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INDENTURE
BETWEEN
NEW JERSEY ECONOMIC DEVELOPMENT AUTHORITY
AND
THE BANK OF NEW YORK, AS TRUSTEE
DATED AS OF AUGUST 15, 2005
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TABLE OF CONTENTS
ARTICLE I
DEFINITIONS AND INTERPRETATIONS
PAGE
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Section 1.01 Definitions................................................................5
ARTICLE II
AUTHORIZATION, TERMS AND EXECUTION OF BONDS
Section 2.01 Issuance of Bonds in One or More Series...................................11
Section 2.02 Particular Terms of the Initial Bonds.....................................11
Section 2.03 General Terms of Bonds....................................................11
Section 2.04 Execution of Bonds........................................................14
Section 2.05 Authentication of Bonds...................................................14
Section 2.06 Interchangeability of Bonds...............................................15
Section 2.07 Transfer and Registry of Bonds and Agency Therefor........................15
Section 2.08 Transfer of Bonds.........................................................15
Section 2.09 Ownership of Bonds and Effect of Registration.............................15
Section 2.10 Mutilated, Destroyed, Stolen or Lost Bonds................................15
Section 2.11 Regulations with Respect to Registration, Exchanges and Transfers.........16
Section 2.12 Cancellation and Destruction of Surrendered Bonds.........................16
ARTICLE III
AUTHENTICATION AND DELIVERY OF BONDS
Section 3.01 Authorization of Bonds....................................................17
Section 3.02 Issuance of Initial Bonds.................................................17
Section 3.03 Disposition of Proceeds of Bonds..........................................17
Section 3.04 Issuance of Additional Bonds..............................................17
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ARTICLE IV
CREATION OF FUNDS
Section 4.01 Establishment of Funds and Accounts.......................................20
Section 4.02 Payments into the Bond Fund...............................................20
Section 4.03 Application of the Bond Fund..............................................20
Section 4.04 Moneys to be Held in Trust................................................21
Section 4.05 No Further Payments Needed................................................21
Section 4.06 Funds Held for Bonds......................................................21
Section 4.07 Rebate Fund...............................................................22
Section 4.08 Payments into the Project Fund; Disbursements.............................22
Section 4.09 Completion of the Project.................................................22
Section 4.10 Debt Service Reserve Fund.................................................23
ARTICLE V
INVESTMENT AND DEPOSIT OF MONIES
Section 5.01 Deposits..................................................................24
Section 5.02 Investments...............................................................24
ARTICLE VI
REDEMPTION OF BONDS
Section 6.01 Bonds Subject to Redemption...............................................26
Section 6.02 Bonds Subject to Redemption; Selection of Bonds to be
Called for Redemption.....................................................26
Section 6.03 Special Mandatory Redemption - Breach of Certain Public
Purpose Covenants........................................................27
Section 6.04 Procedure for Redemption .................................................28
Section 6.05 Payment of Redemption Price...............................................29
ARTICLE VII
COVENANTS OF THE AUTHORITY
Section 7.01 Payment of Principal of and Interest on Bonds.............................30
Section 7.02 Corporate Existence; Compliance with Laws.................................30
Section 7.03 Enforcement of Agreement; Notice of Default...............................30
Section 7.04 Further Assurances........................................................30
Section 7.05 Financing Statements......................................................30
Section 7.06 Intentionally Omitted.....................................................31
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Section 7.07 Creation of Liens.........................................................31
Section 7.08 Exclusion of Interest on the Bonds from Gross Income......................31
Section 7.09 Continuing Disclosure.....................................................31
Section 7.10 Event of Default..........................................................31
Section 7.11 Immunity of Authority.....................................................31
Section 7.12 Authority and Trustee Entitled to Indemnity...............................32
Section 7.13 Neither Authority Nor Trustee Responsible for Insurance,
Taxes, Execution of Indenture, Acts of the Authority or Application
of Moneys Applied in Accordance with this Indenture.......................32
Section 7.14 Authority and Trustee May Rely on Certificates............................33
Section 7.15 Further Assurances........................................................33
ARTICLE VIII
DEFAULTS AND REMEDIES
Section 8.01 Events of Default.........................................................34
Section 8.02 Enforcement of Agreement..................................................35
Section 8.03 Judicial Proceedings by Trustee...........................................35
Section 8.04 Discontinuance or Abandonment of Proceedings..............................36
Section 8.05 Bondholders May Direct Proceedings........................................36
Section 8.06 Limitations on Actions by Bondholders.....................................36
Section 8.07 Trustee May Enforce Rights Without Possession of Bonds....................37
Section 8.08 Remedies Not Exclusive....................................................37
Section 8.09 Delays and Omissions Not to Impair Rights.................................37
Section 8.10 Application of Moneys in Event of Default.................................37
Section 8.11 Trustee's Right to Receiver; Compliance with Act..........................38
Section 8.12 Trustee and Bondholders Entitled to All Remedies Under Act................38
ARTICLE IX
THE TRUSTEE
Section 9.01 Acceptance of Trust.......................................................39
Section 9.02 No Responsibility, Etc....................................................39
Section 9.03 Trustee May Act Through Agents; Answerable Only for Willful
Misconduct or Negligence..................................................39
Section 9.04 Compensation..............................................................39
Section 9.05 Notice of Default; Right to Investigate...................................39
Section 9.06 Obligation to Act on Defaults.............................................40
Section 9.07 Reliance on Requisition, Etc..............................................40
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Section 9.08 Trustee May Deal in Bonds; Other Financial Transactions...................40
Section 9.09 No Duty to Renew Insurance................................................40
Section 9.10 Intentionally Omitted.....................................................40
Section 9.11 Resignation of Trustee....................................................40
Section 9.12 Removal of Trustee........................................................40
Section 9.13 Appointment of Successor Trustee..........................................41
Section 9.14 Qualification of Successor................................................41
Section 9.15 Instruments of Succession.................................................41
Section 9.16 Merger of Trustee.........................................................41
ARTICLE X
EXECUTION OF INSTRUMENTS BY BONDHOLDERS
AND PROOF OF OWNERSHIP OF BONDS
Section 10.01 Ownership of Bonds......................................................43
ARTICLE XI
AMENDMENTS AND SUPPLEMENTS
Section 11.01 Amendments and Supplements Without Bondholders' Consent.................44
Section 11.02 Amendments with Bondholders' Consent....................................44
Section 11.03 Company Consent Required................................................44
Section 11.04 Amendment of Agreement..................................................44
Section 11.05 Trustee Authorized to Join in Amendments and Supplements;
Reliance on Counsel.....................................................45
ARTICLE XII
DEFEASANCE
Section 12.01 Defeasance..............................................................46
ARTICLE XIII
MISCELLANEOUS
Section 13.01 Dissolution.............................................................47
Section 13.02 No Rights Conferred on Others...........................................47
Section 13.03 Deposit of Funds for Payment of Bonds...................................47
Section 13.04 Severability of Invalid Provisions......................................47
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Section 13.05 No Personal Recourse....................................................48
Section 13.06 Notice..................................................................48
Section 13.07 Execution in Several Counterparts.......................................48
Section 13.08 Laws Governing Indenture................................................49
Section 13.09 Successors and Assigns..................................................49
Section 13.10 Headings for Convenience Only...........................................49
Section 13.11 Credits on the Notes....................................................49
Section 13.12 Payments Due on Saturdays, Sundays and Holidays.........................49
Section 13.13 Form of Bonds...........................................................49
EXHIBIT A - FORM OF SERIES A BOND
EXHIBIT B - FORM OF SERIES B BOND
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INDENTURE
THIS INDENTURE, dated as of August 15, 2005, between the NEW JERSEY
ECONOMIC DEVELOPMENT AUTHORITY (the "Authority"), a public body corporate and
politic constituting an instrumentality of the State of New Jersey, and THE BANK
OF NEW YORK, as Trustee (the "Trustee"), a state banking corporation organized
and existing under the laws of the State of New York, with fiduciary and
corporate trust powers in New Jersey, having a corporate trust office and place
of business in West Paterson, New Jersey.
W I T N E S S E T H:
WHEREAS, The New Jersey Economic Development Authority Act,
constituting Chapter 80 of the Pamphlet Laws of 1974 of the State of New Jersey
(the "State"), approved on August 7, 1974 as amended and supplemented, (the
"Act") declares it to be in the public interest and to be the policy of the
State to foster and promote the economy of the State, increase opportunities for
gainful employment and improve living conditions, assist in the economic
development or redevelopment of political subdivisions within the State, and
otherwise contribute to the prosperity, health and general welfare of the State
and its inhabitants by inducing manufacturing, industrial, commercial,
recreational, retail, service and other employment promoting enterprises by
making available financial assistance, to locate, remain or expand within the
State; and
WHEREAS, the Authority was created to aid in remedying the aforesaid
conditions and further to implement the purposes of the Act, and the Legislature
has determined and declared as a matter of express legislative determination
that the authority and powers conferred upon the Authority under the Act and the
expenditure of moneys pursuant thereto constitutes a serving of a valid public
purpose and that the enactment of the provisions set forth in the Act is in the
public interest and for the public benefit and good; and
WHEREAS, the Authority, to accomplish the purposes of the Act, is
empowered to extend credit to such employment promoting enterprises in the name
of the Authority, on such terms and conditions and in such manner as it may deem
proper for such consideration and upon such terms and conditions as the
Authority may determine to be reasonable; and
WHEREAS, on September 2, 1999, the Authority issued its Economic
Development Bonds (Elite Pharmaceuticals, Inc. - 1999 Project) in the aggregate
principal amount of $3,000,000 (the "1999 Bonds") for the purpose of the
acquisition of land and an existing approximately 15,000 sq. ft. building and
the acquisition of equipment, to be used in the manufacturing of pharmaceutical
products to be located in the municipality of Northvale, County of Bergen, State
of New Jersey (the "Project Site"); and
WHEREAS, Elite Pharmaceuticals, Inc. (the "Company") has requested, and
the Authority has determined to issue, its Economic Development Bonds
(Elite Pharmaceuticals, Inc. - 2005 Project) in the aggregate principal amount
of $3,660,000 (the "Series A Bonds") for the purpose of currently refunding and
redeeming the 1999 Bonds and to finance the acquisition of additional equipment
to be used in the manufacturing of pharmaceutical products at the Project Site
(the "Project") and its Economic Development Bonds (Elite Pharmaceuticals, Inc.
- - 2005 Project), Federally Taxable Series B, in the aggregate principal amount
of $495,000 (the "Series B Bonds"; together with the Series A Bonds, the
"Initial Bonds") for the purpose of refinancing the purchase of equipment used
at the Project Site and to finance costs of issuance incurred in connection with
the issuance of the Initial Bonds, all pursuant to a Loan Agreement by and
between the Authority and the Company dated as of August 15, 2005 (the
"Agreement"); and
WHEREAS, the Authority at a meeting thereof duly convened and held on
July 12, 2005, has duly authorized the execution and delivery of this Indenture
and the issuance thereunder of the Initial Bonds upon and subject to the terms
and conditions hereinafter set forth; and
WHEREAS, all acts and things have been done and performed, which are
necessary to make the Initial Bonds, when executed and issued by the Authority,
authenticated by the Trustee and delivered, the valid and binding legal
obligations of the Authority in accordance with their terms and to make this
Indenture a valid and binding agreement for the security of the Bonds
authenticated and delivered under this Indenture.
NOW THEREFORE, THIS INDENTURE WITNESSETH: That, to provide for the
payment of principal or Redemption Price, as the case may be and interest in
respect of the Bonds, issued and outstanding under this Indenture, together with
interest thereon, the rights of the bondholders and the performance of the
covenants contained in said Bonds and herein, the Authority has caused the
Company to deliver the Agreement, the Mortgage, the Assignment of Leases and the
Notes (as hereinafter defined) and as otherwise set forth in the Agreement and
does hereby sell, assign, transfer, set over and pledge unto the Trustee, its
successors in the trust and its assigns forever, all the right, title and
interest of the Authority in and to, and remedies under, the Notes, the
Mortgage, the Assignment of Leases and the Agreement and all the right, title
and interest of the Authority in and to the Revenues, the Collateral, the
Project, the Project Fund, the Bond Fund and all other funds under this
Indenture (other than the Rebate Fund) (as such terms are hereinafter defined)
(hereafter referred to as the "Trust Estate").
TO HAVE AND TO HOLD all and singular said Trust Estate; granted,
bargained, sold, assigned, transferred, conveyed, mortgaged, pledged, aliened,
remised, released, confirmed and set over by the Authority as aforesaid or
intended so to be, unto the said Trustee, its successors and assigns, forever.
IN TRUST, NEVERTHELESS, under and subject to the terms and conditions
hereinafter set forth, for the equal benefit, protection and security of the
Holders of any and all of the Bonds, all of which regardless
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of the time or times of their issuance or maturity, shall be of equal rank,
without preference, priority or distinction of any of the Bonds over any other
thereof, except as otherwise provided in or pursuant to this Indenture, and for
securing the observance and performance of all the conditions, covenants,
promises, stipulations, agreements and terms and provisions of this Indenture
and the uses and purposes herein expressed and declared.
EXPRESSLY RESERVING to the Authority the concurrent right:
(a) to receive notices under this Indenture and the Agreement;
(b) to consent to any amendments, modifications or supplements
to the Agreement and this Indenture;
(c) to receive payments under and to enforce pursuant to
Article VII of the Agreement all provisions or covenants in the Agreement under
and in accordance with the terms of the following sections:
Section 3.02 relating to disbursements from the Project Fund;
Section 3.03 relating to the limitations of the Authority's
liability;
Section 4.01 relating to certain representations and
warranties of the Company;
Section 4.11 relating to untrue statements of the Company;
Section 6.01 relating to the preservation of property and the
Collateral;
Section 6.02 relating to insurance;
Section 6.04 relating to the Project;
Section 6.05 relating to compliance with the Code and
arbitrage regulations;
Section 6.07 relating to compliance with the Department of
Environmental Protection;
Section 6.08 relating to financial statements;
Section 6.10 relating to indemnification;
Section 6.12 relating to reporting the number of employees;
Section 6.14 relating to inspection of the Project;
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Section 6.20 relating to a Project sign;
Section 6.21 relating to brokerage fees;
Section 6.24 relating to compliance with the Indenture;
Section 7.05 relating to the payment of attorneys' fees and
expenses;
Section 7.07 relating to certain remedies of the Authority;
Section 8.03 relating to the payment of fees and expenses;
Section 8.06 relating to modifications, waivers and
amendments;
Section 8.08 relating to the Authority's assignment;
Section 8.09 relating to further assurances and corrective
instruments; and
Section 8.13 relating to the special, limited obligations of
the Authority;
(d) the concurrent right to receive any and all reports,
notices, surveys, certificates and evidences of performance which the Company
may be required to furnish pursuant to the terms of the Agreement and the right
to exercise any rights of inspection granted to it pursuant to the terms of the
Agreement, whether or not the Trustee shall have exercised or shall have
purported to exercise such rights and remedies, without limiting the obligation
of the Trustee to do so;
(e) to receive indemnification and to be held harmless by the
Company;
(f) to redeem or cancel the Bonds in accordance with the
Agreement and this Indenture;
whether or not the Trustee shall have exercised or shall have purported to
exercise such rights and remedies, without limiting the obligation of the
Trustee to do so (the foregoing rights being referred to as the "Reserved
Rights").
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ARTICLE I
DEFINITIONS AND INTERPRETATIONS
SECTION 1.01. DEFINITIONS. As used or referred to in this Indenture,
unless a different meaning clearly appears from the context:
"Act" shall have the meaning given in the recitals hereto;
"Additional Bonds" shall mean any series of Bonds issued pursuant to
Section 3.04 hereof subsequent to the Initial Bonds;
"Additional Notice" shall mean the notice of redemption required by
Section 6.03;
"Agreement" shall have such meaning given in the recitals hereto;
Articles and Sections mentioned by number are the respective Articles
and Sections of this Indenture so numbered;
"Assignment of Leases" means the assignment dated the Closing Date from
the Company to the Authority, which is made part of the record of proceedings
and assigning to the Authority the benefits of existing and future leases on the
Project;
"Authority" shall have the meaning given in the recitals hereto;
"Authorized Authority Representative" shall mean any individual or
individuals duly authorized by the Authority to act on its behalf;
"Authorized Denominations" means denominations of $5,000 or any
integral multiple thereof;
"Bond" or "Bonds" means any of the bonds of the Authority authenticated
and delivered under and pursuant to this Indenture, including the Initial Bonds
and Additional Bonds, if any. Such Bonds may be Taxable Bonds or Tax-exempt
Bonds;
"Bondholder" or the term "Holder" or any similar term, when used with
reference to a Bond or Bonds, means any person who shall be the registered owner
of any Bond or Bonds;
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"Bond Counsel" means McManimon & Scotland, L.L.C., or an attorney or
firm of attorneys of nationally recognized standing on the subject of municipal
bonds;
"Bond Fund" means the fund so designated which is established and
created by Section 4.01 hereof;
"Bond Year" shall have the same meaning as that in the Agreement;
"Certified Resolution" means a copy of one or more resolutions or
amending resolutions certified by the Secretary or Assistant Secretary of the
Authority under its seal to have been duly adopted by the Authority and to be in
effect on the date of such certification;
"Closing Date" means August 31, 2005;
"Collateral" shall mean the land, building, fixtures and other
facilities in which the Authority is granted a lien by the Mortgage, the lease
and revenues assigned by the Assignment of Leases, the assets subject to the
security interest created by the Security Agreement and the security interest
under Section 2.07 of the Agreement;
"Company" shall have the meaning given in the recitals hereto;
"Cost" or "Costs"shall have the same meaning as that in the Agreement;
"Counsel" means an attorney at law or law firm serving as counsel for
the Authority, the Trustee or the Company;
"Debt Service Reserve Fund" shall mean the Fund established by Section
4.10 hereof;
"Event of Default" means any of the events specified in Section 8.01
hereof to be an Event of Default;
"Government Obligations" means (a) direct obligations of the United
States for which its full faith and credit are pledged for the full and timely
payment thereof, (b) obligations of a person controlled or supervised by and
acting as an agency or instrumentality of the United States, the payment of
which is unconditionally guaranteed as a full faith and credit obligation of the
United States for the full and timely payment thereof or (c) securities or
receipts evidencing ownership interests in obligations or specified portions
(such as principal or interest) of obligations described in (a) or (b).
