covenants"), and have not undertaken to verify any facts by
independent investigation.
Based on the foregoing and our review of such other information, papers and
documents as we believe necessary or advisable, we are of the opinion that:
1. The Loan Agreement has been duly authorized, executed and delivered by
the Issuer, and, assuming due authorization, execution and delivery thereof by
the Borrower, is a valid and binding agreement of the Issuer.
2. The Indenture has been duly authorized, executed and delivered by the
Issuer, and, assuming due authorization, execution and delivery thereof by the
Trustee, is a valid and binding agreement of the Issuer.
3. The Bonds have been duly authorized, executed and issued and are valid
and binding limited obligations of the Issuer.
4. Under existing laws, regulations, judicial decisions and rulings, the
interest on the Bonds is exempt from income taxation in the State. This opinion
relates only to the tax exemption of interest on the Bonds from State income
taxes.
5. Under federal statutes, decisions, regulations and rulings existing on
this date, the interest on the Series A Bonds is excludable from gross income
for purposes of federal income taxation pursuant to Section 103 of the Internal
Revenue Code of 1986 (the "Code"). Under Section 147(a) of the Code, the
interest on any Series A Bond will not be excluded from gross income for federal
income tax purposes during the time such Series A Bond is held by a person
City of Gary, Indiana
NBD Bank, N.A.
EVEREN Securities, Inc.
Moody's Investors Service
April, 1, 1996
Page 3
who is a "substantial user" of the facilities financed by the Bonds or a
"related person" thereto within the meaning of Section 147(a) of the Code and
the regulations applicable thereto. This opinion relates only to the exclusion
from gross income of interest on the Series A Bonds for federal income tax
purposes under Section 103 of the Code and is conditioned on continuing
compliance by the Borrower and the Issuer with the Tax Covenants. Failure to
comply with the Tax Covenants could cause interest on the Series A Bonds to lose
the exclusion from gross income for purposes of federal income taxation
retroactive to the Bonds' date of issue.
By the terms of the Indenture, the Loan Agreement and other relevant
documents, the interest rate mode as set forth in the Indenture for the Bonds
may be changed and certain actions may be taken under the circumstances and
subject to the terms and conditions set forth in such documents subject to
receipt of an approving opinion of nationally recognized bond counsel. No
opinion is expressed herein as to the effect upon any Series A Bond or the
excludability of the interest thereon for federal income taxation purposes
resulting from any such change or action.
The interest rate on the Series B Bonds is not excludable from gross income
for purposes of federal income taxation.
It is to be understood that the rights of the owners of the Bonds, the
Issuer, the Trustee and the Borrower and the enforceability of the Bonds, the
Indenture and the Loan Agreement may be subject to bankruptcy, insolvency,
reorganization, moratorium and other similar laws affecting creditors' rights
heretofore and hereafter enacted to the extent constitutionally applicable and
that their enforcement may be subject to the exercise of judicial discretion in
accordance with general principles of equity. It is to be understood that the
rights of the owners of the Bonds, the Issuer, the Trustee and the Borrower and
the enforceability of the Bonds, the Indenture and the Loan Agreement may be
subject to the valid exercise of the constitutional powers of the State and the
United States of America.
We have not been retained to pass upon the validity, creditworthiness or
enforceability of the Letter of Credit issued by The Royal Bank of Scotland plc,
acting through its New York Branch, or any Substitute Letter of Credit, and we
bear no responsibility therefor.
Very truly yours,
APPENDIX D
DEFINITIONS AND SUMMARY OF
CERTAIN LEGAL DOCUMENTS
DEFINITIONS
"Act" means, collectively, Title 36, Article 7, Chapters 11.9 and 12 and
Title 5, Article 1, Chapter 5 of the Indiana Code, as supplemented and amended.
"Additional Bonds" means additional parity bonds secured by an Alternate
Letter of Credit which may be issued under the Indenture.
"Adjustable Rate" means any interest rate to be borne on the Refunding
Bonds other than the Fixed Interest Rate.
"Agreement" or "Loan Agreement" means the Loan Agreement dated as of March
1, 1996, between the Issuer and the Borrower, as amended or supplemented from
time to time.
"Alternate Letter of Credit" means an irrevocable letter of credit
authorizing drawings thereunder by the Trustee issued by a bank, a trust company
or other financial institution and meeting the requirements of the Indenture.
"Authenticating Agent" means the Registrar for the Bonds and any bank,
trust company or other Person designated as an Authenticating Agent for the
Bonds by or in accordance with the Indenture, each of which shall be a transfer
agent registered in accordance with Section 17(A) of the Securities Exchange Act
of 1934, as amended.
"Bank" means The Royal Bank of Scotland plc, acting through its New York
Branch, and its successors and assigns. Upon issuance and effectiveness of any
Alternative Letter of Credit, "Bank" shall mean the issuer thereof and its
successors and assigns.
"Beneficial Owner" means with respect to a Refunding Bond, a Person owning
the Beneficial Ownership Interest therein, as evidenced to the satisfaction of
the Trustee.
"Beneficial Ownership Interest" means the right to receive payments and
notices with respect to the Refunding Bonds which are held by the Depository
under the book entry system.
"Bond Counsel" means an attorney-at-law or firm of attorneys (other than an
employee of the Borrower but including any law firm serving as counsel to the
Borrower) satisfactory to the Trustee, the Bank and the Issuer and nationally
recognized as experienced in matters relating to the tax exemption of interest
on bonds of states and political subdivision.
"Bond Fund" means the Bond Fund created in the Indenture.
"Bond Purchase Agreement" means, as to the Refunding Bonds, the Bond
Purchase Agreement dated as of or after the date hereof but on or prior to the
date of initial delivery of the Refunding Bonds, among the Issuer, the
Underwriter and the Borrower and, as to any Additional Bonds, the bond placement
agreement provided for in the Bond Legislation providing for the issuance of the
Additional Bonds.
"Bond Purchase Date" means any Bond Purchase Date as defined and provided
for in the Indenture.
"Bond Legislation" or "Bond Ordinance" means (a) when used with reference
to the Refunding Bonds, the ordinance providing for their issuance and approving
the Agreement, this Indenture, the Bond Purchase Agreement
and related matters; (b) when used with reference to an issue of Additional
Bonds, the ordinance providing for the issuance of the Refunding Bonds, to the
extent applicable, and the legislation providing for the issuance of the
Additional Bonds and approving any amendment or supplement to the Agreement, any
Supplemental Indenture and related matters; and (c) when used with reference to
Bonds when Additional Bonds are outstanding, the ordinance providing for the
issuance of the Refunding Bonds and the ordinance providing for the issuance of
then outstanding and the then to be issued Additional Bonds; in each case as
amended or supplemented from time to time.
"Bond Service Charges" means, for any series of bonds, the principal of,
premium, if any, and interest on such Bonds for any period or payable at any
time, whether due on an Interest Payment Date, at maturity or upon acceleration,
redemption or upon tender for purchase.
"Bonds" means the Refunding Bonds and any Additional Bonds.
"Book entry form" or Book entry system" means, with respect to the
Refunding Bonds, a form or system, as applicable, under which (i) the Beneficial
Ownership Interests may be transferred only through a book entry and
(ii) physical Refunding Bond certificates in fully registered form are
registered only in the name of a Depository or its nominee as Holder, with the
physical Refunding Bond certificates "immobilized" in the custody of the
Depository. The book entry system maintained by and the responsibility of the
Depository and not maintained by or the responsibility of the Issuer or the
Trustee is the record that identifies, and records the transfer of the interests
of, the owners of book entry interests in the Refunding Bonds.
"Borrower" means The Miller Partnership, L.P., an Illinois limited
partnership, and its successors and assigns.
"Business Day" means a day of the year, other than a Saturday or Sunday, on
which commercial banks located in the city or cities in which the principal
corporate trust office of the Paying Agent, the principal corporate trust office
of the Registrar, the principal office of the Remarketing Agent, and the
principal office of the Bank are located, are not required or authorized to
remain closed and on which The New York Stock Exchange is not closed.
"CenterPoint" means CenterPoint Properties Corporation, a Maryland
corporation and general partner of the Borrower.
"Closing Date" means, with respect to the Refunding Bonds, the date of
delivery of and payment for the Refunding Bonds.
"Code" means the Internal Revenue Code of 1986, as amended from time to
time. Reference to the Code and Sections of the Code include relevant
applicable regulations and proposed regulations thereunder (and under the
related provisions of the Internal Revenue Code of 1954, as amended) and any
successor provisions to those Sections, regulations or proposed regulations.
"Depository" means any securities depository that is a clearing agency
under federal law operating and maintaining, with its participants or otherwise,
a book entry system to record ownership of book entry interests in bonds, and to
effect transfers of book entry interests in bonds in book entry form, and
includes and means initially The Depository Trust Company (a limited purpose
trust company), New York, New York.
"Determination of Taxability" means and shall occur when, (i) the Trustee
receives written notice from the Borrower, supported by an opinion of Bond
Counsel, that interest on the Series 1996 A Bonds is includable in the gross
income of Holders of the Series 1996 A Bonds for federal income tax purposes or
(ii) the Internal Revenue Service shall claim in writing that interest on the
Series 1996 A Bonds is includable in the gross income of Holders of the Series
1996 A Bonds for federal income tax purpose; provided, that such a claim shall
not be deemed a Determination of Taxability unless the Borrower is afforded
reasonable opportunity (at the Borrower's sole expense
-2-
and for a period not to exceed 2 years) to pursue any judicial or administrative
remedy available to the Borrower with respect to such claim.
"Direct Participant" means a Participant as defined in the Letter of
Representations.
"Eligible Funds" means amounts on deposit in the Bond Fund (other than
funds derived from a draw on the Letter of Credit) for a continuous period of
(i) 91 days or (ii) such shorter period if an opinion of counsel acceptable to
the Bank and the Trustee is delivered to the Issuer, the Bank and the Trustee
stating that such shorter period will not result in voidable preferences, during
which period there shall not have occurred the filing of a voluntary or
involuntary petition in bankruptcy under the United States Bankruptcy Code, 11
U.S.C. Sections 101 ET. SEQ., or the commencement of a proceeding under any
other applicable laws concerning insolvency, reorganization or bankruptcy, by or
against the Borrower or the Issuer.
"Event of Default" means an Event of Default as described in the Indenture.
"First Optional Redemption Date" means the earlier to occur of the April 1
occurring in the first year which is (i) at least ten (10) full years after the
Fixed Interest Rate Commencement Date or (ii) a number of years after the Fixed
Interest Rate Commencement Date equal to the number of full years between the
Fixed Interest Rate Commencement Date and the maturity date of the Refunding
Bonds, multiplied by 1/2 and rounded up to the nearest whole number.
"Five Year Interest Rate" means (a) the rate of interest per annum
determined by the Remarketing Agent, on the Interest Rate Determination Date
immediately preceding the applicable Interest Rate Adjustment Date, to be the
interest rate necessary, during the Interest Rate Period commencing on the
applicable Interest Rate Adjustment Date and ending on the March 31 or September
30 nearest to but not later than the date which is five years from the Interest
Rate Adjustment Date, in the judgment of the Remarketing Agent (taking into
consideration current transactions and comparable securities with which the
Remarketing Agent is involved or of which it is aware and prevailing financial
market conditions) to produce as nearly as practical a par bid for the Refunding
Bonds on the Interest Rate Determination Date or (b) in the event that the
Remarketing Agent has been removed or has resigned and no successor has been
appointed or the Remarketing Agent has failed to determine the Five Year
Interest Rate for whatever reason, or the Five Year Interest Rate cannot be
determined pursuant to clause (a) for whatever reason, the interest rate then in
effect with respect to the Refunding Bonds, without adjustment; provided that in
no event shall the Five Year Interest Rate exceed the Maximum Rate.
"Fixed Interest Rate" means (a) the fixed rate of interest per annum
determined by the Remarketing Agent, on the Interest Rate Determination Date
immediately preceding the applicable Interest Period Reset Date, to be the
interest rate necessary, from the Interest Period Reset Date to the final
maturity date of the Refunding Bonds, in the judgment of the Remarketing Agent
(taking into consideration current transactions and comparable securities with
which the Remarketing Agent is involved or of which it is aware and prevailing
financial market conditions) to produce as nearly as practical a par bid for the
Refunding Bonds on the Interest Rate Determination Date or (b) in the event that
the Remarketing Agent has been removed or has resigned and no successor has been
appointed or the Remarketing Agent has failed to determine the Fixed Interest
Rate for whatever reason, or the Fixed Interest Rate cannot be determined
pursuant to clause (a) for whatever reason, the interest rate then in effect
with respect to the Refunding Bonds, without adjustment; provided that in no
event shall the Fixed Interest Rate exceed the Maximum Rate.
"Fixed Interest Rate Commencement Date" means the Interest Period Reset
Date from and after which the Refunding Bonds shall bear interest at the Fixed
Interest Rate, as that date shall be established as provided in the Indenture.
"Government Obligations" means (a) direct obligations of the United States
of America for the payment of which the full faith and credit of the United
States of America is pledged, (b) obligations issued by a person controlled
-3-
or supervised by and acting as an instrumentality of the United States of
America, the payment of the principal of, premium, if any, and interest on which
is fully guaranteed as a full faith and credit obligation of the United States
of America (including any securities described in (a) or (b) issued or held in
book-entry form on the books of the Department of Treasury of the United States
of America or Federal Reserve Bank), and (c) money market funds (including those
of the Trustee or its affiliates), rated in the highest rating category by
Moody's, which invest solely in the obligations described in (a) and (b) above.
"Holder" or "Holder of a Bond" or "Bondholder" means the Person in whose
name a Bond is registered on the Register.
"Indenture" means the Trust Indenture dated as of March 1, 1996, between
the Issuer and the Borrower, as amended or supplemented from time to time.
"Indirect Participant" means a person utilizing the Book Entry System of
the Depository by directly or indirectly clearing through or maintaining a
custodial relationship with a Direct Participant.
"Interest Payment Date" or "Interest Payment Dates" means, (a) as to the
Refunding Bonds, (i) while the Refunding Bonds bear interest at the Six Month
Interest Rate, the One Year Interest Rate, the Five Year Interest Rate or the
Fixed Interest Rate, the first day of each April and October, and (ii) while the
Refunding Bonds bear interest at the Weekly Interest Rate, the One Month
Interest Rate, or the Three Month Interest Rate, the first Business Day of each
month commencing the first Business Day of May, 1996, and (b) as to Additional
Bonds, each date or dates designated as an Interest Payment Date or Dates in the
applicable Supplemental Indenture or Bond Legislation.
"Interest Period Reset Date" means the date on which the interest rate on
the Refunding Bonds converts from the Interest Rate Mode applicable to the
Refunding Bonds prior to such date to a new Interest Rate Mode. An Interest
Period Reset Date shall be the first Business Day of a month; provided that upon
conversion from a Six Month, One Year or Five Year Interest Rate Mode, an
Interest Reset Date shall be the first day of a month; and provided further,
that except when converting from Weekly Interest Rate Mode, an Interest Period
Reset Date may not occur prior to the end of the preceding Interest Rate Period.
"Interest Rate Adjustment Date" means any date on which the interest rate
on the Refunding Bonds may be adjusted, either as the result of the conversion
of the interest rate on the Refunding Bonds to a different Interest Rate Mode,
or by adjustment of the interest rate on the Refunding Bonds within the
applicable Interest Rate Mode. Except as otherwise provided with respect to an
Interest Rate Adjustment Date which is also an Interest Period Reset Date, an
Interest rate Adjustment Date shall be the first day of the first month of the
Interest Rate Period if the Refunding Bonds bear interest at the Six Month, One
Year or Five Year Interest Rates; the first Business day of a month if the
Refunding Bonds bear interest at the One Month or Three Month Interest Rates;
and if the Refunding Bonds bear interest at the Weekly Interest Rate, then
Interest Rate Adjustment shall be Thursday of each week.
"Interest Rate Determination Date" means (i) with respect to the Three
Month Interest Rate, the Six Month Interest Rate, the One Year Interest Rate,
the Five Year Interest Rate and the Fixed Interest Rate, the tenth Business Day
preceding an Interest Rate Adjustment Date, (ii) with respect to the One Month
Interest Rate, the seventh Business Day preceding an Interest Rate Adjustment
Date, and (iii) with respect to the Weekly Interest Rate, not later than 2:00
p.m. according to local time at the principal corporate trust office of the
Registrar on Wednesday of each week, or the next preceding Business Day if such
Wednesday is not a Business Day; provided that upon any conversion to the Weekly
Interest Rate from a different Interest Rate Mode, the first Interest Rate
Determination Date shall mean not later than 2:00 p.m. according to the local
time at the principal corporate trust office of the Registrar on the Business
Day next preceding the Interest Period Reset Date.
"Interest Rate Mode" means any of those modes of interest with respect to
the Refunding Bonds permitted by this Indenture, specifically, the Weekly
Interest Rate, the One Month Interest Rate, the Three Month Interest Rate, the
Six Month Interest Rate, the One Year Interest Rate, the Five Year Interest Rate
and the Fixed Interest Rate.
-4-
"Interest Rate Period" means that period of time for which the interest
rate with respect to the Refunding Bonds has been determined by the Remarketing
Agent or otherwise as provided in the definition of the applicable Interest Rate
Mode, commencing on the applicable Interest Rate Adjustment Date, and
terminating on the day immediately preceding the following Interest Rate
Adjustment Date.
"Issuer" means the City of Gary, Indiana, a municipality and political
subdivision of the State of Indiana.
"Letter of Credit" means (A) the irrevocable letter of credit to be issued
by the Bank and delivered to the Trustee on the same date as the initial
delivery of the Refunding Bonds and being an irrevocable obligation to make
payment to the Trustee of up to the amounts therein specified with respect to
(a) the principal amount of the Refunding Bonds outstanding to enable the
Trustee to pay (i) the principal amount of the Refunding Bonds when due at
maturity or upon redemption or acceleration, and (ii) an amount equal to the
principal portion of the purchase price of any Refunding Bonds or Beneficial
Ownership Interests tendered for purchase by the Holders or Beneficial Owners
thereof, plus (b) the amount of interest due on the Refunding Bonds but not to
exceed 56 days' accrued interest at 12% per annum to enable the Trustee to pay
(i) interest on the Refunding Bonds when due and (ii) an amount equal to the
interest portion, if any, of the purchase price of any Refunding Bonds or
Beneficial Ownership Interests tendered for purchase by the Holder or Beneficial
Owner thereof; as the same may be transferred, reissued, extended, amended to
change the interest coverage period as contemplated in the Indenture, or
replaced in accordance with the Indenture and the Letter of Credit and (B) upon
the issuance and effectiveness thereof, any Alternate Letter of Credit.
"Letter of Credit Termination Date" means the expiration date of the Letter
of Credit (presently April 15, 2001) or of any Alternate Letter of Credit.
"Letter of Representations" means the Letter of Representations from the
Issuer, the Trustee, the Registrar, the Paying Agent and the Remarketing Agent
to the Depository in connection with the issuance of the Refunding Bonds in a
book entry system, as supplemented and amended from time to time.
"Loan" means the loan by the Issuer to the Borrower of the proceeds
received from the sale of the Bonds.
"Loan Payments" means the amounts required to be paid by the Borrower in
repayment of the Loan pursuant to the provisions of the Notes and the Agreement.
"Maximum Rate" means the lesser of twelve percent (12%) per annum or the
maximum rate permitted by law.
"Moody's" means Moody's Investors Service, Inc., a Delaware corporation,
and its successors and assigns.
"Notes" means the Refunding Notes and any Additional Notes.
"Obligors" means, collectively, the Borrower and CenterPoint.
"One Month Interest Rate" means (a) the rate of interest per annum
determined by the Remarketing Agent, on the Interest Rate Determination Date
immediately preceding the applicable Interest Rate Adjustment Date, to be the
interest rate necessary, during the Interest Rate Period commencing on the
applicable Interest Rate Adjustment Date to and including the day preceding the
first Business Day of the next month, in the judgment of the Remarketing Agent
(taking into consideration current transactions and comparable securities with
which the Remarketing Agent is involved or of which it is aware and prevailing
financial market conditions) to produce as nearly as practical a par bid for the
Refunding Bonds on the Interest Rate Determination Date or (b) in the event that
the Remarketing Agent has been removed or has resigned and no successor has been
appointed, or the Remarketing Agent has failed to determine the One Month
Interest Rate for whatever reason, or the One Month Interest Rate cannot be
determined pursuant to clause (a) for whatever reason, the interest rate than in
effect with respect to the Refunding Bonds, without adjustment; provided that in
no event shall the One Month Interest Rate exceed the Maximum Rate.
-5-
"One Year Interest Rate" means (a) the rate of interest per annum
determined by the Remarketing Agent, on the Interest Rate Determination Date
immediately preceding the applicable Interest Rate Adjustment Date, to be the
interest rate necessary, during the Interest Rate Period commencing on the
applicable Interest Rate Adjustment Date and ending on the March 31 or September
30 nearest to but not later than the date which is one year from the Interest
Rate Adjustment Date, in the judgment of the Remarketing Agent (taking into
consideration current transactions and comparable securities with which the
Remarketing Agent is involved in of which it is aware and prevailing financial
market conditions) to produce as nearly as practical a par bid for the Refunding
Bonds on the Interest Rate Determination Date or (b) in the event that the
Remarketing Agent has been removed or has resigned and no successor has been
appointed, or the Remarketing Agent has failed to determine the One Year
Interest Rate for whatever reason, or the One Year Interest Rate cannot be
determined pursuant to clause (a) for whatever reason, the interest rate then in
effect with respect to the Refunding Bonds, without adjustment; provided that in
no event shall the One Year Interest Rate exceed the Maximum Rate.
"Outstanding Bonds" or "Bonds outstanding" means, as of the applicable
date, all Bonds which have been authenticated and delivered, or which are being
delivered by the Registrar under the Indenture, except:
a. Bonds canceled upon surrender, exchange or transfer, or canceled
because of payment or redemption on or prior to that date;
b. Bonds, or the portion thereof, the payment, redemption or purchase for
cancellation of which sufficient money has been deposited and credited
with the Trustee or any Paying Agents pursuant to the Indenture on or
prior to that date for that purpose (whether upon or prior to the
maturity or redemption date of those Bonds); provided, that if any of
those bonds are to be redeemed prior to their maturity, notice of that
redemption shall have been given or arrangements satisfactory to the
Trustee shall have been made for giving notice of that redemption, or
waiver by the affected Holders of that notice satisfactory in form to
the Trustee shall have been filed with the Trustee;
c. Bonds, or the portion thereof, which are deemed to have been paid and
discharged or caused to have been paid and discharged pursuant to the
provisions of the Indenture;
d. Bonds in lieu of which others have been authenticated under the
Indenture; and
e. Bonds which are tendered or deemed to have been tendered pursuant to
the Indenture;
provided that, in determining whether the Holders of the requisite percentage of
Bonds have concurred in any demand, direction, request, notice, consent, waiver
or other action under the Indenture, Bonds that are owned by the Borrower or any
Person directly or indirectly controlling or controlled by or under direct or
indirect common control with the Borrower shall be regarded and deemed not to be
outstanding for the purpose of any such determination; provided that for the
purposes of determining whether the Trustee shall be protected in relying on any
such direction, consent or waiver, only such Bonds which the Trustee knows are
so owned shall be disregarded. Bonds so owned that have been pledged in good
faith may be regarded as Outstanding for such purpose, if the pledgee shall
establish to the satisfaction of the Trustee the pledgee's right to vote such
Bonds and the pledgee is not a Person directly or indirectly controlling or
controlled by or under direct or indirect common control with the Borrower. In
case of a dispute as to such right, any decision by the Trustee taken upon the
advice of counsel shall be full protection to the Trustee.
"Paying Agent" means, initially, The Fifth Third Bank, located in
Cincinnati, Ohio, and any bank or trust company designated as a Paying Agent by
or in accordance with the Indenture.
"Person" or words importing persons means firms, associations,
corporations, partnerships (including without limitation, general and limited
partnerships), joint ventures, societies, estates, trusts, limited liability
companies, public or governmental bodies, other legal entities and natural
persons.
-6-
"Prior Bonds" means collectively the Series 1991 A Bonds, the Series 1991 B
Bonds, the Series 1993 A Bonds and the Series 1993 B Bonds.
"Prior Bonds Trustee" means LaSalle National Bank, Chicago, Illinois, as
trustee under the Prior Indenture.
"Prior Indenture" means, collectively, the Trust Indenture dated as of
April 1, 1991, as supplemented by the First Supplemental Trust Indenture dated
as of September 1, 1993, among the Issuer, LaSalle National Bank, as Trustee and
Mercantile National Bank of Indiana, as Co-Trustee, pursuant to which the Prior
Bonds were issued.
"Project" means the 14-building, 682 unit multi-family housing project,
located at 415 North Lake Street, in the City of Gary, Indiana.
"Rating Service" means either Moody's or S & P.
"Refunding Bonds" means, collectively, the Series 1996 A Bonds and the
Series 1996 B Bonds, in the aggregate principal amount of $22,220,000 authorized
in the Bond Legislation and the Indenture.
"Refunding Fund" means the Refunding Fund created pursuant to the
Indenture.
"Refunding Notes" means, collectively the Note, Series 1996 A in the
principal amount of $20,540,000 and the Note, Series 1996 B in the principal
amount of $1,680,000 of the Borrower, dated as of even date with the Refunding
Bonds, evidencing the obligation of the Borrower to make Loan Payments.
"Register" means the books kept and maintained by the Registrar for
registration and transfer of Bonds pursuant to the Indenture.
"Registrar" means The Fifth Third Bank, located in Cincinnati, Ohio, until
a successor Registrar shall have become such pursuant to applicable provisions
of this Indenture.
"Regular Record Date" means, with respect to any Bond, the fifth business
Day next preceding an Interest Payment Date applicable to the Bond; provided,
however, that so long as the Bonds bear interest at the Fixed Interest Rate,
"Regular Record Date" means the fifteen day next preceding an Interest Payment
Date applicable to that Bond.
"Reimbursement Agreement" means the Reimbursement Agreement dated as of
March 1, 1996, by and among the Bank, the Borrower and CenterPoint, as amended
and supplemented from time to time. Upon the issuance of any Alternate Letter
of Credit, "Reimbursement Agreement" shall mean the reimbursement or similar
agreement relating to such Alternate Letter of Credit, entered into between the
Borrower and the issuer of such Alternate Letter of Credit.
"Remarketing Agent" means, initially, Everen Securities, Inc. and Gates
Capital Corporation, serving jointly, as the Remarketing Agent, and any Person
meeting the qualifications set forth in the Indenture and designated from time
to time to act as Remarketing Agent under the Indenture.
"Remarketing Reimbursement Fund" means the Remarketing Reimbursement Fund
created in the Indenture.
"Revenues" means (a) the Loan Payments, (b) all of the moneys received or
to be received by the Issuer or the Trustee in respect of repayment of the Loan,
(c) all moneys and investment in the Bond Fund, including without limitation
moneys received by the Trustee under or pursuant to the Letter of Credit, (d)
any moneys and investments in the Refunding Fund, and (e) all income and profit
from the investment of the foregoing moneys.
"S&P" means Standard & Poor's Ratings Group, a division of McGraw-Hill and
its successors and assigns.
-7-
"Series 1991 A Bonds" means the City of Gary, Indiana Economic Development
Revenue Bonds, Series 1991 A (The Miller Partnership L.P. Project) issued in the
original principal amount of $14,500,000.
"Series 1991 B Bonds" means the City of Gary, Indiana Taxable Economic
Development Revenue Bonds, Series 1991 B (The Miller Partnership L.P. Project)
issued in the original principal amount of $1,000,000.
"Series 1993 A Bonds" means the City of Gary, Indiana Economic Development
Revenue Bonds, Series 1993 A (The Miller Partnership L.P. Project) issued in the
original principal amount of $6,040,000.
"Series 1993 B Bonds" means the City of Gary, Indiana Taxable Economic
Development Revenue Bonds, Series 1993 B (The Miller Partnership L.P. Project)
issued in the original principal amount of $1,460,000.
"Series 1996 A Bonds" means the City of Gary, Indiana Adjustable Rate
Economic Development Revenue Refunding Bonds, Series 1996 A (The Miller
Partnership, L.P. Project) issued in the original principal amount of
$20,540,000, which are being issued to refund the Series 1991 A Bonds and the
Series 1993 A Bonds.
"Series 1996 B Bonds" means the City of Gary, Indiana Taxable Adjustable
Rate Economic Development Revenue Refunding Bonds, Series 1996 B (The Miller
Partnership, L.P. Project) issued in the original principal amount of
$1,680,000, which are being issued to refund a portion of the Series 1991 B
Bonds and the Series 1993 B Bonds.
"Six Month Interest Rate" means (a) the rate of interest per annum
determined by the Remarketing Agent, on the Interest Rate Determination Date
immediately preceding the applicable Interest Rate Adjustment Date, to be the
interest rate necessary, during the Interest Rate Period commencing on the
applicable Interest Rate Adjustment Date and ending on the March 31 or September
30 nearest to but not later than the date which is six months from the Interest
Rate Adjustment Date, in the judgment of the Remarketing Agent (taking into
consideration current transactions and comparable securities with which the
Remarketing Agent is involved or of which it is aware and prevailing financial
market conditions) to produce as nearly as practical a par bid for the Refunding
Bonds on the Interest Rate Determination Date or (b) in the event that the
Remarketing Agent has been removed or has resigned and no successor has been
appointed, or the Remarketing Agent has failed to determine the Six Month
Interest Rate for whatever reason, or the Six Month Interest Rate cannot be
determined pursuant to clause (a) for whatever reason, the interest rate then in
effect with respect to the Refunding Bonds, without adjustment; provided that in
no event shall the Six Month Interest Rate exceed the Maximum Rate.
"Supplemental Indenture" means any indenture supplemental to the Indenture
entered into between the Issuer and the Trustee in accordance with the
provisions of the Indenture.
"Three Month Interest Rate" means (a) the rate of interest per annum
determined by the Remarketing Agent, on the Interest Rate Determination Date
immediately preceding the applicable Interest Rate Adjustment Date, to be the
interest rate necessary, during the Interest Rate Period commencing on the
applicable Interest Rate Adjustment Date to and including the day preceding the
first Business Day of the January, April, July or October, nearest to but not
later than the date which is three months from the Interest Rate Adjustment
Date, in the judgment of the Remarketing Agent (taking into consideration
current transactions and comparable securities with which the Remarketing Agent
is involved or of which it is aware and prevailing financial market conditions)
to produce as nearly as practical a par bid for the Refunding Bonds on the
Interest Rate Determination Date or (b) in the event that the Remarketing Agent
has been removed or has resigned and no successor has been appointed, or the
Remarketing Agent has failed to determine the Three Month Interest Rate for
whatever reason, or the Three Month Interest Rate cannot be determined pursuant
to clause (a) for whatever reason, the interest rate then in effect with respect
to the Refunding Bonds, without adjustment; provided that in no event shall the
Three Month Interest Rate exceed the Maximum Rate.
-8-
"Trustee" means the Trustee at the time acting as such under the Indenture,
originally Fifth Third Bank of Central Indiana, as Trustee, Indianapolis,
Indiana, and any successor Trustee as determined or designated under or pursuant
to this Indenture.
"Weekly Interest Rate" means (a) the rate of interest per annum determined
by the Remarketing Agent on the Interest Rate Determination Date immediately
preceding the applicable Interest Rate Adjustment Date, to be the interest rate
necessary during the Interest Rate Period of one week (or less in the case of
any such Interest Rate Period commencing on an Interest Period Reset Date which
is not a Thursday or ending on the day preceding an Interest Period Reset Date)
commencing on the applicable Interest Rate Adjustment Date, in the judgment of
the Remarketing Agent (taking into consideration current transactions and
comparable securities with which the Remarketing Agent is involved or of which
it is aware and prevailing financial market conditions) to produce as nearly as
practical a par bid (plus accrued interest, if any) for the Refunding Bonds on
the Interest Rate Determination Date or (b) in the event that the Remarketing
Agent has been removed or has resigned and no successor has been appointed, or
the Remarketing Agent has failed to determine the Weekly Interest Rate for
whatever reason, or the Weekly Interest Rate cannot be determined pursuant to
clause (a) for whatever reason, the interest rate then in effect with respect to
the Refunding Bonds, without adjustment; provided that in no event shall the
Weekly Interest Rate exceed the Maximum Rate.
THE LETTER OF CREDIT
THE FOLLOWING IS A SUMMARY OF CERTAIN PROVISIONS CONTAINED IN THE
LETTER OF CREDIT. THIS SUMMARY DOES NOT PURPORT TO BE A COMPREHENSIVE
DESCRIPTION AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO THE
LETTER OF CREDIT.
The Letter of Credit is an irrevocable obligation of the Bank to pay
to the Trustee up $22,634,774 upon the terms and conditions set forth in the
Letter of Credit which represents the principal amount of the Series 1996 A
Bonds ($20,540,000), plus 56 days' interest thereon at a maximum interest rate
of 12% per annum, plus the principal amount of the Series 1996 B Bonds
($1,680,000), plus 56 days' interest thereon at a maximum interest rate of 12%
per annum, in each case calculated on the basis of a 360-day year consisting of
twelve 30-day months.
Pursuant to the Indenture, the Trustee is required to draw upon the
Letter of Credit in the following circumstances:
(a) to make timely payment of the principal of and interest on
the Bonds;
(b) to make timely payment of the redemption price (excluding
any premium) of Bonds called for mandatory or optional redemption; and
(c) to make timely payment of the purchase price of Bonds or
Beneficial Ownership Interests required to be purchased, as the result of
an optional or mandatory tender, pursuant to the provisions of the
Indenture, but only to the extent of a shortfall in remarketing proceeds.
The Letter of Credit will terminate upon the earliest to occur of the
following (the "Termination Date"): (i) the Trustee's making of the final
drawing available to be made thereunder; (ii) surrender of the Letter of Credit
to the Bank for cancellation, as a result of (A) the payment in full of the
Bonds pursuant to the provision of the Indenture, or (B) the acceptance by the
Trustee of an Alternate Letter of Credit (as herein defined), as certified by a
duly authorized officer of the Trustee; (iii) April 15, 2001; (iv) the fifth
calendar day following the Fixed Interest Rate Commencement Date unless waived
in writing by the Bank prior to the Fixed Interest Rate Commencement Date;
(v) the fifth calendar day following the Interest Period Reset Date (as defined
in the Indenture) from and after which any of the Bonds bear interest at the Six
Month Interest Rate, the One Year Interest Rate or the Five Year Interest
-9-
Rate; or (vi) the fifteenth calendar day following delivery by the Bank to the
Trustee of a direction pursuant to the Indenture to declare the Bonds
immediately due and payable which has not been rescinded.
The Letter of Credit and the amounts available thereunder to be drawn
to pay principal of Bonds or to pay the principal portion of the purchase price
for any Bonds or Beneficial Ownership Interests will be reduced automatically
without notice by amounts drawn under the Letter of Credit for the payment of
principal when due on Bonds or to pay the principal portion of the purchase
price of any Bonds or Beneficial Ownership Interests. The amounts available
under the Letter of Credit will be reinstated with respect to a drawing for the
principal portion of the purchase price of Bonds and Beneficial Ownership
Interests upon the receipt by the Bank of remarketing proceeds with respect to
such Bonds or Beneficial Ownership Interests, or of Bonds or Beneficial
Ownership Interests tendered and not remarketed by the Remarketing Agent. The
amounts available under the Letter Credit to be drawn for the payment of
interest will be reduced automatically, without notice, by the amount of any
draw on the Letter of Credit for the payment of interest. Such amount with
respect to interest will be reinstated in an amount sufficient to provide total
interest coverage equal to 56 days interest at the Maximum Rate on the then
outstanding principal amount of the Bonds on the 16th calendar day after the
date of such reduction, unless within 15 calendar days after the date of such
reduction the Bank sends written notice to the Trustee to declare the Bonds
immediately due and payable; provided that such reinstatement of interest
coverage will occur immediately in the case of any drawing for the interest
portion of the purchase price of any Bonds and Beneficial Ownership Interests
that have been remarketed and for which the Trustee is holding proceeds.
THE REIMBURSEMENT AGREEMENT
THE FOLLOWING IS A SUMMARY OF CERTAIN PROVISIONS CONTAINED IN THE
REIMBURSEMENT AGREEMENT. THIS SUMMARY DOES NOT PURPORT TO BE A
COMPREHENSIVE DESCRIPTION AND IS QUALIFIED IN ITS ENTIRETY BY
REFERENCE TO THE REIMBURSEMENT AGREEMENT.
ISSUANCE OF LETTER OF CREDIT AND REIMBURSEMENT
Under the Reimbursement Agreement, the Bank will agree to issue its
Letter of Credit to the Trustee concurrently with the issuance and delivery of
the Bonds. The issuance of the Letter of Credit is subject to the satisfaction
of certain conditions set forth in the Reimbursement Agreement, including the
receipt by the Bank of various certifications or documents from the Obligors,
the Issuer and the Trustee, among other parties, and the delivery of certain
legal opinions.
Under the Reimbursement Agreement, the Obligors will agree to pay to
the Bank all amounts that are drawn under the Letter of Credit and any and all
reasonable charges and expenses which the Bank may pay or incur relative to the
Letter of Credit, together with interest, if any, on such amounts at the rate or
rates specified in the Reimbursement Agreement.
COLLATERAL UNDER REIMBURSEMENT AGREEMENT
In order to secure the Obligors' reimbursement obligation with respect
to the Letter of Credit and other obligations of the Obligors to the Bank under
the Reimbursement Agreement, the Obligors have granted and will grant mortgages
and security interests to the Bank. Neither the Trustee nor any Holder will
have any right to any collateral security granted to the Bank pursuant to the
Reimbursement Agreement.
FEES AND EXPENSES
Under the Reimbursement Agreement, the Obligors will agree to pay to
the Bank for the issuance of the Letter of Credit certain fees, and to pay all
reasonable charges and expenses of the Bank incurred relative to
-10-
the issuance, transfer, drawing upon or other actions with respect to the Letter
of Credit or under the Reimbursement Agreement.
CERTAIN COVENANTS OF THE OBLIGORS
The Obligors, subject to specific provisions in the Reimbursement
Agreement, will covenant in the Reimbursement Agreement, among other things,
that each are duly created, validly existing and in good standing under the laws
of their respective states of organization and incorporation; to pay applicable
taxes; to maintain its existence; to maintain certain insurance on the Project;
to keep proper books of record and account; to maintain the Project in good
condition; to furnish financial and other reports and information within the
timeframes and of the kind specified in the Reimbursement Agreement; and to
comply with certain financial and other covenants. NO ASSURANCE CAN BE GIVEN AS
TO THE ABILITY OF THE OBLIGORS TO COMPLY WITH SUCH COVENANTS. FAILURE TO SO
COMPLY COULD, AT THE OPTION OF THE BANK, RESULT IN ACCELERATION OF THE MATURITY
OF THE BONDS.
EVENTS OF DEFAULT AND REMEDIES
The Reimbursement Agreement specifies numerous other Events of
Default, including failure by the Obligors to timely pay amounts payable to the
Bank thereunder or to the Bank or others under certain other obligations of the
Obligors to the Bank or others, the Obligors' failure to comply with other
covenants or conditions of the Reimbursement Agreement, including any breach of
representations or warranties, or the occurrence of certain acts of insolvency
or bankruptcy, or the occurrence of a default under any of certain other
agreements relating to the issuance of the Bonds.
The Obligors' obligations under the Reimbursement Agreement will be
secured by a mortgage and certain other collateral security documents which will
be for the sole benefit and security of the Bank and will not be for the benefit
or security of the Trustee or the Holders.
If an Event of Default under the Reimbursement Agreement has occurred,
the Bank may direct the Trustee to accelerate the Bonds under the Indenture and
take any other remedial action available to it.
AMENDMENT
The Reimbursement Agreement may be amended by the Borrower and the
Bank without the consent of the Issuer or the Trustee.
THE LOAN AGREEMENT
THE FOLLOWING IS A SUMMARY OF CERTAIN PROVISIONS CONTAINED IN THE LOAN
AGREEMENT. THIS SUMMARY DOES NOT PURPORT TO BE A COMPREHENSIVE
DESCRIPTION AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO THE LOAN
AGREEMENT.
ISSUANCE OF THE BONDS AND USE OF BOND PROCEEDS
Under the Loan Agreement, the Issuer agrees to issue the Series 1996
Bonds and to loan the proceeds thereof to the Borrower to assist the Borrower in
refunding the Prior Bonds. Such proceeds will be deposited in the Refunding
Fund and transferred immediately to the Prior Bonds Trustee for deposit in the
Bond Fund established pursuant to the Prior Indenture and disbursed in
connection with the refunding of the Prior Bonds.
-11-
PAYMENTS BY THE BORROWER
The Borrower agrees to make payments corresponding, as to amount, to
debt service payments on the Series 1996 Bonds and to make such payments at the
times required by the Loan Agreement and the Refunding Notes delivered to the
Trustee in connection with issuance of the Series 1996 Bonds or any additional
notes delivered by the Borrower to the Trustee in connection with the issuance
of Additional Bonds. The Borrower's obligation to make such payments will be
absolute and unconditional.
PREPAYMENT UNDER THE LOAN AGREEMENT
OPTIONAL PREPAYMENT. The Borrower is given options in the Loan
Agreement to prepay the amounts payable thereunder. Such prepayment options
correspond to the optional redemption provisions applicable to the Bonds.
EXTRAORDINARY OPTIONAL REDEMPTION. The Bonds are also subject to
redemption by the Issuer in the event of the exercise by the Borrower of its
option to direct redemption with the written consent of the Bank upon the
occurrence of certain events provided in the Loan Agreement relating to damage
to or destruction of the Project, or the Project being subject to eminent domain
proceedings or changes in the law which render the Loan Agreement unenforceable
or imposing unreasonable or excessive liabilities with respect to the Project
or the operation thereof.
MANDATORY PREPAYMENT. The Borrower is obligated under the Loan
Agreement to prepay the amounts payable thereunder in full upon the occurrence
of certain conditions. Such prepayment obligations correspond to the mandatory
redemption provisions applicable to the Series 1996 Bonds in such cases.
TAX-EXEMPT STATUS OF BONDS
The Borrower makes various representations, warranties and covenants
designed to ensure that interest on the Series 1996 A Bonds will be and remain
excluded from the gross income of the Holders for federal income tax purposes.
EVENTS OF DEFAULT
The Loan Agreement provides that each of the following shall be an
"Event of Default":
(a) The Borrower's failure to pay when due any payment under any
Note;
(b) The Borrower's failure to observe and perform any
agreement, term or condition contained in the Loan Agreement, which failure
shall have continued for a period of 30 days after notice shall have been
provided, to the Borrower by the Issuer, or the Trustee, or such longer
period as the Issuer and the Trustee may agree to in writing; provided,
that if the failure is other than the payment of money and is of such
nature that it can be corrected but not within the applicable period, that
failure shall not constitute an Event of Default so long as the Borrower
institutes curative action within the applicable period and diligently
pursues that action to completion; and provided further that no such
failure shall constitute an Event of Default solely because it results in a
Determination of Taxability;
(c) Action by the Borrower to: (i) admit in writing its
inability to pay its debts generally as they become due; (ii) have an order
for relief entered in any case commenced by or against it under the federal
bankruptcy laws, as now or hereafter in effect; (iii) commence a proceeding
under any other federal or state bankruptcy, insolvency, reorganization or
similar law, or have such a proceeding commenced against it and either have
an order of insolvency or reorganization entered against it or have the
proceeding remain undismissed and unstayed for 90 days; (iv) make an
assignment for the benefit of
-12-
creditors; or (v) have a receiver or trustee appointed for it or for the
whole or any substantial part of its property; and
(d) The occurrence of any Event of Default under the Indenture;
Notwithstanding the foregoing, if, by reason of Force Majeure, the
Borrower is unable to perform or observe any agreement, term or condition hereof
which would give rise to an Event of Default under paragraph (b) hereof, other
than the payment of money, the Borrower shall not be deemed in default during
the continuance of such inability. However, the Borrower is required to
promptly give notice to the Trustee and the Issuer of the existence of an event
of Force Majeure and is required to use its best efforts to remove the effects
thereof; provided that the settlement of strikes or other industrial
disturbances shall be entirely within the Borrower's discretion.
The term Force Majeure means, without limitation, the following:
(i) acts of God; strikes; lockouts or other industrial
disturbances; acts of public enemies; orders or restraints of any kind
of the government of the United States of America or the State or any
of their departments, agencies, political subdivisions or officials,
or any civil or military authority; insurrections; civil disturbances;
riots; epidemics; landslides; lightning; earthquakes; fires;
hurricanes; tornados; storms; droughts; floods; arrests; restraint of
government and people; explosions; breakage, malfunction or accident
to facilities, machinery, transmission pipes or canals; partial or
entire failure of utilities; shortages of labor, materials, supplies
or transportation; or
(ii) any cause, circumstance or event not reasonably within
the control of the Borrower.
The declaration of an Event of Default under paragraph (c) above,
and the exercise of remedies upon any such declaration, shall be subject to
any applicable limitations of federal bankruptcy law affecting or
precluding that declaration or exercise during the pendency of or
immediately following any bankruptcy, liquidation or organization
proceedings.
REMEDIES
Whenever an Event of Default shall have happened and be continuing,
any one or more of the following remedial steps may be taken:
(a) If and only if acceleration of the principal amount of the
Bonds has been declared pursuant to the Indenture, the Trustee shall
declare all Loan Payments and Notes to be immediately due and payable,
whereupon the same shall become immediately due and payable;
(b) The Bank and the Trustee may have access to, inspect,
examine and make copies of the books, records, accounts and financial data
of the Borrower pertaining to the Project; and
(c) The Issuer or the Trustee may pursue all remedies now or
hereafter existing at law or in equity to collect all amounts then due and
thereafter to become due under the Loan Agreement, the Letter of Credit or
the Notes or to enforce the performance and observance of any other
obligation or agreement of the Borrower under those instruments.
Notwithstanding the foregoing, the Issuer shall not be obligated to
take any step which in its opinion will or might cause it to expend time or
money or otherwise incur liability unless and until a satisfactory indemnity
bond has been furnished to the Issuer at no cost or expense to the Issuer. Any
amounts collected as Loan Payments or applicable to Loan Payments and any other
amounts which would be applicable to payment of Bond Service
-13-
Charges collected pursuant to action taken under the provisions of the Loan
Agreement summarized in this paragraph shall be paid into the Bond Fund and
applied in accordance with the provisions of the Indenture or, if the
outstanding Bonds have been paid and discharged in accordance with the
provisions of the Indenture, shall be paid as provided in the Indenture for
transfers of remaining amounts in the Bond Fund.
The provisions described hereinabove are subject to the further
limitation that the rescission by the Trustee of its declaration that all of the
Bonds are immediately due and payable also shall constitute an annulment of any
corresponding declaration made pursuant to paragraph (a) above and a waiver and
rescission of the consequences of that declaration and of the Event of Default
with respect to which that declaration has been made, provided that no such
waiver or rescission shall extend to or affect any subsequent or other default
or impair any right consequent thereon.
THE INDENTURE
THE FOLLOWING IS A SUMMARY OF CERTAIN PROVISIONS CONTAINED IN THE
INDENTURE. THIS SUMMARY DOES NOT PURPORT TO BE A COMPREHENSIVE
DESCRIPTION AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO THE
INDENTURE.
ASSIGNMENT AND SECURITY
In the Indenture, the Issuer will assign to the Trustee its right,
title and interest in and to the Revenues, including without limitation, all
Loan Payments and other amounts receivable by or on behalf of the Issuer under
the Agreement in respect of repayment of the Loan; the Agreement, executed for
the Unassigned Issuer's Rights; and the Notes.
APPLICATION OF REFUNDING FUND
All moneys received from the sale of the Bonds will be deposited in
the Refunding Fund created by the Indenture and disbursed immediately from the
Refunding Fund to the Prior Bonds Trustee for deposit in the Bond Fund
established pursuant to the Prior Indenture in connection with the refunding of
the Prior Bonds.
REVENUES AND BOND FUND
Any amounts which are to be applied to the payment of Bond Service
Charges on the Bonds, including all Revenues and all moneys received upon
drawings for such purpose made under the Letter of Credit, will be deposited in
the Bond Fund created by the Indenture and maintained with the Trustee. Moneys
in the Bond Fund are to be used for the payment of Bond Service Charges on the
Bonds and for redemption of Bonds prior to maturity in the following order:
1. Amounts drawn by the Trustee under the Letter of Credit
(provided that no amount drawn on the Letter of Credit may be used to
pay Bond Service Charges on any Additional Bonds, or to pay any
premium on the Bonds);
2. Any Eligible Funds on deposit in the Bond Fund; and
3. Any other amounts available in the Bond Fund.
"Eligible Funds" means amounts on deposit in the Bond Fund (other than
funds derived from a draw on the Letter of Credit) for a continuous period of
(i) 91 days, or (ii) such shorter period if an opinion of counsel acceptable to
the Bank and the Trustee is delivered to the Issuer, the Bank and the Trustee
stating that such shorter period will not result in voidable preferences, during
which there shall not have occurred the filing of a voluntary or
-14-
involuntary petition in bankruptcy under the United States Bankruptcy Code, or
the commencement of a proceeding under any other applicable laws concerning
insolvency, reorganization or bankruptcy, by or against the Borrower or the
Issuer.
Amounts remaining in the Bond Fund after payment or provision for
payment of all Bond Service Charges are to be paid to the Bank or, if no amounts
are then due under the Reimbursement Agreement, to the Borrower.
REMARKETING REIMBURSEMENT FUND
The Indenture creates the Remarketing Reimbursement Fund, to be held
by the Trustee and administered in accordance with the terms of the Indenture
for the deposit of amounts derived from the remarketing of Bonds or Beneficial
Ownership Interests or from the payment of the purchase price of Bonds or
Beneficial Ownership Interests by the Bank under the Letter of Credit. While
the Bonds are outstanding, moneys in the Remarketing Reimbursement Fund will be
used solely for the payment of the purchase price of Bonds or Beneficial
Ownership Interests upon their optional or mandatory tender for purchase, and
are not subject to the lien of the Indenture.
REBATE FUND
The Indenture creates the Rebate Fund to be held by the Trustee for
the deposit of amounts required to make payments to the United States federal
government in satisfaction of the arbitrage rebate requirements under
Section 148 of the Code. Although moneys deposited with or paid to the Trustee
for the account of the Rebate Fund are required to be held by the Trustee in
trust, such moneys are not subject to the lien of the Indenture.
The amounts on deposit in the Rebate Fund will not be part of the
Revenues assigned under the Indenture to the Trustee.
INVESTMENT OF FUNDS
Moneys held in the above described Funds are to be invested by the
Trustee at the written direction of the Borrower, in Eligible Investments.
"Eligible Investments" means
(i) Government obligations, which are defined to mean
(a) direct obligations of the United States of America for the payment
of which the full faith and credit of the United States of America is
pledged, (b) obligations issued by a person controlled or supervised
by and acting as an instrumentality of the United States of America,
the payment of the principal of, premium, if any, and interest on
which is fully guaranteed as a full faith and credit obligation of the
United States of America (including any securities described in (a)
or (b) issued or held in book-entry form on the books of the
Department of Treasury of the United States of America or Federal
Reserve Bank), and (c) money market funds (including those of the
Trustee or its affiliates), rated in the highest rating category by
Moody's, which invest solely in the obligations described in (a) and
(b) above.
(ii) Federal Home Loan Mortgage Corporation (FHLMC) and
Farm Credit Banks (Federal Land Banks, Federal Intermediate Credit
Banks and Banks for Cooperatives) participation certificates and
senior debt obligations which bear interest at a fixed rate and are
fully amortizing;
-15-
(iii) Federal National Mortgage Association's (FNMA)
mortgage backed securities and senior debt obligations which bear
interest at a fixed rate and are fully amortizing;
(iv) Student Loan Marketing Association (Sallie Mae)
letter of credit backed issues and senior debt obligations;
(v) Federal funds, certificates of deposit, time deposits
and bankers' acceptances (having original maturities of not more than
365 days) of any bank (including the Trustee and any of its
affiliates), the unsecured, uninsured and unguaranteed debt
obligations of which (or, in the case of a bank subsidiary in a bank
holding company, debt obligations of the bank holding company) have
been rated "AA" or "A-1" or its equivalent by either Rating Service;
(vi) commercial paper (having original maturities of not
more than 270 days) rated "A-1" or its equivalent by either Rating
Service;
(vii) obligations rated "AA" or "A-1" or its equivalent by
either Rating Service, or unrated general obligations of any Person
which has outstanding other unsecured, uninsured and unguaranteed
obligations which are so rated by either Rating Service;
(viii) repurchase agreements with any institution the
unsecured, uninsured and unguaranteed debt obligations of which (or,
in the case of a bank subsidiary in a bank holding company, debt
obligations of the bank holding company) are rated "AA" or its
equivalent by either Rating Service;
(ix) tax-exempt obligations of any state of the United
States of America or any political subdivision or other
instrumentality of any such state and such obligations are rated in
either of the two highest rating categories (i.e., "AA" or higher) of
either Rating Service and are not "specified private activity bonds"
as defined in Section 57(a)(5)(C) of the Code;
(x) tax-exempt money market funds (including those of the
Trustee or any of its affiliates) which are "qualified regulated
investment companies" within the meaning of IRS Notice 87-22, dated
October 25, 1987, and which meet the other requirements of IRS
Notice 87-22 and any subsequent regulations necessary to exempt
investments in such funds from the definition of "investment property"
under Section 148 of the Code whose assets are solely invested in
obligations rated in either of the two highest rating categories by
either Rating Service;
(xi) money market funds (including those of the Trustee or
any of its affiliates) the assets of which are obligations of or
guaranteed by the United States and which funds are rated "Am" or
"Am-G" or higher by Standard & Poor's Corporation; and
(xii) obligations approved in writing by the Bank;
provided, however, that "Eligible Investments" with respect to any proceeds
from a draw under the Letter of Credit shall mean only Government
Obligations maturing as needed to pay principal of and interest on the
Bonds on a timely basis, and in no event more than thirty days after
purchase. In addition, moneys in the Remarketing Reimbursement Fund may be
invested only in Government Obligations which mature no later than the Bond
Purchase Date next following the date of such investment. Any investments
may be purchased from or sold to the Trustee, the Remarketing Agent, or any
bank, trust company or savings and loan association affiliated with either
of them.
The Trustee shall hold and control all investments of moneys in the
Rebate Fund, the Remarketing Reimbursement Fund, the Refunding Fund or the Bond
Fund and interest accruing thereon and any profit realized
-16-
from such investments will be credited, and any loss will be charged, to the
particular fund from which the investment was made.
ALTERNATE LETTER OF CREDIT
The Borrower at its option may cause to be delivered to the Trustee,
as a replacement for the Letter of Credit, an Alternate Letter of Credit
("Alternate Letter of Credit"). Any such Alternate Letter of Credit must be
issued by a financial institution, must require such financial institution to
pay when due, to and upon request of the Trustee, the same amounts as are
payable under the initial Letter of Credit, must have an expiration date which
is no earlier than the expiration date of the Letter of Credit being replaced
and must have an effective date (the "Replacement Date") as set forth below.
If the Refunding Bonds are bearing interest at other than the Fixed
Interest Rate, the Borrower may, at its option, provide for the delivery to the
Trustee of an Alternate Letter of Credit to take effect on a date selected by
the Borrower (the "Replacement Date"). If the Refunding Bonds are bearing
interest at the Weekly Interest Rate, the Replacement Date may be any date
selected by the Borrower. If the Refunding Bonds are bearing interest at the
One Month Interest Rate, Three Month Interest Rate, Six Month Interest Rate, One
Year Interest Rate or Five Year Interest Rate, the Replacement Date shall be the
Interest Rate Adjustment Date or the Fixed Interest Rate Commencement Date if
the Bonds are to bear interest at the Fixed Interest Rate. If the Borrower is
providing an Alternate Letter of Credit in connection with the conversion of the
interest rate on the Refunding Bonds to the Fixed Interest Rate, the expiration
date on the Alternate Letter of Credit shall not be earlier than the earlier of
fifteen (15) days after the First Optional Redemption Date or ten (10) years and
fifteen (15) days after the date of issuance of the Alternate Letter of Credit.
Prior to the replacement of a Letter of Credit with an Alternate Letter of
Credit, the Trustee shall give notice to the Holders and, if the Refunding Bonds
are then rated by a Rating Service, to each Rating Service which then has a
rating on the Refunding Bonds of such event and shall have received the
following not less than forty-five (45) days prior to the Replacement Date:
(A) an opinion of counsel for the issuer of the Alternate Letter of
Credit that it constitutes a legal, valid and binding obligation of the
issuer in accordance with its terms;
(B) an opinion of counsel acceptable to the Trustee to the effect
that payments under the Alternate Letter of Credit will not constitute
voidable preferences in the event of a bankruptcy of the Borrower;
(C) an opinion of Bond Counsel that such replacement will not cause
interest on the Series 1996 A Bonds to become includable in gross income
for federal income tax purposes; and
(D) the Alternate Letter of Credit.
If the Refunding Bonds are bearing interest at the Fixed Interest
Rate, the Borrower shall provide for the delivery to the Trustee of an Alternate
Letter of Credit to take effect on a date selected by the Borrower (the
"Replacement Date"). Prior to such replacement, the Trustee shall give notice
to the Holders of such event and shall have received the following not less than
forty-five (45) days prior to the Replacement Date:
(A) An opinion of counsel for the issuer of the Alternate Letter of
Credit that it constitutes a legal, valid and binding obligation of the
issuer in accordance with its terms;
(B) An opinion of counsel acceptable to the Trustee to the effect
that payments under the Alternate Letter of Credit will not constitute
voidable preferences in the event of a bankruptcy of the Borrower;
-17-
(C) an opinion of Bond Counsel that such replacement will not cause
interest on the Series 1996 A Bonds to become includable in gross income
for federal income tax purposes; and
(D) the Alternate Letter of Credit.
Each of the terms "Rating Service" and "Rating Agency" as used herein
means either Moody's Investors Service, Inc., and its successors and assigns, or
Standard & Poor's Ratings Group, and its successors and assigns.
ADDITIONAL BONDS
At the request of the Borrower, and with the prior written consent of
the Bank, the Issuer may issue additional bonds (the "Additional Bonds") for any
purpose permitted under the Act. Any Additional Bonds shall be secured by an
Alternate Letter of Credit and shall be on a parity with the Bonds (except with
respect to any moneys drawn by the Trustee on the Letter of Credit) and any
Additional Bonds theretofore or thereafter issued and outstanding as to the
assignment to the Trustee of the Issuer's right, title and interest in the
Revenues, the Loan Agreement and the Refunding Notes to provide for payment of
Bond Service Charges; provided, however, that nothing herein shall prevent
payment of Bond Service Charges on any series of Additional Bonds from (i) being
otherwise secured and protected from sources or by property or instruments not
applicable to the Refunding Bonds and any one or more series of Additional
Bonds, or (ii) not being secured or protected from sources or by property or
instruments applicable to the Refunding Bonds or one or more series of
Additional Bonds.
EVENTS OF DEFAULT AND REMEDIES
The Indenture provides that each of the following shall be an "Event
of Default":
(a) Failure to pay when due any interest on any Bond.
(b) Payment of the principal of or any premium on any Bond shall
not be made when and as that principal or premium shall become due and
payable whether at stated maturity, by redemption, pursuant to any
mandatory sinking fund requirements, by acceleration or otherwise.
(c) Failure to pay on the Bond Purchase Date amounts due to the
Holder of any Bonds, or to the Beneficial Owner of any Beneficial Ownership
Interests, tendered or deemed tendered to the Trustee pursuant to the
Indenture.
(d) Failure by the Issuer to observe or perform any other
covenant, agreement or obligation on its part to be observed or performed
contained in the Indenture or in the Bonds, which failure shall have
continued for a period of thirty (30) days after written notice, by
registered or certified mail, to the Issuer, the Bank and the Borrower
specifying the failure and requiring it be remedied, which notice may be
given by the Trustee in its discretion and shall be given by the Trustee at
the written request of the Bank or the Holders of not less than twenty-five
percent (25%) in the aggregate principal amount of Bonds then outstanding.
(e) The occurrence and continuation of an Event of Default under
the Loan Agreement.
(f) Receipt by the Trustee of a written notice from the Bank
which states that an Event of Default under the Reimbursement Agreement has
occurred and is continuing and directing the Trustee to accelerate the
Refunding Bonds.
-18-
(g) Failure of the Bank to honor any drawing in accordance with
the terms of the Letter of Credit.
(h) Certain events of insolvency relating to the Bank.
(i) Receipt by the Trustee of written notice from the Bank by
the end of the fifteenth Business Day following the honoring of an interest
drawing on the Letter of Credit (including the interest portion of a
drawing to pay the purchase price of tendered Refunding Bonds) that the
amount available to be drawn by the Trustee under the Letter of Credit has
not been reinstated to an amount not less than 100% of the outstanding
principal, of plus 56 days' interest on the Refunding Bonds (or 195 days'
interest on the Refunding Bonds if the Interest Rate Mode on the Refunding
Bonds is six months or longer) computed at the maximum rate of 12% per
annum.
Upon the occurrence of an Event of Default under items (a), (b), (c),
(f), (g) or (i), described above, the Trustee shall declare, by a notice in
writing delivered to the Issuer and the Borrower, the principal of and accrued
interest on all then outstanding Bonds (if not then due and payable), together
with interest accrued thereon, to be immediately due and payable. Upon the
occurrence of any other Event of Default (except an Event of Default specified
in (h) described above), the Trustee shall, upon the written direction of the
Bank so long as an Event of Default as specified in paragraphs (g) or (h)
described above has not occurred and is continuing, declare by a notice in
writing delivered to the Issuer and the Borrower the principal of Bonds then
outstanding (if not then due and payable), together with interest accrued
thereon, to be immediately due and payable. Upon the occurrence of an Event of
Default under item (h) described above, and if there is not then existing an
Event of Default described in (a), (b), (c), (f), (g) or (i), described above,
the Trustee, without the consent of the Bank, may, and upon the written request
of the Holders of not less than 25% in aggregate principal amount of Series 1996
Bonds outstanding shall, declare the principal of and accrued interest on all
Series 1996 Bonds then outstanding, together with interest accrued thereon, to
be immediately due and payable. If such a declaration is made, the Trustee is
required to draw upon the Letter of Credit to the extent permitted by the terms
thereof and to give notice to Holders of such acceleration.
In addition, upon the happening and continuance of an Event of
Default, the Trustee may pursue any available remedy to remedy any Event of
Default or to enforce the observance and performance of any other covenant,
agreement or obligation of the Indenture, the Loan Agreement, the Note or any
other instrument providing security for the Bonds and any Additional Bonds;
provided, however, that the Trustee shall not pursue any such remedy without the
prior written consent of the Bank so long as no Event of Default described
in (g) or (h) above has occurred and is continuing.
The Trustee will also be empowered to enforce each and every right
granted to it under the Loan Agreement as assigned to it and in the Note.
RIGHT OF HOLDERS TO DIRECT PROCEEDINGS
The Holders of at least a majority in aggregate principal amount of
Bonds then outstanding will have the right at any time, by an instrument or
instruments in writing executed and delivered to the Trustee, to direct the
method and place of conducting all proceedings to be taken in connection with
the enforcement of the terms and conditions of the Indenture or any other
proceedings under the Indenture, provided, that (i) any direction shall not be
otherwise than in accordance with the provisions of law and the Indenture;
(ii) the Trustee shall be indemnified as provided in the Indenture; (iii) the
Trustee may take any other action which it deems to be proper and which is not
inconsistent with the direction; and (iv) provided, however, that so long as no
Event of Default described in (g) or (h) above has occurred and is continuing,
the Bank shall have the exclusive right to give such directions to the Trustee.
-19-
WAIVERS OF EVENTS OF DEFAULT
The Trustee, but only with the express written consent of the Bank
(other than in the case of an Event of Default described in items (a), (b), (c),
(g) or (h) above), may waive an Event of Default and its consequences and may
rescind and annul any declaration of maturity of principal and interest of the
Bonds. The Trustee shall do so upon the written request of the Bank (other than
in the case of an Event of Default described in items (a), (b), (c), (g) or
(h) above). Notwithstanding the foregoing, prior to waiving any Event of
Default described in item (f) or (i) above, the Trustee shall have received
written confirmation from the Bank that (i) the Bank has annulled the
declaration of maturity of principal of the Bonds and (ii) that the Letter of
Credit has been reinstated to an amount not less than 100% of the outstanding
principal of, plus 56 days' interest (or 195 days' interest if the Interest Rate
Mode on the Bonds is six months or longer) on, the Bonds at the maximum rate of
12% per annum.
