Exhibit 4.10
EXECUTION COPY
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PARTICIPATION AGREEMENT
Dated as of October 1, 1999
by and between
NEW YORK STATE ENERGY RESEARCH
AND DEVELOPMENT AUTHORITY
and
KEYSPAN GENERATION LLC
- relating to -
$41,125,000 Pollution Control Refunding Revenue Bonds
(KeySpan Generation LLC Projects), 1999 Series A
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PARTICIPATION AGREEMENT
THIS PARTICIPATION AGREEMENT, dated as of October 1, 1999, between NEW
YORK STATE ENERGY RESEARCH AND DEVELOPMENT AUTHORITY, a body corporate and
politic, constituting a public benefit corporation, established and
existing under and by virtue of the laws of the State of New York (the
"Authority") and KEYSPAN GENERATION LLC (formerly known as MarketSpan
Generation LLC), a limited liability company duly organized and existing
under the laws of the State of New York (the "Company"),
WITNESSETH:
WHEREAS, pursuant to special act of the Legislature of the State of
New York (Title 9 of Article 8 of the Public Authorities Law of New York,
as from time to time amended and supplemented, herein called the "Act"),
the Authority has been established, as a body corporate and politic,
constituting a public benefit corporation; and
WHEREAS, pursuant to the Act, the Authority is also empowered to
extend credit and make loans from bond and note proceeds to any person for
the construction, acquisition and installation of, or for the reimbursement
to any person for costs in connection with, any special energy project,
including, but not limited to, any land, works, system, building or other
improvement, and all real and personal properties of any nature or any
interest in any of them which are suitable for or related to the
furnishing, generation or production of energy or the conversion of
oil-burning facilities to alternate fuel; and
WHEREAS, the Authority is also authorized under the Act to borrow
money and issue its negotiable bonds and notes to provide sufficient monies
for achieving its corporate purposes, including for the purpose of
refunding outstanding Authority bonds and notes and the payment of costs
related thereto; and
WHEREAS, the Authority is also authorized under the Act to enter into
any contracts and to execute all instruments necessary or convenient for
the exercise of its corporate powers and the fulfillment of its corporate
purposes; and
WHEREAS, the Authority issued Pollution Control Revenue Bonds (Long
Island Lighting Company Projects), Series A in the principal amount of
$28,375,000 (the "Series A Bonds"), which where used, in part, to finance
certain costs primarily associated with the acquisition, construction, and
installation of various systems to abate, control, and reduce pollution and
to dispose of sewage and solid waste at Northport Power Station, Glenwood
Landing Power Station and at the former Shoreham Nuclear Power Station and
miscellaneous facilities at the former Mitchell Gardens Power Station; and
WHEREAS, there is currently outstanding $26,375,000 aggregate
principal amount of the Series A Bonds; and
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WHEREAS, the Authority issued Pollution Control Revenue Bonds (Long
Island Lighting Company Projects), Series B in the principal amount of
$19,100,000 (the "Series B Bonds", and collectively with the Series A
Bonds, the "Prior Bonds"), which were used, in part, to finance certain
costs primarily associated with the acquisition, construction, and
installation of various systems to abate, control, and reduce pollution and
to dispose of sewage and solid waste at the Glenwood Landing Power Station,
Far Rockaway Power Station, E.F. Barrett Power Station, Northport Power
Station, and Port Jefferson Power Station; and
WHEREAS, all of the Series B Bonds are currently outstanding; and
WHEREAS, the Company is the current owner of all the assets financed
by the Prior Bonds other than the facilities at former Shoreham Nuclear
Power Station and former Mitchell Gardens Power Station, having acquired on
May 28, 1998, pursuant to the Agreement and Plan of Merger, dated as of
June 26, 1997, by and among MarketSpan Corporation d/b/a KeySpan (formerly
known as BL Holding Corp.) ("KeySpan"), Long Island Lighting Company
("LILCO"), Long Island Power Authority and LIPA Acquisition Corp. (the
"Merger Agreement"), all of the non-nuclear electric generation businesses,
among other assets, of LILCO; and
WHEREAS, pursuant to the Merger Agreement and in connection with the
transferby LILCO of its generating assets to the Company, the Company,
KeySpan and other Transferee Subsidiaries (as defined in the Merger
Agreement) (collectively, the "KeySpan Notes Obligors") have executed and
delivered to LILCO promissory notes relating to the Prior Bonds and
evidencing the joint and several obligation of the KeySpan Notes Obligors
to pay to LILCO amounts which would be sufficient to pay principal of, and
premium, if any, and interest on, the Prior Bonds when due (the "KeySpan
Notes"); and
WHEREAS, the Company has requested that the Authority issue bonds for
the purpose of refunding the Prior Bonds; and
WHEREAS, the Company proposes to achieve the refunding of the Prior
Bonds by applying the proceeds of the Bonds together with other moneys
advanced from its own funds to the prepayment of the KeySpan Notes; and
WHEREAS, LILCO has agreed to direct redemption of the Prior Bonds and
use the proceeds received from the prepayment of the KeySpan Notes to
refund the Prior Bonds; and
WHEREAS, the Authority proposes to issue $41,125,000 aggregate
principal amount of Pollution Control Refunding Revenue Bonds (KeySpan
Generation LLC Projects), 1999 Series A (the "Bonds") for the purpose of
applying the proceeds thereof together with monies advanced by the Company
to the prepayment of the KeySpan Notes and causing LILCO to use the
proceeds received from the prepayment of the KeySpan Notes to pay all or a
portion of the redemption price of the Prior Bonds, all such bonds to be
issued under and secured by a Trust
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Indenture dated as of October 1, 1999, between the Authority and The Chase
Manhattan Bank, as trustee (the "Indenture"); and
WHEREAS, Ambac Assurance Corporation has agreed to issue a municipal
bond insurance policy in favor of the Trustee to provide for the payment of
such amounts as are specified therein with respect to regularly scheduled
payments of principal of, and interest on, the Bonds when due.