"Guarantor" shall mean Elite Laboratories, Inc. and any successor
guarantor of the Loans;
"Indenture" means this Trust Indenture as amended or supplemented at
the time in question;
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"Initial Bonds" shall have the meaning given in the recitals hereto;
"Interest Account" means the account so designated which is established
and created by Section 4.01 hereof;
"Interest Payment Date" means March 1 and September 1 of each Bond
Year, commencing March 1, 2006;
"Investment Obligations" means, to the extent permitted by law (i)
Government Obligations, (ii) obligations rated in one of the two highest rating
categories by Moody's Investors Service, Inc. or Standard & Poor's Rating Group,
a division of McGraw Hill, Inc., the interest on which is excludable from gross
income under Section 103 of the Code, (iii) money market funds investing
exclusively in the obligations listed in (i) or (ii) or repurchase agreements
secured by such obligations rated AAA or better which may include funds as to
which the Trustee or any affiliate of the Trustee provides and earns
compensation for managerial, investment and/or custodial services, (iv)
repurchase agreements secured exclusively by obligations listed in (i) or (ii),
(v) commercial paper of a quality rated either A-1 or P-1 by Standard & Poor's
Rating Group, a division of McGraw Hill, Inc. or Moody's Investors Service,
Inc., (vi) shares of an Investment Company, organized under the Investment
Company Act of 1940, as amended, including an Investment Company for which the
Trustee or any affiliate provides and is compensated for managerial, investment
and/or custodial services, which invests its assets substantially in obligations
of the type described in clauses (i) and (ii) or repurchase agreements secured
by such obligations rated AAA or better, (vii) bank deposits or certificates, if
such deposits or certificates are insured by FDIC or FSLIC, (viii) banker's
acceptances of any bank (including the Trustee) organized under the laws of the
State or the United States or any foreign bank having a branch organized and
existing under the laws of the State or of the State of New York rated A or
higher by Standard & Poor's Rating Group, a division of McGraw Hill, Inc. or
Moody's Investors Service, Inc., and (ix) guaranteed investment contracts (GICs)
rated BBB or higher by Standard & Poor's Rating Group, a division of McGraw
Hill, Inc. or Moody's Investors Service, Inc.;
"Loans" shall mean the Series A Loan and the Series B Loan;
"Majority of Owners" means collectively, the owners of more than fifty
percent (50%) of the Bonds Outstanding;
"Mortgage" shall mean the first lien mortgage on the Premises, subject
only to Permitted Encumbrances, which is made part of the record of proceedings,
executed by the Company, as Mortgagor and given to the Authority, as Mortgagee;
"Notes" shall mean the Series A Note and the Series B Note;
"1999 Bonds" shall have the meaning given in the recitals hereto;
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"Outstanding", when used with reference to Bonds and as of any
particular date, describes all Bonds theretofore and thereupon being
authenticated and delivered except (a) any Bond canceled by the Trustee at or
before said date, (b) any Bond for the payment or redemption of which cash,
equal to the principal amount or Redemption Price thereof, as the case may be,
with interest to the date of maturity or redemption date, shall have theretofore
been deposited with the Trustee in trust whether upon or prior to maturity or
the redemption date of such Bonds and, except in the case of a Bond to be paid
at maturity, of which notice of redemption shall have been given or provided for
in accordance with Article VI, and (c) any Bond in lieu of or in substitution
for which another Bond shall have been authenticated and delivered pursuant to
the provisions of this Indenture;
"Paying Agent" means any paying agent appointed pursuant to this
Indenture, and its successor or successors of any other corporation or
association which may at any time be substituted in its place pursuant to this
Indenture;
"Placement Agent" means Ryan Beck & Co., Shrewsbury, New Jersey;
"Premises" shall mean the premises and all improvements thereon located
in the municipality of Northvale, County of Bergen, in the State, as described
in Schedule A to the Mortgage;
"Principal Account" means the account so designated which is
established and created by Section 4.01 hereof;
"Principal Installment Date" means any date on which the principal of
any Bonds shall mature;
"Project" shall have the meaning given in the recitals hereto;
"Project Site" shall have the meaning given in the recitals hereto;
"Rebatable Arbitrage" shall have the meaning given to such term in the
Agreement;
"Rebate Fund" shall mean the fund so designated and established
pursuant to Section 4.07;
"Redemption Price", when used with respect to a Bond, means the
principal amount of such Bond plus the applicable premium, if any, and accrued
interest payable upon redemption thereof in the manner contemplated in
accordance with its terms pursuant to this Indenture;
"Reserved Rights" shall have the meaning given in the recitals hereto;
"Revenues" means (i) all amounts payable in respect of the Notes which
may in the future be delivered to the Trustee, (ii) investment income in respect
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of any money held by the Trustee, and (iii) any other amounts paid by the
Company to the Trustee pursuant to the Agreement (subject, however, to the
Reserved Rights of the Authority);
"Security Agreement" shall mean the Security Agreement dated as of
August 15, 2005 by and between the Guarantor and the Authority in which the
Guarantor grants a security interest in certain assets described therein;
"Series A Bonds" shall have the meaning given in the recitals hereto;
"Series A Loan" shall mean the loan from the Authority to the Company
of the proceeds of the Series A Bonds;
"Series A Note" shall mean the promissory note dated the Closing Date,
executed and delivered by the Company to the Authority evidencing the Series A
Loan;
"Series B Bonds" shall have the meaning given in the recitals hereto;
"Series B Loan" shall mean the loan from the Authority to the Company
of the proceeds of the Series B Bonds;
"Series B Note" shall mean the promissory note dated the Closing Date,
executed and delivered by the Company to the Authority evidencing the Series B
Loan;
"Significant Bondholder" means any bond fund or bondholder which owns,
manages, controls or the like more than One Million Dollars ($1,000,000) of
Bonds Outstanding;
"State" shall have the meaning given in the recitals hereto;
"Supplemental Indenture" means any Indenture amending, modifying or
supplementing this Indenture made, signed and becoming effective in accordance
with the terms of Article XI hereof;
"Taxable Bonds" shall mean Bonds, including the Series B Bonds, the
interest on which is includable in the gross income of the holders thereof for
federal income tax purposes;
"Tax-exempt Bonds" shall mean Bonds, including the Series A Bonds, the
interest on which is not includable in the gross income of the holders thereof
for federal income tax purposes;
"Trust Estate" shall have the meaning given in the recitals hereto;
"Trustee"shall have the meaning given in the recitals hereto;
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The words "hereof", "herein", "hereto", "hereby" and "hereunder"
(except in the form of Bonds) refer to this entire Indenture.
Terms defined in the Agreement are hereby incorporated herein by
reference as though set forth in full.
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ARTICLE II
AUTHORIZATION, TERMS AND EXECUTION OF BONDS
SECTION 2.01. ISSUANCE OF BONDS IN ONE OR MORE SERIES. The Bonds may,
at the election of the Authority, be issued in one or more series and, except as
hereinafter provided, shall be designated generally as "Economic Development
Bonds (Elite Pharmaceuticals, Inc. - 2005 Project)" with such further
appropriate particular designations added to or incorporated in such title for
the Bonds of any particular series as the Authority may determine. Each Bond
shall bear upon the face thereof the designation so selected for the series to
which it belongs.
SECTION 2.02. PARTICULAR TERMS OF THE INITIAL BONDS. There shall be
issued under and secured by this Indenture a series of Bonds for the purpose of
financing the Project to be designated "Economic Development Bonds (Elite
Pharmaceuticals, Inc. - 2005 Project), Series A" in the aggregate principal
amount of $3,660,000 and a series of Bonds for the purpose of refinancing the
purchase of equipment used at the Project Site and to finance costs of issuance
incurred in connection with the issuance of the Initial Bonds to be designated
"Economic Development Bonds (Elite Pharmaceuticals, Inc. - 2005 Project),
Federally Taxable Series B" in the aggregate principal amount of $495,000, and
shall contain substantially the terms recited in the form of the Bonds in
Section 13.13 hereof. The Initial Bonds shall provide that principal or
Redemption Price, and interest in respect thereof, shall be payable only out of
Revenues.
SECTION 2.03. GENERAL TERMS OF BONDS. Every Bond shall bear such
designation or title, including the words "Economic Development Bond" with a
series designation as may be fixed herein or by Supplemental Indenture prior to
its authentication on original issuance by the Trustee. Every Bond shall be
payable, with respect to principal or Redemption Price, and interest, in any
coin or currency of the United States of America which, at the respective dates
of payment thereof, is legal tender for payment of public and private debts.
Every Bond shall be issued as fully registered bonds in the form of a Bond or in
the form of book entry and payable to Cede & Co. or to a named person or
registered assigns, shall be substantially in the form as provided in this
Indenture, with such omissions, insertions and variations as are properly
required and as specified in a Supplemental Indenture. The Bonds shall be
authenticated on or after the date of this Indenture, but may be dated a date
preceding the date of this Indenture for the purposes of calculating accrued
interest and the interest payable on the Initial Interest Payment Date. Interest
on the Bonds shall be calculated on the basis of a 360-day year of twelve thirty
day months. Interest on each Initial Bond shall be payable from and after its
date first on March 1, 2006 and on March 1 and September 1 in each year
thereafter to any Holder of Bonds as of the close of business on the record date
next preceding such Interest Payment Date until the Authority's obligation with
respect to the payment of the principal sum thereof shall be paid. Payments of
principal, Redemption Price or interest due on the Bonds may
11
also be payable by electronic funds transfer to any Holder of Bonds in the
aggregate principal amount of $1,000,000 or more; provided such Holder requests
such electronic funds transfer and delivers to the Trustee in writing, in the
case of an interest payment, not later than the close of business on the
December15 or June 15 (each a "Record Date") preceding such transfer or in the
case of a payment of principal or Redemption Price, and not later than the close
of business on June 15 preceding such transfer, the following information needed
to make such transfer: the name of the bank to receive such transfer, wiring
code of said bank, ABA number, account number of the Holder and name of a
contact person at the bank. Any interest on any Bond which is payable, but is
not punctually paid or provided for, on any Interest Payment Date (herein called
"Defaulted Interest") shall forthwith cease to be payable to the registered
owner on the relevant Record Date by virtue of having been such owner, and such
Defaulted Interest shall be paid to the registered owner in whose name the Bond
is registered at the close of business on a special Record Date (the "Special
Record Date") to be fixed by the Trustee, such Special Record Date to be not
more than fifteen (15) nor less than ten (10) days prior to the date of proposed
payment. The Trustee shall cause notice of the proposed payment of such
Defaulted Interest and the Special Record Date therefor to be mailed, first
class postage prepaid, to each Bondholder, at such Bondholder's address as it
appears in the Bond Register, not less than ten (10) days prior to such Special
Record Date.
All Initial Bonds shall each be of the minimum denomination of $5,000
or any integral multiple of $5,000 and shall each be in substantially the form
provided for in Section 13.13. The Bonds of any series may contain or have
endorsed thereon such provisions, specifications and descriptive words as are
(a) not inconsistent with the provisions of this Indenture, (b) necessary or
desirable to comply with custom or the rules of any securities exchange or
commission or brokerage board, and (c) authorized by a supplemental resolution
adopted by the Authority prior to the authentication and delivery thereof by the
Trustee. The Initial Bonds shall be dated August 15, 2005. Thereafter, each Bond
shall be dated as of the date six (6)months preceding the interest payment date
next following the date of delivery thereof by the Trustee, except that (a) if
such date of such delivery shall be an interest payment date, said Bond shall be
dated as of such date of delivery, or (b) if interest on such Bond shall not
have been paid in full in accordance with its terms, then, notwithstanding any
of the foregoing provisions of this Section, such Bond shall be dated as of the
date to which interest has been paid in full on such Bond. Temporary Bonds in
denominations specified by the Placement Agent are authorized to be issued,
authenticated and delivered to the Placement Agent thereof in lieu of and until
such time as Bonds in definitive form are available for authentication and
delivery. The Initial Bonds shall be in the principal amounts set forth below
and shall mature on the dates set forth below and shall bear interest at the
rate of interest set forth below.
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SERIES A BONDS:
MATURITY AMOUNT INTEREST RATE
-------- ------ -------------
September 1, 2030 $3,660,000 6.50%
The Series A Bonds are subject to the following sinking fund redemption
payments:
YEAR AMOUNT
---- ------
2006 $120,000
2007 125,000
2008 135,000
2009 140,000
2010 150,000
2011 165,000
2012 170,000
2013 185,000
2014 195,000
2015 210,000
2016 220,000
2017 85,000
2018 90,000
2019 95,000
2020 105,000
2021 110,000
2022 115,000
2023 125,000
2024 130,000
2025 140,000
2026 150,000
2027 160,000
2028 170,000
2029 180,000
2030* 190,000
*Final Maturity
SERIES B BONDS:
MATURITY AMOUNT INTEREST RATE
-------- ------ -------------
September 1, 2012 $495,000 9.00%
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The Series B Bonds are subject to the following sinking fund redemption
payments:
YEAR AMOUNT
---- ------
2006 $55,000
2007 60,000
2008 65,000
2009 70,000
2010 75,000
2011 80,000
2012* 90,000
*Final Maturity
In lieu of the mandatory sinking fund redemption of the Bonds in any
year, the Company may deliver to the Trustee for cancellation Bonds in an amount
up to but not exceeding the principal amount of Bonds scheduled for sinking fund
redemption in such year, a notice of such forthcoming delivery to be provided by
the Company to the Trustee in writing at least sixty (60) days prior to the
redemption date. The Trustee shall reduce the principal amount of such Bonds
subject to mandatory sinking fund redemption on the next succeeding redemption
date by the principal amount of the Bonds so presented for cancellation.
SECTION 2.04. EXECUTION OF BONDS. Each Bond shall be executed in the
name of the Authority by the manual or facsimile signature of its Chairman, Vice
Chairman, Chief Executive Officer or Chief Financial Officer and its corporate
seal shall be thereunto affixed, imprinted or otherwise reproduced and attested
by the manual or facsimile signature of the Secretary or Assistant Secretary. In
case any officer who shall have signed, sealed or attested any of the Bonds
shall cease to be such officer of the Authority before the Bonds so signed,
sealed or attested shall have been authenticated and delivered by the Trustee,
such Bonds may nevertheless be authenticated and delivered as herein provided as
if the person who so signed, sealed or attested such Bonds had not ceased to be
such officer. Any Bond may be signed, sealed or attested on behalf of the
Authority by any person who, at the date of such act, shall hold the proper
office, notwithstanding that at the date of such Bond such person may not have
held such office.
SECTION 2.05. AUTHENTICATION OF BONDS. The Bonds shall bear thereon a
certificate of authentication, substantially in the form set forth hereinafter
in this Indenture, duly executed by the Trustee. Only such Bonds shall be
entitled to any right or benefit under this Indenture. No Bond shall be valid or
obligatory for any purpose unless such certificate of authentication upon such
Bond shall have been duly executed by the Trustee, and such certificate of
authentication by the Trustee upon any Bond executed on behalf of the Authority
shall be conclusive and the only evidence that the Bond so authenticated has
been duly authenticated and delivered under this
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Indenture and that the holder thereof is entitled to the benefit of this
Indenture.
SECTION 2.06. INTERCHANGEABILITY OF BONDS. Bonds, upon surrender
thereof at the corporate trust office of the Trustee with a written instrument
or instruments of transfer satisfactory to the Trustee duly executed by the
registered owner or owners thereof or his attorney duly authorized in writing,
may, at the option and expense of such registered owner, be exchanged for an
equal aggregate principal amount of Bonds of the same series, designation,
maturity and interest rate of any other authorized denominations.
SECTION 2.07. TRANSFER AND REGISTRY OF BONDS AND AGENCY THEREFOR. The
Authority shall cause the Trustee to maintain and keep registry books for the
registration and transfer of Bonds (the "Bond Register"), and, upon presentation
thereof for such purpose at the designated office of the Trustee, the Trustee
shall register or cause to be registered therein, and permit to be transferred
thereon or to be exchanged, under such reasonable regulations as the Authority
or the Trustee may prescribe, any Bond entitled to registration, transfer or
exchange. The Trustee is hereby appointed the agent of the Authority for such
registration, transfer and exchange of Bonds.
SECTION 2.08. TRANSFER OF BONDS. Each Bond shall be transferable only
upon the books of the Authority at the designated office of the Trustee, by the
registered owner thereof in person or by his attorney duly authorized in
writing, upon surrender thereof together with a written instrument of transfer
satisfactory to the Trustee duly executed by the registered owner or such duly
authorized attorney. Upon the transfer of any such Bond, the Authority shall
execute, and the Trustee shall authenticate and deliver, a new Bond or Bonds
registered in the name of the transferee of the same aggregate principal amount
and series, designation, maturity and interest rate as the surrendered Bond.
SECTION 2.09. OWNERSHIP OF BONDS AND EFFECT OF REGISTRATION. The
Authority, the Trustee and any Paying Agent may treat and consider the person in
whose name any Bond shall be registered as the holder and absolute owner
thereof, whether such Bond shall be overdue or not, for the purpose of receiving
payment of the principal or Redemption Price thereof or interest thereon and for
all other purposes whatsoever; and payment of, or on account of, the principal
or Redemption Price of or interest on such Bond shall be made only to, or upon
the order of, such registered owner thereof, but such registration may be
changed or discharged as herein provided. All payments made as in this Section
provided shall be valid and effectual to satisfy and discharge the liability
upon the several Bonds to the extent of the sum or sums so paid.