There shall not be so waived, however, any Event of Default described
in items (a), (b), (c), (g) or (h) above or any declaration of acceleration in
connection therewith rescinded or annulled except (i) if such Event of Default
shall have been cured and (ii) with the written consent of the Holders of a
majority in aggregate principal amount of all Bonds then outstanding and of the
Bank. In the case of such waiver or rescission and annulment, or in case any
suit, action or proceedings taken by the Trustee on account of any Event of
Default shall have been discontinued, abandoned, or determined adversely to it,
the Issuer, the Trustee, the Bank and the Holders shall be restored to their
former positions and rights under the Indenture. No waiver or rescission shall
extend to any subsequent or other Event of Default or impair any right
consequent thereon.
APPLICATIONS OF MONEYS RECEIVED PURSUANT TO RIGHT OF ACTION TAKEN
All moneys received by the Trustee after acceleration of the maturity
of the Bonds and derived from any drawing made upon the Letter of Credit will be
applied by the Trustee only to the payment of principal of or interest on the
Bonds. Subject to the foregoing, after payment of any costs, expenses,
liabilities and advances paid, incurred or made by the Trustee in the collection
of moneys pursuant to any right given or action taken under the Indenture, or
the provision of the Agreement or the Refunding Notes (including without
limitation, reasonable attorney's fees and expenses, except as limited by law or
judicial order or decision entered in any action taken under the Indenture) and
all fees owing to the Trustee for ordinary or extraordinary services, all moneys
received by the Trustee, shall be applied in the manner and in order of priority
set forth in the Indenture.
RIGHTS AND REMEDIES OF HOLDERS
No Holder of any Bond will have any right to institute any suit,
action or proceeding for the enforcement of the Indenture or for the execution
of any trust under the Indenture or any remedy under the Indenture, unless
(i) an Event of Default has occurred and is continuing of which the Trustee has
been notified or of which it is deemed to have notice, and (ii) the Holders of
not less than 25% in aggregate principal amount of the Bonds then outstanding
have made written request to the Trustee and have afforded the Trustee
reasonable opportunity to proceed to exercise the powers provided in the
Indenture or to institute such action, suit or proceeding and have offered to
the Trustee indemnity as provided for in the Indenture, and (iii) the Trustee
thereafter has failed or refused to exercise its powers under the Indenture or
to institute such action, suit or proceeding in its own name; provided, however,
no Holder may institute any suit, action or proceeding at law or in equity for
the enforcement of the Indenture or the enforcement of any remedy thereunder
unless an Event of Default described in (g) or (h) above has occurred and is
continuing.
SUPPLEMENTAL INDENTURES
The Issuer and the Trustee, with the consent of the Borrower and the
Bank, may enter into supplemental indentures, without the consent of or notice
to any of the Holders, for any one or more of the following purposes: (a) to
cure any ambiguity, inconsistency or formal defect or omission in the Indenture;
(b) to grant to the Trustee additional rights, remedies, powers or authority for
the benefit of the Holders; (c) to assign additional
-20-
revenues under the Indenture; (d) to accept additional security and instruments
of further assurance with respect to the Project; (e) to add to the covenants,
agreements and obligations of the Issuer contained in the Indenture other
covenants, agreements and obligations thereafter to be observed for the
protection of the Holders, or to surrender or limit any right, power or
authority reserved to or conferred upon the Issuer in the Indenture; (f) to
evidence any succession to the Issuer and the assumption by such successor of
the covenants, agreements and obligations of the Issuer contained in the
Indenture, the Loan Agreement and the Bonds; (g) to permit the exchange of Bonds
for coupon Bonds in an aggregate principal amount not exceeding the unmatured
and unredeemed principal amount of the Predecessor Bonds (as defined in the
Indenture), bearing interest at the same rates and maturing on the same date or
dates, if that exchange would not result in the interest on any of the Series
1996 A Bonds outstanding becoming included in the gross income of the Holders
for federal income tax purposes; (h) to permit the Trustee to comply with any
obligations imposed upon it by law; (i) to specify further the duties and
responsibilities of, and to define further the relationship among, the Trustee,
the Registrar, the Remarketing Agent and any Paying Agents or Authenticating
Agents; (j) to achieve compliance of the Indenture with any applicable federal
securities or tax law; (k) to evidence the appointment of a new Remarketing
Agent; (l) to make necessary or advisable amendments or additions in connection
with the issuance of Additional Bonds as do not adversely affect the Holders of
the outstanding Bonds; (m) to permit any other amendment which, in the judgment
of the Trustee, is not to the prejudice of the Trustee or the Holders,
including, but not limited to, changes required in order to obtain or maintain a
rating on the Bonds or any Additional Bonds from a Rating Service; and, (n) to
accept a Supplemental Credit Facility as described in the Indenture.
Exclusive of supplemental indentures for the purposes above
summarized, the consent of the Borrower, the Bank and the Holders of not less
than a majority in aggregate principal amount of the Bonds then outstanding will
be required to approve any indenture supplementing the Indenture provided that:
(i) without the consent of the Holder of each Bond so affected and the consent
of the Bank as provided in the Indenture, no supplemental indenture shall permit
an extension of the maturity of the principal of or the interest on any Bond, or
a reduction in principal amount of any Bond or the rate of interest or
redemption premium on any Bond, or a reduction in the amount or extension of the
time of paying of any mandatory sinking fund requirements and (ii) without the
consent of the Holders of all Bonds then outstanding and the consent of the Bank
as provided in the Indenture, no supplemental indenture shall permit a privilege
or priority of any Bond over any other Bond, or a reduction in the aggregate
principal amount of Bonds required for consent to such supplemental indenture.
DISCHARGE OF LIEN
The lien of the Indenture will be discharged if the Issuer shall pay
or cause to be paid and discharged all the outstanding Bonds or there shall
otherwise be paid to the Holders of the outstanding Bonds all Bond Service
Charges due or to become due thereon, and provisions shall also be made for
paying all other amounts payable under the Indenture, the Loan Agreement and the
Notes.
Any Bond shall be deemed to be paid and discharged for all purposes of
the Indenture when payment of the principal of and premium, if any, on such
Bond, plus interest thereon to the due date thereof (whether such due date is by
reason of maturity or upon redemption as provided in the Indenture) shall have
been made or caused to be made with funds available therefor on deposit in the
Bond Fund (as defined in the Indenture) in accordance with the terms thereof.
All the outstanding Bonds will be deemed to have been paid and discharged within
the meaning of the Indenture if (a) the Trustee and any Paying Agents shall have
received and hold in trust and irrevocably committed for such payment,
sufficient moneys which are Eligible Funds or the proceeds of drawings under the
Letter of Credit used to make such payment, or other moneys if accompanied by an
opinion of bankruptcy counsel in a form acceptable to the Trustee and the Rating
Service, if any, for the Bonds, or (b) the Trustee shall hold in trust,
irrevocably committed for such payment, direct noncallable Government
Obligations (purchased with Eligible Funds or the proceeds of drawings under the
Letter of Credit or other moneys if accompanied by an opinion of bankruptcy
counsel in a form acceptable to the Trustee and the Rating Service if any, for
the Bonds), which are certified by an independent public accounting firm of
national reputation to be of such maturities and interest payment dates and to
bear such interest as will, without further investment or reinvestment of either
the principal amount thereof or the
-21-
interest earnings therefrom, be sufficient together with moneys referred to in
(a) above, for the payment, at their maturities or redemption dates, of the
payment of all Bond Service Charges on the Bonds on and to the next Interest
Rate Adjustment Date, maturity date, or prior redemption date, as the case may
be; provided that if any Bonds are to be redeemed prior to the maturity thereof,
notice of such redemption shall have been duly given or irrevocable provision
satisfactory to the Trustee shall have been duly made for the giving of such
notice; and further provided that the Bonds shall not be deemed to be paid and
discharged within the meaning of this paragraph (i) if the Interest Rate Mode of
such Bonds is other than the Fixed Interest Rate, unless such Bonds are to be
redeemed on or prior to the next Interest Rate Adjustment Date for such Bonds
and notice of that redemption shall have been duly given or irrevocable
provision satisfactory to the Trustee shall have been duly made for the giving
of that notice, or (ii) if they bear interest at the Weekly Interest Rate. Any
moneys so held by the Trustee may be invested by the Trustee, but only in
Government Obligations, the maturities or redemption dates of which, at the
option of the Holder, shall be not later than the date or dates at which said
moneys will be required for the aforesaid purposes.
Notwithstanding anything herein to the contrary, if any Bonds are then
rated by a Rating Service, no such Bonds shall be deemed to have been paid and
discharged by reason of any deposit pursuant to paragraphs (a) and/or (b) above
(other than any deposit of moneys, or Government Obligations purchased with
moneys, which are the proceeds of drawings under the Letter of Credit) unless
each such Rating Service shall have confirmed in writing to the Trustee that its
rating will not be withdrawn or lowered as the result of any such deposit.
UNCLAIMED MONEYS
In the event that any Bond shall not be presented for payment when the
principal thereof becomes due in whole or in part, either at stated maturity, by
redemption or pursuant to any mandatory sinking fund requirements, or a check or
draft for interest is uncashed, if moneys sufficient to pay the principal and
premium, if any, then due on that Bond or to pay such check or draft shall have
been made available to the Trustee for the benefit of its Holder, all liability
of the Issuer to that Holder for such payment of the principal and premium, if
any, then due on the Bond or interest on such Bond represented by such check or
dafter thereupon shall cease and be discharged completely. Thereupon, it shall
be the duty of the Trustee to hold those moneys, without liability for interest
thereon, in a separate account in the Bond Fund for the exclusive benefit of the
Holder, who shall be restricted thereafter exclusively those moneys for any
claim or whatever nature on its part under the Indenture or on, or with respect
to, the principal and premium, if any, then due on that Bond or interest on such
Bond represented by such check or draft.
Any of those moneys which shall be so held by the Trustee, and which
remain unclaimed by the Holder of a Bond not presented for payment or check or
draft not cashed for a period of four years after the due date thereof, shall be
paid to the Bank free of any trust or lien unless the Bank shall have confirmed
to the Trustee in writing that no moneys are then due under the Reimbursement
Agreement in which case such moneys shall be paid to the Borrower. Thereafter,
the Holder of that Bond shall look only to the Borrower for payment and then
only to the amounts so received by the Borrower or paid to or on behalf of the
Borrower (including to the Bank pursuant to this paragraph), without any
interest thereon, and the Trustee shall not have any responsibility with respect
to those moneys.
THE TRUSTEE
The Trustee is Fifth Third Bank of Central Indiana, Indianapolis,
Indiana, an Indiana banking corporation.
The Trustee will undertake to perform such duties as are specifically
set forth in the Indenture. In case a default or Event of Default has occurred
and is continuing under the Indenture, the Trustee shall exercise such of the
rights and powers vested in it by the Indenture, and shall use the same degree
of care and skill in their exercise, as a prudent person acting as a fiduciary
would exercise under the circumstances.
-22-
The Indenture will provide that the Trustee shall be entitled to act
upon opinions of counsel as specified in the Indenture and shall not be
responsible for any loss or damage resulting from reliance thereon in good
faith. In addition, the Indenture will provide that the Trustee shall be
entitled to rely on certain other instruments and it shall not be liable for any
action reasonably taken or omitted to be taken by it in good faith and
reasonably believed by it to be within the discretion or power conferred upon it
in the Indenture.
EXTENT OF ISSUER'S COVENANTS; NO PERSONAL LIABILITY
All agreements of the Issuer contained in the Indenture shall be
effective to the extent authorized and permitted by applicable law and they
shall not be deemed to be a covenant, stipulation, obligation or agreement of
any present or future member, officer, agent or employee of the Issuer or the
Issuing Authority. No official of the Issuer executing the Bonds shall be liable
personally on the Bonds or be subject to any personal liability or
accountability by reason of the issuance thereof.
-23-
A-1
UNITED STATES OF AMERICA
STATE OF INDIANA
CITY OF GARY, INDIANA
ADJUSTABLE RATE ECONOMIC DEVELOPMENT
REVENUE REFUNDING BOND, SERIES 1996 A
(THE MILLER PARTNERSHIP, L.P. PROJECT)
NO. A-1
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO ISSUER OR ITS AGENT
FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY CERTIFICATE ISSUED
IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY
AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO
SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY
TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON
IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST
HEREIN.
Maturity Date CUSIP Number Date of Authentication
- ------------- ------------ ----------------------
March 1, 2031 April 1, 1996
Date of Initial Delivery: April 1, 1996
Registered Owner: CEDE & CO.
Principal Amount: $20,540,000
The City of Gary, Indiana (the "Issuer"), a municipal corporation and
political subdivision validly existing under the laws of the State of Indiana,
for value received, promises to pay to the registered owner specified above or
registered assigns, but solely from the sources and in the manner referred to
herein, the principal amount specified above on the aforesaid Maturity Date,
unless this Bond is called for earlier redemption, and to pay from those sources
interest thereon at the rate per annum determined as described herein. Initial
interest on this Bond shall accrue from the Date of Initial Delivery of this
Bond. Interest on this Bond is payable on the first Business Day, as
hereinafter defined, of each month, as long as the interest rate hereon is
calculated pursuant to the Weekly Interest Rate, the One Month Interest Rate or
the Three Month Interest Rate (as such terms are hereinafter defined),
commencing the first Business Day of May, 1996, until the principal amount is
paid or duly provided for. For any period of time during which this Bond bears
interest at the Six Month Interest Rate, the One Year Interest Rate, the Five
Year Interest Rate or the Fixed Interest Rate (as such terms are hereinafter
defined) interest hereon shall be payable on the first day of each April and
October. Any date established for the payment
A-1
of interest as described above is hereinafter referred to as an "Interest
Payment Date". The interest payable hereon on each Interest Payment Date shall
be for the period commencing on the next preceding Interest Payment Date (or the
Date of Initial Delivery of this Bond with respect to the first Interest Payment
Date) to and including the day immediately preceding the Interest Payment Date
on which payment is made. Interest shall be calculated on the basis of a year
of 365 days or 366 days, as applicable, for the number of days actually elapsed,
while the interest hereon is payable at the Weekly Interest Rate, the One Month
Interest Rate or the Three Month Interest Rate. Otherwise, interest shall be
calculated on the basis of a 360-day year consisting of twelve 30-day months.
The term "Business Day", as used herein, means any day, other than a
Saturday or Sunday, on which commercial banks located in the cities in which the
principal corporate trust office of the Paying Agent, the principal corporate
trust office of the Registrar, the principal office of the Remarketing Agent,
and the principal office of the Bank, as hereafter defined, are located are not
required or authorized to remain closed and on which the New York Stock Exchange
is not closed. This Bond will bear interest from the most recent date to which
interest has been paid or duly provided for or, if no interest has been paid or
duly provided for, from its date of initial delivery. If any Interest Payment
Date, date of maturity of this Bond, Bond Purchase Date (as hereinafter defined)
or date fixed for redemption of this Bond, is not a Business Day, then payment
of the applicable interest, principal, purchase price or redemption price may be
made on the next succeeding Business Day with the same force and effect as if
such payment were made on such Interest Payment Date, date of maturity, Bond
Purchase Date or date fixed for redemption and no interest shall accrue for the
period after such date; provided, however, if this Bond bears interest at any of
the Weekly Interest Rate, the One Month Interest Rate or the Three Month
Interest Rate, interest shall accrue from the scheduled date of any maturity or
redemption due date of this Bond until the Business Day on which such payment is
made.
The principal of and premium, if any, on this Bond is payable upon
presentation and surrender hereof at the principal corporate trust office of the
Paying Agent, presently The Fifth Third Bank (the "Paying Agent"), located in
Cincinnati, Ohio. Interest is payable on each Interest Payment Date by check or
draft mailed to the person in whose name this Bond (or one or more predecessor
bonds) is registered (the "Holder") at the close of business on the fifth
Business Day preceding such Interest Payment Date (the "Regular Record Date") on
the registration books for this issue maintained by The Fifth Third Bank,
located in Cincinnati, Ohio, as Registrar, at the address appearing therein.
Notwithstanding the foregoing, interest on any Bond in the denomination of
$100,000 or more shall be paid by wire transfer in immediately available funds
to the bank account number and address filed in writing with the Registrar by
such Holder, which account number and address shall be filed with the Registrar
at least two (2) Business Days prior to that Interest Payment Date. Any
interest which is not timely paid or duly provided for shall cease to be payable
to the Holder hereof (or of one or more predecessor bonds) as of the Regular
Record Date, and shall be payable to the Holder hereof (or of one or more
predecessor bonds) at the close of business on a Special Record Date to be fixed
by the Trustee for the payment of that overdue interest. Notice of the Special
Record Date shall be mailed to Holders not less than ten days prior thereto.
The principal and redemption price of and interest on this Bond are payable in
lawful money of the United States of America, without deduction for the services
of the Paying Agent. Notwithstanding anything herein to the contrary, when this
Bond is registered in the name of a Depository (as defined in the Indenture
hereinafter defined) or its nominee, the principal and redemption price of and
interest on this Bond shall be payable in federal funds delivered or transmitted
to the Depository or its nominee.
THIS BOND DOES NOT REPRESENT OR CONSTITUTE A DEBT OR PLEDGE OF THE FAITH
AND CREDIT OF THE ISSUER, THE STATE OF INDIANA OR ANY POLITICAL SUBDIVISION
THEREOF. THE HOLDERS OR OWNERS OF THIS BOND
-2-
A-1
HAVE NO RIGHT TO HAVE TAXES LEVIED BY THE ISSUER, THE STATE OF INDIANA OR ANY
POLITICAL SUBDIVISION THEREOF FOR THE PAYMENT OF THE PRINCIPAL OF OR PREMIUM (IF
ANY) OR INTEREST ON THIS BOND. PRINCIPAL OF AND PREMIUM (IF ANY) AND INTEREST
ON THIS BOND ARE PAYABLE SOLELY FROM THE REVENUES PLEDGED PURSUANT TO THE
INDENTURE (AS HEREINAFTER DEFINED).
This Bond shall not constitute the personal obligation, either jointly or
severally, of the members of the Common Council of the Issuer (the "Issuing
Authority"), its Economic Development Commission, or of any officer, employee or
official of the Issuer.
This Bond shall not be entitled to any security or benefit under the
Indenture or be valid or become obligatory for any purpose until the certificate
of authentication hereon shall have been duly signed.
GENERAL PROVISIONS
This Bond is one of a duly authorized issue the City of Gary, Indiana
Adjustable Rate Economic Development Revenue Refunding Bonds, Series 1996 A (The
Miller Partnership, L.P. Project) (the "Bonds"), issuable under the Trust
Indenture, dated as of March 1, 1996 (the "Indenture"), between the Issuer and
Fifth Third Bank of Central Indiana, as Trustee, aggregating in the principal
amount of $20,540,000 and issued for the purpose of making a loan (the "Loan")
to The Miller Partnership, L.P., an Illinois limited partnership (the
"Borrower"), to refund the City of Gary, Indiana Economic Development Revenue
Bonds, Series 1991 A (The Miller Partnership, L.P. Project) and the City of
Gary, Indiana Economic Development Revenue Bonds, Series 1993 A (The Miller
Partnership, L.P. Project), which were issued for the purpose of financing of
the Project, as defined in the Loan Agreement, dated as of even date with the
Indenture (the "Agreement"), between the Issuer and the Borrower. The Bonds,
together with any Additional Bonds which may be issued on a parity therewith
under the Indenture, are special obligations of the Issuer, issued or to be
issued under and are to be secured and entitled equally and ratably to the
protection given by the Indenture. The Bonds are issued pursuant to Indiana
Code 36-7-11.9 and 12, and Indiana Code 5-1-5 (collectively, the "Act") and
pursuant to an Ordinance duly adopted by the Issuing Authority. The Bonds are
issued on a parity with the City of Gary, Indiana Taxable Adjustable Rate
Economic Development Revenue Bonds, Series 1996 B (The Miller Partnership, L.P.
Project).
Reference is made to the Indenture and the Agreement for a more complete
description of the Project, the provisions, among others, with respect to the
nature and extent of the security for the Bonds, the rights, duties and
obligations of the Issuer, the Trustee and the Holders of the Bonds and the
terms and conditions upon which the Bonds are issued and secured. All terms
used herein with initial capitalization where the rules of grammar or context do
not otherwise require shall have the meanings as set forth in the Indenture.
Each Holder assents, by its acceptance hereof, to all of the provisions of the
Indenture.
Pursuant to the Agreement, the Borrower has executed and delivered to the
Trustee the Borrower's Note, Series 1996 A dated as of even date with the Bonds
(the "Series 1996 A Note"), in the principal amount of $20,540,000. The
Borrower is required by the Agreement and the Note, Series 1996 A to make
payments to the Trustee in amounts and at times necessary to pay the principal
of and premium (if any) and interest on the Bonds (the "Bond Service Charges").
In the Indenture, the Issuer has assigned to the Trustee, to provide for the
payment of the Bond Service Charges on the Bonds and any Additional Bonds, the
Issuer's right, title and interest in and to the Series 1996 A Note and the
Agreement, except for Unassigned Issuer's Rights, as defined in the Agreement.
-3-
A-1
Pursuant to the Agreement, the Borrower has caused to be issued and
delivered to the Trustee by The Royal Bank of Scotland plc, acting through its
New York Branch (the "Bank") an irrevocable letter of credit (the "Letter of
Credit"), pursuant to which the Trustee is entitled to draw up to (a) the
principal amount of the Bonds outstanding to enable the Trustee to pay (i) the
principal amount of the Bonds when due at maturity or upon redemption or
acceleration on the occurrence of an event of default, and (ii) an amount equal
to the principal portion of the purchase price of any Bonds or Beneficial
Ownership Interests duly tendered by the Holders or Beneficial Owners thereof
for purchase pursuant to the Indenture, plus (b) the amount of interest accruing
on the Bonds, but not to exceed 56 days' accrued interest at the maximum rate of
12% per annum (the "Maximum Rate") to enable the Trustee to pay interest when
due on the Bonds and the interest portion (if any) of the purchase price of any
Bonds or Beneficial Ownership Interests duly tendered by the Holders or
Beneficial Owners thereof for purchase pursuant to the Indenture. In connection
with the issuance of the Letter of Credit, the Bank has entered into a
Reimbursement Agreement (the "Reimbursement Agreement") with the Borrower
pursuant to which the Borrower is obligated to reimburse the Bank for all draws
made under Letter of Credit. The Letter of Credit shall expire, subject to
provisions for earlier termination or extension, on April 15, 2001.
Subject to the provisions of the Indenture and the Agreement, the Letter of
Credit may be replaced from time to time by another letter of credit (an
"Alternate Letter of Credit"), in which case the term "Bank" shall mean the
financial institution issuing the Alternate Letter of Credit and the term
"Letter of Credit" shall mean the Alternate Letter of Credit.
Copies of the Indenture, the Agreement, the Letter of Credit, and the
Series 1996 A Note are on file in the principal corporate trust office of the
Trustee.
The Bond Service Charges on the Bonds are payable solely from the Revenues,
as defined and as provided for in the Indenture (being, generally, the amounts
payable under the Agreement in repayment of the Loan, any unexpended proceeds of
the Bonds and amounts deposited in the Refunding Fund and the Bond Fund as
defined and provided for in the Indenture, including amounts drawn pursuant to
the Letter of Credit), and are an obligation of the Issuer only to the extent of
the Revenues. The Bonds are not secured by a pledge of the faith and credit or
the taxing power of the Issuer, the State of Indiana or any political
subdivision thereof.
No recourse under or upon any obligation, covenant, acceptance or agreement
contained in the Indenture, or in any of the Bonds, or under any judgment
obtained against the Issuer, its Economic Development Commission or the Issuing
Authority, or by the enforcement of any assessment or by any legal or equitable
proceeding by virtue of any constitution or statute or otherwise, or under any
circumstances, shall be had against any member or officer, as such, past,
present, or future, of the Issuer, its Economic Development Commission or the
Issuing Authority, whether directly or through the Issuer, or otherwise, for the
payment for or to the Issuer or any receiver thereof, or for or to any Holder of
any Bond, or otherwise, of any sum that may be due and unpaid by the Issuer upon
any of the Bonds. Any and all personal liability of every nature, whether at
common law or in equity, or by statute or by constitution or otherwise, of any
such member or officer, as such, to respond by reason of any act or omission on
his or her part, or otherwise, for, directly or indirectly, the payment for or
to the Issuer or any receiver thereof, or for or to the owner or any Holder of
any Bond, or otherwise, of any sum that may remain due and unpaid upon any Bond,
shall be deemed to be and is hereby expressly waived and released as a condition
of and consideration for the execution and delivery of the Indenture and the
issuance of the Bonds.
The Bonds are issuable only as fully registered bonds in the denominations
of $100,000 or $5,000 multiples in excess thereof and shall be originally issued
only to a Depository to be held in a book entry system and: (i) the Bonds shall
be registered in the name of the Depository or its
-4-
A-1
nominee, as Bondholder, and immobilized in the custody of the Depository; (ii)
unless otherwise requested by the Depository, there shall be a single Bond
certificate; and (iii) the Bonds shall not be transferable or exchangeable,
except for transfer to another Depository or another nominee of a Depository,
without further action by the Issuer. While the Bonds are in book entry only
form, Bonds in the form of physical certificates shall only be deposited with
the Depository. The owners of beneficial interests in the Bonds shall not have
any right to receive Bonds in the form of physical certificates. If any
Depository determines not to continue to act as a Depository for the Bonds for
use in a book entry system, the Issuer may attempt to have established a
securities depository/book entry system relationship with another qualified
Depository under the Indenture. If the Issuer does not or is unable to do so,
the Issuer and the Trustee, after the Trustee has made provision for
notification to the owners of book entry interests by the then Depository, shall
permit withdrawal of the Bonds from the Depository, and authenticate and
deliver, or cause to be authenticated and delivered, Bond certificates in fully
registered form (in denominations of $100,000 or $5,000 multiples in excess
thereof) to the assignees of the Depository or its nominee.
While a Depository is the sole holder of the Bonds, delivery or notation of
partial redemption or tender for purchase of Bonds shall be effected in
accordance with the provisions of the Letter of Representations, as defined in
the Indenture.
In addition to the words and terms defined elsewhere in this Bond, the
following terms shall have the following meanings:
"Beneficial Owner" means with respect to the Bonds, a person owning a
Beneficial Ownership Interest therein, as evidenced to the satisfaction of the
Trustee.
"Beneficial Ownership Interest" means the beneficial right to receive
payments and notices with respect to the Bonds which are held by the Depository
under a book entry system.
"book entry form" or "book entry system" means, with respect to the Bonds,
a form or system, as applicable, under which (i) the ownership of beneficial
interests in Bonds and Bond Service Charges may be transferred only through a
book entry and (ii) physical Bond certificates in fully registered form are
registered only in the name of a Depository or its nominee as Holder, with the
physical Bond certificates "immobilized" in the custody of the Depository. The
book entry system maintained by and the responsibility of the Depository and not
maintained by or the responsibility of the Issuer or the Trustee is the record
that identifies, and records the transfer of the interests of, the owners of
beneficial (book entry) interests in the Bonds.
"Depository" means any securities depository that is a clearing agency
under federal law operating and maintaining, with its participants or otherwise,
a book entry system to record ownership of book entry interests in Bonds, and to
effect transfers of book entry interests in Bonds, and includes and means
initially The Depository Trust Company (a limited purpose trust company), New
York, New York.
The Indenture permits certain amendments or supplements to the Agreement,
the Indenture, the Letter of Credit and the Series 1996 A Note not prejudicial
to the Holders to be made with the consent of the Bank but without the consent
of or notice to the Holders, and other amendments or supplements thereto to be
made with the consent of the Bank and the Holders of at least a majority in
aggregate principal amount of the Bonds and any Additional Bonds then
outstanding. So long as the Bank is not in default under the Letter of Credit,
and the Bank consents in writing to such amendments, the consent of the Holders
is not required for those amendments to the Indenture, Agreement, Letter of
Credit or Series 1996 A Note which otherwise require the consent of only a
majority in aggregate principal amount of the Bonds and any Additional Bonds
then outstanding.
-5-
A-1
DETERMINATION OF INTEREST RATE
The initial interest rate on this Bond shall be established and be in
effect until the first Interest Rate Adjustment Date. Thereafter, except as
provided below, for each succeeding period the interest rate on the Bonds shall
be the Weekly Interest Rate for such weekly period as established on the
Interest Rate Determination Date immediately preceding the commencement of such
weekly period.
On June 1, 1996, and on any Interest Period Reset Date thereafter, subject
to the conditions set forth in the Indenture, the interest rate on the Bonds may
be converted to a different Interest Rate Mode upon receipt by the Trustee, the
Paying Agent, the Registrar and the Remarketing Agent of a written direction
from the Borrower, given on behalf of the Issuer, not less than 45 days prior to
the Interest Period Reset Date, to convert the interest rate on the Bonds to an
Interest Rate Mode other than the Interest Rate Mode then in effect.
On each Interest Rate Determination Date, the Remarketing Agent shall give
the Trustee, the Registrar and Paying Agent telephonic notice (immediately
confirmed in writing) of the interest rate to be borne by the Bonds for the
following Interest Rate Period; provided that if the interest rate is determined
pursuant to clause (b) of the definition of the applicable Interest Rate Mode,
on the Interest Rate Determination Date, the Trustee shall give notice to the
Borrower and the Bank as above provided.
If the interest rate on the Bonds is converted to a different Interest Rate
Mode, at least 30 days prior to the Interest Period Reset Date the Registrar
shall use its best efforts to notify the Holders of all outstanding Bonds by
telephone (to the extent their telephone numbers have been provided in writing
to the Registrar), immediately confirmed by first class mail to all Holders,
that upon such Interest Period Reset Date the Bonds shall be converted to a
different Interest Rate Mode, which Interest Rate Mode shall be specified, and
that all Bonds shall be subject to a mandatory tender, subject to the right of
the Holders to affirmatively elect to waive the mandatory tender and retain
their Bonds.
Any calculation of the interest rate to be borne by the Bonds shall be
rounded to the nearest one-hundredth of one percent (0.01%). The computation of
the interest rate on the Bonds by the Remarketing Agent shall be binding and
conclusive upon the Holders of the Bonds.
"Five Year Interest Rate" means (a) the rate of interest per annum
determined by the Remarketing Agent, on the Interest Rate Determination Date
immediately preceding the applicable Interest Rate Adjustment Date, to be the
interest rate necessary, during the Interest Rate Period commencing on the
applicable Interest Rate Adjustment Date and ending on March 31 or September 30
nearest to but not later than the date which is five years from the Interest
Rate Adjustment Date, in the judgment of the Remarketing Agent (taking into
consideration current transactions and comparable securities with which the
Remarketing Agent is involved or of which it is aware and prevailing financial
market conditions) to produce as nearly as practical a par bid for the Bonds on
the Interest Rate Determination Date or (b) in the event that the Remarketing
Agent has been removed or has resigned and no successor has been appointed or
the Remarketing Agent has failed to determine the Five Year Interest Rate for
whatever reason, or the Five Year Interest Rate cannot be determined pursuant to
clause (a) for whatever reason, the interest rate then in effect with respect to
the Bonds, without adjustment; provided that in no event shall the Five Year
Interest Rate exceed the lesser of 12% per annum or the maximum rate permitted
by law (the "Maximum Rate").
"Fixed Interest Rate" means (a) the fixed rate of interest per annum
determined by the Remarketing Agent, on the Interest Rate Determination Date
immediately preceding the applicable
-6-
A-1
Interest Period Reset Date, to be the interest rate necessary, from the Interest
Period Reset Date to the final maturity date of the Bonds, in the judgment of
the Remarketing Agent (taking into consideration current transactions and
comparable securities with which the Remarketing Agent is involved or of which
it is aware and prevailing financial market conditions) to produce as nearly as
practical a par bid for the Bonds on the Interest Rate Determination Date or (b)
in the event that the Remarketing Agent has been removed or has resigned and no
successor has been appointed or the Remarketing Agent has failed to determine
the Fixed Interest Rate for whatever reason, or the Fixed Interest Rate cannot
be determined pursuant to clause (a) for whatever reason, the interest rate then
in effect with respect to the Bonds, without adjustment; provided that in no
event shall the Fixed Interest Rate exceed the Maximum Rate.
"Interest Period Reset Date" means the date on which the interest rate on
the Bonds converts from the Interest Rate Mode applicable to the Bonds prior to
such date to a new Interest Rate Mode. An Interest Period Reset Date shall be
the first Business Day of a month; provided that, upon conversion from a Six
Month, One Year or Five Year Interest Rate Mode, an Interest Period Reset Date
shall be the first day of a month; and provided further that, except when
converting from a Weekly Interest Rate Mode, an Interest Period Reset Date may
not occur prior to the end of the preceding Interest Rate Period.
"Interest Rate Adjustment Date" means any date on which the interest rate
on the Bonds is adjusted, either as the result of the conversion of the interest
rate on the Bonds to a different Interest Rate Mode or by adjustment of the
interest rate on the Bonds within the applicable Interest Rate Mode. Except as
otherwise provided with respect to an Interest Rate Adjustment Date which is
also an Interest Period Reset Date, an Interest Rate Adjustment Date shall be
the first day of the first month of the Interest Rate Period if the Bonds bear
interest at the Six Month, One Year or Five Year Interest Rate; the first
Business Day of the month if the Bonds bear interest at the One Month or Three
Month Interest Rate; and if the Bonds bear interest at the Weekly Interest Rate,
then the Interest Rate Adjustment Date shall be Thursday of each week.
"Interest Rate Determination Date" means (i) with respect to the Three
Month Interest Rate, the Six Month Interest Rate, the One Year Interest Rate,
the Five Year Interest Rate and the Fixed Interest Rate, the tenth Business Day
preceding an Interest Rate Adjustment Date, (ii) with respect to the One Month
Interest Rate, the seventh Business Day preceding an Interest Rate Adjustment
Date, and (iii) with respect to the Weekly Interest Rate, not later than 2:00
p.m. according to local time at the principal corporate trust office of the
Registrar on Wednesday of each week, or the next preceding Business Day if such
Wednesday is not a Business Day; provided that upon any conversion to the Weekly
Interest Rate from a different Interest Rate Mode, the first Interest Rate
Determination Date shall mean not later than 2:00 p.m. according to the local
time at the principal corporate trust office of the Registrar on the Business
Day next preceding the Interest Period Reset Date.
"Interest Rate Mode" means any of those modes of interest with respect to
the Bonds permitted by the Indenture, specifically, the Weekly Interest Rate,
the One Month Interest Rate, the Three Month Interest Rate, the Six Month
Interest Rate, the One Year Interest Rate, the Five Year Interest Rate and the
Fixed Interest Rate.
"Interest Rate Period" means that period of time during which the interest
rate with respect to the Bonds has been determined by the Remarketing Agent or
otherwise as provided in the definition of the applicable Interest Rate Mode,
commencing on the applicable Interest Rate Adjustment Date, and terminating on
the day immediately preceding the following Interest Rate Adjustment Date.
-7-
A-1
"One Month Interest Rate" means (a) the rate of interest per annum
determined by the Remarketing Agent, on the Interest Rate Determination Date
immediately preceding the applicable Interest Rate Adjustment Date, to be the
interest rate necessary, during the Interest Rate Period commencing on the
applicable Interest Rate Adjustment Date to and including the day preceding the
first Business Day of the next month, in the judgment of the Remarketing Agent
(taking into consideration current transactions and comparable securities with
which the Remarketing Agent is involved or of which it is aware and prevailing
financial market conditions) to produce as nearly as practical a par bid for the
Bonds on the Interest Rate Determination Date or (b) in the event that the
Remarketing Agent has been removed or has resigned and no successor has been
appointed, or the Remarketing Agent has failed to determine the One Month
Interest Rate for whatever reason, or the One Month Interest Rate cannot be
determined pursuant to clause (a) for whatever reason, the interest rate then in
effect with respect to the Bonds, without adjustment; provided that in no event
shall the One Month Interest Rate exceed the Maximum Rate.
"One Year Interest Rate" means (a) the rate of interest per annum
determined by the Remarketing Agent, on the Interest Rate Determination Date
immediately preceding the applicable Interest Rate Adjustment Date, to be the
interest rate necessary, during the Interest Rate Period commencing on the
applicable Interest Rate Adjustment Date, and ending on the March 31 or
September 30 nearest to but not later than the date which is one year from the
Interest Rate Adjustment Date, in the judgment of the Remarketing Agent (taking
into consideration current transactions and comparable securities with which the
Remarketing Agent is involved or of which it is aware and prevailing financial
market conditions) to produce as nearly as practical a par bid for the Bonds on
the Interest Rate Determination Date or (b) in the event that the Remarketing
Agent has been removed or has resigned and no successor has been appointed, or
the Remarketing Agent has failed to determine the One Year Interest Rate for
whatever reason, or the One Year Interest Rate cannot be determined pursuant to
clause (a) for whatever reason, the interest rate then in effect with respect to
the Bonds, without adjustment; provided that in no event shall the One Year
Interest Rate exceed the Maximum Rate.
"Remarketing Agent" means, initially, Everen Securities, Inc. and any
successor Remarketing Agent appointed pursuant to the Indenture.
"Six Month Interest Rate" means (a) the rate of interest per annum
determined by the Remarketing Agent, on the Interest Rate Determination Date
immediately preceding the applicable Interest Rate Adjustment Date, to be the
interest rate necessary during the Interest Rate Period commencing on the
applicable Interest Rate Adjustment Date and ending on the March 31 or September
30 nearest to but not later than the date which is six months from the Interest
Rate Adjustment Date, in the judgment of the Remarketing Agent (taking into
consideration current transactions and comparable securities with which the
Remarketing Agent is involved or of which it is aware and prevailing financial
market conditions) to produce as nearly as practical a par bid for the Bonds on
the Interest Rate Determination Date or (b) in the event that the Remarketing
Agent has been removed or has resigned and no successor has been appointed, or
the Remarketing Agent has failed to determine the Six Month Interest Rate for
whatever reason, or the Six Month Interest Rate cannot be determined pursuant to
clause (a) for whatever reason, the interest rate then in effect with respect to
the Bonds, without adjustment; provided that in no event shall the Six Month
Interest Rate exceed the Maximum Rate.
"Three Month Interest Rate" means (a) the rate of interest per annum
determined by the Remarketing Agent, on the Interest Rate Determination Date
immediately preceding the applicable Interest Rate Adjustment Date, to be the
interest rate necessary during the Interest Rate Period commencing on the
applicable Interest Rate Adjustment Date to and including the day preceding the
first Business Day of the January, April, July or October, nearest to but not
later than the date which is three months from the Interest Rate Adjustment
Date, in the judgment of the Remarketing
-8-
A-1
Agent (taking into consideration current transactions and comparable securities
with which the Remarketing Agent is involved or of which it is aware and
prevailing financial market conditions) to produce as nearly as practical a par
bid for the Bonds on the Interest Rate Determination Date or (b) in the event
that the Remarketing Agent has been removed or has resigned and no successor has
been appointed, or the Remarketing Agent has failed to determine the Three Month
Interest Rate for whatever reason, or the Three Month Interest Rate cannot be
determined pursuant to clause (a) for whatever reason, the interest rate then in
effect with respect to the Bonds, without adjustment; provided that in no event
shall the Three Month Interest Rate exceed the Maximum Rate.
"Weekly Interest Rate" means (a) the rate of interest per annum determined
by the Remarketing Agent, on the Interest Rate Determination Date immediately
preceding the applicable Interest Rate Adjustment Date, to be the interest rate
necessary during the Interest Rate Period of one week (or less in the case of
any such Interest Rate Period commencing on an Interest Period Reset Date which
is not a Thursday, or ending on the day preceding an Interest Period Reset Date)
commencing on the applicable Interest Rate Adjustment Date, in the judgment of
the Remarketing Agent (taking into consideration current transactions and
comparable securities with which the Remarketing Agent is involved or of which
it is aware and prevailing financial market conditions) to produce as nearly as
practical a par bid for the Bonds on the Interest Rate Determination Date or (b)
in the event that the Remarketing Agent has been removed or has resigned and no
successor has been appointed, or the Remarketing Agent has failed to determine
the Weekly Interest Rate for whatever reason, or the Weekly Interest Rate cannot
be determined pursuant to clause (a) for whatever reason, the interest rate then
in effect with respect to the Bonds, without adjustment; provided that in no
event shall the Weekly Interest Rate exceed the Maximum Rate.
TENDER OPTION
A.1. TENDER OPTION WHILE BONDS BEAR INTEREST IN AN INTEREST RATE MODE OTHER
THAN THE WEEKLY INTEREST RATE. While the Bonds bear interest at the One Month
Interest Rate, the Three Month Interest Rate, the Six Month Interest Rate, the
One Year Interest Rate or the Five Year Interest Rate, on each Interest Rate
Adjustment Date (each a "Bond Purchase Date"), each Holder or Beneficial Owner,
as applicable, shall have the option to tender for purchase, at 100% of the
principal amount thereof, all of the Bonds owned by such Holder (or all
Beneficial Ownership Interests owned by such Beneficial Owner), or such lesser
principal amount thereof (in denominations of $5,000 or any integral multiple
thereof, provided that such Holder or Beneficial Owner tenders $100,000 or more
in principal amount and provided that the untendered portion of any Bond or
Beneficial Ownership Interest shall be $100,000 or more in principal amount) as
such Holder or Beneficial Owner may specify in accordance with the terms,
conditions and limitations hereinafter set forth. The purchase price for each
such Bond or Beneficial Ownership Interest shall be payable in lawful money of
the United States of America, shall equal the principal amount, or such portion
thereof, to be purchased and shall be paid in full on the applicable Bond
Purchase Date.
A.2. TENDER OPTION WHILE BONDS BEAR INTEREST AT THE WEEKLY INTEREST RATE.
While the Bonds bear interest at the Weekly Interest Rate, each Holder or
Beneficial Owner, as applicable, has the option to tender for purchase, at 100%
of the principal amount thereof plus accrued interest to the purchase date (a
"Bond Purchase Date"), all of the Bonds owned by such Holder (or all Beneficial
Ownership Interests owned by such Beneficial Owner), or such lesser principal
amount thereof (in denominations of $5,000 or any integral multiple thereof,
provided that such Holder or Beneficial Owner tenders $100,000 or more in
principal amount and provided that the untendered portion of any Bond or
Beneficial Ownership Interest shall be $100,000 or more in principal amount) as
such Holder or Beneficial Owner may specify in accordance with the terms,
conditions and limitations hereafter set forth. The purchase price for each such
Bond or Beneficial
-9-
A-1
Ownership Interest shall be payable in lawful money of the United States of
America and shall be paid in full on the applicable Bond Purchase Date.
To exercise the option granted in paragraph A.1. above, the Holder or
Beneficial Owner, as applicable, shall (1) no earlier than 15 days prior to the
Bond Purchase Date and no later than 11:00 a.m. according to the local time at
the principal corporate trust office of the Registrar on the eighth Business Day
prior to the Bond Purchase Date, unless the Bonds bear interest at the One Month
Interest Rate, then on the fifth Business Day prior to the Bond Purchase Date,
give notice to the Registrar by telecopy or in writing which states (i) the name
and address of the Holder or Beneficial Owner, as applicable, (ii) the principal
amount, CUSIP number and bond numbers of the Bonds or Beneficial Ownership
Interests to be purchased, (iii) that such Bonds or Beneficial Ownership
Interests are to be purchased on such Bond Purchase Date pursuant to the terms
of the Indenture, and (iv) that such notice is irrevocable; (2) in the case of a
Beneficial Owner, provide the Registrar with evidence satisfactory to the
Registrar of such Beneficial Owner's Beneficial Ownership Interest; (3) in the
case of a Holder, no later than 10:00 a.m. according to the local time at the
principal corporate trust office of the Registrar on the seventh day preceding
such Bond Purchase Date, or the next preceding Business Day if such seventh day
is not a Business Day, unless the Bonds bear interest at the One Month Interest
Rate, then on the fourth day preceding such Bond Purchase Date, or the next
preceding Business Day if such fourth day is not a Business Day, deliver to the
principal corporate trust office of the Registrar the Bonds to be purchased in
proper form, accompanied by fully completed and executed Instructions to Sell,
the form of which is printed hereon; and (4) in the case of a Beneficial Owner,
no later than 10:00 a.m. (according to the local time at the principal corporate
trust office of the Registrar) on the Bond Purchase Date, cause the transfer of
the Beneficial Owner's Beneficial Ownership on the records of the Depository.
To exercise the option granted in paragraph A.2. above, the Holder or
Beneficial Owner, as applicable, shall (1) give notice to the Registrar by
telecopy or in writing, which states (i) the name and address of the Holder or
Beneficial Owner, (ii) the principal amount, CUSIP number and Bond numbers of
the Bonds or Beneficial Ownership Interests to be purchased, (iii) the date on
which such Bonds or Beneficial Ownership Interests are to be purchased, which
Bond Purchase Date shall be a Business Day not prior to the seventh day and not
later than the fifteenth day next succeeding the date of giving of such notice
to the Registrar and, if the interest rate on the Bonds is to be converted from
the Weekly Interest Rate to a new Interest Rate Mode, is a date no later than
the Interest Period Reset Date with respect to the new Interest Rate Mode, and
(iv) that such notice is irrevocable; (2) in the case of a Beneficial Owner,
provide the Trustee with evidence satisfactory to the Registrar of such
Beneficial Owner's Beneficial Ownership Interest; (3) in the case of a Holder,
no later than 10:00 a.m. according to the local time at the principal corporate
trust office of the Registrar on the second Business Day immediately preceding
the applicable Bond Purchase Date, deliver to the principal corporate trust
office of the Registrar the Bonds to be purchased in proper form, accompanied by
fully completed and executed Instructions to Sell; and (4) in the case of a
Beneficial Owner, no later than 10:00 a.m. (according to the local time at the
principal corporate trust office of the Registrar) on the Bond Purchase Date
cause the transfer of the Beneficial Owner's Beneficial Ownership on the records
of the Depository. In the case of a Bond or Beneficial Ownership Interest or
portion thereof to be purchased prior to an Interest Payment Date and after the
Record Date in respect thereof, the Holder or Beneficial Owner, as applicable,
shall deliver a due-bill check, in form satisfactory to the Registrar, for
interest due on such Interest Payment Date.
Any Bonds not delivered by Holders following the giving of notice of tender
shall nevertheless be deemed tendered for remarketing. Subject to the right of
such nondelivering Holders to receive the purchase price of such Bonds and
accrued interest to the Bond Purchase Date, such Bonds shall be null and void,
and the Trustee shall cause to be authenticated and
-10-
A-1
delivered new Bonds in replacement thereof pursuant to the remarketing of such
Bonds. After the giving of a notice of tender Beneficial Owners shall be
obligated to transfer their Beneficial Ownership Interests on the records of the
Depository in accordance with the instructions of the Registrar.
The tender options granted to the Holders or Beneficial Owners and all
mandatory tenders of Bonds or Beneficial Ownership Interests are subject to the
additional condition that any tendered Bonds or Beneficial Ownership Interests
(or the applicable portions thereof) will not be purchased if such Bonds (or
applicable portions thereof) mature or are redeemed on or prior to the
applicable Bond Purchase Date.
MANDATORY TENDER
(a) If at any time the Issuer at the direction of the Borrower shall
convert the interest rate on the Bonds to a different Interest Rate Mode, on the
Interest Period Reset Date upon which such conversion is effective, all Bonds
and Beneficial Ownership Interests shall be subject to mandatory tender by the
Holders or Beneficial Owners thereof for purchase on the Interest Period Reset
Date (a "Bond Purchase Date") at the applicable purchase price provided for
above. Notwithstanding such mandatory tender, any Holder or Beneficial Owner
may elect to retain his or her Bonds or Beneficial Ownership Interests by
delivering to the Registrar a written notice no later than 11:00 a.m. according
to the local time at the principal corporate trust office of the Registrar on
the eighth Business Day prior to such Interest Period Reset Date or by 11:00
a.m. according to the local time at the principal corporate trust office of the
Registrar on the fifth Business Day prior to such Interest Period Reset Date if
the Interest Rate Mode is to be converted to the One Month Interest Rate, which
notice shall state that (a) such Holder or Beneficial Owner realizes that the
Bonds or Beneficial Ownership Interests are being converted to bear interest at
the applicable Interest Rate Mode, (b) unless the interest rate on the Bonds is
being converted to the Weekly Interest Rate, such Holder or Beneficial Owner
realizes that the next Bond Purchase Date upon which the Bonds or Beneficial
Ownership Interests may be tendered for purchase is the next Interest Rate
Adjustment Date or, if such Bonds are being converted to the Fixed Interest
Rate, that such Bonds may no longer be tendered for purchase, (c) such Holder or
Beneficial Owner realizes that any securities rating on the Bonds may be
withdrawn or lowered as a result of the conversion to a different Interest Rate
Mode, and (d) such Holder or Beneficial Owner affirmatively elects to hold his
or her Bonds and receive interest at the applicable Interest Rate Mode.
Bonds or Beneficial Ownership Interests with respect to which the Registrar
shall not have received the election required by the preceding paragraph shall
be deemed to have been tendered whether or not the Holders thereof shall have
delivered such Bonds to the Registrar and without the need for further action of
the Beneficial Owners. Subject to the right of the Holders of such Bonds or
Beneficial Owners of such Beneficial Ownership Interests to receive the purchase
price of such Bonds or Beneficial Ownership Interests and to receive interest
accrued thereon to the Interest Period Reset Date, such Bonds or Beneficial
Ownership Interests shall be null and void and the Trustee shall cause to be
authenticated and delivered new Bonds in replacement thereof, or new Beneficial
Ownership Interests shall be created, pursuant to the remarketing of such Bonds
or Beneficial Ownership Interests.
(b) If at any time the Borrower shall provide for the delivery to the
Trustee of an Alternate Letter of Credit in accordance with the provisions of
Section 5.09 of the Indenture, on the date that precedes the Replacement Date by
at least five Business Days (a "Bond Purchase Date"), as defined in the
Indenture, all Bonds and Beneficial Ownership Interests shall be subject to
mandatory tender by the Holders or Beneficial Owners, as the case may be,
thereof for purchase at the applicable purchase price provided for above. At
least 30 days prior to the Bond
-11-
A-1
Purchase Date the Registrar shall use its best efforts to notify the Holders of
all outstanding Bonds by telephone (to the extent their telephone numbers have
been provided in writing to the Registrar), immediately confirmed by first class
mail to all Holders, that such an Alternate Letter of Credit is to be delivered
by the Borrower to the Trustee. The notice shall advise the Holders of the
requirements of Section 5.09 of the Indenture and confirm that such requirements
have been met, and that all Bonds shall be subject to mandatory tender pursuant
to Section 2.06 of the Indenture, subject to the right of the Holders or
Beneficial Owners to affirmatively elect to waive the mandatory tender and
retain the Bonds or Beneficial Ownership Interests.
Notwithstanding such mandatory tender, any Holder or Beneficial Owner, as
applicable, may elect to retain its Bonds or Beneficial Ownership Interests by
delivering to the Registrar a written notice no later than 11:00 a.m. according
to the local time at the principal corporate trust office of the Registrar on
the eighth Business Day prior to such Replacement date which notice shall state
that (a) such Holder or Beneficial Owner realizes that the Borrower is
delivering an Alternate Letter of Credit to the Trustee pursuant to Section 5.09
of the Indenture, (b) such Holder or Beneficial Owner has received the notice
required by Section 2.06 of the Indenture, and (c) such Holder or Beneficial
Owner affirmatively elects to hold its Bonds or Beneficial Ownership Interests.
Bonds or Beneficial Ownership Interests with respect to which the Registrar
shall not have received the election required by the preceding paragraph shall
be deemed to have been tendered for purposes of Section 2.06 of the Indenture
whether or not the Holders thereof shall have delivered such Bonds to the
Registrar and without the need for further action by the Beneficial Owners.
Subject to the right of the Holders of such Bonds or Beneficial Owners of such
Beneficial Ownership Interests to receive the purchase price of such Bonds or
Beneficial Ownership Interests and interest accrued thereon to the Replacement
Date, such Bonds or Beneficial Ownership Interests shall be null and void and
the Trustee shall cause to be authenticated and delivered new Bonds in
replacement thereof or new Beneficial Ownership Interests shall be created
pursuant to the remarketing of such Bonds or Beneficial Ownership Interests or
the pledge of such Bonds or Beneficial Ownership Interests to the Bank in lieu
or remarketing such Bonds or Beneficial Ownership Interests as described in
Section 6.20 of the Indenture.
REDEMPTION
(a) MANDATORY REDEMPTION UPON A DETERMINATION OF TAXABILITY. Upon the
occurrence of a Determination of Taxability, as defined in the Indenture, the
Bonds are subject to mandatory redemption in whole at a redemption price equal
to 100% of the outstanding principal amount thereof, plus interest accrued to
the redemption date, at the earliest practicable date selected by the Trustee,
after consultation with the Borrower, but in no event later than 45 days
following the Trustee's notification of the Determination of Taxability. The
occurrence of a Determination of Taxability with respect to the Bonds will not
constitute an Event of Default under the Indenture. No increase in the interest
payable with respect to the Bonds will occur in the event a Determination of
Taxability occurs.
(b) MANDATORY REDEMPTION UPON EXPIRATION OF LETTER OF CREDIT. The Bonds
are subject to mandatory redemption in whole on the Interest Payment Date which
next precedes the Letter of Credit Termination Date, at a redemption price of
100% of the outstanding principal amount thereof plus accrued interest to the
redemption date unless, at least 45 days prior to any such Interest Payment
Date, (a) the Bank shall have agreed in writing to an extension or further
extension of the Letter of Credit Termination Date to a date not less earlier
than one year from the Letter of Credit Termination Date being extended or (b)
pursuant to Section 5.09 of the Indenture, the Borrower shall have obtained and
delivered to the Trustee an Alternate Letter of
-12-
Credit with a termination date not earlier than one year from the Letter of
Credit Termination Date for the Letter of Credit it replaces, in which case the
Bonds will be subject to the mandatory tender provisions set forth above.
(c) OPTIONAL REDEMPTION. Unless previously redeemed, the Bonds are
subject to redemption at the option of the Issuer, upon the written direction of
the Borrower (subject to compliance with Section 4.03 of the Indenture), (1) if
the Bonds do not bear interest at the Fixed Interest Rate, in whole or in part
(in integral multiples of $5,000, provided that the unredeemed portion of any
Bond redeemed in part shall be $100,000 or more) on any Interest Rate Adjustment
Date at the redemption price of 100% of the principal amount redeemed plus
accrued interest thereon to the redemption date, or (2) if the Bonds bear
interest at the Fixed Rate after the Fixed Interest Rate Commencement Date and
on or after the First Optional Redemption Date, in whole or in part (in integral
multiples of $5,000, provided that the unredeemed portion of any Bond redeemed
in part shall be $100,000 or more) at any time at a redemption price equal to
the following percentages of the principal amount redeemed, plus in each case
accrued interest to the date fixed for redemption:
Redemption Date Optional Redemption Price
--------------- -------------------------
First Optional Redemption
Date, through the following
last day of March 103%
First Anniversary of the First
Optional Redemption Date,
through the following
last day of March 102%
Second Anniversary of the
First Optional Redemption
Date, through the following
last day of March 101%
Third Anniversary of the First
Optional Redemption Date and
thereafter 100%
"First Optional Redemption Date" means the earlier to occur of the April 1
occurring in the year which is (i) at least ten (10) full years after the Fixed
Interest Rate Commencement Date or (ii) a number of years after the Fixed
Interest Rate Commencement Date equal to the number of full years between the
Fixed Interest Rate Commencement Date and the maturity date of the Bonds,
multiplied by 1/2 and rounded up to the nearest whole number.
"Fixed Interest Rate Commencement Date" means the Interest Period Reset
Date from and after which the Bonds shall bear interest at the Fixed Interest
Rate, as that date shall be established as provided in the Indenture.
(d) EXTRAORDINARY OPTIONAL REDEMPTION. The Bonds are also subject to
redemption by the Issuer in the event of the exercise by the Borrower of its
option to direct that redemption upon occurrence of any of the events described
in Section 6.2 of the Agreement (generally, substantial damage to, or
destruction or condemnation of the Project or changes in law causing the
Agreement to become void, unenforceable or impossible of performance or the
imposition of unreasonable burdens or excessive liabilities with respect to the
Project or its operation), (1) at
-13-
any time in whole, or (2) at any time in part in the event of condemnation of
part of the Project, as provided in Section 6.2 of the Agreement, in each case
at a redemption price of 100% of the principal amount redeemed, plus interest
accrued to the redemption date.
If less than all Bonds are to be redeemed at one time, the selection of
Bonds, or portions thereof (in integral multiples of $5,000) to be redeemed
shall be made by lot by the Trustee; provided, however, Bonds (or book entry
interests in Bonds) pledged to the Bank pursuant to the Reimbursement Agreement
shall be selected for redemption prior to the selection of any other Bonds. If
Bonds or portions thereof are called for redemption and if on the redemption
date moneys for the redemption thereof are held by the Trustee, thereafter those
Bonds or portions thereof to be redeemed shall cease to bear interest, and shall
cease to be secured by, and shall not be deemed to be outstanding under, the
Indenture.
Unless waived in writing by any Holder of Bonds to be redeemed, official
notice of any such redemption shall be given by the Registrar on behalf of the
Issuer by mailing a copy of an official redemption notice by first class mail at
least 30 days and not more than 60 days prior to the date fixed for redemption
(except in the case of a redemption under Section 4.01(a) of the Indenture, in
which case such notice shall be given at least 5 days and not more than 15 days
prior to the date fixed for redemption) to the registered owner of the Bond or
Bonds to be redeemed at the address shown on the Register or at such other
address as is furnished in writing by such registered owner to the Registrar.
It is certified and recited that there have been performed and have
happened in regular and due form, as required by law, all acts and conditions
necessary to be done or performed by the Issuer or to have happened (i)
precedent to and in the issuing of the Bonds in order to make them legal, valid
and binding special obligations of the Issuer, and (ii) precedent to and in the
execution and delivery of the Indenture and the Agreement; that payment in full
for the Bonds has been received; and that the Bonds do not exceed or violate any
constitutional or statutory limitation.
IN WITNESS OF THE ABOVE, the Issuer has caused this Bond to be executed in
the name of the Issuer by the manual or facsimile signatures of its duly
authorized officers, as of the date shown above.
CITY OF GARY, INDIANA
By:
-----------------------------------
Mayor
(Seal)
Attest:
- -------------------------------
Clerk
-14-
A-1
CERTIFICATE OF AUTHENTICATION
This Bond is one of the Bonds described in the within mentioned Indenture.
THE FIFTH THIRD BANK, as Authenticating
Agent
By:
-------------------------------------
Authorized Representative
ASSIGNMENT
For value received, the undersigned sells, assigns and transfers unto
______________ _______________________________ the within Bond and irrevocably
constitutes and appoints __________________________ attorney to transfer that
Bond on the books kept for registration thereof, with full power of substitution
in the premises.
Dated:
------------------------------ ---------------------------------------
Signature
Signature Guaranteed:
- ---------------------------------------- -----------------------------------
NOTICE: Signature(s) must be guaranteed NOTICE: The assignor's signature
by an eligible guarantor institution to this assignment must correspond
participating in a Securities Transfer with the name as it appears upon
Association recognized signature guarantee the face of the within Bond in
program. every particular, without
alteration or any change whatever.
-15-
A-1
NOTICE OF EXERCISE OF TENDER OPTION
INSTRUCTIONS TO SELL
To:
-----------------------
Attention: Corporate Trust Department
RE: City of Gary, Indiana Adjustable Rate Economic Development
Revenue Refunding Bonds, Series 1996 A (The Miller
Partnership, L.P. Project)
Gentlemen:
The undersigned, as the Holder of the Bond annexed hereto ("Bond"), hereby
elects the option available to the undersigned pursuant to the Trust Indenture
relating to the above-captioned bond issue. In accordance with such option, the
undersigned hereby tenders:
check the appropriate box / / the entire Bond
/ / (increments of $5,000 with a minimum
tender of $100,000)
for purchase on the first Bond Purchase Date (as defined in the Bond) after the
date hereof, pursuant to the referenced Trust Indenture. In accordance with
such tender, the undersigned hereby irrevocably sells, assigns and transfers
such Bond or portion thereof at the purchase price set forth in the Trust
Indenture, and does hereby irrevocably constitute and appoint the Registrar as
attorney to transfer such Bond or portion thereof on the books of the Registrar,
with full power of substitution in the premises.
Dated:
------------------------------- --------------------------------------
Signature
--------------------------------------
Signature Guaranteed:
NOTICE: Signature(s) must be guaranteed
by an eligible guarantor institution
participating in a Securities Transfer
Association recognized signature
guarantee program.
NOTICE: To exercise the option available to the Holder pursuant to the
referenced Trust Indenture, the Holder must notify the Registrar of
such exercise and deliver this Bond to the Registrar at the times and
in the manner set forth in this Bond. The signature to these
Instructions to Sell must correspond with the name as written upon the
face of this Bond in every particular, without alteration or
enlargement, or any change whatsoever.
B-1
UNITED STATES OF AMERICA
STATE OF INDIANA
CITY OF GARY, INDIANA
TAXABLE ADJUSTABLE RATE ECONOMIC DEVELOPMENT
REVENUE REFUNDING BOND, SERIES 1996 B
(THE MILLER PARTNERSHIP, L.P. PROJECT)
NO. B-1
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO ISSUER OR ITS AGENT
FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY CERTIFICATE ISSUED
IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY
AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO
SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY
TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON
IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST
HEREIN.
Maturity Date CUSIP Number Date of Authentication
- ------------- ------------ ----------------------
March 1, 2031 April 1, 1996
Date of Initial Delivery: April 1, 1996
Registered Owner: CEDE & CO.
Principal Amount: $1,680,000
The City of Gary, Indiana (the "Issuer"), a municipal corporation and
political subdivision validly existing under the laws of the State of Indiana,
for value received, promises to pay to the registered owner specified above or
registered assigns, but solely from the sources and in the manner referred to
herein, the principal amount specified above on the aforesaid Maturity Date,
unless this Bond is called for earlier redemption, and to pay from those sources
interest thereon at the rate per annum determined as described herein. Initial
interest on this Bond shall accrue from the Date of Initial Delivery of this
Bond. Interest on this Bond is payable on the first Business Day, as
hereinafter defined, of each month, as long as the interest rate hereon is
calculated pursuant to the Weekly Interest Rate, the One Month Interest Rate or
the Three Month Interest Rate (as such terms are hereinafter defined),
commencing the first Business Day of May, 1996, until the principal amount is
paid or duly provided for. For any period of time during which this Bond bears
interest at the Six Month Interest Rate, the One Year Interest Rate, the Five
Year Interest Rate or the Fixed Interest Rate (as such terms are hereinafter
defined) interest hereon shall be payable on the first day of each April and
October. Any date established for the payment
B-1
of interest as described above is hereinafter referred to as an "Interest
Payment Date". The interest payable hereon on each Interest Payment Date shall
be for the period commencing on the next preceding Interest Payment Date (or the
Date of Initial Delivery of this Bond with respect to the first Interest Payment
Date) to and including the day immediately preceding the Interest Payment Date
on which payment is made. Interest shall be calculated on the basis of a year
of 365 days or 366 days, as applicable, for the number of days actually elapsed,
while the interest hereon is payable at the Weekly Interest Rate, the One Month
Interest Rate or the Three Month Interest Rate. Otherwise, interest shall be
calculated on the basis of a 360-day year consisting of twelve 30-day months.
The term "Business Day", as used herein, means any day, other than a
Saturday or Sunday, on which commercial banks located in the cities in which the
principal corporate trust office of the Paying Agent, the principal corporate
trust office of the Registrar, the principal office of the Remarketing Agent,
and the principal office of the Bank, as hereafter defined, are located are not
required or authorized to remain closed and on which the New York Stock Exchange
is not closed. This Bond will bear interest from the most recent date to which
interest has been paid or duly provided for or, if no interest has been paid or
duly provided for, from its date of initial delivery. If any Interest Payment
Date, date of maturity of this Bond, Bond Purchase Date (as hereinafter defined)
or date fixed for redemption of this Bond, is not a Business Day, then payment
of the applicable interest, principal, purchase price or redemption price may be
made on the next succeeding Business Day with the same force and effect as if
such payment were made on such Interest Payment Date, date of maturity, Bond
Purchase Date or date fixed for redemption and no interest shall accrue for the
period after such date; provided, however, if this Bond bears interest at any of
the Weekly Interest Rate, the One Month Interest Rate or the Three Month
Interest Rate, interest shall accrue from the scheduled date of any maturity or
redemption due date of this Bond until the Business Day on which such payment is
made.