NOW THEREFORE, for and in consideration of the premises and of the
mutual covenants and agreements hereinafter set forth, it is hereby agreed
by and between the parties as follows:
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ARTICLE I
DEFINITIONS; EFFECTIVE DATE AND DURATION
OF PARTICIPATION AGREEMENT
SECTION 1.1. Definitions. The terms used in this Participation
Agreement which are defined in Section 1.01 of the Indenture shall have the
meanings, respectively, herein, which such terms are given in said Section
1.01 of the Indenture.
SECTION 1.2. Effective Date and Duration of Participation Agreement.
This Participation Agreement shall become effective upon its execution and
delivery, and shall continue in full force and effect until the principal
of and premium, if any, and interest on the Note and the Bonds have been
fully paid (or provision for their payment has been made in accordance with
the provisions of the Indenture) and all sums to which the Authority or the
Trustee are entitled hereunder have been fully paid, it being intended that
the Company's obligations under Sections 3.3, 4.2(e), 5.16 and 7.4 hereof
shall survive the termination of this Participation Agreement.
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ARTICLE II
REPRESENTATIONS AND WARRANTIES
SECTION 2.1. Representations and Warranties by the Authority. The
Authority represents and warrants as follows:
(a) The Authority is a body corporate and
politic, constituting a public benefit corporation,
established and existing under the laws of the State of New
York;
(b) The Authority has full power and authority to execute
and deliver the Bonds, this Participation Agreement, the Indenture,
the Tax Regulatory Agreement, the Bond Purchase Trust Agreement and
the Bond Purchase Agreement and to consummate the transactions
contemplated hereby and thereby and perform its obligations hereunder
and thereunder;
(c) The Authority is not in violation or default under any
of the provisions of the Constitution or the laws of the State of New
York which would affect its existence or its powers referred to in
the preceding paragraph (b);
(d) The Authority has determined that its participation in the
Project, as contemplated by this Participation Agreement, is in
the public interest;
(e) The Authority has duly authorized the execution and
delivery of the Bonds, this Participation Agreement, the Tax
Regulatory Agreement, the Bond Purchase Trust Agreement, the Bond
Purchase Agreement and the Indenture and all necessary authorizations
therefor or in connection with the performance by the Authority of
its obligations hereunder and thereunder have been obtained and are
in full force and effect; and
(f) The execution and delivery of the Bonds, this
Participation Agreement, the Tax Regulatory Agreement, the Bond
Purchase Trust Agreement, the Bond Purchase Agreement and the
Indenture and the consummation of the transactions herein or therein
contemplated will not violate or cause a default under any indenture,
mortgage, loan agreement or other contract or instrument to which the
Authority is a party or by which it is bound, or any judgment,
decree, order, statute, rule or regulation applicable to the
Authority.
