EXHIBIT 10.1
EXECUTION COPY
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CITY OF OLATHE, KANSAS
AND
U.S. BANK NATIONAL ASSOCIATION,
AS TRUSTEE
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TRUST INDENTURE
DATED AS OF JULY 1, 2007
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RELATING TO:
$24,500,000
(AGGREGATE MAXIMUM PRINCIPAL AMOUNT)
CITY OF OLATHE, KANSAS
INDUSTRIAL REVENUE BONDS
(PACSUN PROJECT)
SERIES 2007
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TRUST INDENTURE
TABLE OF CONTENTS
Page
Parties ....................................................................................... 1
Recitals ...................................................................................... 1
Granting Clauses .............................................................................. 1
ARTICLE I
DEFINITIONS
Section 101. Definitions of Words and Terms..................................................................3
Section 102. Rules of Interpretation.........................................................................7
ARTICLE II
THE BONDS
Section 201. Title and Amount of Bonds.......................................................................7
Section 202. Nature of Obligation............................................................................7
Section 203. Denomination, Number and Dating of Bonds........................................................8
Section 204. Method and Place of Payment of Bonds............................................................8
Section 205. Execution and Authentication of Bonds...........................................................9
Section 206. Registration, Transfer and Exchange of Bonds....................................................9
Section 207. Persons Deemed Owners of Bonds.................................................................10
Section 208. Authorization of the Bonds.....................................................................10
Section 209. Authorization of Additional Bonds..............................................................11
Section 210. Mutilated, Lost, Stolen or Destroyed Bonds.....................................................12
Section 211. Cancellation and Destruction of Bonds Upon Payment.............................................12
ARTICLE III
REDEMPTION OF BONDS
Section 301. Redemption of Bonds Generally..................................................................12
Section 302. Redemption of Bonds............................................................................12
Section 303. Effect of Call for Redemption..................................................................12
Section 304. Notice of Redemption...........................................................................13
ARTICLE IV
FORM OF BONDS
Section 401. Form Generally.................................................................................13
Section 402. Form of Bond...................................................................................13
Section 403. Form of Certificate of Authentication..........................................................21
(i)
ARTICLE V
CUSTODY AND APPLICATION OF BOND PROCEEDS
Section 501. Creation of Construction Fund..................................................................22
Section 502. Deposits into the Construction Fund............................................................22
Section 503. Disbursements from the Construction Fund.......................................................22
Section 504. Completion of the Project......................................................................22
Section 505. Disposition Upon Acceleration..................................................................23
ARTICLE VI
REVENUES AND FUNDS
Section 601. Creation of the Bond Fund......................................................................23
Section 602. Deposits Into the Bond Fund....................................................................23
Section 603. Application of Moneys in the Bond Fund.........................................................23
Section 604. Payments Due on Saturdays, Sundays and Holidays................................................24
Section 605. Nonpresentment of Bonds........................................................................24
Section 606. Repayment to the Corporation from the Bond Fund................................................24
ARTICLE VII
SECURITY FOR DEPOSITS AND INVESTMENT OF FUNDS
Section 701. Moneys to be Held in Trust.....................................................................24
Section 702. Investment of Moneys in Construction Fund and Bond Fund........................................25
Section 703. Record Keeping.................................................................................25
ARTICLE VIII
GENERAL COVENANTS AND PROVISIONS
Section 801. Payment of Principal and Interest..............................................................25
Section 802. Authority to Execute Indenture and Issue Bonds.................................................26
Section 803. Performance of Covenants.......................................................................26
Section 804. Instruments of Further Assurance...............................................................26
Section 805. Payment of Taxes and Charges...................................................................26
Section 806. Insurance......................................................................................26
Section 807. Maintenance and Repair.........................................................................26
Section 808. Recordings and Filings.........................................................................26
Section 809. Inspection of Project Books....................................................................27
Section 810. Enforcement of Rights Under the Lease..........................................................27
Section 811. Subordination of Indenture to the Lease........................................................27
(ii)
ARTICLE IX
DEFAULT AND REMEDIES
Section 901. Events of Default; Notice; Opportunity to Cure.................................................27
Section 902. Acceleration of Maturity in Event of Default...................................................27
Section 903. Surrender of Possession of Trust Estate; Rights and Duties of Trustee in Possession............28
Section 904. Appointment of Receivers in Event of Default...................................................28
Section 905. Exercise of Remedies by the Trustee............................................................28
Section 906. Limitation on Exercise of Remedies by Bondowners...............................................29
Section 907. Right of Bondowners to Direct Proceedings......................................................29
Section 908. Application of Moneys in Event of Default......................................................29
Section 909. Remedies Cumulative............................................................................30
Section 910. Waivers of Events of Default...................................................................30
ARTICLE X
THE TRUSTEE
Section 1001. Acceptance of the Trusts.......................................................................31
Section 1002. Fees, Charges and Expenses of the Trustee......................................................33
Section 1003. Notice to Bondowners if Default Occurs.........................................................33
Section 1004. Intervention by the Trustee....................................................................33
Section 1005. Successor Trustee Upon Merger, Consolidation or Sale...........................................33
Section 1006. Resignation of Trustee.........................................................................34
Section 1007. Removal of Trustee.............................................................................34
Section 1008. Appointment of Successor Trustee...............................................................34
Section 1009. Vesting of Trusts in Successor Trustee.........................................................34
Section 1010. Right of Trustee to Pay Taxes and Other Charges................................................34
Section 1011. Trust Estate May be Vested in Co-trustee.......................................................35
Section 1012. Annual Accounting..............................................................................35
Section 1013. Performance of Duties Under the Lease..........................................................35
ARTICLE XI
SUPPLEMENTAL INDENTURES
Section 1101. Supplemental Indentures Not Requiring Consent of Bondowners....................................36
Section 1102. Supplemental Indentures Requiring Consent of Bondowners........................................36
Section 1103. Corporation's Consent to Supplemental Indentures...............................................37
ARTICLE XII
SUPPLEMENTAL LEASES
Section 1201. Supplemental Leases Not Requiring Consent of Bondowners........................................37
Section 1202. Supplemental Leases Requiring Consent of Bondowners............................................37
(iii)
ARTICLE XIII
SATISFACTION AND DISCHARGE OF INDENTURE
Section 1301. Satisfaction and Discharge of this Indenture...................................................37
Section 1302. Bonds Deemed to be Paid........................................................................38
ARTICLE XIV
MISCELLANEOUS PROVISIONS
Section 1401. Consents and Other Instruments by Bondowners...................................................39
Section 1402. Limitation of Rights Under this Indenture......................................................39
Section 1403. Notices........................................................................................39
Section 1404. Severability...................................................................................40
Section 1405. Execution in Counterparts......................................................................40
Section 1406. Governing Law..................................................................................40
Section 1407. Electronic Storage.............................................................................40
Signatures and Seals
Acknowledgments
(iv)
TRUST INDENTURE
THIS TRUST INDENTURE dated as of July 1, 2007 (the "Indenture"), between
the CITY OF OLATHE, KANSAS, a municipal corporation organized and existing under
the laws of the State of Kansas (the "City"), and U.S. BANK NATIONAL
ASSOCIATION, a national banking association duly organized and existing and
authorized to accept and execute trusts of the character herein set forth under
the laws of the United States of America, with its designated corporate trust
office located in Los Angeles, California, as Trustee (the "Trustee");
WITNESSETH:
WHEREAS, the City is authorized under the provisions of K.S.A. 12-1740 to
12-1749d, inclusive, as amended (the "Act"), to purchase, acquire, construct,
improve, equip and remodel certain facilities within its jurisdiction for
commercial purposes, and to enter into leases and lease-purchase agreements with
any person, firm or corporation for said facilities, and to issue revenue bonds
for the purpose of paying the cost of any such facilities, and to pledge the
income and revenues to be derived from the operation of such facilities to
secure the payment of the principal of and interest on such bonds;
WHEREAS, pursuant to the Act, the governing body of the City adopted
Resolution No. 06-1085 on June 6, 2006, expressing the intent of the City to
issue its industrial revenue bonds in one or more series in an aggregate amount
not to exceed $135,000,000 for one or more projects for Waterford Glen, LLC, a
Kansas limited liability company, the first series to be issued in a series of
Industrial Revenue Bonds (PacSun Project), Series 2007 (the "Bonds"), in the
aggregate maximum principal amount of $24,500,000, for the purpose of acquiring,
purchasing, constructing, installing a commercial project, consisting of a
distribution facility, including land, buildings, structures, improvements and
fixtures (the "Project"), and authorizing the City to lease the Project to
Pacific Sunwear Stores Corp., a California corporation (the "Corporation");
WHEREAS, pursuant to such Resolution and Ordinance No. 07-34 adopted by
the City on May 1, 2007, the City is authorized to execute and deliver this
Indenture for the purpose of issuing and securing the Bonds and to enter into
the Lease Agreement of even date herewith (the "Lease"), with the Corporation
under which the City, as lessor, will acquire, purchase, construct and remodel
the Project and will lease the Project to the Corporation, as lessee, in
consideration of rentals which will be sufficient to pay the principal of and
interest on the Bonds; and
WHEREAS, all things necessary to make the Bonds, when authenticated by the
Trustee and issued as in this Indenture provided, the valid and legally binding
obligations of the City, and to constitute this Indenture a valid and legally
binding pledge and assignment of the Trust Estate herein made for the security
of the payment of the principal of and interest on the Bonds, have been done and
performed, and the execution and delivery of this Indenture and the execution
and issuance of the Bonds, subject to the terms hereof, have in all respects
been duly authorized;
NOW, THEREFORE, THIS TRUST INDENTURE WITNESSETH:
GRANTING CLAUSES
That the City, in consideration of the premises, the acceptance by the
Trustee of the trusts hereby created, the purchase and acceptance of the Bonds
by the Owners thereof, and of other good and valuable
consideration, the receipt of which is hereby acknowledged, and in order to
secure the payment of the principal of and interest on all of the Bonds issued
and outstanding under this Indenture from time to time according to their tenor
and effect, and to secure the performance and observance by the City of all the
covenants, agreements and conditions herein and in the Bonds contained, does
hereby pledge and assign to the Trustee and its successors and assigns forever
(subject to the qualifications set forth herein), the property described in
paragraphs (a), (b) and (c) below (said property being herein referred to as the
"Trust Estate"), to-wit:
(a) All right, title and interest in and to the Project together
with the tenements, hereditaments, appurtenances, rights, privileges and
immunities thereunto belonging or appertaining;
(b) All right, title and interest of the City in, to and under the
Lease, and all rents, revenues and receipts derived by the City from the
Project including, without limitation, all rentals and other amounts to be
received by the City and paid by the Corporation under and pursuant to and
subject to the provisions of the Lease; and
(c) All moneys and securities from time to time held by the Trustee
under the terms of this Indenture, and any and all other real or personal
property of every kind and nature from time to time hereafter, by delivery
or by writing of any kind, pledged, assigned or transferred as and for
additional security hereunder by the City or by anyone in its behalf, or
with its written consent, to the Trustee, which is hereby authorized to
receive any and all such property at any and all times and to hold and
apply the same subject to the terms hereof.
TO HAVE AND TO HOLD, all and singular, the Trust Estate with all rights
and privileges hereby pledged and assigned or agreed or intended so to be, to
the Trustee and its successors and assigns forever;
IN TRUST NEVERTHELESS, upon the terms and subject to the conditions herein
set forth, for the equal and proportionate benefit, protection and security of
all Owners from time to time of the Bonds outstanding under this Indenture,
without preference, priority or distinction as to lien or otherwise of any of
the Bonds over any other of the Bonds except as expressly provided in or
permitted by this Indenture;
PROVIDED, HOWEVER, that if the City shall well and truly pay, or cause to
be paid, the principal of and interest on the Bonds, at the time and in the
manner mentioned in the Bonds, according to the true intent and meaning thereof,
or shall provide for the payment thereof (as provided in ARTICLE XIII hereof),
and shall pay or cause to be paid to the Trustee all other sums of money due or
to become due to it in accordance with the terms and provisions hereof, then
upon such final payments this Indenture and the rights thereby granted shall
cease, determine and be void; otherwise, this Indenture shall be and remain in
full force and effect.
THIS INDENTURE FURTHER WITNESSETH, and it is hereby expressly declared,
covenanted and agreed by and between the parties hereto, that all Bonds issued
and secured hereunder are to be issued, authenticated and delivered and that all
the Trust Estate is to be held and applied under, upon and subject to the terms,
conditions, stipulations, covenants, agreements, trusts, uses and purposes as
hereinafter expressed, and the City does hereby agree and covenant with the
Trustee and with the respective Owners from time to time of the Bonds or
coupons, as follows:
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ARTICLE I
DEFINITIONS
SECTION 101. DEFINITIONS OF WORDS AND TERMS. In addition to words and
terms defined in SECTION 1.1 of the Lease, which definitions shall be deemed to
be incorporated herein, and terms defined elsewhere in this Indenture, the
following words and terms as used in this Indenture shall have the following
meanings, unless some other meaning is plainly intended:
"ACT" means K.S.A. 12-1740 to 12-1749d, inclusive, as amended.
"ADDITIONAL BONDS" means any Bonds issued pursuant to SECTION 209 of this
Indenture.
"AUTHORIZED CITY REPRESENTATIVE" means the City Manager, Director of
Strategic Financial Management, City Clerk or such other person at the time
designated to act on behalf of the City as evidenced by a written certificate
furnished to the Corporation and the Trustee containing the specimen signature
of such person and signed on behalf of the City by its Mayor. Such certificate
may designate an alternate or alternates each of whom shall be entitled to
perform all duties of the Authorized City Representative.
"AUTHORIZED CORPORATION REPRESENTATIVE" means the person at the time
designated to act on behalf of the Corporation as evidenced by written
certificate furnished to the City and the Trustee containing the specimen
signature of such person and signed on behalf of the Corporation by authorized
officers. Such certificate may designate an alternate or alternates each of whom
shall be entitled to perform all duties of the Authorized Corporation
Representative.
"BOND" or "BONDS" means the Industrial Revenue Bonds (PacSun Project),
Series 2007, in the aggregate maximum principal amount of $24,500,000, issued
pursuant to SECTION 208 of this Indenture and any Additional Bonds authenticated
and delivered under and pursuant to this Indenture.