The principal of and premium, if any, on this Bond is payable upon
presentation and surrender hereof at the principal corporate trust office of the
Paying Agent, presently The Fifth Third Bank (the "Paying Agent"), located in
Cincinnati, Ohio. Interest is payable on each Interest Payment Date by check or
draft mailed to the person in whose name this Bond (or one or more predecessor
bonds) is registered (the "Holder") at the close of business on the fifth
Business Day preceding such Interest Payment Date (the "Regular Record Date") on
the registration books for this issue maintained by The Fifth Third Bank,
located in Cincinnati, Ohio, as Registrar, at the address appearing therein.
Notwithstanding the foregoing, interest on any Bond in the denomination of
$100,000 or more shall be paid by wire transfer in immediately available funds
to the bank account number and address filed in writing with the Registrar by
such Holder, which account number and address shall be filed with the Registrar
at least two (2) Business Days prior to that Interest Payment Date. Any
interest which is not timely paid or duly provided for shall cease to be payable
to the Holder hereof (or of one or more predecessor bonds) as of the Regular
Record Date, and shall be payable to the Holder hereof (or of one or more
predecessor bonds) at the close of business on a Special Record Date to be fixed
by the Trustee for the payment of that overdue interest. Notice of the Special
Record Date shall be mailed to Holders not less than ten days prior thereto.
The principal and redemption price of and interest on this Bond are payable in
lawful money of the United States of America, without deduction for the services
of the Paying Agent. Notwithstanding anything herein to the contrary, when this
Bond is registered in the name of a Depository (as defined in the Indenture
hereinafter defined) or its nominee, the principal and redemption price of and
interest on this Bond shall be payable in federal funds delivered or transmitted
to the Depository or its nominee.
THIS BOND DOES NOT REPRESENT OR CONSTITUTE A DEBT OR PLEDGE OF THE FAITH
AND CREDIT OF THE ISSUER, THE STATE OF INDIANA OR ANY POLITICAL SUBDIVISION
THEREOF. THE HOLDERS OR OWNERS OF THIS BOND
-2-
B-1
HAVE NO RIGHT TO HAVE TAXES LEVIED BY THE ISSUER, THE STATE OF INDIANA OR ANY
POLITICAL SUBDIVISION THEREOF FOR THE PAYMENT OF THE PRINCIPAL OF OR PREMIUM (IF
ANY) OR INTEREST ON THIS BOND. PRINCIPAL OF AND PREMIUM (IF ANY) AND INTEREST
ON THIS BOND ARE PAYABLE SOLELY FROM THE REVENUES PLEDGED PURSUANT TO THE
INDENTURE (AS HEREINAFTER DEFINED).
This Bond shall not constitute the personal obligation, either jointly or
severally, of the members of the Common Council of the Issuer (the "Issuing
Authority"), its Economic Development Commission, or of any officer, employee or
official of the Issuer.
This Bond shall not be entitled to any security or benefit under the
Indenture or be valid or become obligatory for any purpose until the certificate
of authentication hereon shall have been duly signed.
GENERAL PROVISIONS
This Bond is one of a duly authorized issue the City of Gary, Indiana
Taxable Adjustable Rate Economic Development Revenue Refunding Bonds, Series
1996 B (The Miller Partnership, L.P. Project) (the "Bonds"), issuable under the
Trust Indenture, dated as of March 1, 1996 (the "Indenture"), between the Issuer
and Fifth Third Bank of Central Indiana, as Trustee, aggregating in the
principal amount of $1,680,000 and issued for the purpose of the Issuer making a
loan (the "Loan") to The Miller Partnership, L.P., an Illinois limited
partnership (the "Borrower") pursuant to the Loan Agreement, dated as of even
date with the Indenture (the "Agreement"), to refund the City of Gary, Indiana
Economic Development Revenue Bonds, Series 1991 B (The Miller Partnership, L.P.
Project) and the City of Gary, Indiana Economic Development Revenue Bonds,
Series 1993 B (The Miller Partnership, L.P. Project), which were issued for the
purpose of financing of the costs of issuance of such bonds. The Bonds,
together with any Additional Bonds which may be issued on a parity therewith
under the Indenture, are special obligations of the Issuer, issued or to be
issued under and are to be secured and entitled equally and ratably to the
protection given by the Indenture. The Bonds are issued pursuant to Indiana
Code 36-7-11.9 and 12, and Indiana Code 5-1-5 (collectively, the "Act") and
pursuant to an Ordinance duly adopted by the Issuing Authority. The Bonds are
issued on a parity with the City of Gary, Indiana Adjustable Rate Economic
Development Revenue Bonds, Series 1996 A (The Miller Partnership, L.P. Project)
(the "Series 1996 A Bonds").
Reference is made to the Indenture and the Agreement for a more complete
description of the Project, the provisions, among others, with respect to the
nature and extent of the security for the Bonds, the rights, duties and
obligations of the Issuer, the Trustee and the Holders of the Bonds and the
terms and conditions upon which the Bonds are issued and secured. All terms
used herein with initial capitalization where the rules of grammar or context do
not otherwise require shall have the meanings as set forth in the Indenture.
Each Holder assents, by its acceptance hereof, to all of the provisions of the
Indenture.
Pursuant to the Agreement, the Borrower has executed and delivered to the
Trustee the Borrower's Note, Series 1996 B dated as of even date with the Bonds
(the "Series 1996 B Note"), in the principal amount of $1,680,000. The Borrower
is required by the Agreement and the Series 1996 B Note to make payments to the
Trustee in amounts and at times necessary to pay the principal of and premium
(if any) and interest on the Bonds (the "Bond Service Charges"). In the
Indenture, the Issuer has assigned to the Trustee, to provide for the payment of
the Bond Service Charges on the Bonds and any Additional Bonds, the Issuer's
right, title and interest in and to the Series 1996 B Note and the Agreement,
except for Unassigned Issuer's Rights, as defined in the Agreement.
-3-
B-1
Pursuant to the Agreement, the Borrower has caused to be issued and
delivered to the Trustee by The Royal Bank of Scotland plc, acting through its
New York Branch (the "Bank") an irrevocable letter of credit (the "Letter of
Credit"), pursuant to which the Trustee is entitled to draw up to (a) the
principal amount of the Bonds outstanding to enable the Trustee to pay (i) the
principal amount of the Bonds when due at maturity or upon redemption or
acceleration on the occurrence of an event of default, and (ii) an amount equal
to the principal portion of the purchase price of any Bonds or Beneficial
Ownership Interests duly tendered by the Holders or Beneficial Owners thereof
for purchase pursuant to the Indenture, plus (b) the amount of interest accruing
on the Bonds, but not to exceed 56 days' accrued interest at the maximum rate of
12% per annum (the "Maximum Rate") to enable the Trustee to pay interest when
due on the Bonds and the interest portion (if any) of the purchase price of any
Bonds or Beneficial Ownership Interests duly tendered by the Holders or
Beneficial Owners thereof for purchase pursuant to the Indenture. In connection
with the issuance of the Letter of Credit, the Bank has entered into a
Reimbursement Agreement (the "Reimbursement Agreement") with the Borrower
pursuant to which the Borrower is obligated to reimburse the Bank for all draws
made under Letter of Credit. The Letter of Credit shall expire, subject to
provisions for earlier termination or extension, on April 15, 2001.
Subject to the provisions of the Indenture and the Agreement, the Letter of
Credit may be replaced from time to time by another letter of credit (an
"Alternate Letter of Credit"), in which case the term "Bank" shall mean the
financial institution issuing the Alternate Letter of Credit and the term
"Letter of Credit" shall mean the Alternate Letter of Credit.
Copies of the Indenture, the Agreement, the Letter of Credit, and the
Series 1996 A Note are on file in the principal corporate trust office of the
Trustee.
The Bond Service Charges on the Bonds are payable solely from the Revenues,
as defined and as provided for in the Indenture (being, generally, the amounts
payable under the Agreement in repayment of the Loan, any unexpended proceeds of
the Bonds and amounts deposited in the Refunding Fund and the Bond Fund as
defined and provided for in the Indenture, including amounts drawn pursuant to
the Letter of Credit), and are an obligation of the Issuer only to the extent of
the Revenues. The Bonds are not secured by a pledge of the faith and credit or
the taxing power of the Issuer, the State of Indiana or any political
subdivision thereof.
No recourse under or upon any obligation, covenant, acceptance or agreement
contained in the Indenture, or in any of the Bonds, or under any judgment
obtained against the Issuer, its Economic Development Commission or the Issuing
Authority, or by the enforcement of any assessment or by any legal or equitable
proceeding by virtue of any constitution or statute or otherwise, or under any
circumstances, shall be had against any member or officer, as such, past,
present, or future, of the Issuer, its Economic Development Commission or the
Issuing Authority, whether directly or through the Issuer, or otherwise, for the
payment for or to the Issuer or any receiver thereof, or for or to any Holder of
any Bond, or otherwise, of any sum that may be due and unpaid by the Issuer upon
any of the Bonds. Any and all personal liability of every nature, whether at
common law or in equity, or by statute or by constitution or otherwise, of any
such member or officer, as such, to respond by reason of any act or omission on
his or her part, or otherwise, for, directly or indirectly, the payment for or
to the Issuer or any receiver thereof, or for or to the owner or any Holder of
any Bond, or otherwise, of any sum that may remain due and unpaid upon any Bond,
shall be deemed to be and is hereby expressly waived and released as a condition
of and consideration for the execution and delivery of the Indenture and the
issuance of the Bonds.
The Bonds are issuable only as fully registered bonds in the denominations
of $100,000 or $5,000 multiples in excess thereof and shall be originally issued
only to a Depository to be held in a book entry system and: (i) the Bonds shall
be registered in the name of the Depository or its
-4-
B-1
nominee, as Bondholder, and immobilized in the custody of the Depository; (ii)
unless otherwise requested by the Depository, there shall be a single Bond
certificate; and (iii) the Bonds shall not be transferable or exchangeable,
except for transfer to another Depository or another nominee of a Depository,
without further action by the Issuer. While the Bonds are in book entry only
form, Bonds in the form of physical certificates shall only be deposited with
the Depository. The owners of beneficial interests in the Bonds shall not have
any right to receive Bonds in the form of physical certificates. If any
Depository determines not to continue to act as a Depository for the Bonds for
use in a book entry system, the Issuer may attempt to have established a
securities depository/book entry system relationship with another qualified
Depository under the Indenture. If the Issuer does not or is unable to do so,
the Issuer and the Trustee, after the Trustee has made provision for
notification to the owners of book entry interests by the then Depository, shall
permit withdrawal of the Bonds from the Depository, and authenticate and
deliver, or cause to be authenticated and delivered, Bond certificates in fully
registered form (in denominations of $100,000 or $5,000 multiples in excess
thereof) to the assignees of the Depository or its nominee.
While a Depository is the sole holder of the Bonds, delivery or notation of
partial redemption or tender for purchase of Bonds shall be effected in
accordance with the provisions of the Letter of Representations, as defined in
the Indenture.
In addition to the words and terms defined elsewhere in this Bond, the
following terms shall have the following meanings:
"Beneficial Owner" means with respect to the Bonds, a person owning a
Beneficial Ownership Interest therein, as evidenced to the satisfaction of the
Trustee.
"Beneficial Ownership Interest" means the beneficial right to receive
payments and notices with respect to the Bonds which are held by the Depository
under a book entry system.
"book entry form" or "book entry system" means, with respect to the Bonds,
a form or system, as applicable, under which (i) the ownership of beneficial
interests in Bonds and Bond Service Charges may be transferred only through a
book entry and (ii) physical Bond certificates in fully registered form are
registered only in the name of a Depository or its nominee as Holder, with the
physical Bond certificates "immobilized" in the custody of the Depository. The
book entry system maintained by and the responsibility of the Depository and not
maintained by or the responsibility of the Issuer or the Trustee is the record
that identifies, and records the transfer of the interests of, the owners of
beneficial (book entry) interests in the Bonds.
"Depository" means any securities depository that is a clearing agency
under federal law operating and maintaining, with its participants or otherwise,
a book entry system to record ownership of book entry interests in Bonds, and to
effect transfers of book entry interests in Bonds, and includes and means
initially The Depository Trust Company (a limited purpose trust company), New
York, New York.
The Indenture permits certain amendments or supplements to the Agreement,
the Indenture, the Letter of Credit and the Series 1996 A Note not prejudicial
to the Holders to be made with the consent of the Bank but without the consent
of or notice to the Holders, and other amendments or supplements thereto to be
made with the consent of the Bank and the Holders of at least a majority in
aggregate principal amount of the Bonds and any Additional Bonds then
outstanding. So long as the Bank is not in default under the Letter of Credit,
and the Bank consents in writing to such amendments, the consent of the Holders
is not required for those amendments to the Indenture, Agreement, Letter of
Credit or Series 1996 A Note which otherwise require the consent of only a
majority in aggregate principal amount of the Bonds and any Additional Bonds
then outstanding.
-5-
B-1
DETERMINATION OF INTEREST RATE
The initial interest rate on this Bond shall be established and be in
effect until the first Interest Rate Adjustment Date. Thereafter, except as
provided below, for each succeeding period the interest rate on the Bonds shall
be the Weekly Interest Rate for such weekly period as established on the
Interest Rate Determination Date immediately preceding the commencement of such
weekly period.
On June 1, 1996, and on any Interest Period Reset Date thereafter, subject
to the conditions set forth in the Indenture, the interest rate on the Bonds may
be converted to a different Interest Rate Mode upon receipt by the Trustee, the
Paying Agent, the Registrar and the Remarketing Agent of a written direction
from the Borrower, given on behalf of the Issuer, not less than 45 days prior to
the Interest Period Reset Date, to convert the interest rate on the Bonds to an
Interest Rate Mode other than the Interest Rate Mode then in effect.
On each Interest Rate Determination Date, the Remarketing Agent shall give
the Trustee, the Registrar and Paying Agent telephonic notice (immediately
confirmed in writing) of the interest rate to be borne by the Bonds for the
following Interest Rate Period; provided that if the interest rate is determined
pursuant to clause (b) of the definition of the applicable Interest Rate Mode,
on the Interest Rate Determination Date, the Trustee shall give notice to the
Borrower and the Bank as above provided.
If the interest rate on the Bonds is converted to a different Interest Rate
Mode, at least 30 days prior to the Interest Period Reset Date the Registrar
shall use its best efforts to notify the Holders of all outstanding Bonds by
telephone (to the extent their telephone numbers have been provided in writing
to the Registrar), immediately confirmed by first class mail to all Holders,
that upon such Interest Period Reset Date the Bonds shall be converted to a
different Interest Rate Mode, which Interest Rate Mode shall be specified, and
that all Bonds shall be subject to a mandatory tender, subject to the right of
the Holders to affirmatively elect to waive the mandatory tender and retain
their Bonds.
Any calculation of the interest rate to be borne by the Bonds shall be
rounded to the nearest one-hundredth of one percent (0.01%). The computation of
the interest rate on the Bonds by the Remarketing Agent shall be binding and
conclusive upon the Holders of the Bonds.
"Five Year Interest Rate" means (a) the rate of interest per annum
determined by the Remarketing Agent, on the Interest Rate Determination Date
immediately preceding the applicable Interest Rate Adjustment Date, to be the
interest rate necessary, during the Interest Rate Period commencing on the
applicable Interest Rate Adjustment Date and ending on March 31 or September 30
nearest to but not later than the date which is five years from the Interest
Rate Adjustment Date, in the judgment of the Remarketing Agent (taking into
consideration current transactions and comparable securities with which the
Remarketing Agent is involved or of which it is aware and prevailing financial
market conditions) to produce as nearly as practical a par bid for the Bonds on
the Interest Rate Determination Date or (b) in the event that the Remarketing
Agent has been removed or has resigned and no successor has been appointed or
the Remarketing Agent has failed to determine the Five Year Interest Rate for
whatever reason, or the Five Year Interest Rate cannot be determined pursuant to
clause (a) for whatever reason, the interest rate then in effect with respect to
the Bonds, without adjustment; provided that in no event shall the Five Year
Interest Rate exceed the lesser of 12% per annum or the maximum rate permitted
by law (the "Maximum Rate").
"Fixed Interest Rate" means (a) the fixed rate of interest per annum
determined by the Remarketing Agent, on the Interest Rate Determination Date
immediately preceding the applicable
-6-
B-1
Interest Period Reset Date, to be the interest rate necessary, from the Interest
Period Reset Date to the final maturity date of the Bonds, in the judgment of
the Remarketing Agent (taking into consideration current transactions and
comparable securities with which the Remarketing Agent is involved or of which
it is aware and prevailing financial market conditions) to produce as nearly as
practical a par bid for the Bonds on the Interest Rate Determination Date or (b)
in the event that the Remarketing Agent has been removed or has resigned and no
successor has been appointed or the Remarketing Agent has failed to determine
the Fixed Interest Rate for whatever reason, or the Fixed Interest Rate cannot
be determined pursuant to clause (a) for whatever reason, the interest rate then
in effect with respect to the Bonds, without adjustment; provided that in no
event shall the Fixed Interest Rate exceed the Maximum Rate.
"Interest Period Reset Date" means the date on which the interest rate on
the Bonds converts from the Interest Rate Mode applicable to the Bonds prior to
such date to a new Interest Rate Mode. An Interest Period Reset Date shall be
the first Business Day of a month; provided that, upon conversion from a Six
Month, One Year or Five Year Interest Rate Mode, an Interest Period Reset Date
shall be the first day of a month; and provided further that, except when
converting from a Weekly Interest Rate Mode, an Interest Period Reset Date may
not occur prior to the end of the preceding Interest Rate Period.
"Interest Rate Adjustment Date" means any date on which the interest rate
on the Bonds is adjusted, either as the result of the conversion of the interest
rate on the Bonds to a different Interest Rate Mode or by adjustment of the
interest rate on the Bonds within the applicable Interest Rate Mode. Except as
otherwise provided with respect to an Interest Rate Adjustment Date which is
also an Interest Period Reset Date, an Interest Rate Adjustment Date shall be
the first day of the first month of the Interest Rate Period if the Bonds bear
interest at the Six Month, One Year or Five Year Interest Rate; the first
Business Day of the month if the Bonds bear interest at the One Month or Three
Month Interest Rate; and if the Bonds bear interest at the Weekly Interest Rate,
then the Interest Rate Adjustment Date shall be Thursday of each week.
"Interest Rate Determination Date" means (i) with respect to the Three
Month Interest Rate, the Six Month Interest Rate, the One Year Interest Rate,
the Five Year Interest Rate and the Fixed Interest Rate, the tenth Business Day
preceding an Interest Rate Adjustment Date, (ii) with respect to the One Month
Interest Rate, the seventh Business Day preceding an Interest Rate Adjustment
Date, and (iii) with respect to the Weekly Interest Rate, not later than 2:00
p.m. according to local time at the principal corporate trust office of the
Registrar on Wednesday of each week, or the next preceding Business Day if such
Wednesday is not a Business Day; provided that upon any conversion to the Weekly
Interest Rate from a different Interest Rate Mode, the first Interest Rate
Determination Date shall mean not later than 2:00 p.m. according to the local
time at the principal corporate trust office of the Registrar on the Business
Day next preceding the Interest Period Reset Date.
"Interest Rate Mode" means any of those modes of interest with respect to
the Bonds permitted by the Indenture, specifically, the Weekly Interest Rate,
the One Month Interest Rate, the Three Month Interest Rate, the Six Month
Interest Rate, the One Year Interest Rate, the Five Year Interest Rate and the
Fixed Interest Rate.
"Interest Rate Period" means that period of time during which the interest
rate with respect to the Bonds has been determined by the Remarketing Agent or
otherwise as provided in the definition of the applicable Interest Rate Mode,
commencing on the applicable Interest Rate Adjustment Date, and terminating on
the day immediately preceding the following Interest Rate Adjustment Date.
-7-
B-1
"One Month Interest Rate" means (a) the rate of interest per annum
determined by the Remarketing Agent, on the Interest Rate Determination Date
immediately preceding the applicable Interest Rate Adjustment Date, to be the
interest rate necessary, during the Interest Rate Period commencing on the
applicable Interest Rate Adjustment Date to and including the day preceding the
first Business Day of the next month, in the judgment of the Remarketing Agent
(taking into consideration current transactions and comparable securities with
which the Remarketing Agent is involved or of which it is aware and prevailing
financial market conditions) to produce as nearly as practical a par bid for the
Bonds on the Interest Rate Determination Date or (b) in the event that the
Remarketing Agent has been removed or has resigned and no successor has been
appointed, or the Remarketing Agent has failed to determine the One Month
Interest Rate for whatever reason, or the One Month Interest Rate cannot be
determined pursuant to clause (a) for whatever reason, the interest rate then in
effect with respect to the Bonds, without adjustment; provided that in no event
shall the One Month Interest Rate exceed the Maximum Rate.
"One Year Interest Rate" means (a) the rate of interest per annum
determined by the Remarketing Agent, on the Interest Rate Determination Date
immediately preceding the applicable Interest Rate Adjustment Date, to be the
interest rate necessary, during the Interest Rate Period commencing on the
applicable Interest Rate Adjustment Date, and ending on the March 31 or
September 30 nearest to but not later than the date which is one year from the
Interest Rate Adjustment Date, in the judgment of the Remarketing Agent (taking
into consideration current transactions and comparable securities with which the
Remarketing Agent is involved or of which it is aware and prevailing financial
market conditions) to produce as nearly as practical a par bid for the Bonds on
the Interest Rate Determination Date or (b) in the event that the Remarketing
Agent has been removed or has resigned and no successor has been appointed, or
the Remarketing Agent has failed to determine the One Year Interest Rate for
whatever reason, or the One Year Interest Rate cannot be determined pursuant to
clause (a) for whatever reason, the interest rate then in effect with respect to
the Bonds, without adjustment; provided that in no event shall the One Year
Interest Rate exceed the Maximum Rate.
"Remarketing Agent" means, initially, Everen Securities, Inc., and any
successor Remarketing Agent appointed pursuant to the Indenture.
"Six Month Interest Rate" means (a) the rate of interest per annum
determined by the Remarketing Agent, on the Interest Rate Determination Date
immediately preceding the applicable Interest Rate Adjustment Date, to be the
interest rate necessary during the Interest Rate Period commencing on the
applicable Interest Rate Adjustment Date and ending on the March 31 or September
30 nearest to but not later than the date which is six months from the Interest
Rate Adjustment Date, in the judgment of the Remarketing Agent (taking into
consideration current transactions and comparable securities with which the
Remarketing Agent is involved or of which it is aware and prevailing financial
market conditions) to produce as nearly as practical a par bid for the Bonds on
the Interest Rate Determination Date or (b) in the event that the Remarketing
Agent has been removed or has resigned and no successor has been appointed, or
the Remarketing Agent has failed to determine the Six Month Interest Rate for
whatever reason, or the Six Month Interest Rate cannot be determined pursuant to
clause (a) for whatever reason, the interest rate then in effect with respect to
the Bonds, without adjustment; provided that in no event shall the Six Month
Interest Rate exceed the Maximum Rate.
"Three Month Interest Rate" means (a) the rate of interest per annum
determined by the Remarketing Agent, on the Interest Rate Determination Date
immediately preceding the applicable Interest Rate Adjustment Date, to be the
interest rate necessary during the Interest Rate Period commencing on the
applicable Interest Rate Adjustment Date to and including the day preceding the
first Business Day of the January, April, July or October, nearest to but not
later than the date which is three months from the Interest Rate Adjustment
Date, in the judgment of the Remarketing
-8-
B-1
Agent (taking into consideration current transactions and comparable securities
with which the Remarketing Agent is involved or of which it is aware and
prevailing financial market conditions) to produce as nearly as practical a par
bid for the Bonds on the Interest Rate Determination Date or (b) in the event
that the Remarketing Agent has been removed or has resigned and no successor has
been appointed, or the Remarketing Agent has failed to determine the Three Month
Interest Rate for whatever reason, or the Three Month Interest Rate cannot be
determined pursuant to clause (a) for whatever reason, the interest rate then in
effect with respect to the Bonds, without adjustment; provided that in no event
shall the Three Month Interest Rate exceed the Maximum Rate.
"Weekly Interest Rate" means (a) the rate of interest per annum determined
by the Remarketing Agent, on the Interest Rate Determination Date immediately
preceding the applicable Interest Rate Adjustment Date, to be the interest rate
necessary during the Interest Rate Period of one week (or less in the case of
any such Interest Rate Period commencing on an Interest Period Reset Date which
is not a Thursday, or ending on the day preceding an Interest Period Reset Date)
commencing on the applicable Interest Rate Adjustment Date, in the judgment of
the Remarketing Agent (taking into consideration current transactions and
comparable securities with which the Remarketing Agent is involved or of which
it is aware and prevailing financial market conditions) to produce as nearly as
practical a par bid for the Bonds on the Interest Rate Determination Date or (b)
in the event that the Remarketing Agent has been removed or has resigned and no
successor has been appointed, or the Remarketing Agent has failed to determine
the Weekly Interest Rate for whatever reason, or the Weekly Interest Rate cannot
be determined pursuant to clause (a) for whatever reason, the interest rate then
in effect with respect to the Bonds, without adjustment; provided that in no
event shall the Weekly Interest Rate exceed the Maximum Rate.
TENDER OPTION
A.1. TENDER OPTION WHILE BONDS BEAR INTEREST IN AN INTEREST RATE MODE OTHER
THAN THE WEEKLY INTEREST RATE. While the Bonds bear interest at the One Month
Interest Rate, the Three Month Interest Rate, the Six Month Interest Rate, the
One Year Interest Rate or the Five Year Interest Rate, on each Interest Rate
Adjustment Date (each a "Bond Purchase Date"), each Holder or Beneficial Owner,
as applicable, shall have the option to tender for purchase, at 100% of the
principal amount thereof, all of the Bonds owned by such Holder (or all
Beneficial Ownership Interests owned by such Beneficial Owner), or such lesser
principal amount thereof (in denominations of $5,000 or any integral multiple
thereof, provided that such Holder or Beneficial Owner tenders $100,000 or more
in principal amount and provided that the untendered portion of any Bond or
Beneficial Ownership Interest shall be $100,000 or more in principal amount) as
such Holder or Beneficial Owner may specify in accordance with the terms,
conditions and limitations hereinafter set forth. The purchase price for each
such Bond or Beneficial Ownership Interest shall be payable in lawful money of
the United States of America, shall equal the principal amount, or such portion
thereof, to be purchased and shall be paid in full on the applicable Bond
Purchase Date.
A.2. TENDER OPTION WHILE BONDS BEAR INTEREST AT THE WEEKLY INTEREST RATE.
While the Bonds bear interest at the Weekly Interest Rate, each Holder or
Beneficial Owner, as applicable, has the option to tender for purchase, at 100%
of the principal amount thereof plus accrued interest to the purchase date (a
"Bond Purchase Date"), all of the Bonds owned by such Holder (or all Beneficial
Ownership Interests owned by such Beneficial Owner), or such lesser principal
amount thereof (in denominations of $5,000 or any integral multiple thereof,
provided that such Holder or Beneficial Owner tenders $100,000 or more in
principal amount and provided that the untendered portion of any Bond or
Beneficial Ownership Interest shall be $100,000 or more in principal amount) as
such Holder or Beneficial Owner may specify in accordance with the terms,
conditions and limitations hereafter set forth. The purchase price for each such
Bond or Beneficial
-9-
B-1
Ownership Interest shall be payable in lawful money of the United States of
America and shall be paid in full on the applicable Bond Purchase Date.
To exercise the option granted in paragraph A.1. above, the Holder or
Beneficial Owner, as applicable, shall (1) no earlier than 15 days prior to the
Bond Purchase Date and no later than 11:00 a.m. according to the local time at
the principal corporate trust office of the Registrar on the eighth Business Day
prior to the Bond Purchase Date, unless the Bonds bear interest at the One Month
Interest Rate, then on the fifth Business Day prior to the Bond Purchase Date,
give notice to the Registrar by telecopy or in writing which states (i) the name
and address of the Holder or Beneficial Owner, as applicable, (ii) the principal
amount, CUSIP number and bond numbers of the Bonds or Beneficial Ownership
Interests to be purchased, (iii) that such Bonds or Beneficial Ownership
Interests are to be purchased on such Bond Purchase Date pursuant to the terms
of the Indenture, and (iv) that such notice is irrevocable; (2) in the case of a
Beneficial Owner, provide the Registrar with evidence satisfactory to the
Registrar of such Beneficial Owner's Beneficial Ownership Interest; (3) in the
case of a Holder, no later than 10:00 a.m. according to the local time at the
principal corporate trust office of the Registrar on the seventh day preceding
such Bond Purchase Date, or the next preceding Business Day if such seventh day
is not a Business Day, unless the Bonds bear interest at the One Month Interest
Rate, then on the fourth day preceding such Bond Purchase Date, or the next
preceding Business Day if such fourth day is not a Business Day, deliver to the
principal corporate trust office of the Registrar the Bonds to be purchased in
proper form, accompanied by fully completed and executed Instructions to Sell,
the form of which is printed hereon; and (4) in the case of a Beneficial Owner,
no later than 10:00 a.m. (according to the local time at the principal corporate
trust office of the Registrar) on the Bond Purchase Date, cause the transfer of
the Beneficial Owner's Beneficial Ownership on the records of the Depository.
To exercise the option granted in paragraph A.2. above, the Holder or
Beneficial Owner, as applicable, shall (1) give notice to the Registrar by
telecopy or in writing, which states (i) the name and address of the Holder or
Beneficial Owner, (ii) the principal amount, CUSIP number and Bond numbers of
the Bonds or Beneficial Ownership Interests to be purchased, (iii) the date on
which such Bonds or Beneficial Ownership Interests are to be purchased, which
Bond Purchase Date shall be a Business Day not prior to the seventh day and not
later than the fifteenth day next succeeding the date of giving of such notice
to the Registrar and, if the interest rate on the Bonds is to be converted from
the Weekly Interest Rate to a new Interest Rate Mode, is a date no later than
the Interest Period Reset Date with respect to the new Interest Rate Mode, and
(iv) that such notice is irrevocable; (2) in the case of a Beneficial Owner,
provide the Trustee with evidence satisfactory to the Registrar of such
Beneficial Owner's Beneficial Ownership Interest; (3) in the case of a Holder,
no later than 10:00 a.m. according to the local time at the principal corporate
trust office of the Registrar on the second Business Day immediately preceding
the applicable Bond Purchase Date, deliver to the principal corporate trust
office of the Registrar the Bonds to be purchased in proper form, accompanied by
fully completed and executed Instructions to Sell; and (4) in the case of a
Beneficial Owner, no later than 10:00 a.m. (according to the local time at the
principal corporate trust office of the Registrar) on the Bond Purchase Date
cause the transfer of the Beneficial Owner's Beneficial Ownership on the records
of the Depository. In the case of a Bond or Beneficial Ownership Interest or
portion thereof to be purchased prior to an Interest Payment Date and after the
Record Date in respect thereof, the Holder or Beneficial Owner, as applicable,
shall deliver a due-bill check, in form satisfactory to the Registrar, for
interest due on such Interest Payment Date.
Any Bonds not delivered by Holders following the giving of notice of tender
shall nevertheless be deemed tendered for remarketing. Subject to the right of
such nondelivering Holders to receive the purchase price of such Bonds and
accrued interest to the Bond Purchase Date, such Bonds shall be null and void,
and the Trustee shall cause to be authenticated and
-10-
B-1
delivered new Bonds in replacement thereof pursuant to the remarketing of such
Bonds. After the giving of a notice of tender Beneficial Owners shall be
obligated to transfer their Beneficial Ownership Interests on the records of the
Depository in accordance with the instructions of the Registrar.
The tender options granted to the Holders or Beneficial Owners and all
mandatory tenders of Bonds or Beneficial Ownership Interests are subject to the
additional condition that any tendered Bonds or Beneficial Ownership Interests
(or the applicable portions thereof) will not be purchased if such Bonds (or
applicable portions thereof) mature or are redeemed on or prior to the
applicable Bond Purchase Date.
MANDATORY TENDER
(a) If at any time the Issuer at the direction of the Borrower shall
convert the interest rate on the Bonds to a different Interest Rate Mode, on the
Interest Period Reset Date upon which such conversion is effective, all Bonds
and Beneficial Ownership Interests shall be subject to mandatory tender by the
Holders or Beneficial Owners thereof for purchase on the Interest Period Reset
Date (a "Bond Purchase Date") at the applicable purchase price provided for
above. Notwithstanding such mandatory tender, any Holder or Beneficial Owner
may elect to retain his or her Bonds or Beneficial Ownership Interests by
delivering to the Registrar a written notice no later than 11:00 a.m. according
to the local time at the principal corporate trust office of the Registrar on
the eighth Business Day prior to such Interest Period Reset Date or by 11:00
a.m. according to the local time at the principal corporate trust office of the
Registrar on the fifth Business Day prior to such Interest Period Reset Date if
the Interest Rate Mode is to be converted to the One Month Interest Rate, which
notice shall state that (a) such Holder or Beneficial Owner realizes that the
Bonds or Beneficial Ownership Interests are being converted to bear interest at
the applicable Interest Rate Mode, (b) unless the interest rate on the Bonds is
being converted to the Weekly Interest Rate, such Holder or Beneficial Owner
realizes that the next Bond Purchase Date upon which the Bonds or Beneficial
Ownership Interests may be tendered for purchase is the next Interest Rate
Adjustment Date or, if such Bonds are being converted to the Fixed Interest
Rate, that such Bonds may no longer be tendered for purchase, (c) such Holder or
Beneficial Owner realizes that any securities rating on the Bonds may be
withdrawn or lowered as a result of the conversion to a different Interest Rate
Mode, and (d) such Holder or Beneficial Owner affirmatively elects to hold his
or her Bonds and receive interest at the applicable Interest Rate Mode.
Bonds or Beneficial Ownership Interests with respect to which the Registrar
shall not have received the election required by the preceding paragraph shall
be deemed to have been tendered whether or not the Holders thereof shall have
delivered such Bonds to the Registrar and without the need for further action of
the Beneficial Owners. Subject to the right of the Holders of such Bonds or
Beneficial Owners of such Beneficial Ownership Interests to receive the purchase
price of such Bonds or Beneficial Ownership Interests and to receive interest
accrued thereon to the Interest Period Reset Date, such Bonds or Beneficial
Ownership Interests shall be null and void and the Trustee shall cause to be
authenticated and delivered new Bonds in replacement thereof, or new Beneficial
Ownership Interests shall be created, pursuant to the remarketing of such Bonds
or Beneficial Ownership Interests.
(b) If at any time the Borrower shall provide for the delivery to the
Trustee of an Alternate Letter of Credit in accordance with the provisions of
Section 5.09 of the Indenture, on the date that precedes the Replacement Date by
at least five Business Days (a "Bond Purchase Date"), as defined in the
Indenture, all Bonds and Beneficial Ownership Interests shall be subject to
mandatory tender by the Holders or Beneficial Owners, as the case may be,
thereof for purchase at the applicable purchase price provided for above. At
least 30 days prior to the Bond
-11-
Purchase Date the Registrar shall use its best efforts to notify the Holders of
all outstanding Bonds by telephone (to the extent their telephone numbers have
been provided in writing to the Registrar), immediately confirmed by first class
mail to all Holders, that such an Alternate Letter of Credit is to be delivered
by the Borrower to the Trustee. The notice shall advise the Holders of the
requirements of Section 5.09 of the Indenture and confirm that such requirements
have been met, and that all Bonds shall be subject to mandatory tender pursuant
to Section 2.06 of the Indenture, subject to the right of the Holders or
Beneficial Owners to affirmatively elect to waive the mandatory tender and
retain the Bonds or Beneficial Ownership Interests.
Notwithstanding such mandatory tender, any Holder or Beneficial Owner, as
applicable, may elect to retain its Bonds or Beneficial Ownership Interests by
delivering to the Registrar a written notice no later than 11:00 a.m. according
to the local time at the principal corporate trust office of the Registrar on
the eighth Business Day prior to such Replacement date which notice shall state
that (a) such Holder or Beneficial Owner realizes that the Borrower is
delivering an Alternate Letter of Credit to the Trustee pursuant to Section 5.09
of the Indenture, (b) such Holder or Beneficial Owner has received the notice
required by Section 2.06 of the Indenture, and (c) such Holder or Beneficial
Owner affirmatively elects to hold its Bonds or Beneficial Ownership Interests.
Bonds or Beneficial Ownership Interests with respect to which the Registrar
shall not have received the election required by the preceding paragraph shall
be deemed to have been tendered for purposes of Section 2.06 of the Indenture
whether or not the Holders thereof shall have delivered such Bonds to the
Registrar and without the need for further action by the Beneficial Owners.
Subject to the right of the Holders of such Bonds or Beneficial Owners of such
Beneficial Ownership Interests to receive the purchase price of such Bonds or
Beneficial Ownership Interests and interest accrued thereon to the Replacement
Date, such Bonds or Beneficial Ownership Interests shall be null and void and
the Trustee shall cause to be authenticated and delivered new Bonds in
replacement thereof or new Beneficial Ownership Interests shall be created
pursuant to the remarketing of such Bonds or Beneficial Ownership Interests or
the pledge of such Bonds or Beneficial Ownership Interests to the Bank in lieu
or remarketing such Bonds or Beneficial Ownership Interests as described in
Section 6.20 of the Indenture.
REDEMPTION
(a) MANDATORY REDEMPTION UPON A DETERMINATION OF TAXABILITY. Upon the
occurrence of a Determination of Taxability, as defined in the Indenture, with
respect to the Series 1996 A Bonds, the Bonds are subject to mandatory
redemption in whole at a redemption price equal to 100% of the outstanding
principal amount thereof, plus interest accrued to the redemption date, at the
earliest practicable date selected by the Trustee, after consultation with the
Borrower, but in no event later than 45 days following the Trustee's
notification of the Determination of Taxability. The occurrence of a
Determination of Taxability with respect to the Bonds will not constitute an
Event of Default under the Indenture. No increase in the interest payable with
respect to the Bonds will occur in the event a Determination of Taxability
occurs.
(b) MANDATORY REDEMPTION UPON EXPIRATION OF LETTER OF CREDIT. The Bonds
are subject to mandatory redemption in whole on the Interest Payment Date which
next precedes the Letter of Credit Termination Date, at a redemption price of
100% of the outstanding principal amount thereof plus accrued interest to the
redemption date unless, at least 45 days prior to any such Interest Payment
Date, (a) the Bank shall have agreed in writing to an extension or further
extension of the Letter of Credit Termination Date to a date not less earlier
than one year from the Letter of Credit Termination Date being extended or (b)
pursuant to Section 5.09 of the Indenture, the Borrower shall have obtained and
delivered to the Trustee an Alternate Letter of
-12-
B-1
Credit with a termination date not earlier than one year from the Letter of
Credit Termination Date for the Letter of Credit it replaces, in which case the
Bonds will be subject to the mandatory tender provisions set forth above.
(c) OPTIONAL REDEMPTION. Unless previously redeemed, the Bonds are
subject to redemption at the option of the Issuer, upon the written direction of
the Borrower (subject to compliance with Section 4.03 of the Indenture), (1) if
the Bonds do not bear interest at the Fixed Interest Rate, in whole or in part
(in integral multiples of $5,000, provided that the unredeemed portion of any
Bond redeemed in part shall be $100,000 or more) on any Interest Rate Adjustment
Date at the redemption price of 100% of the principal amount redeemed plus
accrued interest thereon to the redemption date, or (2) if the Bonds bear
interest at the Fixed Rate after the Fixed Interest Rate Commencement Date and
on or after the First Optional Redemption Date, in whole or in part (in integral
multiples of $5,000, provided that the unredeemed portion of any Bond redeemed
in part shall be $100,000 or more) at any time at a redemption price equal to
the following percentages of the principal amount redeemed, plus in each case
accrued interest to the date fixed for redemption:
REDEMPTION DATE OPTIONAL REDEMPTION PRICE
First Optional Redemption
Date, through the following
last day of March 103%
First Anniversary of the First
Optional Redemption Date,
through the following
last day of March 102%
Second Anniversary of the
First Optional Redemption
Date, through the following
last day of March 101%
Third Anniversary of the First
Optional Redemption Date and
thereafter 100%
"First Optional Redemption Date" means the earlier to occur of the April 1
occurring in the year which is (i) at least ten (10) full years after the Fixed
Interest Rate Commencement Date or (ii) a number of years after the Fixed
Interest Rate Commencement Date equal to the number of full years between the
Fixed Interest Rate Commencement Date and the maturity date of the Bonds,
multiplied by 1/2 and rounded up to the nearest whole number.
"Fixed Interest Rate Commencement Date" means the Interest Period Reset
Date from and after which the Bonds shall bear interest at the Fixed Interest
Rate, as that date shall be established as provided in the Indenture.
(d) EXTRAORDINARY OPTIONAL REDEMPTION. The Bonds are also subject to
redemption by the Issuer in the event of the exercise by the Borrower of its
option to direct that redemption upon occurrence of any of the events described
in Section 6.2 of the Agreement (generally, substantial damage to, or
destruction or condemnation of the Project or changes in law causing the
Agreement to become void, unenforceable or impossible of performance or the
imposition of unreasonable burdens or excessive liabilities with respect to the
Project or its operation), (1) at
-13-
B-1
any time in whole, or (2) at any time in part in the event of condemnation of
part of the Project, as provided in Section 6.2 of the Agreement, in each case
at a redemption price of 100% of the principal amount redeemed, plus interest
accrued to the redemption date.
If less than all Bonds are to be redeemed at one time, the selection of
Bonds, or portions thereof (in integral multiples of $5,000) to be redeemed
shall be made by lot by the Trustee; provided, however, Bonds (or book entry
interests in Bonds) pledged to the Bank pursuant to the Reimbursement Agreement
shall be selected for redemption prior to the selection of any other Bonds. If
Bonds or portions thereof are called for redemption and if on the redemption
date moneys for the redemption thereof are held by the Trustee, thereafter those
Bonds or portions thereof to be redeemed shall cease to bear interest, and shall
cease to be secured by, and shall not be deemed to be outstanding under, the
Indenture.
Unless waived in writing by any Holder of Bonds to be redeemed, official
notice of any such redemption shall be given by the Registrar on behalf of the
Issuer by mailing a copy of an official redemption notice by first class mail at
least 30 days and not more than 60 days prior to the date fixed for redemption
(except in the case of a redemption under Section 4.01(a) of the Indenture, in
which case such notice shall be given at least 5 days and not more than 15 days
prior to the date fixed for redemption) to the registered owner of the Bond or
Bonds to be redeemed at the address shown on the Register or at such other
address as is furnished in writing by such registered owner to the Registrar.
It is certified and recited that there have been performed and have
happened in regular and due form, as required by law, all acts and conditions
necessary to be done or performed by the Issuer or to have happened (i)
precedent to and in the issuing of the Bonds in order to make them legal, valid
and binding special obligations of the Issuer, and (ii) precedent to and in the
execution and delivery of the Indenture and the Agreement; that payment in full
for the Bonds has been received; and that the Bonds do not exceed or violate any
constitutional or statutory limitation.
IN WITNESS OF THE ABOVE, the Issuer has caused this Bond to be executed in
the name of the Issuer by the manual or facsimile signatures of its duly
authorized officers, as of the date shown above.
CITY OF GARY, INDIANA
By:
-----------------------------------
Mayor
(Seal)
Attest:
- ------------------------------------
Clerk
-14-
B-1
CERTIFICATE OF AUTHENTICATION
This Bond is one of the Bonds described in the within mentioned Indenture.
THE FIFTH THIRD BANK, as Authenticating
Agent
By:
------------------------------------
Authorized Representative
ASSIGNMENT
For value received, the undersigned sells, assigns and transfers unto
______________ _______________________________ the within Bond and irrevocably
constitutes and appoints __________________________ attorney to transfer that
Bond on the books kept for registration thereof, with full power of substitution
in the premises.
Dated:
----------------------------- -----------------------------------
Signature
Signature Guaranteed:
- -----------------------------------------
NOTICE: Signature(s) must be guaranteed NOTICE: The assignor's to this
by an eligible guarantor institution assignment must correspond with the
participating in a Securities Transfer name as it appears upon the face of
Association recognized signature guarantee the within Bond in every
program. particular, without alteration or
any change whatever.
-15-
B-1
NOTICE OF EXERCISE OF TENDER OPTION
INSTRUCTIONS TO SELL
To:
-----------------------
Attention: Corporate Trust Department
RE: City of Gary, Indiana Adjustable Rate Economic Development
Revenue Refunding Bonds, Series 1996 B (The Miller Partnership,
L.P. Project)
Gentlemen:
The undersigned, as the Holder of the Bond annexed hereto ("Bond"), hereby
elects the option available to the undersigned pursuant to the Trust Indenture
relating to the above-captioned bond issue. In accordance with such option, the
undersigned hereby tenders:
check the appropriate box / / the entire Bond
/ / (increments of $5,000 with a minimum
tender of $100,000)
for purchase on the first Bond Purchase Date (as defined in the Bond) after the
date hereof, pursuant to the referenced Trust Indenture. In accordance with
such tender, the undersigned hereby irrevocably sells, assigns and transfers
such Bond or portion thereof at the purchase price set forth in the Trust
Indenture, and does hereby irrevocably constitute and appoint the Registrar as
attorney to transfer such Bond or portion thereof on the books of the Registrar,
with full power of substitution in the premises.
Dated:
------------------------------- ---------------------------------
Signature
---------------------------------
Signature Guaranteed:
NOTICE: Signature(s) must be guaranteed
by an eligible guarantor institution
participating in a Securities Transfer
Association recognized signature
guarantee program.
NOTICE: To exercise the option available to the Holder pursuant to the
referenced Trust Indenture, the Holder must notify the Registrar of
such exercise and deliver this Bond to the Registrar at the times and
in the manner set forth in this Bond. The signature to these
Instructions to Sell must correspond with the name as written upon the
face of this Bond in every particular, without alteration or
enlargement, or any change whatsoever.
3053952.3
05-04-96
REIMBURSEMENT AGREEMENT
THIS REIMBURSEMENT AGREEMENT, dated as of March 1, 1996 (the "Reimbursement
Agreement"), by and among THE MILLER PARTNERSHIP, L.P., an Illinois limited
partnership ("Miller"), CENTERPOINT PROPERTIES CORPORATION, a Maryland
corporation ("CenterPoint", and collectively with Miller, the "Obligors"), and
THE ROYAL BANK OF SCOTLAND plc, acting through its New York Branch (the "Bank");
W I T N E S S E T H:
WHEREAS, the City of Gary, Indiana, a municipal corporation duly organized
and validly existing under the laws of the State of Indiana (the "Issuer"),
proposes to issue its tax exempt Adjustable Rate Economic Development Revenue
Refunding Bonds, Series 1996 A (The Miller Partnership, L.P. Project) in the
aggregate principal amount of $20,540,000 (the "Series 1996 A Bonds") and its
Taxable Adjustable Rate Economic Development Revenue Refunding Bonds, Series
1996 B (The Miller Partnership, L.P. Project) in the aggregate principal amount
of $1,680,000 (the "Series 1996 B Bonds" and collectively with the Series 1996 A
Bonds the "Series 1996 Bonds") pursuant to a Trust Indenture dated as of
March 1, 1996 (said Trust Indenture, together with any indentures supplemental
thereto are referred to collectively herein as the "Indenture"), by and between
the Issuer and Fifth Third Bank of Central Indiana, as Trustee; and
WHEREAS, the Series 1996 Bonds are being issued in order to obtain funds to
lend to Miller, pursuant to a Loan Agreement dated as of March 1, 1996 (said
Loan Agreement, as supplemented and amended from time to time, is referred to
herein as the "Loan Agreement"), between the Issuer and Miller for the purpose
of refunding the Issuer's outstanding Economic Development Revenue Bonds, Series
1991 A (The Miller Partnership L.P. Project)(the "Series 1991 A Bonds"), Taxable
Economic Development Revenue Bonds, Series 1991 B (The Miller Partnership L.P.
Project) (the "Series 1991 B Bonds", and collectively with the Series 1991 A
Bonds, the "Series 1991 Bonds"), Economic Development Revenue Bonds, Series 1993
A (The Miller Partnership L.P. Project)(the "Series 1993 A Bonds"), and Taxable
Economic Development Revenue Bonds, Series 1993 B (The Miller Partnership L.P.
Project) (the "Series 1993 B Bonds", and collectively with the Series 1993 A
Bonds, the "Series 1993 Bonds") (the Series 1991 Bonds and the Series 1993 Bonds
are referred to collectively herein as the "Prior Bonds"); and
WHEREAS, in order to support the payment when due of the principal of and
interest on the Series 1996 Bonds (with interest calculated at an assumed rate
of 12% per annum, based on a year of 360 days, for a 56 day period), the
Obligors have requested that the Bank issue its irrevocable direct pay
transferable letter of credit in the form of Annex I hereto (said Letter of
Credit, and any letter of credit or letters of credit hereinafter issued by the
Bank in substitution therefor or replacement thereof are hereinafter referred to
as the "Letter of Credit"), in favor of the Trustee, in the initial stated
amount of $22,634,774, of which initial stated amount, up to
$22,220,000 in the aggregate may be drawn upon in respect of principal of the
Series 1996 Bonds, and $414,774 may be drawn upon in respect of interest on the
Series 1996 Bonds; and
WHEREAS, CenterPoint is the sole general partner of Miller, and will
realize a direct financial benefit from the issuance by the Bank of the Letter
of Credit;
NOW, THEREFORE, in consideration of the premises and in order to induce
the Bank to issue the Letter of Credit, the Obligors and the Bank hereby agree
as follows:
Section l. CERTAIN DEFINED TERMS. As used in this Agreement and unless
otherwise expressly indicated, or unless the context clearly requires otherwise,
the following terms shall have the following meanings (such meaning to be
equally applicable to both the singular and plural forms of the terms defined):
"Affiliate" means, as to any Person, (i) any other Person that directly or
indirectly through one or more intermediaries controls is controlled by or is
under common control with, such Person, or (ii) any trade or business (whether
or not incorporated) which is a member of a group of which such Person is a
member and which is under common control.
"Agreement" means this Reimbursement Agreement, as the same may be from
time to time supplemented, modified and amended from time to time hereafter.
"Applicable Law" means (i) all applicable provisions of all constitutions,
statutes, rules, regulations and orders of all governmental bodies, including,
without limitation, any statute, rule, regulation or order pertaining to
environmental, health and safety matters or to the Employee Retirement Income
Security Act of 1974 (as amended from time to time) and any other welfare or
other employee benefit or fringe benefit plan, program or arrangement, (ii) all
Governmental Approvals and (iii) all orders, judgments and decrees of all courts
and arbitrators.
"Authorized Denominations" has the meaning assigned to that term in the
Indenture.
"Bank" means The Royal Bank of Scotland plc, acting through its New York
Branch.
"Bondholder" has the meaning assigned to that term in the Indenture.
"Bond Purchase Draft" means a demand for payment under the Letter of Credit
accompanied by a completed and executed document in the form of Annex C thereto.
"Bonds" means the Series 1996 Bonds.
"Bond Purchase Agreement" means the Bond Purchase Agreement dated as of
March ___, 1996, by and among the Issuer, Miller and the Underwriter.
"Business Day" means any day other than (i) a Saturday, Sunday, (ii) a day
on which commercial banks in New York, New York or Chicago, Illinois, or the
city or cities in which are
- 2 -
located the principal corporate trust office of the Trustee and the office of
the Bank at which demands for payment under the Letter of Credit are to be
presented, are authorized by law to close, or (iii) a day on which the New York
Stock Exchange is closed.
"Capitalized Lease" means the lease of any property (real, personal or
mixed) which, in accordance with GAAP, should be capitalized on the lessee's
balance sheet or for which the amount of the asset and liability thereunder, if
so capitalized, should be disclosed in a note to such balance sheet.
"CenterPoint" means CenterPoint Properties Corporation, a Maryland
corporation.
"Date of Issuance" means April 1, 1996.
"Debt" of any Person means at any date, without duplication, (i) all
obligations of such Person for borrowed money, (ii) all obligations of such
Person evidenced by bonds, debentures, notes or other similar instruments,
(iii) all obligations of such Person to pay the deferred purchase price of
property or services, except trade accounts payable arising in the ordinary
course of business, (iv) all obligations of such Person as lessee under
Capitalized Leases, (v) all obligations referred to in the foregoing clauses
(i) to (iv) of others secured by a Lien on any asset of such Person, whether or
not any such obligation is assumed by such Person, and (vi) all obligations
referred to in the foregoing clauses (i) to (iv) of others Guaranteed by such
Person.
"Default" means any event or condition which with the giving of notice or
the lapse of time or both would, unless cured or waived, become an Event of
Default.
"Environmental Laws" has the meaning assigned to that term in Section 5(o)
of this Agreement.
"Event of Default" has the meaning assigned to that term in Section 7 of
this Agreement.
"Final Draft" means a draft for payment under the Letter of Credit
accompanied by a completed and executed document in the form of Annex D thereto.
"GAAP" means the generally accepted accounting principles applied in the
preparation of the audited financial statements of CenterPoint at December 31,
1994, with such changes thereto as (i) shall be consistent with the
then-effective principles promulgated or adopted by the Financial Accounting
Standards Board and its predecessors and successors and (ii) shall be concurred
in by the independent certified public accountants of recognized standing
certifying any financial statements of CenterPoint.
"Governmental Approval" means an authorization, permit, consent, approval,
license or exemption from, registration or filing with, or report to, any
governmental or regulatory unit.
- 3 -
"Hazardous Materials" has the meaning assigned to that term in Section 5(o)
of this Agreement.
"Indemnity Agreement" means the Indemnity Agreement dated as of March 1,
1996, from the Obligors to the Bank, relating to the Project and the
Supplemental Property.
"Indenture" has the meaning assigned to that term in the first recital
clause of this Agreement.
"Interest Draft" means a demand for payment under the Letter of Credit
accompanied by a completed and executed document in the form of Annex A thereto.
"Issuer" has the meaning assigned to that term in the first recital clause
of this Agreement.
"LaSalle" means LaSalle National Bank, a national banking association.
"Letter of Credit" means the Irrevocable Letter of Credit No. LCA
02229600417NY in the initial stated amount of $22,634,774 dated April 1, 1996,
in the form of Annex I hereto, and any substitute letter of credit therefor of
the Bank issued from time to time hereafter.
"Lien" means, with respect to any asset, any mortgage, lien, pledge,
charge, security interest or encumbrance of any kind in respect of such asset.
For the purposes of this Agreement, the Obligors or any of their respective
partners or their affiliates shall be deemed to own subject to a Lien any asset
which it has acquired or holds subject to the interest of a vendor or lessor
under any conditional sale agreement, Capitalized Lease or other title retention
agreement relating to such asset.
"Loan Agreement" has the meaning assigned to that term in the second
recital clause of this Agreement.
"Miller" means The Miller Partnership, L.P., an Illinois limited
partnership.
"Moody's" means Moody's Investor Services, a Delaware corporation, and its
successors and assigns.
"Mortgaged Property" means, collectively, the property conveyed or upon
which a lien in favor of the Bank is granted pursuant to any of the Related
Documents.
"Notes" has the meaning assigned to that term in the Indenture.
"Obligor" means, individually, Miller or CenterPoint.
"Obligors" means, collectively, Miller and CenterPoint.
- 4 -
"Official Statement" means the Official Statement dated March 29, 1996
relating to the issuance of the Bonds, including any amendments or any
supplement thereto and any documents incorporated therein by reference.
"Outstanding" has the meaning assigned to that term in the Indenture.
"Participation Agreement" means the Participation Agreement dated as of
March 1, 1996, between the Bank and LaSalle.
"Permitted Encumbrances" with respect to the Project has the meaning
assigned to that term in the Project Mortgage, and with respect to the
Supplemental Property has the meaning assigned to that term in the Supplemental
Property Mortgage.
"Person" means an individual, a corporation, a partnership, an association,
a trust or any other entity or organization, including a government or political
subdivision or an agency or instrumentality thereof.
"Pledged Bonds" has the meaning assigned to that term in the Section 2(d)
of this Agreement.
"Preliminary Official Statement" means the Preliminary Official Statement
dated March __, 1996 relating to the issuance of the Bonds, including any
amendments or any supplement thereto and any documents incorporated therein by
reference.
"Prime Rate" has the meaning assigned to that term in Section 2(a) of this
Agreement.
"Principal Draft" means a demand for payment under the Letter of Credit
accompanied by a completed and executed document in the form of Annex B thereto.
"Prior Bonds" means, collectively, the Series 1991 Bonds and the Series
1993 Bonds.
"Prior Borrower" means The Miller Partnership L.P., an Illinois limited
partnership.
"Prior Loan Agreement" means the Loan Agreement, Mortgage, Security
Agreement, Assignment of Rents and Leases and Financing Statement dated as of
April 1, 1991, by and among the Prior Borrower, the Issuer and the Bank, as
amended, relating to the Prior Bonds.
"Prior Reimbursement Agreement" means the Reimbursement Agreement dated as
of April 1, 1991, as amended, between the Prior Borrower and the Bank.
"Project" means a 14-building, 682 unit multi-family housing project,
located at 415 North Lake Street, in the City of Gary, Indiana, which is located
on the Project Site.
"Project Assignment of Rents" means the Assignment of Rents and Leases
dated as of March 1, 1996, from Miller to the Bank, relating to the Project.
- 5 -
"Project Mortgage" means the Mortgage and Security Agreement dated as of
March 1, 1996, from Miller to the Bank relating to the Project.
"Project Site" means the real estate described in Exhibit A hereto.
"Reimbursement Agreement" means this Reimbursement Agreement dated as of
March 1, 1996, as supplemented, modified and amended from time to time
hereafter.
"Reimbursement Documents" means the Letter of Credit, this Reimbursement
Agreement, the Project Mortgage, the Project Assignment of Rents, the
Supplemental Property Mortgage, the Supplemental Property Assignment of Rents,
the Indemnity Agreement and any other agreement, certificate or instrument
relating thereto or from time to time evidencing or securing the obligations of
the Obligors hereunder.
"Related Documents" means the Bonds, the Notes, the Indenture, the Loan
Agreement, the Bond Purchase Agreement, the Official Statement, the Remarketing
Agreement, the Tax Regulatory Agreement, the Reimbursement Documents and any
other agreement, certificate or instrument relating thereto.
"Remarketing Agent" means Everen Securities, Inc., and Gates Capital
Corporation, and any successor remarketing agent appointed in accordance with
the provisions of the Indenture and/or the Remarketing Agreement.
"Remarketing Agreement" means the Remarketing Agreement dated April 1,
1996, by and among Miller, Everen Securities, Inc. and Gates Capital
Corporation.
"Series 1991 A Bonds" has the meaning assigned to that term in the second
recital clause hereof.
"Series 1991 B Bonds" has the meaning assigned to that term in the second
recital clause hereof.
"Series 1991 Bonds" means, collectively, the Series 1991 A Bonds and the
Series 1991 B Bonds.
"Series 1993 A Bonds" has the meaning assigned to that term in the second
recital clause hereof.
"Series 1993 B Bonds" has the meaning assigned to that term in the second
recital clause hereof.
"Series 1993 Bonds" means, collectively, the Series 1993 A Bonds and the
Series 1993 B Bonds.
- 6 -
"Stated Amount" means, at any time, the aggregate amount that at such time
may be demanded under the Letter of Credit, subject to increase (reinstatement)
or reduction as provided therein.
"Stated Expiration Date" has the meaning assigned to that term in Section
3(a) of this Agreement.
"Supplemental Property" means the real estate described in Exhibit B
hereto, and all improvements now and hereafter thereon, and all other property,
rights and interests described in the granting clauses of the Supplemental
Property Mortgage.
"Supplemental Property Assignment of Rents" means the Assignment of Rents
and Leases dated as of March 1, 1996, from CenterPoint to the Bank, relating to
the Supplemental Property.
"Supplemental Property Mortgage" means the Mortgage and Security Agreement
dated as March 1, 1996, from CenterPoint to the Bank, relating to the
Supplemental Property.
"Tax Agreement" means the Tax Regulatory Agreement dated as of March 1,
1996, by and between the Issuer and Miller.
"Termination Date" has the meaning assigned to that term in Section 2(b) of
this Agreement.
"Title Company" means Chicago Title Insurance Company.
"Trustee" means NBD Bank, N.A., and any successor trustee under the
Indenture.
"Underwriter" means Everen Securities, Inc.
Section 2. REIMBURSEMENT AND OTHER PAYMENTS.
(a) REIMBURSEMENT. The Obligors, jointly and severally agree to pay to
the Bank (i) without demand, on or prior to the date that is five (5) days after
the date any amount is drawn under the Letter of Credit a sum equal to the
amount so drawn (plus interest on such amount from the date of drawing of such
amount under the Letter of Credit until payment has been made in full at the
rate provided in clause (iii) below); (ii) on demand any and all reasonable
charges and expenses which the Bank may pay or incur relative to the Letter of
Credit; and (iii) interest on any and all amounts unpaid by the Obligors when
due under this Agreement from the date such amounts become payable until payment
has been made in full, such interest shall be payable on demand, at a
fluctuating interest rate per annum equal to 2.0% plus the rate of interest
announced by the Bank in New York, New York from time to time as its prime rate
(the "Prime Rate"), such rate of interest to change on the effective date of any
change in such Prime Rate.
(b) COMMISSIONS AND FEES. On or before the Date of Issuance, and as a
condition precedent to the issuance of the Letter of Credit, the Obligors shall
pay to the Bank a one time
- 7 -
commitment fee equal to $67,905, and no portion of such fee shall be refundable
under any circumstances. The Obligors jointly and severally agree that they
will pay to the Bank (i) an annual fee, computed at the rate of 1.35% per annum
on the Stated Amount from time to time available to be drawn under the Letter of
Credit (plus the amount of any Interest Draft which is automatically
reinstatable under the Letter of Credit but which has not been reinstated, plus
the amount of any Bond Purchase Draft which is reinstatable under the Letter of
Credit but which has not been reinstated), from and including the Date of
Issuance (of the Letter of Credit) until the last day a drawing is available
under the Letter of Credit (the "Termination Date"), payable quarterly in
advance and calculated on the basis of the Stated Amount available to be drawn
(plus the amount of any Interest Draft which is automatically reinstatible but
which has not been reinstated, plus the amount of any Bond Purchase Draft which
is reinstatable under the Letter of Credit but which has not been reinstated) on
the date payment is due, commencing on July 15, 1996, and on each October 15,
January 15, April 15, and July 15, thereafter (or the next succeeding Business
Day if any such day is not a Business Day); provided, however, that the Bank and
the Obligors acknowledge and agree that the per annum fee for the period
commencing on the Date of Issuance and ending on July 15, 1996, shall be paid in
advance on the Date of Issuance, (ii) a drawing fee of $250 upon each date of
payment of any Principal Draft, a drawing fee of $100 upon each date of payment
of any Interest Draft and a drawing fee of $1,000 upon the date of payment of
any Bond Purchase Draft or Final Draft, and (iii) a sum equal to $1,000 upon
each transfer to a successor trustee of the Letter of Credit in accordance with
its terms. Annual Fees shall be deemed earned in full on the quarterly payment
date when due and no portion thereof shall be refundable upon redemption of the
Bonds, or otherwise.