SECTION 2.2. Representations and Warranties by the Company. The
Company represents and warrants as follows:
(a) The Company is a limited liability company duly
organized and existing and in good standing under the laws of the
State of New York, has power to enter into, execute
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and deliver this Participation Agreement, the Tax Regulatory
Agreement and the Company Note by proper limited liability company
action and has duly authorized the execution and delivery by it of
this Participation Agreement, the Tax Regulatory Agreement and the
Company Note;
(b) The execution and delivery by the Company of this
Participation Agreement, the Tax Regulatory Agreement and the Company
Note and the consummation of the transactions herein and therein
contemplated do not conflict with or constitute a breach of or a
default under the Company's Articles of Organization, operating
agreement or any indenture, mortgage, loan agreement or other
contract or instrument to which the Company is a party or by which it
is bound or, to the best of the Company's knowledge, any judgment,
decree, order, statute, rule or regulation applicable to the Company;
(c) This Participation Agreement, the Tax Regulatory
Agreement and the Company Note constitute valid and legally binding
obligations of the Company, enforceable against the Company in
accordance with their respective terms, except as enforcement may be
limited by applicable bankruptcy, insolvency, moratorium,
reorganization or other laws, judicial decisions or principles of
equity relating to or affecting the enforcement of creditors' rights
or contractual obligations generally;
(d) The issuance and delivery by the Company of the Company
Note in the manner and for the purposes herein set forth have been
duly authorized by the Public Service Commission of the State of New
York; and
(e) No additional authorizations for or approvals of the
execution and delivery by the Company of this Participation
Agreement, the Tax Regulatory Agreement and the Company Note need be
obtained by the Company or if any such authorization or approval is
necessary it has been obtained.
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ARTICLE III
THE PROJECT; ISSUANCE OF BONDS
SECTION 3.1. The Project. Construction of the Project is
complete. The Project is the property of the Company. In order to
effectuate the purposes of this Participation Agreement, the Company,
in its own name, will do or cause to be done all things requisite or
proper for the fulfillment of the obligations of the Company under
this Participation Agreement.
SECTION 3.2. Sale of Bonds and Deposit of Proceeds. In order to
provide funds for the prepayment of a portion of the KeySpan Notes and
the redemption of a part of the Prior Bonds, the Authority, on the
date specified in the Bond Purchase Agreement or as soon thereafter as
practicable, and concurrently with the issuance and delivery to the
Trustee of the Note as provided in Section 4.1 hereof, will issue,
sell and deliver the Bonds, all pursuant to and as provided in the
Bond Purchase Agreement and subject to the conditions set forth in
Section 2.06 of the Indenture, and will deposit the proceeds of such
sale paid by the initial purchasers of the Bonds in the Project Fund.
SECTION 3.3. Disbursements from Project Fund and Rebate Fund. 1.
The Authority has in the Indenture authorized and directed the Trustee
to make payments from the Project Fund in accordance with Section 8.01
of the Indenture, to pay the Prepayment Price and costs related
thereto and the refunding of the Prior Bonds upon receipt from time to
time of requisitions signed by an Authorized Company Representative,
stating with respect to each payment to be made the information
required by Section 8.01 of the Indenture. Amounts on deposit in the
Rebate Fund shall be disbursed in accordance with the terms of the
Indenture and the Tax Regulatory Agreement.
The Company will cause such requisitions to be submitted to the
Trustee as may be necessary to effect payments out of the Project Fund
in accordance with the provisions of the Indenture.
Concurrently with the delivery by the Company of each requisition
to the Trustee, the Company will deliver to the Authority a copy of
such requisition and any attachments thereto. The Authority and the
Trustee may rely as to the completeness and accuracy of all statements
in such requisition and the Company will indemnify and save harmless
the Authority and the Trustee from any liability incurred in
connection with any requisition so delivered and any payments made in
reliance thereon.
2. Except for amounts retained by the Trustee at the written
direction of an Authorized Company Representative for payment of items
not then due and payable or the liability for payment of which is
being contested or disputed by the Company, all monies remaining in
the Project Fund (but not the Rebate Fund) after the redemption of the
Prior Bonds and payment of all costs related thereto shall, at the
written direction of an Authorized Company Representative,
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be applied in accordance with Section 8.01.6 of the Indenture. Any balance
remaining of such retained amounts to the extent not disbursed in accordance
with subsection 1 above, shall, at the written direction of an Authorized
Company Representative, be similarly applied.
SECTION 3.4. Adequacy of Project Fund. The monies which will be
paid into the Project Fund will not be sufficient to pay the
Prepayment Price and costs related thereto and the refunding of the
Prior Bonds. The Company shall pay that portion of the Prepayment
Price and costs related thereto and the refunding of the Prior Bonds
in excess of the monies available therefor in the Project Fund.
Without limiting the generality of the foregoing, the Company has
agreed and hereby agrees to prepay the $4,557,681.25 principal amount
of the KeySpan Notes, representing a portion of the principal of the
Series A Bonds applied to the payment of costs of facilities located
at the former Shoreham Nuclear Power Station and the former Mitchell
Gardens Power Station. The Company shall not be entitled to any
reimbursement therefor from the Authority, the Trustee or the owners
of any of the Bonds, nor shall it be entitled to any diminution in or
postponement of the payments required to be paid by the Company
pursuant to this Participation Agreement or the Note.