SECTION 2.10. MUTILATED, DESTROYED, STOLEN OR LOST BONDS. In case any
Outstanding Bond shall become mutilated or be destroyed, stolen, or lost, the
Trustee shall authenticate and deliver a new Bond of like tenor, number
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and amount as the Bond so mutilated, destroyed, stolen or lost, in exchange and
substitution for such mutilated Bond and upon surrender of such mutilated Bond
or, in lieu of and substitution for the Bond destroyed, stolen or lost, upon
filing with the Trustee evidence satisfactory to the Authority and the Trustee
that such Bond has been destroyed, stolen or lost and proof of ownership
thereof, and upon furnishing the Authority and the Trustee with indemnity
satisfactory to them and complying with such other reasonable regulations as the
Authority and the Trustee may prescribe in connection therewith and upon payment
to the Trustee of any charge, fee or expense incurred by the Authority or the
Trustee with respect to such authentication and delivery. In lieu of
authenticating and delivering a new Bond in substitution for a mutilated,
destroyed, lost or stolen Bond which is due and payable, the Trustee may pay the
amount due on such Bond to the owner or Holder thereof, provided all the other
requirements of this Section have been met.
SECTION 2.11. REGULATIONS WITH RESPECT TO REGISTRATION, EXCHANGES AND
TRANSFERS. In all cases in which the privilege of transferring Bonds is
exercised, the Authority shall execute and the Trustee shall authenticate Bonds
in accordance with the provisions of this Indenture. For every transfer of
Bonds, the Authority and the Trustee may charge a sum sufficient to reimburse
them for any tax, fee or other governmental charge required to be paid and any
mailing, delivery or insurance expense incurred with respect to such transfer,
which sum shall be paid by the person requesting such transfer as a condition
precedent to the exercise of the privilege of effecting such transfer. Neither
the Authority nor the Trustee shall be required to exchange or transfer any Bond
after the close of business on the Record Date next preceding any Interest
Payment Date and will not be required to exchange or transfer any Bond selected
for redemption in whole or in part after the mailing of notice calling such Bond
or portion thereof for redemption nor during the fifteen (15) days before
mailing of notice of redemption.
SECTION 2.12. CANCELLATION AND DESTRUCTION OF SURRENDERED BONDS. Bonds
surrendered for payment, redemption or transfer and Bonds purchased from any
moneys held by the Trustee hereunder or surrendered to the Trustee by the
Authority or by the Company shall be canceled and destroyed by the Trustee or
delivered to the Authority for destruction. No such Bonds shall be deemed
Outstanding under this Indenture and no Bonds shall be issued in lieu thereof
(except for a Bond transferred pursuant to Section 2.08 hereof).
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ARTICLE III
AUTHENTICATION AND DELIVERY OF BONDS
SECTION 3.01. AUTHORIZATION OF BONDS. The aggregate principal amount of
Bonds which may be executed by the Authority and authenticated by the Trustee
and delivered and secured by this Indenture is not limited, except as is or may
hereafter be provided in this Indenture or the Agreement or as may be limited by
law. This Indenture creates and shall be and constitute a continuing,
irrevocable and exclusive lien upon, and pledge of, the Revenues, and the income
earned by the investment of funds under this Indenture to the extent provided in
this Indenture. All Bonds issued and to be issued hereunder are, and are to be,
to the extent provided in this Indenture, equally and ratably secured by this
Indenture without preference, priority or distinction on account of the actual
time or times of the authentication or delivery or maturity of the Bonds or any
of them, so that subject as aforesaid, all Bonds at any time outstanding
hereunder shall have the same right, lien and preference under and by virtue of
this Indenture and shall all be equally and ratably secured hereby with like
effect as if they had all been executed, authenticated and delivered
simultaneously on the date hereof, whether the same or any of them shall
actually be disposed of at such date, or whether they, or any of them, shall be
disposed of at some future date.
SECTION 3.02. ISSUANCE OF INITIAL BONDS. Initial Bonds, consisting of
Series A Bonds in the aggregate principal amount of $3,660,000 and Series B
Bonds in the aggregate principal amount of $495,000, being Bonds issued under
this Indenture, shall forthwith be executed by the Authority and delivered to
the Trustee for authentication, together with a statement as to the amount and
disposition of the proceeds of the sale of such principal amount of said Bonds,
and thereupon the Initial Bonds shall be authenticated by the Trustee and shall
be delivered to or upon the written order of an Authorized Authority
Representative. Prior to authentication and delivery of the Bonds by the
Trustee, the Trustee shall also have received the documents described in Section
5.03 of the Agreement.
SECTION 3.03. DISPOSITION OF PROCEEDS OF BONDS. Simultaneously with the
delivery of the Initial Bonds by the Trustee, the amount received as accrued
interest on the Series A Bonds shall be deposited in the Series A Interest
Account of the Bond Fund and the amount received as accrued interest on the
Series B Bonds shall be deposited in the Series B Interest Account of the Bond
Fund. The remaining proceeds of the Series A Bonds shall be deposited by the
Trustee in the Series A Account of the Project Fund and the remaining proceeds
of the Series B Bonds shall be deposited by the Trustee in the Series B Account
of the Project Fund, to be disbursed in accordance with Section 3.02 of the
Agreement.
SECTION 3.04. ISSUANCE OF ADDITIONAL BONDS. So long as the Agreement is
in effect and no Event of Default shall have occurred thereunder and there is no
Event of Default hereunder, one or more series of Additional Bonds may be
authorized by resolution of the Authority to pay Costs or for the
17
purpose of refunding any prior issue of Bonds. Such Additional Bonds shall be
issued in such series and principal amounts, shall be subject to redemption at
such times and at such prices, shall bear interest at such rate or rates, shall
mature in such amounts as the Supplemental Indenture authorizing the issuance
thereof and the resolution of the Authority in connection therewith shall fix
and determine not inconsistent with this Indenture. Such Supplemental Indenture
shall specify and determine the purpose for which such Additional Bonds are to
be issued (but no purpose shall be authorized other than paying Costs of the
Project, including any addition to the Project) or for the purpose of refunding
any prior issue of Bonds, and such other matters and things as may be deemed
necessary or appropriate by the Authority or as may be required by the Act, the
Agreement or this Indenture for authorization and issuance of such Additional
Bonds not inconsistent with this Indenture. Prior to the issuance of Additional
Bonds and the execution and delivery of a Supplemental Indenture in connection
therewith, the Authority and the Company shall enter into an amendment to the
Agreement pursuant to Article XI hereof which shall provide that the payments
due under the Agreement shall be increased and computed so as to provide for
payments sufficient to pay in full the principal of and interest on such
Additional Bonds and any other costs in connection therewith.
For the issuance of Additional Bonds to pay for Costs of the Project,
the Company is also required to deliver to the Trustee the following:
(a) a cost estimate of the Costs of the Project proposed to be
constructed from the proceeds of such Additional Bonds prepared by an architect
or engineering firm or a list of equipment with cost estimates prepared by the
Company and substantiated by estimates from vendors;
(b) a feasibility report prepared in accordance with GAAP by an
independent certified public accountant certifying that monies available for
debt service for the Company, upon completion of the proposed addition to the
Project, is equal to 125% of the debt service necessary for the Bonds. For
purposes hereof, monies available for debt service means cash flow of the
Company from operations less operating expenses (minus depreciation); and
(c) an MAI (Member, Appraisal Institute) appraisal certifying that the
fair market value of the bond financed facility, including additions thereto and
equipment financed with the Additional Bonds, is equal to 125% of the principal
amount of the Bonds Outstanding, after the issue of the Additional Bonds.
Each series of Additional Bonds shall be equally and ratably secured
under the Indenture with the Initial Bonds and all other series of Additional
Bonds, if any, without preference, priority or a distinction of any Bonds over
any other thereof except as expressly provided in or permitted by the Indenture
or any Supplemental Indenture.
The Additional Bonds shall be deposited with the Trustee and thereupon
shall be authenticated by the Trustee. Upon payment to the Trustee of the
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proceeds of sale of Additional Bonds, they shall be delivered by the Trustee to
or upon the order of the purchasers thereof, but only upon receipt by the
Trustee of:
(a) A copy of the resolution, duly certified by the Secretary or the
Assistant Secretary of the Authority, authorizing the execution and delivery of
the Supplemental Indenture and authorizing and awarding the Additional Bonds and
providing the terms thereof; and
(b) Original executed counterparts of the Supplemental Indenture,
together with an original executed counterpart amendment of, or supplement to,
the Agreement, and the other Loan Documents reflecting the increase in the
amount of Bonds Outstanding in the amount of the Loans; and
(c) A written opinion by an attorney or firm of attorneys of recognized
standing on the subject of municipal bonds, to the effect that the issuance of
the Additional Bonds and the execution thereof have been duly authorized and
that all conditions precedent to the delivery thereof as required hereunder have
been fulfilled and that the Additional Bonds constitute legal, valid and binding
obligations of the Authority enforceable in accordance with their terms and that
the issuance of the Additional Bonds will not adversely affect the exclusion of
interest on the Tax- exempt Bonds from gross income for federal income tax
purposes and with a reliance letter to the Trustee confirming the above; and
(d) A written order to the Trustee executed by an Authorized Authority
Representative to authenticate and deliver the Additional Bonds to the purchaser
or purchasers therein identified upon payment to the Trustee of a specified sum;
and
(e) All other documents reasonably required by the Authority and the
Trustee.
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ARTICLE IV
CREATION OF FUNDS
SECTION 4.01. ESTABLISHMENT OF FUNDS AND ACCOUNTS. The Authority hereby
establishes the following funds and accounts within such funds:
BOND FUND AND WITHIN THE BOND FUND,
THE SERIES A PRINCIPAL ACCOUNT,
THE SERIES B PRINCIPAL ACCOUNT,
THE SERIES A INTEREST ACCOUNT AND
THE SERIES B INTEREST ACCOUNT;
DEBT SERVICE RESERVE FUND;
REBATE FUND; AND
PROJECT FUND AND WITHIN THE PROJECT FUND,
THE SERIES A ACCOUNT AND
THE SERIES B ACCOUNT
SECTION 4.02. PAYMENTS INTO THE BOND FUND. There shall be deposited in
the Series A Interest Account all accrued interest received from the Placement
Agent at the time of the issuance and delivery of the Series A Bonds. There
shall be deposited in the Series B Interest Account all accrued interest
received from the Placement Agent at the time of the issuance and delivery of
the Series B Bonds. In addition, there shall be deposited into the applicable
Account of the Bond Fund on a pro rata basis based on the Outstanding principal
amount of each series of Bonds, as and when received, (a) all payments made
under the applicable Note and as specified in Section 2.01 of the Agreement, (b)
moneys transferred from the Debt Service Reserve Fund pursuant to Section 5.02
hereof, and (c) all other moneys, including any prepayments received by the
Trustee under and pursuant to any of the provisions of the Agreement, which are
required or which are accompanied by directions that such moneys are to be paid
into a specific Account in the Bond Fund. The Authority hereby covenants and
agrees that, so long as any of the Bonds issued hereunder are Outstanding, it
will deposit, or cause to be paid to the Trustee for deposit in the Bond Fund
for its account, sufficient sums from Revenues and other moneys derived and to
be derived from the Loans to the Company, promptly to meet and pay the principal
or Redemption Price of, or interest on the Bonds as the same become due and
payable. Nothing herein shall be construed as requiring the Authority or the
Trustee to operate the Project or to use any funds or revenues from any source
other than funds and Revenues derived from the Trust Estate.
SECTION 4.03. APPLICATION OF THE BOND FUND. Except as provided in
Section 4.06 hereof, moneys in the Bond Fund shall be used solely for the
payment of the principal or Redemption Price of and interest on the Bonds and
for the redemption of the Bonds prior to maturity; provided, investment income
earned on any such amount may be applied to the payment of interest on the
Bonds. Any moneys in the Bond Fund in excess of the moneys required for payment
of the Bonds theretofore matured, called at maturity or called for redemption
and past due interest shall be used, upon the written request of
20
the Company, to the extent permitted by this Indenture to redeem a part of the
Bonds Outstanding (except for Bonds matured or called for redemption which have
not yet been presented for payment) so long as the Company is not in default
with respect to any payments under Section 2.01 of the Agreement or the Notes.
The Trustee, without further authorization than is in this Section 4.03
contained, shall pay to the Paying Agent from the moneys in the Bond Fund, (i)
the interest on the Bonds as and when the same shall become due, and (ii) the
principal of or Redemption Price of the Bonds as and when the same shall mature
or are called for redemption, as the case may be, provided that such payment of
principal or Redemption Price shall be made only upon presentation and surrender
of such Bonds as they severally mature or on or after the redemption date.
SECTION 4.04. MONEYS TO BE HELD IN TRUST. All moneys required to be
deposited with or paid to the Trustee for the account of any fund (except moneys
in the Rebate Fund) under any provision of this Indenture shall be held by the
Trustee in trust, and except for moneys deposited with or paid to the Trustee
for the redemption of Bonds, notice of the redemption of which has been duly
given, shall, while held by the Trustee, constitute part of the Trust Estate and
be subject to the lien or security interest created hereby. The Trustee shall be
required to render a monthly statement of account to the Authority, any
Significant Bondholder and the Company of the funds held in the Bond Fund and
the Project Fund, so long as there are any funds therein.
SECTION 4.05. NO FURTHER PAYMENTS NEEDED. For so long as the aggregate
of the amounts then on deposit in the Bond Fund is sufficient to redeem all of
the Bonds then Outstanding, together with accrued interest thereon, or the
Redemption Price, as applicable and all expenses of the Trustee and the
Authority have been paid, the Company shall notify the Trustee and the Authority
in writing that no additional or further payments need be made under this
Indenture and the Authority, at the written direction of the Company, shall
instruct the Trustee in writing to apply the moneys then in said fund to the
payment of the principal of and interest and Redemption Price (if any) on the
Bonds on the next succeeding redemption date for which the required redemption
notice may be given and to the payments of the amounts, if any, payable to
itself as Trustee and to the Authority.
SECTION 4.06. FUNDS HELD FOR BONDS. The amounts held or applied by the
Trustee or Paying Agent for the payment of interest, principal or Redemption
Price, due on any date with respect to particular Bonds shall, pending such
payment, be set aside and held in trust for the Holders of the Bonds, and for
the purposes of this Indenture such principal, interest or Redemption Price,
after the due date thereof, shall no longer be considered to be unpaid. Any
amounts remaining in the Bond Fund after payment in full of the Bonds, the fees,
charges and expenses of the Trustee and all other amounts required to be paid
hereunder and under the Agreement shall be paid to the Company upon the
expiration or sooner termination of the term of the Agreement as provided
therein.
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SECTION 4.07. REBATE FUND. There is hereby established with the Trustee
a Rebate Fund which shall be held separate and apart from all other funds
established under this Indenture. The Company shall comply with the provisions
of Sections 4.01(j) and 6.05 of the Agreement and instruct the Trustee in
writing to transfer from the Bond Fund to the Rebate Fund, or shall otherwise
pay to the Trustee for deposit into the Rebate Fund, such amounts as shall be
necessary to cause the aggregate amount transferred to or otherwise deposited in
the Rebate Fund to equal the Rebatable Arbitrage; provided that no such
transfers or deposits shall be necessary if the Gross Proceeds (within the
meaning of Section 148(f)(4)(B) of the Code) of the Tax-exempt Bonds, are fully
expended within six months of the date of issue. Withdrawals from the Rebate
Fund may be made only pursuant to written directions of the Company given in
accordance with Sections 4.01(j) and 6.05 of the Agreement. All amounts in the
Rebate Fund, including income earned from investment of the Rebate Fund, shall
be held by the Trustee free and clear of the lien of this Indenture, and the
Trustee shall pay said amounts over to the United States from time to time as
the Trustee shall be instructed in writing by the Company, provided that the
Trustee shall so pay over to the United States not less frequently than once
each five Bond Years after the date of original delivery and payment for the
Tax-exempt Bonds, an amount sufficient to assure that at least ninety percent
(90%) of the sum of the amount of the Rebatable Arbitrage with respect to the
Tax-exempt Bonds plus all previous rebate payments as of the close of the period
ending on the most recent Computation Date is paid not later than sixty (60)
days after such Computation Date. Not later than sixty (60) days after the
retirement of the last obligation of the Tax-exempt Bonds, the Company shall
direct the Trustee in writing to pay to the United States of America one hundred
percent (100%) of the Rebatable Arbitrage (as calculated by the Company) with
respect to the Tax-exempt Bonds.
The Trustee agrees to furnish the Company and the Authority with notice
of the Company's obligation to file a written certification to the Authority and
the Trustee indicating whether the Company has complied with the six (6) month
exception to the arbitrage rebate requirement. In addition, the Trustee agrees
to furnish the Company and the Authority with notice of the Company's obligation
to prepare its rebate calculation and make its rebate payment, if any, to the
Internal Revenue Service. Such reminder notice shall be furnished to the Company
and the Authority at least ninety (90) days prior to each fifth Bond Year and
within thirty (30) days following the redemption or final payment of the
Tax-exempt Bonds.
Moneys held in the Rebate Fund shall be held by the Trustee for a
period of not less than seventy-five (75) days following the redemption or final
maturity of the Tax-exempt Bonds.
SECTION 4.08. PAYMENTS INTO THE PROJECT FUND; DISBURSEMENTS.
(a) The balance of the proceeds of the issuance and delivery of the
Series A Bonds and Series B Bonds remaining after the deductions provided by the
first sentence of Section 4.02 hereof and the first paragraph of Section
22
4.10 hereof have been made shall be deposited in the Series A Account and the
Series B Account of the Project Fund, respectively.
(B) The Trustee is hereby authorized and directed to make each
disbursement required by the provisions of the Agreement and to issue its checks
therefor. The Trustee shall keep and maintain adequate records pertaining to the
Project Fund and all such payments therefrom, and after the Project has been
completed and a certificate of payment of all costs is or has been filed as
provided in Section 4.09 hereof, the Trustee shall file a final monthly
statement of account thereof with the Authority, any Significant Bondholder and
the Company as required by Section 4.04 hereof.