(c) INCREASED COSTS. If the Bank reasonably determines that the
introduction of, change in, or change in the interpretation or application of,
any law, rule, regulation, directive or request by any court or administrative
or governmental authority charged with the administration thereof (whether or
not having the force of law) shall either (i) impose, modify or deem applicable
any taxation, reserve, assessment, special deposit or other requirement (other
than any income taxation requirement imposed, modified or deemed applicable by
any court, administrative or governmental authority of the United Kingdom or any
political subdivision thereof) with respect to letters of credit issued by, or
with respect to any other extension of credit by, or assets held by, or deposits
in or other liabilities for the account of, the Bank or (ii) impose on the Bank
any other condition regarding this Agreement, its Letter of Credit, or any
collateral therefor, or any of the transactions in the preceding clause (i) or
(ii), or (iii) affect the amount of any deduction that the Bank may take for
purposes of federal, state or local income taxes (other than any income taxes
imposed or deemed applicable by any court, administrative or governmental
authority of the United Kingdom or any political subdivision thereof) in respect
of the cost, including, but not limited to, interest, costs of maintaining its
Letter of Credit or the reimbursement obligations of the Obligors hereunder, and
the result of any event referred to in clause (i), (ii) or (iii) above shall be
to increase the cost, or diminish the anticipated return, to the Bank of issuing
or maintaining its Letter of Credit or the reimbursement obligations of the
Obligors hereunder, or reduce the amounts receivable by the Bank hereunder or
thereunder (which increase in cost, diminution in return or reduction of
amounts, shall be determined by the Bank's reasonable allocation of the
aggregate of such costs, increases, diminution in return, or reductions
resulting from such event) or reduce the rate of return on all or any part of
the Bank's capital as described in the next
- 8 -
succeeding sentence, then, upon demand by the Bank, the Obligors will pay to the
Bank on demand from time to time as specified by the Bank additional amounts
which shall be sufficient to compensate the Bank on an adjusted after-tax basis
for such increased cost, diminution in return, reduction or loss of
profitability from the date of compliance with such event together with interest
on such amount from the date demanded until payment in full at the rate set
forth in clause (iii) of Section 2(a) above. If after the date hereof, the Bank
reasonably determines that the introduction of, implementation of, change in, or
change in the interpretation or application of, any law, rule, regulation,
guideline or directive (whether or not having the force of law) by any
governmental authority, central bank or other comparable agency charged with the
interpretation or administration thereof, imposes, modifies or deems applicable
any capital adequacy or similar requirement (including without limitation a
request or requirement which affects the manner in which the Bank allocates
capital resources to its commitments, including its obligations hereunder) and
as a result thereof, in the reasonable discretion of the Bank, the rate of
return on the Bank's capital as a consequence of its obligations hereunder is
reduced to a level below that which the Bank could have achieved but for such
circumstances, then, upon demand by the Bank, the Obligors shall pay to the
Bank, in the manner described in the preceding sentence, such additional amount
as will compensate the Bank for such reduction in rate of return. A certificate
setting forth such increased cost, diminution in return, or reduction of amounts
or in rate of return incurred by the Bank as a result of any event mentioned
above and giving a reasonable explanation thereof, submitted by the Bank to the
Obligors (absent manifest error), shall be conclusive and binding for all
purposes. The provisions of this Section 2(c) shall survive termination of this
Agreement.
(d) PLEDGE OF BONDS. As security for the payment of the obligations of
the Obligors pursuant to Section 2(a), Miller hereby pledges, assigns,
hypothecates, transfers and delivers to the Bank all its right, title and
interest to, and hereby grants to the Bank a first lien on, and security
interest in, all of its right, title and interest in and to Bonds delivered to
the Bank or held by the Trustee for the benefit of the Bank and in Beneficial
Ownership Interests (as defined in the Indenture) and/or registered in the name
of the Bank by the Depository or a Direct Participant (each as defined in the
Indenture) in connection with Bond Purchase Drawings under the Letter of Credit
for the purchase of Bonds that are not remarketed, (herein called "Pledged
Bonds"), and the interest thereon and all proceeds thereof. This Agreement
shall constitute a security agreement under the provisions of the Uniform
Commercial Code of the State of Illinois (the "UCC") from Miller as debtor to
the Bank as secured party.
(e) PAYMENTS ON THE PLEDGED BONDS. If, while this Agreement is in effect,
Miller shall become entitled to receive or shall receive any payment in respect
of the Pledged Bonds, Miller agrees to accept the same as the Bank's agent and
to hold the same in trust on behalf of the Bank and to deliver the same
forthwith to the Bank. All sums of money so paid in respect of the Pledged
Bonds which are received by Miller, and paid to the Bank shall be credited
against the obligation of the Obligors to pay the Bank set forth in Section 2(a)
of this Agreement.
(f) RELEASE OF PLEDGED BONDS. Upon reimbursement of any drawing described
in Section 2(d) above in accordance with clause (i) of Section 2(a) above,
together with accrued interest to the date of such payment on the amount to be
paid, the outstanding obligations of the
- 9 -
Obligors under Section 2(a) above shall be reduced by the amount of such
payment, interest shall cease to accrue on the amount paid and the Bank shall
release to Miller from the pledge hereunder, a principal amount of Pledged Bonds
(but only in Authorized Denominations) held hereunder corresponding and equal to
the principal amount of such Pledged Bonds included in the drawings reimbursed
by such payment.
(g) RIGHTS OF THE BANK CONCERNING PLEDGED BONDS. The Bank shall not be
liable for failure to collect or realize upon the obligations of the Obligors
hereunder or any collateral security or guarantee therefor, or any part thereof,
or for any delay in so doing, nor shall it be under any obligation to take any
action whatsoever with regard thereto. If an Event of Default has occurred and
is continuing, the Bank may thereafter, without notice, exercise all rights,
privileges or options pertaining to any Pledged Bonds as if it were the absolute
owner thereof, upon such terms and conditions as it may determine, all without
liability except to account for property actually received by it, but the Bank
shall have no duty to exercise any of the aforesaid rights, privileges or
options and shall not be responsible for any failure to do so or delay in doing
so.
(h) REMEDIES IN RESPECT OF PLEDGED BONDS. In the event that any portion
of the obligations of the Obligors hereunder become due and payable, the Bank,
without demand of performance or other demand, advertisement or notice of any
kind (except the notice specified below of time and place of public or private
sale) to or upon Miller or any other Person (all and each of which demands,
advertisements and/or notices are hereby expressly waived), may forthwith
collect, receive, appropriate and realize upon the Pledged Bonds, or any part
thereof, and/or may forthwith sell, assign, give option or options to purchase,
contract to sell or otherwise dispose of and deliver the Pledged Bonds, or any
pert thereof, in one or more parcels at public or private sale or sales, at any
exchange, broker's board or at any of the Bank's offices or elsewhere upon such
terms and conditions as it may deem advisable and at such prices as it may deem
best, for cash or on credit or for future delivery without assumption of any
credit risk, with the right of the Bank upon any such sale or sales, public or
private, to purchase the whole or any part of said collateral so sold, free of
any right or equity of redemption in Miller, which right or equity is hereby
expressly waived or released. The Bank shall pay over the net proceeds of any
such obligation, recovery, receipt, appropriation, realization or sale, after
deducting all reasonable costs and expenses of every kind incurred therein or
incidental to the care, safekeeping or otherwise of any and all of the Pledged
Bonds or in any way relating to the rights of the Bank hereunder, including
reasonable attorney's fees and legal expenses, and the payment in whole or in
part of the obligations of the Obligors hereunder in such order as the Bank may
elect, the Obligors remaining liable for any deficiency remaining unpaid after
such application, and only after so paying over such net proceeds and after the
payment by the Bank of any other amount required by any provision of law,
including, without limitation, Section 9-504(l)(c) of the Uniform Commercial
Code, need the Bank account for the surplus, if any, to Miller. Miller agrees
that the Bank shall give at least 10 days' notice of the time and place of any
public sale or of the time after which a private sale or other intended
disposition is to take place and that such notice is reasonable notification of
such matters. No notification need be given to Miller if it has signed after
default a statement renouncing or modifying any right to notification of sale or
other intended disposition. In addition to the other rights and remedies
granted to it in this Agreement and in any
- 10 -
other instrument or agreement securing, evidencing or relating to any of the
obligations of the Obligors hereunder, the Bank shall have all the rights and
remedies of a secured party under the UCC. The Obligors further agree to waive
and agree not to assert any rights or privileges which it may acquire under
Section 9-112 of the UCC and the Obligors shall be liable for the deficiency if
the proceeds of any sale or other disposition of the Pledged Bonds are
insufficient to pay all amounts to which the Bank is entitled, and the
reasonable fees of any attorneys employed by the Bank to collect such
deficiency.
(i) REPRESENTATIONS, WARRANTIES AND COVENANTS CONCERNING PLEDGED BONDS.
The Obligors represent and warrant that: (a) on the date of delivery to the
Bank or the Trustee for the benefit of the Bank or the date of registration of
any Beneficial Ownership Interests in the name of the Bank of any Pledged Bonds
described herein (each a "Delivery Date"), neither the Issuer nor the Trustee
will have any right, title or interest in and to the Pledged Bonds; (b) Miller
has, and on the Delivery Date will have, full power, authority and legal right
to pledge all of its right, title and interest in and to the Pledged Bonds
pursuant to this Agreement; (c) this Agreement has been duly authorized,
executed and delivered by the Obligors and constitutes a legal, valid and
binding obligation of the Obligors enforceable in accordance with its terms; (d)
no consent of any other party (including, without limitation, any creditors of
either of the Obligors) and no consent, license, permit, approval or
authorization of, exemption by, notice or report to, or registration, filing or
declaration with, any governmental authority, domestic or foreign, is required
to be obtained by either of the Obligors in connection with the execution,
delivery or performance of this Agreement; (e) the execution, delivery and
performance of this Agreement will not violate any provision of any applicable
law or regulation or of any order, judgment, writ, award or decree of any court,
arbitrator or governmental authority, domestic or foreign, or of any securities
issued by either of the Obligors or of any mortgage, indenture, lease, contract
or other agreement, instrument or undertaking to which either of the Obligors is
a party or which purports to be binding upon either of the Obligors or upon any
of their assets and will not result in the creation or imposition of any lien,
charge or encumbrance on or security interest in any of the assets of either of
the Obligors except as contemplated by this Agreement; and (f) the pledge,
assignment and delivery of such Pledged Bonds pursuant to this Agreement will
create a valid first lien on and a first perfected security interest in, all
right, title or interest of Miller in or to such Pledged Bonds, and the proceeds
thereof, subject to no prior pledge, lien, mortgage, hypothecation, security
interest, charge, option or encumbrance or to any agreement purporting to grant
to any third party a security interest in the property or assets of Miller which
would include the Pledged Bonds. Miller covenants and agrees that it will
defend the Bank's right, title and security interest in and to the Pledged Bonds
and the proceeds thereof against the claims and demands of all Persons
whomsoever.
(j) NO DISPOSITIONS, ETC. Without the prior written consent of the Bank,
Miller agrees that it will not sell, assign, transfer, exchange or otherwise
dispose of, or grant any option with respect to, the Pledged Bonds, nor will it
create, incur or permit to exist any pledge, lien, mortgage, hypothecation,
security interest, charge, option or any other encumbrance with respect to any
of the Pledged Bonds, or any interest therein, or any proceeds thereof, except
for the lien and security interest provided for by this Agreement.
- 11 -
(k) SALE OF PLEDGED BONDS. (i) The Obligors recognize that the Bank may
be unable to effect a public sale of any or all of the Pledged Bonds by reason
of certain prohibitions contained in the Securities Act of 1933, as amended, and
applicable state securities laws, but may be compelled to resort to one or more
private sales thereof to a restricted group of purchasers who will be obligated
to agree, among other things, to acquire such securities for their own account
for investment and not with a view to the distribution or resale thereof. The
Obligors acknowledge and agree that any such private sale may result in prices
and other terms less favorable to the seller than if such sale were a public
sale and, notwithstanding such circumstances, agree that such private sale shall
be deemed to have been made in a commercially reasonable manner. The Bank shall
be under no obligation to delay a sale of any of the Pledged Bonds for the
period of time necessary to permit the Issuer to register such securities for
public sale under the Securities Act of 1933, or under applicable state
securities laws, even if the Issuer would agree to do so.
(ii) The Obligors further agree to do or cause to be done all such
other acts and things as may be necessary to make such sale or sales of any
portion or all of the Pledged Bonds valid and binding and in compliance
with any and all applicable laws, regulations, orders, writs, injunctions,
decrees or awards of any and all courts, arbitrators or governmental
instrumentalities, domestic or foreign, having jurisdiction over any such
sale or sales, all at the Obligors' expense. The Obligors further agree
that a breach of any of the covenants contained in this Section 2(k)(ii)
will cause irreparable injury to the Bank, that the Bank has no adequate
remedy at law in respect of such breach and, as a consequence, agrees that
each and every covenant contained in this Section 2(k)(ii) shall be
specifically enforceable against the Obligors, and the Obligors hereby
waive and agree not to assert any defenses against an action for specific
performance of such covenants except for a defense that no Event of Default
has occurred under this Agreement. The Obligors further acknowledge the
impossibility of ascertaining the amount of damages which would be suffered
by the Bank by reason of a breach of any of such covenants and,
consequently, agrees that, if the Bank shall sue for damages for breach, it
shall pay, as liquidated damages and not as a penalty, an amount equal to
the par value of the Pledged Bonds plus accrued interest under this
Agreement on the date the Bank shall demand compliance with this Section
2(k)(ii).
(l) PAYMENTS AND COMPUTATION OF PAYMENTS AND INTEREST. All payments by
the Obligors to the Bank hereunder shall be made in lawful currency of the
United States and in immediately available funds at the Bank's office at 88 Pine
Street, 26th Floor, New York, New York, or at such other place as it may
designate in writing without any withholding, deduction or set-off. Funds
received after 2:00 p.m., New York time, shall be deemed to have been received
by the Bank on the following Business Day, and if any amount payable to be paid
hereunder shall fall due on a day that is not a Business Day, then such date
shall be extended to the next succeeding Business Day. In each such case,
interest and/or fees provided hereunder shall continue to accrue during such
extension. If any payment by the Bank under the Letter of Credit with respect
to a demand for payment by the Trustee thereunder shall be reimbursed by the
Obligors to the Bank on or before 2:00 p.m. at the Bank's Address on the same
date such payment is made by the Bank, no interest shall be payable on the
reimbursed amount. Interest and annual
- 12 -
fees payable hereunder shall be computed on the basis of a year of 360 days.
All payments and other recoveries of money received by the Bank hereunder shall
be applied: FIRST, to the payment of fees, costs, expenses, taxes and
indemnification amounts required to be paid hereunder; SECOND, to the payment of
interest as provided herein; and THIRD, to the reimbursement of amounts drawn
under the Letter of Credit.
Section 3. ISSUANCE OF THE LETTER OF CREDIT; CONDITIONS PRECEDENT TO
ISSUANCE OF THE LETTER OF CREDIT.
(a) ISSUANCE OF THE LETTER OF CREDIT; SUBSTITUTE LETTERS OF CREDIT.
(i) Subject to the terms and conditions of this Agreement,
the Bank agrees to issue the Letter of Credit on the date of
issuance of the Series 1996 Bonds in the form of Annex I hereto,
to expire initially on April 15, 2001 (such date, as it may be
extended pursuant to clause (iii) of this Section 3(a), the
"Stated Expiration Date").
(ii) The Obligors by written notice to the Bank not less
than 90 days prior to April 15, 1999 (and not less than 90 days
prior to each succeeding April 15), may request that the Bank
extend the Stated Expiration Date of the Letter of Credit by
issuing an Extension Certificate in the form of Annex G to the
Letter of Credit (an "Extension Certificate"), to be delivered to
the Trustee not less than forty-five (45) days prior to the
expiration date of the then current Letter of Credit extending
the then Stated Expiration Date (without regard to any extension
thereof not evidenced by prior delivery of an Extension
Certificate or substitute Letter of Credit) for a period of not
less than twelve months, or a substitute Letter of Credit in
substantially the form of Annex I, but expiring not less than
twelve months following the date on which the Letter of Credit is
to expire.
(iii) The Bank shall not be required to issue an Extension
Certificate or substitute Letter of Credit to extend the then
Stated Expiration Date of the Letter of Credit, and only an
appropriate writing signed by the Bank and received by the
beneficiary of the Letter of Credit shall constitute such an
Extension Certificate or substitute Letter of Credit. In the
event the Bank in its discretion issues an Extension Certificate
or a substitute Letter of Credit, the Extension Certificate will
be effective, and the substitute Letter of Credit shall be issued
to be effective, on the ensuing April 15, or the ensuing
anniversary of the date of issuance of a substitute Letter of
Credit, and the terms and conditions, fees and commission, as
provided in this Agreement shall apply to the Letter of Credit as
extended or substitute Letter of Credit, except as then otherwise
agreed in writing by the Obligors and Bank. In no event shall
the Bank be obligated to deliver such Extension Certificate or
substitute Letter of Credit to the Trustee, the Obligors or any
other Person more than fifty (50) days prior to the then
- 13 -
current expiration date (without regard to any extension thereof not
evidenced by prior delivery of an Extension Certificate or substitute
Letter of Credit) of the Letter of Credit. Notwithstanding anything
to the contrary herein or in the other Related Documents, if the Bank
has agreed to extend the term of the Letter of Credit or any portion
thereof to a date beyond the fifth calendar day following any Fixed
Interest Rate Commencement Date (as defined in the Indenture) or the
fifth calendar day following the Interest Rate Reset Date (as defined
in the Indenture) from and after which any of the Bonds bear interest
at the Six Month Interest Rate, the One Year Interest Rate or the Five
Year Interest Rate (each as defined in the Indenture), the Bank shall
nonetheless have no obligation to deliver any Extension Certificate or
substitute Letter of Credit if the Stated Amount of the Letter of
Credit or any portion thereof attributable to any Bonds or series of
Bonds which are intended to remain outstanding following such Fixed
Interest Rate Commencement Date or Interest Rate Reset Date would be
required to be increased for any reason, including, without
limitation, due to an increase in the interest rate on any Bonds or an
increase in the number of days' interest required to be covered by the
Letter of Credit, unless the Obligors shall cash collateralize the
amount of any such increase in a manner satisfactory to the Bank in
its sole discretion. In the event the Bank determines not to extend
the Letter of Credit or issue a substitute Letter of Credit, as
requested by the Obligors, the Bank will give the Obligors written
notice that the Stated Expiration Date of the Letter of Credit will
not be extended or substitute Letter of Credit will not be issued, as
the case may be, no later than 30 days prior to the April 15 next
succeeding such request.
(b) CONDITIONS PRECEDENT TO THE ISSUANCE OF THE LETTER OF CREDIT.
The agreement of the Bank to issue the Letter of Credit is subject to the
following conditions precedent:
(i) The Bank shall have received on or before the Date of
Issuance, the following each dated (unless otherwise indicated) the
Date of Issuance, in form and substance satisfactory to the Bank and
its counsel:
(A) this Agreement, duly executed by the Obligors;
(B) the Project Mortgage, duly executed by Miller and in
recordable form;
(C) the Project Assignment of Rents, duly executed by
Miller and in recordable form;
(D) the Indemnity Agreement, duly executed by the
Obligors;
- 14 -
(E) UCC Financing Statements pertaining to the Project
Mortgage and the Project Assignment of Rents for filing with the
Secretary of State of Indiana and Recorder of Lake County,
Indiana, duly executed by Miller;
(F) the Supplemental Property Mortgage, duly executed by
CenterPoint and in recordable form;
(G) the Supplemental Property Assignment of Rents, duly
executed by CenterPoint and in recordable form;
(H) UCC Financing Statements pertaining to the
Supplemental Property Mortgage and the Supplemental Property
Assignment of Rents for filing with the Secretary of State of
Illinois and Recorder of Cook County, Illinois, duly executed by
CenterPoint;
(I) an American Land Title Association Loan Policy of
title insurance (ALTA Form 1990) issued by the Title Company,
dated the Date of Issuance, in the amount of $22,634,774 naming
the Bank as the insured party, showing Miller as being vested
with fee simple title to the land described therein, being the
same as the land described in Exhibit A to the Project Mortgage,
showing the Project Mortgage as the insured mortgage thereunder,
showing in Schedule B thereto no exceptions other than Permitted
Encumbrances, and containing as a part of said policy the
following described endorsements thereto (each in form and
substance acceptable to the Bank): (i) comprehensive
endorsement no. 1, (ii) a 3.1 zoning endorsement, including
parking requirements, (iii) a usury endorsement, (iv) a letter of
credit/future advance endorsement, (v) a variable rate
endorsement, (vi) a survey endorsement assuring that the plat of
survey previously delivered to the Bank or the plat of survey
referred to herein, accurately depicts the land described in
Schedule A of the Policy, and improvements thereon, (vii) an
access endorsement, (viii) a restriction endorsement, (ix) a
contiguity endorsement, (x) an encroachment endorsement, and (xi)
an endorsement deleting exclusions 3(e) and 7 (creditors'
rights);
(J) an American Land Title Association Loan Policy of
title insurance (ALTA Form 1990) issued by the Title Company,
dated the Date of Issuance, in the amount of $4,700,000 naming
the Bank as the insured party, showing CenterPoint as being
vested with fee simple title to the land described therein, being
the same as the land described in Exhibit A to the Supplemental
Property Mortgage, showing the Supplemental Property Mortgage as
the insured mortgage thereunder, showing in Schedule B thereto no
exceptions other than Permitted Encumbrances, and containing as a
part of said policy the following described endorsements thereto
(each
- 15 -
in form and substance acceptable to the Bank): (i)
comprehensive endorsement no. 1, (ii) a location endorsement no.
1, (iii) a 3.1 zoning endorsement, including parking
requirements, (iv) a usury endorsement, (v) a letter of
credit/future advance endorsement, (vi) a variable rate
endorsement, (vii) a survey endorsement assuring that the plat of
survey previously delivered to the Bank or the plat of survey
referred to herein, accurately depicts the land described in
Schedule A of the Policy, and improvements thereon, (viii) an
access endorsement, (ix) a restriction endorsement, (x) a
contiguity endorsement, (xi) a P.I.N. endorsement, and (xii) an
endorsement deleting exclusions 3(e) and 7 (creditors' rights);
(K) current corporate documents for Obligors, including,
in the case of Miller, a Certificate of Limited Partnership and a
Certificate of Good Standing, each issued by the Illinois
Secretary of State within 30 days prior to the Date of Issuance,
a Certificate of Existence and/or Authority to Transact Business,
issued by the Indiana Secretary of State within 30 days prior to
the Date of Issuance, and the Agreement of Limited Partnership
and all Amendments thereto, and partnership resolution
authorizing the transactions contemplated hereby, each certified
by CenterPoint in its capacity as general partner, and, in the
case of CenterPoint, Articles of Incorporation certified by the
Secretary of State of the State of Maryland, Certificate of Good
Standing issued by the Department of Assessments and Taxation of
the State of Maryland, Certificate of Corporate Secretary
certifying By-Laws, Resolutions and Officers' Signatures and
Incumbency, Certificate of Authority to Transact Business and
Good Standing in Illinois issued by the Illinois Secretary of
State within 30 days prior to the Date of Issuance, and
Certificate of Authority to Transact Business and Good Standing
in Indiana, issued by the Indiana Secretary of State within 30
days prior to the Date of Issuance;
(L) a current survey of each of the Project and the
Supplemental Property showing all buildings and improvements
located thereon, all easements and all encroachments onto or from
any adjoining property, and access to a dedicated public highway,
certified as having been prepared in accordance with "Minimum
Standard Detail Requirements for ALTA/ACSM Land Title Surveys"
jointly established and adopted by ALTA and ACSM and meeting the
accuracy requirements of a Class A Survey, as defined therein,
and including items 1-13 and 15 of Table 3 thereof, and certified
in favor of the Bank, and the Title Company and disclosing no
matter which is not acceptable to the Bank, or a certificate of
no change pertaining to the survey previously delivered to the
Bank in form sufficient to permit the title insurance company
issuing the policy and/or endorsements required hereby to issue
the required survey coverage;
- 16 -
(M) a copy of each lease affecting any of the Supplemental
Properties or any portion thereof, a tenant estoppel letter with
respect to each such lease; provided, however, that the Obligor
may deliver tenant estoppel letters on or before July 1, 1996,
but if all tenant estoppel letters (except from tenants who have
refused to deliver an estoppel letter after having received at
least three written requests therefor) are not delivered to the
Bank on or before July 1, 1996, a fee of $5,000 shall be
immediately due and payable to the Bank;
(N) a disclosure document under any applicable Indiana
environmental disclosure law, or representation and warranty of
inapplicability executed by Miller and/or any other party
required by law for the Project;
(O) a disclosure document under the Illinois Responsible
Property Transfer Act or representation and warranty of
inapplicability executed by CenterPoint and/or any other party
required by law for the Supplemental Property;
(P) evidence of recording and filing with all appropriate
governmental bodies of any disclosure document delivered pursuant
to subsections (N) or (O) above;
(Q) original policies of insurance or certificates thereof
with respect to the Project and the Supplemental Property, each
in form and substance satisfactory to the Bank in its sole
discretion, naming the Bank as mortgagee, loss payee and
additional insured, and conforming to the requirements of the
Project Mortgage and the Supplemental Property Mortgage, and
otherwise in such amounts and insuring such risks as the Bank
shall require;
(R) copies of duly executed deeds, bills of sale and other
instruments of transfer evidencing transfer of ownership of the
Project from CenterPoint to Miller;
(S) fully executed counterpoints of all release documents
and UCC Termination Statements necessary to release the documents
securing the Prior Bonds;
(T) an irrevocable direction to LaSalle National Bank, as
trustee for the Prior Bonds directing it to apply the proceeds of
the Bonds deposited with it to reimburse the Bank for the drawing
on the Bank's outstanding letter of credit securing the Prior
Bonds (the "Prior Bonds Letter of Credit") for the redemption of
the Prior Bonds;
- 17 -
(U) an irrevocable direction to LaSalle and the Bank,
executed by the Obligors, authorizing and directing the
application of any amounts on deposit with LaSalle in the
"Collateral Account" held pursuant to that certain Investment
Agreement dated as of April 1, 1991, from the Prior Borrower to
the Bank, as amended, and as assigned to and assumed by
CenterPoint pursuant to that certain Assignment and Assumption
Agreement dated as of December 10, 1993, by and among the Prior
Borrower, CenterPoint and the Bank, to reimburse the Bank for the
drawing on the Prior Bonds Letter of Credit for the redemption of
the Prior Bonds, and to pay any additional sums necessary to
secure the release of the documents securing the Prior Bonds;
(V) opinions of Coffield Ungaretti & Harris, counsel to
the Obligors, as to such matters as the Bank may reasonably
request, which opinions shall be satisfactory to the Bank in form
and substance;
(W) opinions of Ice, Miller, Donadio & Ryan, Bond Counsel,
as to such matters as the Bank shall reasonably request, which
opinions shall be satisfactory to the Bank in form and substance;
(X) the Participation Agreement, duly executed by LaSalle;
(Y) an appraisal of the Project and the Supplemental
Property prepared by an independent appraiser appointed or
approved by the Bank, dated a date not more than 90 days prior to
the Date of Issuance;
(Z) an executed copy of the Loan Agreement;
(AA) an executed copy of the Indenture;
(BB) an executed copy of the Bond Purchase Agreement;
(CC) each of the documents required to be delivered
pursuant to the Bond Purchase Agreement, which in the case of
opinions of counsel shall also be addressed or confirmed to the
Bank;
(DD) evidence of rating of the Bonds by Moody's;
(EE) certificates of authorized officers of the Trustee
dated the Date of Issuance, certifying the names and true
signatures of the officers of the Trustee authorized to execute
the Indenture and such other matters as the Bank may reasonably
request;
(FF) a copy of Preliminary Official Statement and an
executed copy of the Official Statement;
- 18 -
(GG) a flood hazard certification pertaining to each of the
Project and the Supplemental Property in form and substance
satisfactory to the Bank; and
(HH) such other documents, instruments, approvals (and, if
requested by the Bank, certified duplicates of executed copies
thereof) or opinions as the Bank may reasonably request;
(ii) The following statements shall be true and correct on the Date of
Issuance, and the Bank shall have received a certificate signed by on
behalf of Miller and CenterPoint by a duly authorized officer of
CenterPoint, dated the Date of Issuance stating that:
(A) the representations and warranties contained in
Sections 2 and 5 of this Agreement, and Section 2.2 of the Loan
Agreement are correct on and as of the Date of Issuance as though
made on and as of such date; and
(B) no Default or Event of Default has occurred and is
continuing under this Agreement or any of the other Related
Documents, or would result from the execution and delivery of
this Agreement, or any of the other Reimbursement Documents, or
the consummation of the transactions contemplated hereby and
thereby.
(iii) On or before the Date of Issuance:
(A) this Agreement and the Related Documents shall be in
full force and effect;
(B) all conditions precedent to the issuance of the Bonds
shall have been satisfied or waived in a manner acceptable to the
Bank in its sole discretion; and
(C) the Issuer shall have duly executed, issued and
delivered all of the Bonds pursuant to the Indenture and all of
the Bonds shall have been purchased pursuant to the Bond Purchase
Agreement;
(iv) The Obligors shall have paid to the Bank the accrued fees
provided for in Sections 2(b) and 17 hereof.
Section 4. OBLIGATIONS ABSOLUTE. Except as hereinafter provided, the
obligations of the Obligors under this Agreement and the other Reimbursement
Documents shall be absolute, unconditional and irrevocable and shall be paid and
performed strictly in accordance with the terms of this Agreement and the other
Reimbursement Documents under all circumstances whatsoever, including, without
limitation, the following circumstances:
- 19 -
(a) any lack of validity or enforceability of the Letter of Credit, or any
of the other Related Documents.
(b) any amendment or waiver of, or any consent to or departure from all or
any of the Related Documents which is not consented to in writing by the Bank;
(c) the existence of any claim, setoff, defense or other rights which the
Obligors or either of them may have at any time against the Trustee, any
beneficiary or any transferee of the Letter of Credit (or any persons or
entities for whom the Trustee, any such beneficiary or any such transferee may
be acting), the Bank or any other person or entity, whether in connection with
this Agreement, the Related Documents or any unrelated transaction, except to
the extent of the Bank's gross negligence or willful misconduct;
(d) any statement or any other document presented under the Letter of
Credit proving to be forged, fraudulent, invalid or insufficient in any respect
or any statement therein being untrue or inaccurate in any respect whatsoever;
(e) payment by the Bank under the Letter of Credit against presentation of
a draft or certificate which does not comply with the terms of the Letter of
Credit except if such payment constitutes the gross negligence or willful
misconduct of the Bank; or
(f) any other circumstance or happening whatsoever, whether or not similar
to any of the foregoing, provided, however, that such circumstance or happening
shall not constitute the gross negligence or willful misconduct of the Bank.
Section 5. REPRESENTATIONS AND WARRANTIES. The Obligors represent and
warrant as follows:
(a) ORGANIZATION. Miller is a limited partnership duly created, validly
existing and in good standing under the laws of the State of Illinois. Miller
has all requisite power and authority as a limited partnership to own and
operate its properties, to carry on its business as now conducted and as
proposed to be conducted, to enter into such of this Agreement the other
Reimbursement Documents and the other Related Documents to which it is a party
and to carry out the transactions contemplated hereby and thereby. CenterPoint
is a corporation duly created, validly existing and in good standing under the
laws of the State of Maryland. CenterPoint has all requisite power and
authority as a corporation to own and operate its properties, to carry on its
business as now conducted and as proposed to be conducted, to enter into such of
this Agreement, the other Reimbursement Documents and the other Related
Documents to which it is a party or which it has executed in its capacity as
general partner on behalf of Miller, and to carry out the transactions
contemplated hereby and thereby. CenterPoint is the sole general Partner of
Miller.
(b) GOOD STANDING. Miller exists as a foreign limited partnership
authorized to transact business in the State of Indiana and exists as a limited
partnership in the State of Illinois. CenterPoint is duly qualified to do
business as a corporation and is in good standing wherever
- 20 -
necessary to carry on its present business and operations including, without
limitation, the States of Indiana and Illinois, except in jurisdictions in which
the failure to be so qualified and in good standing has not had and will not
have a material adverse effect on the conduct of the business of CenterPoint or
its ability to perform fully any obligation it has under this Agreement, the
other Reimbursement Documents or any other Related Document.
(c) AUTHORIZATION. The execution, delivery and performance by each of
Miller and CenterPoint of such of this Agreement, the other Reimbursement
Documents and the other Related Documents to which it is a party (or which it
has executed in its capacity as general partner) have been duly authorized by
all necessary partnership or corporate action.
(d) NO CONFLICT. The execution, delivery and performance by each of
Miller and CenterPoint of such of this Agreement, the other Reimbursement
Documents and any of the other Related Documents to which it is a party (or
which it has executed in its capacity as general partner) do not and will not
(i) contravene Miller's Agreement of Limited Partnership or CenterPoint's
Articles of Incorporation or By-Laws, (ii) conflict with, or result in the
violation of, any Applicable Law or any order, writ, rule or regulation of any
court or governmental agency or instrumentality binding upon or applicable to
either of the Obligors which conflict or violation would have a material adverse
effect on the conduct of business or either of the Obligors or its ability to
perform fully any obligations it has under this Agreement, the other
Reimbursement Documents or any other Related Document, (iii) contravene,
conflict with, or result in a violation of any other contract or agreement to
which either of the Obligors is a party or by which it is bound which conflict
or violation would have a material adverse effect on the conduct of business of
either of the Obligors or its ability to perform fully any obligations it has
under this Agreement, the other Reimbursement Documents or any other Related
Document, or (iv) result in or require the creation or imposition of any Lien,
security interest or other charge or encumbrance upon or with respect to any of
its properties, except as contemplated by this Agreement, the Indenture, the
Loan Agreement, the other Reimbursement Documents and the other Related
Documents.
(e) APPROVALS. No further approval, authorization, consent or order of
any public board or body (other than in connection or in compliance with the
provisions of the securities or "Blue Sky" laws of any jurisdiction) is legally
required with respect to the Obligors' participation in the issuance of the
Bonds, including the entering into and performance by either of the Obligors of
this Agreement, the other Reimbursement Documents and the other Related
Documents to which either of them is a party (or which CenterPoint has executed
in its capacity as general partner).
(f) VALIDITY. This Agreement, the other Reimbursement Documents and the
other Related Documents to which either of the Obligors is a party (or which
CenterPoint has executed in its capacity as general partner) are valid and
legally binding obligations of such Obligor, enforceable against such Obligor in
accordance with their respective terms, except as such enforceability may be
limited by bankruptcy, insolvency, reorganization, moratorium or other laws or
equitable principles relating to or limiting creditors' rights generally.
- 21 -
(g) FINANCIAL INFORMATION. CenterPoint has delivered to the Bank its
audited financial statements for the fiscal year ended December 31, 1994, and
its Form 10Q dated September, 1995. Such financial statements were prepared in
conformity with GAAP consistently applied. Such financial statements present
fairly in all material respects the financial position of CenterPoint as of the
date thereof and, if available, the results of operations and cash flows of
CenterPoint for each of the periods covered thereby, subject, in the case of any
unaudited interim financial statements to changes resulting from normal year-end
adjustments. To its knowledge CenterPoint has no material contingent
obligations, liabilities or unusual forward or long-term commitments not
disclosed in said financial statements, and there are no material unrealized or
anticipated losses from any commitments of CenterPoint which have not been
disclosed to the Bank in writing.
(h) NO MATERIAL ADVERSE CHANGE. Since the date of the most recent
financial statements referred to in Section 5(g) hereof, there has been no
material adverse change in the financial condition, business, operations,
properties or assets of CenterPoint and no event has occurred which materially
adversely affects the financial condition, business, operations, properties or
assets of CenterPoint or the ability of CenterPoint to perform fully any
obligations it has under this Agreement or any other Related Document.
(i) LEGAL PROCEEDINGS. There are no actions, suits or proceedings, and no
proceedings before any arbitrator or by or before any governmental commission,
board, bureau or other administrative agency, pending, or, to the knowledge of
the Obligors, threatened against or affecting either of the Obligors or their
respective properties which, if adversely determined, would have a material
adverse effect on either Obligor's ability to perform fully any obligations it
has under this Agreement, the other Reimbursement Documents or any other Related
Document on a timely basis or would have a material adverse effect on the
financial condition, business, operations, property or assets of such Obligor.
(j) OFFICIAL STATEMENT. The statements and information contained in
Preliminary Official Statement and in the Official Statement (other than the
statements and information contained in the Official Statement with respect to
the Bank in Appendix B thereof) were as of the date thereof, and as of the date
of issuance of the Bonds are, to the Obligors' knowledge, true, correct and
complete in all material respects, and do not, and at the date of issuance of
the Bonds did not, omit any statement or information necessary to make the
statements and information therein not misleading in any material respect.
(k) REGULATION. Neither of the Obligors is subject to regulation under
the Investment Company Act of 1940 or any other federal or state statute or
regulation such that its ability to consummate the transactions contemplated in
this Agreement or any Related Document is materially impaired.
(l) MARGIN STOCK. Neither of the Obligors has engaged principally or as
one of its important activities, in the business of extending credit for the
purpose of purchasing or carrying any margin stock (as such term is defined in
Regulations G and U of the Board of Governors of the Federal Reserve System).
- 22 -
(m) COMPLIANCE WITH APPLICABLE LAW. Each of the Obligors and their
respective properties are in compliance with all Applicable Laws, including all
Governmental Approvals, except where the necessity or compliance therewith, or
of such Governmental Approvals, is being contested in good faith by appropriate
proceedings diligently pursued and the failure to comply therewith would not
have a material adverse effect on the conduct of the business of the Obligors or
their ability to perform fully any obligation they have under this Agreement or
any Related Document.
(n) INTEREST RATE. The rate of interest established and payable hereunder
does not exceed the maximum rate of interest allowed by Applicable Law.
(o) ENVIRONMENTAL MATTERS.
(i) Each of the Obligors and the Project and the Supplemental
Property are currently in compliance with all applicable Environmental Laws
(as defined below), and the Obligors have obtained and presently have in
force all permits, licenses, registrations and other authorizations and
approvals ("Permits") needed under Environmental Laws to maintain and
occupy the Project and the Supplemental Property, and have not and to the
best of each Obligor's knowledge, none of its predecessors with respect to
the Project or the Supplemental Property have, violated any applicable
Environmental Law.
(ii) The Obligors are unaware of any present requirement of any
applicable Environmental Law which is due to be imposed upon either of them
which will increase the cost of complying with the Environmental Laws with
respect to the Project, except as disclosed in that certain Environmental
Assessment of Marina Dunes Apartments, Gary, Indiana, September 17, 1990,
prepared by Environmental Resources Management - North Central, Inc. and in
that certain Phase I Environmental Assessment, Site No. 30, 440 N. Lake
Street, Gary, Indiana, Project No. 8652, dated August 21, 1993, prepared by
Carlson Environmental, Inc. (collectively, the "Audit Report").
(iii) All past use, handling, generation, treatment, storage and
disposal of "Hazardous Materials" (as described below) on, from or at the
Project and the Supplemental Property by either of the Obligors and to the
best of each Obligor's knowledge, its predecessors, has been done in
compliance with then applicable Environmental Laws, except as disclosed in
the Audit Report.
(iv) The Obligors have not, and to the best of each Obligor's
knowledge, except as described in the Audit Report, none of its
predecessors have, generated, treated, spilled, discharged, emitted,
disposed of or released any Hazardous Materials on or from the Project or
the Supplemental Property except to the extent the same was permitted by,
or remediated in accordance with, applicable Environmental Laws and, to the
best of each Obligor's knowledge, there are no Hazardous Materials on the
Project or the Supplemental Property that are not stored or contained in
accordance with applicable Environmental Laws, except as disclosed in the
Audit Report and/or described in the Supplemental
- 23 -
Property Mortgage, and there are no underground storage tanks on the
Project or the Supplemental Property.
(v) All past off-Site handling, treatment, recycling,
transportation, storage and disposal of Hazardous Materials originating on
the Project and the Supplemental Property by either of the Obligors and to
the best of each Obligor's knowledge, except as described in the Audit
Report, its predecessors, have been in compliance with applicable
Environmental Laws.
(vi) Obligors have used and will continue to use the level of care
that a reasonable and prudent operator would use in ensuring that its (and
its tenants') use and occupation of the Project and its (and its Tenants')
use and occupation of the Supplemental Property are in compliance with all
Environmental Laws.
(vii) As used in this Agreement, the terms (I) "Environmental Laws"
shall mean and include, but not be limited to any federal, state or local
law, statute, charter or ordinance (including without limitation,
applicable safety/environmental laws such as the Resource Conservation and
Recovery Act of 1976, Comprehensive Environmental Response Compensation and
Liability Act, as amended, Federal Emergency Planning and Community
Right-to-Know Law, the OSHA Hazardous Communication Standard, the Clean Air
Act, The Clean Water Act, the Hazardous Materials Transportation Act, and
the Toxic Substances Control Act), as any of the same have been amended,
and any rule, regulation, binding interpretation, binding policy, permit,
order, court order or consent decree promulgated or issued pursuant to any
of the foregoing, which pertains to, governs or otherwise regulates the
protection of health, worker safety or the environment, now, hereafter or
heretofore in effect, including, but not limited to any of the following
activities: (a) the emission, discharge, release, threatened release,
spilling or dumping of any Hazardous Material into the air, surface water,
groundwater, soil or substrata; (b) the use, generation, processing, sale,
recycling, treatment, handling, storage, disposal, transportation, labeling
or other management of any Hazardous Material, and (II) "Hazardous
Materials" shall mean and include any quantity required to be reported by
any applicable Environmental Law of any pollutant, contaminant, or
hazardous substances, hazardous materials, toxic substances, regulated
substances and wastes, radioactive materials, polychlorinated biphenyls,
asbestos and petroleum, including crude oil or any fraction thereof, as now
or hereafter defined or regulated as such by any applicable Environmental
Law.
(p) RELATED DOCUMENTS. The Obligors each make the representations and
warranties made by either of the Obligors contained in the Related Documents, to
which either of the Obligors is or is to be a party, to and for the benefit of
the Bank as if the same were set forth in full herein and such representations
and warranties shall speak as of the date hereof, except to the extent such
representations and warranties have been specifically superseded by this
Agreement, and except that any reference to financial statements bearing a
specific date contained in such representations and warranties shall be deemed a
reference to the financial statements of the Obligors most recently delivered to
the Bank.
- 24 -
(q) BORROWER'S UNDERTAKING. The Obligors have completed or caused to be
completed the Borrower's Undertaking (as defined in the Prior Loan Agreement) in
all material respects in accordance with the Plans, the Prior Reimbursement
Agreement and the Prior Loan Agreement, and the Project as of the date hereof is
free and clear of all liens or claims for liens for materials supplied or labor
or services furnished in connection with the Borrower's Undertaking other than
Permitted Encumbrances, and otherwise complies and has been operated and leased
in all material respects with the requirements of the Prior Reimbursement
Agreement, the Prior Loan Agreement and this Agreement.
Section 6. COVENANTS OF THE OBLIGORS. So long as the Termination Date
has not occurred or any amount is due or owing to the Bank hereunder, the
Obligors agree that unless the Bank shall otherwise consent in writing, they
will comply with the following covenants:
(a) FINANCIAL STATEMENTS AND OTHER INFORMATION. The Obligors will deliver
to the Bank:
(i) a true and complete copy of each Form 10K, Form 8K and Form 10Q
required to be filed by CenterPoint with the United States Securities and
Exchange Commission within five days following the date on which such
filing is required;
(ii) simultaneously with the delivery of each set of financial
statements referred to in clauses (i) and (vi) of this Section 6(a), a
certificate of the chief financial officer or the chief accounting officer
of the CenterPoint stating whether there exists on the date of such
certificate any Default or Event of Default hereunder or, to its best
knowledge, with respect to any of the Related Documents and, if any such
Default or Event of Default then exists, setting forth the details thereof
and the action which CenterPoint is taking or proposes to take with respect
thereto;
(iii) forthwith upon the occurrence of any Default or Event of
Default, a certificate of the chief financial officer or the chief
accounting officer of CenterPoint setting forth the details thereof and the
action which CenterPoint is taking or proposes to take with respect
thereto;
(iv) within ten (10) days after obtaining knowledge of the
commencement thereof, written notice of any action, suit or proceeding
before any arbitrator or by or before any governmental commission, board,
bureau or other administrative agency, pending or, to the knowledge of
either of the Obligors, threatened in writing against or affecting either
of the Obligors or their respective properties which, if adversely
determined, may have a material adverse effect on the financial condition,
business, operations, properties or assets of either of the Obligors or
their ability to perform fully any obligations under this Agreement or any
Related Document;
(v) from time to time such additional information regarding the
financial condition, business, operations, properties or assets of each of
the Obligors as the Bank may reasonably request; and
- 25 -
(vi) as soon as available and in any event within 60 days after the
end of each quarter of each fiscal year of Miller, an unaudited operating
statement for the Project, as of the end of such quarter, including the
related statements of income and retained earnings and statements of cash
flows for such quarter and for the portion of the Miller's fiscal year
ended at the end of such quarter, setting forth in each case in comparative
form the figures for the corresponding portion of the Miller's previous
fiscal year, all certified as to fairness of presentation, GAAP and
consistency by the chief financial officer or the chief accounting officer
of Miller and a rent roll as of the end of each such quarter certified by
the chief financial officer or the chief accounting officer of Miller.
(b) CONSOLIDATIONS, MERGERS. Neither of Miller or CenterPoint will
consolidate with or merge into any other Person.
(c) CONDUCT OF BUSINESS AND MAINTENANCE OF EXISTENCE. Miller will
continue to engage in business of the same general type as now conducted by it
and will do or cause to be done all things necessary to preserve, renew and keep
in full force and effect, its partnership existence, rights, privileges and
franchises necessary or desirable in the normal conduct of its business and to
qualify, and remain qualified, as a limited partnership existing and authorized
to transact business in each jurisdiction in which such qualification is
necessary under Applicable Law to enable it to perform fully all obligations it
has under any of this Agreement, the other Reimbursement Documents and any other
Related Document. CenterPoint will continue to engage in business of the same
general type as now conducted by it and will do or cause to be done all things
necessary to preserve, renew and keep in full force and effect, its corporate
existence, rights, privileges and franchises necessary or desirable in the
normal conduct of its business and to qualify, and remain qualified, as a
corporation in good standing and authorized to transact business in each
jurisdiction in which such qualification is necessary under Applicable Law to
enable it to perform fully all obligations it has under any of this Agreement,
the other Reimbursement Documents and any other Related Document.
(d) INTENTIONALLY DELETED.
(e) COMPLIANCE WITH LAWS. The Obligors will comply with all Applicable
Laws, except where the necessity of compliance therewith is being contested in
good faith by appropriate proceedings diligently pursued and the failure to
comply therewith would not have a material adverse effect on the conduct of the
business of the Obligors or their ability to perform fully all obligations
either of them has under any of this Agreement, the other Reimbursement
Documents and any other Related Document.
(f) INSPECTION OF PROPERTY, BOOKS AND RECORDS. The Obligors will keep
proper books of record and account consistent with the requirements of the
United States Securities and Exchange Commission and as required by Section
6(a)(vi) hereof, the Loan Agreement, Section 2.11 of the Project Mortgage and
Section 2.11 of the Supplemental Property Mortgage; and will permit
representatives of the Bank to inspect the properties and operations of the
Obligors all upon such reasonable prior notice and at such reasonable times and
as often as may reasonably be desired.
- 26 -
(g) AMENDMENT OF RELATED DOCUMENTS. The Obligors will not enter into or
consent to any amendment of any of the Related Documents, or require or consent
to the replacement of the Trustee or the Remarketing Agent, permit any Bonds
(other than Pledged Bonds) not to be secured by the Letter of Credit, or deliver
or permit the delivery of a Supplemental Credit Facility (as defined in the
Indenture) without the Bank's prior written consent.
(h) REGISTRATION OF BONDS. The Obligors will cause all Pledged Bonds to
be registered in the name of Miller as pledgor or the Bank as pledgee, pursuant
to this Agreement, in each case as the Bank shall request.
(i) LIENS. Except for Permitted Encumbrances, the Obligors will not
create, incur, assume or suffer or permit to exist any Lien on the Project, the
Supplemental Property or any portion of either of them.
(j) REQUIRED VALUE OF COLLATERAL; APPRAISAL. The Obligors covenant and
agree that the aggregate fair market value of the Project and the Supplemental
Property shall at all times during the term of this Agreement be not less than
133% of the Stated Amount of the Letter of Credit. The Obligors shall notify
the Bank in writing within 10 days after either of them become aware of any
likely decrease in the aggregate fair market value of the Project and the
Supplemental Property which would cause such fair market value to be less than
133% of the then current Stated Amount of the Letter of Credit. The Bank may
obtain an updated appraisal of the Project and the Supplemental Property at any
time. If such appraisal discloses that the aggregate fair market value of the
Project and the Supplemental Property is less than 133% of the then current
Stated Amount of the Letter of Credit, the cost of the appraisal shall be paid
by the Obligors immediately upon demand, and the Obligors shall deposit
additional collateral acceptable to the Bank in its sole discretion, and having
a cash or fair market value equal to the difference between the appraised
aggregate fair market value of the Project and the Supplemental Property and
133% of the Stated Amount of the Letter of Credit, within 60 days following
demand therefor. If such appraisal discloses that the aggregate fair market
value of the Project and the Supplemental Property is equal to or greater than
133% of the then current Stated Amount of the Letter of Credit, and provided no
Event of Default shall have occurred, the cost of the appraisal shall be paid by
the Bank. Notwithstanding the foregoing provisions of this Section 6(j), the
Obligors shall pay the cost of any appraisal obtained by the Bank following the
occurrence of a Default or an Event of Default, and all appraisals (not
exceeding one per calendar year) which are required by applicable law or
regulation.
(k) ENVIRONMENTAL MATTERS. Obligors shall comply with any and all
Environmental Laws, settlements, agreements, consent orders, decrees, judgments,
injunctions or directives heretofore, now or hereafter affecting the Project,
the Supplemental Property or any portion thereof or the construction,
installation and rehabilitation of the Project, or any requirement of any
insurer of the Project or any portion thereof, or the Supplemental Property or
any portion thereof, and shall timely perform, or cause to be performed, any
investigation, testing, monitoring, repair, cleanup, detoxification, preparation
of any closure or other required plans, or other removal, response or remedial
action relating to (i) the presence, management, disposal, release or threatened
release, escape, seepage or leakage of any Hazardous Materials at, on, in,
- 27 -
from or under all or a portion of the Project and/or the Supplemental Property;
or (ii) the migration of Hazardous Materials from the Project and/or the
Supplemental Property to any other property, or onto the Project Site from any
property or area adjacent to the Project Site and/or the Supplemental Property;
or (iii) the generation, transportation, storage or disposal of Hazardous
Materials onto or from the Project and/or the Supplemental Property; or (iv)
waste water from the Project and/or the Supplemental Property; or (v) the
incorporation, whether prior or future, of any Hazardous Materials into the
Project and/or the Supplemental Property. Nothing herein shall prohibit the
Obligors from contesting the validity or application of any Environmental Law,
settlement, agreement, consent order, decree, judgment, injunction or directive,
in good faith in any appropriate manner, in accordance with Applicable Law, and
while so contesting the Obligors may defer such compliance and/or performance;
PROVIDED, HOWEVER, that no such deferral shall be permitted if a Default or
Event of Default shall have occurred and be continuing; such contest or deferral
imposes a material obligation, burden or risk on the Trustee or the Bank; there
exists as a result of such contest or deferral any risk of the sale, forfeiture
or loss of the Project, the Supplemental Property or any part thereof, or the
creation of any Lien (other than a Lien permitted by this Agreement), or any
risk of criminal liability for the Trustee or the Bank; the Bank shall not have
received an indemnity from the Obligors satisfactory to the Bank, in its sole
discretion, against losses or liabilities to the Bank arising from such contest
or deferral, including, at the request of the Bank, a satisfactory undertaking
to inform or consult with the Bank periodically during any such deferral; or any
bond or security required to be posted or filed in connection with such contest
shall not have been so posted or filed.
(l) SALE, SUBSTITUTION, OR LEASE OF MORTGAGED PROPERTY.
(i) Except for Permitted Encumbrances CenterPoint will not sell,
lease, mortgage, transfer, otherwise dispose of, or grant a security
interest in, all or any part of its interests in the Supplemental Property.
Except for Permitted Encumbrances and as herein specifically provided in
this Section 6(l) or in Sections 6(m) or 6(n) or otherwise in this
Agreement, the Obligors will not sell, lease, mortgage, transfer, otherwise
dispose of, or grant a security interest in, all or any part of their
interests in the Project.
(ii) The Obligors may at any time request the Bank to enter into an
amendment to the Project Mortgage in form and substance satisfactory to the
Bank, for the purpose of effecting the release therefrom of any portion of
the Project Site which is not necessary to the operating integrity and
unity of the Project and the release of which will not adversely and
materially affect the ability of Miller to operate and maintain the Project
as provided in the Loan Agreement. The Obligors' request shall be in
writing and shall be accompanied by the following, each of which shall be
satisfactory to the Bank in its sole discretion:
(A) A certificate of the Obligors (1) stating that Miller is not
in default under the Loan Agreement and neither of the Obligors is in
default under any of the other Related Documents, (2) giving an
adequate legal description of that portion of the Project Site to be
released, (3) stating the purpose for which the
- 28 -
release is desired, (4) requesting the release and (5) approving any
necessary amendment to the Project Mortgage;
(B) an opinion of independent counsel stating that execution and
delivery of such amendment by Miller will not conflict with or result
in a breach of or default under the Loan Agreement or any of the other
Related Documents;
(C) a copy of the amendment as proposed, and evidence of the
authority of the officers of the signators to execute and deliver the
amendment;
(D) a certificate of an independent architect acceptable to the
Bank, dated not more than sixty (60) days prior to the date of the
amendment and stating that, in his opinion, (1) the part of such
Project Site proposed to be released is not required for the
operation of the Project for the purposes hereinabove stated, and is
not necessary to the operating integrity and unity of the Project and
(2) the release will not destroy the means of ingress thereto and
egress therefrom; provided that such architect may consider any
property to be added to the Project Site in consideration of such
release;
(E) an ALTA survey of the Project which depicts the portion of
the Project Site to be released and the portion thereof remaining
subject to the lien of the Project Mortgage and which contains a
separate legal description for each of the portion of the Project Site
to be released and the portion remaining subject to the lien of the
Project Mortgage;
(F) a commitment from the Title Company to issue an endorsement
to the Bank's title insurance policy dating down said policy and all
endorsements thereto to the date of recording of the amendment,
reflecting recording of the amendment and no encumbrances other than
Permitted Encumbrances, and reciting that the lien of the Project
Mortgage as to the portion of the Project Site remaining subject
thereto is not impaired by such release and that the title insurance
policy and endorsements thereto previously delivered to the Bank are
not impaired, nor the insurance provided thereunder diminished, by
virtue of such amendment;
(G) if required by the Bank, either (1) a deposit of an amount
of money equal to the value of such portion of the Project Site as
determined by an appraisal furnished to the Trustee and the Bank and
prepared by an appraiser satisfactory to the Bank, which amount shall
be held by the Bank and used to purchase additional real property or
equipment to be subjected to the terms and liens of the Project
Mortgage; or (2) with the written consent of the Bank, the Obligors
may, in said amendment, subject to the lien of the Project Mortgage
real property equal in value to the portion of Project Site to be
released, the value of such real property to be determined by an
appraisal furnished to the Trustee and the Bank and prepared by an
appraiser satisfactory to the Bank; and
- 29 -
(H) an opinion of recognized bond counsel that the amendment to
the sale of a portion of the Project and application of the proceeds
of sale will not affect the tax exempt status of the Series 1996 A
Bonds.
Upon satisfaction of all conditions set forth in clause (ii) of this
Section 6(l), and after due execution and delivery of such amendment to the
Project Mortgage by all other parties thereto, the Bank shall execute such
amendment and shall deliver such executed amendment to the Title Company in
exchange for an endorsement to the Bank's title insurance policy in the
form described above. No release effected under the provisions of this
Section 6(l) shall entitle Miller to any abatement or diminution of the
payments to be made under the Loan Agreement or hereunder.
(m) SUBSTITUTION AND REMOVAL OF EQUIPMENT.
(i) Except as provided in this Section 6(m) and Section 6(l) hereof,
equipment comprising part of the Mortgaged Property shall remain in or near
the buildings comprising the Mortgaged Property and on the site thereof.
The Obligors may from time to time substitute equipment in the Mortgaged
Property if the equipment so substituted shall be of equivalent value and
utility to that replaced. Any such substituted equipment with an aggregate
fair market value in excess of $25,000 shall be identified in writing by
the Obligors to the Bank and shall become a part of the Mortgaged Property
and be included under the terms of the Project Mortgage.
(ii) The Bank at the request of the Obligors shall release from the
lien of the Project Mortgage (but only to the extent of its interest), any
equipment comprising part of the Mortgaged Property without substitution
therefor so long as in the opinion of the Obligors, such property is no
longer useful to the Obligors in their operations conducted on or in the
Project (whether by reason of changed techniques, obsolescence,
depreciation or otherwise), and if so required by the Bank, the Obligors
shall segregate the proceeds of such sale and either (i) the proceeds from
the sale of the equipment or (ii) the fair market value of the equipment or
(iii) an amount equal to the original cost of the equipment to either of
the Obligors (or their predecessor) less depreciation calculated on a
straight-line basis on the lesser of the "average life" of the Bonds or the
useful life of the equipment, whichever amount is highest and use such
amount to purchase additional equipment or real property to be subjected to
the lien of the Project Mortgage and the terms of the Loan Agreement.
(iii) This provision shall not entitle the Obligors to any abatement
or diminution of the payments payable under the Loan Agreement or
hereunder.
(iv) The Obligors agree to execute and deliver such documents (if
any) as the Bank may reasonably request in connection with any action taken
by the Issuer, Trustee or Obligors under this Section 6(m).
- 30 -
(n) GRANTING OF EASEMENTS. The Obligors may at any time or times grant
easements, licenses, rights-of-way (including the dedication of public highways)
and other rights or privileges in the nature of easements with respect to any
property subject to the lien of the Project Mortgage and/or the Supplemental
Property Mortgage, free from the lien of the Project Mortgage and/or the
Supplemental Property Mortgage, the Indenture, or Obligors may release existing
easements, licenses, rights-of-way and other rights or privileges, whether with
or without consideration for such grant or release, but only with the prior
written consent of the Bank, and provided such are within the definition of
Permitted Encumbrances. The Bank agrees that it shall execute and deliver any
instrument necessary or appropriate to confirm and grant or release any such
easement, license, right-of-way or other right or privilege permitted under the
provisions hereof.
(o) INSPECTIONS. The Obligors shall forthwith upon completion of any
construction at the Project or the Supplemental Property cause the same to be
inspected by each governmental or regulatory unit having jurisdiction thereof,
shall correct any defects and deficiencies which may be disclosed by any such
inspection and shall cause to be duly issued all occupancy certificates and
other licenses, permits and authorizations, if any, necessary for the operation
and occupancy of the Project and/or the Supplemental Property and each portion
thereof (and in any event the Obligors shall do and perform all of the foregoing
acts and things) and cause to be issued and executed all such occupancy permits,
licenses and authorizations.
(p) CORRECTIONS. The Obligors shall, upon demand by the Bank, correct any
defect or condition in the Project and/or the Supplemental Property which could
materially diminish the value of the Project or the Supplemental Property or
violate any requirements of any governmental or regulatory unit having
jurisdiction and upon demand by any such governmental or regulatory unit shall
correct any defect or condition in the Project and/or the Supplemental Property.
The Bank's previous authorization of disbursement of proceeds of the Series 1991
Bonds or the Series 1993 Bonds for the Project shall not constitute a waiver of
the Bank's right to require compliance with this covenant with respect to any
such defects or conditions not theretofore objected to by the Bank. The
Obligors shall obtain or cause to be obtained all required permits, licenses or
other approvals of any governmental or regulatory unit to be obtained prior to
the time any work for which such permit or approval is required is commenced.
(q) LEASES. The Obligors shall comply with the terms and conditions of
the Project Mortgage, the Project Assignment of Rents, the Supplemental Property
Mortgage and the Supplemental Property Assignment of Rents as they pertain to
leases of the Project and/or the Supplemental Property or any portion thereof.
(r) AGREEMENT CONCERNING SUPPLEMENTAL PROPERTY MORTGAGE. CenterPoint is
delivering the Supplemental Property Mortgage to induce the Bank to enter into
this Agreement and issue the Letter of Credit. The Obligors acknowledge and
agree that upon the occurrence of an event of default under the Supplemental
Property Mortgage, the Supplemental Property Assignment of Rents or the
Indemnity Agreement (as it relates to the Supplemental Property), and provided
the Bank has not exercised its right to give notice of termination of the Letter
of Credit and demand payment of the amount available to be drawn on the Letter
of Credit as provided in Section 7 hereof, the Obligors shall be obligated to
make a cash deposit with the Bank (the "Cash Deposit")
- 31 -
in the amount of $3,525,000, which Cash Deposit shall secure the obligations of
the Obligors hereunder and under the other Related Documents, and shall be held
by and pledged to the Bank in a manner acceptable to the Bank in its sole
discretion. The Cash Deposit shall be due and payable within 30 days following
demand, provided that demand shall be deemed to have been made on earlier of (i)
the date of notice to the Obligors of any default under the Supplemental
Property Mortgage, the Supplemental Property Assignment of Rents or the
Indemnity Agreement and (ii) the date of occurrence of any event which
constitutes an event of default under the Supplemental Property Mortgage, the
Supplemental Property Assignment of Rents or the Indemnity Agreement without the
necessity of notice thereof to the Obligors. In connection with the Cash
Deposit hereunder, the Bank shall be entitled to obtain the advice of and an
opinion of Bond Counsel (as defined in the Indenture) in structuring the pledge
or security documents to assure that such pledge will not adversely affect the
tax exempt status of interest on the Bonds. The fees and expenses of Bond
Counsel shall be paid by the Obligors upon demand. The Bank agrees to release
the Supplemental Property Mortgage and the Supplemental Property Assignment of
Rents upon delivery of the Cash Deposit as provided herein and perfection of a
bankruptcy preference-proof security interest therein. Following delivery of
the Cash Deposit, the Bank shall release the Supplemental Property Mortgage and
the Supplemental Property Assignment of Rents upon either (i) the receipt of an
opinion of Bond Counsel that the delivery of the Cash Deposit does not
constitute a transfer avoidable under 11 USC Section 101 ET SEQ. (the
"Bankruptcy Laws") or (ii) the 91st day after delivery of the Cash Deposit,
provided that during the 91-day period no filing under the Bankruptcy Laws shall
have been made by or against CenterPoint. If, during the 91-day period, a
filing under the Bankruptcy Laws shall have been made, the Bank shall return the
Cash Deposit to CenterPoint on demand. In no event shall the Bank be entitled
to retain both the Cash Deposit AND the Supplemental Property Mortgage and the
Supplemental Property Assignment of Rents as collateral, it being understood
that the Bank shall be entitled to either, but not both, forms of collateral.
If an event of default shall have occurred as described above, upon return of
the Cash Deposit to CenterPoint or as directed by the Bankruptcy Court, the Bank
shall again be entitled to exercise all of its remedies available in consequence
of such event of default, without further notice, subject to any applicable
Bankruptcy Laws.
Section 7. EVENTS OF DEFAULT. The occurrence of any of the following
events shall constitute an "Event of Default" hereunder, unless waived by the
Bank pursuant to Section 8 hereof:
(a) the Obligors shall fail to pay when due any amount payable by the
Obligors under this Agreement; or
(b) any representation or warranty made by the Obligors or either of them
herein, in any Related Document or in any certificate, financial or other
statement furnished by either of the Obligors pursuant to this Agreement or any
other Related Document, shall prove to have been untrue or incomplete in any
material respect when made; or
(c) if, for any reason (other than release by the Bank) this Agreement,
the Project Mortgage, the Project Assignment of Rents, the Indemnity Agreement,
the Supplemental Property Mortgage, the Supplemental Property Assignment of
Rents or any of the other Related Documents
- 32 -
to which either of the Obligors is a party shall cease to be valid, binding and
enforceable in accordance with its terms or if either of the Obligors shall
assert that it is not liable under this Agreement, the Project Mortgage, the
Project Assignment of Rents, the Indemnity Agreement, the Supplemental Property
Mortgage, the Supplemental Property Assignment of Rents or any of the other
Related Documents to which it is a party; or
(d) the Obligors or either of them shall fail to perform or observe any
other term, covenant or agreement deemed by the Bank in its sole judgment to be
material and to be performed or observed by the Obligors or either of them under
this Agreement, the Loan Agreement, the Project Mortgage, the Project Assignment
of Rents, the Indemnity Agreement, the Supplemental Property Mortgage, the
Supplemental Property Assignment of Rents or any other Related Document, and any
such failure shall remain unremedied for 30 days, or, to the extent that such
failure is susceptible of cure but cannot be cured within 30 days, and the
Obligors undertake and diligently pursue appropriate actions to remedy such
failure, not more than 60 days, after written notice thereof shall have been
given to the Obligors, by the Bank; or
(e) an "Event of Default" under and as defined in Section 7.1 of the Loan
Agreement or Section 7.01 of the Indenture shall have occurred and be
continuing; or
(f) either of the Obligors shall (i) apply for or consent to the
appointment of a receiver, trustee, liquidator or custodian or the like of
itself or of its property, (ii) admit in writing its inability to pay its debts
generally as they become due, (iii) make a general assignment for the benefit of
creditors, (iv) be adjudicated a bankrupt or insolvent, or (v) commence a
voluntary case under the federal bankruptcy laws of the United States of America
or file a voluntary petition or answer seeking reorganization, an arrangement
with creditors or an order for relief or seeking to take advantage of any
insolvency law or file an answer admitting the material allegations of a
petition filed against it in any bankruptcy, reorganization or insolvency
proceeding; or corporate or other action shall be taken by it for the purpose of
effecting any of the foregoing; or
(g) if without the application, approval or consent of the affected
Obligor, a proceeding shall be instituted in any court of competent
jurisdiction, under any law relating to bankruptcy, insolvency, reorganization,
or relief of debtors seeking in respect of such Obligor an order for relief or
an adjudication in bankruptcy, reorganization, dissolution, winding up,
liquidation, a composition or arrangement with creditors, a readjustment of
debts, the appointment of a trustee, receiver, liquidator or custodian or the
like of such Obligor of all or any substantial part of its assets, or other like
relief in respect thereof under any bankruptcy or insolvency law, and, if such
proceeding is being contested by such Obligor in good faith, the same shall (i)
nevertheless result in the entry of an order for relief or in any such
adjudication or appointment or (ii) continue undismissed, or pending and
unstayed, for any period of sixty (60) consecutive days; or
(h) either of the Obligors shall fail to make any payment in the amount of
$2,000,000 or more in respect of any Debt when due or within any applicable
grace period, or any event or condition shall occur which results in the
acceleration of the maturity of any Debt in the amount of $2,000,000 or more of
either of the Obligors or enables (or, with the giving of notice or lapse of
time or both, would enable) the holder of such Debt to accelerate the maturity
thereof (except
- 33 -
only to the extent that such event or condition which results in such
acceleration is being contested by the affected Obligor in good faith by
appropriate proceedings, diligently pursued); or
(i) the entry against the either of Obligors of one or more judgments,
orders or decrees involving an aggregate liability of $2,000,000 or more, which
has or have become nonappealable and shall remain undischarged, unsatisfied by
insurance and unstayed for more than 30 days, whether or not consecutive; or the
issuance or levy of a writ of attachment or garnishment against the property of
either of the Obligors in an action claiming $2,000,000 or more, and which is
not released or appealed and bonded in a manner reasonably satisfactory to the
Bank.