"BOND FUND" means "The City of Olathe, Kansas, Industrial Revenue Bond
Fund - PacSun Project, Series 2007" created in SECTION 601 of this Indenture.
"BONDOWNER" means the registered owner of any Bond.
"BOND PURCHASE AGREEMENT" means the agreement by that name with respect to
the Bonds by and among the City, the Corporation and the purchaser identified
therein.
"BUSINESS DAY" shall mean a day which is not (a) a Saturday, Sunday or any
other day on which banking institutions in New York, New York, or the city or
cities in which the corporate trust office of the Trustee is located are
required or authorized to close, or (b) a day on which the New York Stock
Exchange is closed.
"CITY" means the City of Olathe, Kansas, a municipal corporation organized
and existing under the laws of the State of Kansas, and its successors and
assigns.
"CORPORATION" means Pacific Sunwear Stores Corp., a California
corporation, and its successors or assigns.
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"COMPLETION DATE" means the date of execution of the certificate required
pursuant to SECTION 504 hereof.
"CONSTRUCTION FUND" means "The City of Olathe, Kansas, Construction Fund -
PacSun Project, Series 2007" created in SECTION 501 of this Indenture.
"CUMULATIVE OUTSTANDING PRINCIPAL AMOUNT" means an amount equal to the
aggregate of all amounts paid into the Construction Fund in accordance with the
provisions of this Indenture, the Bond Purchase Agreement and the Lease, as
reflected in the bond registration records maintained by the Trustee or in the
Table of Cumulative Outstanding Principal Amount set forth in the form of Bond
in SECTION 402 hereof.
"EVENT OF DEFAULT" means any Event of Default as defined in SECTION 901
hereof.
"GOVERNMENT SECURITIES" means direct obligations of, or obligations the
payment of principal of and interest on which are unconditionally guaranteed by,
the United States of America.
"INDENTURE" means this Trust Indenture, as from time to time amended and
supplemented by Supplemental Indentures in accordance with the provisions of
ARTICLE XI hereof.
"INVESTMENT SECURITIES" means any of the following securities:
(a) any bonds or other obligations which as to principal and
interest constitute direct obligations of, or are unconditionally
guaranteed by, the United States of America, including obligations of any
of the federal agencies set forth in clause (b) below to the extent they
are unconditionally guaranteed by the United States of America;
(b) obligations of the Federal National Mortgage Association, the
Government National Mortgage Association, the Federal Financing Bank, the
Federal Intermediate Credit Corporation, Federal Banks for Cooperatives,
Federal Land Banks, Federal Home Loan Banks, Farmers Home Administration
and Federal Home Loan Mortgage Association;
(c) direct and general obligations of any state of the United States
of America, to the payment of the principal of and interest on which the
full faith and credit of such state is pledged, provided that at the time
of their purchase under this Indenture such obligations are rated in
either of the two highest rating categories by a nationally-recognized
bond rating agency;
(d) certificates of deposit, whether negotiable or nonnegotiable,
issued by any financial institution organized under the laws of any state
of the United States of America or under the laws of the United States of
America (including the Trustee), provided that such certificates of
deposit shall be either (1) continuously and fully insured by the Federal
Deposit Insurance Corporation, or (2) continuously and fully secured by
such securities as are described above in clauses (a) through (c),
inclusive, which shall have a market value (exclusive of accrued interest)
at all times at least equal to the principal amount of such certificates
of deposit and shall be lodged with the Trustee or a custodian bank, trust
company or national banking association. The bank, trust company or
national banking association holding each such certificate of deposit
required to be so secured shall furnish the Trustee written evidence
satisfactory to it that the aggregate market value of all such obligations
securing each such certificate of deposit will at all times be an amount
at least equal to the principal
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amount of each such certificate of deposit and the Trustee shall be
entitled to rely on each such undertaking;
(e) Shares of a fund registered under the Investment Company Act of
1940, as amended, whose shares are registered under the Securities Act of
1933, as amended, having assets of at least $100,000,000, whose only
assets are obligations described in (a) above, and which shares, at the
time of purchase, are rated by Standard & Poor's and Moody's in one of the
two highest rating categories (without regard to any refinements or
gradation of rating category by numerical modifier or otherwise) assigned
by such rating agencies for obligations of that nature; and
(f) Any other investment approved in writing by the Owner of the
Bonds.
"LEASE" means the Lease Agreement dated as of July 1, 2007, between the
City, as Lessor, and the Corporation, as Lessee, as from time to time amended
and supplemented by Supplemental Leases in accordance with the provisions
thereof and of ARTICLE XII of this Indenture.
"OUTSTANDING," when used with reference to Bonds, means, as of a
particular date, all Bonds theretofore authenticated and delivered, except:
(a) Bonds theretofore cancelled by the Trustee or delivered to the
Trustee for cancellation;
(b) Bonds deemed to be paid in accordance with the provisions of
SECTION 1302 hereof; and
(c) Bonds in exchange for or in lieu of which other Bonds have been
authenticated and delivered pursuant to this Indenture.
"OWNER" shall have the same meaning as Bondowner.
"PAYING AGENT" means the Trustee and any other bank or trust company
designated by this Indenture upon written notice to the Corporation as paying
agent for the Bonds at which the principal of or interest on the Bonds shall be
payable.
"PROJECT" means the project referred to in the recitals of this Indenture,
including the Project Site and the Project Improvements and all additions,
modifications, improvements, replacements and substitutions made to the Project
pursuant to the Lease as they may at any time exist, exclusive of Excluded
Property.
"PROJECT COSTS" means all costs of acquisition, purchase, construction,
improvement, financing and remodeling of the Project, including, without
limitation, the following:
(a) all costs and expenses necessary or incident to the acquisition
of the Project Site and any Project Improvements located thereon at the
execution of the Lease and which the Corporation conveys to the City;
(b) fees and expenses of architects, appraisers, surveyors and
engineers for estimates, surveys, soil borings and soil tests and other
preliminary investigations and items necessary to the commencement of
acquisition, purchase, construction, improvement and remodeling,
preparation of
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plans, drawings and specifications and supervision of construction and
renovation, as well as for the performance of all other duties of
architects, appraisers, surveyors and engineers in relation to the
acquisition, purchase, construction, improvement and remodeling of the
Project or the issuance of the Bonds;
(c) all costs and expenses of every nature incurred in acquisition,
purchase, construction, improvement and remodeling the Project
Improvements and otherwise improving the Project Site, including the
actual cost of labor, materials and furnishings as payable to contractors,
builders and materialmen in connection with the acquisition, purchase,
construction, improvement and remodeling of the Project;
(d) interest accruing on the Bonds during the period of the
acquisition, purchase, construction, improvement and remodeling of the
Project;
(e) the cost of the title insurance policies and the cost of any
insurance maintained during the construction period in accordance with
ARTICLE VII of the Lease, respectively;
(f) reasonable expenses of administration, supervision and
inspection properly chargeable to the Project, underwriting expenses,
legal fees and expenses, fees and expenses of accountants and other
consultants, publication and printing expenses, and initial fees and
expenses of the Trustee to the extent that said fees and expenses are
necessary or incident to the issuance and sale of the Bonds or the
acquisition, purchase, construction, improvement and remodeling of the
Project;
(g) all other items of expense not elsewhere specified in this
definition as may be necessary or incident to: (1) the authorization,
issuance and sale of the Bonds; (2) the acquisition, purchase,
construction, improvement and remodeling of the Project; and (3) the
financing thereof; and
(h) reimbursement to the Corporation or those acting for it for any
of the above enumerated costs and expenses incurred and paid by them
before or after the execution of the Lease;
provided, however, the Project Costs shall not include any of the foregoing
items if such item was paid or incurred prior to June 6, 2006, with the
following two exceptions (i) costs and expenses relating to architectural and
engineering services for the Project constitute Project Costs within the meaning
of this definition regardless of the date such costs were paid to the extent
such costs are properly capitalizable in accordance with generally accepted
accounting principles, and (ii) costs and expenses necessary or incidental to
the acquisition by the City of the Project Site constitute Project Costs within
the meaning of this definition regardless of the date such costs were paid.
"REFUNDING BONDS" shall have the meaning set forth in SECTION 209 hereof.
"SUPPLEMENTAL INDENTURE" means any indenture supplemental or amendatory to
this Indenture entered into by the City and the Trustee pursuant to ARTICLE XI
hereof.
"SUPPLEMENTAL LEASE" means any supplement or amendment to the Lease
entered into pursuant to ARTICLE XII hereof.
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"TAX ABATEMENT AGREEMENT" means the Performance Agreement dated as of July
1, 2007, by and between the City and the Corporation.
"TRUST ESTATE" means the Trust Estate described in the Granting Clauses of
this Indenture.
"TRUSTEE" means U.S. Bank National Association in the City of Los Angeles,
California, a national banking association duly organized and existing under the
laws of the United States of America, and its successor or successors and any
other corporation which at the time may be substituted in its place pursuant to
and at the time serving as Trustee under this Indenture.
SECTION 102. RULES OF INTERPRETATION.
(a) Unless the context shall otherwise indicate, the words importing the
singular number shall include the plural and vice versa, and words importing
persons shall include firms, associations and corporations, including public
bodies, as well as natural persons.
(b) Wherever in this Indenture it is provided that either party shall or
will make any payment or perform or refrain from performing any act or
obligation, each such provision shall, even though not so expressed, be
construed as an express covenant to make such payment or to perform, or not to
perform, as the case may be, such act or obligation.
(c) All references in this instrument to designated "Articles," "Sections"
and other subdivisions are, unless otherwise specified, to the designated
Articles, Sections and subdivisions of this instrument as originally executed.
The words "herein," "hereof," "hereunder" and other words of similar import
refer to this Indenture as a whole and not to any particular Article, Section or
subdivision.
(d) The Table of Contents and the Article and Section headings of this
Indenture shall not be treated as a part of this Indenture or as affecting the
true meaning of the provisions hereof.
ARTICLE II
THE BONDS
SECTION 201. TITLE AND AMOUNT OF BONDS. No Bonds may be issued under this
Indenture except in accordance with the provisions of this Article. The Bonds
authorized to be issued under this Indenture shall be designated as "City of
Olathe, Kansas Industrial Revenue Bonds (PacSun Project), Series 2007." The
maximum total principal amount of Bonds that may be issued hereunder is hereby
expressly limited to $24,500,000, plus the principal amount of any Additional
Bonds.
SECTION 202. NATURE OF OBLIGATION. The Bonds and the interest thereon
shall be special obligations of the City payable solely out of the rents,
revenues and receipts derived by the City from the Project and not from any
other fund or source of the City, and are secured by a pledge and assignment of
the Trust Estate to the Trustee in favor of the Owners of the Bonds, as provided
in this Indenture. The Bonds and the interest thereon shall not constitute
general obligations of the City or the State of Kansas, and neither the City nor
said State shall be liable thereon, and the Bonds shall not constitute an
indebtedness within the meaning of any constitutional or statutory debt
limitation or restriction, and are not payable in any manner by taxation.
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SECTION 203. DENOMINATION, NUMBER AND DATING OF BONDS.
(a) The Bonds shall be initially issuable in the form of one fully
registered Bond without coupons in the maximum principal denomination of up to
$24,500,000. The Bond shall be substantially in the form hereinafter set forth
in ARTICLE IV of this Indenture.
(b) The Bond shall be dated by the Trustee as of the date of initial
delivery thereof as provided herein. If the Bond is at any time thereafter
transferred, any Bond replacing such Bond shall be dated as of the date of
authentication thereof.
SECTION 204. METHOD AND PLACE OF PAYMENT OF BONDS.
(a) The principal of and interest on the Bonds shall be payable in any
coin or currency of the United States of America which on the respective dates
of payment thereof is legal tender for payment of public and private debts.
(b) Payment of the principal of the Bonds shall be made upon the
presentation and surrender of such Bond at the corporate trust office of any
Paying Agent named in the Bond; PROVIDED, that so long as the Corporation is the
sole Bondowner, the Trustee shall make payments of principal on the Bonds by
internal bank transfer or by wire transfer to an account at a commercial bank or
savings institution designated by such Bondowner and located in the continental
United States; PROVIDED, FURTHER, that upon any payment by internal bank
transfer or by wire transfer of principal on the Bonds, the Trustee shall record
the amount of such principal payment on the registration books for the Bonds
maintained by the Trustee on behalf of the City. If the Bonds are presented to
the Trustee together with such payment, the Trustee may enter the amount of such
principal payment on the Table of Cumulative Outstanding Principal Amount on the
Bonds in the manner provided by SECTION 402 hereof. Notwithstanding the
foregoing, the registration books maintained by the Trustee shall be the
official record of the Cumulative Outstanding Principal Amount on the Bonds at
any time, and the Bondowner is not required to present the Bonds for action by
the Trustee, as bond registrar, with each payment of principal on the Bonds.
Payment of the interest on the Bonds shall be made by the Trustee on each
interest payment date to the person appearing on the registration books of the
City hereinafter provided for as the registered owner thereof on the fifteenth
day (whether or not a Business Day) of the calendar month next preceding such
interest payment date by check or draft mailed to such registered owner at such
owner's address as it appears on such registration books. In the event that the
Corporation is the sole Bondowner, the Trustee is authorized to make interest
payments on the Bonds by internal bank transfer or by wire transfer to an
account at a commercial bank or savings institution designated by such Bondowner
and located in the continental United States. In addition, at the written
request of any registered owner of Bonds in the aggregate principal amount of at
least $1,000,000, the principal and interest on the Bonds shall be paid by
electronic transfer to such owner upon written notice to the Trustee from such
owner containing the electronic transfer instructions (which shall be in the
continental United States) to which such owner wishes to have such transfer
directed and such written notice is given by such owner to the Trustee not later
than the fifteenth day (whether or not a Business Day) of the calendar month
next preceding such interest payment date. Any such written notice for
electronic transfer shall be signed by such owner and shall include the name of
the bank, its address, its ABA routing number and the name, number and contact
name related to such owner's account at such bank to which the payment is to be
credited.
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SECTION 205. EXECUTION AND AUTHENTICATION OF BONDS.