SECTION 3.5. Ownership and Possession of the Project. Issuance of
the Bonds will not vest in the owners thereof, the Trustee, the
Authority or any other person, with ownership, or the right to
possession, of the Project. The Company is entitled to sole and
exclusive ownership and possession of the Project.
SECTION 3.6. Operation, Maintenance and Repair. The Authority and
the Company recognize that the Project constitutes integrated portions
of the electric energy production facilities of the Company and that
it is not feasible to administer the Project separately from such
facilities. The Company shall operate the Project (with such changes,
improvements or additions as the Company may deem desirable) as part
of such facilities for the joint useful life of the Project and such
facilities, shall maintain and repair the Project in conformity with
the Company's normal maintenance and repair programs for such
facilities and shall proceed in good faith to maintain the
availability of the Project for use as an authorized project under the
Act; but the Company shall have no obligation to operate, maintain or
repair any element or item of the Project the operation, maintenance,
or repair of which becomes uneconomic to the Company because of damage
or destruction or obsolescence (including physical, functional and
economic obsolescence), or change in government standards and
regulations, or the termination of the operation of the portion of
such facilities to which the element or item of the Project is an
adjunct.
SECTION 3.7. Investment of Monies in Funds Under the Indenture.
Any monies held as a part of any fund created under the Indenture
shall, at the direction of an Authorized Company Representative, be
invested or reinvested by the Trustee as provided in Article IX of the
Indenture.
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ARTICLE IV
NOTE AND PAYMENTS
SECTION 4.1. Execution and Delivery of Note to Trustee.
Concurrently with the authentication by the Registrar and Paying Agent
and delivery by the Authority of the Bonds and in order to evidence
the obligation of the Company to the Authority to repay the Bonds, the
Authority hereby directs the Company, and the Company hereby agrees,
to execute and deliver to the Trustee its Note, duly and validly
executed and delivered, relating to the Bonds. The Note shall be in
substantially the form attached hereto as Exhibit C with only such
changes to such form as may be approved by the Authority. Thereafter,
the Company shall be obligated to make the Note Payments, constituting
payments of principal of, and premium, if any, and interest on the
Note, and the Additional Payments required by this Participation
Agreement. Such obligations shall terminate on the date when the Note
has been paid in full. The Note may be prepaid in accordance with
Section 4.4 hereof. Upon payment or provision for payment in full of
all amounts payable or to become payable under the Note, the Trustee
shall cancel the Note and deliver the same to the Company. Provision
for payment in full of all amounts payable or to become payable under
the Note shall be deemed to have occurred upon receipt by the Trustee
of written notice from the Authority acknowledging that the Company
has satisfied its obligations to the Authority under the Note. The
Authority agrees to deliver such written notice to the Trustee
promptly when such provision for payment in full has been made.
SECTION 4.2. Payments Payable; Note Payments; Additional
Payments. (a) The Company covenants and agrees to pay the Payments as
and when the same are due and payable in accordance with the Note and
this Section 4.2. The Company shall provide the Trustee with a written
allocation of amounts paid under this Section 4.2 among the various
purposes set forth in this Section 4.2.
(b) The Note Payments shall be in an aggregate amount sufficient
for, together with other amounts held by the Trustee and available
under the Indenture for application to, the payment in full of the
Bonds consisting of (i) the total interest becoming due and payable on
the Bonds to the date of payment thereof, and (ii) the total principal
amount plus premium, if any, of the Bonds.
The Company covenants that it shall deposit, or cause to be
deposited with the Trustee, sufficient funds to assure that no default
shall occur in the payment of the principal of or premium, if any, or
the interest on the Bonds as and when due, and that no unreasonable
delay shall occur in the payment of the costs and expenses payable
from Additional Payments.
(c) The Company shall make Note Payments by 12:00 noon, New York
City time, one Business Day (two Business Days during any Auction Rate
Period or any Auction Rate- Inverse Rate Period) next preceding each
Interest Payment Date to the Bond Fund for credit by the Trustee to
the Interest Account of the Bond Fund established pursuant to Section
9.01 of the
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Indenture, in the aggregate amount required, together with other funds available
therefor in the Interest Account in the Bond Fund, to pay the interest payable
on each such Outstanding Bond on each such Interest Payment Date.
In addition, the Company shall pay an additional amount to the
Trustee for deposit in the Bond Fund and credit to the Principal
Account, Interest Account, Redemption Account or to the Trustee for
payment to, or directly to, the Registrar and Paying Agent for deposit
in the Bond Purchase Fund and credit to the Company Account therein to
be applied to the payment of the principal of and premium, if any, and
interest payable upon redemption of any Bond pursuant to Article V of
the Indenture or purchase price of any Bond pursuant to the Bond
Purchase Trust Agreement to the extent not provided from the sources
described therein.