Upon the occurrence of any Event of Default, the Bank may, (i) by written notice
to the Obligors, declare the obligations of the Obligors under Section 2 hereof
to be forthwith due and payable, whereupon the same shall become due and payable
without demand, presentment, protest or further notice of any kind, all of which
are hereby expressly waived; (ii) decline to reinstate any amount available
under the Letter of Credit, including sending notice to the Obligors and the
beneficiary of the Letter of Credit as provided in the Letter of Credit that the
Bank will not reinstate the amount of any Interest Draft thereunder; (iii)
notify the Obligors and the beneficiary of the Letter of Credit pursuant to the
Letter of Credit that the Letter of Credit shall terminate fifteen (15) days
following delivery of such notice to the addressees thereof; (iv) by written
notice to the Obligors demand payment forthwith of the amount available to be
drawn under the Letter of Credit on the date of such demand, provided that
notice of termination of the Letter of Credit shall have been given pursuant to
clause (iii) immediately preceding, whereupon the Obligors shall be obligated
hereunder to immediately deposit such amount with the Bank; (v) demand that the
Obligors procure the issuance of a substitute letter of credit from another
financial institution or otherwise arrange to purchase or defease the Bonds or
otherwise arrange for the prompt release of the Bank's obligations under the
Letter of Credit; (vi) exercise any right provided in the Indenture to cause an
event of default thereunder to be declared; and/or (vii) pursue any other remedy
available to it under this Agreement, under the Related Documents or otherwise.
Section 8. AMENDMENTS, ETC. No amendment or waiver of any provision of
this Agreement nor consent to any departure by the Obligors therefrom shall in
any event be effective unless the same shall be in writing and signed by the
Obligors and the Bank, and then such waiver or consent shall be effective only
in the specific instance and for the specific purpose for which given.
Section 9. NOTICES. Except as expressly provided for herein, all
notices and other communications provided for hereunder shall be in writing to
the addressed listed below or such other address as shall be designated by such
party in a written notice to the other party, except that communications with
the Bank with respect to drawings under the Letter of Credit shall be made as
provided in the Letter of Credit.
- 34 -
If to the Bank: The Royal Bank of Scotland plc
Wall Street Plaza
88 Pine Street, 26th Floor
New York, NY 10005-1801
Attention: Derek Bonnar
Telephone: 212/269-1718
Telecopier: 212/269-8929
If to the Obligors: CenterPoint Properties Corporation
401 North Michigan Avenue, 30th Floor
Chicago, IL 60611
Attention: John S. Gates and Paul Fisher
Telephone: 312/346-5600
Telecopier: 312/456-7696
All such notices and other communications shall be effective (i) if given by
telecopy, when such telecopy is transmitted to the telecopy number specified
above and the appropriate answerback is received, (ii) if given by mail five
days after the date of deposit in the United States mails, registered or
certified, with return receipt requested with postage prepaid, addressed as
aforesaid; or (iii) when delivered if delivered personally or by commercial
courier.
Section 10. NO WAIVER; REMEDIES. No failure on the part of the Bank to
exercise, and no delay in exercising, any right hereunder shall operate as a
waiver thereof; nor shall any single or partial exercise of any right hereunder
preclude any other further exercise thereof or the exercise of any other right.
The remedies herein provided are cumulative and not exclusive of any remedies
provided by law.
Section 11. RIGHT OF SETOFF. Upon the occurrence and during the
continuance of any Default or Event of Default, the Bank is hereby authorized at
any time and from time to time, without notice to the Obligors (any such notice
being expressly waived by the Obligors), to set-off and apply any and all
deposits (general or special, time or demand, provisional or final) at any time
held and other indebtedness at any time owing by the Bank to or for the credit
or the account of the Obligors against any and all of the obligations of the
Obligors now or hereafter existing under this Agreement, irrespective of whether
or not the Bank shall have made any demand under this Agreement and although
such obligations may be contingent and unmatured.
Section 12. INDEMNIFICATION. The Obligors hereby indemnify and hold
harmless the Bank (and its directors, officers, employees, attorneys and agents)
from and against any and all claims, damages, losses, liabilities, reasonable
costs or expenses whatsoever which the Bank may incur (or which may be claimed
against the Bank by any Person) by reason of, or in connection with: (a) the
execution and delivery or transfer of, or payment or failure to pay under, the
Letter of Credit (including, without limitation, actions commenced by any Person
including the Obligors or either of them for wrongful dishonor or to enjoin the
Bank from honoring the Letter of Credit), (b) the issuance and sale of the
Bonds, including without limitation any of the foregoing resulting
- 35 -
from any misstatement or omission in the Official Statement (other than in
Appendix B to such Official Statement), or (c) the pledge of any of the Pledged
Bonds pursuant to this Agreement; provided that the Obligors shall not be
required to indemnify the Bank for any claims, damages, losses, liabilities,
costs or expenses to the extent, but only to the extent, caused by the willful
misconduct or gross negligence of the Bank in failing to observe general banking
usage or to examine with care the form of the documents presented to the Bank
under the Letter of Credit. Nothing in this Section 12 is intended to limit the
reimbursement obligation of the Obligors contained in Section 2(a) hereof. If
any action shall be brought against the Bank in respect of which indemnity may
be sought against the Obligors, the Bank shall promptly notify the Obligors in
writing, and the Obligors shall promptly assume the defense thereof, including
the employment of counsel able to represent the interests of the Bank, the
payment of all expenses and the right to negotiate settlement. If the Bank
determines, in its sole judgment, that its interests are not being diligently
and capably represented by such counsel, the Bank shall have the right to employ
separate counsel in any such action and to participate in the defense thereof,
and the fees and expenses of such counsel shall be at the expense of the
Obligors. The Obligors shall not be liable for any settlement of any such
action effected without their consent by the Bank, but if settled with the
consent of the Obligors or if there shall be a final judgment for the plaintiff
in any such action against the Obligors or the Bank, with or without the consent
of the Obligors, the Obligors agree to indemnify and hold harmless the Bank to
the extent provided herein. Notwithstanding anything to the contrary contained
in this Agreement, the Bank shall not be bound by any settlement agreement
entered into without its express written consent.
Section 13. ENVIRONMENTAL INDEMNIFICATION. Without limiting the
generality of the indemnity contained in Section 12, the Obligors
unconditionally agrees to indemnify and hold harmless the Bank, its directors,
officers, employees, agents, successors and assigns from and against any and all
losses, claims, damages, penalties, liabilities, costs and expenses (including
attorneys' fees and court costs), fines, injuries, penalties, response costs
(including without limitation, the cost of any required or necessary
investigation, testing, monitoring, repair, cleanup, detoxification, preparation
of any closure or other required plans, or other removal, response or remedial
action at or relating to the Project or the Supplemental Property (collectively,
the "Claims and Costs"), with respect to, as a direct or indirect result of, or
arising out of any of the following: (A) any Environmental Law, requirement of
any insurer of the Project or any portion thereof or the Supplemental Property
or any portion thereof, lawsuit (brought or threatened), settlement, agreement,
consent order or judgment, injunction, or restraining order, relating to the
generation, presence, storage, management, disposal, release (or threatened
release), escape, seepage, leakage or clean-up of any Hazardous materials at,
on, in, from or under all or a portion of the Project or the Supplemental
Property or any portion thereof; (B) any necessary or desirable removal,
response or remedial action with respect to the presence of Hazardous Materials
at, on, in, from or under the Project Site or the Supplemental Property or any
portion thereof; (C) the migration of Hazardous Materials from the Project Site
or the Supplemental Property or any portion thereof to any other property or
onto the Project Site or the Supplemental Property or any portion thereof from
any property or area adjacent to the Project Site or the Supplemental Property
or any portion thereof; (D) the past generation, treatment, disposal or storage
of Hazardous Materials or the transportation of Hazardous materials at, onto or
from the Project or the Supplemental Property or any portion thereof; (E) the
incorporation,
- 36 -
whether prior or future, of any Hazardous Materials into the Project or the
Supplemental Property; (F) any breach of Section 5(o) or Section 6(k) contained
herein; or (g) the discharge, treatment, storage or disposal of deionization or
waste water from the Project or the Supplemental Property regardless of whether
such discharge, treatment, storage or disposal occurred or occurs prior to, on
or subsequent to the date hereof. The provisions of this Section 13 shall
survive the expiration or termination of this Agreement and the Related
Documents.
Section 14. CONTINUING OBLIGATION. This Agreement is a continuing
obligation, shall survive the termination of the Letter of Credit and shall (a)
be binding upon the Obligors, their respective successors and assigns, and (b)
inure to the benefit of and be enforceable by the Bank and its successors,
participants and assigns; provided that, except as otherwise expressly permitted
herein, none of the parties to this Agreement may assign all or any part of this
Agreement without the prior written consent of the other parties. The Bank may
sell participations herein in whole or in part to another bank or financial
institution with the consent of the Obligors, such consent not to be
unreasonably withheld, in which case the participant shall have the same rights
and benefits as the Bank hereunder, including the Bank's rights under Section
2(c) herein. The Obligors specifically acknowledge and consent to the sale of a
fifty percent (50%) participation to LaSalle, and acknowledge and agree that the
participation agreement between the Bank and LaSalle requires or may require the
Bank to obtain the consent of LaSalle to certain matters, including, without
limitation, the transfer or sale of the Project and/or the Supplemental
Property, and the Obligors agree to be bound by such requirements.
Section 15. TRANSFER OF LETTER OF CREDIT; REDUCTION OF STATED AMOUNT.
The Letter of Credit may be transferred in accordance with the provisions set
forth therein and the Stated Amount of the Letter of Credit may be reduced in
accordance with the provisions set forth therein.
Section 16. LIMITATIONS ON BANK LIABILITY. The Obligors assume all
risks of, and the Bank shall not be liable or responsible for, the acts or
omissions of the Trustee and any beneficiary or transferee of the Letter of
Credit with respect to its use of the Letter of Credit and whether any demand
under the Letter of Credit is inconsistent with any other demand or with any
Related Document. As between the Obligors and the Bank, neither the Bank nor
any of its officers or directors shall be liable or responsible for any claim,
damage, loss, liability, cost or expense which the Obligors or either or them
may incur (or which may be claimed by any Person) by reason of or in connection
with the execution and delivery or transfer of the Letter of Credit or under any
Related Document or any circumstance or event referred to in Section 4 of this
Agreement, except only that the Obligors shall have a claim against the Bank,
and the Bank shall be liable to the Obligors, to the extent, but only to the
extent, of any direct, as opposed to consequential, damages suffered by the
Obligors which the Obligors prove were caused by the Bank's gross negligence or
willful misconduct (and also except to the extent applicable law may preclude
the Obligors from waiving in advance a claim or defense involving the Bank's
failure to observe banking usage or examine with care the face of demands under
the Letter of credit). In furtherance and not in limitation of the foregoing,
the Bank may accept documents that appear on their face to be in order, without
responsibility for further investigation, regardless of any notice or
information to the contrary. In addition, the Obligors acknowledge that they
have
- 37 -
specifically requested that the Letter of Credit provide for honor within a
period of time significantly shorter than the three day period for examining
documents provided for under applicable law and banking usage, and that this
feature of the Letter of Credit is not consistent with bank usage and increases
the risk that purported demands under the Letter of Credit may not receive the
same examination (and the bank may not be able to obtain the opinion of its
counsel or the Obligors with respect to such demand) had such three day period
been available to the Bank, and the Obligors accept and agree not to hold the
Bank responsible for such variance from bank usage. Any claim or demand by the
Obligors for gross negligence, willful misconduct or otherwise against the Bank
shall require that the Obligors establish that the Bank's conduct was not
occasioned or the result of such shortened examination period. The Obligors
acknowledge and agree that the Bank also shall be relieved from responsibility
for (and its right to reimbursement hereunder shall not be impaired by) any act
or omission for which banks are relieved of responsibility under the Uniform
Customs and Practice for Documentary Credits, 1993 revision, ICC Publication No.
500.
Section 17. COSTS, EXPENSES AND TAXES. The Obligors agree to pay on
demand all reasonable costs and expenses of the Bank in connection with the
preparation, execution, delivery and administration of this Agreement and any
other documents which may be delivered in connection with this Agreement,
including, without limitation, the reasonable fees and out-of-pocket expenses of
counsel for the Bank with respect thereto, with respect to any opinions rendered
by such counsel, and with respect to advising the Bank as to its rights and
responsibilities under this Agreement, and all reasonable costs and expenses in
connection with the appraisals required by Section 6(j) hereof or the
enforcement or any renegotiation of this Agreement, any Related Document and
such other documents which may be delivered in connection with this Agreement.
The Obligors shall pay or discharge or cause to be paid and discharged promptly
all stamp and other taxes, assessments and governmental charges or levies
payable, determined to be payable, or imposed upon either party in connection
with the execution and delivery of this Agreement and the documents to be
delivered by the Obligors hereunder and under any Related Document or upon the
income or profits of the Obligors before the same shall become in default;
provided, however, that the Obligors shall not be required to pay and discharge
or cause to be paid and discharged any such tax, assessment, charge, levy or
claim so long as the validity thereof shall be contested in good faith by
appropriate proceedings. The Obligors agree to hold the Bank harmless from and
against any and all liabilities with respect to or resulting from any delay in
paying or omission to pay such taxes, assessments, charges and levies other than
such delays solely attributable to the gross negligence or willful misconduct of
the Bank.
Section 18. SEVERABILITY. Any provision of this Agreement which is
prohibited, unenforceable or not authorized in any jurisdiction shall, as to
such jurisdiction, be ineffective to the extent of such prohibition,
unenforceability or nonauthorization without invalidating the remaining
provisions hereof or affecting the validity, enforceability or legality of such
provision in any other jurisdiction.
Section 19. GOVERNING LAW. This Agreement shall be governed by, and
construed in accordance with, the law of the State of Illinois applicable to
contracts to be performed in said state.
- 38 -
Section 20. SUBSTITUTE LETTER OF CREDIT ISSUING OFFICE. In the event
that the Bank determines, in its complete discretion, that the banking office of
the Bank, as set forth in the Letter of Credit shall be changed to another
banking office within the United States of America, (a) in order to avoid any
increased cost or amount referred to in Section 2(c), or (b) in the event the
adoption of any applicable law, rule or regulation, or any change therein, or
any change in the interpretation or administration thereof by any governmental
authority, central bank or comparable agency charged with the interpretation or
administration thereof, or compliance by the Bank with any request or directive
(whether or not having the force of law) of any such authority, central bank or
comparable agency, shall make it unlawful for the Bank to maintain the Letter of
Credit at such bank's aforesaid address, then the Bank shall notify the Trustee
and the Obligors not less than 10 Business Days prior to such change and (with
the written consent of the Obligors only in the case of avoiding an increased
cost or amount as referred to in clause (a) above) upon receipt of such notice
the Letter of Credit shall be deemed issued by such other banking office in the
United States on the effective date that the Bank specifies in its notice.
[INTENTIONALLY LEFT BLANK]
- 39 -
Section 21. HEADINGS. Section headings in this Agreement are included
herein for convenience of reference only and shall not constitute a part of this
Agreement for any other purpose.
Section 22. ACCOUNTING TERMS AND DEFINITIONS. Unless otherwise
specified herein, all accounting terms used herein shall be interpreted, all
accounting determinations hereunder shall be made, and all financial statements
required to be delivered hereunder shall be prepared in accordance with GAAP as
in effect from time to time, applied on a basis consistent (except for changes
approved by the Obligors' independent public accountants) with the most recent
audited financial statements of each Obligor delivered to the Bank.
Section 23. COUNTERPARTS. This Agreement may be signed in any number of
counterparts, each of which shall be an original with the same effect as if the
signatures thereto and hereto were upon the same instrument.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered by their respective officers thereunto duly
authorized as of the date first above written.
THE MILLER PARTNERSHIP, L.P., an Illinois limited
partnership
By CenterPoint Properties Corporation, a
Maryland corporation, its general partner
By
--------------------------------------
Title:
CENTERPOINT PROPERTIES CORPORATION, a Maryland
corporation
By
------------------------------------------
Title:
THE ROYAL BANK OF SCOTLAND plc, ACTING THROUGH ITS
NEW YORK BRANCH
By
------------------------------------------
Title:
- 40 -
ANNEX I
LETTER OF CREDIT
EXHIBIT A
Legal Description of the Project Site
EXHIBIT B
Legal Description of Supplemental Property
LOCATION 1:
Parcel 1:
LOTS 1 AND 2 IN TACO BELL RESUBDIVISION, BEING A RESUBDIVISION OF
SECTION 34, TOWNSHIP 41 NORTH, RANGE 11 EAST OF THE THIRD PRINCIPAL
MERIDIAN, IN COOK COUNTY, ILLINOIS.
Parcel 2:
EASEMENT FOR THE BENEFIT OF PARCEL 1 FOR INGRESS AND EGRESS AS CREATED
BY EASEMENT AND LICENSE AGREEMENT DATED APRIL 30, 1987 AND RECORDED
MAY 8, 1987 AS DOCUMENT 87250925 AND AMENDED BY FIRST AMENDMENT
RECORDED NOVEMBER 15, 1988 AS DOCUMENT 88526155 MADE BY BOULEVARD BANK
NATIONAL ASSOCIATION, AS TRUSTEE UNDER TRUST AGREEMENT DATED OCTOBER
10, 1986 AND KNOWN AS TRUST NUMBER 8365 AND BETWEEN MCDONALD'S
CORPORATION OVER THE FOLLOWING DESCRIBED PROPERTY:
THE EAST 193.53 FEET (AS MEASURED ALONG THE EAST LINE) OF LOT 285 IN
CENTEX INDUSTRIAL PARK UNIT 165, BEING A SUBDIVISION OF THE EAST 1/2
OF THE NORTHEAST 1/4 OF SECTION 34, TOWNSHIP 41 NORTH, RANGE 11 EAST
OF THE THIRD PRINCIPAL MERIDIAN, IN COOK COUNTY, ILLINOIS.
REIMBURSEMENT AGREEMENT
by and among
THE MILLER PARTNERSHIP, L.P.,
an Illinois limited partnership,
CENTERPOINT PROPERTIES CORPORATION,
a Maryland corporation,
and
THE ROYAL BANK OF SCOTLAND plc,
NEW YORK BRANCH
dated as of
March 1, 1996
-------------------------------------------------
relating to
$22,220,000 Aggregate Principal
Amount of
City of Gary, Indiana
Adjustable Rate Economic Development
Revenue Refunding Bonds, Series 1996 A
and
Taxable Adjustable Rate Economic Development
Revenue Refunding Bonds, Series 1996 B
(The Miller Partnership, L.P. Project)
-45-
TABLE OF CONTENTS
Page No.
--------
Section l. Certain Defined Terms . . . . . . . . . . . . . . . . . . . . 2
Section 2. Reimbursement and Other Payments. . . . . . . . . . . . . . . 8
(a) Reimbursement. . . . . . . . . . . . . . . . . . . . . . . . . . . 8
(b) Commissions and Fees . . . . . . . . . . . . . . . . . . . . . . . 8
(c) Increased Costs. . . . . . . . . . . . . . . . . . . . . . . . . . 9
(d) Pledge of Bonds. . . . . . . . . . . . . . . . . . . . . . . . . . 10
(e) Payments on the Pledged Bonds. . . . . . . . . . . . . . . . . . . 10
(f) Release of Pledged Bonds . . . . . . . . . . . . . . . . . . . . . 10
(g) Rights of the Bank Concerning Pledged
Bonds. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
(h) Remedies in Respect of Pledged Bonds . . . . . . . . . . . . . . . 11
(i) Representations, Warranties and Covenants
Concerning Pledged Bonds . . . . . . . . . . . . . . . . . . . . 12
(j) No Dispositions, etc . . . . . . . . . . . . . . . . . . . . . . . 13
(k) Sale of Pledged Bonds. . . . . . . . . . . . . . . . . . . . . . . 13
(l) Payments and Computation of Payments and
Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Section 3. Issuance of the Letter of Credit; Conditions
Precedent to Issuance of the Letter of Credit. . . . . . . . 14
(a) Issuance of the Letter of Credit;
Substitute Letters of Credit . . . . . . . . . . . . . . . . . . 14
(b) Conditions Precedent to the Issuance of the
Letter of Credit . . . . . . . . . . . . . . . . . . . . . . . . 16
Section 4. Obligations Absolute. . . . . . . . . . . . . . . . . . . . . 22
Section 5. Representations and Warranties. . . . . . . . . . . . . . . . 22
(a) Organization . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
(b) Good Standing. . . . . . . . . . . . . . . . . . . . . . . . . . . 23
(c) Authorization. . . . . . . . . . . . . . . . . . . . . . . . . . . 23
(d) No Conflict. . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
(e) Approvals. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
(f) Validity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
(g) Financial Information. . . . . . . . . . . . . . . . . . . . . . . 24
(h) No Material Adverse Change . . . . . . . . . . . . . . . . . . . . 24
(i) Legal Proceedings. . . . . . . . . . . . . . . . . . . . . . . . . 24
(j) Official Statement . . . . . . . . . . . . . . . . . . . . . . . . 25
(k) Regulation . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
(l) Margin Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
(m) Compliance with Applicable Law . . . . . . . . . . . . . . . . . . 25
(n) Interest Rate. . . . . . . . . . . . . . . . . . . . . . . . . . . 25
(o) Environmental Matters. . . . . . . . . . . . . . . . . . . . . . . 25
(p) Related Documents. . . . . . . . . . . . . . . . . . . . . . . . . 27
(q) Borrower's Undertaking . . . . . . . . . . . . . . . . . . . . . . 27
Section 6. Covenants of the Obligors. . . . . . . . . . . . . . . . . . . . 28
(a) Financial Statements and Other Information . . . . . . . . . . . . 28
(b) Consolidations, Mergers. . . . . . . . . . . . . . . . . . . . . . 29
(c) Conduct of Business and Maintenance of
Existence. . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
(d) Intentionally Deleted. . . . . . . . . . . . . . . . . . . . . . . 29
(e) Compliance with Laws . . . . . . . . . . . . . . . . . . . . . . . 29
(f) Inspection of Property, Books and Records. . . . . . . . . . . . . 29
(g) Amendment of Related Documents . . . . . . . . . . . . . . . . . . 30
(h) Registration of Bonds. . . . . . . . . . . . . . . . . . . . . . . 30
(i) Liens. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
(j) Required Value of Collateral; Appraisal. . . . . . . . . . . . . . 30
(k) Environmental Matters. . . . . . . . . . . . . . . . . . . . . . . 31
(l) Sale, Substitution, or Lease of Mortgaged
Property . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
(m) Substitution and Removal of Equipment. . . . . . . . . . . . . . . 33
(n) Granting of Easements. . . . . . . . . . . . . . . . . . . . . . . 34
(o) Inspections. . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
(p) Corrections. . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
(q) Leases . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
(r) Agreement Concerning Supplemental Property
Mortgage . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
Section 7. Events of Default. . . . . . . . . . . . . . . . . . . . . . . . 36
Section 8. Amendments, Etc. . . . . . . . . . . . . . . . . . . . . . . . . 39
Section 9. Notices. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
Section 10. No Waiver; Remedies. . . . . . . . . . . . . . . . . . . . . . . 39
Section 11. Right of Setoff. . . . . . . . . . . . . . . . . . . . . . . . . 39
Section 12. Indemnification. . . . . . . . . . . . . . . . . . . . . . . . . 40
- ii -
Section 13. Environmental Indemnification. . . . . . . . . . . . . . . . . . 41
Section 14. Continuing Obligation. . . . . . . . . . . . . . . . . . . . . . 41
Section 15. Transfer of Letter of Credit; Reduction of
Stated Amount. . . . . . . . . . . . . . . . . . . . . . . . . 42
Section 16. Limitations on Bank Liability . . . . . . . . . . . . . . . . . 42
Section 17. Costs, Expenses and Taxes . . . . . . . . . . . . . . . . . . . 43
Section 18. Severability. . . . . . . . . . . . . . . . . . . . . . . . . . 43
Section 19. Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . 43
Section 20. Substitute Letter of Credit Issuing Office. . . . . . . . . . . 44
Section 21. Headings. . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
Section 22. Accounting Terms and Definitions. . . . . . . . . . . . . . . . 45
Section 23. Counterparts. . . . . . . . . . . . . . . . . . . . . . . . . . 45
ANNEX I - LETTER OF CREDIT . . . . . . . . . . . . . . . . . . . . . . . . . 46
EXHIBIT A - Legal Description of the Project Site. . . . . . . . . . . . . . 47
EXHIBIT B - Legal Description of Supplemental Property . . . . . . . . . . . 48
- iii -
April 1, 1996
Irrevocable Letter of Credit
No. LCA 02229600417NY
Fifth Third Bank of Central Indiana,
as Trustee (the "Trustee") under the Trust
Indenture dated as of March 1, 1996,
between The City of Gary, Indiana
and the Trustee for the benefit of the holders
of $22,220,000 in aggregate principal amount
of the Adjustable Rate Economic Development
Revenue Refunding Bonds, Series 1996 A and
Taxable Adjustable Rate Economic Development
Revenue Refunding Bonds, Series 1996 B (The
Miller Partnership, L.P. Project)
251 North Illinois Street
Suite 1000
Indianapolis, Indiana 46204
Attention: Corporate Trust Department
At the request and for the account of our customers, The Miller
Partnership, L.P., an Illinois limited Partnership ("Miller") and CenterPoint
Properties Corporation, a Maryland corporation ("CenterPoint", and collectively
with Miller, the "Obligors") we establish in your favor, as Trustee (and agent
for the holders of the Bonds described below) under the Trust Indenture, dated
as of March 1, 1996 (the "Indenture"), between the City of Gary, Indiana (the
"Issuer") and you, pursuant to which $22,220,000 in aggregate principal amount
of the Issuer's Adjustable Rate Economic Development Revenue Refunding Bonds,
Series 1996 A (The Miller Partnership, L.P. Project) (the "Series 1996 A Bonds")
and Taxable Adjustable Rate Economic Development Revenue Refunding Bonds, Series
1996 B (The Miller Partnership, L.P. Project) (the "Series 1996 B Bonds", and
collectively with the Series 1996 A Bonds, the "Bonds"), are being issued, our
Irrevocable Letter of Credit No. LCA 02229600417NY, in the amount not to exceed
$22,634,774 (representing the principal amount of the Series 1996 A Bonds
($20,540,000), plus 56 days' interest thereon at a maximum rate of 12% per annum
($383,414), plus the principal amount of the Series 1996 B Bonds ($1,680,000),
plus 56 days' interest thereon at a maximum rate of 12% per annum ($31,360), in
each case calculated on the basis of a 360 day year consisting of twelve 30-day
months, all as more fully described below) effective immediately
and expiring (unless earlier terminated in accordance with the provisions
hereof) on April 15, 2001, or such later date to which the Stated Expiration
Date has been extended in accordance with the terms hereof (the "Stated
Expiration Date").
We hereby irrevocably authorize you to draw on us, in accordance with the
terms and conditions hereinafter set forth, (1) in one or more drawings by your
draft payable one Business Day (as hereinafter defined) after sight, drawn on
us, and accompanied by your written and completed certificate signed by you in
substantially the form of Annex A attached hereto (such draft being your
"Interest Draft"), an amount not to exceed $414,774 (representing 56 days'
interest on the Bonds at a maximum rate of 12% per annum), subject to reduction
or reinstatement, if applicable, as hereinafter provided, (2) in one or more
drawings by your draft or drafts payable one Business Day after sight, drawn on
us, and, for each such drawing, accompanied by your written and completed
certificate signed by you in substantially the form of Annex B attached hereto
(any such draft being your "Principal Draft"), an aggregate amount not to exceed
$22,220,000, subject to reduction as hereinafter provided, (3) in one or more
drawings by your draft or drafts payable one Business Day (or in certain
circumstances as described herein on the same Business Day) after sight, drawn
on us, and, for each such drawing, accompanied by your written and completed
certificate signed by you in substantially the form of Annex C attached hereto
(any such draft being your "Bond Purchase Draft"), an aggregate amount not to
exceed $22,634,774 (representing the principal amount of the Bonds plus 56 days'
interest coverage at a maximum rate of 12% per annum), subject to reduction or
reinstatement, if applicable, as hereinafter provided, and (4) in a single
drawing by your draft payable one Business Day after sight, drawn on us, and
accompanied by your written and completed certificate signed by you in
substantially the form of Annex D attached hereto (such draft being your "Final
Draft"), an amount not to exceed $22,634,774 (representing the principal amount
of the Bonds plus 56 days' interest coverage at a maximum rate of 12% per
annum), as hereinafter provided. Any such draft, with the accompanying
certificate, drawn in strict conformity with the terms and conditions of this
Letter of Credit and presented at our office as hereinafter set forth prior to
5:00 p.m. (New York time) on any Business Day shall be honored by us before
12:00 noon (New York time) on the first Business Day thereafter in accordance
with your payment instructions; provided, however, that any Bond Purchase Draft,
with the accompanying certificate, drawn in strict conformity with the terms and
conditions of this Letter of Credit and presented at our office as hereinafter
set forth prior to 10:30 a.m. (New York time) on any Business Day shall be
honored by us before 12:30 p.m. (New York time) on the same Business Day if
specified in your payment instructions. You shall give us telephonic notice, at
(212) 269-1718, of your intention to make a drawing hereunder by your Bond
Purchase Draft, not later that 10:00 a.m. (New York time) on the day of such
drawing; provided that the giving of such telephonic notice shall not be a
condition precedent to your drawing hereunder. Notwithstanding any other
provision of this Letter of Credit, you are not authorized to draw on us
hereunder with respect to any payment of principal of or interest on any Pledged
Bonds (as defined in the Indenture).
If you shall draw on us by your Interest Draft and shall have received from
us within 15 calendar days from the date of our honoring such Interest Draft a
written direction under Section
-2-
7.01(f) or 7.01(i) of the Indenture to declare the Bonds immediately due and
payable because of the occurrence and continuance of an Event of Default as
defined in the Reimbursement Agreement, dated as of March 1, 1996, by and among
the Obligors and us (the "Reimbursement Agreement"), your right to draw on us in
multiple drawings by your Bond Purchase Draft(s) or in a single drawing by your
Final Draft shall be reduced by the amount of such Interest Draft. Your right
to draw on us by your Interest Draft(s) shall also be reduced by the amount of
any drawing or drawings theretofore made on us by your Bond Purchase Draft(s)
and attributable to interest on the Bonds, unless reinstated. Your right to
draw on us by your Principal Draft(s), your Bond Purchase Draft(s) and your
Final Draft shall also be reduced by the amount of any drawing or drawings
theretofore made on us by your Principal Draft(s) and, unless reinstated, your
Bond Purchase Draft(s) attributable to principal of the Bonds.
If you shall draw on us by your Interest Draft and shall not have received
from us within 15 calendar days from the date of our honoring such Interest
Draft a written direction under Section 7.01(f) or 7.01(i) of the Indenture to
declare the Bonds immediately due and payable because of the occurrence and
continuance of an Event of Default as defined in the Reimbursement Agreement,
your right to draw on us in a single drawing by your Interest Draft under clause
(1) in the second paragraph hereof shall be automatically and irrevocably
reinstated and, effective the 16th calendar day from the date of our honoring
such Interest Draft, you shall again be irrevocably authorized to draw on us for
such Bonds in accordance with such clause (1) and the other terms and conditions
referred to or set forth above, in a drawing by your Interest Draft; and this
automatic reinstatement of your right to draw on us by your Interest Draft under
such clause (1) shall be applicable to successive drawings by your Interest
Drafts under such clause (1) so long as this Letter of Credit shall not have
terminated as set forth below.
If you shall draw on us by your Bond Purchase Draft and thereafter you
shall receive and confirm to us by telephone that you hold in trust for our
account collected and immediately available funds constituting the proceeds of
the remarketing of all or a portion of the Bonds or Beneficial Ownership
Interests (as defined in the Indenture) tendered to you for purchase in
accordance with the terms of the Indenture, such confirmation shall
automatically reinstate your right to draw on us (i) by your Interest Draft
under clause (1) above in the amount of the drawing made on us by such Bond
Purchase Draft and attributable to interest on the Bonds or Beneficial Ownership
Interests that have been remarketed and for which you are holding proceeds, (ii)
by your Principal Draft(s) under clause (2) above, in the amount of the drawing
made on us by such Bond Purchase Draft and attributable to principal on the
Bonds or Beneficial Ownership Interests that have been remarketed and for which
you are holding proceeds and (iii) by your Bond Purchase Draft(s) under clause
(3) above and your Final Draft under clause (4) above, in the amount of the
drawing made on us by such Bond Purchase Draft and attributable to the Bonds or
Beneficial Ownership Interests that have been remarketed and for which you are
holding proceeds. Upon the resale and delivery of the Bonds and transfer of the
Beneficial Ownership Interests in such amount under the Indenture and your
telephonic confirmation to us, you shall again be irrevocably authorized to draw
on us in accordance with clauses (1) through (4) in the second paragraph hereof,
and the other terms and conditions referred to or set forth above, in a single
or
-3-
multiple drawing as set forth above; and this automatic reinstatement of your
right to draw on us shall be applicable to successive drawings hereunder so long
as this Letter of Credit shall not have been terminated as set forth below. We
shall thereafter promptly confirm such reinstatement in writing, but such
written confirmation to you by us shall not be required to effect such
reinstatement.
Subject to the provisions set forth above for reinstatement of amounts
drawn under the Letter of Credit by your Interest Draft(s) and Bond Purchase
Draft(s), drawings under the Letter of Credit honored by us shall not, in the
aggregate, exceed the face amount of this Letter of Credit as reduced from time
to time as hereinabove provided.
In addition, the total amount of this Letter of Credit and the amounts
available to be drawn by you under any draft shall be decreased upon our receipt
of notice from you, in the form of your written and completed certificate signed
by you in substantially the form of Annex E attached hereto (a "Reduction
Certificate"), of a payment by means other than a draw under this Letter of
Credit of less than all of the unpaid principal of the Bonds outstanding, to the
respective amounts stated by you in such certificate. No more than one
Reduction Certificate shall be submitted to us in any six-month period, provided
that such limitation shall not apply to any Reduction Certificate in which the
reduction of the amount available to be drawn under the Letter of Credit equals
or exceeds $100,000.
Funds under this Letter of Credit are available to you against (1) your
Interest Draft accompanied by your written and completed certificate signed by
you in substantially the form of Annex A attached hereto, (2) your Principal
Draft accompanied by your written and completed certificate signed by you in
substantially the form of Annex B attached hereto, (3) your Bond Purchase Draft
accompanied by your written and completed certificate signed by you in
substantially the form of Annex C attached hereto, and (4) your Final Draft
accompanied by your written and completed certificate signed by you in
substantially the form of Annex D attached hereto. To the extent that amounts
are available to be drawn by your Interest Draft, such Interest Draft may be
presented together with your Principal Draft (but not your Final Draft). Each
such draft shall include thereon a reference to the number of this Letter of
Credit and each such draft and certificate shall be dated the date of its
presentation, shall be signed by an Authorized Officer (as defined below) and
shall be presented at our office located at 88 Pine Street, 26th Floor, New
York, New York 10005-1801, or such other address as we may specify in a writing
that mentions this letter of credit and is signed by us and received by you, or
if delivered via tested telex, to telex number WU 1620261, Answerback: RBSINY,
or if delivered via facsimile, to facsimile number (212) 480-0791, in each case
to the attention of Derek Bonnar, Vice President; provided, that any draft and
certificate presented by telex or facsimile shall be simultaneously confirmed
with our office by telephone at (212) 269-1718 (or such other telephone number
as we may designate) and an original executed copy of such draft and certificate
shall be forwarded to us promptly by first class mail or overnight mail or
courier. By "Authorized Officer" we mean any of your Vice Presidents, Assistant
Vice Presidents or Trust Officers. If requested by you, payment under this
Letter of Credit may be made by wire transfer or by deposit of immediately
-4-
available funds into a designated account that you maintain with us. We agree
that all payments made by us hereunder will be made with our own funds.
This Letter of Credit shall automatically terminate upon the earliest to
occur of (i) our honoring your Final Draft hereunder, or (ii) your surrendering
this Letter of Credit to us for cancellation as a result of (A) the payment in
full of the Bonds pursuant to the provisions of the Indenture, or (B) the
acceptance by you of an Alternate Letter of Credit (as defined in the
Indenture), as certified by you to us, or (iii) the Stated Expiration Date, or
(iv) the fifth calendar day following the Fixed Interest Rate Commencement Date
(as defined in the Indenture) unless waived in writing by us prior to the Fixed
Interest Rate Commencement Date, or (v) the fifth calendar day following the
Interest Period Reset Date (as defined in the Indenture) from and after which
any of the Bonds bear interest at the Six Month Interest Rate, the One Year
Interest Rate or the Five Year Interest Rate, or (vi) the fifteenth calendar day
following delivery to you of a direction by us under Section 7.01(f) or 7.01(i)
of the Indenture to declare the Bonds immediately due and payable which has not
been rescinded.
If a demand for payment made by you hereunder does not, in any instance,
conform to the terms and conditions of this Letter of Credit, we shall give you
prompt written notice that the demand was not effected in accordance with the
terms and conditions of this Letter of Credit, stating the reasons therefore and
that we are holding any documents at your disposal or are returning the same to
you, as we may elect. Upon being notified that the demand was not effected in
conformity with this Letter of Credit, you may attempt to correct any such
non-conforming demand for payment if, and to the extent that, you are able to do
so in accordance with the terms of this Letter of Credit and within the
expiration date of the Letter of Credit.
Communications with respect to this Letter of Credit shall be in writing
and shall be addressed to us at 88 Pine Street, 26th Floor, New York, New York
10005-1801, or such other address as we may specify in a writing, or if
delivered via tested telex, to telex number WU 1620261, Answerback: RBSINY, or
if delivered via facsimile, to facsimile number (212) 480-0791, in each case to
the attention of Derek Bonnar, Vice President, and specifically referring to the
number of this Letter of Credit. By "Business Day" we mean any day on which we
are open in New York, New York for a commercial banking business.
This Letter of Credit is subject to the Uniform Customs and Practice for
Documentary Credits (1993 Revision), International Chamber of Commerce,
Publication No. 500 (the "Uniform Customs") with the exceptions of Articles
48(f) and 48(g) thereof. This Letter of Credit shall be deemed to be a contract
made under the laws of the State of New York and shall, as to matters not
governed by the Uniform Customs, be governed by and constructed in accordance
with the laws of the State of New York, including the Uniform Commercial Code as
in effect in the State of New York.
This Letter of Credit is transferable to any transferee who has succeeded
you as Trustee under the Indenture. Each letter of credit issued upon any such
transfer may be successively
-5-
transferred. Transfer of the available drawing(s) under this Letter of Credit
to such transferee shall be effected by the presentation to us of this Letter of
Credit accompanied by a written and completed certificate signed by you
substantially in the form of Annex F attached hereto. Upon such presentation we
shall forthwith transfer the same to your transferee or, if so requested by your
transferee, issue an irrevocable letter of credit to your transferee in the form
of this Letter of Credit.
The Stated Expiration Date may be extended from time to time, at our sole
discretion, by our delivery to you of a written and completed certificate in the
form of Annex G hereto. Each such extension of the Stated Expiration Date shall
become effective on the Business Day following delivery of such notice to you
and thereafter all references in this Letter of Credit or the Reimbursement
Agreement to the Stated Expiration Date shall be deemed to be references to the
date designated as such in such notice. Any date to which the Stated Expiration
Date has been extended as herein provided may, at our sole discretion, be
extended in a like manner. No further action shall be required to extend such
expiry date, and no substitute letter of credit shall be issued to effect such
extension.
This Letter of Credit sets forth in full our understanding, and such
undertaking shall not in any way be modified, amended, amplified or limited by
reference to any document, instrument or agreement referred to herein
(including, without limitation, the Bonds), other than the certificates and the
drafts referred to herein; and any such reference shall not be deemed to
incorporate herein by reference any document, instrument or agreement except for
such certificates and such drafts.
Very truly yours,
THE ROYAL BANK OF SCOTLAND PLC
By:
---------------------------
Title:
-6-
ANNEX A
CERTIFICATE FOR DRAWING IN CONNECTION
WITH THE PAYMENT OF INTEREST ON THE
CITY OF GARY, INDIANA
ADJUSTABLE RATE ECONOMIC DEVELOPMENT REVENUE REFUNDING
BONDS, SERIES 1996A (THE MILLER PARTNERSHIP, L.P. PROJECT) AND
TAXABLE ADJUSTABLE RATE ECONOMIC DEVELOPMENT REVENUE
REFUNDING BONDS, SERIES 1996B (THE MILLER PARTNERSHIP, L.P. PROJECT)
The undersigned, a duly authorized officer of Fifth Third Bank of Central
Indiana, an Indiana banking corporation (acting in its capacity as trustee under
the Indenture, the "Trustee"), hereby certifies to The Royal Bank of Scotland
plc (the "Bank"), with reference to Irrevocable Letter of Credit No. LCA
02229600417NY (the "Letter of Credit") issued by the Bank in favor of the
Trustee, that:
(1) The Trustee is the Trustee under the Indenture for the holders of
the Bonds.
(2) The Trustee is making a drawing under the Letter of Credit with
respect to a payment, pursuant to the terms of the Indenture, of interest on the
Bonds.
(3) The amount of the Interest Draft accompanying this Certificate is
$__________________, being drawn in respect of such interest, and does not
include any amount of interest on the Bonds included in any Interest Draft or
Bond Purchase Draft (that has not been reinstated) presented to you and not
dishonored by you on or prior to the date of presentation hereof.
(4) [The Interest Draft accompanying this Certificate is the first
Interest Draft presented by the Trustee under the Letter of Credit.](1) [The
Interest Draft last presented by the Trustee under the Letter of Credit was
honored by you on ______________, 19____, and the Trustee did not within 15
calendar days after such date receive a written direction from you under Section
7.01(f) or 7.01(i) of the Indenture to accelerate and declare the Bonds
immediately due and payable because of the occurrence and continuance of an
Event of Default as defined in the Reimbursement Agreement.](2)
(5) The amount of the Interest Draft accompanying this Certificate
was computed in accordance with the terms and conditions of the Bonds and the
Indenture. Such
_____________________
(1) To be used in the Certificate relating to the first Interest Draft only.
(2) To be used in each Certificate relating to each Interest Draft other than
the first Interest Draft.
amount does not include any amount in respect of Pledged Bonds and does not
exceed the amount available to be drawn by an Interest Draft under the Letter of
Credit.
(6) This Certificate and the Interest Draft it accompanies are dated,
and are being presented to the Bank on the date that is one Business Day prior
to the date on which interest on the Bonds with respect to which this drawing is
being made is due and payable under the terms of the Bonds and the Indenture.
All capitalized terms used but not defined herein shall have the respective
meanings assigned thereto in the Letter of Credit.
IN WITNESS WHEREOF, the Trustee has executed this Certificate as of the
_____ day of ____________________, 19_____.
FIFTH THIRD BANK OF CENTRAL INDIANA, as Trustee
By:
-------------------------------------------
Its: Authorized Officer
ANNEX B
CERTIFICATE FOR DRAWING IN CONNECTION
WITH THE PAYMENT OF UNPAID PRINCIPAL OF THE
CITY OF GARY, INDIANA
ADJUSTABLE RATE ECONOMIC DEVELOPMENT REVENUE REFUNDING
BONDS, SERIES 1996A (THE MILLER PARTNERSHIP, L.P. PROJECT) AND
TAXABLE ADJUSTABLE RATE ECONOMIC DEVELOPMENT REVENUE
REFUNDING BONDS, SERIES 1996B (THE MILLER PARTNERSHIP, L.P. PROJECT)
The undersigned, a duly authorized officer of Fifth Third Bank of Central
Indiana, an Indiana banking corporation (acting in its capacity as Trustee under
the Indenture, the "Trustee"), hereby certifies to The Royal Bank of Scotland
plc (the "Bank"), with reference to Irrevocable Letter of Credit No. LCA
02229600417NY (the "Letter of Credit") issued by the Bank in favor of the
Trustee, that:
(1) The Trustee is the Trustee under the Indenture for the holders of
the Bonds.
(2) The Trustee is making a drawing under the Letter of Credit with
respect to the payment, pursuant to the terms of the Indenture, of less than all
of the unpaid principal of the Bonds which are outstanding under the Indenture.
(3) The amount of the Principal Draft accompanying this Certificate
is $_______________, being drawn in respect of the payment of such principal,
and does not include any amount of principal on the Bonds included in any
Principal Draft, Bond Purchase Draft that has not been reinstated or Final Draft
presented to you and not dishonored by you on or prior to the date of
presentation hereof.
(4) The amount of the Principal Draft accompanying this Certificate
was computed in accordance with the terms and conditions of the Bonds and the
Indenture. Such amount does not include any amount in respect of Pledged Bonds
and does not exceed the amount available to be drawn with respect to principal
of the Bonds under the Letter of Credit.
(5) This Certificate and the Principal Draft it accompanies are
dated, and are being presented to the Bank on, the date that is one Business Day
prior to the date on which unpaid principal of the Bonds with respect to which
this drawing is being made is due and payable under the terms of the Bonds and
the Indenture.
The Trustee acknowledges that, pursuant to the terms of the Letter of
Credit, upon your honoring the Principal Draft accompanying this Certificate,
the total amount available under the Letter of Credit and the amounts available
to be drawn by the Trustee thereunder by any subsequent Principal Draft and
Final Draft are automatically decreased by an amount equal to the amount
specified in paragraph (3) above as being drawn in respect of the payment of
unpaid principal of the Bonds.
All capitalized terms used but not defined herein shall have the respective
meanings assigned thereto in the Letter of Credit.
IN WITNESS WHEREOF, the Trustee has executed this Certificate as of the
______ day of _____________________, 19____.
FIFTH THIRD BANK OF CENTRAL INDIANA, as Trustee
By:
-------------------------------------------
Its: Authorized Officer
-2-
ANNEX C
CERTIFICATE FOR DRAWING IN CONNECTION
WITH THE PAYMENT OF THE PURCHASE PRICE OF THE
CITY OF GARY, INDIANA
ADJUSTABLE RATE ECONOMIC DEVELOPMENT REVENUE REFUNDING
BONDS, SERIES 1996A (THE MILLER PARTNERSHIP, L.P. PROJECT) AND
TAXABLE ADJUSTABLE RATE ECONOMIC DEVELOPMENT REVENUE
REFUNDING BONDS, SERIES 1996B (THE MILLER PARTNERSHIP, L.P. PROJECT)
The undersigned, a duly authorized officer of Fifth Third Bank of Central
Indiana, an Indiana banking corporation (acting in its capacity as trustee under
the Indenture, the "Trustee"), hereby certifies to The Royal Bank of Scotland
plc (the "Bank"), with reference to Irrevocable Letter of Credit No. LCA
02229600417NY (the "Letter of Credit") issued by the Bank in favor of the
Trustee, that:
(1) The Trustee is the Trustee under the Indenture for the holders of
the Bonds.
(2) The Trustee is making a drawing under the Letter of Credit with
respect to the payment of the aggregate purchase price of the Bonds or
Beneficial Ownership Interests tendered to the Trustee for purchase pursuant to
the terms of the Bonds and of Section 2.04, 2.05 or 2.06 of the Indenture.
Sufficient funds are not available in the Remarketing Reimbursement Fund (as
defined in the Indenture) to purchase the Bonds and Beneficial Ownership
interests so tendered.
(3) The amount of the Bond Purchase Draft accompanying this
Certificate is $________________ (representing $__________ of principal and
$____________ of interest), being drawn in respect of the payment of the
purchase price of Bonds or Beneficial Ownership Interests properly tendered or
deemed tendered for purchase, and does not include any amount of principal on
the Bonds or Beneficial Ownership Interests included in any other Bond Purchase
Draft (except to the extent of your reinstatement of the amount which may be
drawn thereby under the terms of the Letter of Credit), or in any Principal
Draft or Final Draft presented to you, and not dishonored by you, on or prior to
the date of presentation hereof.
(4) The Bonds or Beneficial Ownership Interests being purchased with
the proceeds of the Bond Purchase Draft accompanying this Certificate are being
registered in the name of the Bank or its nominee and held by the Trustee for
the benefit of the Bank and the Beneficial Ownership Interests being purchased
with the proceeds of the Bond Purchase Draft accompanying this Certificate are
being registered in the name of the Bank on the books of the Depository or a
Direct Participant (each as defined in the Indenture), all in accordance with
the Indenture and the Reimbursement Agreement, dated as of March 1, 1996, by and
among the Obligors and the Bank.
(5) The amount of the Bond Purchase Draft accompanying this
Certificate was computed in accordance with the terms and conditions of the
Bonds and the Indenture. Such amount does not include any amount in respect of
Pledged Bonds and does not exceed the amount available to be drawn under the
Letter of Credit with respect to the purchase of the Bonds.
(6) This Certificate and the Bond Purchase Draft it accompanies are
dated, and are being presented to the Bank on, the date that is not more than
one Business Day prior to the date on which the purchase price of the Bonds with
respect to which this Drawing is being made is due and payable under the terms
of the Bonds and the Indenture.
The Trustee acknowledges that, pursuant to the terms of the Letter of
Credit, upon your honoring the Bond Purchase Draft accompanying this
Certificate, the total amount of the Letter of Credit and the amounts available
to be drawn by the Trustee thereunder by (i) any subsequent Bond Purchase Draft,
Principal Draft, and Final Draft are automatically decreased by an amount equal
to the amount specified in paragraph (3) above as being drawn in respect of the
payment of unpaid principal of the Bonds or Beneficial Ownership Interests,
unless such amount is reinstated in the manner provided in the Letter of Credit,
and (ii) any subsequent Interest Draft, Bond Purchase Draft and Final Draft is
automatically decreased by an amount equal to the amount specified in paragraph
(3) above as being drawn in respect of the payment of unpaid interest on the
Bonds, unless such amount is reinstated in the manner provided in the Letter of
Credit.
All capitalized terms used but not defined herein shall have the respective
meanings assigned thereto in the Letter of Credit.
IN WITNESS WHEREOF, the Trustee has executed this Certificate as of the
______ day of ___________________, 19____.
FIFTH THIRD BANK OF CENTRAL INDIANA, as Trustee
By:
-------------------------------------------
Its: Authorized Officer
-2-
ANNEX D
CERTIFICATE FOR DRAWING IN CONNECTION
WITH THE PAYMENT OF ENTIRE OUTSTANDING
PRINCIPAL OF AND INTEREST ON THE
CITY OF GARY, INDIANA
ADJUSTABLE RATE ECONOMIC DEVELOPMENT REVENUE REFUNDING
BONDS, SERIES 1996A (THE MILLER PARTNERSHIP, L.P. PROJECT) AND
TAXABLE ADJUSTABLE RATE ECONOMIC DEVELOPMENT REVENUE
REFUNDING BONDS, SERIES 1996B (THE MILLER PARTNERSHIP, L.P. PROJECT)
The undersigned, a duly authorized officer of Fifth Third Bank of Central
Indiana, an Indiana banking corporation (acting in its capacity as trustee under
the Indenture, the "Trustee"), hereby certifies to The Royal Bank of Scotland
plc (the "Bank"), with reference to Irrevocable Letter of Credit No. LCA
02229600417NY (the "Letter of Credit") issued by the Bank in favor of the
Trustee, that:
(1) The Trustee is the Trustee under the Indenture for the holders of
the Bonds.
(2) The Trustee is making a drawing under the Letter of Credit with
respect to the payment of the unpaid principal amount of, and up to 56 days'
interest on, all of the Bonds which are outstanding under the Indenture.
(3) The amount of the Final Draft accompanying this Certificate is
equal to the sum of (i) $__________________ being drawn in respect of unpaid
principal of the Bonds and (ii) $_________________ being drawn in respect of
unpaid interest on the Bonds, and does not include any amount of principal of or
interest on the Bonds or Beneficial Ownership Interests included in any Interest
Draft or Bond Purchase Draft that has not been reinstated, or Principal Draft
presented and not dishonored by you on or prior to the date of this Certificate.
(4) The amount of the Final Draft accompanying this Certificate was
computed in accordance with the terms and conditions of the Bonds and the
Indenture. Such amount does not include any amount in respect of Pledged Bonds
and does not exceed the amount available to be drawn by a Final Draft under the
Letter of Credit.
(5) This Certificate and the Final Draft it accompanies are dated,
and are being presented to the Bank on the date that is one Business Day prior
to the date on which the unpaid principal of, and interest on, all of the Bonds
which are outstanding under the Indenture are due and payable under the terms of
the Bonds and the Indenture.
The Trustee acknowledges that, pursuant to the terms of the Letter of
Credit, upon your honoring the Final Draft accompanying this Certificate, the
entire amount available to be drawn by the Trustee under the Letter of Credit
shall have been drawn and the Letter of Credit shall automatically terminate.
All capitalized terms used but not defined herein shall have the respective
meanings assigned thereto in the Letter of Credit.
IN WITNESS WHEREOF, the Trustee has executed this Certificate as of this
______ day of ____________________, 19____.
FIFTH THIRD BANK OF CENTRAL INDIANA, as Trustee
By:
-------------------------------------------
Its: Authorized Officer
-2-
ANNEX E
CERTIFICATE FOR THE REDUCTION OF AMOUNTS
AVAILABLE UNDER LETTER OF CREDIT NO. LCA 02229600417NY
ISSUED IN CONNECTION WITH THE
CITY OF GARY, INDIANA
ADJUSTABLE RATE ECONOMIC DEVELOPMENT REVENUE REFUNDING
BONDS, SERIES 1996A (THE MILLER PARTNERSHIP, L.P. PROJECT) AND
TAXABLE ADJUSTABLE RATE ECONOMIC DEVELOPMENT REVENUE
REFUNDING BONDS, SERIES 1996B (THE MILLER PARTNERSHIP, L.P. PROJECT)
The undersigned, a duly authorized officer of Fifth Third Bank of Central
Indiana, an Indiana banking corporation (acting in its capacity as trustee under
the Indenture, the "Trustee"), hereby certifies to The Royal Bank of Scotland
plc (the "Bank"), with reference to Irrevocable Letter of Credit No. LCA
02229600417NY (the "Letter of Credit") issued by the Bank in favor of the
Trustee, that:
(1) The Trustee is the Trustee under the Indenture for the holders of
the Bonds.
(2) The Trustee hereby notifies you that on or prior to the date
hereof $____________ in aggregate principal amount of the Bonds have been paid
(or provision for payment thereof has been made) with Eligible Funds (as defined
in the Indenture) pursuant to the Indenture.
(3) After giving effect to such payment(s), the aggregate principal
amount of all of the Bonds outstanding under the Indenture is or will be, as the
case may be $__________.
(4) The maximum amount of interest, computed in accordance with the
terms and conditions of the Bonds and the Indenture, accruing on the Bonds
referred to in paragraph (3) above in any period of 56 days is $_______________.
(5) The amount available to be drawn by the Trustee under the Letter
of Credit by any Interest Draft is hereby reduced to $____________ (such amount
being equal to the amount specified in paragraph (4) above).
(6) The aggregate amount available to be drawn by the Trustee under
the Letter of Credit by any Principal Draft(s) is hereby reduced to
$_______________ (such amount being equal to the amount specified in paragraph
(3) above).
(7) The amount available to be drawn by the Trustee under the Letter
of Credit by any Bond Purchase Draft(s) or Final Draft is hereby reduced to
$______________ (such amount being equal to the sum of the amounts specified in
paragraphs (3) and (4) above).
(8) Either (a) the reduction of the amount available to be drawn
under the Letter of Credit evidenced by this Reduction Certificate exceeds
$100,000 or (b) no other Reduction Certificate, other than a Reduction
Certificate in which the reduction of the amount available to be drawn under the
Letter of Credit equaled or exceeded $100,000, has been submitted to the Bank in
the six-month period immediately preceding the date hereof.
The Trustee acknowledges that, pursuant to the terms of the Letter of
Credit, the amounts available to be drawn thereunder by an Interest Draft,
Principal Draft, Bond Purchase Draft and Final Draft shall be reduced to the
respective amounts set forth above effective upon the later of (i) the date on
which you received this Certificate or (ii) ___________________, 19____.
All capitalized terms used but not defined herein shall have the respective
meanings assigned thereto in the Letter of Credit.
IN WITNESS WHEREOF, the Trustee has executed this Certificate this _______
day of ___________________, 19_____.
FIFTH THIRD BANK OF CENTRAL INDIANA, as Trustee
By:
-------------------------------------------
Its: Authorized Officer
-2-
ANNEX F
INSTRUCTIONS TO TRANSFER
_______________, 19_____
The Royal Bank of Scotland plc
88 Pine Street
26th Floor
New York, New York 10005-1801
Attention: Derek Bonnar, Vice President
Re: The Royal Bank of Scotland plc Irrevocable Letter of Credit No. LCA
02229600417NY
Ladies and Gentlemen:
For value received, the undersigned beneficiary hereby irrevocably
transfers to:
-------------------------
(Name of Transferee)
-------------------------
(Address)
all rights of the undersigned beneficiary to draw under the above Letter of
Credit. Such transferee has succeeded the undersigned beneficiary as Trustee
under the Indenture.
By this transfer, all rights of the undersigned beneficiary in such Letter
of Credit are transferred to the transferee and the transferee shall hereafter
have the sole rights as beneficiary thereof; PROVIDED, HOWEVER, that no rights
shall be deemed to have been transferred to the transferee until such transfer
complies with the requirements of such Letter of Credit pertaining to transfers.
Such Letter of Credit is returned herewith and in accordance therewith we
ask you to transfer the same to the transferee or, if so requested by the
transferee, to issue a new irrevocable letter of credit in favor of the
transferee with provisions consistent with such Letter of Credit.
All capitalized terms used but not defined herein shall have the respective
meanings assigned thereto to such Letter of Credit.
FIFTH THIRD BANK OF CENTRAL INDIANA, as Trustee
By:
-------------------------------------------
Its: Authorized Officer
-2-
ANNEX G
EXTENSION CERTIFICATE
_________________, 19_____
[Trustee address]
___________________________
___________________________
Attention: _______________________
Re: The Royal Bank of Scotland plc
Irrevocable Letter of Credit No. LCA 02229600417NY
Securing the City of Gary, Indiana
Adjustable Rate Economic Development Revenue Refunding
Bonds, Series 1996A (The Miller Partnership, L.P. Project) and
Taxable Adjustable Rate Economic Development Revenue
Refunding Bonds, Series 1996B (The Miller Partnership, L.P. Project)
Ladies and Gentlemen:
Reference is made to that certain Irrevocable Letter of Credit No. LCA
02229600417NY dated April 1, 1996 (the "Letter of Credit") issued by The Royal
Bank of Scotland plc in your favor as beneficiary. We hereby extend the Stated
Expiration Date (as defined in the Letter of Credit) from _____________________,
_______ to _______________________, ______.
Other than as set forth above, all rights of the beneficiary to draw under
the above Letter of Credit shall remain as set forth in such Letter of Credit.
THE ROYAL BANK OF SCOTLAND plc
By:
-------------------------------------------
Title:
-----------------------------------
REMARKETING AGREEMENT
This Remarketing Agreement, dated as of April 1, 1996, is by and among
EVEREN Securities, Inc., a corporation organized under the laws of the State of
Delaware ("EVEREN"), and GATES Capital Corporation, a corporation organized
under the laws of the State of New York ("GATES"), as Remarketing Agent (jointly
the "Remarketing Agent"), the City of Gary, Indiana, a municipal corporation and
political subdivision organized and existing under the laws of the State of
Indiana, (the "Issuer") and The Miller Partnership, L.P., an Illinois limited
partnership (the "Borrower"). This Remarketing Agreement is executed in
connection with the offering and sale from time to time in the secondary market
of all or part of $20,540,000 and $1,680,000 aggregate principal amounts of
Adjustable Rate Economic Development Revenue Refunding Bonds, Series 1996 A and
Taxable Adjustable Rate Economic Development Revenue Refunding Bonds, Series
1996 B, respectively (collectively the "Bonds"), issued by the Issuer, under and
pursuant to an ordinance adopted by the Issuer on March 5, 1996 (the "Bond
Ordinance"), and that certain Trust Indenture dated as of March 1, 1996,
relating to the Bonds (the "Indenture"), by and among the Issuer, Borrower and
Fifth Third Bank of Central Indiana, a Banking organization duly organized,
existing and authorized to accept and execute trusts of the character therein
set out under the laws of the State of Indiana, as Trustee (the "Trustee"),
having its principal corporate trust office at Indianapolis, Indiana (together
with any successor trustee under the Indenture the "Trustee" and as tender agent
the "Tender Agent").
All capitalized terms used herein and not defined herein shall have
the meanings specified in the Indenture, unless the context otherwise requires.
Simultaneously with the execution and delivery of this Remarketing
Agreement, the Borrower and CenterPoint Properties Corporation, a Maryland
corporation, have entered into that certain Reimbursement Agreement, dated as of
March 1, 1996 (the "Letter of Credit Agreement"), by and between the Borrower
and The Royal Bank of Scotland plc, through its New York Branch (the "Bank"),
and the Bank has issued its irrevocable, direct-pay, letter of credit relating
to the Bonds (the "Letter of Credit") in favor of the Trustee.
Section 1. APPOINTMENT OF REMARKETING AGENT: OBLIGATIONS AND
RESPONSIBILITIES OF REMARKETING AGENT
(a) EVEREN and GATES are hereby appointed the Remarketing Agent for
the Bonds in accordance with the terms of the Indenture with the consent of the
Trustee. Subject to the terms and conditions herein contained, the Borrower
hereby consents to the appointment of EVEREN and GATES, and EVEREN and GATES
hereby accept such appointment, as Remarketing Agent in connection with the
offering and sale of the Bonds from time to time in the secondary market
subsequent to the date hereof. The Remarking Agent agrees that, so long as it
is the Remarketing Agent under the Remarketing Agreement, it will, at the times
and in the manner required by the Indenture, send notice to the Borrower, the
Bank, the Paying Agent and the Trustee advising them of the interest rate on the
Bonds, determined as provided in the Indenture, or it will advise such parties
that it is unable to determine an interest rate or rates as
of such date. In determining the interest rate on the Bonds in accordance with
the terms of the Indenture, the remarketing agent shall not be acting as an
agent of the Borrower.
(b) It is understood by the Issuer, the Borrower, and the Remarketing
Agent that EVEREN and GATES shall collectively act as the sole and exclusive
Remarketing Agent under this Remarketing Agreement and the Indenture until such
time as EVEREN and GATES are collectively removed or resign as Remarketing
Agent.