(a) The Bonds shall be executed on behalf of the City by the manual or
facsimile signature of its Mayor and attested by the manual or facsimile
signature of its City Clerk, and shall have the corporate seal of the City
affixed thereto or imprinted thereon. In case any officer whose signature or
facsimile thereof appears on the Bonds shall cease to be such officer before the
delivery of the Bonds, such signature or facsimile thereof shall nevertheless be
valid and sufficient for all purposes, the same as if such person had remained
in office until delivery. Any Bond may be signed by such persons as at the
actual time of the execution of such Bond shall be the proper officers to sign
such Bond although at the date of such Bond such persons may not have been such
officers.
(b) The Bonds shall have endorsed thereon a Certificate of Authentication
substantially in the form set forth in SECTION 403 hereof, which shall be
manually executed by the Trustee. No Bonds shall be entitled to any security or
benefit under this Indenture or shall be valid or obligatory for any purposes
unless and until such Certificate of Authentication shall have been duly
executed by the Trustee. Such executed Certificate of Authentication upon any
Bond shall be conclusive evidence that such Bond has been duly authenticated and
delivered under this Indenture. The Certificate of Authentication on any Bond
shall be deemed to have been duly executed if signed by any authorized officer
or employee of the Trustee.
SECTION 206. REGISTRATION, TRANSFER AND EXCHANGE OF BONDS.
(a) The Trustee shall keep books for the registration and for the transfer
of Bonds as provided in this Indenture.
(b) The Bonds may be transferred only upon the books kept for the
registration and transfer of Bonds upon surrender thereof to the Trustee duly
endorsed for transfer or accompanied by an assignment duly executed by the
registered owner or such owner's attorney or legal representative, in such form
as shall be satisfactory to the Trustee. The Bonds have not been registered
under the Securities Act of 1933, as amended, or any state securities law, and
the Bonds may not be transferred unless (i) the City consents in writing to such
transfer, and (ii) and the City and the Trustee are furnished a written legal
opinion from counsel acceptable to the City and the Corporation, to the effect
that such transfer is exempt from the registration requirements of the
Securities Act of 1933, as amended, and any applicable state securities law. The
Bonds may be transferred to any successor to the Corporation or any entity owned
or under common ownership with the Corporation, as Lessee under the Lease
without the necessity of obtaining the City's consent or such an opinion. In
connection with any such transfer of the Bonds the Trustee shall receive an
executed representation letter signed by the proposed assignee containing
substantially the same representations contained in the representation letter
delivered to the Trustee from the Owner upon the initial issuance of the Bonds.
Upon any such transfer, the City shall execute and the Trustee shall
authenticate and deliver in exchange for such Bonds a new fully registered Bond
or Bonds, registered in the name of the transferee, of any denomination or
denominations authorized by this Indenture, in an aggregate principal amount
equal to the outstanding principal amount of such Bonds, of the same maturity
and bearing interest at the same rate.
(c) In all cases in which Bonds shall be exchanged or transferred
hereunder the provisions of any legend restrictions on the Bonds shall be
complied with and the City shall execute and the Trustee shall authenticate and
deliver at the earliest practicable time Bonds in accordance with the provisions
of this Indenture. All Bonds surrendered in any such exchange or transfer shall
forthwith be cancelled by the Trustee. The City or the Trustee may make a
reasonable charge for every such exchange or transfer of Bonds sufficient to
reimburse it for any tax, fee or other governmental charge required to be paid
with
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respect to such exchange or transfer, and such charge shall be paid before any
such new Bond shall be delivered. Neither the City nor the Trustee shall be
required to make any such exchange or transfer of Bonds during the 15 days
immediately preceding an interest payment date on the Bonds or, in the case of
any proposed redemption of Bonds, during the 15 days immediately preceding the
selection of Bonds for such redemption or after such Bonds or any portion
thereof have been selected for redemption.
SECTION 207. PERSONS DEEMED OWNERS OF BONDS. As to any Bond, the person in
whose name the same shall be registered as shown on the bond registration books
required by SECTION 206 hereof shall be deemed and regarded as the absolute
owner thereof for all purposes, and payment of or on account of the principal of
and interest on any such Bond shall be made only to or upon the order of the
registered owner thereof or a legal representative thereof. All such payments
shall be valid and effectual to satisfy and discharge the liability upon such
bond, including the interest thereon, to the extent of the sum or sums so paid.
SECTION 208. AUTHORIZATION OF THE BONDS.
(a) There shall be issued and secured by this Indenture a series of Bonds
in the aggregate maximum principal amount of $24,500,000 for the purpose of
providing funds for paying the costs of the Project, which Bonds shall be
designated "City of Olathe, Kansas Industrial Revenue Bonds (PacSun Project),
Series 2007." The Bonds shall be dated as provided in SECTION 203(b) hereof,
shall become due on January 1, 2018 (subject to prior redemption as hereinafter
provided in ARTICLE III) and shall bear interest as specified in SECTION 208(e)
hereof, payable on the dates specified in SECTION 208(e) hereof.
(b) The Trustee is hereby designated as the City's Paying Agent for the
payment of the principal of and interest on the Bonds.
(c) The Bonds shall be executed without material variance from the form
and in the manner set forth in ARTICLE IV hereof and delivered to the Trustee
for authentication, but prior to or simultaneously with the authentication and
delivery of the Bonds by the Trustee, there shall be filed with the Trustee the
following:
(1) An original or certified copy of Ordinance No. 07-34 passed by
the governing body of the City on May 1, 2007, authorizing the issuance of
the Bonds and the execution of this Indenture and the Lease;
(2) An original executed counterpart of this Indenture;
(3) An original executed counterpart of the Lease;
(4) A request and authorization to the Trustee on behalf of the
City, executed by the Authorized City Representative, to authenticate the
Bonds and deliver the same to the purchaser identified in the Bond
Purchase Agreement upon payment to the Trustee, for the account of the
City, of the purchase price thereof specified in the Bond Purchase
Agreement. The Trustee shall be entitled to conclusively rely upon such
request and authorization as to names of the purchaser and the amount of
such purchase price;
(5) An opinion of counsel nationally recognized on the subject of
municipal bonds to the effect that the Bonds constitute valid and legally
binding limited and special revenue obligations of the City; and
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(6) Such other certificates, statements, receipts and documents as
the City shall reasonably require for the delivery of the Bonds.
(d) When the documents specified in SUBSECTION (c) of this Section shall
have been filed with the Trustee, and when the Bonds shall have been executed
and authenticated as required by this Indenture, the Trustee shall deliver the
Bonds to or upon the order of the purchaser thereof, but only upon payment to
the Trustee of the purchase price of the Bonds, as specified in the Bond
Purchase Agreement. The proceeds of the sale of the Bonds shall be immediately
paid over to the Trustee, and the Trustee shall deposit and apply such proceeds
as provided in ARTICLE V hereof.
(e) The Bonds shall bear interest at the rate of 7% per annum on the
Cumulative Outstanding Principal Amount of the Bonds, and such interest shall be
payable in arrears on each January 1 and July 1, commencing on January 1, 2008,
and continuing thereafter until the said Cumulative Outstanding Principal Amount
is paid in full. Interest shall be calculated on the basis of a year of 360 days
consisting of twelve months of 30 days each. Principal shall be payable at
maturity unless redeemed prior to said date in accordance with ARTICLE III.
SECTION 209. AUTHORIZATION OF ADDITIONAL BONDS.
(a) Additional Bonds may be issued under and equally and ratably secured
by this Indenture on a parity with the Bonds, and any other Additional Bonds
which remain Outstanding after the issuance of such Additional Bonds, at any
time or from time to time, upon compliance with the conditions hereinafter
provided in this Section, for the purpose of providing funds for (i) refunding
all or part of the Bonds then Outstanding, including the payment of any premium
thereon and interest to accrue to the designated redemption date and any
expenses in connection with such refunding, (ii) to provide funds to pay the
costs of completing the Project, (iii) to provide funds to pay all or any part
of the costs of repairing, replacing or restoring the Project in the event of
damage, destruction or condemnation thereto or thereof, and (iv) to provide
funds to pay all or any part of the costs of acquisition, purchase,
construction, improvement and remodeling to the Project as the Corporation may
deem necessary or desirable. Additional Bonds issued for purposes described in
clause (i) above shall also be referred to as "Refunding Bonds."
(b) Before any Additional Bonds shall be issued under the provisions of
this Section, the City shall (i) pass an ordinance authorizing the issuance of
such Additional Bonds, fixing the amount thereof and describing the Bonds to be
refunded, authorizing the City to enter into a Supplemental Indenture for the
purpose of issuing such Additional Bonds and, if required, authorizing the City
to enter into a Supplemental Lease with the Corporation, and (ii) except in the
case of Refunding Bonds, for which consent shall not be required, obtain the
written consent to the issuance of the proposed Additional Bonds from the Owners
of 100% of the Bonds Outstanding as reflected on the bond registration books
maintained by the Trustee immediately preceding the issuance of such Additional
Bonds.
(c) Such Additional Bonds shall be dated, shall be stated to mature in
such year or years, shall bear interest at such rate or rates not exceeding the
maximum rate then permitted by law, and shall be redeemable at such times and
prices, all as may be provided by the Supplemental Indenture authorizing the
issuance of such Additional Bonds. Except as to any difference in the date, the
maturity or maturities, the rate or rates of interest or the provisions for
redemptions, such Additional Bonds shall be on a parity with and shall be
entitled to the same benefit and security of this Indenture as the Bonds, and
any other Additional Bonds which remain Outstanding after the issuance of such
Additional Bonds.
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(d) Except as provided in this Section, the City will not otherwise issue
any obligations on a parity with the Bonds, but the City may, at the written
request of the Corporation, issue other obligations specifically subordinate and
junior to the Bonds, without the written consent of all or any of the Owners.
SECTION 210. MUTILATED, LOST, STOLEN OR DESTROYED BONDS. In the event any
Bond shall become mutilated, or be lost, stolen or destroyed, the City shall
execute and the Trustee shall authenticate and deliver a new Bond of like
series, date and tenor as the Bond mutilated lost, stolen or destroyed; provided
that, in the case of any mutilated Bond, such mutilated Bond shall first be
surrendered to the Trustee, and in the case of any lost, stolen or destroyed
Bond, there shall be first furnished to the City and the Trustee evidence of
such loss, theft or destruction satisfactory to the City and the Trustee,
together with indemnity satisfactory to them. In the event any such Bond shall
have matured, instead of issuing a substitute Bond, the City and the Trustee may
require the payment of an amount sufficient to reimburse the City and the
Trustee for any tax or other governmental charge that may be imposed in relation
thereto and any other reasonable fees and expenses incurred in connection
therewith.
SECTION 211. CANCELLATION AND DESTRUCTION OF BONDS UPON PAYMENT.
(a) All Bonds which have been paid or redeemed or which the Trustee has
purchased or which have otherwise been surrendered to the Trustee under this
Indenture, either at or before maturity shall be cancelled by the Trustee
immediately upon the payment, redemption or purchase of such Bonds and the
surrender thereof to the Trustee.
(b) All Bonds cancelled under any of the provisions of this Indenture
shall be destroyed by the Trustee. The Trustee shall execute a certificate in
triplicate describing the Bonds so destroyed, and shall file executed
counterparts of such certificate with the City and the Corporation.
ARTICLE III
REDEMPTION OF BONDS
SECTION 301. REDEMPTION OF BONDS GENERALLY. The Bonds shall be subject to
redemption prior to maturity in accordance with the terms and provisions set
forth in this Article. Additional Bonds shall be subject to redemption prior to
maturity in accordance with the terms and provisions contained in this Article
and as may be specified in the Supplemental Indenture authorizing such
Additional Bonds.
SECTION 302. REDEMPTION OF BONDS. The Bonds shall be subject to redemption
and payment in whole or in part, as follows:
(a) At any time prior to the stated maturity thereof, by the City,
at the option of and upon written instructions from the Corporation, at a
price equal to the principal amount thereof, plus accrued interest
thereon, without premium or penalty, to the date of payment.
(b) At any time prior to the stated maturity thereof, to the extent
amounts are deposited into the Bond Fund in accordance with SECTION 602
hereof, at a price equal to the principal amount thereof, plus accrued
interest thereon, without premium or penalty, to the date of payment.
SECTION 303. EFFECT OF CALL FOR REDEMPTION. Prior to or on the date fixed
for redemption, funds or Government Securities shall be placed with the Trustee
which are sufficient to pay the Bonds called for
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redemption and accrued interest thereon, if any, to the redemption date. Upon
the happening of the above conditions and appropriate written notice having been
given, the Bonds or the portions of the principal amount of Bonds thus called
for redemption shall cease to bear interest on the specified redemption date,
and shall no longer be entitled to the protection, benefit or security of this
Indenture and shall not be deemed to be Outstanding under the provisions of this
Indenture.
SECTION 304. NOTICE OF REDEMPTION. In the event the Bonds are to be called
for redemption as provided in SECTION 302(a) or (b) hereof, the Corporation
shall deliver written notice to the City and the Trustee that it has elected to
redeem all or a portion of the Bonds in accordance with SECTION 302(a) or (b)
hereof at least ten days prior to the scheduled redemption date. The Trustee
shall then deliver written notice to the Owner at least five days prior to the
scheduled redemption date by first class mail stating the date upon which the
Bonds will be redeemed and paid.
ARTICLE IV
FORM OF BONDS
SECTION 401. FORM GENERALLY. The Bonds and the Trustee's Certificate of
Authentication to be endorsed thereon shall be issued in substantially the form
set forth in this article. Additional Bonds and the Trustee's Certificate of
Authentication to be endorsed thereon shall be in substantially the form set
forth in this Article, with such necessary or appropriate variations, omissions
and insertions as are permitted or required by this Indenture or any
Supplemental Indenture. The Bonds may have endorsed thereon such legends or text
as may be necessary or appropriate to conform to any applicable rules and
regulations of any governmental authority or any custom, usage or requirements
of law with respect thereto.
SECTION 402. FORM OF BOND.
[Remainder of page intentionally blank.]
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(FORM OF BOND)
This Bond has not been registered under the Securities Act of 1933, as amended,
or any state securities laws, and this Bond may not be transferred unless (i)
the City consents in writing to such transfer, and (ii) the City and the Trustee
are furnished a written legal opinion from counsel acceptable to the City and
the Corporation, to the effect that such transfer is exempt from the
registration requirements of the Securities Act of 1933, as amended, and any
applicable state securities laws. This Bond may be transferred to any successor
of the Corporation or any entity owned by or under common ownership with the
Corporation without the necessity of obtaining the City's consent or such an
opinion.