(d) The Company agrees that, at all times prior to the Fixed Rate
Conversion Date to the extent a Liquidity Facility is in place and to
the extent necessary to maintain or obtain any short term rating with
respect to the Bonds, monies provided by the Company shall not be
applied to the payment of the purchase price, until any such amounts
have been on deposit in the applicable account for a period of at
least 124 days and the Company shall have delivered a Non- Bankruptcy
Certificate to the Trustee in accordance with the Indenture. If and to
the extent such monies are not available and there is no Liquidity
Facility in place, the Company shall pay or provide for the payment of
principal of, premium, if any, and interest on, and the Purchase Price
of, the Bonds from other sources.
(e) The Company further covenants and agrees to pay, when due and
payable,as Additional Payments, certain additional amounts and costs
and expenses, exclusive of costs and expenses payable from the
proceeds of the Bonds. Each installment of Additional Payments, if
any, shall be equal to the sum of the amounts set forth in clauses (i)
to (iv), inclusive, below, and shall be paid directly to the persons
entitled to such payments. "Additional Payments" is hereby defined to
be the aggregate of the installments of the following:
(i) the reasonable fees and expenses payable to the
Trustee, any Indexing Agent, the Registrar and Paying Agent, any
issuer of a Support Facility, the Market Agent (and in the case of
Auction Rate Bonds during an Auction Rate Period, the Auction Agent
under the Auction Agency Agreement and any Broker-Dealers under the
respective Broker- Dealer Agreements), and of any counsel or agents
of any of the foregoing except any fees or expenses attributable to
negligence, willful misconduct or bad faith;
(ii) all costs incurred in connection with the transfer,
exchange, purchase or redemption of Bonds not otherwise paid by the
holders thereof, including all charges of the Authority, the Market
Agents (and in the case of Auction Rate Bonds during an Auction Rate
Period, the Auction Agent and any Broker-Dealer), the Registrar and
Paying Agent and the Trustee with respect thereto, to the extent
monies are not otherwise available therefor;
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(iii) the reasonable fees and other costs incurred for
services of such attorneys and accountants as are employed to make
examinations, provide services, render opinions and prepare reports
required under this Participation Agreement, the Bond Purchase Trust
Agreement, and the Indenture; and
(iv) an administration fee of the Authority in the amount
of $102,812.50 paid to the Authority on the date of authentication
and delivery of the Bonds and an annual fee equal to $130 per million
dollar principal amount of the Bonds on October 1 of each year
commencing October 1, 2000, based upon the amount of Bonds
Outstanding as of such October 1 and for purposes of the calculation
of such fee, rounding up to the nearest whole million dollars, and
all reasonable expenses, disbursements, advances, taxes, assessments
or impositions, not otherwise paid under this Participation Agreement
or the Indenture, incurred by or imposed upon the Authority in
connection with its administration and enforcement of, and compliance
with, this Participation Agreement, the Auction Agency Agreement, the
Bond Purchase Trust Agreement, the Market Agent Agreement and the
Indenture, which amounts the Company is obligated to pay, including,
but not limited to, reasonable attorneys' fees. In addition, the
Company shall pay to the State of New York with respect to the Bonds
a bond issuance charge in the amount of $143,937.50 on the date of
authentication and delivery of the Bonds.
(f) In the event that the Company shall fail to make any Payment
as required by Sections 4.2(a), (b), (c), (d) and (e) hereof, the
Payment so in default shall continue as an obligation of the Company
until the amount in default shall have been fully paid, and the
Company agrees to pay the same with interest thereon, which interest
shall also constitute an obligation of the Company at the maximum rate
of interest payable on the Bonds pursuant to the Indenture, to the
extent permitted by law, from the date of default until paid;
provided, that the Company agrees in the event the Company shall fail
to make any Payment during an Auction Rate Period or an Auction
Rate-Inverse Rate Period, the Payment so in default shall continue as
an obligation of the Company until the amount in default shall have
been fully paid, and the Company agrees to pay the same with interest
thereon, which interest shall also constitute an obligation of the
Company at, in the case of an Auction Rate Period, the Maximum Auction
Rate, and in the case of an Auction Rate-Inverse Rate Period, the
Overdue Rate, to the extent permitted by law, from the date of default
until paid. Nothing in this Section 4.2 shall require the Company to
pay costs and expenses mentioned in clause (e)(iii) above so long as
the validity or the reasonableness thereof shall be contested in good
faith unless the Trustee shall receive an opinion of independent
counsel that such contest materially jeopardizes the respective
interests of the Authority and the Trustee in this Participation
Agreement, the Auction Agency Agreement, the Bond Purchase Trust
Agreement, the Indenture or the Market Agent Agreement, in which event
the Company shall pay such costs and expenses (without prejudice to
any rights of the Company to recover such costs and expenses if not
valid or reasonable) to the end that the respective interests of the
Authority and the Trustee, in the opinion of independent counsel, are
not materially jeopardized.