SECTION 4.09. COMPLETION OF THE PROJECT. The completion of the Project
and payment or provision made for payment of all Costs shall be evidenced by the
filing with the Trustee of the Company's Completion Certificate required by the
provisions of Section 3.04 of the Agreement. As soon as practicable and in any
event not more than sixty (60) days from the date of receipt of the Company's
Completion Certificate, any balance remaining in the Project Fund (except
amounts the Company shall have directed the Trustee in writing to retain for any
Costs of the Project not then due or payable or not then paid) shall, at the
written direction of the Company, be deposited in the applicable series
Principal Account in the Bond Fund by the Trustee and, in accordance with
written direction provided to the Trustee by the Company as provided in Section
3.04, used to pay principal on the applicable series of Bonds or in any manner
requested by the Company which preserves the exclusion of interest on the
Tax-exempt Bonds from federal income taxation, provided there is delivered to
the Trustee an opinion of Counsel by an attorney or firm of attorneys of
nationally recognized standing on the subject of municipal bonds to the effect
that the use requested by the Company of such monies is permitted by law and
will not adversely affect the exclusion from federal income taxation of interest
on the Tax-exempt Bonds. The Trustee may rely conclusively on such opinion in
any disbursement of funds pursuant to this Section 4.09. Such balance of the
proceeds of Tax-exempt Bonds after the Completion Date shall not be invested at
a yield materially higher than the yield on the Tax-exempt Bonds beyond any
applicable temporary period or otherwise in contravention of Sections 103 and
148 of the Code. The Company shall provide written instruction to the Trustee
regarding such investment.
SECTION 4.10. DEBT SERVICE RESERVE FUND. There is hereby established
with the Trustee a Debt Service Reserve Fund which shall be maintained by the
Company at a level of $388,990 (the "Reserve Requirement"). $339,490 from the
proceeds of the issuance and delivery of the Series A Bonds and $49,500 from the
proceeds of the Series B Bonds shall be deposited into the Debt Service Reserve
Fund.
On the Business Day prior to an Interest Payment Date, the Trustee
shall withdraw from the Debt Service Reserve Fund for deposit in the Bond Fund,
the amount necessary to meet the deficiency, if any, in the applicable Principal
Account or Interest Account, in order to provide the moneys necessary to pay the
principal of and interest on the Bonds. Such amount shall be deposited in
23
the applicable Bond Fund Principal Account and/or Interest Account, as the case
may be. Beginning on the fifteenth day of the month of such Interest Payment
Date, the Company is required to promptly deposit an amount equal to one-sixth
(1/6th) of the amount withdrawn from the Debt Service Reserve Fund with the
Trustee and a similar amount on the fifteenth day of each month thereafter until
the amount in the Debt Service Reserve Fund equals the Reserve Requirement.
Within fifteen (15) days after notice from the Trustee to the Company that the
amount in the Debt Service Reserve Fund is less than the Reserve Requirement
pursuant to a valuation under Section 5.02 hereof, the Company is required to
deposit the amount of such deficiency with the Trustee.
ARTICLE V
INVESTMENT AND DEPOSIT OF MONEYS
SECTION 5.01. DEPOSITS. All moneys received by the Trustee under this
Indenture shall, except as hereinafter provided, be deposited with the Trustee,
until or unless invested as provided in Section 5.02 hereof. The Trustee may
deposit such moneys with any other depository which is authorized to receive
them and is subject to supervision by public banking authorities.
SECTION 5.02. INVESTMENTS. The Trustee, at the written request and
written direction of the Company, shall invest any moneys held by it and not
needed for immediate application in Investment Obligations; provided that
specified amounts of Investment Obligations shall mature no later than required
to apply such amounts for purposes of this Indenture. The Trustee shall have no
liability with respect to making, holding, redeeming or selling any investments
made in accordance with such written directions.
Any such investments shall be held by or under the control of the
Trustee and, except as provided below shall be deemed at all times a part of the
fund for which they were made. The interest thereon and any profit realized from
such investments shall be credited to such fund, and any loss resulting from
such investments shall be charged to such fund. The Trustee shall sell and
reduce to cash a sufficient amount of such investments whenever (i) at the
written direction of the Company, the cash balance in the Project Fund is
insufficient to pay a requisition when presented or (ii) whenever the cash
balance in the Bond Fund is insufficient to pay the principal of, premium, if
any, and interest on the Bonds when due.
On the Business Day following the September 1st principal and interest
payment on the Bonds, the Trustee shall withdraw from the Debt Service Reserve
Fund, after determining the amount necessary to meet the Reserve Requirement,
the amount of investment earnings in the Fund and deposit the same in the
applicable Interest Account in the Bond Fund. In making its determination as to
the value of the Investment Obligations in the Debt Service Reserve Fund, the
Trustee shall value the investments marked to market value. Should the Trustee
determine that the amount in the Debt Service Reserve Fund is less than the
Reserve Requirement pursuant to a valuation described in this paragraph, the
Trustee shall promptly notify the
24
Company in writing of the amount of such deficiency and the Company shall
deposit the amount of such deficiency with the Trustee in accordance with
Section 4.10 hereof. Should the Trustee determine that the amount in the Debt
Service Reserve Fund exceeds the Reserve Requirement, the Trustee shall transfer
such excess to the Bond Fund.
In the absence of written instructions from the Company, the Trustee
shall invest any moneys held by it under the Indenture in the money market
mutual funds customarily utilized by the Trustee's corporate trust department in
the ordinary course of its corporate trust duties.
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ARTICLE VI
REDEMPTION OF BONDS
SECTION 6.01. BONDS SUBJECT TO REDEMPTION. The Initial Bonds are
subject to redemption prior to maturity as provided in the form of Initial Bonds
in EXHIBIT A and EXHIBIT B.
SECTION 6.02. BONDS SUBJECT TO REDEMPTION; SELECTION OF BONDS TO BE
CALLED FOR REDEMPTION.
(a) The Series A Bonds are subject to optional redemption, in whole at
any time or in part on any Interest Payment Date, at the redemption prices
(expressed as a percentage of the principal amount to be redeemed) as set forth
below:
DATE REDEMPTION PRICE
---- ----------------
September 1, 2015 to August 31, 2016 102%
September 1, 2016 to August 31, 2017 101%
Thereafter 100%
If less than all the Series A Bonds are to be redeemed, the Series A
Bonds shall be selected by the Trustee by lot, or in such other manner as the
Trustee may determine, for redemption.
The Authority shall direct the Trustee in writing to call the Series A
Bonds for optional redemption when and only when and to the extent that (a) the
Company has itself notified the Trustee and the Authority in writing of a
corresponding prepayment made or proposed to be made by redemption or otherwise
on the Series A Note, or (b) the Series A Note held by the Trustee has been
surrendered to the Company pursuant to Article XII hereof. The Authority shall
furnish the Company with a copy of the written direction to the Trustee.
The Series B Bonds are not subject to optional redemption.
(b) The Series A Bonds are subject to mandatory sinking fund redemption
prior to maturity, at a redemption price equal to 100% of the principal amount
thereof on September 1 of the years and in the amounts set forth below:
YEAR AMOUNT
---- ------
2006 $120,000
2007 125,000
2008 135,000
2009 140,000
2010 150,000
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2011 165,000
2012 170,000
2013 185,000
2014 195,000
2015 210,000
2016 220,000
2017 85,000
2018 90,000
2019 95,000
2020 105,000
2021 110,000
2022 115,000
2023 125,000
2024 130,000
2025 140,000
2026 150,000
2027 160,000
2028 170,000
2029 180,000
2030* 190,000
*Final Maturity
The Series B Bonds are subject to mandatory sinking fund redemption
prior to maturity, at a redemption price equal to 100% of the principal amount
thereof on September 1 of the years and in the amounts set forth below:
YEAR AMOUNT
---- ------
2006 $55,000
2007 60,000
2008 65,000
2009 70,000
2010 75,000
2011 80,000
2012* 90,000
*Final Maturity
SECTION 6.03. SPECIAL MANDATORY REDEMPTION - BREACH OF CERTAIN PUBLIC
PURPOSE COVENANTS. The Bonds are subject to special mandatory redemption in
whole as soon as practicable but no later than the 90th day following the
Authority's written notice to the Trustee and the Company that (i) the Company
has ceased to operate the Project or ceased to cause the Project to be operated
as an authorized project under the Act for twelve (12) consecutive months,
without first obtaining the prior written consent of the Authority or (ii) any
representation or warranty of the Company contained in the Agreement or in any
other document furnished to the Authority in connection with the Bonds proves to
have been false or misleading in any material respect when made. Upon the
occurrence of any such event, the Bonds
27
shall be redeemed by the Authority at a redemption price equal to 100% of the
principal amount thereof plus interest accrued thereon to the redemption date.
SECTION 6.04. PROCEDURE FOR REDEMPTION. When the Trustee shall be
required or authorized to redeem Bonds, upon sixty (60) days written notice by
the Authority or the Company (or such shorter period agreeable to the Trustee)
the Trustee shall, in accordance with the terms and provisions of the Bonds and
of this Indenture, select the Bonds to be redeemed and shall give notice, in the
name of the Authority or the Company, as the case may be, of the redemption of
Bonds, which notice shall specify the series, CUSIP numbers (if any), maturities
of and the interest rate borne by the Bonds to be redeemed, the redemption date
and the place or places where amounts due upon such redemption will be payable
and, if less than all of the Bonds of any like series and maturity are to be
redeemed, the letters and numbers or other distinguishing marks of such Bonds so
to be redeemed, and, in the case of a Bond to be redeemed in part only, such
notice shall also specify the portion of the principal amount thereof to be
redeemed. Such notice shall further state that on such date there shall become
due and payable upon each Bond to be redeemed the Redemption Price thereof, or
the Redemption Price of the specified portion of the principal thereof in the
case of a Bond to be redeemed in part only, together with interest accrued to
such date, and that from and after such date, if the aggregate of the amounts
then on deposit in the Bond Fund is sufficient to pay the Redemption Price
together with interest accrued to such date, interest thereon shall cease to
accrue and be payable. Such notice shall be given by the Trustee by mailing a
copy of such notice, postage prepaid, by first class mail, not less than thirty
(30) days nor more than forty-five (45) days before such redemption date, to the
registered owner of any Bond all or a portion of which is to be redeemed, at his
last address, if any, appearing upon the registry books, but such mailing shall
not be a condition precedent to such redemption and failure so to mail any such
notice shall not affect the validity of any proceedings for the redemption of
Bonds. Any notice mailed pursuant to this paragraph will be conclusively
presumed to have been given whether or not actually received by the addressee.
If, at the time of mailing of notice of any optional redemption, the
Company shall not have deposited with the Trustee moneys sufficient to redeem
all the Bonds called for redemption, the redemption notice may state that it is
conditional on the deposit of the redemption moneys with the Trustee not later
than the redemption date, and such notice shall be of no effect unless such
moneys are so deposited.
If there shall be so called for redemption less than all of a Bond, the
Authority shall execute and the Trustee shall authenticate and cause to be
delivered, upon the surrender of such Bond, without charge to the owner thereof,
for the unredeemed balance of the principal amount of the Bond so surrendered,
Bonds of like series, designation, interest rates and maturities in any of the
authorized denominations.
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On the Business Day preceding the redemption date specified in the
notice above provided for, the Company or the Authority, as the case may be,
shall, and it hereby covenants that it will, deposit with the Trustee an amount
of cash sufficient to effect the redemption of the Bonds specified in such
notice, except that such amount may be reduced to the extent that moneys then
held by the Trustee under any of the provisions of this Indenture are available
for such redemption. All moneys deposited by the Authority or the Company with
the Trustee or set apart by the Trustee under the provisions of this Indenture
for the redemption of Bonds shall be held in trust for the account of the
respective registered owners of the Bonds to be redeemed and applied in
accordance with the provisions of Section 13.03 hereof.
On the redemption date designated in such notice, the principal amount
of each Bond so to be redeemed, together with the accrued interest thereon to
such date, and such premium, if any, as is due and payable on such Bond upon
such redemption, shall become due and payable; and from and after such date
(such notice having been given in accordance with the provisions of this Section
6.04 and such deposit having been made or moneys set apart as aforesaid), then,
notwithstanding that any Bonds so called for redemption shall not have been
surrendered, no further interest shall accrue on any such Bond (or on the
portion thereof so to be redeemed). From and after such date of redemption (such
notice having been given in accordance with the provisions of this Section 6.04
and such deposit having been made or moneys set apart as aforesaid), or from and
after the date upon which such notice is mailed, if such notice shall state that
moneys to effect such redemption have been deposited with or set apart by the
Trustee, all such Bonds or such portions thereof, as the case may be, insofar as
such deposit shall have been made or moneys set apart as aforesaid, shall be
deemed to have been paid in full as between the Authority or the Company and the
respective Bondholders and shall no longer be deemed to be Outstanding
hereunder, and the Authority or the Company shall be under no further liability
in respect thereof.
The Trustee agrees to provide timely notice to the Authority that some
or all of the Bonds have been redeemed or paid.
SECTION 6.05. PAYMENT OF REDEMPTION PRICE. If notice of redemption has
been duly mailed or duly waived by the Holders of all Bonds called for
redemption and the redemption moneys have been duly deposited with the Trustee,
then in either such case the Bonds called for redemption shall be payable on the
redemption date at the applicable Redemption Price. Payment of the Redemption
Price together with accrued interest shall be made by the Trustee, out of
Revenues or other funds deposited for the purpose, to or upon the order of the
Holders of the Bonds called for redemption upon surrender of such Bonds if
redeemed in full.
Upon the payment of the redemption price of Bonds being redeemed, each
check or other transfer of funds issued by the Trustee for such purpose shall
bear a description of the issue and maturity of the Bonds being redeemed with
the proceeds of such check or other transfer.
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ARTICLE VII
COVENANTS OF THE AUTHORITY
SECTION 7.01. PAYMENT OF PRINCIPAL OF AND INTEREST ON BONDS. The
Authority shall promptly pay or cause to be paid the principal or Redemption
Price of, and the interest on, every Bond issued hereunder according to the
terms thereof, but shall be required to make such payment or cause such payment
to be made only out of Revenues. The Authority shall appoint one or more paying
agents for such purpose, each such agent to be a national banking association, a
state bank, a bank and trust company or a trust company. The Authority hereby
appoints The Bank of New York as Paying Agent, which shall from time to time
designate a corporate trust office of such agent as the place of payment, such
appointment and designation to remain in effect until notice of change is filed
with the Trustee.
SECTION 7.02. CORPORATE EXISTENCE; COMPLIANCE WITH LAWS. The Authority
shall maintain its corporate existence; shall use its best efforts to maintain
and renew all its rights, powers, privileges and franchises; and shall comply
with all valid and applicable laws, acts, rules, regulations, permits, orders,
requirements and directions of any legislative, executive, administrative or
judicial body.
SECTION 7.03. ENFORCEMENT OF AGREEMENT; NOTICE OF DEFAULT. The
Authority shall give prompt written notice to the Trustee of any default known
to the Authority under the Agreement or any amendment or supplement thereto.
SECTION 7.04. FURTHER ASSURANCES. Except to the extent otherwise
provided in this Indenture, the Authority shall not enter into any contract or
take any action by which the rights of the Trustee or the Bondholders may be
impaired and shall, from time to time, execute and deliver such further
instruments and take such further action as may be required to carry out the
purposes of this Indenture.
SECTION 7.05. FINANCING STATEMENTS. The Authority shall cause this
Indenture or a financing statement relating thereto to be filed, in such manner
and at such places as may be required by law fully to protect the security of
the Holders of the Bonds and the right, title and interest of the Trustee in and
to the Trust Estate or any part thereof. The Company shall execute or cause to
be executed, recorded and filed any and all further instruments, including
continuation statements, as may be required by law for such protection of the
interests of the Bondholders, and shall furnish satisfactory evidence to the
Trustee of filing and refiling of such instruments and of every additional
instrument which shall be necessary to preserve the lien of this Indenture upon
the Trust Estate or any part thereof until the principal, redemption premium, if
any, and interest on the Bonds issued hereunder shall have been paid. The
Trustee shall cooperate with the Company regarding the filing of continuation
statements and shall provide notice to the Company of the necessity to file, in
order to preserve and protect the security of the
30
owners of the Bonds, within thirty (30) days of the date by which a continuation
statement must be so filed for such purposes but the Trustee shall not be liable
for any failure to provide such notice.
SECTION 7.06. INTENTIONALLY OMITTED
SECTION 7.07. CREATION OF LIENS. The Authority will not create or
suffer to be created any lien or charge upon the Trust Estate or any part
thereof, except the lien, charge and pledge created by this Indenture.
SECTION 7.08. EXCLUSION OF INTEREST ON THE BONDS FROM GROSS INCOME. The
Authority agrees that it will not take any action, nor omit to make any action,
which may cause the interest payable on the Tax-exempt Bonds to become
includable in the gross income of the Holders thereof for federal income tax
purposes.
SECTION 7.09. CONTINUING DISCLOSURE. The Company has covenanted in
Section 6.25 of the Agreement to deliver to the Trustee and the Authority a
written undertaking (the "Continuing Disclosure Agreement"), in a form
acceptable to the Trustee and the Authority and satisfying the requirements of
Rule 15c2-12(b)(5) (codified at 17 C.F.R. Section 240.15c2-12), as the same may
be further amended, supplemented and officially interpreted from time to time,
or any successor provision thereto ("Rule 15c2-12"), promulgated by the
Securities and Exchange Commission pursuant to the Securities Exchange Act of
1934, as amended and supplemented (codified as of the date hereof at 15 U.S.C.
77 ET SEQ.) in the event that Rule 15c2-12 requires such an undertaking. The
Trustee hereby covenants that it will execute and deliver the Continuing
Disclosure Agreement to the Company and the Authority. Neither the Authority nor
the Trustee shall have any duty to determine the sufficiency of the Continuing
Disclosure Agreement under Rule 15c2-12 and neither the Authority nor the
Trustee shall incur any liability arising out of their acceptance of the form of
the Continuing Disclosure Agreement.
SECTION 7.10. EVENT OF DEFAULT. Notwithstanding anything in this
Indenture or in any of the other documents executed in connection with the
issuance of the Bonds to the contrary, neither the Trustee nor the registered
owners shall have the right to waive an Event of Default under any of the
documents executed in connection with the issuance of the Bonds which arises out
of a violation of a Reserved Right without the prior written consent of the
Authority, which it shall give in its sole and complete discretion.
Notwithstanding anything herein or in any of the documents executed in
connection with the issuance of the Bonds to the contrary, nothing herein shall
affect the Authority's unconditional right to specifically enforce its Reserved
Rights.