UNITED STATES OF AMERICA
STATE OF KANSAS
COUNTY OF JOHNSON
CITY OF OLATHE, KANSAS
INDUSTRIAL REVENUE BOND
(PACSUN PROJECT)
SERIES 2007
THE CITY OF OLATHE, KANSAS, a municipal corporation organized and existing
under the laws of the State of Kansas (the "City"), for value received, promises
to pay, but solely from the source hereinafter referred to, to
PACIFIC SUNWEAR STORES CORP.
or registered assigns, on January 1, 2018, the principal amount of
TWENTY-FOUR MILLION FIVE HUNDRED THOUSAND DOLLARS
or such lesser amount as may be outstanding hereunder as reflected in the bond
registration books maintained by the Trustee. The registered owner shall note
the principal amount outstanding hereunder in the Table of Cumulative
Outstanding Principal Amount attached hereto, provided, however, that the
registration books maintained by the Trustee shall be the official record of the
Cumulative Outstanding Principal Amount of this Bond, in any coin or currency of
the United States of America which on the date of payment thereof is legal
tender for the payment of public and private debts, and in like manner to pay to
the registered owner hereof, either by check or draft mailed to the registered
owner at a stated address as it appears on the bond registration books of the
City kept by the Trustee under the within mentioned Indenture or, in certain
situations authorized in the Indenture, by internal bank transfer or by wire
transfer to an account in a commercial bank or savings institution located in
the continental United States, interest on the Cumulative Outstanding Principal
Amount (as hereinafter defined) at the rate of 7% per annum payable in arrears
on each January 1 and July 1, commencing on January 1, 2008, and continuing
thereafter until the said Cumulative Outstanding Principal Amount is paid in
full. Interest shall be computed on the basis of a year of 360 days consisting
of 12 months of 30 days each. Principal on this Bond shall be payable on the
maturity date set forth above, unless such principal shall have been paid as a
result of a redemption of this Bond prior to such maturity date.
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As used herein, the term "Cumulative Outstanding Principal Amount" means
an amount equal to the aggregate of all amounts paid into the Construction Fund
in accordance with the terms of the hereinafter defined Indenture, as reflected
in the bond registration books maintained by the Trustee.
The Trustee shall keep and maintain a record of the amounts deposited into
the Construction Fund pursuant to the terms of the Indenture as "Principal
Amount Deposited into Construction Fund" and shall enter the aggregate principal
amount of this Bond then outstanding on its records as the "Cumulative
Outstanding Principal Amount" on its records maintained for this Bond. On each
date upon which a portion of the Cumulative Outstanding Principal Amount is paid
to the registered owner hereof, pursuant to the optional redemption provisions
of the Indenture, the Trustee shall enter on its records the principal amount
paid on the Bond as "Principal Amount Paid Pursuant to Optional Redemption
Provisions," and shall enter the then outstanding principal amount of this Bond
as "Cumulative Outstanding Principal Amount" on its records. The registered
owner may from time to time enter the respective amounts deposited into the
Construction Fund pursuant to the terms of the Indenture under the column headed
"Principal Amount Deposited Into Construction Fund" on the attached Table of
Cumulative Outstanding Principal Amount (the "Table") and may enter the
aggregate principal amount of this Bond then outstanding under the column headed
"Cumulative Outstanding Principal Amount" on the attached Table. On each date
upon which a portion of the Cumulative Outstanding Principal Amount is paid to
the registered owner hereof pursuant to the optional redemption provisions of
the Indenture, the registered owner may enter the principal amount paid on this
Bond under the column headed "Principal Amount Paid Pursuant to Optional
Redemption Provisions" on the Table and may enter the then outstanding principal
amount of this Bond under the column headed "Cumulative Outstanding Principal
Amount" on the Table. However, the records maintained by the Trustee as to
amounts deposited into the Construction Fund or principal amounts paid on this
Bond shall be the official records of the Cumulative Outstanding Principal
Amount for all purposes.
THIS BOND is a duly authorized Bond of the City designated "City of
Olathe, Kansas Industrial Revenue Bonds (PacSun Project), Series 2007," in the
aggregate maximum principal amount of $24,500,000 (the "Bonds"), to be issued
for the purpose of providing funds to pay the cost of acquiring, purchasing,
constructing, installing and remodeling a commercial project, consisting of a
distribution facility, including land, buildings, structures, improvements and
fixtures (the "Project"), to be leased to Pacific Sunwear Stores Corp., a
California corporation (the "Corporation"), under the terms of a Lease Agreement
dated as of July 1, 2007 (said Lease Agreement, as amended and supplemented from
time to time in accordance with the provisions thereof, being herein called the
"Lease"), between the City and the Corporation, all pursuant to the authority of
and in full compliance with the provisions, restrictions and limitations and
Constitution and statutes of the State of Kansas, including particularly K.S.A.
12-1740 to 12-1749d, inclusive, as amended, and pursuant to proceedings duly had
by the governing body of the City.
THE BONDS are issued under and are equally and ratably secured and
entitled to the protection given by a Trust Indenture dated as of July 1, 2007
(said Trust Indenture, as amended and supplemented from time to time in
accordance with the provisions thereof, being herein called the "Indenture"),
between the City and U.S. Bank National Association (the "Trustee"). Subject to
the terms and conditions set forth therein, the Indenture permits the City to
issue Additional Bonds (as defined therein) secured by the Indenture on a parity
with the Bonds. Reference is hereby made to the Indenture for a description of
the provisions, among others, with respect to the nature and extent of the
security for the Bonds, the rights, duties and obligations of the City, the
Trustee and the owners of the Bonds, and the terms upon which the Bonds are
issued and secured.
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THIS BOND shall be subject to redemption and payment in whole or in part,
as follows:
(a) At any time prior to the stated maturity thereof, by the City,
at the option of and upon instructions from the Corporation, at a price
equal to the principal amount thereof, plus accrued interest thereon,
without premium or penalty, to the date of payment.
(b) At any time prior to the stated maturity thereof, to the extent
amounts are deposited into the Bond Fund in accordance with SECTION 602 of
the Indenture, at a price equal to the principal amount thereof, plus
accrued interest thereon, without premium or penalty, to the date of
payment.
In the event the Bonds are to be called for redemption as provided in paragraphs
(a) or (b) above, the Corporation shall deliver written notice to the City and
the Trustee that it has elected to redeem all or a portion of the Bonds in
accordance with paragraph (a) or (b) above at least ten days prior to the
scheduled redemption date. The Trustee shall then deliver written notice to the
Owner of this Bond at least five days prior to the scheduled redemption date by
first class mail stating the date upon which the Bonds will be redeemed and
paid.
THE BONDS are special obligations of the City payable solely out of the
rents, revenues and receipts derived by the City from the Project and not from
any other fund or source of the City, and are secured by a pledge and assignment
of the Project and of such rents, revenues and receipts, including all rentals
and other amounts to be received by the City under and pursuant to the Lease,
all as provided in the Indenture. The Bonds do not constitute general
obligations of the City or the State of Kansas, and neither the City nor said
State shall be liable thereon, and the Bonds shall not constitute an
indebtedness within the meaning of any constitutional or statutory debt
limitation or restriction, and are not payable in any manner by taxation.
Pursuant to the provisions of the Lease, rental payments sufficient for the
prompt payment when due of the principal of and interest on the Bonds are to be
paid by the Corporation directly to the Trustee for the account of the City and
deposited in a special account created by the City and designated the "City of
Olathe, Kansas, Industrial Revenue Bond Fund - PacSun Project, Series 2007."
THE OWNER of this Bond shall have no right to enforce the provision of the
Indenture or to institute action to enforce the covenants therein, or to take
any action with respect to any event of default under the Indenture, or to
institute, appear in or defend any suit or other proceedings 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 all the Bonds issued under the Indenture and then Outstanding may
become or may be declared due and payable before the stated maturity thereof,
together with interest accrued thereon. Modifications or alterations of this
Bond or the Indenture may be made only to the extent and in the circumstances
permitted by the Indenture.
SUBJECT TO the requirements for transfer set forth above in the legend
contained on the face of this Bond, this Bond is transferable, as provided in
the Indenture, only upon the books of the City kept for that purpose at the
above-mentioned office of the Trustee by the registered owner hereof in person
or by such person's duly authorized attorney, upon surrender of this Bond
together with a written instrument of transfer satisfactory to the Trustee duly
executed by the registered owner or such person's duly authorized attorney, and
thereupon a new fully registered Bond or Bonds, without coupons, and in the same
aggregate principal amounts, shall be issued to the transferee in exchange
therefor as provided in the Indenture, and upon payment of the charges therein
prescribed. The City, the Trustee and any Paying Agent may deem and treat the
person in whose name this Bond is registered as the absolute owner hereof for
the purpose of receiving payment of, or on account of, the principal or
redemption price hereof and interest due hereon and for all other purposes.
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THE BONDS are issuable in the form of one fully registered Bond without
coupons in the maximum principal denomination of $24,500,000.
THIS BOND shall not be valid or become obligatory for any purposes or be
entitled to any security or benefit under the Indenture until the Certificate of
Authentication hereon shall have been executed by the Trustee.
IT IS HEREBY CERTIFIED AND DECLARED that all acts, conditions and things
required to exist, happen and be performed precedent to and in the execution and
delivery of the Indenture and the issuance of this Bond do exist, have happened
and have been performed in due time, form and manner as required by the
Constitution and laws of the State of Kansas.
[Remainder of page intentionally blank.]
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IN WITNESS WHEREOF, the City of Olathe, Kansas, has caused this Bond to be
executed in its name by the manual or facsimile signature of its Mayor, attested
by the manual or facsimile signature of its City Clerk and its corporate seal to
be affixed hereto or imprinted hereon, and has caused this Bond to be dated as
of July ____, 2007.
CITY OF OLATHE, KANSAS
By:
---------------------------
Mayor
(SEAL)
ATTEST:
By:
---------------------------
City Clerk
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TABLE OF CUMULATIVE OUTSTANDING PRINCIPAL AMOUNT
Principal Amount Cumulative
Principal Amount Paid Pursuant to Outstanding Notation
Deposited Into Redemption Principal Made
Date Construction Fund Provisions Amount By
- ---- ----------------- ---------------- ----------- --------
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================================================================================
(FORM OF ASSIGNMENT)
(NOTE RESTRICTIONS ON TRANSFERS)
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers unto
________________________________________________________________________________
Print or Typewrite Name, Address and Social Security or
other Taxpayer Identification Number of Transferee
the within Bond and all rights thereunder, and hereby irrevocably constitutes
and appoints _____________________________ attorney to transfer the within Bond
on the books kept by the Trustee for the registration and transfer of Bonds,
with full power of substitution in the premises.
Dated: ______________________.
___________________________________________
NOTICE: The signature to this assignment
must correspond with the name as it appears
upon the face of the within Bond in every
particular.
Signature Guaranteed By:
[Seal of Bank] -------------------------------------------
(Name of Bank)
By:
---------------------------------------
Title:
------------------------------------
================================================================================
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SECTION 403. FORM OF CERTIFICATE OF AUTHENTICATION.
(FORM OF TRUSTEE'S CERTIFICATE OF AUTHENTICATION)
================================================================================
CERTIFICATE OF AUTHENTICATION
This Bond is the Industrial Revenue Bond (PacSun Project), Series 2007,
described in the Trust Indenture. The effective date of registration of this
Bond is set forth below.
U.S. BANK NATIONAL ASSOCIATION,
as Trustee
________________________ By:
----------------------------
Date Name:
--------------------------
Title:
------------------------
================================================================================
(End of ARTICLE IV)
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ARTICLE V
CUSTODY AND APPLICATION OF BOND PROCEEDS
SECTION 501. CREATION OF CONSTRUCTION FUND. There is hereby created and
ordered to be established in the custody of the Trustee a special trust fund in
the name of the City to be designated the "City of Olathe, Kansas, Construction
Fund - PacSun Project, Series 2007" (herein called the "Construction Fund").
SECTION 502. DEPOSITS INTO THE CONSTRUCTION FUND. The proceeds of the sale
of the Bonds, including Additional Payments provided for in the Bond Purchase
Agreement, when received, excluding such amounts required to be paid into the
Bond Fund pursuant to SECTION 602 hereof, shall be deposited by the Trustee into
the Construction Fund. Any money received by the Trustee from any other source
for the purpose of acquisition, purchasing, construction, improving or
remodeling of the Project shall also be deposited into the Construction Fund.
SECTION 503. DISBURSEMENTS FROM THE CONSTRUCTION FUND.
(a) The moneys in the Construction Fund shall be disbursed by the Trustee
for the payment of Project Costs upon receipt of requisition certificates signed
by the Corporation in accordance with the provisions of ARTICLE IV of the Lease,
and the Trustee hereby covenants and agrees to disburse such moneys in
accordance with such provisions. All disbursements from the Construction Fund
which are payable to the Corporation shall be made by internal bank transfer or
wire transfer as designated by the Corporation in writing to the Trustee. The
Trustee shall disburse moneys in the Construction Fund in each case within two
(2) Business Days after receipt by the Trustee of an executed written
requisition certificate. The Trustee shall notify the registered owner of the
Bonds by telephone when the Trustee is prepared to disburse moneys pursuant to
any requisition certificate. Any moneys received by the Trustee by 11:00 a.m.
for deposit in the Construction Fund for which the Trustee has received a
requisition certificate shall be disbursed from the Construction Fund on the
same Business Day.
(b) In paying any requisition under this Section, the Trustee may rely as
to the completeness and accuracy of all statements in such requisition
certificate if such requisition certificate is signed by the Authorized
Corporation Representative. If the City so requests in writing, a copy of each
requisition certificate submitted to the Trustee for payment under this Section
shall be promptly provided by the Trustee to the City.
(c) If required, the City covenants and agrees to take all necessary and
appropriate action promptly in approving and ordering all such disbursements.
The Trustee is hereby authorized and directed to issue checks for each
disbursement in the manner and as provided for by the aforesaid provisions of
the Lease.
(d) The Trustee shall keep and maintain adequate records pertaining to the
Construction Fund and all disbursements therefrom, and shall provide a statement
of receipts and disbursements with respect thereto to the Corporation on a
monthly basis. After the Project has been completed and a certificate of payment
of all costs filed as provided in SECTION 504 hereof, the Trustee shall file a
final statement of receipts and disbursements with respect thereto with the City
and the Corporation.