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(g) The Company agrees to give notice to the Credit Facility
Issuer not less than two days prior to any regularly scheduled payment
date for principal or interest on the Bonds if the Company does not
intend or will be unable to make the corresponding payment to the
Trustee under the Note.
SECTION 4.3. Notice to Pay; Medium of Payment; Acceleration.
Failure to receive any prior notice of the due date of any Payment
will not relieve the Company of its obligation to pay such Payment
when it is due and payable. The Company covenants and agrees that it
will pay or cause to be paid when due and payable hereunder the
Payments, and every installment thereof, without notice or demand
therefor and without abatement, reduction or set-off of any kind or
nature whatsoever, in lawful money of the United States of America.
If pursuant to the provisions of Section 12.03 of the Indenture,
the obligation of the Authority to pay the Bonds is accelerated or
shall otherwise be declared due and payable immediately, then the
Company shall forthwith pay or cause to be paid to the Trustee an
amount sufficient with all other funds available therefor, to pay the
Bonds in full and, secondly an amount which shall be sufficient, with
all other funds available therefor, to pay all other obligations of
the Authority or the Company incurred or to be incurred under the
Indenture, this Participation Agreement, the Auction Agency Agreement,
the Bond Purchase Trust Agreement or the Market Agent Agreement.
SECTION 4.4. Advance Payments. The Company shall have the option
from time to time in conjunction with the redemption of Bonds pursuant
to Section 5.01 or 5.04 of the Indenture to pay to the Trustee in
advance of the time required by this Participation Agreement and the
Note for deposit in the Bond Fund for credit to the Redemption Account
therein such amounts as the Company may elect in order to effect the
prepayment of the Note in whole or in part. The Company shall give
notice to the Trustee and the Authority of any intention to prepay the
Note in whole or in part and of the principal amount to be prepaid not
more than sixty (60) nor less than thirty-five (35) days prior to the
date on which such Payment is to be made on the Note. Such optional
prepayment may be made not later than one (1) Business Day prior to
the date of prepayment of the Bonds.
SECTION 4.5. Company's Payments as Trust Funds. All Note Payments
and Additional Payments required to be made by the Company under this
Participation Agreement and the Note to the Authority, the Trustee or
the Registrar and Paying Agent which under the Indenture are required
to be applied in payment of or as security for the Bonds, shall be and
constitute and are hereby declared to be trust funds, whether held by
the Authority, the Trustee, the Registrar and Paying Agent, or any
bank or trust company, designated for such purpose and shall continue
to be impressed with a trust until such monies are applied in the
manner provided in the Indenture.
SECTION 4.6. Absolute Obligation to Make Payments. The obligation
of the Company to pay the Note Payments and the Additional Payments,
as required by this Participation
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Agreement and the Note, and to satisfy any other financial liabilities incurred
hereunder and thereunder shall be an absolute, direct, general obligation, and
shall be unconditional and shall not be abated, rebated, set off, reduced,
abrogated, waived, diminished or otherwise modified in any manner or to any
extent whatsoever (other than for prior payment), regardless of any rights of
set-off, recoupment or counterclaim that the Company might otherwise have
against the Authority or the Trustee or any other party or parties and
regardless of any contingency, act of God, event or cause whatsoever and
notwithstanding any circumstance or occurrence that may arise or take place
including, but without limiting the generality of the foregoing, the following:
(a) any damage to or destruction of any part or all of the
Project;
(b) the taking or damaging of any part or all of the
Project by any public authority or agency in the
exercise of the power of eminent domain or otherwise;
(c) any assignment, novation, merger, consolidation, transfer
of assets, subleasing or other similar transaction of or
affecting the Company whether with or without the approval
of the Trustee, except as otherwise expressly provided in
this Participation Agreement;
(d) with respect solely to the obligation of the Company to pay
the Additional Payments, the termination of this Agreement
and payment or provision for payment in full of the amount
due under the Note pursuant to the provisions hereof;
(e) any failure of any party to perform or observe any
agreement or covenant, whether express or implied, or any
duty, liability or obligation arising out of or in
connection with this Participation Agreement, the Note, the
Auction Agency Agreement, any Broker-Dealer Agreement, the
Market Agent Agreement, the Bond Purchase Trust Agreement
or the Indenture;
(f) any change or delay in the time of availability of the
Project or any part thereof for use of the Project or any part
thereof;
(g) any acts or circumstances that may constitute an eviction or
constructive eviction from any part of the Project;
(h) failure of consideration, failure of title to any part of the
Project or commercial frustration; and
(i) any change in the tax or other laws of the United States or
of any state or other governmental authority;
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provided, however, that the foregoing shall not be deemed to be a waiver of any
right of recourse the Company may have against the Authority, the holder of any
Bond or others, including but not limited to, the rights, causes of action or
claims which may arise out of the breach of their respective obligations or the
inaccuracy of their respective warranties, provided, however, that the Company
may pursue any such right, claim or cause of action only by a separate
proceeding or action and not by counterclaim or set-off hereunder and the
bringing of such separate proceeding or action shall not affect the Company's
absolute, irrevocable and unconditional obligation to make payments pursuant to
this Section 4.6.