SECTION 7.11. IMMUNITY OF AUTHORITY. In the exercise of the powers of
the Authority and its members, officers, employees or agents under this
Indenture and the Agreement, and including without limitation the application of
moneys, the investment of funds, the assignment or other disposition of the
Trust Estate in the event of default by the Company, neither the Authority nor
31
its members, officers employees or agents shall be accountable to the registered
owners of the Bonds, the Trustee or the Company for any action taken or omitted
by it or them in good faith and believed by it or them to be authorized or
within the discretion or rights or powers conferred. The Authority and its
members, officers, employees and agents shall be protected in its or their
acting upon any paper or document believed by it or them to be genuine, and it
and they may conclusively rely upon the advice of counsel and may (but need not)
require further evidence of any fact or matter before taking any action.
SECTION 7.12. AUTHORITY AND TRUSTEE ENTITLED TO INDEMNITY. (a) Pursuant
to Section 6.10 of the Agreement, the Company has agreed to indemnify the
Authority, any person who "controls" the Authority within the meaning of Section
15 of the Securities Act of 1933, as amended, or Section 20 of the Securities
Exchange Act of 1934, as amended and any member, director, officer, official,
agent, attorney and employee of the Authority, the Trustee or the State (herein
the "Indemnified Parties").
(b) The Company shall not be obligated to reimburse any expense or to
indemnify against any loss or liability incurred by an Indemnified Party through
its own gross negligence or willful misconduct.
(c) To secure the Company's indemnification payment obligation, the
Indemnified Parties shall have a lien prior to the lien created by this
Indenture for the benefit of the owners of the Bonds on all money or property
held or collected by the Trustee other than money in the Rebate Fund and money
held for the payment of the principal or redemption price of any Bonds, and
interest on any Bonds previously matured or called for redemption in accordance
with this Indenture, which shall be held for the benefit of the registered
owners of such Bonds only. Such obligations shall survive the satisfaction and
discharge of this Indenture.
(d) When an Indemnified Party incurs expenses or renders services after
an Event of Default, the expenses and compensation for the services are intended
to constitute expenses of administration under any applicable bankruptcy law.
SECTION 7.13. NEITHER AUTHORITY NOR TRUSTEE RESPONSIBLE FOR INSURANCE,
TAXES, EXECUTION OF INDENTURE, ACTS OF THE AUTHORITY OR APPLICATION OF MONEYS
APPLIED IN ACCORDANCE WITH THIS INDENTURE. (a) Neither the Authority nor the
Trustee shall be under any obligation to effect or maintain insurance or to
renew any policies of insurance or to inquire as to the sufficiency of any
policies of insurance carried by the Company, or to report, or make or file
claims or proof of loss for, any loss or damage insured against or which may
occur, or to keep itself informed or advised as to the payment of any taxes or
assessments, or to require any such payment to be made. Neither the Authority
nor the Trustee shall have responsibility in respect of the sufficiency of the
security provided by this Indenture. Neither the Authority nor the Trustee shall
be under any obligation to see that any duties herein imposed upon any party
other than itself, or any covenants herein
32
contained on the part of any party other than itself to be performed, shall be
done or performed, and neither the Authority nor the Trustee shall be under any
liability for failure to see that any such duties or covenants are so done or
performed.
(b) Neither the Authority nor the Trustee shall be liable or
responsible because of the failure of the Authority or of any of its employees
or agents to make any collections or deposits or to perform any act herein
required of the Authority or because of the loss of any moneys arising through
the insolvency or the act or default or omission of any other depositary in
which such moneys shall have been deposited under the provisions of this
Indenture. Neither the Authority nor the Trustee shall be responsible for the
application of any of the proceeds of the Bonds or any other moneys deposited
with it and paid out, withdrawn or transferred hereunder if such application,
payment, withdrawal or transfer shall be made in accordance with the provisions
of this Indenture.
(c) The immunities and exemptions from liability of the Authority and
the Trustee hereunder shall extend to their respective directors, members,
attorneys, officers, employees and agents.
SECTION 7.14. AUTHORITY AND TRUSTEE MAY RELY ON CERTIFICATES. The
Authority and the Trustee shall be protected and shall incur no liability in
acting or proceeding, or in not acting or not proceeding, in good faith and in
accordance with the terms of this Indenture, upon any resolution, order, notice
request, consent, waiver, certificate, statement, affidavit, requisition, bond
or other paper or document which it shall in good faith believe to be genuine
and to have been adopted or signed by the proper board or person or to have been
prepared and furnished pursuant to any of the provisions of the Agreement or
this Indenture, or upon the written opinion of any attorney, engineer,
accountant or other expert believed by it to be qualified in relation to the
subject matter, and neither the Authority nor the Trustee shall be under any
duty to make any investigation or inquiry as to any statements contained or
matters referred to in any such instrument.
SECTION 7.15. FURTHER ASSURANCES. At the expense of the Company, the
Authority and the Trustee will make, execute and deliver any and all such
further indentures, instruments and assurances as may be reasonably necessary or
proper to carry out the intention or to facilitate the performance of this
Indenture and for the better assuring and confirming unto the Holders of the
Bonds of the rights and benefits provided in this Indenture.
33
ARTICLE VIII
DEFAULTS AND REMEDIES
SECTION 8.01. EVENTS OF DEFAULT. Each of the following shall be
considered an Event of Default hereunder:
(a) payment of the principal of the Bonds and Redemption Price shall
not be made when the same shall become due and payable, whether at maturity,
upon redemption or otherwise; or
(b) payment of an installment of interest on any Bonds shall not be
made when the same shall become due and payable; or
(c) the occurrence of an "Event of Default" under a Note or the
Agreement or Mortgage, which shall continue uncured for the period of any
applicable notice and cure period or has not otherwise been waived or rescinded
by the Trustee, unless the Company is diligently attempting to remedy such
default, in which case the Company shall be entitled to such additional time to
do so as set forth in a written direction of the Authority to the Trustee, but
in no event exceeding ninety (90) additional days; or
(d) the Authority shall default (other than an Event of Default listed
as (a),(b) or (c) above) in the due and punctual performance of any covenant,
condition, agreement or provision contained in the Bonds or in this Indenture on
the part of the Authority to be performed, and such default shall continue for
thirty (30) days after written notice by registered mail specifying such default
and requiring the same to be remedied shall have been given to the Authority and
the Company by the Trustee. The Significant Bondholders shall be provided with
copies of any such notice (of events of which the Trustee is aware) within ten
(10) days.
If any of the foregoing shall occur or be continuing, the Trustee
(a) may, and upon written request of the Holders of at least fifty per
cent (50%) of the aggregate principal amount of all Bonds then Outstanding
shall, by written notice given to the Authority and the Company and provided
that the default has not theretofore been cured, declare the principal of, and
all accrued interest on, all Bonds then Outstanding to be due and payable
immediately, and upon such declaration the same shall become due and payable
immediately at the place of payment provided in the said notice, anything in
this Indenture or in said Bonds to the contrary notwithstanding. Upon an Event
of Default under Section 7.01(g) of the Agreement, the Bonds shall automatically
be deemed to have been accelerated without further notice from or action taken
by the Trustee.
The above provisions, however, are subject to the condition that if,
after the principal of all Bonds then Outstanding shall have been so declared to
be due and payable, all arrears of interest upon such Bonds, and interest on
overdue installments of interest (to the extent permitted by law) at the rate
34
per annum borne by the Bonds and the principal and redemption premium, if any,
on all Bonds then Outstanding which shall have become due and payable otherwise
than by acceleration, and all other sums payable under this Indenture, except
the principal of, and interest on, the Bonds which by such declaration shall
have become due and payable, shall have been paid by or on behalf of the
Authority, all other Events of Default hereunder shall have been cured, and the
Authority also shall have performed all other things in respect of which it may
have been in default under this Indenture, and shall have paid the reasonable
fees and expenses of the Trustee and of the Holders of such Bonds, including
reasonable attorneys' fees paid or incurred, then and in every such case, the
Holders of at least fifty per cent (50%) in aggregate principal amount of the
Bonds then Outstanding, by written notice to the Trustee, may rescind and annul
such declaration, whereupon the Trustee shall give written notice thereof to the
Authority and the Company by registered mail. Any such rescission and annulment
shall be binding upon all Bondholders, but no such rescission and annulment
shall extend to or affect any subsequent default or impair any right or remedy
consequent thereon. Immediately upon such annulment, the Trustee shall cancel,
by notice to the Company, any demand for redemption made by the Trustee pursuant
to Section 8.03;
(b) may, and upon written request of the Holders of at least fifty per
cent (50%) of the aggregate principal amount of all Bonds then Outstanding
shall, transfer any balance remaining in the Project Fund into the Bond Fund.
SECTION 8.02. ENFORCEMENT OF AGREEMENT. The Authority agrees that the
Trustee, subject to the provisions of the Agreement and this Indenture reserving
the Reserved Rights to the Authority and respecting actions by the Trustee in
its name or where necessary to validly assert the rights of the Bondholders, AS
ASSIGNEE OF THE AUTHORITY,(but NOT in the name of the Authority) may enforce all
rights of the Authority and all obligations of the Company under and pursuant to
the Agreement for and on behalf of the registered owners whether or not the
Authority is in default hereunder.
SECTION 8.03. JUDICIAL PROCEEDINGS BY TRUSTEE. Upon the happening and
continuance of any Event of Default, then and in every such case the Trustee in
its discretion may, and upon the written request of the Holders of at least
fifty per centum (50%) of the aggregate principal amount of the Bonds then
Outstanding and receipt of indemnity to its satisfaction shall, and upon written
request of the Authority if an Event of Default occurs pursuant to Section
8.01(c) of this Indenture shall:
(a) exercise any and all rights or powers permitted to be taken or
exercised by it or by the Authority under this Indenture, the Agreement, the
Bonds, the Notes, and any agreements related thereto;
(b) by mandamus, or other suit, action or proceeding at law or in
equity, enforce all rights of the Bondholders and require the Company to carry
out any agreements with or for the benefit of the Bondholders and to perform its
or their duties under the Act, the Bonds, the Notes, the Agreement and this
Indenture;
35
(c) bring suit upon the Bonds;
(d) by action or suit in equity require the Authority to account as if
it were the trustee of an express trust for the Bondholders;
(e) by action or suit in equity enjoin any acts or things which may be
unlawful or in violation of the rights of the Bondholders;
(f) exercise such rights as it may have as holder of the Notes,
including the right to accelerate payment of the Notes;
(g) exercise such rights as it may have as holder of the Mortgage and
Assignment of Leases, including the right to seek the appointment of a receiver
for the Project; or
(h) exercise, with respect to the security interest granted hereunder,
all of the rights and remedies of a secured party under the State Uniform
Commercial Code.
SECTION 8.04. DISCONTINUANCE OR ABANDONMENT OF PROCEEDINGS. In case any
proceeding taken by the Trustee on account of any default shall have been
discontinued or abandoned for any reason, or shall have been determined
adversely to the Trustee, then and in every such case the Authority, the Trustee
and the Bondholders shall be restored to their former positions and rights under
this Indenture, respectively, and all rights, remedies and powers of the Trustee
shall continue as though no such proceeding had been taken.
SECTION 8.05. BONDHOLDERS MAY DIRECT PROCEEDINGS. The Holders of a
majority in principal amount of the Bonds Outstanding hereunder shall have the
right, after furnishing indemnity satisfactory to the Trustee, to direct the
method and place of conducting all remedial proceedings by the Trustee
hereunder, provided that such direction shall not be in conflict with any rule
of law or with this Indenture or unduly prejudice the rights of minority
Bondholders.
SECTION 8.06. LIMITATIONS ON ACTIONS BY BONDHOLDERS. No Bondholder
shall have any right to pursue any remedy hereunder unless:
(a) the Trustee shall have been given written notice of an Event of
Default;
(b) the Holders of at least fifty per cent (50%) in aggregate principal
amount of all Bonds then Outstanding shall have requested the Trustee, in
writing, to exercise the powers hereinabove granted or to pursue such remedy in
its or their name or names;
(c) the Trustee shall have been offered indemnity satisfactory to it
against costs, expenses and liabilities; and
36
(d) the Trustee shall have failed to comply with such request within a
reasonable time.
Notwithstanding the foregoing provisions of this Section 8.06 or any
other provision of this Indenture, the obligation of the Authority shall be
absolute and unconditional to pay hereunder, but solely from the Revenues and
other funds pledged under this Indenture, the principal or Redemption Price of,
and interest on, the Bonds to the respective Holders thereof on the respective
due dates thereof, and nothing herein shall affect or impair the right of
action, which is absolute and unconditional, of such Holders to enforce such
payment.
SECTION 8.07. TRUSTEE MAY ENFORCE RIGHTS WITHOUT POSSESSION OF BONDS.
All rights under this Indenture and the Bonds may be enforced by the Trustee
without the possession of any Bonds at the trial or other proceedings relative
thereto, and any proceeding instituted by the Trustee shall be brought in its
name for the ratable benefit of the Holders of the Bonds.
SECTION 8.08. REMEDIES NOT EXCLUSIVE. No remedy herein conferred is
intended to be exclusive of any other remedy or remedies, and each remedy is in
addition to every other remedy given hereunder or now or hereafter existing at
law or in equity or by statute.
SECTION 8.09. DELAYS AND OMISSIONS NOT TO IMPAIR RIGHTS. No delays or
omission in respect of exercising any right or power accruing upon any default
shall impair such right or power or be a waiver of such default, and every
remedy given by this Article VIII may be exercised from time to time and as
often as may be deemed expedient.
SECTION 8.10. APPLICATION OF MONEYS IN EVENT OF DEFAULT. Any moneys
received by the Trustee under this Article VIII shall be applied:
First: to the payment of the costs of the Trustee, including
Counsel fees, any disbursements of the Trustee and its reasonable
compensation; and
Second: to the payment of principal or Redemption Price (as
the case may be) and interest then owing on the Bonds, and in case such
moneys shall be insufficient to pay same in full, then to the payment
of principal and interest ratably without preference or priority of any
installment of principal or interest over any other installment of
principal or interest; and
Third: to the payment of costs and expenses of the Authority,
including counsel fees, incurred in connection with the Event of
Default; and
Fourth: to the payment of any other amounts due under this
Indenture or the Agreement.
37
The surplus, if any, shall be paid to the Company or the person
lawfully entitled to receive the same as a court of competent jurisdiction may
direct.
SECTION 8.11. TRUSTEE'S RIGHT TO RECEIVER; COMPLIANCE WITH ACT. As
provided by the Act, the Trustee shall be entitled as of right to the
appointment of a receiver; and the Trustee, the Bondholders and any receiver so
appointed shall have such rights and powers and be subject to such limitations
and restrictions as are contained in the Act.
SECTION 8.12. TRUSTEE AND BONDHOLDERS ENTITLED TO ALL REMEDIES UNDER
ACT. It is the purpose of this Article to provide such remedies to the Trustee
and Bondholders as may be lawfully granted under the provisions of the Act or
any applicable statute or available at law or in equity; but should any remedy
herein granted be held unlawful, the Trustee and the Bondholders shall
nevertheless be entitled to every remedy provided by the Act. It is further
intended that, insofar as lawfully possible, the provisions of this Article
shall apply to and be binding upon any trustee or receiver appointed under the
Act.
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ARTICLE IX
THE TRUSTEE
SECTION 9.01. ACCEPTANCE OF TRUST. The Trustee accepts and agrees to
execute the trusts hereby created, but only upon the additional terms set forth
in this Article, to all of which the parties hereto and the Bondholders agree.
SECTION 9.02. NO RESPONSIBILITY, ETC. The recitals, statements and
representations in this Indenture or in the Bonds, save only the Trustee's
certificate of authentication upon the Bonds, have been made by the Authority
and not by the Trustee; and the Trustee shall be under no responsibility for the
correctness thereof.
SECTION 9.03. TRUSTEE MAY ACT THROUGH AGENTS; ANSWERABLE ONLY FOR
WILLFUL MISCONDUCT OR NEGLIGENCE. The Trustee may exercise any powers hereunder
and perform any duties required of it through attorneys, agents, officers or
employees, and shall be entitled to rely upon the advice of Counsel concerning
all questions hereunder. The Trustee shall not be answerable for the default or
misconduct of any attorney or agent selected by it with reasonable care. Except
as otherwise provided herein, the Trustee shall not be answerable for the
exercise of any discretion or power under this Indenture nor for anything
whatever in connection with the trust hereunder, except only its own willful
misconduct or negligence.
SECTION 9.04. COMPENSATION. In the Agreement, the Company has agreed to
pay the Trustee reasonable compensation for its services hereunder, and also all
its reasonable expenses and disbursements, including reasonable attorneys' fees.
Such obligations of the Company pursuant to Sections 7.05 and 8.04 of the
Agreement are secured by a first lien security interest in the Trust Estate
superior to the interests of the Holders hereunder. With regard to its
compensation, however, except when an Event of Default exists hereunder, the
Trustee agrees to exercise any rights pursuant to the preceding sentence only
upon forty-five (45) days notice to the Company that such amounts are owed.
SECTION 9.05. NOTICE OF DEFAULT; RIGHT TO INVESTIGATE. The Trustee
shall, within ten (10) days for Significant Bondholders and within ninety (90)
days for all Bondholders after the occurrence thereof, give written notice by
first class mail to registered Holders of Bonds of all defaults known to the
Trustee, unless such defaults have been remedied (the term "defaults" for
purposes of this Section and Section 9.06 being defined to include the events
specified in clauses (a) through (d) of Section 8.01). The Trustee shall not be
deemed to have notice of any default other than under clauses (a) and (b) of
Section 8.01, unless it has actual notice or it is notified in writing of such
default by any of the Holders of the Bonds then Outstanding or by the Authority.
The Trustee may, however, at any time request that the Authority provide to the
Trustee full information of which the Authority has actual knowledge (without
undertaking an investigation) as to the performance of any covenant hereunder;
and, if information satisfactory to it is not forthcoming,
39
the Trustee may make or cause to be made, at the expense of the Company, an
investigation into the affairs of the Company related to this Indenture.
SECTION 9.06. OBLIGATION TO ACT ON DEFAULTS. If any Event of Default
shall have occurred and be continuing, the Trustee shall exercise such of the
rights and remedies vested in it by this Indenture and shall use the same degree
of care in their exercise as a prudent person would exercise or use in the
circumstances in the conduct of his or her own affairs; provided, that if in the
opinion of the Trustee such action may tend to involve expense or liability, it
shall not be obligated to take such action unless it is furnished with indemnity
satisfactory to it.