SECTION 504. COMPLETION OF THE PROJECT. The completion of the Project and
payment of all costs and expenses incident thereto shall be evidenced by the
filing with the Trustee of the certificate
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required by the provisions of SECTION 4.5 of the Lease. As soon as practicable
any balance remaining in the Construction Fund shall without further
authorization be deposited in the Bond Fund.
SECTION 505. DISPOSITION UPON ACCELERATION. If the principal of the Bonds
shall have become due and payable pursuant to SECTION 902 of this Indenture,
upon the date of payment by the Trustee of any moneys due as hereinafter
provided in ARTICLE IX provided, any balance remaining in the Construction Fund
shall without further authorization be deposited in the Bond Fund by the Trustee
with advice to the City and to the Corporation of such action.
ARTICLE VI
REVENUES AND FUNDS
SECTION 601. CREATION OF THE BOND FUND. There is hereby created and
ordered established in the custody of the Trustee a special trust fund in the
name of the City to be designated the "City of Olathe, Kansas, Industrial
Revenue Bond Fund - PacSun Project, Series 2007" (herein called the "Bond
Fund").
SECTION 602. DEPOSITS INTO THE BOND FUND. The Trustee shall deposit into
the Bond Fund, as and when received, (a) all accrued interest on the Bonds paid
by the purchaser of the Bonds; (b) all rent payments payable by the Corporation
to the City specified in SECTION 5.1 of the Lease and amounts due under SECTION
5.2 of the Lease; (c) any amount in the Construction Fund to be transferred to
the Bond Fund pursuant to SECTION 504 hereof upon completion of the Project; (d)
the balance of any Net Proceeds (as defined in the Lease) of condemnation awards
or insurance received by the Trustee pursuant to ARTICLE IX of the Lease; (e)
the amounts to be deposited in the Bond Fund pursuant to SECTIONS 9.1(b) and
9.1(c) of the Lease; (f) all interest and other income derived from investments
of Bond Fund moneys as provided in SECTION 702 hereof; and (g) all other moneys
received by the Trustee under and pursuant to any of the provisions of the Lease
when accompanied by directions from the person depositing such moneys that such
moneys are to be paid into the Bond Fund, including, without limitation, amounts
payable into the Bond Fund by the City pursuant to SECTION 801 hereof.
SECTION 603. APPLICATION OF MONEYS IN THE BOND FUND.
(a) Except as provided in SECTION 606 and SECTION 908 hereof or in SECTION
4.6(a) of the Lease, moneys in the Bond Fund shall be expended solely for the
payment of the principal of and the interest on the Bonds as the same mature and
become due or upon the redemption thereof prior to maturity; provided, however,
that any amounts received by the Trustee as Additional Rent under SECTION 5.2 of
the Lease and deposited to the Bond Fund as provided in SECTION 602 above, shall
be expended by the Trustee for such items of Additional Rent as they are
received or due without further authorization from the City.
(b) The City hereby authorizes and directs the Trustee to withdraw
sufficient funds from the Bond Fund to pay the principal of and the interest on
the Bonds as the same become due and payable and to make said funds so withdrawn
available to the Paying Agent for the purpose of paying said principal and
interest.
(c) Whenever the amount in the Bond Fund from any source whatsoever is
sufficient to redeem all of the Bonds Outstanding and to pay interest to accrue
thereon prior to such redemption, the City covenants and agrees, upon request of
the Corporation, to take and cause to be taken the necessary steps to redeem all
such Bonds on the next succeeding redemption date for which the required
redemption notice
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may be given or on such later redemption date as may be specified by the
Corporation. The Trustee may use any moneys in the Bond Fund to redeem a part of
the Bonds Outstanding in accordance with and to the extent permitted by ARTICLE
III hereof so long as the Corporation is not in default (beyond any applicable
notice and cure periods) with respect to any payments under the Lease and to the
extent said moneys are in excess of the amount required for payment of Bonds
theretofore matured or called for redemption and past due interest, if any, in
all cases when such Bonds have not been presented for payment.
SECTION 604. PAYMENTS DUE ON SATURDAYS, SUNDAYS AND HOLIDAYS. In any case
where the date of maturity of principal of or interest, if any, on the Bonds or
the date fixed for redemption of any Bonds shall be a Saturday, a Sunday or a
legal holiday or a day on which banking institutions in the city of payment are
authorized by law to close, then payment of principal or interest, if any, need
not be made on such date but may be made on the next succeeding Business Day not
a Saturday, a Sunday or a legal holiday or a day upon which banking institutions
are authorized by law to close with the same force and effect as if made on the
date of maturity or the date fixed for redemption, and no interest, if any,
shall continue to accrue for the period from and after such date.
SECTION 605. NONPRESENTMENT OF BONDS. In the event any Bond shall not be
presented for payment when the principal thereof becomes due, either at maturity
or otherwise, or at the date fixed for redemption thereof, if funds sufficient
to pay such Bond shall have been made available to the Trustee, all liability of
the City to the Owner thereof for the payment of such Bond shall forthwith
cease, determine and be completely discharged, and thereupon it shall be the
duty of the Trustee to hold such fund or funds, without liability for interest
thereon, for the benefit of the Owner of such Bond who shall thereafter be
restricted exclusively to such fund or funds for any claim of whatever nature on
his part under this Indenture or on, or with respect to, said Bond. If any Bond
shall not be presented for payment within five years following the date when
such Bond becomes due, whether by maturity or otherwise, the Trustee shall repay
to the Corporation the funds theretofore held by it for payment of such Bond,
and such Bond shall, subject to the defense of any applicable statute of
limitation, thereafter be an unsecured obligation of the Corporation, and the
Owner thereof shall be entitled to look only to the Corporation for payment, and
then only to the extent of the amount so repaid, and the Corporation shall not
be liable for any interest thereon and shall not be regarded as a trustee of
such money.
SECTION 606. REPAYMENT TO THE CORPORATION FROM THE BOND FUND. After
payment in full of the principal of and interest, if any, on the Bonds (or
provision has been made for the payment thereof as provided in this Indenture),
and the fees, charges and expenses of the Trustee, the City and any Paying Agent
and any other amounts required to be paid under this Indenture and the Lease,
all amounts remaining in the Bond Fund shall be paid to the Corporation upon the
expiration or sooner termination of the Lease.
ARTICLE VII
SECURITY FOR DEPOSITS AND INVESTMENT OF FUNDS
SECTION 701. MONEYS TO BE HELD IN TRUST. All moneys deposited with or paid
to the Trustee for account of the Bond Fund or the Construction Fund under any
provision of this Indenture, and all moneys deposited with or paid to any Paying
Agent under any provision of this Indenture, shall be held by the Trustee or
Paying Agent in trust and shall be applied only in accordance with the
provisions of this Indenture and the Lease, and, until used or applied as herein
provided, shall constitute part of the Trust Estate and be subject to the lien
hereof. Neither the Trustee nor any Paying Agent shall be under any liability
for interest or any moneys received hereunder except such as may be agreed upon.
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SECTION 702. INVESTMENT OF MONEYS IN CONSTRUCTION FUND AND BOND FUND.
Moneys held in the Construction Fund and the Bond Fund shall, pursuant to
written direction of the Corporation, signed by the Authorized Corporation
Representative, be separately invested and reinvested by the Trustee in
Investment Securities which mature or are subject to redemption by the owner
prior to the date such funds will be needed. In the event the Corporation fails
to provide written directions concerning investment of moneys held in the
Construction Fund and the Bond Fund, the Trustee shall invest in Investment
Securities described in paragraph (e) of the definition of Investment
Securities, provided they mature or are subject to redemption prior to the date
such funds will be needed. Any such Investment Securities shall be held by or
under the control of the Trustee and shall be deemed at all times a part of the
fund in which such moneys are originally held, and the interest accruing thereon
and any profit realized from such Investment Securities shall be credited to
such fund, and any loss resulting from such Investment Securities shall be
charged to such fund. After the Trustee has notice pursuant to SECTION 1001(h)
of this Indenture of the existence of an Event of Default, the Trustee shall
invest moneys in the Bond Fund and the Construction Fund in Investment
Securities. The Trustee shall sell and reduce to cash a sufficient amount of
such Investment Securities whenever the cash balance in any Fund is insufficient
for the purposes of such Fund. In determining the balance in any Fund,
investments in such Fund shall be valued at the lower of their original cost or
their fair market value as of the most recent Payment Date. The Trustee may make
any and all investments permitted by the provisions of this Section through its
own bond department or any affiliate or short-term investment department.
The City and the Corporation (by its execution of the Lease) acknowledge
that to the extent regulations of the Comptroller of the Currency or other
applicable regulatory authority grant the City or the Corporation the right to
receive brokerage confirmations of the security transactions made by the Trustee
as they occur, the City and the Corporation waive receipt of such confirmations
to the extent permitted by law. The Trustee will furnish the Corporation and the
City (if requested by it) with periodic account transaction statements which
will include detail for all investment transactions made by the Trustee
hereunder.
SECTION 703. RECORD KEEPING. The Trustee shall maintain records designed
to show compliance with the provisions of this Article and with the provisions
of ARTICLE VI for at least six years after the payment of all of the Outstanding
Bonds.
ARTICLE VIII
GENERAL COVENANTS AND PROVISIONS
SECTION 801. PAYMENT OF PRINCIPAL AND INTEREST. The City covenants and
agrees that it will, but solely from the rents, revenues and receipts derived
from the Project as described herein, deposit or cause to be deposited in the
Bond Fund sufficient sums payable under the Lease promptly to meet and pay the
principal of and the interest on the Bonds as they become due and payable at the
place, on the dates and in the manner provided herein and in the Bonds according
to the true intent and meaning thereof, and to this end the City covenants and
agrees that it will use its best efforts to cause the Project to be continuously
and sufficiently leased as a revenue and income-providing undertaking, and that,
should there be a default under the Lease with the result that the right of
possession of the Project is returned to the City, the City shall fully
cooperate with the Trustee and with the Bondowners to the end of fully
protecting the rights and security of the Bondowners and shall diligently
proceed in good faith and use its best efforts to secure another tenant for the
Project to the end that at all times sufficient rents, revenues and receipts
will be derived from the Project promptly to meet and pay the principal of and
the interest on the Bonds as they become due and payable.
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Nothing herein shall be construed as requiring the City to operate the Project
as a business other than as lessor or to use any funds or revenues from any
source other than funds and revenues derived from the Project.
SECTION 802. AUTHORITY TO EXECUTE INDENTURE AND ISSUE BONDS. The City
covenants that it is duly authorized under the Constitution and laws of the
State of Kansas to execute this Indenture, to issue the Bonds and to pledge and
assign the Trust Estate in the manner and to the extent herein set forth; that
all action on its part for the execution and delivery of this Indenture and the
issuance of the Bonds has been duly and effectively taken; that the Bonds in the
hands of the Owners thereof are and will be valid and enforceable obligations of
the City according to the import thereof.
SECTION 803. PERFORMANCE OF COVENANTS. The City covenants that it will
faithfully perform at all times any and all covenants, undertakings,
stipulations and provisions contained in this Indenture, in the Bonds and in all
proceedings of its governing body pertaining thereto. The Trustee may take such
action as it deems appropriate to enforce all such covenants, undertaking,
stipulations and provisions of the City hereunder.
SECTION 804. INSTRUMENTS OF FURTHER ASSURANCE. The City covenants that it
will do, execute, acknowledge and deliver, or cause to be done, executed,
acknowledged and delivered, such Supplemental Indentures and such further acts,
instruments, financing statements and other documents as the Trustee may
reasonably require for the better pledging and assigning unto the Trustee the
property and revenues herein described to the payment of the principal of and
interest, if any, on the Bonds. The City covenants and agrees that, except as
herein and in the Lease provided, it will not sell, convey, mortgage, encumber
or otherwise dispose of any part of the Project or the rents, revenues and
receipts derived therefrom or from the Lease, or of its rights under the Lease.
SECTION 805. PAYMENT OF TAXES AND CHARGES. The City represents that
pursuant and subject to the provisions of SECTION 5.2 of the Lease, the
Corporation has agreed to pay, as the same respectively become due, all taxes,
assessments and other governmental charges at any time lawfully levied or
assessed upon or against the Project or any part thereof.
SECTION 806. INSURANCE. The City represents that pursuant and subject to
the provisions of ARTICLE VII of the Lease, the Corporation has agreed at its
own expense to keep the Project constantly insured to the extent provided for
therein.
SECTION 807. MAINTENANCE AND REPAIR. The City represents that pursuant and
subject to the provisions of SECTION 6.1 of the Lease, the Corporation has
agreed at its own expense to cause the Project to be maintained and kept in good
condition, repair and working order, and that pursuant and subject to SECTION
8.3 of the Lease the Corporation may, at its own expense, make from time to time
additions, changes and alterations to the Project under the terms and conditions
set forth therein.
SECTION 808. RECORDINGS AND FILINGS. Upon request of the Owner of the
Bonds or the Trustee, the City will cooperate in causing this Indenture and all
Supplemental Indentures, the Lease and all Supplemental Leases (or, at the
Corporation's option, a memorandum thereof) and all appropriate financing and
continuation statements and other security instruments to be recorded and filed
in such manner and in such places as may be required by law in order to fully
preserve and protect the security of the Owners of the Bonds and the rights of
the Trustee hereunder.
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SECTION 809. INSPECTION OF PROJECT BOOKS. The City covenants and agrees
that all books and documents in its possession relating to the Project and the
rents, revenues and receipts derived from the Project shall at all times be open
to inspection by such accountants or other agencies as the Trustee may from time
to time designate.
SECTION 810. ENFORCEMENT OF RIGHTS UNDER THE LEASE. The City covenants and
agrees that it shall enforce all of its rights and all of the obligations of the
Corporation (at the expense of the Corporation) under the Lease to the extent
necessary to preserve the Project in good order and repair, and to protect the
rights of the Trustee and the Bondowners hereunder with respect to the pledge
and assignment of the rents, revenues and receipts coming due under the Lease.