(c) The Remarketing Agent hereby agrees to use its best efforts to
offer for sale and to sell at par in the secondary market the Bonds which are to
be remarketed in accordance with the provisions of the Indenture, including, but
not limited to, any Pledged Bonds which the Bank has requested in writing to be
remarketed. The Remarketing Agent shall sell such Bonds at a price of 100% of
the principal amount thereof plus accrued interest, if any. The Remarketing
Agent shall not remarket any such Bonds if the Bank is then in default of its
obligations under the Letter of Credit. The Remarketing Agent shall not
remarket any such Bonds to the Issuer, the Borrower, any affiliate of the
Borrower, or any guarantor of the reimbursement obligation of the Borrower to
the Bank. The Borrower hereby agrees not to purchase any of the Bonds, except
as permitted by the Indenture.
(d) The Remarketing Agent shall determine each interest rate for the
Bonds during interest rate periods pursuant to and in accordance with the
Indenture and shall not be required to consult or confer with the Issuer, the
Trustee, the Bank or the Borrower with respect to such actions.
(e) Subject to the terms and conditions hereof, the Remarketing Agent
also agrees to perform the other obligations of the Remarketing Agent as set
forth in the Indenture (which provisions are incorporated herein by reference)
and as may be reasonably requested by the Issuer and the Borrower and agreed to
by the Remarketing Agent.
(f) It is understood and agreed upon by the parties hereto that the
Remarketing Agent is undertaking its obligations pursuant to Section 1(c) hereof
on a best-efforts basis. The Remarketing Agent shall not act as an underwriter
for the Bonds and is in no way obligated to advance its own funds to purchase
any Bonds at any time under any circumstances.
(g) The Remarketing Agent agrees (i) to hold all Bonds delivered to
it in accordance with the Indenture in trust for the benefit of the holders of
such Bonds until such Bonds shall have been delivered by the Remarketing Agent
to the purchasers thereof or otherwise delivered as provided in the Indenture;
and (ii) to hold all moneys delivered to it for payment of the purchase price of
the Bonds remarketed by it in trust for the benefit of the respective
Bondholders to which such moneys are due until such moneys have been paid to
such Bondholders or otherwise paid as provided in the Indenture.
-2-
(h) Neither the Issuer, the Borrower, nor any guarantor of the
reimbursement obligation of the Borrower to the Bank shall have any right, title
or interest in the proceeds of any Bonds remarketed.
(i) No obligation imposed on the Remarketing Agent under the
Indenture or hereunder or any actions taken by the Remarketing Agent in
performing such obligations shall constitute a warranty by the Remarketing Agent
that, with respect to any interest rate determination, there is a market for the
sale of Bonds affected thereby or that such Bonds can be sold at par, or that,
with respect to any remarketing effort it is required to or will purchase any
Bonds or expend any of its own funds or incur any liability for any portion of
the price of the Bonds; provided, however, nothing contained herein shall
prohibit the Remarketing Agent from purchasing Bonds or functioning as a broker
or dealer with respect to the Bonds.
(j) The duties of the Remarketing Agent shall be solely as provided
herein and in the Indenture and no implied covenants or obligations shall be
read into this Remarketing Agreement against the Remarketing Agent.
(k) To the extent Bonds tendered for purchase or deemed tendered for
purchase are not remarketed by the Remarketing Agent on the applicable purchase
date, the Remarketing Agent understands that the Paying Agent shall draw on the
Letter of Credit to satisfy such purchase obligations with respect to such Bonds
in accordance with the terms of the Indenture. The Remarketing Agent shall
continue to use its best efforts to remarket any Bonds purchased by a draw under
the Letter of Credit in accordance with the terms of this Remarketing Agreement.
(l) Notices or reports required by this Section may be given by
telephone, telecopier, interbank telex, telegram or other communication device,
promptly confirmed by a written notice to the Trustee, the Paying Agent, the
Bank, the Issuer and the Borrower.
Section 2. FURNISHING OF OFFERING MATERIALS.
(a) The Borrower agrees to furnish the Remarketing Agent with as many
copies as the Remarketing Agent may reasonably request of the Official Statement
and any amendment or supplement thereto (a "Supplement") and the Borrower agrees
to furnish the Remarketing Agent with such other information with respect to the
Borrower, the Bank, the Project and the Bonds as the Remarketing Agent shall
reasonably request from time to time. The Borrower agrees not to request the
amendment or supplementation of the Official statement or any Supplement prior
to notifying the Remarketing Agent in writing of the proposed amendment or
supplementation. If, at any time during the term of this Remarketing Agreement,
any event known to the Borrower relating to or affecting the Borrower, the Bank,
the Project or the Bonds shall occur which materially affects the accuracy or
completeness of any statement of a material fact contained in any Official
Statement or any Supplement, the Borrower shall promptly notify the Remarketing
Agent of the circumstances and details of such event, and if in the opinion of
the Remarketing Agent such event requires the preparation and publication of a
Supplement, the Borrower agrees, at the expense of the Borrower, to prepare a
Supplement in a form and in a
-3-
manner approved by the Remarketing Agent. The Borrower shall provide such
certificates and opinions of counsel with respect to the accuracy and
completeness of any Supplement as may be requested by the Remarketing Agent.
(b) The Borrower and the Remarketing Agent acknowledge that the
Remarketing Agent may be obligated to comply with applicable provisions of Rule
15c2-12 under the 1934 Act in connection with certain remarketings of the Bonds,
including a remarketing upon a conversion of the Interest Rate Mode on the
Bonds. The Borrower agrees to cooperate with the Remarketing Agent to enable
the Remarketing Agent to comply with applicable provisions of Rule 15c2-12,
including the preparation of a disclosure document satisfactory to the
Remarketing Agent and its counsel, "deeming final" such disclosure document as
provided in Rule 15c2-12, providing sufficient copies of such disclosure
document within the time required by Rule 15c2-12 (together with such
certificates and opinions of counsel with respect to the accuracy and
completeness of such disclosure documents as may be reasonably requested by the
Remarketing Agent) and taking all such other action as may be reasonably
requested by the Remarketing Agent so as to enable the Remarketing Agent to
comply with applicable provisions of Rule 15c2-12.
Section 3. REPRESENTATIONS, WARRANTIES AND AGREEMENTS OF THE BORROWER
(a) The Borrower represents and warrants to the Remarketing Agent and
the Issuer that all of the representations and warranties of the Borrower
contained in the Indenture and the Letter of Credit Agreement are true and
correct as if the same were made to the Issuer and the Remarketing Agent on the
date hereof.
(b) The Borrower represents and warrants to the Remarketing Agent and
the Issuer that this Remarketing Agreement constitutes a legal, valid and
binding obligation of the Borrower, enforceable in accordance with its terms,
subject to applicable bankruptcy, reorganization, insolvency, moratorium and
other laws of general applicability relating to or affecting creditors' rights
generally and the application of general principles of equity regardless of
whether such enforceability is considered in a proceeding in equity or at law.
(c) The Borrower represents and warrants to the Remarketing Agent
that with respect to the bonds, (i) the Borrower has duly ratified the
distribution of the Preliminary Official Statement; and (ii) it has duly
ratified the execution and delivery of, and the distribution of, the Official
Statement.
(d) The Borrower agrees with the Remarketing Agent that if, prior to
the termination of this Remarketing Agreement, any event shall occur or
condition shall exist relating to or affecting the Borrower, the Project, the
Bank or the ability of the Borrower or the Bank to pay the principal of,
purchase price of, or interest on the Bonds, pursuant to the Letter of Credit,
the Letter of Credit Agreement and the Indenture, which might materially
adversely affect the interests of the holders of the Bonds, or which might
affect the correctness of any statement of a material fact contained in any
Official Statement or Supplement or any additional reoffering memorandum, the
Borrower will promptly notify the Remarketing Agent of the circumstances and
-4-
details of such event or condition. If, and as a result of such event or
condition, or any other event or condition, it is necessary or advisable, in the
reasonable opinion of the Remarketing Agent, to amend or supplement such
Official Statement or Supplement or any additional reoffering memorandum, in
light of such event or condition or such other event or condition, the Borrower
will have prepared forthwith, at the sole expense of the Borrower, a Supplement
or amendment to such Official Statement or any additional reoffering memorandum,
which Supplement, amendment or additional reoffering memorandum shall be in form
and substance satisfactory to the Remarketing Agent, the Borrower and their
respective counsel.
(e) The Borrower represents and warrants to the Remarketing Agent
that the Borrower will furnish such information, execute such documents and take
such other action in cooperation with the Remarketing Agent as the Remarketing
Agent may reasonably request in order to remarket the Bonds, provided that the
Borrower shall not be required to take any action which would submit it to, or
constitute consent to, service of process or to qualify as a foreign corporation
in any jurisdiction where it is not otherwise presently subject to service or so
qualified, as the case may be.
(f) The Borrower agrees that it will inform the Remarketing Agent of
any material adverse change which becomes known to it regarding the financial
condition of the Bank.
(g) The Borrower agrees that it shall immediately notify the
Remarketing Agent by telephone, confirmed in writing of:
(i) the execution of any amendments to the Indenture or the
Letter of Credit Agreement; or
(ii) the obtaining of any substitute Letter of Credit; or
(iii) The occurrence or existence of any event or condition
which becomes known to the Borrower and which would make any of its
representations contained herein or incorporated herein by reference
incorrect or untrue in any material respect if made on and as of any
day during the term of this Remarketing Agreement; or
(iv) the extension or termination of the Letter of Credit or any
substitute Letter of Credit; or
(v) any resignation or removal of, and appointment of a
successor for, the Trustee, the Tender Agent, the Registrar or the
Paying Agent.
Section 4. REPRESENTATIONS, WARRANTIES AND AGREEMENTS OF THE ISSUER.
(a) The Issuer represents and warrants to the Remarketing Agent that
its following representations and warranties are true and correct:
-5-
(i) The Issuer is a municipal corporation and political
subdivision duly organized and existing under the laws of the State of
Indiana.
(ii) The Issuer has full power and authority pursuant to the law
and the Act to act with respect to all transactions contemplated by
this Remarketing Agreement, the Bonds, the Bond Ordinance and the
Indenture, and to carry out and consummate all other transactions
contemplated by each of the aforesaid documents.
(iii) The Issuer has duly authorized the execution, delivery and
due performance of this Agreement, the Bonds, the Indenture, and the
taking of any and all such action as may be required on the part of
the Issuer to carry out, give effect to and consummate the
transactions contemplated by this Remarketing Agreement and all
approvals necessary in connection with the foregoing have been
received.
(iv) The Bonds have been duly authorized, issued, executed,
authenticated and delivered and constitute the legal, valid and
binding special obligations of the Issuer (payable solely from the
revenues and other funds provided in the Indenture) and will be
entitled to the benefit of the Indenture.
(v) The execution and delivery of this Remarketing Agreement and
compliance with the provisions thereof, will not conflict with or
constitute on the part of the Issuer a violation of the Constitution
of the State of Indiana or a violation of, breach of or default under
its by-laws or any statute, indenture, mortgage, deed of trust, note
agreement or other agreement or instrument to which the Issuer is a
party or by which the Issuer is bound, or, to the knowledge of the
Issuer, any order, rule or regulation of any court of governmental
authority or body having jurisdiction over the Issuer or any of its
activities or properties; and all consents, approvals, authorizations
and orders of governmental or regulatory authorities which are
required for the consummation of the transactions contemplated thereby
have been obtained.
(vi) There is no action, suit, proceeding or investigation at
law or in equity to which the Issuer is a party by or before any court
or public authority, or, to the best of the knowledge of the Issuer,
any basis therefor, wherein an unfavorable decision, ruling or finding
would adversely affect the transactions contemplated hereby and by the
Indenture, or which in any way, would adversely affect the validity of
the Bonds, the Bond Ordinance, the Indenture, this Remarketing
Agreement, or any agreement or instrument to which the Issuer is a
party and which is used or contemplated for use in consummation of the
transactions contemplated hereby or by the Indenture.
-6-
(vii) The Issuer makes no representation or warranty concerning
the financial position or business condition of the Borrower, nor does
it represent or warrant as to the correctness of any statements or
representations made or materials furnished by the Borrower in
connection with the remarketing of the Bonds.
(b) The Issuer agrees with the Remarketing Agent that if, prior to
the termination of this Remarketing Agreement, any event shall occur as a result
of which it is deemed necessary by the Remarketing Agent to amend or supplement
the Official Statement relating to the Bonds to make that Official Statement not
misleading in any material respect in light of the circumstances existing at the
time it is delivered to a purchaser, or if it is necessary to amend or
supplement the Official Statement to comply with law, the Issuer, if notified of
the occurrence of such event by the Borrower and so requested, will cooperate
with the Borrower and the Remarketing Agent in the preparation of a Supplement
or any additional reoffering memorandum, at the sole expense of the Borrower
which Supplement or additional reoffering memorandum shall be in form and
substance satisfactory to the Remarketing Agent, Bond Counsel and the Borrower.
(c) The Issuer covenants with the Remarketing Agent that the Issuer
will furnish such information with respect to the Issuer as the Remarketing
Agent may reasonably request in order to remarket the Bonds.
Section 5. CONDITIONS TO REMARKETING AGENT'S OBLIGATION. The
obligations of the Remarketing Agent under this Remarketing Agreement have been
undertaken in reliance on, and shall be subject to, the due performance by the
Borrower of its obligations and agreements to be performed hereunder and to the
accuracy of and compliance with the representations, warranties, covenants and
agreements of the Borrower contained herein, on and as of the date of delivery
of this Remarketing Agreement and on and as of each date on which Bonds are to
be remarketed pursuant to this Remarketing Agreement; and to the further
conditions contained in the Bond Ordinance, the Indenture, the Letter of Credit
Agreement (including the exhibits thereto required to be executed and delivered
as a condition to the issuance of the Letter of Credit) and the Letter of
Credit, that such documents shall be in full force and effect and shall not have
been amended, modified or supplemented in any way which would materially and
adversely affect the Bonds, except as may have been agreed to in writing by the
Remarketing Agent; that no Event of Default under such documents shall have
occurred and be continuing, that the opinions relating to the financing which
have been previously delivered have not been withdrawn or modified, the
financing which have been previously delivered have not been withdrawn or
modified, except as agreed to by the Remarketing Agent; and that there shall be
in full force and effect additional resolutions, agreement, certificates which
shall be (1) considered necessary by the Remarketing Agent for the continued
remarketing of the Bonds and (2) reasonably satisfactory in form and substance
to Bond Counsel and counsel for the Remarketing Agent.
Section 6. RECORDS. The Remarketing Agent shall keep records of its
Bond remarketing transactions. Such records shall be kept in a manner
consistent with prudent industry
-7-
practice. The Borrower may examine such records at times reasonably established
by the Remarketing Agent.
Section 7. TERM AND TERMINATION OF REMARKETING AGREEMENT.
(a) This Remarketing Agreement shall become effective upon its
execution by EVEREN and GATES, the Issuer and the Borrower, and shall continue
in full force and effect while the Bonds are outstanding, subject to the right
of EVEREN and GATES to resign as Remarketing Agent as provided in the Indenture.
In addition, the Agreement may be terminated by the Borrower, in its sole
discretion, on thirty (30) days prior written notice, by the filing by the
Borrower of an instrument to such effect with the Remarketing Agent, the Issuer,
the Bank, the Tender Agent, and the Trustee. Upon resignation or removal of the
Remarketing Agent, a successor remarketing agent shall be appointed in
accordance with the provisions of the Indenture.
(b) In addition to the provisions of subsection (a) hereof, the
Remarketing Agent may terminate its obligations under this Remarketing Agreement
upon thirty (30) days notice, by notifying the Borrower, the Issuer, the Bank,
the Tender Agent, the Trustee and the Registrar of its election so to do, if:
(i) Legislation shall be favorably reported by a committee of
House of Representatives or the Senate of the Congress of the United
States, or shall be introduced by Committee, by amendment or
otherwise, in, or be enacted by, the House of Representatives or the
Senate, or shall be recommended by the President of the United States
to the Congress of the United States for passage by the Congress of
the United States, or a decision by a court of the United States shall
be rendered, or a stop order, ruling, regulation or official statement
by, or on behalf of, the United States Securities and Exchange
Commission or other governmental authority having jurisdiction of the
subject matter shall be made or proposed, to the effect that the
offering or sale of obligations of the character of the Bonds or the
issuance of the Letter of Credit, as contemplated hereby, is or would
be in violation of any provision of the Securities Act of 1933, as
amended and as then in effect (the "Securities Act"), or the
Securities Exchange Act of 1934, as amended and as then in effect or
that the Indenture shall be required to be qualified under the Trust
Indenture Act of 1939, as amended and as then in effect, or with the
purpose or effect of otherwise prohibiting the offering or sale of
obligations of the character of the Bonds, or the Bonds, as
contemplated hereby, without registration under the Securities Act or
qualification of the Indenture under the Trust Indenture Act of 1939,
as amended; or
(ii) Legislation shall be favorably reported by a committee of
the House of Representatives or the Senate of the Congress of the
United States, or shall be introduced by committee, by amendment or
otherwise, in, or be enacted by, the House of Representatives or the
Senate, or shall be recommended by the President of the United States
to the Congress of the United States for passage by the
-8-
Congress of the United States, or a decision by a court of the United
States shall be rendered, or a ruling, regulation or order of the
Treasury Department of the United States or the Internal Revenue
Service shall be made or proposed, to the effect of imposing federal
income taxation, or any other event shall have occurred which results
in the imposition of federal income taxation (other than tax laws or
regulations in effect on the date hereof) upon interest received on
the Bonds; or
(iii) Any information shall have become known, which, in the
Remarketing Agent's reasonable opinion makes untrue any statement of a
material fact contained in the Official Statement, as then
supplemented or amended in accordance with Section 2 hereof, or causes
the Official Statement, as so supplemented or amended, to contain any
untrue statement of a material fact or to omit to state a material
fact necessary to make the statements made therein, in light of the
circumstances under which they were made, not misleading; or
(iv) Any legislation, resolution, ordinance, rule or regulation
shall be introduced in, or be enacted by, any federal governmental
body, department or authority of the United States, any State of
Indiana governmental body, department or authority, the State of
Indiana, or a decision by any court of competent jurisdiction within
the United States or the State of Indiana shall be rendered which, in
the Remarketing Agent's reasonable opinion, materially adversely
affects the marketability of the Bonds; or
(v) Additional material restrictions not in force as of the date
hereof shall have been imposed upon trading in securities by any
governmental authority or by any national securities exchange, which,
in the Remarketing Agent's reasonable opinion, material adversely
affects the marketability of the Bonds; or
(vi) Any governmental authority shall impose, as to the Bonds,
or obligations of the character of the Bonds, any material
restrictions not now in force, or increase materially those now in
force which, in the Remarketing Agent's reasonable opinion, materially
adversely affects the marketability of the Bonds; or
(vii) A banking moratorium shall have been established by
federal or Indiana authorities; or
(viii) A war involving the United States shall have been
declared, or any existing conflict involving the armed forces, or
emergency relating to the effective operation of government or the
financial community shall have occurred, which, in the Remarketing
Agent's reasonable opinion, materially adversely affects the
marketability of the Bonds; or
(ix) Any event, including without limitation, the bankruptcy or
default of any issuer of, or obligor on, securities shall have
occurred that in the
-9-
Remarketing Agent's reasonable opinion makes the marketing of
securities of the character of the Bonds impracticable or impossible.
Section 8. PAYMENT OF FEES AND EXPENSES.
(a) In consideration of the services to be performed by the
Remarketing Agent under this Remarketing Agreement, the Borrower agrees to pay
to GATES, on behalf of itself and EVEREN, the following fees in respect of the
Bonds: a fee equal to 1/8 of 1% per annum of the principal amount of Bonds then
outstanding for Bonds bearing interest at the Adjustable Rate Modes, payable
quarterly in advance for the actual number of days elapsed, upon receipt of
invoice in each year commencing April 1, 1996. Payments with respect to the
fees payable to the Remarketing Agent under this Section that are made in excess
of 20 Business Days after, shall bear interest at the Prime Rate of interest
plus two (2%) percent annually. For purposes of the Remarketing Agreement, the
Prime Rate shall mean the rate announced from time to time by a Money Center
Bank as its "Prime Rate."
(b) The Borrower shall bear all reasonable costs and expenses
incident to the performance of the obligations of the Remarketing Agent
hereunder including the fees and disbursements of counsel to the Remarketing
Agent in connection with the preparation and review of any amendment or
supplement to the Official Statement or any additional material described in
and/or furnished pursuant to Section 2 hereof.
Section 9. INDEMNIFICATION.
(a) To the extent, if any, that a court of competent jurisdiction
would find such obligation enforceable, the Borrower and its respective
successors and assigns, shall jointly and severally indemnify and hold harmless
the Remarketing Agent and its members, officers, directors and employees and
each person, if any, who controls the Remarketing Agent within the meaning of
Section 15 of the Securities Act (each an "Indemnified Person"), from and
against any and all losses, claims, damages, liabilities and expenses (including
without limitation costs of investigation and attorneys' fees and disbursements)
to which any such person or persons may become subject insofar as any such loss,
claim, damage, liability or action arises out of or is based upon:
(i) an allegation or determination that the Bonds or the
obligation of the Borrower should have been registered under the
Securities Act or the Indenture should have been qualified under the
Trust Indenture Act of 1939, as amended or
(ii) any untrue statement or alleged untrue statement of a
material fact contained in, or any omission or alleged omission to
state any material fact necessary to make the statements made therein
not misleading in light of the circumstances under which they were
made in, the Official Statement as amended or supplemented, or in any
disclosure documents prepared in accordance with Section 2 hereof.
The indemnity agreements contained in this Section 9 shall
-10-
remain operative and in full force and effect, regardless of any
investigation made by or on behalf of the Remarketing Agent, or the
delivery of any payment for any Bonds hereunder, and shall survive the
termination or cancellation of this Remarketing Agreement.
(b) If an action or claim shall be brought or asserted against the
Remarketing Agent or any person so controlling the Remarketing Agent in respect
of which indemnity may be sought from the Borrower under subparagraph (a) above,
the Remarketing Agent or such controlling person, as the case may be, shall
promptly notify the Borrower in writing. The Borrower shall assume the defense
thereof, including the employment of counsel and the payment of all related
expenses. The Remarketing Agent or any such controlling person, as the case may
be, shall have the right to employ separate counsel in any such action and
participate in the defense thereof, but the fees and expenses of such counsel
shall be at the expense of the Remarketing Agent or such controlling person, as
the case may be, unless:
(i) the employment thereof has been specifically authorized by
the Borrower, or
(ii) the Borrower has failed to assume the defense or employ
counsel. The Borrower shall not be liable for any settlement of any
such action effected without its consent, but if settled with the
consent of the Borrower, or if there is a final judgment for the
plaintiff in any such action, the Borrower will indemnify and hold
harmless any indemnified person from and against any loss or liability
by reason of such settlement or judgment insofar as such settlement or
judgment shall relate to any liability with respect to which indemnity
may be sought hereunder.
Section 10. DEALING IN BONDS BY REMARKETING AGENT. The Remarketing
Agent, in its individual capacity, either as principal or agent, may buy, sell,
own, hold, and deal in any of the Bonds, and may join in any action which any
Bondholder may be entitled to take with like effect as if it did not act in any
capacity hereunder. The Remarketing Agent, in its individual capacity, as
principal, may in good faith from time to time buy and hold Bonds for periods of
time mutually agreed to by the Remarketing Agent and the Borrower, and the
Remarketing Agent shall be reimbursed by the Borrower for the cost of holding
such Bonds in an amount to be agreed upon by the parties, which amount initially
shall be equal to the Remarketing Agent's actual cost of the principal of such
Bonds. Nothing in the preceding sentence shall relieve the Remarketing Agent of
its best efforts obligation to solicit indications of interest on the part of
purchasers of any tendered Bonds. The Remarketing Agent in its individual
capacity, either as principal or agent, may also engage in or be interested in
any financial or other transaction with the Issuer, the Borrower, or any of its
affiliates, and may act as tender agent, trustee, or agent for any committee or
body of bondholders or other obligations of the Issuer, the Borrower or any of
its affiliates, as freely as if it did not act in any capacity hereunder.
Section 11. INTENTION OF PARTIES. It is the express intention of the
parties hereto that no purchase, sale or transfer of any Bonds, as herein
provided, shall constitute or be
-11-
construed to be the extinguishment of any Bonds or the indebtedness evidenced
thereby or the reissuance of any Bonds or the refunding of any indebtedness
represented thereby.
Section 12. REMARKETING AGENT NOT ACTING AS UNDERWRITER. It is
understood and agreed by the parties hereto that the Remarketing Agent is only
obligated hereunder to use its best efforts to solicit indications of interest
on the part of the purchasers of any tendered Bonds. The Remarketing Agent
shall be construed to be acting as agent only for and on behalf of the owners
from time to time of the Bonds. The Remarketing Agent shall not act as an
underwriter for the tendered Bonds and shall in no way be obligated to advance
its own funds to purchase any tendered Bonds.
Section 13. MISCELLANEOUS.
(a) Except as otherwise specifically provided in this Remarketing
Agreement, all notices, demands and formal actions under this Remarketing
Agreement shall be in writing and mailed, telegraphed or delivered to the
parties at the following addressees:
If to the Remarketing Agent:
EVEREN Securities, Inc.
77 W. Wacker Drive, 28th Floor
Chicago, IL 60601-1398
Attention: Municipal Financial Department
and
GATES Capital Corporation
100 Park Avenue, 30th Floor
New York, NY 10017
Attention: Municipal Finance Department
If to the Issuer:
City of Gary, Indiana
504 Broadway, Suite 625
Gary, IN 46402
Attention: Kennard B. Sloan
If to the Borrower:
The Miller Partnership, L.P.
401 North Michigan Avenue
Suite 3000
Chicago, IL 60611
-12-
Attention: Paul Fisher
If to the Bank:
The Royal Bank of Scotland plc
New York Branch
Wall Street Plaza
88 Pine Street, 26th Floor
New York, NY 10005-1801
Attention: Derek Bonnar
If to the Trustee:
Fifth Third Bank of Central Indiana
251 N. Illinois Street, Suite 1000
Indianapolis, Indiana 46204
Attention: Corporate Trust Department
If to the Paying Agent:
The Fifth Third Bank
38 Fountain Square Plaza
Cincinnati, Ohio 45263
Attention: Corporate Trust Department
The Remarketing Agent, the Issuer, the Borrower, the Bank, the Trustee
and the Paying Agent by notice given under this Remarketing Agreement, may
designate other addresses to which subsequent notices, requests, report or other
communications shall be directed.
(b) The obligations of the respective parties hereto may not be
assigned or delegated to any other person without the consent of the other
parties hereto. This Remarketing Agreement will inure to the benefit of and be
binding upon the Issuer, the Borrower, and the Remarketing Agent and their
respective successors and assigns, and will not confer any rights upon any other
person, company, association or corporation other than the indemnified persons
referred to in Section 9 hereof and the persons, if any, controlling the
Remarketing Agent within the meaning of the Securities Act. The terms
"successors" and "assigns" shall not include any purchaser of any of the Bonds
merely because of such purchase.
(c) In performing its duties and obligations hereunder, the
Remarketing Agent shall use the same degree of care and skill as a prudent
person would exercise under the same circumstances in the conduct of its own
affairs. The Remarketing Agent shall not be liable in connection with the
performance of its duties hereunder except for its own willful misconduct or
negligence or failure to act in a commercially reasonable manner.
-13-
(d) Section headings have been inserted in this Remarketing Agreement
as a matter of convenience of reference only, and it is agreed that such section
headings are not a part of this Remarketing Agreement and will not be used in
the interpretation of any provisions of this Remarketing Agreement.
(e) This Remarketing Agreement may be amended only by a written
document executed by the parties hereto; provided that, if any amendment would
change the Borrower's right to remove the Remarketing Agent as set forth in
Section 7(a) hereof, the written consent of the Borrower also must be obtained
before such amendment becomes effective. If any provision of this Remarketing
Agreement shall be held or deemed to be or shall, in fact, be invalid,
inoperative or unenforceable as applied in any particular case in any
jurisdiction or jurisdictions, or in all jurisdictions because it conflicts with
any provisions of any constitution, statute, rule of public policy, or for any
other reason, such circumstances shall not have the effect of rendering the
provision in question invalid, inoperative or unenforceable in any other case or
circumstance, or of rendering any other provision or provisions of this
Remarketing Agreement invalid, inoperative or unenforceable to any extent
whatever.
(f) This Remarketing Agreement may be executed in several
counterparts, each of which shall be regarded as an original and all of which
shall constitute one and the same document.
Section 14. GOVERNING LAW. This Remarketing Agreement shall be
governed by, and in its terms construed in accordance with, the laws of the
State of Indiana.
* * * * *
-14-
IN WITNESS WHEREOF, the Issuer, the Borrower, and the Remarketing
Agent have executed this Remarketing Agreement by their duly authorized officers
as of the date first above written.
EVEREN SECURITIES, INC.
As Remarketing Agent
By:
----------------------------------
Felicia O. Flowers-Smith
GATES CAPITAL CORPORATION
As Remarketing Agent
By:
----------------------------------
Amelia A. Recio
By:
----------------------------------
J. Douglas Casey
CITY OF GARY, INDIANA
As Issuer
By:
----------------------------------
Its:
---------------------------------
THE MILLER PARTNERSHIP, L.P.
As Borrower
By: CenterPoint Properties Corporation
Its General Partner
By:
-----------------------------
Paul Fisher
-15-
TAX REGULATORY AGREEMENT
Developer's
Name and Address: The Miller Partnership, L.P.
c/o CenterPoint Properties Corporation
401 N. Michigan Avenue, Suite 3000
Chicago, Illinois 60611
Attn: Paul Fisher and John Gates
Location of Property: 415 North Lake Street
Gary, Indiana
Name of Project: Lakeshore Apartment Complex
THIS TAX REGULATORY AGREEMENT (together with any amendments or supplements
hereto, the "Agreement") dated as of March 1, 1996 is made and entered into by
and among the City of Gary, Indiana, a municipal corporation of the State of
Indiana, having as its mailing address City Hall, Gary, Indiana 40402 (the
"Issuer"), the developer identified above and permitted successors and assigns
under the Loan Agreement as hereinafter defined (the "Developer") and Fifth
Third Bank of Central Indiana, as Trustee (the "Trustee"), under the Trust
Indenture, dated as of March 1, 1996 between the Trustee and the Issuer.
IN CONSIDERATION of the Issuer's participation in a financing transaction
which has and will provide funds to refinance the purchase, construction and
improvement on lands in Gary, Indiana, which is more particularly described in
EXHIBIT "A" attached hereto, of residential rental facilities consisting of
multi-family residential rental housing (the "Project") pursuant to a Loan
Agreement dated as of March 1, 1996 (the "Loan Agreement") between the Issuer
and the Developer, the Issuer, the Trustee and the Developer acknowledging that
this Agreement is necessary to preserve the federal income tax excludability
from gross income of interest on the Issuer's Adjustable Rate Economic
Development Refunding Revenue Bonds, Series 1996 A (The Miller Partnership, L.P.
Project) (the "Bonds"), issued to refinance the Project, covenant and agree that
in connection with the operation of the Project, they will comply, and will
require (except as otherwise provided herein) any subsequent lessee or purchaser
of the Project to comply, with the following:
Section 1. RENTAL REQUIREMENT.
(a) Once available for occupancy, each unit of the Project (as "unit" is
defined in Treas. Reg. Section 1.103-8(b)(8)(i) and "Project" is defined in
Treas. Reg. Section 1.103-8(b)(4)) must be rented or available for rental on a
continuous basis during the longer of (i) the remaining term of the Bonds, or
(ii) a period (the "Qualified Project Period") (A) commencing on the later of
(1) the
first day on which at least 10% of the units in the Project are first occupied,
or (2) the date of issuance of the Bonds, and (B) ending on the date which is
the latest of (1) 15 years after the date on which at least 50% of the units in
the Project are first occupied, (2) the first day on which no tax-exempt private
activity bond issued with respect to such Project is outstanding (all within the
meaning of Section 142(d) of the Internal Revenue Code of 1986, as amended (the
"Code"), or (3) the date on which any assistance provided with respect to the
Project under Section 8 of the United States Housing Act of 1937 terminates.
(b) All of the units in the Project must be rented or available for rental
on a continuous basis to members of the general public and substantially all of
the Project must consist of similarly constructed units together with any
functionally related or subordinate facilities, including facilities for use by
tenants, E.G., swimming pools, recreational facilities, parking areas, and other
facilities which are reasonably required for such Project as a residential
rental facility.
Section 2. LOW OR MODERATE INCOME OCCUPANCY REQUIREMENT.
(a) Twenty percent (20%) or more of the completed units of the Project
(the "Low or Moderate Income Units") shall be occupied by Low or Moderate Income
Tenants (as described in SECTION 3 hereof) continuously during the Qualified
Project Period (the "Occupancy Requirement").
(b) A unit shall be treated as occupied by Low or Moderate Income Tenants
until re-occupied, other than for a temporary period not to exceed 31 days, by
another occupant, at which time the character of the unit shall be redetermined.
Section 3. LOW OR MODERATE INCOME TENANTS; ANNUAL REVIEWS.
(a) "Low or Moderate Income Tenants" means the occupants of a dwelling
unit in the Project whose adjusted income, as computed in accordance with
Exhibit C hereto, does not exceed fifty percent (50%) of the Median Gross Income
for the Area. "Median Gross Income for the Area" means the median income for
the area where the Project is located as determined with adjustments for larger
and smaller family sizes by the Secretary of the Department of Housing and Urban
Development under Section 8(f)(3) of the United States Housing Act of 1937, as
amended, or if programs under Section 8(f) are terminated, median income
determined under the method used by the Secretary immediately prior to such
termination.
(b) The determination of whether the income of the residents of a unit
exceed the applicable income limit shall be made first at the time of occupancy
and thereafter at least annually on the basis of the current income of such
residents. If the income of the occupants of a unit did not exceed the
applicable income limit upon commencement of such tenants' occupancy, the income
of such occupants shall be treated as continuing to not exceed the applicable
income limit unless, as of the most recent determination of annual income, such
occupants' income exceeds 140% of the applicable income limit for new tenants at
such Project AND before the next income
- 2 -
determination, another residential unit of comparable or smaller size in the
Project is occupied by a new tenant whose income exceeds the applicable income
limit.
(c) If all the occupants of a unit are students as defined under
Section 151(e)(4) of the Code, no one of whom is entitled to file a joint return
under Section 6013 of the Code, such occupants shall not qualify as Low or
Moderate Income Tenants hereunder.
(d) Determination of the status of an occupant of a unit as a Low or
Moderate Income Tenant shall be made upon initial occupancy of a unit in the
Project by such occupant, and a new determination shall be made (i) at least
annually thereafter, and (ii) upon the initial occupancy by such occupant of any
other unit in the Project.
(e) Except as provided in SECTION 10 hereof, the method of determining low
or moderate income in effect on the date of issuance of the Bonds shall be
determinative even if such method is subsequently changed.
Section 4. ADDITIONAL COVENANTS THE DEVELOPER FURTHER COVENANTS AND AGREES
THAT:
(a) The Developer will own, manage and operate the Project on a continuous
basis as a residential rental project comprised of several proximate and
interrelated buildings or structures, each containing at least one dwelling unit
and all of which contain dwelling units and facilities functionally related and
subordinate thereto in accordance with Section 142(d) of the Code and the
regulations promulgated thereunder or applicable thereunder as described more
specifically in the Developer's Tax Representation Certificate dated as of the
closing date for the Bonds.
(b) All of the dwelling units in the Project will consist of similarly
constructed units, and each dwelling unit in the Project will contain separate
and complete facilities for living, sleeping, eating, cooking and sanitation
separate and distinct from other units, including cooking facilities equipped
with a cooking range, refrigerator and sink.
(c) None of the dwelling units in the Project will at any time be utilized
on a transient basis, will ever be leased or rented for an initial lease term of
less than six (6) months, nor will all or any part of the Project ever be used
as a hotel, motel, dormitory, fraternity house, sorority house, hospital,
nursing home, retirement home, sanitarium, rest home or trailer court or park.
(d) Except for dwelling units occupied by a resident manager or
maintenance personnel, the dwelling units in the Project will be rented to
persons who are members of the general public, and the Developer shall not give
preference to any particular class or group of persons in renting units other
than to Low or Moderate Income Tenants and other than as permitted under
Section 142(d) of the Code.
(e) The Developer covenants and agrees to prepare and submit to the Issuer
and the Trustee within thirty (30) days after each anniversary of the first day
on which at least 10% of the
- 3 -
units in the Project are first occupied, a report certified to be accurate by
the Developer substantially in the form of Exhibit B hereto ("Compliance
Certificate").
(f) The mortgage to be granted by the Developer in connection with the
Project (the "Mortgage") provides that the indebtedness secured thereby may be
declared to be immediately due and payable, at the option of the holder thereof,
upon sale or transfer of the Project or any interest therein or transfer of
beneficial interest in the Developer, unless certain conditions specified in the
mortgage are met. As a further condition to any sale or transfer of the
Project, the proposed purchaser or assignee shall assume in writing and agree to
be bound by all of the obligations and covenants of the Developer and all
restrictions applicable to the Project contained herein.
Section 5. COVENANTS AND RESTRICTIONS NOT TO APPLY UNDER CERTAIN
CIRCUMSTANCES.
(a) In the event of an involuntary noncompliance with the requirements of
this Agreement and Treas. Reg. Section 1.103-8(b) caused by fire, seizure,
requisition, foreclosure, transfer of title by deed in lieu of foreclosure,
change in federal law or an action of a federal agency after the date of
issuance of the Bonds which prevents the Issuer from enforcing the requirements
of this Agreement or Treas. Reg. Section 1.103-8(b), or condemnation or similar
event, the covenants and restrictions of this Agreement shall cease to apply,
but only if, within a reasonable period, either the Bonds are retired or amounts
received as a consequence of such event are used to provide a project which
meets the requirement of Section 142(d) of the Code and Treas. Reg. Section
1.103-8(b).
(b) Notwithstanding the foregoing, such requirements shall continue to
apply to the Project subsequent to foreclosure, transfer of title by deed in
lieu of foreclosure or similar event if, at any time during the Qualified
Project Period subsequent to such event, the obligor on the acquired purpose
obligation (as defined in Section 1.103-13(b)(4)(iv)(a) of the Regulations under
the Code) or "related person" (as defined in Section 147(a) of the Code or in
Section 1.103-10(e) of said Regulations) obtains an ownership interest in the
Project or any portion thereof for federal tax purposes.
Section 6. INCOME CERTIFICATION SUBMISSION TO TRUSTEE.
(a) During the term of this Agreement, the Income Certifications described
in Treas. Reg. Section 1.167(k)-3(b) will be submitted to the Trustee and the
Issuer in substantially the form of Exhibit C hereto and at the times as
provided herein.
(b) Except as provided in SECTION 5 hereof, the Occupancy Requirement
shall be a continuing requirement on the part of the Developer and its
successors and assigns for the period prescribed in SECTION 1 hereof, regardless
of whether or not the Bonds remain outstanding.
(c) The Developer shall maintain complete and accurate records pertaining
to the dwelling units occupied, or to be occupied, by Low or Moderate Income
Tenants and permit any
- 4 -
duly authorized representative of the Trustee or the Issuer to inspect the books
and records of the Developer pertaining to the incomes and the Income
Certifications of Low or Moderate Income Tenants residing in the Project upon
reasonable notice and at reasonable times.
(d) As soon as is reasonably possible, the Developer shall notify the
Trustee and the Issuer of the existence of any situation or the occurrence of
any event of which the Developer has knowledge, the existence or occurrence of
which would violate any of the provisions of this Agreement or cause the
interest on the Bonds to become includable in the gross income of the holders
thereof for federal income tax purposes, including the provision to the Trustee
of all notices and correspondence from the Issuer or the Internal Revenue
Service with respect to compliance with the provisions hereof.
Section 7. LOW OR MODERATE INCOME UNITS. The Developer will maintain the
Project so that the Low or Moderate Income Units will be similarly constructed
with all other units in the Project (although they need not be of the same size
nor have the same number of rooms or luxury amenities, but they shall be of
similar quality and type of construction). Low or Moderate Income Tenants shall
enjoy equal access to all common facilities of the Project.
Section 8. TENANT LISTS. All tenant lists, applications, and waiting
lists relating to the Project shall be kept separate and identifiable from any
other business of the Developer which is unrelated to the Project and shall be
maintained in a reasonable condition for proper audit and subject to examination
during business hours by representatives of the Issuer or the Trustee.
Section 9. TENANT LEASE REQUIREMENTS. All tenant leases with respect to
Low or Moderate Income Units will contain as an additional event of default by
the tenant thereunder any material misstatement contained in the Income
Certification submitted to the Developer. In addition, all leases entered into
after the date of original issuance and delivery of this Agreement shall
specifically provide that each such lease is subject and subordinate to the
terms and provisions of the Mortgage, and whether or not a particular lease so
provides, such lease shall nonetheless be subject and subordinate to the terms
and provisions of the Mortgage.
Section 10. MODIFICATION OF COVENANTS. It is understood and agreed that
the covenants of the Issuer and the Developer contained herein are intended to
comply with Section 142(d) of the Code and the regulations promulgated
thereunder. Consistent with such intent it is agreed that any amendment to
Section 142(d) of the Code (or any section of the Code or other law referred to
or referenced therein) which would have the effect of reducing the restrictions
imposed on the Developer pursuant to this Agreement, shall be deemed to be an
amendment to this Agreement without further action on the part of the parties
hereto, and this Agreement shall be deemed to have been amended in accordance
with the provisions of such amendment upon the effective date of such amendment.
Such amendments shall include, without limitation, any modification of the
definition of low or moderate income which would have the effect of increasing
the maximum permissible income of the tenants of the Low or Moderate Income
Units; provided, however, if any such amendment, in the opinion of qualified
Bond Counsel (such counsel to be acceptable to
- 5 -
the Trustee), would adversely affect the excludability of the interest on the
Bonds from gross income for federal tax purposes, such amendment shall be of no
force or effect.
Section 11. COVENANT RUNS WITH THE LAND. Successors BoundThis Agreement
shall be placed of record in the land records of Lake County, Indiana, and,
except as provided in Section 5 hereof, the covenants contained herein shall run
with the land and shall bind, and the benefits shall inure to, respectively, the
Developer and its successors and assigns, and the Issuer and all subsequent
owners of the Project or any interest therein, for the periods prescribed in
SECTION 1 and SECTION 2 hereof.
Section 12. NO CONFLICT WITH OTHER DOCUMENTS. The Developer warrants that
it has not and will not execute any other agreement with provisions
contradictory to, or in opposition to the provisions hereof, and that, in any
event, the requirements of this Agreement are paramount and controlling as to
the obligations herein set forth and supersede any other requirements in
conflict herewith.
Section 13. AMENDMENTS AND WAIVERS. This Agreement may be amended, or the
enforcement of any obligation of the Developer hereunder waived (in whole or in
part) or modified, only upon receipt by the Issuer of an opinion of qualified
Bond Counsel satisfactory to the Issuer and to the Trustee to the effect that
such proposed amendment or waiver will not adversely affect the excludability of
the interest on the Bonds from gross income for federal tax purposes and, except
in the case of a waiver, an amendment in writing executed by the parties hereto,
except with respect to modifications and/or amendments made or deemed made in
accordance with the provisions of SECTION 10 hereof, which modifications and/or
amendments shall be self-executing without action of the parties. The Developer
agrees, from time to time, to take all actions and steps which to its knowledge
are necessary to comply, and to cause the Project to comply, with the
requirements of Section 142(d) of the Code and to enter into modifications and
amendments to this Agreement to the extent required by Treasury Regulations
promulgated thereunder. Restrictions contained herein which are not required by
such regulations may be amended in accordance with the first sentence of this
section.
Section 14. ASSIGNMENT OF ISSUER'S INTEREST. For so long as the Bonds are
outstanding, the interest of the Issuer in this Agreement will be, and hereby
is, assigned to the Trustee, and its successors, under the Indenture, and during
such period this Agreement shall be enforceable by the Trustee in accordance
with its terms. If the Bonds shall mature or be redeemed prior to the end of
the periods set forth in SECTIONS 1 AND 2 hereof, the Trustee shall continue to
enforce the provisions of this Agreement for and on behalf of the Issuer. In
such case, the Developer hereby covenants to pay the customary fees and
reasonable expenses, including reasonable attorney's fees, of the Trustee
incurred by the Trustee in enforcing the provisions hereof.
Section 15. DEFAULTS, REMEDIES. If the Developer shall fail to observe or
perform any covenant, condition or agreement contained herein on its part to be
observed or performed for a period of 30 days after the Trustee or the Issuer
shall have given written notice to the Developer
- 6 -
of such failure, or such grace period as may be permitted by Section 142(d) of
the Code and the regulations thereunder, then and in such event, the Issuer or
the Trustee shall be entitled, individually or collectively, in addition to all
other remedies provided by law or in equity, to compel specific performance by
the Developer of its obligations under this Agreement, it being recognized that
the beneficiaries of the Developer's obligations hereunder cannot be adequately
compensated by monetary damages in the event of the Developer's default. The
Trustee agrees that upon receipt from the Developer of notice of noncompliance
pursuant to Section 6 hereof, it will promptly, by written notice to the
Developer, direct the Developer to institute action to correct such
noncompliance, such corrective action to be taken within a reasonable period
after the violation is first discovered.
Section 16. RELIANCE; COMPLIANCE.
(a) The Issuer and the Developer hereby recognize and agree that the
representations and covenants set forth herein may be relied upon by all persons
interested in the legality and validity of the Bonds and in the exclusion from
gross income for federal income tax purposes of the interest on the Bonds. In
performing their duties and obligations hereunder, the Issuer and the Trustee
may rely upon statements and certificates of the Developer and Low or Moderate
Income Tenants, unless the Issuer and the Trustee have reason to doubt them, and
upon audits of the books and records of the Developer pertaining to the Project.
In addition, the Issuer and the Trustee may consult with counsel, and the
opinion of such counsel shall be full and complete authorization and protection
in respect of any action taken or suffered by the Issuer or the Trustee
hereunder in good faith and in conformity with such opinion.
(b) Promptly following its receipt thereof, the Trustee will review each
Income Certificate and Compliance Certificate delivered pursuant to this
Agreement and verify that the percentage set forth in clause (ii) of the first
paragrpah of the Compliance Certificate is at least 20%. The Trustee will
maintain such documents on file and open to the inspection of the Issuer and the
Developer; provided, however, that the Trustee shall have no obligation to
request or review such other information, documents or certificates. The
Trustee shall hold such certifications and certificates solely for the benefit
of, and review by, the Holders of the Bonds.
(c) Promptly upon determining that any report or certificate submitted to
it is incomplete, the Trustee shall give written notice by certified mail,
return receipt requested, of such lack of completeness to the Developer and
direct the Developer to correct or complete the same, as the case may be, within
a reasonable period of time thereafter. If the Developer fails to submit to the
Trustee any certification required pursuant to this Agreement within 45 days of
the time set forth herein, the Trustee shall immediately give written notice of
that fact to the Issuer and the Developer. If any documentation filed with the
Trustee states that the Project has ceased to meet the requirements of this
Agreement, the Trustee shall immediately give written notice of that fact to the
Issuer and the Developer.
- 7 -
Section 17. INDEMNIFICATION. The Developer shall indemnify, hold harmless
and defend the Issuer and the Trustee and their respective officers, members,
directors, agents and employees against all loss, costs, damages, expenses,
suits, judgments, actions and liabilities of whatsoever nature (including,
without limitation, attorney's fees, litigation and court costs, amounts paid in
settlement, and amounts paid to discharge judgments) directly or indirectly
resulting from or arising out of or related to the performance by the Issuer or
Trustee of the duties imposed upon them under this Agreement, except to the
extent caused by gross negligence or willful misconduct.
Section 18. NOTICE. Any notice, demand, consent, permission or other
communication, which either party hereto is required or desires to give, or
communicate to the other party, shall be in writing and shall be given
personally or communicated by registered or certified mail, postage prepaid,
return receipt requested, addressed to the other party at the address of the
party set forth on the first page of this Agreement, and to the Trustee at Fifth
Third Bank of Central Indiana, 251 North Illinois Street, Suite 1000,
Indianapolis, Indiana 46277, Attention: Corporate Trust Department. Any such
notice or other communication so sent shall be deemed to have been given on the
second business day following the date the same was deposited in the mail, as
registered or certified matter, with postage fully prepaid thereon. Either
party may change its address for notice to the other party in the manner
provided in this section.
Section 19. DEFINITIONS. Capitalized terms used herein and not otherwise
defined herein but defined in the Indenture shall have the meanings assigned to
them in the Indenture. Unless otherwise expressly provided herein or unless the
context clearly requires otherwise, the following terms shall have the
respective meanings set forth below for all purposes of this Agreement:
"Agreement" means this Tax Regulatory Agreement, as it may from time to
time be amended.
"Income Certification" means a certification as to income executed by a
tenant of the Project, in substantially the form of EXHIBIT C hereto.
Section 20. SEVERABILITY. If any provision of this Agreement shall be
invalid, illegal or unenforceable, the validity, legality and enforceability of
the remaining portions shall not in any way be affected or impaired. In case
any covenant, stipulation, obligation or agreement of the Issuer or the
Developer contained herein shall for any reason be held to be in violation of
law, then such covenant, stipulation, obligation or agreement shall be deemed to
be the covenant, stipulation, obligation or agreement of the Issuer or the
Developer, as the case may be, to the full extent permitted by law.
Section 21. GOVERNING LAW. This Agreement shall be governed by and
construed in accordance with the laws of the State of Indiana.
- 8 -
Section 22. SUBORDINATION. The Issuer and the Developer agree that this
Agreement shall be subordinate in all respects to the Mortgage (provided that
the holder of such mortgage is not then in default under the letter of credit
issued to the Trustee in connection with the Bonds), and the Issuer and the
Developer shall, at the written request of the holder of the Mortgage, execute
such instruments as may be required to implement and evidence the subordination
expressed in this Section 22. The Issuer, the Trustee and the Developer further
agree that this Agreement shall terminate if the Project is acquired by
foreclosure of the Mortgage, conveyance of the Project by deed-in-lieu of
foreclosure or comparable conversion of the Mortgage, such termination to be
effective as of the date of such foreclosure, deed-in-lieu or foreclosure or
conversion. No right or authority on the part of the Issuer, the Trustee or any
other party which is provided by this Agreement with respect to the Project
shall survive the foreclosure, granting of a deed-in-lieu of foreclosure or
comparable conversion and no such right or authority shall apply to the Project
if title is transferred pursuant to or following any such foreclosure, deed-in-
lieu of foreclosure or comparable conversion.
- 9 -
IN WITNESS WHEREOF, the parties have caused this Agreement to be signed and
sealed by their respective, duly authorized representatives, as of the day and
year first written above.
CITY OF GARY, INDIANA, as Issuer
(SEAL)
By:
--------------------------------
ATTEST: Scott L. King, Mayor
- ------------------------------------
Katie Hall, Clerk
- 10 -
THE MILLER PARTNERSHIP, L.P. as
Developer
By: CenterPoint Properties Corporation,
its General Partner
By:
--------------------------------
Paul S. Fisher, Executive Vice
President
FIFTH THIRD BANK OF CENTRAL INDIANA, as
Trustee
By:
------------------------------------
- 11 -
STATE of INDIANA )
) SS:
COUNTY of LAKE )
On this 128th day of March, 1996, before me appeared Scott L. King and
Katie Hall, to me personally known who, being by me sworn did say that they are
the Mayor and Clerk, respectively, of the City of Gary, Indiana, a municipal
corporation of the State of Indiana, and that the seal affixed to the foregoing
instrument is the official seal of said corporation, and that said instrument
was signed and sealed on behalf of said municipal corporation, by authority of
its legislative body and said Mayor and Clerk, acknowledged said instrument to
be the free act and deed of said municipal corporation.
IN WITNESS WHEREOF, I have hereunto subscribed my name and affixed my
official seal, the day and year last above written.
----------------------------------------------
Notary Public in and for said County and State
(SEAL)
My Commission expires:
---------------
My County of Residence:
---------------
- 12 -
STATE OF ILLINOIS )
) SS:
COUNTY OF COOK )
On this __________ day of ______________________, 1996, before me appeared
Paul S. Fisher to me personally known, who being by me duly sworn did say that
he is the Vice President of CenterPoint Properties Corporation, a Maryland
corporation, the sole General Partner of The Miller Partnership, L.P., an
Illinois limited partnership, and that he is the person who executed the
foregoing instrument as such officer acting for and on behalf of the corporate
general partner of said partnership, and acknowledged that he executed the same
as his free act and deed as such officer of the general partner of said
partnership.
IN TESTIMONY WHEREOF, I have hereunto set my hand and affixed my notarial
seal, the day and year last above written.
----------------------------------------------
Notary Public in and for said County and State
[SEAL]
My Commission expires:
---------------
My County of Residence:
---------------
- 13 -
STATE OF INDIANA )
) SS:
COUNTY OF MARION )
On this ________________ day of March, 1996, before me appeared
____________________, to me personally known who, being by me duly sworn did say
that he is a ______________________________________ of Fifth Third Bank of
Central Indiana, an Indiana banking association, and acknowledged said
instrument to be the free act and deed of said banking association.
IN WITNESS WHEREOF, I have hereunto subscribed my name and affixed my
official seal, the day and year last above written.
----------------------------------------
(Signature)
----------------------------------------
(Printed Name)
Notary Public in and for said County and
State
[SEAL]
- 14 -
My commission expires: .
-------------------------
My County of Residence: .
-----------------------
- 15 -
EXHIBIT A TO TAX REGULATORY AGREEMENT
PROJECT DESCRIPTION
(1) Project Site
(a) The land legally described in Exhibit A-I, attached hereto and made a
part hereof.
(b) Any covenants, conditions, restrictions and easements of record
benefiting the Project as set forth on the title commitment delivered
in connection with the Loan Agreement
(c) All rights of Borrower under any rental lease agreements existing now
or in the future with respect to any apartment units comprising part
of the Project Buildings
(2) Project Buildings
14 low to midrise apartment buildings containing 682 units and one former
one-story commercial building located on the Project Site and as more
particularly described in the survey delivered pursuant to the terms of the
Reimbursement Agreement.
(3) Project Equipment
The items of fixtures, furnishings and equipment specified in the Plans (as
defined in the Reimbursement Agreement) including, but not limited to:
i) Kitchens (including refrigerators, stoves, sinks, cabinets and
dishwashers)
ii) Bathrooms (including sinks, toilets, bathtubs and vanities)
iii) Carpeting
iv) Security Inter-com systems
v) Windows
vi) Air conditioners
vii) Forced air heating units
viii) Washers and dryers
ix) Tennis court
x) Playground equipment
xi) Picnic equipment
xii) Lighting and electrical fixtures
xiii) Outside lighting
xiv) Other items as contained in the plans and specifications
submitted pursuant to the Reimbursement Agreement
A-1
LEGAL DESCRIPTION - EXHIBIT A1
A-2
EXHIBIT B
CERTIFICATION OF CONTINUING PROGRAM COMPLIANCE
Witnesseth that on this _______ day of ______________, ______, the
undersigned, having borrowed certain funds from the City of Gary, Indiana (the
"Issuer") in association with the Issuer's $20,540,000 Adjustable Rate Economic
Development Revenue Refunding Bonds, Series 1996 A (The Miller Partnership, L.P.
Project), for the purpose of refinancing a multifamily residential rental
housing project located in Gary, Indiana (the "Project"), does hereby certify
that during the preceding year such Project was continually in compliance with
the Tax Regulatory Agreement dated as of March 1, 1996 by and between the Issuer
and the Developer, (ii) ______% of the units in the Project were occupied by Low
or Moderate Income Tenants (minimum of 20% required) or are currently vacant and
being held available for such occupancy and have been so held continuously since
the date a Low or Moderate Income Tenant vacated such unit, as set forth below.
List names of Low or Moderate Income Tenants who commenced or terminated
occupancy during the preceding year.
Commenced Occupancy Terminated Occupancy
------------------- --------------------
1. 1.
2. 2.
3. 3.
Attach a separate sheet listing the apartment numbers of each unit in the
Project and indicating which units are occupied by Low or Moderate Income
Tenants.
The representations set forth herein are true and correct to the best of
the undersigned's knowledge and belief.
THE MILLER PARTNERSHIP, L.P.
By:
----------------------------------
B-1
EXHIBIT C
INCOME COMPUTATION AND CERTIFICATION FORM
Re: Lakeshore Apartments Development
Gary, Indiana
Unit Address and Number:
-------------------------------
I/We, the undersigned, being first duly sworn, state that I/we have read
and answered fully, frankly and personally each of the following questions for
all persons who are to occupy the residential rental unit in the above
development for which application is made, all of whom are listed below:
Occupant Information
--------------------
1. 2. 3. 4.
Names of Members Relationship Social
of the to Head of Security
Household Household Age Number
--------- --------- --- ------
--------------- HEAD -------- ---------------
--------------- SPOUSE -------- ---------------
--------------- ---------- -------- ---------------
--------------- ---------- -------- ---------------
ANNUAL INCOME
5. The anticipated total income of all the above persons, except minors
younger than 18 years of age, during the 12-month period beginning this date is
as follows:
Interest
and Periodic
Name Wages Dividends Payments** Other*** Total
----- ----- --------- -------- ----- -----
- ---------- ---------- ---------- ---------- --------- ----------
- ---------- ---------- ---------- ---------- --------- ----------
- ---------- ---------- ---------- ---------- --------- ----------
- ---------- ---------- ---------- ---------- --------- ----------
TOTAL ----------
C-1
*All wages and salaries, over-time pay, commissions, fees, tips and
bonuses, and other compensation for personal services, in each case before
payroll deductions.
**The full amount of periodic payments received from social security,
annuities, insurance policies, retirement funds, pensions, disability or death
benefits and other similar types of periodic receipts, worker's compensation,
public or welfare assistance, and alimony and child support payments.
***SEE SCHEDULE A ATTACHED HERETO FOR MORE DETAILED INFORMATION CONCERNING
OTHER INCOME AND EXCLUDABLE ITEMS.
FAMILY ASSETS
6. If any of the persons described above (or whose income or
contributions was included in item 5) has any savings, stocks, bonds, equity in
real property, personalty (excluding necessary items such as autos and
furniture) or any other form of capital investment, provide:
a. The total value of all such assets owned by all such persons
(including the excess of fair market value over consideration
received for business or family assets disposed of at less than
fair market value during the preceding two years):
$ ; and
-----------
b. The amount of income, if any, expected to be derived from such
assets in the 12-month period commencing this date which was
included in item 5 above: $
------------
STUDENTS
7. a. Will all of the persons listed in column 1 above be or have
they been full time students during five calendar months of
this calendar year at an educational institution (other than a
correspondence school) with regular faculty and students?
Yes No
---- ----
b. If so, is any such person (other than nonresident aliens)
married and eligible to file a joint federal income tax return?
Yes No
---- ----
CERTIFICATION
C-2
I/We have reviewed Schedule A attached hereto and certify that the income
set forth in paragraph 5 above includes all income, from all sources described
on Schedule A, with no exceptions, and are given under penalty of perjury. We
acknowledge that all of the above information is relevant to the status under
federal income tax law of certain housing tax credits and/or tax-exempt economic
development revenue bonds to finance the apartment for which application is
being made. We consent to the disclosure of the foregoing information to the
U.S. Government, the developer of the project, investors in the project and
their legal and accounting representatives, and to any lender providing
financing for the development.
Date:
----------------- -----------------------------------
Head of Household
-----------------------------------
Spouse
[Notary Appears on Following Page]
C-3
STATE OF INDIANA )
) SS:
COUNTY OF __________ )
Before me, a Notary Public in and for said County and State, personally
appeared ___________ the ____________, who acknowledged execution of the
foregoing document as individuals on their own behalf, and who, having been duly
sworn, stated that the representations therein contained are true.
Witness my hand and Notarial Seal this _______ day of ________________,
1996.
My Commission Expires: -----------------------------------
(signature)
- -------------------------
-----------------------------------
(printed name)
My County of Residence: Notary Public in and for said
County and State
- -------------------------------
C-4
FOR COMPLETION BY DEVELOPMENT OWNER OR MANAGER ONLY:
1. Calculation of Eligible Income:
1. Enter total amount entered for entire household,
except minors, in 5 above: $
---------------
2. If the amount entered in 6.a above is greater
than $5,000, enter the excess of ______%
(being the current passbook savings rate
as determined by HUD) of line 6.a. over
the amount entered on line 6.b., if any. $
---------------
TOTAL ELIGIBLE INCOME
(line 1.a plus line 1.b): $
---------------
2. FIRST YEAR CERTIFICATIONS. In order to comply with applicable federal tax
law the development has elected to comply with the requirement that at
least 20 percent of the units in the development will be rented to
individuals and families with incomes of less than or equal to 50 percent
of Median Gross Income for the Area. Based upon the foregoing election,
the Total Eligible Income of the occupants of the unit as a first year
tenant qualifies the unit as a set-aside unit for purposes of the housing
tax credit provisions contained in Section 42(g) and tax-exempt bond
provisions of Section 142(d) of the Internal Revenue Code of 1986.
3. RECERTIFICATIONS. Applicable federal law requires that the determination
of whether the income of residents of a unit in the Development exceeds the
applicable income limit shall be made at least annually on the basis of the
current income of the residents. On recertification, the income of such
resident shall be treated as continuing to not exceed the applicable income
limit unless, as of the most recent annual recertification, (a) such
resident's income exceeds 140% of the income limit applicable for first
year tenants, AND (b) before the next income determination, any residential
unit of comparable or smaller size in the development is occupied by a new
resident whose income exceeds the applicable income limit.
Applicant/Tenant:
___________ Qualifies as a first year Low or Moderate Income Tenant under
paragraph 2 above.
___________ Qualifies, on recertification, as a continuing tenant under the
140% test under paragraph 3 above.
C-5
___________ Does not, on recertification, qualify as a Low or Moderate
Income Tenant (NOTE: If this box is checked and the development is not 100% Low
or Moderate Income, the next available unit of comparable or smaller size in the
development may need to be rented to a first year qualifying Low or Moderate
Income Tenant to assure that at least 20% of the units are occupied by, or
available for rental to, qualifying tenants).
Date:
------------ -----------------------------------
Owner/Manager
*"Median Gross Income for the Area" means the median income for the statistical
area where the Project is located as determined by the Secretary of Housing and
Urban Development under Section 8(f)(3) of the United States Housing Act of
1937, as amended, taking into account adjustments for family size or if programs
under said Section (8)(f) are terminated, median income determined under the
method used by the Secretary immediately prior to the termination. Such income
figures are to be updated annually by HUD.
C-6
NEW ISSUE -- BOOK - ENTRY - ONLY RATING: Moody's Investors Service, Inc.
Aa3/VMIG 1
(See "RATING" herein)
In the opinions of Ice Miller Donadio & Ryan, Indianapolis, Indiana, Bond
Counsel, Karen Freeman-Wilson, Gary, Indiana, Co-Bond Counsel, and Meyer, Lyles
& Godshalk, Gary, Indiana, Co-Bond Counsel, under existing laws, regulations,
judicial decisions and rulings, interest on the Series 1996 A Bonds is
excludable from gross income under Section 103 of the Internal Revenue Code of
1986, as amended, except for interest on any Series 1996 A Bond for any period
during which such Series 1996 A Bond is owned by a person who is a "substantial
user" of the Project (hereinafter defined) or a "related person", as defined in
Section 147(a) of the Code. Such exclusion is conditioned on continuing
compliance with the Tax Covenants (hereinafter defined). Interest on the Series
1996 A Bonds must be taken into account for purposes of computing certain
alternative minimum taxes and certain other taxes. INTEREST ON THE SERIES 1996
B BONDS IS NOT EXCLUDABLE FROM GROSS INCOME FOR FEDERAL INCOME TAX PURPOSES. In
the opinions of Ice Miller Donadio & Ryan, Indianapolis, Indiana, Karen Freeman-
Wilson, Gary, Indiana, and Meyer, Lyles & Godshalk, Gary, Indiana, under
existing laws, regulations, judicial decisions and rulings, interest on the
Series 1996 A Bonds and Series 1996 B Bonds is exempt from income taxation in
the State of Indiana. See "TAX MATTERS" herein.