SECTION 9.07. RELIANCE ON REQUISITION, ETC. In addition to the
provisions of Section 9.03 with respect to the Trustee's ability to rely on an
opinion of counsel, the Trustee may act on any requisition, resolution, notice,
telegram, request, consent, waiver, certificate, statement, affidavit, voucher,
bond, or other paper or document which it in good faith believes to be genuine
and to have been passed or signed by the proper persons or to have been prepared
and furnished pursuant to any of the provisions of this Indenture; and the
Trustee shall be under no duty to make any investigation as to any statement
contained in any such instrument, but may accept the same as conclusive evidence
of the accuracy of such statement.
SECTION 9.08. TRUSTEE MAY DEAL IN BONDS; OTHER FINANCIAL TRANSACTIONS.
The Trustee may in good faith buy, sell, own, hold and deal in any of the Bonds
and may join in any action which any Bondholders may be entitled to take with
like effect as if the Trustee were not a party to this Indenture. The Trustee
may also engage in or be interested in any financial or other transaction with
the Authority or the Company; provided that if the Trustee determines that any
such relation is in conflict with its duties under this Indenture, it shall
eliminate the conflict or resign as Trustee.
SECTION 9.09. NO DUTY TO RENEW INSURANCE. The Trustee shall be under no
duty to effect or to renew any insurance policy nor shall it incur any liability
for the failure of the Company to effect or renew insurance or to report or file
claims of loss thereunder.
SECTION 9.10. INTENTIONALLY OMITTED.
SECTION 9.11. RESIGNATION OF TRUSTEE. The Trustee may resign and be
discharged of the trusts created by this Indenture by written resignation filed
with the Authority (and a copy to the Company) not less than sixty (60) days
before the date when it is to take effect. The Trustee shall also mail a copy of
such written resignation, when filed with the Authority, to the registered owner
of any Bond at his last address appearing on the registry books. Such
resignation shall take effect only upon the appointment of a successor trustee
and the transfer of the Collateral to such successor.
SECTION 9.12. REMOVAL OF TRUSTEE. Any Trustee hereunder may be removed
at any time by an instrument appointing a successor to the Trustee so
40
removed, (a) executed by the Holders of a majority in principal amount of the
Bonds then Outstanding and filed with the Trustee and the Authority or (b)
provided no uncured Event of Default has occurred, executed by the Company and
filed with the Trustee and the Authority.
SECTION 9.13. APPOINTMENT OF SUCCESSOR TRUSTEE. If the Trustee or any
successor trustee resigns or is removed or dissolved, or if its property or
business is taken under the control of any state or federal court or
administrative body, a vacancy shall forthwith exist in the office of the
Trustee, and the Authority at direction of the Company shall appoint a successor
and such successor shall mail notice of such appointment to the registered owner
of any Bond by first class mail at his last address appearing on the registry
books. If the Authority fails to make such appointment promptly, the holders of
a majority in principal amount of the Bonds then Outstanding may do so. If the
holders of a majority in principal amount of Bonds fail to appoint a successor
trustee within thirty (30) days, the Trustee may seek a court of competent
jurisdiction to have a successor trustee appointed.
SECTION 9.14. QUALIFICATION OF SUCCESSOR. A successor trustee shall be
a national banking association with trust powers, a state bank or a bank and
trust company or a trust company or if there be no bank or trust company willing
to accept the trust on reasonable and customary terms then such Trustee as may
be appointed by a Court of competent jurisdiction, such successor trustee to
have a minimum capital and surplus requirement of $50,000,000.
SECTION 9.15. INSTRUMENTS OF SUCCESSION. Any such successor trustee
shall execute, acknowledge and deliver to the Authority an instrument accepting
such appointment hereunder; and thereupon such successor trustee, without any
further act, deed or conveyance, shall become fully vested with all the estates,
properties, rights, powers, trusts, duties and obligations of its predecessor in
the trust hereunder, with like effect as if originally named Trustee herein. The
Trustee ceasing to act hereunder shall pay over to the successor trustee all
moneys held by it hereunder; and, upon request of the successor trustee, the
Trustee ceasing to act and the Authority shall execute and deliver an instrument
transferring to the successor trustee all the estates, properties, rights,
powers and trusts hereunder of the Trustee ceasing to act.
SECTION 9.16. MERGER OF TRUSTEE. Any corporation into which any Trustee
hereunder may be converted or merged or with which it or any successor to it may
be consolidated or to which it may sell or transfer its assets and corporate
trust business as a whole or substantially as a whole or any corporation
resulting from any such conversion, sale, merger, consolidation or transfer to
which any Trustee hereunder shall be a party, IPSO FACTO, shall be the successor
trustee under this Indenture, and vested with all of the trusts, powers, duties,
discretions, immunities, privileges and other matters as was its predecessor,
without the execution or filing of any paper or any
41
further act on the part of the parties hereto, anything herein to the contrary
notwithstanding.
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ARTICLE X
EXECUTION OF INSTRUMENTS BY BONDHOLDERS
AND PROOF OF OWNERSHIP OF BONDS
SECTION 10.01. OWNERSHIP OF BONDS. Any request, direction, consent or
other instrument in writing required or permitted by this Indenture to be signed
or executed by Bondholders may be in any number of concurrent instruments of
similar tenor and may be signed or executed by such Bondholders in person or by
agent appointed by an instrument in writing. Proof of the execution of any such
instrument and of the ownership of Bonds shall be sufficient for any purpose of
this Indenture and shall be conclusive in favor of the Trustee and any Paying
Agent with regard to any action taken, suffered or omitted by any of them under
such instrument if made in the following manner:
(a) The fact and date of the execution by any person of any such
instrument may be proved by the certificate of any officer in any jurisdiction
who, by the laws thereof, has power to take acknowledgments within such
jurisdiction, to the effect that the person signing such instrument acknowledged
before him the execution thereof, or by an affidavit of a witness to such
execution; and
(b) The ownership of the Bonds shall be proved by the Bond Register.
Nothing contained in this Article X shall be construed as limiting the
Trustee to such proof, it being intended that the Trustee may accept any other
evidence of the matters in this Article X stated which to it may seem
sufficient. Any request or consent of the Holder of any Bond shall bind every
future Holder of the same Bond and any Bond or Bonds issued in exchange or
substitution therefor or upon the registration of transfer thereof in respect of
anything done by the Trustee in pursuance of such request or consent.
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ARTICLE XI
AMENDMENTS AND SUPPLEMENTS
SECTION 11.01. AMENDMENTS AND SUPPLEMENTS WITHOUT BONDHOLDERS' CONSENT.
This Indenture may be amended or supplemented at any time and from time to time,
without the consent of the Bondholders, by a Supplemental Indenture executed by
the Authority and the Trustee, for one or more of the following purposes:
(a) to add additional covenants of the Authority; and
(b) for any purpose not inconsistent with the terms of this
Indenture, including, without limitation, the issuance of Additional
Bonds, or to cure any ambiguity or to correct or supplement any
provision contained herein or in any Supplemental Indenture which may
be defective or inconsistent with any other provision contained herein
or in any Supplemental Indenture, or to make such other provisions in
regard to matters or questions arising under this Indenture which shall
not be inconsistent with the provisions of this Indenture and which
shall not adversely affect the interests of the Holders of the Bonds.
SECTION 11.02. AMENDMENTS WITH BONDHOLDERS' CONSENT. This Indenture may
be amended from time to time, except with respect to (a) the principal,
Redemption Price, or interest payable upon any Bonds, (b) the Interest Payment
Dates, the date of maturity or the redemption provisions of any Bonds, (c)
provisions relating to the aggregate principal amount of Bonds required for
consent to such Supplemental Indenture, and (d) the security interest and lien
granted under this Indenture, (except as provided in Section 6.16 of the
Agreement and except to add additional security) by a Supplemental Indenture and
approved by the Holders of at least fifty-one per centum (51%) in aggregate
principal amount of the Bonds then Outstanding; provided that any dilution of
the security for the Loans shall require the consent of one-hundred percent
(100%) of the Holders. This Indenture may be amended from time to time in any
manner by a Supplemental Indenture consented to by the Company and approved by
the Holders of all the Bonds then Outstanding. It shall not be necessary for the
consent of the Holders under this Section 11.02 to approve the particular form
of any proposed Supplemental Indenture but it shall be sufficient if such
consent shall approve the substance thereof.
SECTION 11.03. COMPANY CONSENT REQUIRED. A Supplemental Indenture shall
not become effective unless the Company delivers to the Trustee its written
consent to the amendment or supplement or unless the Company fails to deliver a
written objection to the Trustee within fifteen (15) days after receipt by the
Company of a proposed form of such amendment or supplement.
SECTION 11.04. AMENDMENT OF AGREEMENT. The Agreement may be amended or
supplemented from time to time, without the consent of the Bondholders, by a
supplemental Agreement executed by the Authority and the Company, for one or
more of the following purposes:
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(a) to add additional covenants of the Company; and
(b) for any purpose not inconsistent with the terms of the
Agreement, including, without limitation, the issuance of Additional
Bonds, or to cure any ambiguity or to correct or supplement any
provision contained therein or in any supplemental agreement which may
be defective or inconsistent with any other provision contained therein
or in any supplemental agreement, or to make such other provisions in
regard to matters or questions arising under the Agreement which shall
not be inconsistent with the provisions of the Agreement and which
shall not adversely affect the interests of the Holders of the Bonds.
If the Authority and the Company propose to amend the Agreement in such
a way as would affect the interests of Bondholders and, therefore, would require
the consent of the Trustee as provided in this Section 11.04, the Authority
shall file with the Trustee a copy of the proposed amendment. The Trustee shall
notify Bondholders of the proposed amendment and may consent thereto with the
consent of at least fifty-one per centum (51%) in aggregate principal amount of
the Bonds then Outstanding and each Significant Bondholder; provided, that the
Trustee shall not, without the unanimous consent of the Holders of all Bonds
then Outstanding, consent to any amendment which would (a) decrease the amounts
payable on the Notes, (b) change the maturity date or the date of payment of any
installment of interest under the Notes or change any of the payment provisions
of the Notes, or (c) provisions relating to the aggregate principal amount of
the Bonds required for consent to such amendment.
SECTION 11.05. TRUSTEE AUTHORIZED TO JOIN IN AMENDMENTS AND
SUPPLEMENTS; RELIANCE ON COUNSEL. The Trustee is authorized to join with the
Authority in the execution and delivery of any Supplemental Indenture or
amendment permitted by this Article XI and in so doing shall be fully protected
by an opinion of Counsel that such Supplemental Indenture or amendment is so
permitted and has been duly authorized by the Authority and does not adversely
affect the interests of the Holders of the Bonds and that all things necessary
to make it a valid and binding agreement have been done. The Authority agrees to
deliver to the Trustee, prior to the execution of a Supplemental Indenture or a
supplemental Agreement, an opinion of Bond Counsel to the effect that such
amendment or supplement will not have an adverse effect on the exemption of
interest on the Bonds from inclusion in gross income of the Holders.
Notwithstanding anything contained herein to the contrary, there shall
be no amendments or supplements to this Indenture or any Supplemental Indenture
which increase the duties or responsibilities of any fiduciary under this
Indenture or any Supplemental Indenture, without the express prior written
consent of such fiduciary.
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ARTICLE XII
DEFEASANCE
SECTION 12.01. DEFEASANCE. (a) When principal or Redemption Price (as
the case may be) of, and interest on, all Bonds issued hereunder have been paid,
or provision has been made for payment of the same when due in the manner
described in this Section 12.01, whether at maturity or upon redemption,
acceleration, or otherwise, together with all other sums payable hereunder or
under the Agreement, the right, title and interest of the Trustee shall
thereupon cease (except with respect to moneys or securities held by the Trustee
hereunder for the payment of the principal or Redemption Price (as the case may
be) of, and interest on, the Bonds and other amounts) and the Trustee, on
written demand of the Authority, shall release the lien of this Indenture and
shall execute documents to evidence such release as may be reasonably required
by the Authority, shall surrender the Notes to the Company and shall turn over
to the Company or to such person, body or authority as may be entitled to
receive the same all balances then held by it hereunder.
(b) Provision for the payment of Bonds shall be deemed to have been
made upon the delivery to the Trustee of (i) cash in an amount which, when added
to any other moneys held by the Trustee and available for such payment, would be
sufficient to make all payments specified above, or (ii) Government Obligations
which are non-callable prior to the stated maturity thereof and having stated
maturities arranged so that the principal of and interest becoming due and
payable on such Government Obligations will, under any and all circumstances
(and without further investment or reinvestment of either the principal amount
thereof or the interest earned thereon), be sufficient (as confirmed by a
nationally recognized firm of public accountants) to make all such payments, or
(iii) any combination of such cash and such Government Obligations the amounts
of which and interest thereon, when due, are or will be, in the aggregate,
sufficient to make all such payments, and in each case, the delivery to the
Trustee of (a) an opinion of Bond Counsel to the effect that such defeasance is
permitted under this Section 12.01 and (b) an opinion of Counsel selected by the
Trustee and reasonably acceptable to the Company as to such other matters as the
Trustee or the Holders of at least a majority in aggregate principal amount of
the Outstanding Bonds may reasonably request. Neither the obligations nor moneys
deposited with the Trustee pursuant to this Section shall be withdrawn or used
for any purpose other than, and shall be segregated and held in trust for the
payment of the principal of, Redemption Price and interest on said Bonds.
(c) The release of the obligations of the Authority under this Section
12.01 shall not affect the obligations of the Company to make direct payments to
the Authority, the Trustee or any Holder of the Bonds pursuant to the Agreement.
46
ARTICLE XIII
MISCELLANEOUS
SECTION 13.01. DISSOLUTION. In the event of the dissolution of the
Authority, all the covenants, stipulations, promises and agreements in this
Indenture contained, by or on behalf of, or for the benefit of, the Authority,
shall bind or inure to the benefit of the successors of the Authority from time
to time and any officer, board, commission, agency or instrumentality to whom or
to which any power or duty of the Authority shall be transferred.
SECTION 13.02. NO RIGHTS CONFERRED ON OTHERS. Except as in this
Indenture otherwise specifically provided, nothing in this Indenture expressed
or implied is intended or shall be construed to confer upon any person other
than the Company, the Authority, the Trustee and the Holders of the Bonds issued
under this Indenture, any right, remedy or claim under or by reason of this
Indenture, this Indenture being intended to be for the sole and exclusive
benefit of the Company, the Authority, the Trustee and the Holders of the Bonds
issued under this Indenture.
SECTION 13.03. DEPOSIT OF FUNDS FOR PAYMENT OF BONDS. If the Authority
deposits with the Trustee funds sufficient to pay the principal or Redemption
Price of any Bonds becoming due, either at maturity or by call for redemption or
otherwise, together with all interest accruing thereon to the due date, all
interest on such Bonds shall cease to accrue on the due date and all liability
of the Authority with respect to such Bonds shall likewise cease, except as
hereinafter provided. Thereafter the Holders of such Bonds shall be restricted
exclusively to the funds so deposited for any claim of whatsoever nature with
respect to such Bonds, provided that such restriction shall not affect the
obligations of the Company to make direct payments to the Holders of the Bonds
pursuant to this Indenture or the Agreement, and the Trustee shall deposit such
moneys with the Paying Agent to be held in trust for such Holders.
If any Bond or evidence of beneficial ownership of such Bond shall not
be presented for payment when the principal thereof becomes due (whether at
maturity, by acceleration, upon call for redemption, upon purchase or
otherwise), all liability of the Authority to the registered owner thereof for
the payment of such Bond, shall forthwith cease, terminate and be completely
discharged if funds sufficient to pay such Bond and interest due thereon, if
any, are held by the Trustee uninvested for the benefit of the registered owner
thereof. Thereupon it shall be the duty of the Trustee to comply with the
Uniform Unclaimed Property Act, N.J.S.A. 46:30B-1 ET SEQ. with respect to such
funds. The registered owner shall thereafter be restricted exclusively to such
funds for any claim of whatever nature on his part under this Indenture or on,
or with respect to, such Bond.
SECTION 13.04. SEVERABILITY OF INVALID PROVISIONS. In case any one or
more of the provisions of this Indenture or of the Bonds issued under this
Indenture shall, for any reason, be held to be illegal or invalid, such
47
illegality or invalidity shall not affect any other provisions of this Indenture
or of said Bonds, and this Indenture and the Bonds shall be construed and
enforced as if such illegal or invalid provisions had not been contained herein
or therein.
SECTION 13.05. NO PERSONAL RECOURSE. No covenant or agreement contained
in the Bonds or in this Indenture shall be deemed to be the covenant or
agreement of any member, agent, or employee of the Authority in his individual
capacity, and neither the members of the Authority nor any official executing
the Bonds shall be liable personally on the Bonds or be subject to any personal
liability or accountability by reason of the issuance thereof.
SECTION 13.06. NOTICE.
(a) Any notice, demand, direction, request or other instrument
authorized or required by this Indenture to be given to or filed with the
persons named below shall be deemed to have been sufficiently given or filed for
all purposes of this Indenture if and when sent by registered mail return
receipt requested:
(i) To the Authority at 36 West State Street, P.O. Box 990,
Trenton, New Jersey, 08625, Attention: Director of Program Services or
at such other address as may be designated in writing by the Authority
to the Trustee, copy to McManimon & Scotland, L.L.C., One Riverfront
Plaza, Newark, New Jersey 07102, Attention: John V. Cavaliere, Esq.;
(ii) To the Trustee at 385 Rifle Camp Road, West Paterson, New
Jersey 07424, Attn: Corporate Trust Department;
(iii) To the Company at 165 Ludlow Avenue, Northvale, New
Jersey 07647, Attention: Mark Gittelman, Chief Financial Officer, with
a copy to Gallo Geffner Fenster, P.C., Country Club Plaza, West 115
Century Road, Paramus, New Jersey 07652, Attention: Michael L. Messer,
Esq.; and
(iv) To the Placement Agent, Ryan Beck & Co., 740 Broad
Street, Shrewsbury, New Jersey 07702, copy to DeCotiis, FitzPatrick,
Cole & Wisler, LLP, 500 Frank W. Burr Boulevard, Teaneck, New Jersey
08607, Attention: Isabel Miranda, Esq.