The City agrees that the Trustee, as assignee of the rentals and other amounts
to be received by the City and paid by the Corporation under the Lease, or in
its name or in the name of the City, may enforce all rights of the City to
receive such rentals and other amounts and all obligations of the Corporation to
pay such rentals and other amounts under and pursuant to the Lease for and on
behalf of the Bondowners, whether or not the City is in default hereunder,
subject to and in accordance with the conditions and limitations set forth in
the Lease.
SECTION 811. SUBORDINATION OF INDENTURE TO THE LEASE. This Indenture and
the rights and privileges hereunder of the Trustee and the Owners of the Bonds
are specifically made subject and subordinate to the rights and privileges of
the Corporation (as long as no default by the Corporation under the Lease is
continuing beyond any applicable grace period) set forth in the Lease. So long
as not otherwise provided in this Indenture, the Corporation shall be suffered
and permitted to possess, use and enjoy the Project and appurtenances so as to
carry out its obligations under the Lease.
ARTICLE IX
DEFAULT AND REMEDIES
SECTION 901. EVENTS OF DEFAULT; NOTICE; OPPORTUNITY TO CURE. If any of the
following events occur, it is hereby defined as and declared to be and to
constitute an "Event of Default":
(a) Default in the due and punctual payment of the principal on any
Bond, whether at the stated maturity or accelerated maturity thereof, or
at the date fixed for redemption thereof for a period of five (5) business
days following written notice to the City and the Corporation by the
Trustee or by the Owners of 25% in aggregate principal amount of the Bonds
Outstanding;
(b) Default in the due and punctual payment of the interest on any
Bond, whether at the stated maturity or accelerated maturity thereof, or
at the date fixed for redemption thereof for a period of 5 days following
written notice to the City and the Corporation by the Trustee or by the
Owners of 25% in aggregate principal amount of the Bonds Outstanding; or
(c) The occurrence of an Event of Default as specified in SECTION
12.1(b) or (c) of the Lease shall have occurred.
SECTION 902. ACCELERATION OF MATURITY IN EVENT OF DEFAULT. If an Event of
Default shall have occurred and be continuing, the Trustee may, and upon the
written request of the Owners of not less than 25% in aggregate principal amount
of Bonds then Outstanding, shall, by notice in writing delivered to the City and
the Corporation, declare the principal of all Bonds then Outstanding and the
interest accrued
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thereon immediately due and payable, and such principal and interest shall
thereupon become and be immediately due and payable.
SECTION 903. SURRENDER OF POSSESSION OF TRUST ESTATE; RIGHTS AND DUTIES OF
TRUSTEE IN POSSESSION. If an Event of Default shall have occurred and be
continuing, the City, upon demand of the Trustee, shall forthwith surrender the
possession of, and it shall be lawful for the Trustee, by such officer or agent
as it may appoint, to take possession of all or any part of the Trust Estate,
together with the books, papers and accounts of the City pertaining thereto, and
including the rights and the position of the City under the Lease, and to hold,
operate and manage the same, and from time to time make all needful repairs and
improvements as shall be deemed wise by the Trustee; the Trustee may lease the
Project or any part thereof, in the name and for account of the City, and
collect, receive and sequester the rents, revenues and receipts therefrom, and
out of the same and any moneys received from any receiver of any part thereof
pay, and set up proper reserves for the payment of all proper costs and expenses
of so taking, holding and managing the same, including without limitation (a)
reasonable compensation to the Trustee, his agents and counsel, (b) any
reasonable charges of the Trustee hereunder, (c) any taxes and assessments and
other charges prior to the lien of this Indenture, which the Trustee may deem it
wise to pay, and (d) all expenses of such repairs and improvements, and the
Trustee shall apply the remainder of the moneys so received in accordance with
the provisions of SECTION 908 hereof. Whenever all that is due upon the Bonds
shall have been paid and all defaults made good, the Trustee shall surrender
possession of the Trust Estate to the City, its successors or assigns, the same
right of entry, however, to exist upon any subsequent Event of Default. While in
possession of such property, the Trustee shall render annually to the City and
the Corporation a summarized statement of receipts and expenditures in
connection therewith.
SECTION 904. APPOINTMENT OF RECEIVERS IN EVENT OF DEFAULT. If an Event of
Default shall have occurred and be continuing, and upon the filing of a suit or
other commencement of judicial proceedings to enforce the rights of the Trustee
and of the Bondowners under this Indenture, the Trustee shall be entitled, as a
matter of right, to the appointment of a receiver or receivers of the Trust
Estate or any part thereof, pending such proceedings, with such powers as the
court making such appointment shall confer.
SECTION 905. EXERCISE OF REMEDIES BY THE TRUSTEE.
(a) Upon the occurrence of an Event of Default, the Trustee may pursue any
available remedy at law or in equity by suit, action, mandamus or other
proceeding to enforce the payment of the principal of interest on the Bonds then
Outstanding, and to enforce and compel the performance of the duties and
obligations of the City as herein set forth.
(b) If an Event of Default shall have occurred and be continuing, and if
requested to do so by the Owners of 25% in aggregate principal amount of Bonds
then Outstanding and indemnified as provided in SECTION 1001(l) hereof, the
Trustee shall be obligated to exercise such one or more of the rights and powers
conferred by this Article as the Trustee, being advised by counsel, shall deem
most expedient in the interests of the Bondowners.
(c) All rights of action under this Indenture or under any of the Bonds
may be enforced by the Trustee without the possession of any of the Bonds or the
production thereof in any trial or other proceedings relating thereto, and any
such suit or proceeding instituted by the Trustee shall be brought in its name
as Trustee without necessity of joining as plaintiffs or defendants any Owners
of the Bonds, and any recovery of judgment shall, subject to the provisions of
SECTION 908 hereof, be for the equal benefit of all the Owners of the
Outstanding Bonds and coupons.
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SECTION 906. LIMITATION ON EXERCISE OF REMEDIES BY BONDOWNERS. No Owner of
any Bond shall have any right to institute any suit, action or proceeding in
equity or at law for the enforcement of this Indenture or for the execution of
any trust hereunder or for the appointment of a receiver or any other remedy
hereunder, unless (a) a default has occurred of which the Trustee has been
notified as provided in SECTION 1001(h) or of which by said subsection the
Trustee is deemed to have notice, (b) such default shall have become an Event of
Default, (c) the Owners of 25% in aggregate principal amount of Bonds then
Outstanding shall have made written request to the Trustee, shall have offered
it reasonable opportunity either to proceed and to exercise the powers
hereinbefore granted or to institute such action, suit or proceeding in its own
name, and shall have offered to the Trustee indemnity as provided in SECTION
1001(l), and (d) the Trustee shall thereafter fail or refuse to exercise the
powers herein granted or to institute such action, suit or proceeding in its own
name; such notification, request and offer of indemnity are hereby declared in
every case, at the option of the Trustee, to be conditions precedent to the
execution of the powers and trusts of this Indenture, and to any action or cause
of action for the enforcement of this Indenture, or for the appointment of a
receiver or for any other remedy hereunder it being understood and intended that
no one or more Owners of the Bonds shall have any right in any manner whatsoever
to affect, disturb or prejudice this Indenture by their action or to enforce any
right hereunder except in the manner herein provided, and that all proceedings
at law or equity shall be instituted, had and maintained in the manner herein
provided and for the equal benefit of the Owners of all Bonds then Outstanding.
Nothing in this Indenture contained shall, however, affect or impair the right
of any Bondowner to payment of the principal of and interest on any Bond at and
after the maturity thereof or the obligation of the City to pay the principal of
and interest on each of the Bonds issued hereunder to the respective Owners
thereof at the time, place, from the source and in the manner herein and in the
Bonds expressed.
SECTION 907. RIGHT OF BONDOWNERS TO DIRECT PROCEEDINGS. Anything in this
Indenture to the contrary notwithstanding, the Owners of a majority in aggregate
principal amount of Bonds then Outstanding shall have the right, at any time, by
an instrument or instruments in writing executed and delivered to the Trustee,
to direct the time, method and place of conducting all proceedings to be taken
in connection with the enforcement of the terms and conditions of this
Indenture, or for the appointment of a receiver or any other proceedings
hereunder; provided that such direction shall not be otherwise than in
accordance with the provisions of law and of this Indenture, including SECTION
1001(l) hereof.
SECTION 908. APPLICATION OF MONEYS IN EVENT OF DEFAULT.
(a) All moneys received by the Trustee pursuant to any right given or
action taken under the provisions of this Article shall, after payment of the
cost and expenses of the proceedings resulting in the collection of such moneys
and of the fees, expenses, liabilities and advances incurred or made by the
Trustee, be deposited in the Bond Fund and all moneys so deposited in the Bond
Fund shall be applied as follows:
(1) Unless the principal of all the Bonds shall have become or shall
have been declared due and payable, all such moneys shall be applied:
FIRST -- To the payment to the persons entitled thereto of all
installments of interest, if any, then due and payable on the Bonds, in
the order in which such installments of interest became due and payable,
and, if the amount available shall not be sufficient to pay in full any
particular installment, then to the payment ratably, according to the
amounts due on such installment, to the persons entitled thereto, without
any discrimination or privilege;
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SECOND -- To the payment to the persons entitled thereto of the
unpaid principal of any of the Bonds which shall have become due and
payable (other than Bonds called for redemption for the payment of which
moneys are held pursuant to the provisions of this Indenture), in the
order of their due dates, and, if the amount available shall not be
sufficient to pay in full Bonds due on any particular date, together with
such interest, then to the payment, ratably, according to the amount of
principal due on such date, to the persons entitled thereto without any
discrimination or privilege;
(2) If the principal of all the Bonds shall have become due or shall
have been declared due and payable, all such moneys shall be applied to
the payment of the principal and interest, if any, then due and unpaid on
all of the Bonds, without preference or priority of principal over
interest or of interest over principal or of any installment of interest
over any other installment of interest or of any Bond over any other Bond,
ratably, according to the amounts due respectively for principal and
interest, to the person entitled thereto, without any discrimination or
privilege; and
(3) If the principal of all the Bonds shall have been declared due
and payable, and if such declaration shall thereafter have been rescinded
and annulled under the provisions of SECTION 910, then, subject to the
provisions of SUBSECTION (2) of this Section in the event that the
principal of all the Bonds shall later become due or be declared due and
payable, the moneys shall be applied in accordance with the provisions of
SUBSECTION (1) of this Section.
(b) Whenever moneys are to be applied pursuant to the provisions of this
Section, such moneys shall be applied at such times and from time to time as the
Trustee shall determine, having due regard to the amount of such moneys
available and which may become available for such application in the future.
Whenever the Trustee shall apply such moneys, it shall fix the date (which shall
be an interest payment date unless it shall deem another date more suitable)
upon which such application is to be made and upon such date interest on the
amounts of principal to be paid on such dates shall cease to accrue.
(c) Whenever all of the Bonds and interest thereon, if any, have been paid
under the provisions of this Section, and all fees, expenses and charges of the
City and the Paying Agent have been paid, any balance remaining in the Bond Fund
shall be paid to the Corporation as provided in SECTION 606 hereof.
SECTION 909. REMEDIES CUMULATIVE. No remedy by the terms of this Indenture
conferred upon or reserved to the Trustee or to the Bondowners is intended to be
exclusive of any other remedy, but each and every such remedy shall be
cumulative and shall be in addition to any other remedy given to the Trustee or
to the Bondowners hereunder or now or hereafter existing at law or in equity or
by statute. No delay or omission to exercise any right, power or remedy accruing
upon any Event of Default shall impair any such right, power or remedy or shall
be construed to be a waiver of any such Event of Default or acquiescence
therein; every such right, power or remedy may be exercised from time to time
and as often as may be deemed expedient. In case the Trustee shall have
proceeded to enforce any right under this Indenture by the appointment of a
receiver, by entry, or otherwise, and such proceedings have been discontinued or
abandoned for any reason, or shall have been determined adversely, then and in
every such case the City, the Corporation, the Trustee and the Bondowners shall
be restored to their former positions and rights hereunder, and all rights,
remedies and powers of the Trustee shall continue as if no such proceedings had
been taken.
SECTION 910. WAIVERS OF EVENTS OF DEFAULT. The Trustee may in its
discretion waive any Event of Default hereunder and its consequences and rescind
any declaration of maturity of principal of and interest, if any, on Bonds, and
shall do so upon the written request of the Owners of at least 50% in aggregate
principal amount of all the Bonds then Outstanding, provided, however, that
there shall not be
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waived without the consent of the Owners of all the Bonds Outstanding (a) any
Event of Default in the payment of the principal of any Outstanding Bonds when
due (whether at the date of maturity or redemption specified therein), or (b)
any Event of Default in the payment when due of the interest on any such Bonds,
unless prior to such waiver or rescission, all arrears of interest, or all
arrears of payments of principal when due, as the case may be, and all
reasonable expenses of the Trustee and the City, in connection with such
default, shall have been paid or provided for. In case of any such waiver or
rescission, or in case any proceeding taken by the Trustee on account of any
such default shall have been discontinued or abandoned or determined adversely,
then and in every such case the City, the Corporation, the Trustee and the
Bondowners shall be restored to their former positions, rights and obligations
hereunder, respectively, but no such waiver or rescission shall extend to any
subsequent or other default, or impair any right consequent thereon.
ARTICLE X
THE TRUSTEE
SECTION 1001. ACCEPTANCE OF THE TRUSTS. The Trustee hereby accepts the
trusts imposed upon it by this Indenture, and agrees to perform said trusts as a
corporate trustee ordinarily would perform said trusts under a corporate
indenture, but only upon and subject to the following express terms and
conditions, and no implied covenants or obligations shall be read into this
Indenture against the Trustee:
(a) The Trustee, prior to the occurrence of an Event of Default and
after the curing or waiver of all Events of Default which may have
occurred, undertakes to perform such duties and only such duties as are
specifically set forth in this Indenture. If any Event of Default shall
have occurred and be continuing, subject to SECTION 1001(1) below, the
Trustee shall exercise such of the rights and powers vested in it by this
Indenture, and shall use the same degree of care and skill in their
exercise, as a prudent corporate trust department would exercise or use
under the circumstances in the conduct of its own affairs.