$20,540,000 $1,680,000
CITY OF GARY, INDIANA CITY OF GARY, INDIANA
ADJUSTABLE RATE ECONOMIC DEVELOPMENT TAXABLE ADJUSTABLE RATE
REVENUE REFUNDING BONDS, SERIES 1996 A ECONOMIC DEVELOPMENT REVENUE
(THE MILLER PARTNERSHIP, L.P. PROJECT) REFUNDING BONDS SERIES 1996 B
(THE MILLER PARTNERSHIP, L.P. PROJECT)
Dated: Date of Issuance Maturity Date: March 1, 2031
Price: 100%
The City of Gary, Indiana Adjustable Rate Economic Development Revenue Refunding
Bonds, Series 1996 A (The Miller Partnership, L.P. Project) (the "Series 1996 A
Bonds") and the City of Gary, Indiana Taxable Adjustable Rate Economic
Development Revenue Refunding Bonds, Series 1996 B (The Miller Partnership, L.P.
Project) (the "Series 1996 B Bonds") (the Series 1996 A Bonds and the Series
1996 B Bonds being sometimes collectively referred to herein as the "Series 1996
Bonds") to be issued by the City of Gary, Indiana, will be issued pursuant to a
Trust Indenture, dated as of March 1, 1996 (the "Indenture"), between the City
and Fifth Third Bank of Central Indiana, as Trustee (the "Trustee"), and
pursuant to I.C. 36-7-11.9 and I.C. 37-7-12 and I.C. 5-1-5, as amended. The
Series 1996 Bonds are issuable only as fully registered bonds in denominations
of One Hundred Thousand and 00/100 Dollars ($100,000.00) and integral multiples
of Five Thousand and 00/100 Dollars ($5,000.00) in excess thereof. When issued,
the Series 1996 Bonds will be registered in the name of Cede & Co., as nominee
for The Depository Trust Company, New York, New York ("DTC"). Purchases of
beneficial interest in the Series 1996 Bonds will be made in Book-Entry Only
form. Purchasers of beneficial interest in the Series 1996 Bonds (the
"Beneficial Owners") will not receive physical delivery of certificate
representing their interest in the Series 1996 Bonds. As long as DTC or its
nominee is the registered owner of the Series 1996 Bonds, interest, together
with the principal of and redemption premium, if any, on the Series 1996 Bonds
and the purchase price of tendered Series 1996 Bonds will be paid directly to
DTC, so long as the Series 1996 Bonds are held in Book-Entry Only form. ( See
"THE SERIES 1996 BONDS -- Book-Entry-Only System.").
Interest on the Series 1996 Bonds is subject to a maximum rate of twelve percent
(12%) per annum. Subject to the conditions set forth in Indenture, the Series
1996 Bonds will bear interest from the most recent date to which interest has
been paid, or if no interest has been paid, from the date of initial delivery of
the Series 1996 Bonds, at an adjustable rate of interest in one of several modes
(the "Adjustable Interest Rate Modes") or at a Fixed Interest Rate. The
Adjustable Interest Rate Modes are: Weekly, One Month, Three Month, Six Month,
One Year and Five Year. The Series 1996 Bonds will be issued initially in the
Weekly Mode. See "THE SERIES 1996 BONDS -- Interest Rate Modes on Series 1996
Bonds."
THE SERIES 1996 BONDS, THE INTEREST PAYABLE THEREON AND PREMIUM, IF ANY, DO NOT
REPRESENT OR CONSTITUTE A DEBT OF THE ISSUER WITHIN THE MEANING OF THE
PROVISIONS OF THE CONSTITUTION OR STATUTES OF THE STATE OF INDIANA OR A PLEDGE
OF THE FAITH AND CREDIT OF THE ISSUER. THE SERIES 1996 BONDS, AS TO PRINCIPAL,
INTEREST AND PREMIUM, IF ANY, ARE NOT AN OBLIGATION OF THE STATE OF INDIANA, OR
OF ANY POLITICAL SUBDIVISION THEREOF, INCLUDING THE ISSUER, AND ARE PAYABLE
SOLELY AND ONLY FROM THE PAYMENT TO BE MADE ON THE SERIES 1996 NOTES
(HEREINAFTER DEFINED) DELIVERED BY THE MILLER PARTNERSHIP, L.P., AN ILLINOIS
LIMITED PARTNERSHIP (THE "BORROWER") ISSUED UNDER THE LOAN AGREEMENT
(HEREINAFTER DEFINED) PLEDGED AND ASSIGNED FOR THEIR PAYMENT IN ACCORDANCE WITH
INDENTURE. ALL PRINCIPAL AND UP TO 56 DAYS' INTEREST (BUT NOT ANY PREMIUM)
WHICH BECOMES DUE ON THE SERIES 1996 BONDS (WHETHER AT STATED MATURITY OR UPON
ADVANCEMENT OF STATED MATURITY BY REDEMPTION, MANDATORY TENDER, OR ACCELERATION)
THROUGH AND INCLUDING APRIL 15, 2001, IS TO BE PAID, AS NECESSARY, BY DRAWS ON
AN IRREVOCABLE LETTER OF CREDIT ISSUED BY:
THE ROYAL BANK OF SCOTLAND plc,
acting through its New York Branch (the "Bank")
The Series 1996 Bonds are subject to mandatory redemption as described herein
(i) in whole on the Interest Payment Date (hereinafter defined) which next
proceeds the expiration date of the Letter of Credit at a redemption price of
one hundred percent (100%) of the principal amount thereof plus accrued interest
to the redemption date unless, at least 45 days prior to any such Interest
Payment Date, the Bank shall have agreed to an extension of the Letter of Credit
to a date not earlier than one (1) year from the expiration date being extended,
or the Borrower shall have obtained and delivered to the Trustee an Alternate
Letter of Credit with a termination date not earlier than one (1) year from the
expiration date of Letter of Credit it replaces; and (ii) upon a Determination
of Taxability with respect to the Series 1996 A Bonds. The Series 1996 Bonds
are also subject to certain optional redemptions by the Borrower. See "THE
SERIES 1996 BONDS -- Redemption of Series 1996 Bonds Prior to Maturity" herein.
The Series 1996 Bonds may also become due in advance of the stated maturity as a
consequence of a default by the Borrower under the Reimbursement Agreement
pursuant to which the Letter of Credit is issued. Prospective purchasers of
Series 1996 Bonds should not assume that they have protection against an early
retirement of the Series 1996 Bonds.
The Series 1996 Bonds are offered when, as and if issued by the Issuer and
accepted by EVEREN Securities, Inc. (the "Underwriter"), subject to prior sale,
to the withdrawal or modification of the offer without notice and to certain
other conditions including the unqualified approval of legality by Ice Miller
Donadio & Ryan, Indianapolis, Indiana, Bond Counsel, Karen Freeman-Wilson, Gary,
Indiana, Co-Bond Counsel, and Meyer, Lyles & Godshalk, Co-Bond Counsel. Certain
legal matters will be passed upon for the Underwriter by Baker & Daniels,
Indianapolis, Indiana; for the Borrower by Coffield Ungaretti & Harris, Chicago,
Illinois; and for the Bank by Seyfarth, Shaw, Fairweather & Geraldson, Chicago,
Illinois. It is expected that delivery of the Series 1996 Bonds will be made
through the facilities of the DTC in New York, New York, on or about April 1,
1996, against payment therefor. Prior to this offering there has been no market
for the Series 1996 Bonds. Subject to applicable securities laws and market
conditions, the Underwriter intends to effect a secondary market in the Series
1996 Bonds; however, neither the Underwriter nor any other party described
herein is obligated to repurchase any Series 1996 Bonds except as otherwise
described herein. For information with respect to the Underwriter and its
compensation, see "UNDERWRITING" herein.
April 1, 1996 EVEREN SECURITIES, INC.
NO DEALER, BROKER, SALESPERSON OR OTHER PERSON HAS BEEN AUTHORIZED BY THE
BORROWER, THE ISSUER, THE UNDERWRITER OR THE BANK, TO GIVE ANY INFORMATION OR TO
MAKE ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS OFFICIAL STATEMENT,
AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED
UPON AS HAVING BEEN AUTHORIZED BY THE BORROWER, THE ISSUER, THE UNDERWRITER OR
THE BANK. THIS OFFICIAL STATEMENT DOES NOT CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY, NOR SHALL THERE BE ANY SALE OF THE SERIES 1996
BONDS BY ANY PERSON, IN ANY JURISDICTION IN WHICH IT IS UNLAWFUL FOR SUCH PERSON
TO MAKE SUCH OFFER, SOLICITATION OR SALE. THE INFORMATION SET FORTH HEREIN HAS
BEEN OBTAINED FROM THE BORROWER, THE ISSUER, THE BANK (WHICH PROVIDED ONLY THE
INFORMATION IN APPENDIX B) AND OTHER SOURCES WHICH ARE BELIEVED TO BE RELIABLE,
BUT IT IS NOT GUARANTEED AS TO ACCURACY OR COMPLETENESS, AND IS NOT TO BE
CONSTRUED AS A REPRESENTATION BY THE UNDERWRITER. THE INFORMATION, ESTIMATES
AND EXPRESSIONS OF OPINION IN THIS OFFICIAL STATEMENT ARE SUBJECT TO CHANGE
WITHOUT NOTICE, AND NEITHER THE DELIVERY OF THIS OFFICIAL STATEMENT NOR ANY SALE
OF THE SERIES 1996 BONDS SHALL, UNDER ANY CIRCUMSTANCES, CREATE ANY IMPLICATION
THAT THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF THE PARTIES REFERRED TO HEREIN,
SUBSEQUENT TO THE DATE AS OF WHICH SUCH INFORMATION IS PRESENTED.
IN CONNECTION WITH THIS OFFERING, THE UNDERWRITER MAY OVER-ALLOT OR EFFECT
TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE SERIES 1996
BONDS AT A LEVEL ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN MARKET.
SUCH STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME.
THE SERIES 1996 BONDS HAVE NOT BEEN REGISTERED WITH THE SECURITIES AND
EXCHANGE COMMISSION UNDER THE SECURITIES ACT OF 1933, AS AMENDED.
IN MAKING AN INVESTMENT DECISION, INVESTORS MUST RELY ON THEIR OWN
EXAMINATION OF THE ISSUER AND THE TERMS OF THE OFFERING, INCLUDING THE MERIT AND
RISK INVOLVED. THESE SECURITIES HAVE NOT BEEN RECOMMENDED BY ANY FEDERAL OR
STATE SECURITIES COMMISSION OR REGULATORY AUTHORITY. FURTHERMORE, THE FOREGOING
AUTHORITIES HAVE NOT CONFIRMED THE ACCURACY OR DETERMINED THE ADEQUACY OF THIS
DOCUMENT. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
TABLE OF CONTENTS
OFFICIAL STATEMENT SUMMARY . . . . . . . . . . . . . . . . . . . . . . . i
INTRODUCTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
THE ISSUER . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
THE BORROWER, THE PROJECT AND USE OF SERIES 1996 BOND PROCEEDS . . . . . 4
THE SERIES 1996 BONDS. . . . . . . . . . . . . . . . . . . . . . . . . . 5
SECURITY AND SOURCES OF PAYMENT FOR THE SERIES 1996 BONDS. . . . . . . .21
RISKS TO BONDHOLDERS . . . . . . . . . . . . . . . . . . . . . . . . . .22
TAX MATTERS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .24
NO LITIGATION. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .25
APPROVAL OF LEGAL PROCEEDINGS. . . . . . . . . . . . . . . . . . . . . .25
UNDERWRITING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .25
RATING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .26
MISCELLANEOUS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .26
APPENDIX A - The Miller Partnership, L.P.
APPENDIX B - The Royal Bank of Scotland plc
APPENDIX C - Form of Bond Counsel Opinion
APPENDIX D - Definitions and Summary of Certain Legal Documents
OFFICIAL STATEMENT SUMMARY
The following is a summary of certain information contained in this
Official Statement, to which reference should be made for a complete statement
thereof. The Series 1996 Bonds are offered to potential investors only by means
of the entire Official Statement, including the cover page, this summary
statement and the Appendices hereto. No person is authorized to detach this
summary statement from the Official Statement or otherwise use it without the
entire Official Statement.
SECURITIES BEING OFFERED
The following securities are being offered:
$20,540,000.00 $1,680,000.00
CITY OF GARY, INDIANA CITY OF GARY, INDIANA
ADJUSTABLE RATE TAXABLE ADJUSTABLE RATE
ECONOMIC DEVELOPMENT ECONOMIC DEVELOPMENT
REVENUE REFUNDING BONDS, REVENUE REFUNDING BONDS,
SERIES 1996 A SERIES 1996 B
(THE MILLER PARTNERSHIP, L.P. (THE MILLER PARTNERSHIP, L.P.
PROJECT) PROJECT)
THE SERIES 1996 BONDS ARE SPECIAL LIMITED OBLIGATIONS OF THE ISSUER
AND ARE PAYABLE SOLELY OUT OF THE REVENUES AND OTHER AMOUNTS DERIVED FROM THE
LOAN AGREEMENT OR AS OTHERWISE AUTHORIZED BY THE BOND ORDINANCE OR THE INDENTURE
AND PERMITTED BY LAW (EXCEPT TO THE EXTENT PAID OUT OF MONEYS ATTRIBUTABLE TO
THE PROCEEDS DERIVED FROM THE SALE OF THE SERIES 1996 BONDS OR TO INCOME FROM
THE TEMPORARY INVESTMENT THEREOF). THE SERIES 1996 BONDS DO NOT CONSTITUTE AN
INDEBTEDNESS OF THE CITY OF GARY, INDIANA, WITHIN THE MEANING OF ANY INDIANA
CONSTITUTIONAL PROVISION OR STATUTORY LIMITATION, AND DO NOT CONSTITUTE OR GIVE
RISE TO A PECUNIARY LIABILITY OF THE CITY OF GARY, INDIANA, OR A CHARGE AGAINST
ITS GENERAL CREDIT OR TAXING POWERS.
THE TRUSTEE
Fifth Third Bank of Central Indiana, Indianapolis, Indiana, will serve
as the initial Trustee under the Indenture.
REGISTRAR, PAYING AGENT AND AUTHENTICATING AGENT
The Fifth Third Bank, Cincinnati, Ohio, has been appointed to serve as
registrar (the "Registrar"), paying agent (the "Paying Agent") and
authenticating agent (the "Authenticating Agent") under the Indenture.
THE BANK AND THE LETTER OF CREDIT
The Royal Bank of Scotland plc, acting through its New York Branch,
will provide a Letter of Credit for the Series 1996 Bonds (See APPENDIX B -- The
Royal Bank of Scotland plc). The Letter of Credit will permit the Trustee to
draw an amount with respect to the Series 1996 Bonds up to (a) the outstanding
principal amount of the Series 1996 Bonds (i) to enable the Trustee to pay the
principal amount of the Series 1996 Bonds when due at maturity, upon redemption
or acceleration and (ii) to enable the Trustee to pay the portion of the
purchase price of the Series 1996 Bonds or Beneficial Ownership Interests (as
hereinafter defined) tendered to it equal to the principal amount of such
tendered Series 1996 Bonds or Beneficial Ownership Interests, plus (b) an amount
equal to interest to accrue on the Series 1996 Bonds for 56 days at the maximum
interest rate of 12% per annum, (i) to enable the Trustee to pay interest on the
Series 1996 Bonds when due and (ii) to enable the Trustee to pay the portion, if
any,
of the purchase price of the Series 1996 Bonds or Beneficial Ownership Interests
tendered to it equal to the accrued interest on such tendered Series 1996 Bonds
or Beneficial Ownership Interests. The Letter of Credit will terminate upon the
earliest to occur of the following (the "Termination Date"): (i) the honoring
by the Bank of the final drawing to be made thereunder, or (ii) surrender of the
Letter of Credit to the Bank for cancellation as a result of (A) the payment in
full of the Bonds pursuant to the provisions of the Indenture, or (B) the
acceptance by the Trustee of an Alternate Letter of Credit (as herein defined),
as certified by the Trustee to the Bank, or (iii) April 15, 2001, or (iv) the
fifth calendar day following the Fixed Interest Rate Commencement Date unless
waived in writing by the Bank pursuant to the Indenture prior to the Fixed
Interest Rate Commencement Date, (v) the fifth calendar day following the
Interest Period Reset Date from and after which any of the Bonds bear interest
at the Six Month Interest Rate, the One Year Interest Rate or the Five Year
Interest Rate, or (vi) the fifteenth calendar day following delivery to the
Trustee of a direction by the Bank pursuant to the Indenture to declare the
Bonds immediately due and payable which has not been rescinded (see "APPENDIX D
- -- Definitions and Summary of Certain Legal Documents").
REMARKETING AGENT
EVEREN Securities, Inc., and Gates Capital Corporation have been
appointed to serve as initial Co-Remarketing Agents under the Indenture
(jointly, the "Remarketing Agent").
THE BORROWER AND USE OF SERIES 1996 BOND PROCEEDS
The proceeds of the sale of the Series 1996 Bonds will be loaned to
The Miller Partnership, L.P., an Illinois limited partnership (the "Borrower")
and used by the Borrower to finance the costs of refunding certain bonds issued
by the Issuer in 1991 and 1993 (the "Prior Bonds") for the purposes of loaning
the proceeds of the Prior Bonds to The Miller Partnership, L.P., a previously
existing Illinois limited partnership (the "Prior Borrower") to finance the
acquisition, renovation and redevelopment of a multi-family rental housing
project (the "Project"). (See "THE BORROWER, THE PROJECT AND USE OF SERIES 1996
BOND PROCEEDS" herein.)
MATURITY, REDEMPTION AND MANDATORY PURCHASE
The Series 1996 Bonds will mature on March 1, 2031, subject to prior
optional and mandatory redemption, and are subject to mandatory purchase as set
forth herein (see "THE SERIES 1996 BONDS --Redemption of Series 1996 Bonds Prior
to Maturity," "THE SERIES 1996 BONDS--Mandatory Tender for Purchase of Series
1996 Bonds or Beneficial Ownership Interest upon Conversion Between Modes," "THE
SERIES 1996 BONDS--Mandatory Tender for Purchase of Series 1996 Bonds Upon
Conversion Between Interest Rate Modes" and "THE SERIES 1996 BONDS--Mandatory
Tender for Purchase of Series 1996 Bonds or Beneficial Ownership Interests Upon
Delivery of an Alternate Letter of Credit").
INTEREST RATES, PAYMENT DATES AND CONVERSION BETWEEN INTEREST RATE MODES
The Series 1996 Bonds will bear interest from the most recent date to
which interest has been paid, or if no interest has been paid, from the date of
initial delivery of the Series 1996 Bonds, at an adjustable rate of interest in
one of several modes (each an "Adjustable Interest Rate Mode") or at a Fixed
Interest Rate. (The Adjustable Interest Rate Modes and the Fixed Interest Rate
are collectively referred to as "Interest Rate Modes.") The Adjustable Interest
Rate Modes are: Weekly, One Month, Three Month, Six Month, One Year and Five
Year.
While the Series 1996 Bonds bear interest in one of the Adjustable
Interest Rate Modes, the Series 1996 Bonds bear interest during the period
generally corresponding to the title of the Adjustable Interest Rate Mode (the
"Interest Rate Period") at a rate determined by the Remarketing Agent. The
Remarketing Agent determines the rate on the "Interest Rate Determination Date"
and such rate is effective as of the "Interest Rate Adjustment Date," for such
Interest Rate Period.
The rate of interest determined by the Remarketing Agent for a
particular Interest Rate Period is to be the rate necessary to produce, as
nearly as practical, a par bid for the Series 1996 Bonds on the Interest Rate
-ii-
Determination Date for that Interest Rate Period. If the Remarketing Agent has
been removed or has resigned and no successor has been appointed, or if the
Remarketing Agent has failed to determine the applicable interest rate, the
interest rate for the next succeeding Interest Rate Period will be the interest
rate then borne by the Series 1996 Bonds. In no event, however, can the
interest rate on the Series 1996 Bonds for any Interest Rate Mode exceed 12% per
annum.
The Series 1996 Bonds initially will bear interest in the Weekly
Interest Rate Mode. Commencing on the first day of June, 1996, the Borrower may
elect, from time to time, to change Interest Rate Modes on the Series 1996
Bonds. The date upon which such change becomes effective is referred to as an
"Interest Period Reset Date" and can only occur on the first Business Day of a
month (or the first day of a month when converting from a Six Month, One Year or
Five Year Adjustable Interest Rate Mode) following the conclusion of the
preceding Interest Rate Period (except when converting from the Weekly Interest
Rate Mode). The Series 1996 Bonds or Beneficial Ownership Interests (as
hereinafter defined) are subject to mandatory tender for purchase on the
Interest Period Reset Date upon a conversion between Interest Rate Modes,
subject to the right of each Holder or Beneficial Owner (as hereinafter defined)
to affirmatively elect to retain its Bonds or Beneficial Ownership Interests (as
hereinafter defined) (see "THE SERIES 1996 BONDS -- Mandatory Tender for
Purchase of Series 1996 Bonds or Beneficial Ownership Interests upon Conversion
Between Modes" herein).
Interest on the Series 1996 Bonds is payable monthly on the first
Business Day of each month while the Series 1996 Bonds bear interest in the
Weekly, One Month or Three Month Interest Rate Mode, and is payable semi-
annually on April 1 and October 1 while the Series 1996 Bonds bear interest in
the Six Month, One Year, Five Year or Fixed Interest Rate Mode. The first
interest payment date for the Series 1996 Bonds will be the first Business Day
of May, 1996. The chart below sets forth Interest Rate Adjustment Dates,
Interest Rate Determination Dates and Interest Rate Periods for the Adjustable
Interest Rate Modes:
INTEREST RATE
INTEREST INTEREST RATE DETERMINATION INTEREST RATE
RATE MODE ADJUSTMENT DATE DATE PERIOD
- --------- --------------- -------------- ------------------
Weekly Thursday of each week 2:00 p.m. on Wednesday 1 week commending
of each week, or the Thursday*
preceding Business Day if
Wednesday is not a Business Day*
One Month 1st Business Day of each month 7th Business Day before 1 month commencing the
the Interest Rate first Business Day of the
Adjustment Date month
Three Month 1st Business Day of any month, 10th Business Day before 3 months commencing the
and thereafter the first Business the Interest Rate first Business Day of
Day of January, April, July, and Adjustment Date January, April, July, and
October October**
Six Month 1st Business Day of any month, 10th Business Day before 6 months commencing
and thereafter April 1 and the Interest Rate April 1 or October 1**
October 1 Adjustment Date
One Year 1st Business Day of any month, 10th Business Day before 1 year commencing April
and thereafter April 1 or October the Interest Rate 1 and October 1**
1 commencing the next Interest Adjustment Date
Rate Period.
-iii-
Five Year 1st Business Day of any month, 10th Business Day before 5 years commencing
and thereafter April 1 or October the Interest Rate April 1 and October**
1 commencing the next Interest Adjustment Date
Rate Period
* When converting from another Interest Rate Mode, the Interest Rate
Determination Date for the Weekly Interest Rate Mode is 2:00 p.m. on the
Business Day before the Interest Period Reset Date. The first Interest
Rate Period would commence on the Interest Period Reset Date and run
through the following Wednesday.
** The first Interest Rate Period may be less than the indicated period when
converting from another Interest Rate Mode.
The Interest Rate Determination Date for the Fixed Interest Rate Mode
is the tenth Business Day before the Interest Period Reset Date, which is the
first day or Business Day of a month following the conclusion of the preceding
Interest Rate Period and which is also the Interest Rate Adjustment Date. No
further conversion to other Interest Rate Modes can be made after conversion to
the Fixed Interest Rate Mode (see "THE SERIES 1996 BONDS -- Interest," "Interest
Rate Modes on Series 1996 Bonds," and "Conversion Between Interest Rate Modes"
herein).
PURCHASE OF SERIES 1996 BONDS OR BENEFICIAL OWNERSHIP INTERESTS ON DEMAND OF
OWNERS
THE SERIES 1996 BONDS WILL BE ISSUED INITIALLY IN BOOK-ENTRY ONLY
FORM, AND THE PROCEDURES SET FORTH BELOW ARE SUBJECT TO THE PROVISIONS OF A
LETTER OF REPRESENTATIONS EXECUTED BY THE ISSUER (SEE "THE SERIES 1996 BONDS--
BOOK-ENTRY ONLY SYSTEM" AND "THE SERIES 1996 BONDS--PURCHASE OF SERIES 1996
BONDS OR BENEFICIAL OWNERSHIP INTERESTS UPON DEMAND OF HOLDERS OR BENEFICIAL
OWNERS" HEREIN).
While the Series 1996 Bonds bear interest in an Adjustable Interest
Rate Mode, any Series 1996 Bond or any Beneficial Ownership Interest (or any
portion thereof in the amount of $100,000 or multiples of $5,000 in excess
thereof, and provided that the remaining portion to be held by the Holder or
Beneficial Owner is $100,000 or more in principal amount) will be purchased by
the Registrar upon the demand of the Holder or the Beneficial Owner at a
purchase price equal to the principal amount plus, if the Series 1996 Bond bears
interest in the Weekly Interest Rate Mode, accrued interest, if any, to the date
of purchase. In order to make such demand, the Holder or the Beneficial Owner
must give notice to the Registrar (and, if the Series 1996 Bonds bear interest
in the Weekly Interest Rate Mode, to the Trustee) in writing or by telecopy
stating (i) the name and address of the Holder or the Beneficial Owner, (ii) the
principal amount, CUSIP number and Series 1996 Bond numbers of the Series 1996
Bonds or Beneficial Ownership Interests to be purchased, (iii) that such Series
1996 Bonds or Beneficial Ownership Interests are to be purchased on the Purchase
Date (as defined below) pursuant to the terms of the Indenture, and (iv) that
such notice is irrevocable. The Beneficial Owner must provide the Registrar
with evidence satisfactory to the Registrar of the Beneficial Owner's interest
in the Beneficial Ownership Interest tendered for purchase. The Holder must
deliver the Series 1996 Bonds to be purchased to the Registrar at its principal
corporate trust office accompanied by fully completed and executed Instructions
to Sell, the form of which is printed on the Series 1996 Bonds. The Beneficial
Owner must cause a change in the records of DTC (as hereinafter defined) to
reflect the tender of a Beneficial Ownership Interest. Any Series 1996 Bonds
not so delivered after the Holder has made a demand for purchase nevertheless
shall be deemed tendered. After a demand for purchase, Beneficial Owners shall
be obligated to cause a change in the records of DTC to reflect a tender of such
Beneficial Ownership Interests. Notwithstanding any tender, Series 1996 Bonds
or Beneficial Ownership Interests (or the applicable portions thereof) tendered
for purchase will not be purchased if such Series 1996 Bonds mature or are
redeemed on or prior to the applicable Bond Purchase Date. Demand notices and
Series 1996 Bond deliveries must be given and made as follows (with all
references to local time meaning local time of the city where the principal
corporate trust office of the Registrar is located, presently Cincinnati, Ohio):
1. While the Series 1996 Bonds bear interest in the Weekly Interest
Rate Mode, the notice must be given no earlier than fifteen days but no
later than seven days prior to the Bond
-iv-
Purchase Date. The Bond Purchase Date is determined by the Holder or
Beneficial Owner and must be a Business Day and, if the Interest Rate Mode
is to be converted from the Weekly Interest Rate Mode to another Interest
Rate Mode, must be no later than the Interest Period Reset Date for such
other Interest Rate Mode. In the case of a holder, the Series 1996 Bonds
must be delivered to the Registrar not later than 10:00 a.m., local time,
on the second Business Day before the Bond Purchase Date. The Beneficial
Owner must cause the transfer of the Beneficial Owner's Beneficial
Ownership Interest on the records of DTC (as hereinafter defined) by
10:00 a.m. (local time) on the Bond Purchase Date. In the case of a Series
1996 Bond or Beneficial Ownership Interest or portion thereof to be
purchased prior to an Interest Payment Date and after the Record Date in
respect thereof, the Holder or Beneficial Owner shall deliver a due-bill
check, in form satisfactory to the Registrar for interest due on such
Interest Payment Date.
2. While the Series 1996 Bonds bear interest in the One Month
Interest Rate Mode, the notice must be given no earlier than fifteen
days before the Bond Purchase Date but no later than 11:00 a.m., local
time, on the fifth Business Day before the Bond Purchase Date. The
Bond Purchase Date is the Interest Rate Adjustment Date for the One
Month Interest Rate Mode. The Series 1996 Bonds must be delivered to
the Registrar no later than 10:00 a.m., local time, on the fourth day
before the Bond Purchase Date or the next preceding Business Day if
such fourth day is not a Business Day. The Beneficial Owner must
cause the transfer of the Beneficial Owner's Beneficial Ownership
Interest on the records of DTC (as hereinafter defined) by 10:00 a.m.
(local time) on the Bond Purchase Date. (See "THE SERIES 1996 BONDS
-- Purchase of Series 1996 Bonds or Beneficial Ownership Interests on
Demand of Holders or Beneficial Owners" herein.)
3. While the Series 1996 Bonds bear interest in an Adjustable
Interest Rate Mode other than the Weekly Interest Rate Mode or the One
Month Interest Rate Mode, the notice must be given no earlier than
fifteen days before the Bond Purchase Date but no later than
11:00 a.m., local time, on the eighth Business Day before the Bond
Purchase Date. The Bond Purchase Date is the Interest Rate Adjustment
Date for that Adjustable Interest Rate Mode. The Series 1996 Bonds
must be delivered to the Registrar no later than 10:00 a.m., local
time, on the seventh day before the Bond Purchase Date or the next
preceding Business Day if such seventh day is not a Business Day. The
Beneficial Owner must cause the transfer of the Beneficial Owner's
Beneficial Ownership Interest on the records of DTC (as hereinafter
defined) by 10:00 a.m. (local time) on the Bond Purchase Date. (See
"THE SERIES 1996 BONDS -- Purchase of Series 1996 Bonds or Beneficial
Ownership Interests on Demand of Holders or Beneficial Owners"
herein.)
[Balance of page intentionally left blank]
-v-
INTRODUCTION
This Official Statement sets forth information in connection with the
issuance and sale by the City of Gary, Indiana (the "Issuer") of the Series 1996
A and the Series 1996 B Bonds (collectively, the "Series 1996 Bonds"). The
Series 1996 Bonds are being issued pursuant to a Trust Indenture dated as of
March 1, 1996 (the "Indenture"), between the Issuer and Fifth Third Bank of
Central Indiana, Indianapolis, Indiana, as trustee (the "Trustee"). The Series
1996 Bonds will be dated as of and bear interest from the date of their initial
delivery. The Series 1996 Bonds will mature on March 1, 2031, and will be
subject to redemption prior to maturity as described herein under "THE SERIES
1996 BONDS--Redemption of Series 1996 Bonds Prior to Maturity."
In 1991, the Issuer issued its $14,500,000 City of Gary, Indiana,
Economic Development Revenue Bonds, Series 1991 A (The Miller Partnership, L.P.
Project), and its $1,000,000 City of Gary, Indiana, Taxable Economic Development
Revenue Bonds, Series 1991 B (The Miller Partnership, L.P. Project)
(collectively, the "Series 1991 Bonds"), and in 1993, the Issuer issued its
$6,040,000 City of Gary, Indiana, Economic Development Revenue Bonds, Series
1993 A (The Miller Partnership, L.P. Project) and its $1,460,000 City of Gary,
Indiana, Taxable Economic Development Revenue Bonds, Series 1993 B (The Miller
Partnership, L.P. Project) (collectively, the "Series 1993 Bonds") (the Series
1991 Bonds and the Series 1993 Bonds being collectively referred to herein as
the "Prior Bonds").
The Issuer loaned the proceeds received from the sale of the Series
1991 Bonds and the Series 1993 Bonds to The Miller Limited Partnership, L.P., a
previously existing Illinois limited partnership (the "Prior Borrower") for the
purpose of financing the acquisition, renovation and redevelopment of a
multifamily rental housing project (the "Project") containing approximately 682
units located in Miller, a neighborhood in the City of Gary, Indiana. The loans
made by the Issuer to the Prior Borrower (collectively, the "Prior Loans") were
made pursuant to the Loan Agreement, Mortgage, Security Agreement, Assignment of
Rents and Leases and Financing Statement, dated as of April 1, 1991, among the
Issuer, the Bank, and the Borrower (the "Original Loan Agreement") and the First
Supplemental Loan Agreement, Mortgage, Security Agreement, Assignment of Rents
and Leases and Financing Statement, dated as of September 1, 1993 (the
"Supplemental Loan Agreement") (the Original Loan Agreement as supplemented by
the Supplemental Loan Agreement being referred to herein as the "Prior Loan
Agreement.") As evidence of the Prior Loans, the Prior Borrower executed and
delivered (i) a promissory note dated April 1, 1991, in the principal amount of
$14,500,000; (ii) a promissory note dated April 1, 1991, in the principal amount
of $1,000,000; (iii) a promissory note dated September 1, 1993, in the principal
amount of $6,040,000; and (iv) a promissory note dated September 1, 1993, in the
principal amount of $1,460,000 (collectively, the "Prior Notes"). The Prior
Notes mature and bear interest in accordance with a schedule designed to provide
the Issuer with money sufficient to pay when due the principal of, and interest
on, the Prior Bonds. The Prior Notes are prepayable prior to maturity in
accordance with the terms stated in the Prior Loan Agreement.
The proceeds received from the sale of the Series 1996 Bonds will be
loaned to The Miller Partnership, L.P., an Illinois limited partnership (the
"Borrower"). The loan of the proceeds of the Series 1996 Bonds (collectively,
the "Loans") will be made pursuant to the terms of a Loan Agreement dated as of
March 1, 1996, between the Borrower and the Issuer (the "Loan Agreement") to
provide moneys which, when combined with other funds of the Borrower and/or
CenterPoint, will be used for the purpose of refunding the Prior Bonds. The
Borrower, the Project and the projected use of the proceeds of the Series 1996
Bonds and other funds of the Borrower to refund the Prior Bonds are more
particularly described in "THE BORROWER, THE PROJECT AND USE OF SERIES 1996 BOND
PROCEEDS" herein. Pursuant to the Loan Agreement, the Borrower will agree to
make payments by the times and in the amounts necessary to pay the principal of,
premium (if any) and interest on the Series 1996 Bonds when due (the "Bond
Service Charges"). To evidence such Loans, the Borrower also will execute and
deliver to the Trustee a promissory note dated the date of delivery of the
Series 1996 A Bonds, in the principal amount of $20,540,000 (the "Series 1996 A
Promissory Note") and a promissory note dated the date of delivery of the Series
1996 B Bonds, in the principal amount of $1,680,000 (the "Series 1996 B
Promissory Note") (the Series 1996 A Promissory Note and the Series 1996 B
Promissory Note being collectively referred to as the "Series 1996 Notes").
THE SERIES 1996 BONDS ARE SPECIAL LIMITED OBLIGATIONS OF THE ISSUER,
PAYABLE SOLELY FROM THE REVENUES ASSIGNED AND PLEDGED BY THE INDENTURE TO SECURE
SUCH PAYMENT, WHICH WILL INCLUDE MONEYS DRAWN UNDER THE LETTER OF CREDIT
DESCRIBED BELOW (SEE "SECURITY AND SOURCES OF PAYMENT FOR THE
SERIES 1996 BONDS" HEREIN). THOSE REVENUES WILL ALSO INCLUDE THE LOAN PAYMENTS
REQUIRED TO BE MADE BY THE BORROWER UNDER THE LOAN AGREEMENT AND THE SERIES 1996
NOTES.
The principal of and interest on the Series 1996 Bonds will be payable
from the proceeds of draws under a Letter of Credit (the "Letter of Credit") to
be issued by Royal Bank of Scotland plc, acting through its New York Branch (the
"Bank") (see "APPENDIX D - Definitions and Summary of Certain Legal Documents"
herein). The repayment of drawings under the Letter of Credit will be provided
pursuant to a Reimbursement Agreement as of March 1, 1996 (the "Reimbursement
Agreement") among the Borrower, CenterPoint Properties Corporation, a Maryland
corporation and the general partner of the Borrower ("CenterPoint"), and the
Bank. The obligations of the Borrower to the Bank under the Reimbursement
Agreement will be secured by a mortgage and certain other collateral documents
(collectively, the "Bank Security Documents") to the Bank. The Bank Security
Documents will be for the sole benefit and security of the Bank and will not be
for the benefit or security of the Trustee or the Holders.
THE SERIES 1996 BONDS ARE BEING OFFERED SOLELY ON THE BASIS OF THE
LETTER OF CREDIT AND THE FINANCIAL STRENGTH OF THE BANK AND ARE NOT BEING
OFFERED ON THE BASIS OF THE FINANCIAL STRENGTH OF THE BORROWER OR ANY OTHER
SECURITY. THIS OFFICIAL STATEMENT DOES NOT DESCRIBE THE FINANCIAL CONDITION OF
THE BORROWER. THE SERIES 1996 BONDS ARE SUBJECT TO ACCELERATION OF MATURITY
UPON THE OCCURRENCE OF A DEFAULT BY THE BORROWER UNDER THE REIMBURSEMENT
AGREEMENT, WHICH INCLUDE THE BORROWER'S REIMBURSEMENT OBLIGATION PURSUANT TO
SUCH REIMBURSEMENT AGREEMENT AND CERTAIN OTHER OBLIGATIONS, LOANS AND CREDIT
ACCOMMODATIONS PROVIDED TO THE BORROWER BY THE BANK, BUT SUCH DEFAULTS ARE NOT
FULLY DESCRIBED HEREIN. AS A RESULT OF THE FOREGOING, PROSPECTIVE INVESTORS
WILL NOT BE ABLE TO EVALUATE THE LIKELIHOOD OF A DEFAULT BY THE BORROWER UNDER
THE REIMBURSEMENT AGREEMENT AND RESULTING ACCELERATION OF THE SERIES 1996 BONDS.
ANY PREMIUM PAYABLE ON THE SERIES 1996 BONDS UPON THEIR OPTIONAL
REDEMPTION WHILE THEY BEAR INTEREST AT THE FIXED INTEREST RATE (SEE "THE SERIES
1996 BONDS--OPTIONAL REDEMPTION" HEREIN) IS NOT SECURED BY THE LETTER OF CREDIT.
As long as the Series 1996 Bonds bear interest in any of the
Adjustable Interest Rate Modes defined under "THE SERIES 1996 BONDS--Interest"
herein, the Series 1996 Bonds will be purchased by the Registrar upon demand by
the registered owner thereof (initially, The Depository Trust Company ("DTC"),
or its nominee) (the "Holder"), and beneficial ownership interests in Series
1996 Bonds ("Beneficial Ownership Interests") will be purchased by the Registrar
upon the demand of the owners thereof ("Beneficial Owners"). Any such purchase
will be made on the applicable Bond Purchase Date, as defined herein under "THE
SERIES 1996 BONDS--Purchase of Series 1996 Bonds or Beneficial Ownership
Interests on Demand of Holders or Beneficial Owners." The Beneficial Owner must
provide satisfactory evidence to the Registrar of such Beneficial Owner's
Beneficial Ownership Interest and must comply with the remaining requirements of
the Indenture applicable to the tender of Beneficial Ownership Interests (see
"THE SERIES 1996 BONDS--Purchase of Series 1996 Bonds or Beneficial Ownership
Interests Upon Demand of Holders or Beneficial Owners"). The Indenture provides
for the remarketing by Co-remarketing agents, initially, EVEREN Securities,
Inc., and Gates Capital Corporation, (jointly, the "Remarketing Agent"), of the
Series 1996 Bonds or Beneficial Ownership Interests tendered by the Holders or
Beneficial Owners thereof. If the proceeds of remarketing are not sufficient to
purchase the Series 1996 Bonds or Beneficial Ownership Interests tendered for
purchase, the Trustee is required to draw on the Letter of Credit to pay the
necessary purchase price.
The Borrower may convert the Series 1996 Bonds to a different
Adjustable Interest Rate Mode or to a Fixed Interest Rate Mode as of a specified
date (the "Interest Period Reset Date"). The Series 1996 Bonds or Beneficial
Ownership Interests are subject to mandatory purchase on any such Interest
Period Reset Date from proceeds of remarketing or from proceeds of a drawing on
the Letter of Credit, subject to the right of each Holder or Beneficial Owner to
affirmatively elect to retain its Series 1996 Bonds or Beneficial Ownership
Interests (see "THE SERIES 1996 BONDS--Mandatory Tender for Purchase of Series
1996 Bonds or Beneficial Ownership Interests Upon Conversion Between Modes"
herein).
-2-
The Borrower may provide for the delivery of an Alternate Letter of
Credit (as hereinafter defined) to the Trustee. The Series 1996 Bonds or
Beneficial Ownership Interests are subject to mandatory tender upon the delivery
of an Alternate Letter of Credit to the Trustee, subject to the right of each
Holder or Beneficial Owner to affirmatively elect to retain its Series 1996
Bonds or Beneficial Ownership Interests. (See "THE SERIES 1996 BONDS --
Mandatory Tender for Purchase of Series 1996 Bonds or Beneficial Ownership
Interests Upon Delivery of an Alternate Letter of Credit" herein.)
On the Interest Payment Date next preceding the Termination Date (as
hereinafter defined) of the Letter of Credit or the expiration date of any
Alternate Letter of Credit, the Series 1996 Bonds or Beneficial Ownership
Interests are subject to mandatory redemption unless, at least 45 days prior to
such Interest Payment Date, (a) the Bank shall have agreed to an extension of
the expiration date of the Letter of Credit to a date not earlier than one year
from the expiration date of such Letter of Credit or (b) the Borrower shall have
obtained an Alternate Letter of Credit with a termination date not earlier than
one year from the termination date of the letter of credit it replaces. (See
"THE SERIES 1996 BONDS -- Redemption of Series 1996 Bonds Prior to Maturity").
Except for the information contained herein under the caption "THE
ISSUER," the Issuer has not provided any of the information contained in this
Official Statement. The Issuer is not responsible for and does not certify as
to the accuracy or sufficiency of the disclosures made herein or any other
information provided by the Borrower, the Bank, the Underwriter or any other
person.
Herein follow brief descriptions of the Issuer and the Series 1996
Bonds. Summaries of the Letter of Credit, the Reimbursement Agreement, the Loan
Agreement and the Indenture appear at "DEFINITIONS AND SUMMARY OF CERTAIN LEGAL
DOCUMENTS" in Appendix D herein. Information regarding the Bank is included in
Appendix B hereto. The descriptions and summaries of the Letter of Credit, the
Reimbursement Agreement, the Loan Agreement, the Indenture and other documents
contained in the "DEFINITIONS AND SUMMARY OF CERTAIN LEGAL DOCUMENTS" in
Appendix D herein, do not purport to be comprehensive or definitive and are
qualified in their entirety by reference to those documents, and all references
to Series 1996 Bonds are qualified in their entirety by the definitive form
thereof included in the Indenture. Copies of such documents are available from
the Underwriter.
THE ISSUER
The Issuer is a municipal corporation and political subdivision
organized and existing under the laws of the State of Indiana. The Series 1996
Bonds are authorized and issued by the Issuer pursuant to the provisions of the
Constitution and statutes of the State of Indiana, particularly Indiana
Code 36-7-11.9 and 12 and I.C. 5-1-5 (collectively, the "Act"), and pursuant to
an ordinance adopted by the Common Council of the Issuer (the "Issuing
Authority").
THE SERIES 1996 BONDS ARE SPECIAL LIMITED OBLIGATIONS OF THE ISSUER
AND ARE PAYABLE SOLELY OUT OF THE REVENUES AND OTHER AMOUNTS DERIVED FROM THE
LOAN AGREEMENT OR AS OTHERWISE AUTHORIZED BY THE BOND ORDINANCE OR THE INDENTURE
AND PERMITTED BY LAW (EXCEPT TO THE EXTENT PAID OUT OF MONEYS ATTRIBUTABLE TO
THE PROCEEDS DERIVED FROM THE SALE OF THE SERIES 1996 BONDS OR TO INCOME FROM
THE TEMPORARY INVESTMENT THEREOF). THE SERIES 1996 BONDS DO NOT CONSTITUTE AN
INDEBTEDNESS OF THE ISSUER WITHIN THE MEANING OF ANY INDIANA CONSTITUTIONAL
PROVISION OR STATUTORY LIMITATION, AND DO NOT CONSTITUTE OR GIVE RISE TO A
PECUNIARY LIABILITY OF THE ISSUER OR A CHARGE AGAINST ITS GENERAL CREDIT OR
TAXING POWERS.
-3-
THE BORROWER, THE PROJECT AND USE OF SERIES 1996 BOND PROCEEDS
Appendix A to this Official Statement has been furnished by the
Borrower and contains information regarding the Borrower.
The Project financed with the proceeds of the Prior Bonds included the
acquisition, renovation and development of a 682 unit multi-family apartment
complex located in the principally single family residential lake front
community of Miller, a neighborhood in Gary, Indiana. It is situated on over
twenty (20) acres of land and is located approximately two blocks from Lake
Michigan, immediately adjacent to the Indiana Dunes Lakeshore National Park.
The Project is within walking distance of schools, shopping and recreational
facilities and is approximately one mile from commuter rail service to Chicago
and two miles from the interchange accessing four major interstate highways. It
is approximately 25 miles from downtown Chicago.
Rental rates for units of the Project are positioned below average
market rents and priced to be affordable to middle income households. The
renovations financed by the Prior Bonds resulted in a complete updating and
renovation of the complex including kitchens, bathrooms, carpeting, security
systems, exterior building facades with new windows, HVAC, laundry rooms,
playgrounds, tennis court, swimming pools, parking and extensive landscaping
with picnic areas. There are 682 units available for rental at the Project.
The Project currently has an occupancy rate of approximately 93.5%.
The proceeds of the Series 1996 A Bonds will be loaned by the Issuer
to the Borrower for the purpose of refunding the outstanding Series 1991 A Bonds
and Series 1993 A Bonds. The proceeds of the Series 1996 B Bonds will be loaned
by the Issuer to the Borrower, when combined with other funds of the Borrower,
for the purpose of refunding the outstanding Series 1991 B Bonds and Series 1993
B Bonds. The Borrower anticipates that the sources and uses of funds for the
Project will be approximately as follows:
USES OF FUNDS
- -------------
Series 1991 A Bonds and Series 1993 A
Bonds Refunding $ 20,868,250.00
Series 1991 B Bonds and Series 1993 B
Bonds Refunding 2,501,256.25
Costs of Issuance 484,953.45
---------------
Total Uses of Funds $ 23,854,459.70
SOURCES OF FUNDS
- -----------------
Series 1996 A Bond Proceeds $ 20,540,000.00
Series 1996 B Bond Proceeds 1,680,000.00
Borrower Funds 1,634,459.70
---------------
Total Sources $ 23,854,459.70
THE SERIES 1996 BONDS ARE BEING OFFERED ON THE BASIS OF THE LETTER OF
CREDIT AND NOT ON THE BASIS OF THE FINANCIAL STRENGTH OF THE BORROWER.
ACCORDINGLY, NO FINANCIAL INFORMATION WITH RESPECT TO THE BORROWER IS INCLUDED
IN THIS OFFICIAL STATEMENT.
-4-
THE SERIES 1996 BONDS
GENERAL
The Series 1996 Bonds will be issued as fully registered Series 1996
Bonds without coupons and will be dated as of and bear interest from the date of
their initial delivery. The Series 1996 Bonds will mature on March 1, 2031, and
are subject to mandatory and optional redemption prior to maturity as described
under "Redemption Prior to Maturity." A DEFAULT BY THE BORROWER UNDER THE
REIMBURSEMENT AGREEMENT COULD CONSTITUTE AN EVENT OF DEFAULT UNDER THE INDENTURE
AND RESULT IN THE ACCELERATION OF THE SERIES 1996 BONDS PRIOR TO THEIR MATURITY.
The Series 1996 Bonds are issuable in denominations of $100,000 and increments
of $5,000 in excess thereof.
The Series 1996 Bonds will be issued initially solely in book-entry
form. See "THE SERIES 1996 BONDS--Book-Entry Only System" below.
In the event that the Series 1996 Bonds are no longer held in a book-
entry only system, the principal of and redemption premium (if any) on the
Series 1996 Bonds will be payable at the principal corporate trust office of,
The Fifth Third Bank, as paying agent, (the "Paying Agent"). Payments of
interest due on each Series 1996 Bond will be made by check or draft mailed on
each Interest Payment Date described below to the Holder of that Series 1996
Bond as of the close of business on the fifth Business Day preceding an Interest
Payment Date or the fifteenth Business Day preceding an Interest Payment Date
if the Series 1996 Bonds bear interest at the Fixed Interest Rate (the "Regular
Record Date") at such Holder's address as it appears on the registration books
maintained by The Fifth Third Bank, as registrar, (the "Registrar"). The term
"Business Day" means a day of the year other than a Saturday or Sunday on which
commercial banks, located in the cities in which the principal corporate trust
office of the Paying Agent and the Registrar and the principal offices of the
Bank and the Remarketing Agent are located, are not required or authorized to
remain closed and on which The New York Stock Exchange is not closed. In the
event of a default in the payment of interest on any Series 1996 Bond when due,
the Trustee may establish a Special Record Date with respect to that payment of
interest when money becomes available for such payment.
Any act in connection with the Registrar required to be done by a
certain time is to be done as of the local time in the city where the principal
corporate trust office of the Registrar is located (presently, Cincinnati,
Ohio). Any act in connection with the Paying Agent, required to be done by a
certain time, is to be done at local time in the city where the principal
corporate trust office of the Paying Agent is located (presently, Cincinnati,
Ohio).
BOOK-ENTRY ONLY SYSTEM
The Series 1996 Bonds initially will be issued solely in book-entry
form to be held in the book-entry only system maintained by The Depository Trust
Company ("DTC"), New York, New York. So long as such book-entry system is used,
only DTC will receive or have the right to receive physical delivery of Series
1996 Bonds and, except as otherwise provided herein with respect to tenders of
Beneficial Owners of Beneficial Ownership Interests, Beneficial Owners will not
be or be considered to be, and will not have any rights as, owners or holders of
the Series 1996 Bonds under the Indenture.
THE FOLLOWING INFORMATION ABOUT THE BOOK-ENTRY ONLY SYSTEM APPLICABLE
TO THE SERIES 1996 BONDS HAS BEEN SUPPLIED BY DTC. NONE OF THE ISSUER, THE
TRUSTEE, THE REGISTRAR, THE PAYING AGENT, THE BORROWER, THE BANK, THE
UNDERWRITER OR THE REMARKETING AGENT MAKES ANY REPRESENTATIONS, WARRANTIES OR
GUARANTEES WITH RESPECT TO ITS ACCURACY OR COMPLETENESS.
DTC will act as securities depository for the Series 1996 Bonds. The
Series 1996 Bonds initially will be issued as fully-registered securities
registered in the name of Cede & Co. (DTC's partnership nominee). One
-5-
fully-registered Series 1996 A Bond certificate and one fully registered Series
1996 B Bond will be issued, in the aggregate principal amount of the Series 1996
A Bonds and Series 1996 B Bonds, respectively, and will be deposited with DTC.
DTC is a limited-purpose trust company organized under the New York
Banking Law, a "banking organization" within the meaning of the New York Banking
Law, a member of the Federal Reserve System, a "clearing corporation" within the
meaning of the New York Uniform Commercial Code, and a "clearing agency"
registered pursuant to the provisions of Section 17A of the Securities Exchange
Act of 1934. DTC holds securities that its participants ("Participants")
deposit with DTC. DTC also facilitates the settlement among Participants of
securities transactions, such as transfers and pledges, in deposited securities
through electronic computerized book-entry changes in Participants' accounts,
thereby eliminating the need for physical movement of securities certificates.
"Direct Participants" include securities brokers and dealers, banks, trust
companies, clearing corporations, and certain other organizations. DTC is owned
by a number of its Direct Participants and by the New York Stock Exchange, Inc.,
the American Stock Exchange, Inc., and the National Association of Securities
Dealers, Inc. Access to the DTC system is also available to others such as
securities brokers and dealers, banks, and trust companies that clear through or
maintain a custodial relationship with a Direct Participant, either directly or
indirectly ("Indirect Participants"). The Rules applicable to DTC and its
Participants are on file with the Securities and Exchange Commission.
Purchases of Series 1996 Bonds under the DTC system must be made by or
through Direct Participants, which will receive a credit for the Series 1996
Bonds on DTC's records. The ownership interest of each actual purchaser of each
Series 1996 Bond ("Beneficial Owner") is in turn to be recorded on the Direct
and Indirect Participants' records. Beneficial Owners will not receive written
confirmation from DTC of their purchase, but Beneficial Owners are expected to
receive written confirmations providing details of the transaction, as well as
periodic statements of their holdings, from the Direct or Indirect Participant
through which the Beneficial Owner entered into the transaction. Transfers of
ownership interests in the Series 1996 Bonds ("Beneficial Ownership Interest")
are to be accomplished by entries made on the books of Participants acting on
behalf of Beneficial Owners. Beneficial Owners will not receive certificates
representing their Beneficial Ownership Interests in Series 1996 Bonds, except
in the event that use of the book-entry system for the Series 1996 Bonds is
discontinued.
To facilitate subsequent transfers, all Series 1996 Bonds deposited by
Participants with DTC are registered in the name of DTC's partnership nominee,
Cede & Co. The deposit of Series 1996 Bonds with DTC and their registration in
the name of Cede & Co. effect no change in beneficial ownership. DTC has no
knowledge of the actual Beneficial Owners of the Series 1996 Bonds; DTC's
records reflect only the identity of the Direct Participants to whose accounts
such Series 1996 Bonds are credited, which may or may not be the Beneficial
Owners. The Participants will remain responsible for keeping account of their
holdings on behalf of their customers.
Conveyance of notices and other communications by DTC to Direct
Participants, by Direct Participants to Indirect Participants, and by Direct
Participants and Indirect Participants to Beneficial Owners, will be governed by
arrangements among them, subject to any statutory or regulatory requirements as
may be in effect from time to time.
Redemption notices shall be sent to Cede & Co. If less than all of
the Series 1996 Bonds are being redeemed, DTC's practice is to determine by lot
the amount of the interest of each Direct Participant in the Series 1996 Bonds
to be redeemed.
Neither DTC nor Cede & Co. will consent or vote with respect to the
Series 1996 Bonds. Under its usual procedures, DTC mails an Omnibus Proxy to
the Issuer as soon as possible after the record date. The Omnibus Proxy assigns
Cede & Co.'s consenting or voting rights to those Direct Participants to whose
accounts the Series 1996 Bonds are credited on the record date (identified in a
listing attached to the Omnibus Proxy).
-6-
Principal and interest payments on the Series 1996 Bonds will be made
to DTC. DTC's practice is to credit Direct Participants' accounts on the
payable date in accordance with their respective holdings shown on DTC's records
unless DTC has reason to believe that it will not receive payment on the payable
date. Payments by Participants to Beneficial Owners will be governed by
standing instructions and customary practices, as is the case with securities
held for the accounts of customers in bearer form or registered in "street
name," and will be the responsibility of such Participant and not of DTC, the
Trustee, the Registrar, the Paying Agent or the Issuer, subject to any statutory
or regulatory requirements as may be in effect from time to time. Payment of
principal and interest to DTC is the responsibility of the Issuer or the Paying
Agent, disbursement of such payments to Direct Participants shall be the
responsibility of DTC, and disbursement of such payments to the Beneficial
Owners shall be the responsibility of Direct and Indirect Participants.
A Beneficial Owner shall give notice to elect to have its Beneficial
Ownership Interests purchased or tendered, through its Participant, to the
Registrar, and shall effect delivery of such Beneficial Ownership Interests by
causing the Direct Participant to transfer the Participant's interest in the
Series 1996 Bonds on DTC's records, to the purchaser or the Registrar, as
appropriate. The requirements for physical delivery of Series 1996 Bonds in
connection with a demand for purchase or a mandatory purchase will be deemed
satisfied when the ownership rights in the Series 1996 Bonds are transferred by
Direct Participants on DTC's records.
DTC may discontinue providing its services as securities depository
with respect to the Series 1996 Bonds at any time by giving reasonable notice to
the Issuer, the Trustee, the Registrar, or the Paying Agent. Under such
circumstances, in the event that a successor securities depository is not
obtained, Series 1996 Bond certificates are required to be printed and
delivered, as described below under "THE SERIES 1996 BONDS--Revision of Book-
Entry System; Replacement Bonds."
NEITHER THE ISSUER, THE BORROWER, THE BANK, THE TRUSTEE, THE REGISTRAR
NOR THE PAYING AGENT WILL HAVE ANY RESPONSIBILITY OR OBLIGATION TO ANY DIRECT
PARTICIPANT, INDIRECT PARTICIPANT OR ANY BENEFICIAL OWNER, EXCEPT AS PROVIDED
WITH RESPECT TO THE PURCHASE OF A BENEFICIAL OWNERSHIP INTEREST, OR ANY OTHER
PERSON NOT SHOWN ON THE REGISTRATION BOOKS OF THE REGISTRAR AS BEING A HOLDER
WITH RESPECT TO: (1) THE SERIES 1996 BONDS; (2) THE ACCURACY OF ANY RECORDS
MAINTAINED BY DTC OR ANY DIRECT PARTICIPANT OR INDIRECT PARTICIPANT; (3) THE
PAYMENT BY DTC OR ANY DIRECT PARTICIPANT OR INDIRECT PARTICIPANT OF ANY AMOUNT
DUE TO ANY BENEFICIAL OWNER IN RESPECT OF THE PURCHASE PRICE OF TENDERED SERIES
1996 BONDS, EXCEPT AS PROVIDED WITH RESPECT TO THE PURCHASE OF A BENEFICIAL
OWNERSHIP INTEREST, OR THE PRINCIPAL OR REDEMPTION PRICE OF OR INTEREST ON THE
SERIES 1996 BONDS; (4) THE DELIVERY BY ANY DIRECT PARTICIPANT OR INDIRECT
PARTICIPANT OF ANY NOTICE TO ANY BENEFICIAL OWNER WHICH IS REQUIRED OR PERMITTED
UNDER THE TERMS OF THE INDENTURE TO BE GIVEN TO HOLDERS; (5) THE SELECTION OF
THE BENEFICIAL OWNERS TO RECEIVE PAYMENT IN THE EVENT OF ANY PARTIAL REDEMPTION
OF THE SERIES 1996 BONDS; OR (6) ANY CONSENT GIVEN OR OTHER ACTION TAKEN BY DTC
AS HOLDER.
Each Beneficial Owner for whom a Direct Participant or Indirect
Participant acquires an interest in the Series 1996 Bonds, as nominee, may
desire to make arrangements with such Direct Participant or Indirect Participant
to receive a credit balance in the records of such Direct Participant or
Indirect Participant, to have all notices of redemption, elections to tender
Series 1996 Bonds or other communications to or by DTC which may affect such
Beneficial Owner forwarded in writing by such Direct Participant or Indirect
Participant, and to have notification made of all debt service payments.
Beneficial Owners may be charged a sum sufficient to cover any tax,
fee, or other governmental charge that may be imposed in relation to any
transfer or exchange of their interests in the Series 1996 Bonds.
-7-
The Issuer cannot and does not give any assurances that DTC, Direct
Participants, Indirect Participants or others will distribute payments of debt
service on the Series 1996 Bonds made to DTC or its nominee as the registered
owner, or any redemption or other notices, to the Beneficial Owners, or that
they will do so on a timely basis, or that DTC, Direct Participants or Indirect
Participants will serve and act in the manner described in this Official
Statement.
DTC LETTER OF REPRESENTATIONS
Certain duties of DTC and procedures to be followed by DTC, the
Trustee, the Registrar, the Paying Agent and the Remarketing Agent will be set
forth in a Letter of Representation (the "DTC Letter of Representations")
executed by the Issuer. In the event of any conflict between the provisions of
the Indenture and the provisions of the DTC Letter of Representations relating
to delivery of Series 1996 Bonds to the Registrar, the provisions of the DTC
Letter of Representations shall control.
REVISION OF BOOK-ENTRY SYSTEM; REPLACEMENT BONDS
The Indenture provides for the issuance and delivery of fully
registered Series 1996 Bonds (the "Replacement Bonds") directly to owners other
than DTC only in the event that DTC determines not to continue to act as
securities depository for the Series 1996 Bonds and the Issuer does not or is
unable to establish a book entry relationship with another depository.
Upon occurrence of such event, the Issuer may attempt to establish a
securities depository book-entry relationship with another securities
depository. If the Issuer does not do so, or is unable to do so, and after the
Trustee has notified the Beneficial Owners or their representatives with respect
to the Series 1996 Bonds by appropriate notice to DTC, the Issuer will issue and
the Registrar will authenticate and deliver Replacement Bonds with minimum
denominations of $100,000 to the assignees of the Depository or its nominee.
In the event that the book-entry only system is discontinued, the
principal or redemption price of and interest on the Series 1996 Bonds will be
payable in the manner described above in the third paragraph under "THE SERIES
1996 BONDS--General," and the following provisions would apply. The Series 1996
Bonds may be transferred or exchanged for one or more Series 1996 Bonds in
different authorized denominations upon surrender thereof at the designated
office of the Registrar or at the designated office of any Authenticating Agent
(initially, the Registrar) by the registered owners or their duly authorized
attorneys or legal representatives. Upon surrender of any Series 1996 Bonds to
be transferred or exchanged, the Issuer will execute, and the Registrar will
record the transfer or exchange in its registration books and the Registrar or
Authenticating Agent shall authenticate and deliver, new Series 1996 Bonds
appropriately registered and in appropriate authorized denominations. Neither
the Issuer, the Registrar nor any Authenticating Agent shall be required to
transfer or exchange any Series 1996 Bond during a period beginning at the
opening of business 15 days before the day of the mailing of a notice of
redemption of the Series 1996 Bonds and ending at the close of business on the
day of such mailing, nor any Series 1996 Bond all or part of which has been
selected for redemption.
INTEREST
The Series 1996 Bonds are subject to a maximum rate of interest of 12%
per annum. The Series 1996 Bonds will bear interest in one of several different
Adjustable Interest Rate Modes: Weekly, One Month, Three Month, Six Month, One
Year or Five Year (the "Adjustable Interest Rate Modes") or at a Fixed Interest
Rate in the Fixed Interest Rate Mode. (The Adjustable Interest Rate Modes and
the Fixed Interest Rate Mode are referred to as "Interest Rate Modes.") The
Interest Rate Modes are described below under "Interest Rate Modes on Series
1996 Bonds." The Borrower may elect to convert the Interest Rate Mode on the
Series 1996 Bonds, from time to time, as described under "Conversion Between
Interest Rate Modes" below.
-8-
While the Series 1996 Bonds bear interest in one of the Adjustable
Interest Rate Modes they bear interest in such mode for a period of time
generally corresponding to the title of that Adjustable Interest Rate Mode (the
"Interest Rate Period") at a rate determined by the Remarketing Agent. The
Remarketing Agent determines the interest rate for a particular Interest Rate
Period on the Interest Rate Determination Date for such Interest Rate Period.
The Interest Rate Periods and Interest Rate Determination Dates for each
Adjustable Interest Rate Mode are described below under "Interest Rate Modes on
the Series 1996 Bonds."
The Interest Payment Dates for the Series 1996 Bonds will be (a) the
first Business Day of each month for any periods that Series 1996 Bonds bear
interest at the Weekly Interest Rate, the One Month Interest Rate or the Three
Month Interest Rate or (b) the first day of each April and October for any
periods that Series 1996 Bonds bear interest at the Six Month Interest Rate, the
One Year Interest Rate, the Five Year Interest Rate or the Fixed Interest Rate.
While Series 1996 Bonds bear interest in the Weekly, the One Month or
the Three Month Interest Rate Mode, such interest shall be calculated on the
basis of a 365/366 day year. While Series 1996 Bonds bear interest in the Six
Month, One Year, Five Year or Fixed Interest Rate Mode, such interest shall be
calculated on the basis of a 360 day year, consisting of twelve 30-day months.
The Series 1996 Bonds will bear interest initially at the Weekly
Interest Rate. The first Interest Payment Date on the Series 1996 Bonds will be
the first Business Day of May, 1996.
INTEREST RATE MODES ON SERIES 1996 BONDS
While the Series 1996 Bonds bear interest in one of the Adjustable
Interest Rate Modes, the interest rate for a particular Interest Rate Period is
determined by the Remarketing Agent on the Interest Rate Determination Date.
Such interest rate is effective on the Interest Rate Adjustment Date, for the
succeeding Interest Rate Period.
The interest rate determined by the Remarketing Agent on the Interest
Rate Determination Date is to be that rate of interest per annum determined by
the Remarketing Agent to be the interest rate necessary, during the Interest
Rate Period commencing on the next Interest Rate Adjustment Date, in the
judgment of the Remarketing Agent (taking into consideration current
transactions and comparable securities with which the Remarketing Agent is
involved or of which it is aware and prevailing financial market conditions) to
produce as nearly as practical a par bid for the Series 1996 Bonds on the
Interest Rate Determination Date. In the event that the Remarketing Agent has
been removed or has resigned and no successor has been appointed or the
Remarketing Agent has failed to determine the appropriate interest rate on the
Interest Rate Determination Date for whatever reason, the interest rate then in
effect with respect to the Series 1996 Bonds, without adjustment, will continue
for the next Interest Rate Period. In no event, however, may any interest rate
on the Series 1996 Bonds exceed 12% per annum.