(b) Upon the written request of either the Company or the Placement
Agent, the Trustee shall promptly provide a list of all Bondholders.
SECTION 13.07. EXECUTION IN SEVERAL COUNTERPARTS. This Indenture shall
be simultaneously executed in several identical counterparts, and all of said
counterparts executed and delivered, each as an original and complete in itself,
shall constitute but one and the same instrument and any such counterpart may be
introduced in evidence, proved, recorded or used for any purpose without the
production of any other counterpart.
48
SECTION 13.08. LAWS GOVERNING INDENTURE. The effect and meaning of this
Indenture and the rights of all parties hereunder shall be governed by, and
construed according to, the laws of the State.
SECTION 13.09. SUCCESSORS AND ASSIGNS. All the covenants, promises and
agreements in this Indenture contained by or on behalf of the Authority, or by
or on behalf of the Trustee, shall bind and inure to the benefit of their
respective successors and assigns, whether so expressed or not.
SECTION 13.10. HEADINGS FOR CONVENIENCE ONLY. The descriptive headings
in this Indenture are inserted for convenience only and shall not control or
affect the meaning or construction of any of the provisions hereof.
SECTION 13.11. CREDITS ON THE NOTES. In addition to any credit, payment
or satisfaction expressly provided for under the provisions of this Indenture in
respect of payments due under the Notes, the Trustee shall make credits against
amounts otherwise payable in respect of the applicable Note in an amount
corresponding to (a) the principal amount of any Bond surrendered to the Trustee
by the Company or the Authority, or purchased by the Trustee, for cancellation
and (b) the amount of money held by the Trustee and available and designated for
the payment of principal or Redemption Price of, or interest on, the Bonds,
regardless of the source of payment to the Trustee of such moneys. The Trustee
shall promptly notify the Company when such credits arise.
SECTION 13.12. PAYMENTS DUE ON SATURDAYS, SUNDAYS AND HOLIDAYS. In any
case where the date of maturity of interest on or principal of the Bonds or the
date fixed for redemption of any Bonds shall be a Saturday or Sunday or a legal
holiday or a day on which banking institutions in the municipality of payment
are authorized by law to close, then payment of interest or principal or
Redemption Price need not be made on such date but may be made on the next
succeeding business day with the same force and effect as if made on the date of
maturity or the date fixed for redemption, and no interest on such payment shall
accrue for the period after such date.
SECTION 13.13. FORM OF BONDS. The Initial Bonds to be issued under and
secured by this Indenture and the Trustee's certificate of authentication are to
be in substantially the form attached hereto as EXHIBIT A and EXHIBIT B with
necessary and appropriate variations, omissions and insertions as permitted or
required by this Indenture.
49
IN WITNESS WHEREOF, The Authority and the Trustee have caused their
respective corporate seals to be hereunto affixed and attested and these
presents to be signed by their respective officers thereunto duly authorized and
this Indenture to be dated as of the day and year first above written.
{SEAL}
ATTEST NEW JERSEY ECONOMIC DEVELOPMENT
AUTHORITY
/s/ Lawrence G. Cier By: /s/ Gregory Ritz
- --------------------------------- ------------------------------------
Lawrence G. Cier Gregory Ritz
Assistant Secretary Chief Financial Officer
50
(COUNTERPART SIGNATURE PAGE TO THE INDENTURE)
THE BANK OF NEW YORK, as Trustee
By: /s/ Susan M. Pszonek
-------------------------------
Susan M. Pszonek
Vice President
51
EXHIBIT A
(FORM OF SERIES A BOND)
THE STATE OF NEW JERSEY IS NOT OBLIGATED TO PAY, AND NEITHER THE FAITH AND
CREDIT NOR TAXING POWER OF THE STATE OF NEW JERSEY IS PLEDGED TO THE PAYMENT OF,
THE PRINCIPAL OR REDEMPTION PRICE, IF ANY, OF OR INTEREST ON THIS BOND. THIS
BOND IS A SPECIAL, LIMITED OBLIGATION OF THE AUTHORITY, PAYABLE SOLELY OUT OF
THE REVENUES OR OTHER RECEIPTS, FUNDS OR MONEYS OF THE AUTHORITY PLEDGED UNDER
THE INDENTURE AND FROM ANY AMOUNTS OTHERWISE AVAILABLE UNDER THE INDENTURE FOR
THE PAYMENT OF THIS BOND. THIS BOND DOES NOT NOW AND SHALL NEVER CONSTITUTE A
CHARGE AGAINST THE GENERAL CREDIT OF THE AUTHORITY. THE AUTHORITY HAS NO TAXING
POWER.
THIS BOND IS NOT RATED AND NO APPLICATION WILL BE MADE TO OBTAIN A RATING
HEREON. PURCHASE OF THIS BOND SHOULD ONLY BE MADE BY AN INVESTOR WHO (A) CAN
BEAR THE ECONOMIC RISK OF THIS BOND, (B) HAS SUCH KNOWLEDGE AND EXPERIENCE IN
BUSINESS AND FINANCIAL MATTERS AS TO BE CAPABLE OF EVALUATING THE RISKS AND
MERITS OF THIS BOND, (C) ACKNOWLEDGES THAT THIS BOND SHOULD ONLY BE CONSIDERED
FOR PURCHASE AS PART OF A DIVERSIFIED PORTFOLIO OF HIGH YIELD, HIGH RISK
SECURITIES, AND (D) HAS UNDERTAKEN THE RESPONSIBILITY FOR OBTAINING ALL
INFORMATION THAT IS DEEMED NECESSARY AND DESIRABLE TO FORM A DECISION TO
PURCHASE THIS BOND.
NEW JERSEY ECONOMIC DEVELOPMENT AUTHORITY
ECONOMIC DEVELOPMENT BONDS
(ELITE PHARMACEUTICALS, INC. - 2005 PROJECT), SERIES A
MATURITY DATED
NUMBER RA - 1 DATE DATE
---- ----
September 1, 2030 August 15, 2005
CUSIP NUMBER: ________________
REGISTERED OWNER: CEDE & CO.
PRINCIPAL AMOUNT: THREE MILLION SIX HUNDRED SIXTY THOUSAND
AND 00/100 DOLLARS ($3,660,000.00)
INTEREST RATE: SIX AND ONE HALF PER CENT (6.50%)
THE NEW JERSEY ECONOMIC DEVELOPMENT AUTHORITY (the "Authority"), a
public body corporate and politic, constituting an instrumentality of the
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State of New Jersey duly organized and existing under the laws of the State of
New Jersey and, in particular, The New Jersey Economic Development Authority
Act, constituting N.J.S.A. 34:1B.1 ET SEQ., as may be amended and supplemented
(the "Act"), for value received, hereby promises to pay, but only from the funds
provided therefor as hereinafter set forth, to the registered owner specified
hereinabove, or registered assigns on the maturity date (specified above),
unless this Bond shall be redeemed and shall have been previously called for
redemption and payment of the redemption price shall have been duly made or
provided for, upon surrender hereof, the principal sum specified above and to
pay interest thereon (but only out of said amounts) at the interest rate per
annum specified above from the most recent Interest Payment Date (as hereinafter
defined) to which interest has been paid or provided for or on March 1, 2006 and
semiannually thereafter on March 1 and September 1 in each year (each an
"Interest Payment Date") until payment of said principal sum has been made or
provided for. Interest on the Bonds shall be calculated on the basis of a
360-day year consisting of twelve 30-day months. The interest so payable and
punctually paid or duly provided for, on any Interest Payment Date will,
pursuant to the Indenture (as hereinafter defined) be paid to the registered
owner hereof at the close of business on the regular record date for such
interest, which date shall be the fifteenth (15th) day (whether such day is a
business day) of the calendar month immediately preceding such Interest Payment
Date (the "Regular Record Date"). Any interest on any Bond which is payable, but
is not punctually paid or provided for, on any Interest Payment Date (herein
called "Defaulted Interest") shall forthwith cease to be payable to the
Registered Owner on the relevant Record Date by virtue of having been such
owner, and such Defaulted Interest shall be paid to the Registered Owner in
whose name the Bond is registered at the close of business on a special Record
Date (the "Special Record Date") to be fixed by the Trustee, such Special Record
Date to be not more than fifteen (15) nor less than ten (10) days prior to the
date of proposed payment. The Trustee shall cause notice of the proposed payment
of such Defaulted Interest and the Special Record Date therefor to be mailed,
first class postage prepaid, to each registered owner, at such registered
owner's address as it appears in the Bond Register (as hereinafter defined), not
less than ten (10) days prior to such Special Record Date. Interest on this Bond
shall be payable by check mailed to the Registered Owner hereof on the Interest
Payment Date. Payments of principal, Redemption Price or interest due on this
Bond may also be payable by electronic funds transfer to the Registered Owner of
$1,000,000 or more; provided such Registered Owner requests such electronic
funds transfer and delivers to the Trustee in writing, not later than the close
of business on the applicable Record Date preceding such transfer the following
information needed to make such transfer: the name of the bank to receive such
transfer, wiring code of said bank, ABA number, account number of the Registered
Owner and name of a contact person at the bank. The principal of and interest on
this Bond shall be paid in any coin or currency of the United States of America
which, at the time of payment, is legal tender for the payment of public and
private debts.
This Bond is issued under and pursuant to the Constitution and Laws of
the State of New Jersey, and under and pursuant to a resolution duly adopted by
the Authority on July 12, 2005. This Bond and the Bonds of the issue of
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which it forms a part are special, limited obligations of the Authority payable
solely from the revenues and assets constituting the Trust Estate (as defined in
the Indenture) pledged under the Indenture. THE STATE OF NEW JERSEY IS NOT
OBLIGATED TO PAY, AND NEITHER THE FAITH AND CREDIT NOR TAXING POWER OF THE STATE
OF NEW JERSEY IS PLEDGED TO THE PAYMENT OF, THE PRINCIPAL OR REDEMPTION PRICE,
IF ANY, OF OR INTEREST ON THIS BOND. THIS BOND IS A SPECIAL, LIMITED OBLIGATION
OF THE AUTHORITY, PAYABLE SOLELY OUT OF THE REVENUES OR OTHER RECEIPTS, FUNDS OR
MONEYS OF THE AUTHORITY PLEDGED UNDER THE INDENTURE AND FROM ANY AMOUNTS
OTHERWISE AVAILABLE UNDER THE INDENTURE FOR THE PAYMENT OF THIS BOND. THIS BOND
DOES NOT NOW AND SHALL NEVER CONSTITUTE A CHARGE AGAINST THE GENERAL CREDIT OF
THE AUTHORITY. THE AUTHORITY HAS NO TAXING POWER.
This Bond is one of the Bonds of a duly authorized issue of economic
development bonds of the Authority in the aggregate principal amount of
$3,660,000 and is known as "New Jersey Economic Development Authority, Economic
Development Bonds (Elite Pharmaceuticals, Inc. - 2005 Project), Series A" (the
"Bonds").
The Bonds are issued for the purpose of financing a project as more
fully defined in the Agreement (as hereinafter defined). Elite Pharmaceuticals,
Inc. (the "Company") and the Authority have entered into a Loan Agreement dated
as of August 15, 2005 (which Loan Agreement as it may from time to time be
amended is hereinafter called the "Agreement") pursuant to the terms of which
the Authority has agreed to issue and sell the Bonds and to lend the proceeds
thereof to the Company, and in consideration thereof the Company has agreed to
make payments to the Authority sufficient to pay the principal of, redemption
premium (if any) and interest on the Bonds as the same become due and payable.
This Bond is issued under and pursuant to an Indenture dated as of
August 15, 2005 (said Indenture together with all such supplements and
amendments thereto as therein permitted, the "Indenture"), by and between the
Authority and The Bank of New York, as trustee (said banking institution and any
successor trustee under the Indenture, the "Trustee"). An executed counterpart
of the Indenture is on file at the principal corporate trust office of the
Trustee. Reference is hereby made to the Indenture for the provisions, among
others, with respect to the custody and application of the proceeds of the
Bonds, the collection and disposition of revenues, a description of the funds
pledged to the payment of the principal of and interest on the Bonds, the nature
and extent of the security, the rights, duties and obligations of the Authority
and the Trustee and the rights of the holders of the Bonds, and, by the
acceptance of this Bond, the holder hereof assents to all of the provisions of
the Indenture.
I. REDEMPTION OF BONDS
(a) OPTIONAL REDEMPTION. The Bonds are subject to optional redemption,
in whole at any time or in part on any Interest Payment Date, at the
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redemption prices (expressed as a percentage of the principal amount to be
redeemed) as set forth below:
DATE REDEMPTION PRICE
---- ----------------
September 1, 2015 to August 31, 2016 102%
September 1, 2016 to August 31, 2017 101%
Thereafter 100%
If less than all the Bonds are to be redeemed, the Bonds shall be
selected by the Trustee by lot, or in such other manner as the Trustee may
determine, for redemption.
(b) MANDATORY SINKING FUND REDEMPTION. The Bonds are subject to
mandatory sinking fund redemption prior to maturity, at a redemption price equal
to 100% of the principal amount thereof on September 1 of the years and in the
amounts set forth below:
YEAR AMOUNT
---- ------
2006 $120,000
2007 125,000
2008 135,000
2009 140,000
2010 150,000
2011 165,000
2012 170,000
2013 185,000
2014 195,000
2015 210,000
2016 220,000
2017 85,000
2018 90,000
2019 95,000
2020 105,000
2021 110,000
2022 115,000
2023 125,000
2024 130,000
2025 140,000
2026 150,000
2027 160,000
2028 170,000
2029 180,000
2030* 190,000
*Final Maturity
(c) MANDATORY REDEMPTION - FUNDS REMAINING IN PROJECT FUND. The Bonds
are subject to mandatory redemption in part on the earlier of (a) the third
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anniversary date of the issuance of the Bonds or (b) a date not later than
forty-five (45) days after the Completion Date (as defined in the Indenture), to
the extent of moneys remaining in the Project Fund established under and
pursuant to the Indenture as of such date, at a redemption price equal to one
hundred percent (100%) of the principal amount of Bonds to be redeemed plus
interest accrued thereon to the redemption date; provided, however that such
redemption shall not be made if the Company obtains at its expense an opinion of
bond counsel acceptable to the Trustee to the effect that the failure to make
such redemption will not adversely affect the exemption of interest on the Bonds
for either federal or State income tax purposes.
(d) EXTRAORDINARY MANDATORY REDEMPTION - DETERMINATION OF TAXABILITY.
The Bonds are subject to mandatory redemption in whole not later than sixty (60)
days after the occurrence of a Determination of Taxability (as defined in the
Agreement) at a redemption price equal to one hundred and five percent (105%) of
the principal amount of Bonds to be redeemed plus interest accrued thereon to
such redemption date.
(e) EXTRAORDINARY MANDATORY REDEMPTION - CASUALTY AND CONDEMNATION
PROCEEDS. The Bonds are subject to mandatory redemption by the Authority prior
to maturity, in whole at any time, or in part on any Interest Payment Date to
the extent proceeds of insurance or condemnation awards are received with
respect to the Project and are not used to repair or restore the Project
Facilities pursuant to the Loan Agreement at a redemption price equal to 100% of
the principal amount to be redeemed, plus interest accrued thereon to the
redemption date.
(f) SPECIAL MANDATORY REDEMPTION - BREACH OF CERTAIN PUBLIC PURPOSE
COVENANTS. The Bonds are subject to special mandatory redemption in whole as
soon as practicable but no later than the 90th day following the Authority's
written notice to the Trustee and the Company that (i) the Company has ceased to
operate the Project or ceased to cause the Project to be operated as an
authorized project under the Act for twelve (12) consecutive months, without
first obtaining the prior written consent of the Authority or (ii) any
representation or warranty of the Company contained in the Agreement or in any
other document furnished to the Authority in connection with the Bonds proves to
have been false or misleading in any material respect when made. Upon the
occurrence of any such event, the Bonds shall be redeemed by the Authority at a
redemption price equal to 100% of the principal amount thereof plus interest
accrued thereon to the redemption date.
Notice of any redemption pursuant to the preceding paragraphs shall be
given by the Trustee by first class mail postage prepaid to each registered
owner of the Bonds at his address as it appears on the Bond Register (as
hereinafter defined). Such notice shall be mailed not less than thirty (30) nor
more than forty-five (45) days prior to the redemption date (except with respect
to redemptions made pursuant to paragraphs (d) and (f), mailed within the time
period specified for such redemption). Failure to mail such notice or defects
therein or in the mailing thereof shall not affect the validity of the
redemption. In connection with any such notice, the "CUSIP" numbers assigned
A-5
to the Bonds being called for redemption may be used but reliance may be placed
only on the identification number printed hereon. In the event that less than
the full principal amount hereof shall have been called for redemption, the
registered owner hereof may surrender this Bond in exchange for one or more new
Bonds in aggregate principal amount equal to the unredeemed portion of
principal, as provided in the Indenture.
After notice of redemption shall have been given as aforesaid, then,
from and after the date fixed for redemption, the Bonds so called for redemption
shall cease to bear interest and such Bonds shall no longer constitute a lien on
the Trust Estate and shall not be considered Outstanding under the Indenture.
II. GENERAL PROVISIONS
Pursuant to the Indenture, the Authority has, for the benefit of the
holders of the Bonds, assigned to the Trustee the Authority's right, title and
interest under the Agreement and the Notes, subject to the reservation of
certain rights by the Authority under the Agreement to exercise remedies
thereunder under certain circumstances, to receive certain fees, expenses and
notices, to render consents and approvals and to receive indemnification.
The holder of this Bond shall have no right to enforce the provisions
of the Indenture or the Agreement or to institute any action to enforce the
covenants therein, or to take any action with respect to any event of default
under the Indenture or the Agreement, or to institute, appear in or defend any
suit or other proceeding with respect thereto, except as provided in the
Indenture.
In certain events, on the conditions, in the manner and with the effect
set forth in the Indenture, the principal of the Bonds may become or may be
declared due and payable before the stated maturity hereof, together with the
interest accrued hereon.
Modifications or alterations of the Agreement and the Indenture and any
supplement or amendment thereto may be made only to the extent and in the
circumstances permitted by the Indenture and may be made in certain cases
without the consent of the holders of the Bonds.