However, the obligation of the Company to make Note Payments
shall be deemed satisfied when made or to the extent the Trustee makes
the deposits in the Bond Fund for credit to the Principal Account and
Interest Account from the sources described in Sections
9.02(a)(ii)(II) and 9.02(b)(ii)(I) and (III) of the Indenture.
SECTION 4.7. Assignment of Authority's Rights. As security for
the payment of the Bonds, the Authority will assign to the Trustee
certain of the Authority's rights under this Participation Agreement
and the Note, including the right to receive payments hereunder
(except the right to receive payments, if any, under Sections
4.2(e)(ii) and (iv), 5.16 and 7.4 hereof and the right to amend the
Participation Agreement) and hereby directs the Company to make said
payments directly to the Trustee or in the case of the Purchase Price
to the Registrar and Paying Agent. The Company herewith assents to
such assignment and will make payments under this Participation
Agreement and the Note (except payments made pursuant to Sections
4.2(e)(ii) and (iv), 5.16 and 7.4 hereof which shall be made directly
to the Authority) directly to the Trustee (or in the case of the
Purchase Price, to the Registrar and Paying Agent) without defense or
set-off by reason of any dispute between any of the Company, the
Trustee or Registrar and Paying Agent.
SECTION 4.8. Actions with respect to or by or on behalf of the
Authority under the Indenture. The Authority hereby grants the right
to the Company to request the Authority to take certain actions under
the Indenture and/or to perform or undertake certain actions as
specified under the Indenture. The Company agrees to request the
Authority to take action or undertake or perform any action solely in
compliance with or after complying with the requirements and
provisions of the Indenture.
SECTION 4.9. Agreements of Company relating to Support
Facilities. In order to secure the payment of interest on the Bonds,
the Company has obtained a Credit Facility. The Company agrees not to
request that an Adjustable Rate other than an Auction Rate during a
Auction Rate Period or an Auction Rate and an Inverse Rate during an
Auction Rate-Inverse Rate Period become effective unless there shall
be in effect, prior to the applicable Change in the Interest Rate
Mode, a Liquidity Facility which meets the requirements of Article VI
of the Indenture.
The Company further agrees that it will maintain at all times,
except during any Auction Rate Period, an Auction Rate-Inverse Rate
Period or the Fixed Rate Period, a Liquidity
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Facility meeting the requirements of Article VI of the Indenture. Such Liquidity
Facility shall expire no earlier than the earliest of (1) its stated expiration
date, which shall be not less than six months from its effective date and shall
be no earlier than the second Business Day after the next succeeding date when
Bonds are subject to optional or mandatory tender for purchase, (2) when all
available amounts have been drawn and not been timely reimbursed, (3) the second
business day following a Change in the Interest Rate Mode to an Auction Rate
during an Auction Rate Period or an Auction Rate during and Auction Rate-Inverse
Rate Period, (4) the second business day following the Fixed Rate Conversion
Date, (5) on the effective date of any Alternate Liquidity Facility that
replaces the then effective Liquidity Facility, (6) the earliest date on which
no Bonds are outstanding and (7) twelve days after the Trustee receives notice
from the Liquidity Facility Issuer that it is terminating the Liquidity Facility
and directing the Trustee to cause a mandatory tender and purchase of the Bonds.
SECTION 4.10. Project not Security for Bonds. It is expressly
recognized by the parties that the Project will not constitute any
part of the security for the Bonds. The principal security for the
Bonds shall be the Note and the absolute, irrevocable and
unconditional obligation of the Company to make the Note Payments.
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ARTICLE V
SPECIAL COVENANTS AND REPRESENTATIONS
SECTION 5.1. No Warranty as to Suitability of the Project. The
Authority makes no warranty, either express or implied, with respect
to actual or designed capacity of the Project, as to the suitability
of the Project for the purposes specified in this Participation
Agreement, as to the condition of the Project, or that the Project
will be suitable for the Company's purposes or needs.
SECTION 5.2. Authority's Rights to Inspect the Project and Plans
and Specifications. The Authority shall have the right at all
reasonable times to examine and inspect the Project to the extent
practicable and, to the extent reasonably available, the construction
plans and specifications therefor.