On the Interest Rate Determination Date, the Remarketing Agent will
give the Trustee, the Registrar, and the Paying Agent notice of the interest
rate to be borne by the Series 1996 Bonds for the following Interest Rate
Period. After any Interest Rate Determination Date any Holder or Beneficial
Owner may contact the Registrar (513/579-6280) or the Remarketing Agent
(212/661-8686) in order to be advised of the applicable interest rate. No
notice of the applicable interest rate will be sent to the Holders or Beneficial
Owners.
The determination of any interest rate by the Remarketing Agent is
binding and conclusive upon the Borrower, the Bank, the Beneficial Owners and
the Holders of the Series 1996 Bonds.
The Interest Rate Modes and their Interest Rate Determination Dates,
Interest Rate Adjustment Dates and Interest Rate Periods are as follows:
-9-
WEEKLY INTEREST RATE. In the Weekly Interest Rate Mode, the Interest
Rate Period is a period of one week commencing on Thursday. The Interest Rate
Determination Date in the Weekly Interest Rate Mode is not later than 2:00 p.m.
on Wednesday of each week, or the next preceding Business Day if Wednesday is
not a Business Day. The Interest Rate Adjustment Date for the Weekly Interest
Rate Mode is Thursday of each week. (In the event of a conversion to the Weekly
Interest Rate Mode from a different Interest Rate Mode, the first Interest Rate
Period may be less than one week. Such first Interest Rate Period commences on
the Interest Period Reset Date, which must be the first Business Day of a month
(or the first day of a month upon conversion from a Six Month, One Year or Five
Year Interest Rate Mode) and ends on the next succeeding Wednesday. In such
event, the Interest Rate Determination Date is not later than 2:00 p.m. on the
Business Day preceding the Interest Period Reset Date. In the event of a
conversion from the Weekly Interest Rate Mode to a different Interest Rate Mode,
the last Interest Rate Period may be less than one week as a result of such last
Interest Rate Period ending on the day preceding the first Business Day or the
first day of a month.)
ONE MONTH INTEREST RATE. In the One Month Interest Rate Mode, the
Interest Rate Adjustment Date is the first Business Day of the month and the
Interest Rate Period is one month commencing on the first Business Day of the
month to and including the day preceding the first Business Day of the next
month. The Interest Rate Determination Date is the seventh Business Day
preceding the first Business Day of the month.
THREE MONTH INTEREST RATE. In the Three Month Interest Rate Mode, the
Interest Rate Adjustment Date is the first Business Day of each January, April,
July and October and the Interest Rate Period commences on the Interest Rate
Adjustment Date and continues up to and including the day preceding the next
Interest Rate Adjustment Date. The Interest Rate Determination Date is the
tenth Business Day before the Interest Rate Adjustment Date. (In the event of a
conversion from another Interest Rate Mode to the Three Month Interest Rate
Mode, the first Interest Rate Adjustment Date would be the Interest Period Reset
Date for the Three Month Interest Rate Mode which may be the first Business Day
or the first day of any month. Accordingly, the first Interest Rate Period may
be shorter than a full three months.)
SIX MONTH INTEREST RATE. In the Six Month Interest Rate Mode, the
Interest Rate Adjustment Dates are April 1 and October 1 and the Interest Rate
Period commences on the Interest Rate Adjustment Date and continues up to and
including the day preceding the next Interest Rate Adjustment Date. The
Interest Rate Determination Date is the tenth Business Day preceding the
Interest Rate Adjustment Date. (Upon a conversion from another Interest Rate
Mode to the Six Month Interest Rate Mode, the first Interest Rate Adjustment
Date is the Interest Period Reset Date for the Six Month Interest Rate Mode,
which may be the first Business Day or the first day of any month. Accordingly,
the first Interest Rate Period may be shorter than a full six months.)
ONE YEAR INTEREST RATE. In the One Year Interest Rate Mode, the
Interest Rate Adjustment Date is either April 1 or October 1 and the Interest
Rate Period is a one year period commencing on the appropriate Interest Rate
Adjustment Date and ending on either March 31 or September 30. The Interest
Rate Determination Date is the tenth Business Day preceding the Interest Rate
Adjustment Date. (Upon a conversion from another Interest Rate Mode to the One
Year Interest Rate Mode, the First Interest Rate Adjustment Date would be the
Interest Period Reset Date for the One Year Interest Rate Mode, which may be the
first Business Day or the first day of any month. Accordingly, the first
Interest Rate Period may be shorter than one full year.)
FIVE YEAR INTEREST RATE. In the Five Year Interest Rate Mode, the
Interest Rate Adjustment Date is either April 1 or October 1 and the Interest
Rate Period is a five year period commencing on the appropriate Interest Rate
Adjustment Date and ending on either March 31 or September 30. The Interest
Rate Determination Date is the tenth Business Day preceding the Interest Rate
Adjustment Date. (Upon a conversion to the Five Year Interest Rate Mode from
another Interest Rate Mode, the first Interest Rate Adjustment Date would be the
Interest Period Reset Date for the Five Year Interest Rate Mode, which may be
the first Business Day or the first day of any month. Accordingly, the first
Interest Rate Period may be shorter than five full years.)
-10-
FIXED INTEREST RATE. In the Fixed Interest Rate Mode, there is only
one Interest Rate Adjustment Date and that is the Interest Period Reset Date
upon which such Interest Rate Mode commences. The Interest Rate Period
commences on such Interest Rate Adjustment Date and continues to the final
maturity of the Series 1996 Bonds. The Interest Rate Determination Date is the
tenth Business Day preceding the Interest Rate Adjustment Date.
CONVERSION BETWEEN INTEREST RATE MODES
The Interest Rate Mode on the Series 1996 Bonds may be changed, at the
election of the Borrower with the approval of the Bank, as of an Interest Period
Reset Date in the manner described below. "Interest Period Reset Date" means
the date on which the interest rate on the Series 1996 Bonds converts from one
Interest Rate Mode to a new Interest Rate Mode. An Interest Period Reset Date
must be the first Business Day of a month; provided that, upon conversion from a
Six Month, One Year or Five Year Interest Rate Mode, an Interest Period Reset
Date shall be the first day of a month; and provided further that, except when
converting from a Weekly Interest Rate Mode, an Interest Period Reset Date may
not occur prior to the end of the preceding Interest Rate Period.
On the first day of June, 1996, and on any Interest Period Reset Date
thereafter, the Interest Rate Mode on the Series 1996 Bonds may be converted to
a different Interest Rate Mode upon receipt by the Trustee, the Paying Agent,
the Registrar, and the Remarketing Agent of a written direction from the
Borrower, given on behalf of the Issuer, not less than 45 days prior to such
Interest Period Reset Date, to convert the interest rate on the Series 1996
Bonds to an Interest Rate Mode other than the Interest Rate Mode then in effect.
Except when converting from the Weekly Interest Rate Mode, no Interest Period
Reset Date shall be earlier than the day after the end of the Interest Rate
Period in effect on the date of such direction from the Borrower. Such
direction to convert the interest rate on the Series 1996 Bonds to a different
Interest Rate Mode shall be accompanied by (a) an opinion of nationally
recognized bond counsel ("Bond Counsel") stating that the conversion to the
specified Interest Rate Mode will not adversely affect the exclusion from gross
income of the interest on the Series 1996 Bonds for federal income tax purposes
and (b) a written certificate of the Remarketing Agent stating that the interest
coverage period provided by the Letter of Credit is appropriate for the Interest
Rate Mode directed to be in effect and that the termination date of the Letter
of Credit is no earlier than fifteen days after the end of the new Interest Rate
Period or if the conversion is to the Fixed Interest Rate, that the termination
date of the Letter of Credit is no earlier than the earlier of 15 days after the
First Optional Redemption Date (or 15 days after the final maturity date of the
Series 1996 Bonds, if earlier). If the Series 1996 Bonds bear interest at the
Weekly Interest Rate, the One Month Interest Rate or the Three Month Interest
Rate, the interest coverage period for the Letter of Credit must be at least
56 days of interest at the maximum interest rate. If the Series 1996 Bonds bear
interest at the Six Month Interest Rate, the One Year Interest Rate, the Five
Year Interest Rate or the Fixed Interest Rate, then the interest coverage period
for the Letter of Credit must be at least 195 days of interest at the maximum
interest rate. The Borrower shall be required to provide a Letter of Credit or
an Alternate Letter of Credit which will provide the appropriate interest
coverage. Notwithstanding any provision of this paragraph, no conversion shall
be effective (i) if the Series 1996 Bonds after the conversion would bear
interest at a One Year Interest Rate, Five Year Interest Rate or Fixed Interest
Rate and the Borrower makes an election on or prior to the day immediately
succeeding any Interest Rate Determination Date not to convert to a different
Interest Rate Mode or (ii) the Trustee and the Registrar have not received on
the effective date of such conversion an opinion of Bond Counsel to the same
effect as described in clause (a) above. In either such event, the Interest
Rate Mode for the Series 1996 Bonds will remain as the Interest Rate Mode then
in effect for the Series 1996 Bonds without regard to any proposed conversion.
The Series 1996 Bonds and Beneficial Ownership Interests will continue to be
subject to tender for purchase on the scheduled effective date of the proposed
conversion without regard to the failure of such proposed conversion. If the
Registrar shall have sent any notice to Holders or Beneficial Owners regarding
the proposed conversion, then in the event of a failure of such conversion as
specified above, the Register shall promptly notify all Holders or Beneficial
Owners of such failure, of the reason for such failure, and of the continuation
of the Interest Rate Mode then in effect.
If the Interest Rate Mode on the Series 1996 Bonds is converted to a
different Interest Rate Mode, at least 30 days prior to the Interest Period
Reset Date, the Registrar shall use its best efforts to notify Holders of all
-11-
outstanding Series 1996 Bonds by telephone (to the extent their telephone
numbers have been provided in writing to the Registrar), immediately confirmed
in writing by first class mail to all Holders that on such Interest Period Reset
Date the Series 1996 Bonds shall be converted to a different Interest Rate Mode,
which Interest Rate Mode shall be specified, and that all Series 1996 Bonds or
Beneficial Ownership Interests shall be subject to mandatory tender, subject to
the right of Holders or Beneficial Owners to affirmatively elect to waive the
mandatory tender and retain their Series 1996 Bonds or Beneficial Ownership
Interests. (See "THE SERIES 1996 BONDS -- Mandatory Tender for Purchase of
Series 1996 Bonds or Beneficial Ownership Interests Upon Conversion Between
Modes.") Except as otherwise described herein, so long as the Series 1996 Bonds
are held by DTC or its nominee, Cede & Co., in book-entry only form, the
Registrar will recognize and treat DTC or its nominee, Cede & Co., as the Holder
of Series 1996 Bonds for all purposes under the Indenture. (See "THE SERIES
1996 BONDS -- Book-Entry Only System" herein.) Consequently, the foregoing
notices of conversion will be sent by the Registrar only to DTC or its nominee
and any corresponding notice to the Beneficial Owners will be the responsibility
of DTC and the applicable Direct Participant or Indirect Participant.
The Borrower may elect to convert between Interest Rate Modes with
respect to the Series 1996 Bonds from time to time, as described above. If the
Borrower, however, elects to convert the Series 1996 Bonds to a Fixed Interest
Rate Mode, no further conversions between Interest Rate Modes may be made with
respect to the Series 1996 Bonds.
MUTILATED, LOST, WRONGFULLY TAKEN OR DESTROYED BONDS
If a Series 1996 Bond is mutilated, lost, wrongfully taken or
destroyed, in the absence of written notice to the Issuer and Registrar that
such Series 1996 Bond has been acquired by a bona fide purchaser, the Registrar
shall authenticate a new Series 1996 Bond. Any mutilated Series 1996 Bond shall
be surrendered to the Registrar, and in the case of any lost, wrongfully taken
or destroyed Series 1996 Bond, there shall be first furnished to the Issuer and
the Registrar evidence of such loss, wrongful taking or destruction satisfactory
to the Issuer and the Registrar, together with indemnity satisfactory to the
Borrower, the Bank, the Issuer and the Registrar. In the event any such lost,
wrongfully taken or destroyed Series 1996 Bond shall have matured, instead of
issuing a new Series 1996 Bond, the Borrower may direct the Paying Agent to pay
the same without surrender thereof upon the furnishing of the satisfactory
evidence and indemnity as in the case of issuance of a new Series 1996 Bond.
The Issuer, the Registrar and the Trustee may charge the Holder of such Series
1996 Bond their reasonable fees and expenses in connection therewith.
REDEMPTION OF SERIES 1996 BONDS PRIOR TO MATURITY
The Series 1996 Bonds are callable for redemption in the circumstances
and in the manner described below under "Optional Redemption," "Mandatory
Redemption Upon Determination of Taxability," and "Mandatory Redemption Upon
Expiration of Letter of Credit."
OPTIONAL REDEMPTION. Upon the election of the Borrower, the Series
1996 Bonds are subject to redemption by the Issuer, but only while the Series
1996 Bonds bear interest in one of the Adjustable Interest Rate Modes, in whole
or in part (in integral multiples of $5,000, provided that the unredeemed
portion of any Series 1996 Bond redeemed in part shall be $100,000 or more) on
any Interest Rate Adjustment Date at a redemption price of 100% of the principal
amount redeemed, plus interest accrued thereon to the redemption date.
If the Series 1996 Bonds bear interest at the Fixed Interest Rate,
upon the election of the Borrower, the Series 1996 Bonds are subject to
redemption by the Issuer in whole or in part (in integral multiples of $5,000,
provided that the unredeemed portion of any Series 1996 Bond redeemed in part
shall be $100,000 or more) at any time on or after the First Optional Redemption
Date, as defined below, at redemption prices described below (as a percentage of
principal to be redeemed) plus accrued interest to the date of redemption:
-12-
Redemption Dates
Occurring During Following Periods Redemption Prices
---------------------------------- -----------------
First Optional Redemption Date,
through the following last day of
March 103%
First Anniversary of the First
Optional Redemption Date, through
the following last day of March 102%
Second Anniversary of the First
Optional Redemption Date through
the following last day of March 101%
Third Anniversary of the First
Optional Redemption Date and
thereafter 100%
"First Optional Redemption Date" means the earlier to occur of the
April 1 occurring in the year which is (i) at least ten (10) full years after
the Fixed Interest Rate Commencement Date or (ii) a number of years after the
Fixed Interest Rate Commencement Date equal to the number of full years between
the Fixed Interest Rate Commencement Date and the maturity date of the Series
1996 Bonds, multiplied by one-half (1/2) and rounded up to the nearest whole
number.
Prior to the Series 1996 Bonds being converted to a Fixed Interest
Rate, the Borrower is required to provide a Letter of Credit or Alternate Letter
of Credit which will provide the appropriate interest rate coverage.
In addition, at the option of the Borrower and with the written
consent of the Bank except with respect to subparagraph (c), as to which the
consent of the Bank is not required, the Series 1996 Bonds are subject to
redemption by the Issuer at any time in whole or in part (in integral multiples
of $5,000, provided that the unredeemed portion of any Series 1996 Bond redeemed
in part shall be $100,000 or more) at a redemption price of 100% of the
principal amount thereof redeemed, plus accrued interest thereon to the
redemption date (each an "Extraordinary Optional Redemption"), within 90 days of
any of the following events:
(a) The Project shall have been damaged or destroyed to such an
extent that (1) it cannot reasonably be expected to be restored within
a period of three (3) months, to the condition thereof immediately
preceding such damages or destruction or (2) its normal use and
operation is reasonably expected to be prevented for a period of three
(3) months;
(b) Title to, or the temporary use of, all or a significant part
of the Project shall have been taken under the exercise of the power
of eminent domain (1) to such extent that Project cannot be reasonably
expected to be restored within a period of three (3) months to a
condition of usefulness comparable to that existing prior to the
taking; or (2) as a result of the taking, normal use and operation of
the Project is reasonably expected to prevented for a period of three
(3) months;
(c) As a result of any changes in the Constitution of the State
of Indiana, the Constitution of United States of America or state or
federal laws, or as a result of legislative or administrative action
(whether state or federal) or by final decree, judgment or order of
any court or administrative body (whether state or federal) entered
after the contest thereof by the Issuer, the Trustee or the Borrower
in good faith, the Loan Agreement shall not become void or
unenforceable or impossible if performance in accordance with the
intent and purpose of parties expressed Loan Agreement;
-13-
(d) If unreasonable burdens or excessive liabilities shall be
imposed with respect to the Project or the operation thereof,
including, without limitation, federal, state or other ad valorem,
property, income or other taxes not being imposed as of the date of
the Loan Agreement other than ad valorem taxes presently levied upon
privately owned property used for the same general purpose as the
Project; or
(e) Changes in the economic availability of raw materials,
operating supplies, energy sources or supplies, or facilities
(including, but not limited to, facilities in connection with the
disposal of industrial waste) necessary for the operation of the
Project shall have occurred or technological other changes shall have
occurred which the Borrower cannot reasonably overcome or control and
in the Borrower's reasonable judgment rendered the operation of the
Project uneconomic.
To exercise any such redemption option, the Borrower within 90 days
following the event authorizing the exercise of that option, or at any time
during the continuation of the condition referred to in clause (e), shall give
notice to the Issuer and to the Trustee, together with a copy of the Bank's
consent, specifying the date on which the Borrower will deliver the funds
required for that redemption, which date shall be not more than 90 days from the
date that notice is mailed and shall make arrangements satisfactory to the
Trustee for the giving of the required notice of redemption.
Notwithstanding anything herein to the contrary, as provided in the
Indenture, the Registrar will not, except with the prior written consent of the
Bank, cause notice of optional redemption to be sent to Holders as provided
herein under "THE SERIES 1996 BONDS--Redemption of Series 1996 Prior to Maturity
- -- Notice of Redemption and Payments," unless the Borrower deposits Eligible
Funds, as defined in the Indenture, into the Bond Fund, as provided in the
Indenture, in the amount necessary to reimburse the Bank for the draw on the
Letter of Credit to effect such redemption and an amount of money equal to any
premium payable upon such redemption. PREMIUMS ARE NOT PAYABLE FROM DRAWS ON
THE LETTER OF CREDIT.
MANDATORY REDEMPTION UPON DETERMINATION OF TAXABILITY. Upon the
occurrence of a Determination of Taxability, as defined below, the Series 1996
Bonds are subject to mandatory redemption in whole by the Issuer at a redemption
price of 100% of the outstanding principal amount thereof, plus accrued interest
to the redemption date, at the earliest practicable date selected by the
Trustee, after consultation with the Borrower, but in no event later than
45 days following the Trustee's and Registrar's receipt of notification of the
Determination of Taxability. The occurrence of a Determination of Taxability
with respect to the Series 1996 A Bonds will not constitute an Event of Default
under the Indenture and the Series 1996 Bonds will be subject to mandatory
redemption in accordance with the Indenture. No redemption premium will be
payable and no increase in the interest payable with respect to the Series 1996
Bonds will occur in the event a Determination of Taxability occurs.
"Determination of Taxability" means and shall occur when, (i) the
Trustee receives written notice from the Borrower, supported by an opinion of
Bond Counsel, that interest on the Series 1996 A Bonds is includable in the
gross income of Holders of the Series 1996 A Bonds for federal income tax
purposes or (ii) the Internal Revenue Service shall claim in writing that
interest on the Series 1996 A Bonds is includable in the gross income of Holders
of the Series 1996 A Bonds for federal income tax purposes; provided, that such
a claim shall not be deemed a Determination of Taxability unless the Borrower is
afforded reasonable opportunity (at its sole expense and for a period not to
exceed 2 years) to pursue any judicial or administrative remedy available to the
Borrower with respect to such claim.
MANDATORY REDEMPTION UPON EXPIRATION OF LETTER OF CREDIT. The Series
1996 Bonds are subject to mandatory redemption in whole on the Interest Payment
Date which next precedes the date which is five (5) days prior to the Letter of
Credit Termination Date, at a redemption price of 100% of the outstanding
principal amount thereof plus accrued interest 45 days prior to any such
Interest Payment Date, (a) the Bank shall have agreed to an
-14-
extension or further extension of the Letter of Credit Termination Date to a
date not earlier than one year from the Letter of Credit Termination Date being
extended or (b) the Borrower shall have obtained and deliver to the Trustee an
Alternate Letter of Credit with a termination date not earlier than one year
from the Letter of Credit Termination Date of the Letter of Credit it replaces.
NOTICE OF REDEMPTION AND PAYMENTS. Notice of redemption with respect
to the Series 1996 Bonds is to be given by the Registrar on behalf of the
Issuer, subject to the deposit by the Borrower, except with the consent of the
Bank, of sufficient Eligible Funds (as hereinafter defined) in the Bond Fund to
redeem such Series 1996 Bonds in the case of an Optional Redemption or
Extraordinary Optional Redemption to the registered owner of each Series 1996
Bond being redeemed by first class mail, addressed to the last known address of
such Holder as it appears upon the Register (the "Register") maintained by the
Registrar, or at such other address as is furnished in writing by the Holder to
the Registrar, not less than 30 days nor more than 60 days prior to redemption
(except in the case of mandatory redemption upon the occurrence of a
Determination of Taxability, in which case notice shall be given at least five
days and not more than fifteen days prior to the date fixed for redemption).
Failure to receive any such notice or any defect therein shall not affect the
validity of any proceeding for the redemption of any other Series 1996 Bond.
Notice of the call for redemption of Series 1996 Bonds held under a
book entry system will be sent by the Registrar only to DTC or its nominee as
registered owner. Selection of book entry interests in the Series 1996 Bonds
called, and notice of call to the Beneficial Owners is the responsibility of
DTC, Direct Participants and Indirect Participants. Any failure of DTC to
advise any Direct Participant, or of any Direct Participant or any Indirect
Participant to notify the Beneficial Owners, of any such notice and its content
or effect will not affect the validity of any proceedings for the redemption of
the Series 1996 Bonds. See "THE SERIES 1996 BONDS--Book-Entry Only System"
herein.
When less than the entire unmatured portion of the Series 1996 Bonds
are called for redemption at any time or from time to time, the selection of
such Series 1996 Bonds or portions of Series 1996 Bonds in the amount of $5,000
or any integral multiple thereof is to be made by lot in such manner as
determined by the Trustee provided that the unredeemed portion of any Series
1996 Bond or Beneficial Ownership Interest redeemed in part shall be $100,000 or
more. Except as provided in the preceding sentence, if less than all of an
outstanding Series 1996 Bond held under a book entry system is to be called for
redemption, the Trustee will give notice of redemption only to DTC or its
nominee as registered owner. The selection of the book entry interests in that
Series 1996 Bond to be redeemed, and notice of call to the Beneficial Owners of
those interests called, is the responsibility of DTC, Direct Participants and
Indirect Participants.
The Trustee is required to draw upon the Letter of Credit in amounts
sufficient to pay the principal amount of the Series 1996 Bonds to be redeemed
and any interest accrued thereon.
If any Series 1996 Bonds are not presented for payment at the date
fixed for their redemption and the funds for such payment are available
therefor, the Holders of such Series 1996 Bonds will thereafter be restricted
exclusively to the funds available for redemption for the satisfaction of any
claim relating to such Series 1996 Bonds. Any such funds remaining unclaimed
for four years after becoming due and payable shall be paid to the Bank, unless
it confirms to the Trustee that no moneys are due to the Bank under the
Reimbursement Agreement, in which case such funds shall be paid to the Borrower
and the Holders of such Series 1996 Bonds shall thereafter be entitled to look
only to the Borrower for payment and only in an amount equal to the amounts
received by or paid to or on behalf of the Borrower, without any interest
thereon.
PURCHASE OF SERIES 1996 BONDS OR BENEFICIAL OWNERSHIP INTERESTS ON DEMAND OF
HOLDERS OR BENEFICIAL OWNERS
While the Series 1996 Bonds bear interest in any Adjustable Interest
Rate Mode, each Holder and each Beneficial Owner shall have the option to tender
for purchase all of the Series 1996 Bonds or Beneficial
-15-
Ownership Interests owned by such Holders or Beneficial Owners, or such lesser
principal amount thereof (in denominations of $100,000 or integral multiples of
$5,000 in excess thereof, provided that the untendered portion of any Series
1996 Bond or Beneficial Ownership Interest shall be $100,000 or more in
principal amount) as such Holder or Beneficial Owner may specify in accordance
with the terms, conditions and limitations set forth in the Indenture. The
Trustee shall purchase such tendered Series 1996 Bonds or Beneficial Ownership
Interests at their par value plus, if the Series 1996 Bonds bear interest in the
Weekly Interest Rate Mode, interest accrued to the date of purchase. The
purchase price shall be paid first from the proceeds of the remarketing of the
Series 1996 Bonds or Beneficial Ownership Interests, and second from money drawn
on the Letter of Credit if the proceeds of remarketing are insufficient to pay
the purchase price. Such purchase price will be paid in lawful money of the
United States of America by check or draft and will be paid in full on the Bond
Purchase Date.
The term "Bond Purchase Date" means any Business Day selected by the
Holder or Beneficial Owner while the Series 1996 Bonds bear interest in the
Weekly Interest Mode and if the Interest Rate Mode on the Series 1996 Bonds is
to be converted from the Weekly Interest Rate Mode to a new Interest Rate Mode,
must be a date no later than the Interest Period Reset Date with respect to that
new Interest Rate Mode. While the Series 1996 Bonds bear interest in any other
Adjustable Interest Rate Mode, the term "Bond Purchase Date" means any Interest
Rate Adjustment Date. The Holders or Beneficial Owners do not have the option
to tender their Series 1996 Bonds or Beneficial Ownership Interests for purchase
after the Interest Rate Mode on the Series 1996 Bonds has been converted to the
Fixed Interest Rate Mode.
To exercise the option to tender for purchase, the Holder or
Beneficial Owner must (1) give notice to the Registrar by the time and the date
set forth below in writing or by telecopy stating (i) the name and address of
the Holder or Beneficial Owner, (ii) the principal amount, CUSIP number and
Series 1996 Bond numbers of Series 1996 Bonds or Beneficial Ownership Interests
to be purchased, (iii) that such Series 1996 Bonds or Beneficial Ownership
Interests are to be purchased on the Bond Purchase Date pursuant to the terms of
the Indenture, and (iv) that such notice is irrevocable, (2) in the case of a
purchase of a Beneficial Ownership Interest, each Beneficial Owner must provide
the Registrar with evidence satisfactory to the Registrar of such Beneficial
Owner's Beneficial Ownership Interest, (3) in the case of a Holder, deliver to
the Registrar at its principal corporate trust office (by the time and date set
forth below), the Series 1996 Bonds to be purchased, accompanied by fully
completed and executed Instructions to Sell, the form of which is printed on the
Series 1996 Bonds and (4) in the case of a Beneficial Owner cause the transfer
of the Beneficial Owner's Beneficial Ownership Interest on the records of DTC as
instructed by the Registrar (by the date and time set forth below). After a
demand for purchase any Series 1996 Bonds not so delivered shall be deemed
tendered. After a demand for purchase Beneficial Owners shall be obligated to
transfer such Beneficial Ownership Interests on the records of DTC in accordance
with instructions of the Registrar. (All references to local time mean local
time of the city where the principal corporate trust office of the Registrar is
located, presently Cincinnati, Ohio.) Notwithstanding the foregoing, so long as
the Series 1996 Bonds are held in the DTC book-entry only system, the
requirement of physical delivery of tendered Series 1996 Bonds will be deemed to
be satisfied as described herein under "THE SERIES 1996 BONDS--Book-Entry Only
System."
WEEKLY INTEREST RATE MODE. To exercise the option to tender the
Series 1996 Bonds or Beneficial Ownership Interest while the Series 1996 Bonds
bear interest in the Weekly Interest Rate Mode, the Holder or Beneficial Owner
must (1) give the notice no earlier than the fifteenth day and no later than the
seventh day prior to the Bond Purchase Date (2) in the case of a Holder deliver
the Series 1996 Bonds no later than 10:00 a.m. local time on the second Business
Day preceding the Bond Purchase Date and (3) in the case of a Beneficial Owner,
cause the transfer of the Beneficial Ownership Interest on the records of DTC by
10:00 a.m. local time on the Bond Purchase Date. In the case of a Series 1996
Bond or Beneficial Ownership Interest or portion thereof to be purchased prior
to an Interest Payment Date and after the Record Date in respect thereof, the
Holder or Beneficial Owner shall deliver a due-bill check, in form satisfactory
to the Registrar for interest due on such Interest Payment Date.
ONE MONTH INTEREST RATE MODE. To exercise the option to tender the
Series 1996 Bonds or Beneficial Ownership Interest while the Series 1996 Bonds
bear interest in the One Month Interest Rate Mode the
-16-
Holder or Beneficial Owner must (1) give the notice to the Registrar no earlier
than fifteen days prior to the Bond Purchase Date and no later than 11:00 a.m.
local time on the fifth Business Day prior to the Bond Purchase Date, (2) in the
case of a Holder deliver the Series 1996 Bonds no later than 10:00 a.m. local
time on the fourth day prior to the Bond Purchase Date or the next preceding
Business Day if such fourth day is not a Business Day, and (3) in the case of a
Beneficial Owner, cause the transfer of the Beneficial Ownership Interest on the
records of DTC by 10:00 a.m. local time on the Bond Purchase Date.
OTHER ADJUSTABLE INTEREST RATE MODES. To exercise the option to
tender Series 1996 Bonds or Beneficial Ownership Interests while the Series 1996
Bonds bear interest in any Adjustable Interest Rate Mode other than the One
Month Interest Rate Mode or the Weekly Interest Rate Mode, the Holder or
Beneficial Owner must (1) give the notice to the Registrar no earlier than
fifteen days prior to the Bond Purchase Date and no later than 11:00 a.m. local
time on the eighth Business Day prior to the Bond Purchase Date, (2) in the case
of a Holder deliver the Series 1996 Bonds no later than 10:00 a.m. local time on
the seventh day prior to the Bond Purchase Date or the next preceding Business
Day if such seventh day is not a Business Day, and (3) in the case of a
Beneficial Owner, cause the transfer of the Beneficial Ownership Interest on the
records of DTC by 10:00 a.m. local time on the Bond Purchase Date.
If less than all of a Series 1996 Bond so delivered is to be
purchased, the Registrar will authenticate one or more Series 1996 Bonds,
registered in the name of such Holder, having the aggregate principal amount
being retained by such Holder, and will deliver such authenticated Series 1996
Bond or Series 1996 Bonds to such Holder.
The tender options granted to the Holders and the Beneficial Owners
and all mandatory Series 1996 Bond tenders are subject to the additional
condition that any tendered Series 1996 Bonds or Beneficial Ownership Interests
(or the applicable portions thereof) will not be purchased if such Series 1996
Bonds (or applicable portions thereof) mature or are redeemed on or prior to the
applicable Bond Purchase Date.
SO LONG AS THE SERIES 1996 BONDS ARE HELD BY DTC OR ITS NOMINEE,
CEDE & CO., IN BOOK-ENTRY ONLY FORM, THE REGISTRAR AND THE PAYING AGENT WILL
RECOGNIZE AND TREAT DTC OR ITS NOMINEE, CEDE & CO., AS THE HOLDER OF THE SERIES
1996 BONDS FOR ALL PURPOSES UNDER THE INDENTURE, PROVIDED THAT THE REGISTRAR AND
THE PAYING AGENT WILL RECOGNIZE BENEFICIAL OWNERS FOR PURPOSES OF THE PURCHASE
OF BENEFICIAL OWNERSHIP INTERESTS. (SEE "THE SERIES 1996 BONDS--BOOK-ENTRY ONLY
SYSTEM" HEREIN.) EACH BENEFICIAL OWNER IS RESPONSIBLE FOR OBSERVING THE
PROCEDURES OF DTC, THE DIRECT PARTICIPANT, ANY INDIRECT PARTICIPANT AND THE
REGISTRAR AS SET FORTH IN THE INDENTURE, IN ORDER TO PERMIT THE TIMELY
OBSERVANCE OF THE TENDER PROCESS WITH RESPECT TO BENEFICIAL OWNERSHIP INTERESTS.
MANDATORY TENDER FOR PURCHASE OF SERIES 1996 BONDS OR BENEFICIAL OWNERSHIP
INTERESTS UPON CONVERSION BETWEEN INTEREST RATE MODES
Upon any conversion of the Series 1996 Bonds from one Interest Rate
Mode to another, the Series 1996 Bonds and Beneficial Ownership Interests shall
be subject to mandatory purchase on the Interest Period Reset Date with respect
to the new Interest Rate Mode.
The Borrower is required to give notice to the Trustee, the Paying
Agent, the Registrar, and Remarketing Agent of its election to convert the
Series 1996 Bonds to a new Interest Rate Mode at least 45 days prior to the
Interest Period Reset Date for the new Interest Rate Mode. The Registrar is
required to notify Holders of all outstanding Series 1996 Bonds of such
conversion to a different Interest Rate Mode at least 30 days before the
Interest Period Reset Date. Unless the new Interest Rate Mode is a Weekly
Interest Rate Mode or the One Month Interest Rate Mode, the Remarketing Agent
will determine the interest rate for the first Interest Rate Period for the new
Interest Rate Mode on the Interest Rate Determination Date, which will be the
tenth Business Day before the Interest Period Reset Date for the new Interest
Rate Mode. If the new Interest Rate Mode is the Weekly Interest Rate Mode, the
Remarketing Agent will determine the first Weekly Interest Rate on the Interest
Rate Determination Date for the
-17-
Weekly Interest Rate Mode, which will be 2:00 p.m. local time of the Registrar
on the Business Day preceding the Interest Period Reset Date. If the new
Interest Rate Mode is the One Month Interest Rate Mode, the Interest Rate
Determination Date will be the seventh Business Day before the Interest Period
Reset Date. A Holder or Beneficial Owner may elect to waive the mandatory
purchase and hold its Series 1996 Bonds or Beneficial Ownership Interests by
delivering notice to the Registrar of such election not later than 11:00 a.m.,
on the eighth Business Day prior to the Interest Period Reset Date for the new
Interest Rate Mode, unless the interest rate is to be converted to the One Month
Interest Rate Mode, in which case the notice to the Registrar must be delivered
not later than 11:00 a.m. on the fifth Business Day prior to the Interest Period
Reset Date. Such notice must state that (a) such Holder or Beneficial Owner
realizes that the Series 1996 Bonds are being converted to a different Interest
Rate Mode, (b) unless the interest rate on the Series 1996 Bonds is being
converted to the Weekly Interest Rate Mode, such Holder or Beneficial Owner
realizes that the next Bond Purchase Date upon which the Series 1996 Bonds or
Beneficial Ownership Interests may be tendered for purchase is the next Interest
Rate Adjustment Date or, if such Series 1996 Bonds are being converted to the
Fixed Interest Rate, that such Series 1996 Bonds or Beneficial Ownership
Interests may no longer be tendered for purchase, (c) such Holder or Beneficial
Owner realizes that any securities rating on the Series 1996 Bonds may be
withdrawn or lowered and (d) such Holder or Beneficial Owner affirmatively
elects to hold its Series 1996 Bonds or Beneficial Ownership Interests and
receive interest at the applicable Interest Rate Mode. A Holder or Beneficial
Owner may be advised of the interest rate for the first Interest Rate Period for
the new Interest Rate Mode by calling the Registrar (513/579-6280) or the
Remarketing Agent (212/661-8686) on the Interest Rate Determination Date or
thereafter.
Series 1996 Bonds or Beneficial Ownership Interests with respect to
which the Registrar shall not have received the election required by the
preceding paragraph shall be deemed to have been tendered without further action
by the Holders or Beneficial Owners thereof and subject to the right of the
Holders or Beneficial Owners of such Series 1996 Bonds or Beneficial Ownership
Interests to receive the purchase price of such Series 1996 Bonds or Beneficial
Ownership Interests and interest accrued thereto to the Interest Period Reset
Date, such Series 1996 Bonds or Beneficial Ownership Interests shall be null and
void and the Registrar shall authenticate and deliver new Series 1996 Bonds, or
new Beneficial Ownership Interests shall be created, in replacement thereof
pursuant to the remarketing of such Series 1996 Bonds or Beneficial Ownership
Interests or the pledge of such Series 1996 Bonds or Beneficial Ownership
Interests to the Bank in lieu of remarketing.
SO LONG AS THE SERIES 1996 BONDS ARE HELD BY DTC OR ITS NOMINEE,
CEDE & CO., IN BOOK-ENTRY ONLY FORM, THE REGISTRAR AND THE PAYING AGENT WILL
RECOGNIZE AND TREAT DTC OR ITS NOMINEE, CEDE & CO., AS THE HOLDER OF THE SERIES
1996 BONDS FOR ALL PURPOSES UNDER THE INDENTURE, PROVIDED, HOWEVER, THAT THE
REGISTRAR AND THE PAYING AGENT WILL RECOGNIZE A BENEFICIAL OWNER WITH RESPECT TO
THE WAIVER OF THE PURCHASE OF BENEFICIAL OWNERSHIP INTERESTS. (SEE "THE SERIES
1996 BONDS--BOOK-ENTRY ONLY SYSTEM" HEREIN.) EACH BENEFICIAL OWNER IS
RESPONSIBLE FOR OBSERVING THE PROCEDURES APPLICABLE TO DTC, THE DIRECT
PARTICIPANT, ANY INDIRECT PARTICIPANT AND THE REGISTRAR, AS SET FORTH IN THE
INDENTURE, IN ORDER TO PERMIT THE TIMELY OBSERVANCE OF THE MANDATORY TENDER
WAIVER PROCESS WITH RESPECT TO BENEFICIAL OWNERSHIP INTERESTS.
MANDATORY TENDER FOR PURCHASE OF SERIES 1996 BONDS OR BENEFICIAL OWNERSHIP
INTERESTS UPON DELIVERY OF AN ALTERNATE LETTER OF CREDIT
If the Borrower provides for the delivery to the Trustee of an
Alternate Letter of Credit (as hereinafter defined), on a date determined by the
Borrower, with the consent of the Trustee which date shall precede the
Replacement Date (as hereinafter defined) by at least five (5) Business Days (a
"Bond Purchase Date"), the Series 1996 Bonds and Beneficial Ownership Interests
shall be subject to mandatory tender for purchase from the Holders and
Beneficial Owners thereof.
At least forty-five (45) days prior to a Bond Purchase Date, the
Registrar shall, if the Series 1996 Bonds are then rated by a Rating Service (as
hereinafter defined) give notice to each Rating Service which then has a rating
on the Series 1996 Bonds of the provision of the Alternate Letter of Credit. At
least 30 days prior to the Bond
-18-
Purchase Date the Registrar shall use its best efforts to notify the Holders of
all outstanding Series 1996 Bonds by telephone (to the extent their telephone
numbers have been provided in writing to the Registrar), immediately confirmed
by first class mail to all Holders, that an Alternate Letter of Credit is to be
delivered by the Borrower to the Registrar. Such notice shall advise the
Holders of the Bond Purchase Date and the requirements of the Indenture and the
Series 1996 Bonds relating to Alternate Letters of Credit, that such
requirements have been met, the name of the financial institution issuing the
Alternate Letter of Credit and that all Series 1996 Bonds and Beneficial
Ownership Interests shall be subject to mandatory purchase from the Holders and
Beneficial Owners thereof, subject to the right of each Holder or Beneficial
Owner to affirmatively elect to waive the mandatory tender for purchase and
retain its Series 1996 Bonds or Beneficial Ownership Interests. (See "THE
LETTER OF CREDIT--Alternate Letter of Credit" herein.)
Any Holder or Beneficial Owner may elect to retain its Series 1996
Bonds or Beneficial Ownership Interests by delivering to the Registrar a written
notice no later than 11:00 a.m. according to the local time at the principal
corporate trust office of the Registrar on the eighth Business Day prior to such
Bond Purchase Date which written notice shall state that (a) such Holder or
Beneficial Owner has received notice of and realizes that the Borrower is
delivering an Alternate Letter of Credit to the Registrar pursuant to the
Indenture, (b) such Holder or Beneficial Owner realizes that any securities
rating on the Refunding Bonds may be withdrawn or lowered as a result of the
delivery of the Alternate Letter of Credit and (c) such Holder or Beneficial
Owner affirmatively elects to hold its Series 1996 Bonds or Beneficial Ownership
Interests.
Series 1996 Bonds or Beneficial Ownership Interests with respect to
which the Registrar shall not have received the election required by the
preceding paragraph shall be deemed to have been tendered without further action
by the Holders or Beneficial Owners thereof and subject to the right of the
Holders or Beneficial Owners of such Series 1996 Bonds and Beneficial Ownership
Interests to receive the purchase price of such Series 1996 Bonds and Beneficial
Ownership Interests and interest accrued thereto to the Bond Purchase Date, such
Series 1996 Bonds or Beneficial Ownership Interests shall be null and void and
the Registrar shall authenticate and deliver new Series 1996 Bonds, or new
Beneficial Ownership Interests shall be created, in replacement thereof pursuant
to the remarketing of such Series 1996 Bonds or Beneficial Ownership Interests
or the pledge of such Series 1996 Bonds or Beneficial Ownership Interests to the
Bank in lieu of remarketing such Series 1996 Bonds or Beneficial Ownership
Interests.
SO LONG AS THE SERIES 1996 BONDS ARE HELD BY DTC OR ITS NOMINEE,
CEDE & CO., IN BOOK-ENTRY ONLY FORM, THE REGISTRAR AND THE PAYING AGENT WILL
RECOGNIZE AND TREAT DTC OR ITS NOMINEE, CEDE & CO., AS THE HOLDER OF THE SERIES
1996 BONDS FOR ALL PURPOSES UNDER THE INDENTURE PROVIDED, HOWEVER THE REGISTRAR
AND THE PAYING AGENT WILL RECOGNIZE A BENEFICIAL OWNER WITH RESPECT TO WAIVERS
OF THE PURCHASE OF BENEFICIAL OWNERSHIP INTERESTS. (SEE "THE SERIES 1996
BONDS--BOOK-ENTRY ONLY SYSTEM" HEREIN.) EACH BENEFICIAL OWNER IS RESPONSIBLE
FOR OBSERVING THE PROCEDURES APPLICABLE TO DTC, THE DIRECT PARTICIPANT, ANY
INDIRECT PARTICIPANT AND THE REGISTRAR, AS SET FORTH IN THE INDENTURE, IN ORDER
TO PERMIT THE TIMELY OBSERVANCE OF THE MANDATORY TENDER WAIVER PROCESS WITH
RESPECT TO BENEFICIAL OWNERSHIP INTERESTS.
REMARKETING OF SERIES 1996 BONDS OR BENEFICIAL OWNERSHIP INTERESTS
Whenever Series 1996 Bonds or Beneficial Ownership Interests are
tendered for purchase by the Holders or Beneficial Owners thereof, either by
optional tender or mandatory tender (other than a mandatory tender pursuant to
the expiration of the Letter of Credit or any Alternate Letter of Credit), as
described above, the Remarketing Agent will use its best efforts to remarket
such Series 1996 Bonds or Beneficial Ownership Interests. If Series 1996 Bonds
or Beneficial Ownership Interests tendered for purchase are not remarketed by
the Remarketing Agent, the Trustee shall draw on the Letter of Credit to pay the
purchase price of such Series 1996 Bonds or Beneficial Ownership Interests and
such Series 1996 Bonds or Beneficial Ownership Interests will be delivered to
the Bank or, at the direction of the Bank, held by the Trustee for the benefit
of the Bank. Any due-bill checks delivered to the Registrar pursuant to a
tender of Series 1996 Bonds or Beneficial Ownership Interests shall be delivered
to the
-19-
Holder or Beneficial Owner to whom such Series 1996 Bonds or Beneficial
Ownership Interests have been remarketed, or to the Bank if the purchase price
for the Series 1996 Bonds or Beneficial Ownership Interests has been paid
pursuant to a draw on the Letter of Credit.
Series 1996 Bonds or Beneficial Ownership Interests tendered for
purchase upon the expiration of the Letter of Credit or any Alternate Letter of
Credit shall be delivered to the Bank or, at the direction of the Bank, held by
the Trustee for the benefit of the Bank. Such Series 1996 Bonds or Beneficial
Ownership Interests shall not be remarketed prior to the Borrower's delivery of
a letter of credit which satisfies the terms of the Indenture with respect to
the delivery of an Alternate Letter of Credit (as hereinafter defined) (See "THE
LETTER OF CREDIT--Alternate Letter of Credit" herein).
SECURITY AND SOURCES OF PAYMENT FOR THE SERIES 1996 BONDS
The Series 1996 Bonds will constitute special limited obligations of
the Issuer payable solely from, and secured by, the revenues pledged and
assigned by the Indenture to secure that payment. Those revenues include the
loan payments required to be made by the Borrower under the Loan Agreement and
the Note; all other moneys received by the Issuer or the Trustee for the account
of the Issuer in respect of repayment of the Series 1996 Bonds; all moneys and
investments in the Bond Fund (as defined in the Indenture and hereinafter
described), including money received by the Trustee from draws on the Letter of
Credit; and the income and profit from the investment of those moneys
(collectively, the "Revenues").
THE SERIES 1996 BONDS ARE SPECIAL LIMITED OBLIGATIONS OF THE ISSUER
AND ARE PAYABLE SOLELY OUT OF THE REVENUES AND OTHER AMOUNTS DERIVED FROM THE
LOAN AGREEMENT AND RELATED NOTE OR AS OTHERWISE AUTHORIZED BY THE BOND ORDINANCE
OR THE INDENTURE AND PERMITTED BY LAW (EXCEPT TO THE EXTENT PAID OUT OF MONEYS
ATTRIBUTABLE TO THE PROCEEDS DERIVED FROM THE SALE OF THE SERIES 1996 BONDS OR
TO INCOME FROM THE TEMPORARY INVESTMENT THEREOF). THE SERIES 1996 BONDS DO NOT
CONSTITUTE AN INDEBTEDNESS OF THE CITY OF GARY, INDIANA, WITHIN THE MEANING OF
ANY INDIANA CONSTITUTIONAL PROVISION OR STATUTORY LIMITATION, AND DO NOT
CONSTITUTE OR GIVE RISE TO A PECUNIARY LIABILITY OF THE CITY OF GARY, INDIANA,
OR A CHARGE AGAINST ITS GENERAL CREDIT OR TAXING POWERS.
The principal of and interest on the Series 1996 Bonds will be payable
from the proceeds of draws under the Letter of Credit. The Borrower's
obligation to reimburse the Bank for such draws, as provided for in the
Reimbursement Agreement, will be secured by the Bank Security Documents (see
"INTRODUCTION"). The Bank Security Documents will be for the sole benefit and
security of the Bank and will not be for the benefit of or to secure the Trustee
or the Holders.
THE SERIES 1996 BONDS ARE BEING OFFERED SOLELY ON THE BASIS OF THE
LETTER OF CREDIT AND THE FINANCIAL STRENGTH OF THE BANK AND ARE NOT BEING
OFFERED ON THE BASIS OF THE FINANCIAL STRENGTH OF THE BORROWER OR ANY OTHER
SECURITY. THIS OFFICIAL STATEMENT DOES NOT DESCRIBE THE FINANCIAL CONDITION OF
THE BORROWER. THE SERIES 1996 BONDS ARE SUBJECT TO ACCELERATION OF MATURITY
UPON THE OCCURRENCE OF A DEFAULT BY THE BORROWER OR CENTERPOINT UNDER THE
REIMBURSEMENT AGREEMENT, WHICH INCLUDE THE BORROWER'S REIMBURSEMENT OBLIGATION
PURSUANT TO SUCH REIMBURSEMENT AGREEMENT AND CERTAIN OTHER OBLIGATIONS, LOANS,
AND CREDIT ACCOMMODATIONS PROVIDED TO THE BORROWER AND CENTERPOINT BY THE BANK,
BUT SUCH DEFAULTS ARE NOT FULLY DESCRIBED HEREIN. AS A RESULT OF THE FOREGOING,
PROSPECTIVE INVESTORS WILL NOT BE ABLE TO EVALUATE THE LIKELIHOOD OF A DEFAULT
BY THE BORROWER UNDER THE REIMBURSEMENT AGREEMENT AND RESULTING ACCELERATION OF
THE SERIES 1996 BONDS.
Enforceability of the provisions of the Series 1996 Bonds, the Loan
Agreement, the Letter of Credit and the Indenture may be subject to bankruptcy,
insolvency, reorganization, moratorium or other laws in effect from
-20-
time to time affecting creditors' rights, and to the exercise of judicial
discretion in accordance with general principles of equity.
IN THE EVENT OF A DEFAULT BY THE BANK UNDER THE LETTER OF CREDIT, NO
INSURANCE PROCEEDS FROM THE FEDERAL DEPOSIT INSURANCE CORPORATION OR ANY OTHER
GOVERNMENTAL AGENCY, INSTRUMENTALITY OR AUTHORITY WOULD BE AVAILABLE TO PAY
BONDHOLDERS.
RISKS TO BONDHOLDERS
In addition to factors set forth elsewhere in this Official Statement,
purchasers of Series 1996 Bonds should carefully consider the following risks
factors in connection with investment in the Series 1996 Bonds.
1. The principal of (but not redemption premium) and up to
fifty-six (56) days' accrued interest on the Series 1996 Bonds (to the
Maximum Rate of 12% per annum) are secured by the Letter of Credit.
The Letter of Credit expires on April 15, 2001, which is prior to the
final maturity of the Series 1996 Bonds, and unless at least 45 days
prior to such expiration date the Letter of Credit is renewed,
replaced or extended, the Series 1996 Bonds are subject to mandatory
redemption on the Interest Payment Date next preceding April 15, 2001,
or are subject to mandatory redemption on the Interest Payment Date
next preceding any later expiration date of the Letter of Credit or
the Interest Payment Date next preceding the expiration date of any
Alternate Letter of Credit at a redemption price equal to 100% of the
principal amount thereof (without premium), plus accrued interest to
the Mandatory Bond Purchase Date. See "THE SERIES 1996 BONDS --
Mandatory Redemption and APPENDIX D -- Definitions and Summary of
Certain Legal Documents" herein.
2. Upon the occurrence of certain events, including, but not
limited to, (a) default by the Borrower of its obligations under the
Series 1996 Bonds or the Loan Agreement, (b) default by the Borrower
and CenterPoint of their respective obligations under the
Reimbursement Agreement including, without limitation, any default
with respect to separate loans and credit accommodations made to the
Borrower and CenterPoint and governed by the Reimbursement Agreement
or cross defaulted with the Reimbursement Agreement or (c) damage to
or condemnation of all or a part of the Project, the Series 1996 Bonds
may be subject to prepayment in whole or in part at a price equal to
100% of the principal amount thereof (without premium), plus accrued
interest. See "APPENDIX D -- Summary of Certain Legal Documents and
"THE SERIES 1996 BONDS -- Optional Redemption" herein.
3. Upon the occurrence of a Determination of Taxability (as
defined herein) with respect to the Series 1996 A Bonds, the Series
1996 Bonds are subject to redemption in whole at a price equal to 100%
of the principal amount thereof (without premium), plus accrued
interest. See "THE SERIES 1996 BONDS -- Mandatory Redemption" herein.
4. The Series 1996 Bonds and Beneficial Ownership Interests are
subject to mandatory purchase upon the conversion of the interest rate
on the Series 1996 Bonds to a different Interest Rate Mode and are
subject to mandatory purchase upon the delivery of an Alternate Letter
of Credit (as hereinafter defined) at a purchase price equal to 100%
of the principal amount thereof, plus accrued interest. See "THE
SERIES 1996 BONDS -- Mandatory Tender for Purchase of Series 1996
Bonds or Beneficial Ownership Interests Upon Conversion Between Modes"
and "THE SERIES 1996 BONDS -- Mandatory Tender for Purchase of Series
1996 Bonds or Beneficial Ownership Interests Upon Delivery of an
Alternate Letter of Credit" herein.
-21-
5. THE PRIMARY SECURITY FOR THE SERIES 1996 BONDS IS INTENDED
TO BE THE LETTER OF CREDIT DELIVERED BY THE BANK TO THE TRUSTEE. AS A
CONSEQUENCE, NO FINANCIAL INFORMATION IN RESPECT OF THE CREDIT
WORTHINESS OF THE BORROWER IS INCLUDED HEREIN. REFERENCE IS HEREBY
MADE TO "THE ROYAL BANK OF SCOTLAND PLC" AT APPENDIX B HEREIN WHICH
CONTAINS CERTAIN FINANCIAL INFORMATION REGARDING THE BANK. It is
possible, in the event of the insolvency of the Bank, or the
occurrence of some other event precluding the Bank from honoring its
obligation to make payments as stated in the Letter of Credit, that
the financial resources of the Borrower will be the only source of
payment on the Series 1996 Bonds. There can be no assurance that the
financial resources of the Borrower would be sufficient to pay the
principal, premium, if any, and interest on the Series 1996 Bonds in
the event the Trustee were forced to seek recourse against the
Borrower.
6. Enforcement of remedies provided in the Indenture with
respect to payments to be made by the Bank under the Letter of Credit
may be limited by insolvency, bankruptcy or other laws relating to
creditors' rights generally. The security provided by the Letter of
Credit for payment of the principal of and interest on the Series 1996
Bonds, or the purchase price of the Series 1996 Bonds or Beneficial
Ownership Interests, may be impaired in the event of a deterioration
of the financial condition of the Bank, as the Letter of Credit
represents a general claim against the assets of the Bank.
7. Performance by the Bank of its obligations under the Letter
of Credit is subject to the satisfaction of certain conditions by the
Trustee, as set forth in the Letter of Credit. Bondholders are thus
dependent upon the Trustee acting to satisfy such conditions before
they will receive the benefit of the Letter of Credit. Furthermore,
the question of whether the Trustee has properly satisfied such
conditions is a question of fact which, if disputed, could delay or
defeat the Trustee's rights of enforcement of the Letter of Credit.
8. The United States Bankruptcy Code generally stays the
enforcement of claims against the estate of a bankrupt once a petition
in bankruptcy is filed. The Bank is required under the Letter of
Credit to pay amounts sufficient to pay the principal of and up to
fifty-six (56) days' interest on the Series 1996 Bonds in the event of
the bankruptcy of the Borrower. However, it is possible in the event
of a bankruptcy of the Borrower that a bankruptcy court could at least
temporarily stay the payment of the Letter of Credit until relief from
that stay is granted by the court, thus delaying payment to the
Bondholders.
9. Bond Counsel will opine that interest on the Series 1996 A
Bonds will not be includable in the gross income of the Holders
thereof for federal income tax purposes. However, Bond Counsel's
opinion relates only to the exclusion from gross income on the Series
1996 A Bonds for federal income tax purposes and is conditioned on
continuing compliance by the Issuer and the Borrower with
representations and covenants contained in certain certificates with
respect to arbitrage and other tax matters to be delivered at closing.
Failure to comply with the representations and covenants made in those
certificates could cause interest on the Series 1996 A Bonds to lose
the exclusion from gross income for federal income tax purposes
retroactive to their date of issue. Furthermore, certain categories
of holders of the Series 1996 A Bonds may be subject to taxation as
discussed under "TAX MATTERS" herein.
10. The various legal opinions to be delivered concurrently with
the delivery of the Series 1996 Bonds will be qualified as to the
enforceability of the various legal instruments by limitations imposed
by the valid exercise of the constitutional powers of the State of
Indiana, in the United States of America and other governmental
authorities, including police powers exercised for the benefit of the
public health and welfare, and by bankruptcy, reorganization,
insolvency or other
-22-
similar laws affecting the rights of creditors generally, and by general
principles of equity (regardless of whether such enforceability is
considered in a proceeding in equity or at law).
11. The various legal opinions to be delivered concurrently with
the delivery of the Series 1996 Bonds express the professional
judgment of the attorneys rendering the opinions on the legal issues
explicitly addressed therein. By rendering a legal opinion, the
opinion giver does not become an insurer or guarantor of that
expression of professional judgment, of the transaction opined upon,
or of the future performance of parties to such transaction. Nor does
the rendering of an opinion guarantee the outcome of any legal dispute
that may arise out of the transaction.
TAX MATTERS
In the opinion of Ice Miller Donadio & Ryan, Indianapolis, Indiana ("Bond
Counsel"), Karen Freeman-Wilson, Gary, Indiana ("Co-Bond Counsel") and Meyer,
Lyles & Godshalk, Gary, Indiana ("Co-Bond Counsel"), under existing laws,
regulations, judicial decisions and rulings, interest on the Series 1996 A Bonds
is excludable from gross income under Section 103 of the Internal Revenue Code
of 1986, as amended (the "Code"), for federal income tax purposes, except for
interest on any Series 1996 A Bond for any period during which such Series 1996
A Bond is owned by a person who is a "substantial user" of the Project or a
"related person" as defined in Section 147(a) of the Code. These opinions
relate only to the exclusion from gross income of interest on the Series 1996 A
Bonds for federal income tax purposes under Section 103 of the Code and are
conditioned on continuing compliance by the Issuer and the Borrower with the Tax
Covenants (as hereinafter defined). Failure to comply with the Tax Covenants
could cause interest on the Series 1996 A Bonds to lose the exclusion from gross
income for federal income tax purposes retroactive to the date of issue. In the
opinion of Bond Counsel and each Co-Bond Counsel, under existing laws,
regulations, judicial decisions and rulings, interest on the Bonds is exempt
from income taxation in the State of Indiana. These opinions relate only to the
exemption of interest on the Bonds for State of Indiana income tax purposes.
The Code imposes certain requirements which must be met subsequent to the
issuance of the Series 1996 A Bonds as condition to the exclusion from gross
income of interest on the Series 1996 A Bonds for federal income tax purposes.
The Issuer and the Borrower will covenant not to take any action nor fail to
take any action within their respective power and control with respect to the
Series 1996 A Bonds that would result in the loss of the exclusion from gross
income for federal income tax purposes of interest on the Series 1996 A Bonds
pursuant to Section 103 of the Code (collectively, the "Tax Covenants"). The
Indenture, the Loan Agreement and certain certificates and agreements to be
delivered on the date of delivery of the Series 1996 A Bonds establish
procedures under which compliance with the requirements of the Code can be met.
It is not an event of default under the Indenture if interest on the Series 1996
A Bonds is not excludable from gross income for federal income tax purposes or
otherwise pursuant to any provision of the Code which is not in effect on the
issue date of the Series 1996 A Bonds.
The interest on the Series 1996 A Bonds is a specific preference item for
purposes of the federal individual or corporate alternative minimum taxes.
Interest on the Series 1996 A Bonds is also included in adjusted current
earnings in calculating the environmental tax imposed by Section 59A of the
Code.
Indiana Code 6-5.5 imposes a franchise tax on certain taxpayers (as defined
in Indiana Code 6-5.5) which, in general, are all corporations which are
transacting the business of a financial institution in the State of Indiana.
The franchise tax is measured in part by interest excluded from gross income
under Section 103 of the Code minus associated expenses disallowed under Section
265 of the Code. Taxpayers should consult their own tax advisors regarding the
impact of this legislation on their ownership of the Bonds.
Although Bond Counsel and each Co-Bond Counsel will render an opinion that
interest on the Series 1996 A Bonds is excludable from federal gross income and
exempt from State of Indiana income tax, the accrual or receipt
-23-
of interest on the Series 1996 A Bonds may otherwise affect a Bondholder's
federal or state tax liability. The nature and extent of these other tax
consequences will depend upon the Bondholder's particular tax status and the
Bondholder's other items of income or deductions. Taxpayers who may be affected
by such other tax consequences include, without limitation, financial
institutions, certain insurance companies, S corporations, certain foreign
corporations, individual recipients of Social Security or railroad retirement
benefits and taxpayers who may be deemed to have incurred ( or continued )
indebtedness to purchase or carry the Series 1996 A Bonds. Bond Counsel and
each Co-Bond Counsel express no opinion regarding any other such tax
consequences. Prospective purchasers of the Bonds should consult their own tax
advisors with regard to the other tax consequences of owning the Bonds,
including whether any Bondholder that purchases Bonds in the secondary market at
a price other than par may have potential sale or exchange consequences on a
conversion of the Bonds from one Interest Rate Mode to another, even if the
Bondholder elects to retain its Bonds upon any such conversion.
By the terms of the Indenture, the Loan Agreement and other relevant
documents, the interest rate mode as set forth in the Indenture for the Series
1996 A Bonds may be changed and certain actions may be taken under the
circumstances and subject to the terms and conditions set forth in such
documents subject to receipt of an approving opinion of nationally recognized
bond counsel. Bond Counsel and each Co-Bond Counsel express no opinion as to
the effect upon any Bond or the excludability of the interest on any Series 1996
A Bond for federal income taxation purposes resulting from any such change or
action.
NO LITIGATION
To the knowledge of the Borrower and the Issuer, there is no pending
or threatened litigation against the Borrower or the Issuer which in any way
questions or affects the validity of the Series 1996 Bonds, or any proceedings
or transactions relating to their issuance, sale or delivery or the pledge or
application of any moneys or security provided for the payment of the Bonds.
As of the date of this Official Statement, the Borrower does not know
of any fact or set of facts from which liability might arise which individually
or collectively would materially and adversely affect the business or operation
of the Borrower or the Project.
APPROVAL OF LEGAL PROCEEDINGS
Legal matters incident to the authorization, issuance and sale of the
Series 1996 Bonds are subject to the approving opinions of Ice Miller Donadio &
Ryan, Indianapolis, Indiana, Bond Counsel, Karen Freeman-Wilson, Gary, Indiana,
Co-Bond Counsel, and Meyer, Lyles & Godshalk, Gary, Indiana, Co-Bond Counsel,
and the Underwriter's obligation to purchase the Series 1996 Bonds is subject to
among other things, receipt by it of Co-Bond Counsels unqualified approving
opinions with respect thereto. Certain legal matters relating to the Letter of
Credit will be passed upon by the law firm of Seyfarth, Shaw, Fairweather &
Geraldson, Chicago, Illinois, counsel to the Bank. Certain legal matters will
be passed upon for the Underwriters by the law firm of Baker & Daniels,
Indianapolis, Indiana. Certain legal matters will be passed upon for the
Borrower by its counsel, Coffield Ungaretti & Harris, Chicago, Illinois.
UNDERWRITING
EVEREN Securities, Inc. (the "Underwriter") has agreed, subject to the
terms of a Bond Purchase Agreement among the Underwriter, the Issuer and the
Borrower, to purchase from the Issuer at a price of par the $20,540,000
aggregate principal amount of the Series 1996 A Bonds and the $1,680,000
aggregate principal amount of the Series 1996 B Bonds with the Underwriter
receiving a commission of $154,050 for the Series 1996 A Bonds,
-24-
and a commission of $12,600 for the Series 1996 B Bonds. Concessions from the
initial price may be allowed to selected dealers and special purchasers. The
initial price is subject to change after the date hereof. The Borrower has
agreed to indemnify the Underwriter and the Issuer against certain civil
liabilities, including liabilities under securities laws, relating to this
Official Statement.
RATING
Moody's Investors Service ("Moody's") has given the Bonds the rating
of "Aa3/VMIG 1." An explanation of the rating by Moody's may be obtained from
such agency at 99 Church Street, New York, New York 10007. Any such rating
reflects only the view of Moody's and is not a recommendation to buy, sell or
hold any of the Series 1996 Bonds. There is no assurance that any rating will
continue for any given period of time or that any rating will not be revised
downward or withdrawn entirely if, in the judgment of Moody's, circumstances so
warrant. Any such downward revision or withdrawal of any rating may have an
adverse effect on the market price or marketability of the Series 1996 Bonds.
MISCELLANEOUS
The foregoing summaries and explanations and those in the Appendices
do not purport to be comprehensive and are expressly made subject to the exact
provisions of the complete documents referred to herein. For details of all
terms and conditions, prospective purchasers are referred to the Letter of
Credit, the Reimbursement Agreement, the Refunding Notes, the Loan Agreement and
the Indenture, copies of which may be obtained from the Underwriter. The
Appendices attached hereto are a part of this Official Statement. Any matters
in this Official Statement involving matters of opinion, whether or not
expressly so stated, are intended as such and not as representations of fact.
THE MILLER PARTNERSHIP, L.P.
By: CenterPoint Properties Corporation
Its General Partner
By: /s/ Paul Fisher
----------------------------------
Its: EXECUTIVE VICE PRESIDENT, CHIEF
----------------------------------
FINANCIAL OFFICER AND SECRETARY
----------------------------------
-25-