This Bond is registered as to both principal and interest on the
registration books of the Trustee to be kept for that purpose at the corporate
trust office of the Trustee, and both principal and interest shall be payable
only to the registered owner hereof. No transfer hereof shall be valid unless
made at said office by the registered owner in person or by his duly authorized
attorney and noted hereon. The Authority and the Trustee may treat the
registered owner of this Bond as the absolute owner hereof for all purposes, and
payment of or on account of either principal or interest made to such registered
owner shall be valid and effectual to satisfy and discharge the liability upon
this Bond to the extent of the sum or sums so paid and neither
A-6
the Authority nor the Trustee shall be affected by any notice to the contrary.
At the written request (in form satisfactory to the Trustee) of the
registered owner, this Bond shall, except during the fifteen (15) days
immediately prior to the mailing of notice of such redemption of the Bonds or
after Bonds have been selected for redemption, be exchanged for an equal
aggregate principal amount of Bonds in fully-registered form by the preparation
and substitution of a new Bond or Bonds, signed or executed by such officers of
the Authority as are then in office, of like date, maturity and interest rate,
in minimum denominations of $5,000 and any $5,000 integral multiple thereof.
This Bond is not valid unless the Trustee's Certificate of
Authentication endorsed hereon is duly executed.
This Bond shall be governed by and construed in accordance with the
laws of the State of New Jersey.
The Act provides that no member of the Authority nor any person
executing bonds for the Authority shall be liable personally on the Bonds by
reason of the issuance thereof.
All acts, conditions and things required to happen, exist and be
performed precedent to and in the issuance of this Bond and the execution of the
Indenture have happened, exist and have been performed as so required.
{THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK}
A-7
IN WITNESS WHEREOF, the New Jersey Economic Development Authority has
caused this Bond to be executed by the manual or facsimile signature of its
Chief Financial Officer and its official seal or a facsimile thereof to be
impressed, imprinted or reproduced hereon and attested by the manual or
facsimile signature of its Assistant Secretary.
SEAL
ATTEST NEW JERSEY ECONOMIC DEVELOPMENT
AUTHORITY
By:
- -------------------------------- --------------------------------
A-8
CERTIFICATE OF AUTHENTICATION
This Bond is one the Bonds described in the within mentioned Indenture.
THE BANK OF NEW YORK,
as Trustee and as Bond Registrar
By:
-----------------------------------
Authorized Signatory
Authentication Date:
A-9
EXHIBIT B
(FORM OF SERIES B BOND)
THE STATE OF NEW JERSEY IS NOT OBLIGATED TO PAY, AND NEITHER THE FAITH AND
CREDIT NOR TAXING POWER OF THE STATE OF NEW JERSEY IS PLEDGED TO THE PAYMENT OF,
THE PRINCIPAL OR REDEMPTION PRICE, IF ANY, OF OR INTEREST ON THIS BOND. THIS
BOND IS A SPECIAL, LIMITED OBLIGATION OF THE AUTHORITY, PAYABLE SOLELY OUT OF
THE REVENUES OR OTHER RECEIPTS, FUNDS OR MONEYS OF THE AUTHORITY PLEDGED UNDER
THE INDENTURE AND FROM ANY AMOUNTS OTHERWISE AVAILABLE UNDER THE INDENTURE FOR
THE PAYMENT OF THIS BOND. THIS BOND DOES NOT NOW AND SHALL NEVER CONSTITUTE A
CHARGE AGAINST THE GENERAL CREDIT OF THE AUTHORITY. THE AUTHORITY HAS NO TAXING
POWER.
THIS BOND IS NOT RATED AND NO APPLICATION WILL BE MADE TO OBTAIN A RATING
HEREON. PURCHASE OF THIS BOND SHOULD ONLY BE MADE BY AN INVESTOR WHO (A) CAN
BEAR THE ECONOMIC RISK OF THIS BOND, (B) HAS SUCH KNOWLEDGE AND EXPERIENCE IN
BUSINESS AND FINANCIAL MATTERS AS TO BE CAPABLE OF EVALUATING THE RISKS AND
MERITS OF THIS BOND, (C) ACKNOWLEDGES THAT THIS BOND SHOULD ONLY BE CONSIDERED
FOR PURCHASE AS PART OF A DIVERSIFIED PORTFOLIO OF HIGH YIELD, HIGH RISK
SECURITIES, AND (D) HAS UNDERTAKEN THE RESPONSIBILITY FOR OBTAINING ALL
INFORMATION THAT IS DEEMED NECESSARY AND DESIRABLE TO FORM A DECISION TO
PURCHASE THIS BOND.
NEW JERSEY ECONOMIC DEVELOPMENT AUTHORITY
ECONOMIC DEVELOPMENT BONDS
(ELITE PHARMACEUTICALS, INC. - 2005 PROJECT),
FEDERALLY TAXABLE SERIES B
MATURITY DATED
NUMBER RB - 1 DATE DATE
---- ----
September 1, 2012 August 15, 2005
CUSIP NUMBER: ________________
REGISTERED OWNER: CEDE & CO.
PRINCIPAL AMOUNT: FOUR HUNDRED NINETY FIVE THOUSAND AND
00/100 DOLLARS ($495,000.00)
INTEREST RATE: NINE PER CENT (9.00%)
THE NEW JERSEY ECONOMIC DEVELOPMENT AUTHORITY (the "Authority"), a
public body corporate and politic, constituting an instrumentality of the
B-1
State of New Jersey duly organized and existing under the laws of the State of
New Jersey and, in particular, The New Jersey Economic Development Authority
Act, constituting N.J.S.A. 34:1B.1 ET SEQ., as may be amended and supplemented
(the "Act"), for value received, hereby promises to pay, but only from the funds
provided therefor as hereinafter set forth, to the registered owner specified
hereinabove, or registered assigns on the maturity date (specified above),
unless this Bond shall be redeemed and shall have been previously called for
redemption and payment of the redemption price shall have been duly made or
provided for, upon surrender hereof, the principal sum specified above and to
pay interest thereon (but only out of said amounts) at the interest rate per
annum specified above from the most recent Interest Payment Date (as hereinafter
defined) to which interest has been paid or provided for or on March 1, 2006 and
semiannually thereafter on March 1 and September 1 in each year (each an
"Interest Payment Date") until payment of said principal sum has been made or
provided for. Interest on the Bonds shall be calculated on the basis of a
360-day year consisting of twelve 30-day months. The interest so payable and
punctually paid or duly provided for, on any Interest Payment Date will,
pursuant to the Indenture (as hereinafter defined) be paid to the registered
owner hereof at the close of business on the regular record date for such
interest, which date shall be the fifteenth (15th) day (whether such day is a
business day) of the calendar month immediately preceding such Interest Payment
Date (the "Regular Record Date"). Any interest on any Bond which is payable, but
is not punctually paid or provided for, on any Interest Payment Date (herein
called "Defaulted Interest") shall forthwith cease to be payable to the
Registered Owner on the relevant Record Date by virtue of having been such
owner, and such Defaulted Interest shall be paid to the Registered Owner in
whose name the Bond is registered at the close of business on a special Record
Date (the "Special Record Date") to be fixed by the Trustee, such Special Record
Date to be not more than fifteen (15) nor less than ten (10) days prior to the
date of proposed payment. The Trustee shall cause notice of the proposed payment
of such Defaulted Interest and the Special Record Date therefor to be mailed,
first class postage prepaid, to each registered owner, at such registered
owner's address as it appears in the Bond Register (as hereinafter defined), not
less than ten (10) days prior to such Special Record Date. Interest on this Bond
shall be payable by check mailed to the Registered Owner hereof on the Interest
Payment Date. Payments of principal, Redemption Price or interest due on this
Bond may also be payable by electronic funds transfer to the Registered Owner of
$1,000,000 or more; provided such Registered Owner requests such electronic
funds transfer and delivers to the Trustee in writing, not later than the close
of business on the applicable Record Date preceding such transfer the following
information needed to make such transfer: the name of the bank to receive such
transfer, wiring code of said bank, ABA number, account number of the Registered
Owner and name of a contact person at the bank. The principal of and interest on
this Bond shall be paid in any coin or currency of the United States of America
which, at the time of payment, is legal tender for the payment of public and
private debts.
This Bond is issued under and pursuant to the Constitution and Laws of
the State of New Jersey, and under and pursuant to a resolution duly adopted by
the Authority on July 12, 2005. This Bond and the Bonds of the issue of
B-2
which it forms a part are special, limited obligations of the Authority payable
solely from the revenues and assets constituting the Trust Estate (as defined in
the Indenture) pledged under the Indenture. THE STATE OF NEW JERSEY IS NOT
OBLIGATED TO PAY, AND NEITHER THE FAITH AND CREDIT NOR TAXING POWER OF THE STATE
OF NEW JERSEY IS PLEDGED TO THE PAYMENT OF, THE PRINCIPAL OR REDEMPTION PRICE,
IF ANY, OF OR INTEREST ON THIS BOND. THIS BOND IS A SPECIAL, LIMITED OBLIGATION
OF THE AUTHORITY, PAYABLE SOLELY OUT OF THE REVENUES OR OTHER RECEIPTS, FUNDS OR
MONEYS OF THE AUTHORITY PLEDGED UNDER THE INDENTURE AND FROM ANY AMOUNTS
OTHERWISE AVAILABLE UNDER THE INDENTURE FOR THE PAYMENT OF THIS BOND. THIS BOND
DOES NOT NOW AND SHALL NEVER CONSTITUTE A CHARGE AGAINST THE GENERAL CREDIT OF
THE AUTHORITY. THE AUTHORITY HAS NO TAXING POWER.
This Bond is one of the Bonds of a duly authorized issue of economic
development bonds of the Authority in the aggregate principal amount of $495,000
and is known as "New Jersey Economic Development Authority, Economic Development
Bonds (Elite Pharmaceuticals, Inc. - 2005 Project), Federally Taxable Series B"
(the "Bonds").
The Bonds are issued for the purpose of financing a project as more
fully defined in the Agreement (as hereinafter defined). Elite Pharmaceuticals,
Inc. (the "Company") and the Authority have entered into a Loan Agreement dated
as of August 15, 2005 (which Loan Agreement as it may from time to time be
amended is hereinafter called the "Agreement") pursuant to the terms of which
the Authority has agreed to issue and sell the Bonds and to lend the proceeds
thereof to the Company, and in consideration thereof the Company has agreed to
make payments to the Authority sufficient to pay the principal of, redemption
premium (if any) and interest on the Bonds as the same become due and payable.
This Bond is issued under and pursuant to an Indenture dated as of
August 15, 2005 (said Indenture together with all such supplements and
amendments thereto as therein permitted, the "Indenture"), by and between the
Authority and The Bank of New York, as trustee (said banking institution and any
successor trustee under the Indenture, the "Trustee"). An executed counterpart
of the Indenture is on file at the principal corporate trust office of the
Trustee. Reference is hereby made to the Indenture for the provisions, among
others, with respect to the custody and application of the proceeds of the
Bonds, the collection and disposition of revenues, a description of the funds
pledged to the payment of the principal of and interest on the Bonds, the nature
and extent of the security, the rights, duties and obligations of the Authority
and the Trustee and the rights of the holders of the Bonds, and, by the
acceptance of this Bond, the holder hereof assents to all of the provisions of
the Indenture.
I. REDEMPTION OF BONDS
(a) OPTIONAL REDEMPTION. The Bonds are not subject to optional
redemption.
B-3
(b) MANDATORY SINKING FUND REDEMPTION. The Bonds are subject to
mandatory sinking fund redemption prior to maturity, at a redemption price equal
to 100% of the principal amount thereof on September 1 of the years and in the
amounts set forth below:
YEAR AMOUNT
---- ------
2006 $55,000
2007 60,000
2008 65,000
2009 70,000
2010 75,000
2011 80,000
2012* 90,000
*Final Maturity
(c) MANDATORY REDEMPTION - FUNDS REMAINING IN PROJECT FUND. The Bonds
are subject to mandatory redemption in part on the earlier of (a) the third
anniversary date of the issuance of the Bonds or (b) a date not later than
forty-five (45) days after the Completion Date (as defined in the Indenture), to
the extent of moneys remaining in the Project Fund established under and
pursuant to the Indenture as of such date, at a redemption price equal to one
hundred percent (100%) of the principal amount of Bonds to be redeemed plus
interest accrued thereon to the redemption date.
(d) EXTRAORDINARY MANDATORY REDEMPTION - CASUALTY AND CONDEMNATION
PROCEEDS. The Bonds are subject to mandatory redemption by the Authority prior
to maturity, in whole at any time, or in part on any Interest Payment Date to
the extent proceeds of insurance or condemnation awards are received with
respect to the Project and are not used to repair or restore the Project
Facilities pursuant to the Loan Agreement at a redemption price equal to 100% of
the principal amount to be redeemed, plus interest accrued thereon to the
redemption date.
(e) SPECIAL MANDATORY REDEMPTION - BREACH OF CERTAIN PUBLIC PURPOSE
COVENANTS. The Bonds are subject to special mandatory redemption in whole as
soon as practicable but no later than the 90th day following the Authority's
written notice to the Trustee and the Company that (i) the Company has ceased to
operate the Project or ceased to cause the Project to be operated as an
authorized project under the Act for twelve (12) consecutive months, without
first obtaining the prior written consent of the Authority or (ii) any
representation or warranty of the Company contained in the Agreement or in any
other document furnished to the Authority in connection with the Bonds proves to
have been false or misleading in any material respect when made. Upon the
occurrence of any such event, the Bonds shall be redeemed by the Authority at a
redemption price equal to 100% of the principal amount thereof plus interest
accrued thereon to the redemption date.
B-4
Notice of any redemption pursuant to the preceding paragraphs shall be
given by the Trustee by first class mail postage prepaid to each registered
owner of the Bonds at his address as it appears on the Bond Register (as
hereinafter defined). Such notice shall be mailed not less than thirty (30) nor
more than forty-five (45) days prior to the redemption date (except with respect
to redemptions made pursuant to paragraph (e), mailed within the time period
specified for such redemption). Failure to mail such notice or defects therein
or in the mailing thereof shall not affect the validity of the redemption. In
connection with any such notice, the "CUSIP" numbers assigned to the Bonds being
called for redemption may be used but reliance may be placed only on the
identification number printed hereon. In the event that less than the full
principal amount hereof shall have been called for redemption, the registered
owner hereof may surrender this Bond in exchange for one or more new Bonds in
aggregate principal amount equal to the unredeemed portion of principal, as
provided in the Indenture.
After notice of redemption shall have been given as aforesaid, then,
from and after the date fixed for redemption, the Bonds so called for redemption
shall cease to bear interest and such Bonds shall no longer constitute a lien on
the Trust Estate and shall not be considered Outstanding under the Indenture.
II. GENERAL PROVISIONS
Pursuant to the Indenture, the Authority has, for the benefit of the
holders of the Bonds, assigned to the Trustee the Authority's right, title and
interest under the Agreement and the Notes, subject to the reservation of
certain rights by the Authority under the Agreement to exercise remedies
thereunder under certain circumstances, to receive certain fees, expenses and
notices, to render consents and approvals and to receive indemnification.
The holder of this Bond shall have no right to enforce the provisions
of the Indenture or the Agreement or to institute any action to enforce the
covenants therein, or to take any action with respect to any event of default
under the Indenture or the Agreement, or to institute, appear in or defend any
suit or other proceeding with respect thereto, except as provided in the
Indenture.
In certain events, on the conditions, in the manner and with the effect
set forth in the Indenture, the principal of the Bonds may become or may be
declared due and payable before the stated maturity hereof, together with the
interest accrued hereon.
Modifications or alterations of the Agreement and the Indenture and any
supplement or amendment thereto may be made only to the extent and in the
circumstances permitted by the Indenture and may be made in certain cases
without the consent of the holders of the Bonds.
This Bond is registered as to both principal and interest on the
registration books of the Trustee to be kept for that purpose at the
B-5
corporate trust office of the Trustee, and both principal and interest shall be
payable only to the registered owner hereof. No transfer hereof shall be valid
unless made at said office by the registered owner in person or by his duly
authorized attorney and noted hereon. The Authority and the Trustee may treat
the registered owner of this Bond as the absolute owner hereof for all purposes,
and payment of or on account of either principal or interest made to such
registered owner shall be valid and effectual to satisfy and discharge the
liability upon this Bond to the extent of the sum or sums so paid and neither
the Authority nor the Trustee shall be affected by any notice to the contrary.
At the written request (in form satisfactory to the Trustee) of the
registered owner, this Bond shall, except during the fifteen (15) days
immediately prior to the mailing of notice of such redemption of the Bonds or
after Bonds have been selected for redemption, be exchanged for an equal
aggregate principal amount of Bonds in fully-registered form by the preparation
and substitution of a new Bond or Bonds, signed or executed by such officers of
the Authority as are then in office, of like date, maturity and interest rate,
in minimum denominations of $5,000 and any $5,000 integral multiple thereof.
This Bond is not valid unless the Trustee's Certificate of
Authentication endorsed hereon is duly executed.
This Bond shall be governed by and construed in accordance with the
laws of the State of New Jersey.
The Act provides that no member of the Authority nor any person
executing bonds for the Authority shall be liable personally on the Bonds by
reason of the issuance thereof.
All acts, conditions and things required to happen, exist and be
performed precedent to and in the issuance of this Bond and the execution of the
Indenture have happened, exist and have been performed as so required.
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B-6
IN WITNESS WHEREOF, the New Jersey Economic Development Authority has
caused this Bond to be executed by the manual or facsimile signature of its
Chief Financial Officer and its official seal or a facsimile thereof to be
impressed, imprinted or reproduced hereon and attested by the manual or
facsimile signature of its Assistant Secretary.
SEAL
ATTEST NEW JERSEY ECONOMIC DEVELOPMENT
AUTHORITY
By:
- ----------------------------------- -----------------------------------
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CERTIFICATE OF AUTHENTICATION
This Bond is one the Bonds described in the within mentioned Indenture.
THE BANK OF NEW YORK,
as Trustee and as Bond Registrar
By:
------------------------------
Authorized Signatory
Authentication Date:
B-8