(b) The Trustee may execute any of the trusts or powers hereunder or
perform any duties hereunder either directly or through agents, attorneys
or receivers and shall not be responsible for any misconduct or negligence
on the part of any agent, attorney or receiver appointed or chosen by it
with due care, and the Trustee shall be entitled to act upon the opinion
or advice of counsel, who may be counsel to the City or to the
Corporation, concerning all matters of trust hereof and the duties
hereunder, and may in all cases pay such reasonable compensation to all
such agents, attorneys and receivers as may reasonably be employed in
connection with the trusts hereof. The Trustee shall not be responsible
for any loss or damage resulting from any action or nonaction by it taken
or omitted to be taken in good faith in reliance upon such opinion or
advice of counsel.
(c) Except as provided in the Lease and particularly SECTION 10.8
thereof, the Trustee shall not be responsible for any recital herein or in
the Bonds (except with respect to the Certificate of Authentication of the
Trustee endorsed on the Bonds), or for the recording or rerecording,
filing or refiling of this Indenture or any security agreement in
connection therewith, or for insuring the Project or collecting any
insurance moneys, or for the validity of the execution by the City of this
Indenture or of any Supplemental Indentures or instruments of further
assurance, or for the sufficiency of the security of the Bonds. The
Trustee shall not be responsible or liable for any loss suffered in
connection with any investment of funds made by it in accordance with
ARTICLE VII hereof.
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(d) The Trustee shall not be accountable for the use of any Bonds
authenticated and delivered hereunder. The Trustee, in its individual or
any other capacity, may become the owner or pledgee of Bonds with the same
rights which it would have if it were not Trustee.
(e) The Trustee may rely and shall be protected in acting or
refraining from acting upon any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent, order,
affidavit, letter, telegram or other paper or document provided for under
this Indenture believed by it to be genuine and correct and to have been
signed, presented or sent by the proper person or persons. Any action
taken by the Trustee pursuant to this Indenture upon the request or
authority or consent of any person who, at the time of making such request
or giving such authority or consent is the Owner of any Bond, shall be
conclusive and binding upon all future Owners of the same Bond and upon
Bonds issued in exchange therefor or upon transfer or in place thereof.
(f) As to the existence or nonexistence of any fact or as to the
sufficiency or validity of any instrument, paper or proceeding, or
whenever in the administration of this Indenture the Trustee shall deem it
desirable that a matter be proved or established prior to taking,
suffering or omitting any action hereunder, the Trustee shall be entitled
to rely upon a certificate signed by the Authorized City Representative as
sufficient evidence of the facts therein contained, and prior to the
occurrence of a default of which the Trustee has been notified as provided
in SUBSECTION (h) of this Section or of which by said subsection it is
deemed to have notice, the Trustee shall also be at liberty to accept a
similar certificate to the effect that any particular dealing, transaction
or action is necessary or expedient, but may at its discretion secure such
further evidence deemed necessary or advisable, but shall in no case be
bound to secure the same.
(g) The permissive right of the Trustee to do things enumerated in
this Indenture shall not be construed as a duty, and the Trustee shall not
be answerable for other than its gross negligence or willful misconduct.
(h) The Trustee shall not be required to take notice or be deemed to
have notice of any default hereunder except failure by the City to cause
to be made any of the payments to the Trustee required to be made in
ARTICLE VI hereof, unless the Trustee shall be specifically notified in
writing of such default by the City or by the Owners of at least 25% in
aggregate principal amount of all Bonds then Outstanding.
(i) At any and all reasonable times and subject to the Corporation's
reasonable and standard security procedures, the Trustee and its duly
authorized agents, attorneys, experts, engineers, accountants and
representatives shall have the right, but shall not be required, to
inspect any and all of the Project, and all books, papers and records of
the City pertaining to the Project and the Bonds, and to take such
memoranda from and in regard thereto as may be desired, all subject to the
rights of the Corporation under the Lease. The Trustee shall treat all
proprietary information of the Corporation as confidential.
(j) The Trustee shall not be required to give any bond or surety in
respect to the execution of its trusts and powers hereunder or otherwise
in respect of the Project.
(k) The Trustee shall have the right, but shall not be required, to
demand, in respect of the authentication of any Bonds, the withdrawal of
any cash, the release of any property, or any
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action whatsoever within the purview of this Indenture, any showings,
certificates, opinions, appraisals or other information, or corporate
action or evidence thereof, in addition to that by the terms hereof
required, as a condition of such action by the Trustee deemed desirable
for the purpose of establishing the right of the City to the
authentication of any Bonds, the withdrawal of any cash, or the taking of
any other action by the Trustee.
(l) Before taking any action under this Indenture, the Trustee may
require that satisfactory indemnity be furnished to it for the
reimbursement of all costs and expenses to which it may be put and to
protect it against all liability which it may incur in or by reason of
such action, except liability which is adjudicated to have resulted from
its negligence or willful misconduct by reason of any action so taken.
SECTION 1002. FEES, CHARGES AND EXPENSES OF THE TRUSTEE. The Trustee shall
be entitled to payment of and/or reimbursement for reasonable fees for its
ordinary services rendered hereunder and all advances, agent and counsel fees
and other ordinary expenses reasonably and necessarily made or incurred by the
Trustee in connection with such ordinary services and, in the event that it
should become necessary that the Trustee perform extraordinary services, it
shall be entitled to reasonable extra compensation therefor and to reimbursement
for reasonable and necessary extraordinary expenses in connection therewith;
provided that if such extraordinary services or extraordinary expenses are
occasioned by the neglect or misconduct of the Trustee, it shall not be entitled
to compensation or reimbursement therefor. The Trustee shall be entitled to
payment and reimbursement for the reasonable fees and charges of the Trustee as
Paying Agent for the Bonds. Pursuant to the provisions of SECTION 5.2 of the
Lease, the Corporation has agreed to pay to the Trustee all reasonable fees,
charges and expenses of the Trustee under this Indenture. The Trustee agrees
that the City shall have no liability for any reasonable fees, charges and
expenses of the Trustee, and the Trustee agrees to look only to the Corporation
for the payment of all reasonable fees, charges and expenses of the Trustee and
any Paying Agent as provided in the Lease. Upon the occurrence of an Event of
Default and during its continuance, the Trustee shall have a lien with right of
payment prior to payment on account of principal of or interest on any Bond,
upon all moneys in its possession under any provisions hereof for the foregoing
reasonable advances, fees, costs and expenses incurred.
SECTION 1003. NOTICE TO BONDOWNERS IF DEFAULT OCCURS. If a default occurs
of which the Trustee is by SECTION 1001(h) hereof required to take notice or if
notice of default be given as in said SUBSECTION (h) provided, then the Trustee
shall give written notice thereof to the last known Owners of all Bonds then
Outstanding as shown by the bond registration books required by SECTION 206 to
be kept at the principal office of the Trustee.
SECTION 1004. INTERVENTION BY THE TRUSTEE. In any judicial proceeding to
which the City is a party and which, in the opinion of the Trustee and its
counsel, has a substantial bearing on the interests of Owners of the Bonds, the
Trustee may intervene on behalf of Bondowners and, subject to the provisions of
SECTION 1001(l) hereof, shall do so if requested in writing by the Owners of at
least 25% of the aggregate principal amount of Bonds then Outstanding.
SECTION 1005. SUCCESSOR TRUSTEE UPON MERGER, CONSOLIDATION OR SALE. Any
corporation or association into which the Trustee may be merged or converted or
with or into which it may be consolidated, or to which it may sell or transfer
its corporate trust business and assets as a whole or substantially as a whole,
or any corporation or association resulting from any merger, conversion, sale,
consolidation or transfer to which it is a party, shall be and become successor
Trustee hereunder and shall be vested with all the trusts, powers, rights,
obligations, duties, remedies, immunities and privileges hereunder as was its
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predecessor, without the execution or filing of any instrument or any further
act on the part of any of the parties hereto.
SECTION 1006. RESIGNATION OF TRUSTEE. The Trustee and any successor
Trustee may at any time resign from the trusts hereby created by giving 30 days'
written notice to the City, the Corporation and the Bondowners, and such
resignation shall take effect at the end of such 30 days, or upon the earlier
appointment of a successor Trustee by the Bondowners or by the City.
SECTION 1007. REMOVAL OF TRUSTEE. The Trustee may be removed at any time,
with or without cause, by an instrument or concurrent instruments in writing
delivered to the Trustee, the City and the Corporation and signed by the Owners
of a majority in aggregate principal amount of bonds then Outstanding.
SECTION 1008. APPOINTMENT OF SUCCESSOR TRUSTEE. In case the Trustee
hereunder shall resign or be removed, or shall otherwise become incapable of
acting hereunder, or in case it shall be taken under the control of any public
officer or officers or of a receiver appointed by a court, a successor Trustee
reasonably acceptable to the City and the Corporation may be appointed by the
Owners of a majority in aggregate principal amount of Bonds then Outstanding, by
an instrument or concurrent instruments in writing; provided, nevertheless, that
in case of such vacancy, the City, by an instrument executed and signed by its
Mayor and attested by its Clerk under its seal, may appoint a temporary Trustee
to fill such vacancy until a successor Trustee shall be appointed by the
Bondowners in the manner above provided. Any such temporary Trustee so appointed
by the City shall hold such appointment no longer than 90 days without
Corporation approval and shall immediately and without further acts be
superseded by the successor Trustee so appointed by such Bondowners. Every such
Trustee appointed pursuant to the provisions of this Section shall be a trust
company or bank in good standing and qualified to accept such trust having a
reported capital, surplus and undivided profits of not less than $5,000,000.
SECTION 1009. VESTING OF TRUSTS IN SUCCESSOR TRUSTEE. Every successor
Trustee appointed hereunder shall execute, acknowledge and deliver to its
predecessor and also to the City and the Corporation an instrument in writing
accepting such appointment hereunder, and thereupon such successor shall,
without any further act, deed or conveyance, become fully vested with all the
trusts, powers, rights, obligations, duties, remedies, immunities and privileges
of its predecessor; but such predecessor shall, nevertheless, on the written
request of the City, execute and deliver an instrument transferring to such
successor Trustee all the trusts, powers, rights, obligations, duties, remedies,
immunities and privileges of such predecessor hereunder; every predecessor
Trustee shall deliver all securities and moneys held by it as Trustee hereunder
to its successor. Should any instrument in writing from the City be required by
any successor Trustee for more fully and certainly vesting in such successor the
trusts, powers, rights, obligations, duties, remedies, immunities and privileges
hereby vested in the predecessor, any and all such instruments in writing shall,
on request, be executed, acknowledged and delivered by the City.
SECTION 1010. RIGHT OF TRUSTEE TO PAY TAXES AND OTHER CHARGES. In case any
tax, assessment or governmental or other charge upon, or insurance premium with
respect to, any part of the Project is not paid as required herein or in the
Lease (subject to applicable notice and cure periods), the Trustee may pay such
tax, assessment or governmental charge or insurance premium, without prejudice,
however, to any rights of the Trustee or the Bondowners hereunder arising in
consequence of such failure; any amount at any time so paid under this Section,
with interest thereon from the date of payment at the rate of 10% per annum,
shall become an additional obligation secured by this Indenture, and the same
shall be given a preference in payment over any payment of principal of or
interest on the Bonds, and shall be paid out of the proceeds of rents, revenues
and receipts collected from the Project, if not otherwise caused to be paid; but
the Trustee
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shall be under no obligation to make any such payment unless it shall have been
requested to do so by the Owners of at least 25% of the aggregate principal
amount of Bonds then Outstanding and shall have been provided adequate funds for
the purpose of such payment.
SECTION 1011. TRUST ESTATE MAY BE VESTED IN CO-TRUSTEE.
(a) It is the purpose of this Indenture that there shall be no violation
of any law of any jurisdiction (including particularly the State of Kansas)
denying or restricting the right of banking corporations or associations to
transact business as trustee in such jurisdiction. It is recognized that in case
of litigation under this Indenture or the Lease, and in particular in case of
the enforcement of either on default or in case the Trustee deems that by reason
of any present or future law of any jurisdiction it may not exercise any of the
powers, rights or remedies herein granted to the Trustee, or take any other
action which may be desirable or necessary in connection therewith, it may be
necessary or desirable that the Trustee appoint an additional individual or
institution as a co-trustee or separate trustee, and the Trustee is hereby
authorized to appoint such co-trustee or separate trustee.
(b) In the event that the Trustee appoints an additional individual or
institution as a co-trustee or separate trustee (which appointment shall be
subject to the approval of the Corporation), each and every remedy, power,
right, claim, demand, cause of action, immunity, title, interest and lien
expressed or intended by this Indenture to be exercised by the Trustee with
respect thereto shall be exercisable by such co-trustee or separate trustee but
only to the extent necessary to enable such co-trustee or separate trustee to
exercise such powers, rights and remedies, and every covenant and obligation
necessary to the exercise thereof by such co-trustee or separate trustee shall
run to and be enforceable by either of them.
(c) Should any deed, conveyance or instrument in writing from the City be
required by the co-trustee or separate trustee so appointed by the Trustee for
more fully and certainly vesting in and confirming to such co-trustee such
properties, rights, powers, trusts, duties and obligations, any and all such
deeds, conveyances and instruments in writing shall, on request, be executed,
acknowledged and delivered by the City.
(d) In case any co-trustee or separate trustee shall die, become incapable
of acting, resign or be removed, all the properties, rights, powers, trusts,
duties and obligations of such co-trustee or separate trustee, so far as
permitted by law, shall vest in and be exercised by the Trustee until the
appointment of a successor to such co-trustee or separate trustee.
SECTION 1012. ANNUAL ACCOUNTING. The Trustee shall render an annual
accounting to the City, the Corporation and to any Bondowner requesting the same
within 90 days following the end of each annual period and, upon the request of
the Corporation or the Bondowner, a monthly accounting to the Corporation and
the Bondowner within 30 days following the end of each monthly period, showing
in reasonable detail all financial transactions relating to the Trust Estate
made by the Trustee during the accounting period and the balance in any funds or
accounts created by this Indenture as of the beginning and close of such
accounting period.
SECTION 1013. PERFORMANCE OF DUTIES UNDER THE LEASE. The Trustee hereby
accepts and agrees to perform all duties assigned to it under the Lease.
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ARTICLE XI
SUPPLEMENTAL INDENTURES
SECTION 1101. SUPPLEMENTAL INDENTURES NOT REQUIRING CONSENT OF BONDOWNERS.
The City and the Trustee may from time to time, without the consent of or notice
to any of the Bondowners, enter into such Supplemental Indenture or Supplemental
Indentures as shall not be inconsistent with the terms and provisions hereof,
for any one or more of the following purposes:
(a) To cure any ambiguity or formal defect or omission in this Indenture,
or to make any other change not prejudicial to the Bondowners;
(b) To grant to or confer upon the Trustee for the benefit of the
Bondowners any additional rights, remedies, powers or authority that may
lawfully be granted to or conferred upon the Bondowners or the Trustee or either
of them;
(c) To more precisely identify the Project or to substitute or add
additional property thereto;
(d) To subject to this Indenture additional revenues, properties or
collateral; or
(e) To issue Refunding Bonds as provided in SECTION 209 hereof, provided
such Refunding Bonds contain substantially similar or superior terms than the
original Bonds.
SECTION 1102. SUPPLEMENTAL INDENTURES REQUIRING CONSENT OF BONDOWNERS.
(a) Exclusive of Supplemental Indentures covered by SECTION 1101 hereof
and subject to the terms and provisions contained in this Section, and not
otherwise, the Owners of not less than 50% in aggregate principal amount of the
Bonds then Outstanding shall have the right, from time to time, anything
contained in this Indenture to the contrary notwithstanding, to consent to and
approve the execution by the City and the Trustee of such other Supplemental
Indenture or Supplemental Indentures as shall be deemed necessary and desirable
by the City for the purpose of modifying, amending, adding to or rescinding, in
any particular, any of the terms or provisions contained in this Indenture or in
any Supplemental Indenture; provided, however, that nothing in this Section
contained shall permit or be construed as permitting (1) an extension of the
maturity or a shortening of the redemption date of the principal of or the
interest, if any, on any Bond issued hereunder, (2) a reduction in the principal
amount of any Bond or the rate of interest thereon, if any, (3) a privilege or
priority of any Bond or Bonds over any other Bond or Bonds, or (4) a reduction
in the aggregate principal amount of Bonds the Owners of which are required for
consent to any such Supplemental Indenture.
(b) If at the time the City shall request the Trustee to enter into any
such Supplemental Indenture for any of the purposes of this Section, the Trustee
shall cause notice of the proposed execution of such Supplemental Indenture to
be mailed to each Bondowner as shown on the bond registration books required by
SECTION 206 hereof. Such notice shall briefly set forth the nature of the
proposed Supplemental Indenture and shall state that copies thereof are on file
at the principal corporate trust office of the Trustee for inspection by all
Bondowners. If within 60 days or such longer period as may be prescribed by the
City following the mailing and final publication of such notice, the Owners of
not less than 50% in aggregate principal amount of the Bonds Outstanding at the
time of the execution of any such Supplemental Indenture shall have consented to
and approved the execution thereof as herein provided, no Owner of any Bond
shall have any right to object to any of the terms and provisions contained
therein, or the operation thereof, or in
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any manner to question the propriety of the execution thereof, or to enjoin or
restrain the Trustee or the City from executing the same or from taking any
action pursuant to the provisions thereof.
SECTION 1103. CORPORATION'S CONSENT TO SUPPLEMENTAL INDENTURES. Anything
herein to the contrary notwithstanding, a Supplemental Indenture under this
Article which affects any rights of the Corporation shall not become effective
unless and until the Corporation shall have consented in writing to the
execution and delivery of such Supplemental Indenture, provided that receipt by
the Trustee of a Supplemental Lease executed by the Corporation in connection
with the issuance of Additional Bonds under SECTION 209 hereof shall be deemed
to be the consent of the Corporation to the execution of a Supplemental
Indenture pursuant to SECTION 209 hereof, respectively. In this regard, the
Trustee shall cause notice of the proposed execution and delivery of any such
Supplemental Indenture (other than a Supplemental Indenture proposed to be
executed and delivered pursuant to SECTION 209 hereof) together with a copy of
the proposed Supplemental Indenture to be mailed to the Corporation at least 15
days prior to the proposed date of execution and delivery of any such
Supplemental Indenture.
ARTICLE XII
SUPPLEMENTAL LEASES
SECTION 1201. SUPPLEMENTAL LEASES NOT REQUIRING CONSENT OF BONDOWNERS. The
City and the Trustee shall, without the consent of or notice to the Bondowners,
consent to the execution of any Supplemental Lease or Supplemental Leases by the
City and the Corporation as may be required (a) by the provisions of the Lease
and this Indenture, (b) for the purpose of curing any ambiguity or formal defect
or omission in the Lease, (c) so as to more precisely identify the Project or
substitute or add additional property thereto, (d) in connection with the
issuance of Refunding Bonds under SECTION 209 hereof, (e) in connection with any
other change therein which, in the judgment of the Trustee, is not to the
material prejudice of the Trustee or the Bondowners.
SECTION 1202. SUPPLEMENTAL LEASES REQUIRING CONSENT OF BONDOWNERS. Except
for Supplemental Leases as provided for in SECTION 1201 hereof, neither the City
nor the Trustee shall consent to the execution of any Supplemental Lease or
Supplemental Leases by the City or the Corporation without the mailing of notice
and the obtaining of the written approval or consent of the Owners of not less
than 50% in aggregate principal amount of the Bonds at the time Outstanding
given and obtained as provided in SECTION 1102 hereof. If at any time the City
and the Corporation shall request the consent of the Trustee to any such
proposed Supplemental Lease, the Trustee shall cause notice of such proposed
Supplemental Lease to be mailed in the same manner as provided in SECTION 1102
hereof with respect to Supplemental Indentures. Such notice shall briefly set
forth the nature of such proposed Supplemental Lease and shall state that copies
of the same are on file in the principal office of the Trustee for inspection by
all Bondowners.
ARTICLE XIII
SATISFACTION AND DISCHARGE OF INDENTURE
SECTION 1301. SATISFACTION AND DISCHARGE OF THIS INDENTURE.
(a) When the principal of and interest on all the Bonds shall have been
paid in accordance with their terms or provision has been made for such payment,
as provided in SECTION 1302 hereof, and provision
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shall also be made for paying all other sums payable hereunder, including the
reasonable fees and expenses of the Trustee, the City and Paying Agent to the
date of retirement of the Bonds, then the right, title and interest of the
Trustee in respect hereof shall thereupon cease, determine and be void, and
thereupon the Trustee shall cancel, discharge and release this Indenture and
shall execute, acknowledge and deliver to the City such instruments of
satisfaction and discharge or release as shall be requisite to evidence such
release and the satisfaction and discharge of this Indenture, and shall assign
and deliver to the City any property at the time subject to this Indenture which
may then be in its possession, except amounts in the Bond Fund required to be
paid to the Corporation under SECTION 606 hereof and except funds or securities
in which such funds are invested held by the Trustee for the payment of the
principal of and interest on the Bonds.
(b) The City is hereby authorized to accept a certificate by the Trustee
that the whole amount of the principal and interest, if any, so due and payable
upon all of the Bonds or coupons then Outstanding has been paid or such payment
provided for in accordance with SECTION 1302 hereof as evidence of satisfaction
of this Indenture, and upon receipt thereof shall cancel and erase the
inscription of this Indenture from its records.
SECTION 1302. BONDS DEEMED TO BE PAID.
(a) Bonds shall be deemed to be paid within the meaning of this Article
when payment of the principal of and interest thereon to the due date thereof
(whether such due date be by reason of maturity or upon redemption as provided
in this Indenture, or otherwise), either (1) shall have been made or caused to
be made in accordance with the terms thereof, or (2) shall have been provided
for by depositing with the Trustee in trust and irrevocably set aside
exclusively for such payment (i) moneys sufficient to make such payment or (ii)
Government Securities maturing as to principal and interest in such amount and
at such times as will insure the availability of sufficient moneys to make such
payment. At such time as a Bond shall be deemed to be paid hereunder, as
aforesaid, it shall no longer be secured by or entitled to the benefits of this
Indenture, except for the purposes of such payment from such moneys or
Government Securities.
(b) Notwithstanding the foregoing, in the case of Bonds which by their
terms may be redeemed prior to the stated maturities thereof, no deposit under
clause (2) of the immediately preceding paragraph shall be deemed a payment of
such Bonds as aforesaid until, as to all such Bonds which are to be redeemed
prior to their respective stated maturities, proper notice of such redemption
shall have been given in accordance with ARTICLE III of this Indenture or
irrevocable instructions shall have been given to the Trustee to give such
notice.
(c) Notwithstanding any provision of any other section of this Indenture
which may be contrary to the provisions of this Section, all moneys or
Government Securities set aside and held in trust pursuant to the provisions of
this Section for the payment of Bonds and coupons shall be applied to and used
solely for the payment of the particular Bonds and coupons, if any, with respect
to which such moneys and Government Securities have been so set aside in trust.
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ARTICLE XIV
MISCELLANEOUS PROVISIONS
SECTION 1401. CONSENTS AND OTHER INSTRUMENTS BY BONDOWNERS.
(a) Any consent, request, direction, approval, objection or other
instrument required by this Indenture to be signed and executed by the
Bondowners may be in any number of concurrent writings of similar tenor and may
be signed or executed by such Bondowners in person or by agent appointed in
writing. Proof of the execution of any such instrument or of the writing
appointing any such agent and of the ownership of Bonds, if made in the
following manner, shall be sufficient for any of the purposes of this Indenture,
and shall be conclusive in favor of the Trustee with regard to any action taken,
suffered or omitted under any such instrument, namely:
(1) 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 law has power to take acknowledgements within such
jurisdiction that the person signing such instrument acknowledged before
him the execution thereof, or by affidavit of any witness to such
execution.
(2) The fact of ownership of Bonds and the amount or amounts,
numbers and other identification of such Bonds, and the date of holding
the same shall be proved by the registration books of the City maintained
by the Trustee pursuant to SECTION 206 hereof.
(b) In determining whether the Owners of the requisite principal amount of
Bonds Outstanding have given any request, demand, authorization, direction,
notice, consent or waiver under this Indenture, Bonds owned by the Corporation
or any affiliate of the Corporation, unless the Corporation or such affiliate
own 100% of the Bonds Outstanding, shall be disregarded and deemed not to be
Outstanding under this Indenture, except that, in determining whether the
Trustee shall be protected in relying upon any such request, demand,
authorization, direction, notice, consent or waiver, only Bonds which the
Trustee knows to be so owned shall be so disregarded. For purposes of this
paragraph, the word "affiliate" means any person directly or indirectly
controlling or controlled by or under direct or indirect common control with the
Corporation; for the purposes of this definition, "control" means the power to
direct the management and policies of such person, directly or indirectly,
whether through the ownership of voting securities, by contract or otherwise,
and the terms. Notwithstanding the foregoing, Bonds so owned which have been
pledged in good faith shall not be disregarded as aforesaid if the pledgee
establishes to the satisfaction of the Trustee the pledgee's right so to act
with respect to such Bonds and that the pledgee is not the Corporation or any
affiliate of the Corporation.
SECTION 1402. LIMITATION OF RIGHTS UNDER THIS INDENTURE. With the
exception of rights herein expressly conferred, nothing expressed or mentioned
in or to be implied from this Indenture or the Bonds is intended or shall be
construed to give any person other than the parties hereto, and the Owners of
the Bonds, if any, any right, remedy or claim under or in respect to this
Indenture, this Indenture and all of the covenants, conditions and provisions
hereof being intended to be and being for the sole and exclusive benefit of the
parties hereto and the Owners of the Bonds, as herein provided.
SECTION 1403. NOTICES. It shall be sufficient service of any notice,
request, complaint, demand or other paper required by this Indenture to be given
or filed with the City, the Trustee, the Corporation or Bondowners if the same
shall be duly mailed by registered or certified mail addressed:
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(a) To the City:
City of Olathe, Kansas
City Hall
100 East Santa Fe
Olathe, Kansas 66061
Attention: City Clerk
(b) To the Corporation:
Pacific Sunwear Stores Corp.
3450 East Miraloma Avenue
Anaheim, California 92806
Attention: Director/Treasurer
(c) To the Trustee:
U.S. Bank National Association
633 W. Fifth Street, 24th Floor
Los Angeles, California 90071
Attention: Corporate Trust Services
(d) To the Bondowners if the same shall be duly mailed by registered
or certified mail addressed to each of the Owners of Bonds at the time
Outstanding as shown by the bond registration books required by SECTION
206 hereof to be kept at the principal corporate trust office of the
Trustee.
SECTION 1404. SEVERABILITY. If any provision of this Indenture shall be
held or deemed to be invalid, inoperative or unenforceable as applied in any
particular case in any jurisdiction or jurisdictions or in all jurisdictions, or
in all cases because it conflicts with any other provision or provisions hereof
or any constitution or statute or rule of public policy, or for any other
reason, such circumstances shall not have the effect of rendering the provision
in question inoperative or unenforceable in any other case or circumstance, or
of rendering any other provision or provisions herein contained invalid,
inoperative or unenforceable to any extent whatever.
SECTION 1405. EXECUTION IN COUNTERPARTS. This Indenture may be
simultaneously executed in several counterparts, each of which shall be an
original and all of which shall constitute but one and the same instrument.
SECTION 1406. GOVERNING LAW. This Indenture shall be governed exclusively
by and construed in accordance with the applicable laws of the State of Kansas.
SECTION 1407. ELECTRONIC STORAGE. The parties agree that the transaction
described herein may be conducted and related documents may be stored by
electronic means.
[Remainder of page intentionally blank.]
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IN WITNESS WHEREOF, the City of Olathe, Kansas, has caused this Indenture
to be signed in its name and behalf by its Mayor and the seal of the City to be
hereunto affixed and attested by its City Clerk, and to evidence its acceptance
of the trusts hereby created, U.S. Bank National Association has caused this
Indenture to be signed in its name and behalf by its duly authorized officer and
its official seal to be hereunto affixed and attested by its Secretary or
Assistant Secretary, all as of the date first above written.
CITY OF OLATHE, KANSAS
By: /s/ MICHAEL COPELAND
--------------------------
Mayor
[SEAL]
ATTEST:
By: /s/ DEBRA S. GRAGG
-----------------------------------------
City Clerk
Indenture
PacSun Project, Series 2007
S-1
U.S. BANK NATIONAL ASSOCIATION,
as Trustee
By: /s/ CLAUDE ACOBA
--------------------------
Claude Acoba
Assistant Vice President
Indenture
PacSun Project, Series 2007
S-2