SECTION 5.3. Company Consent to Amendment of Indenture. The
Authority shall not enter into any indenture supplemental to or
amendatory of the Indenture which affects the rights or obligations of
the Company without the prior consent of the Company as evidenced by a
certificate in writing signed by an Authorized Company Representative.
SECTION 5.4. Tax Covenant. Notwithstanding any other
provision hereof, the Company covenants and agrees that it will
not take or authorize any action or permit any action within its
reasonable control to be taken, or fail to take any action within
its reasonable control, with respect to the Project, or the
proceeds of the Bonds, including any amounts treated as proceeds
of the Bonds for any purpose of Section 103 of the Code, the
taking of which or any failure to so take will result in the loss
of the exclusion of interest on the Bonds from gross income for
federal income tax purposes under Section 103 of the Code (except
for any Bond during any period while any such Bond is held by a
person referred to as a "substantial user" of the Project or a
"related person" in Section 147(a) of the Code). This provision
shall control in case of conflict or ambiguity with any other
provision of this Participation Agreement. In furtherance of such
covenant and agreement, the Authority and the Company have
entered into the Tax Regulatory Agreement and the Company hereby
covenants and agrees to comply with the provisions thereof.
SECTION 5.5. Maintenance of Office or Agency. The Company
will at all times keep, in Brooklyn, New York, or another
location in the State of New York, an office or agency where
notices and demands to or upon the Company with respect to this
Participation Agreement and the Note may be served, and will,
from time to time, give written notice to the Authority and the
Trustee of the location of such office or agency; and, in case
the Company shall fail to do so, notices may be served and
demands may be made at the Principal Corporate Trust Office of
the Trustee.
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SECTION 5.6. Further Assurances. Upon the request of the
Trustee in writing, the Company will make, execute, acknowledge
and deliver, or cause to be made, executed, acknowledged and
delivered, to the Trustee any and all such further acts, deeds,
conveyances, assignments or assurances as may be reasonably
required for effectuating the intention of this Participation
Agreement and the Note.
SECTION 5.7. Payment of Taxes and Other Charges. The Company
will promptly pay and discharge, or cause to be paid and
discharged, as the same become due and payable, any and all
taxes, rates, levies, assessments, and governmental liens, claims
and other charges at any time lawfully imposed or accruing upon
or against the Company or upon or against its properties or any
part thereof, or upon the income derived therefrom or from the
operations of the Company, provided, that the Company shall not
be required to pay or discharge, or cause to be paid or
discharged, any such tax, rate, levy, assessment, lien, claim or
other charge so long as in good faith and by appropriate legal
proceedings the validity thereof shall be contested.
SECTION 5.8. Maintenance of Properties. The Company will at
all times make or cause to be made such expenditures for repairs,
maintenance and renewals, or otherwise, as shall be necessary to
maintain its properties in good repair, working order and
condition as an operating system or systems to the extent
necessary to meet the Company's obligations under the Public
Service Law of the State of New York and this Participation
Agreement; provided, however, that nothing herein contained shall
be construed to prevent the Company from ceasing to own or
operate any of its plants or any other property, if, in the
judgment of the Company, it is advisable not to own or operate
the same and the ownership or operation thereof shall not be
essential to the maintenance and continued operation of the rest
of the operating system or systems, and the security under the
Indenture afforded by the Company Note will not be substantially
impaired by the termination of such operation.
SECTION 5.9. Insurance. The Company will keep or cause to be
kept such parts of its properties as, in the opinion of an
Authorized Company Representative (as defined in the Indenture
and who shall be a licensed professional engineer), are of an
insurable nature, insured against loss or damage by fire or other
casualties, the risk of which is customarily insured against by
companies similarly situated and operating like properties, to
the extent that property of similar character is customarily
insured against by such companies, either (a) by reputable
insurers or (b) in whole or in part in the form of reserves or of
one or more insurance funds created by the Company, whether alone
or with other corporations, provided that the plan of each such
insurance fund shall have been or shall be approved by the Board
of Directors of the Company.
SECTION 5.10. Proper Books of Record and Account. The
Company will at all times keep or cause to be kept proper books
of record and account, in which full, true and correct entries
will be made of all dealings, business and affairs of the
Company, including proper and complete entries to capital or
property accounts covering property worn out, obsolete, abandoned
or sold, all in accordance with the requirements of any system of
accounting or keeping accounts or the rules, regulations or
orders prescribed by a regulatory commission with jurisdiction
over
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the rates of the Company giving rise to at least a majority
of the Company's gross revenues, or if there are no such
requirements or rules, regulations or orders, then in compliance
with generally accepted accounting principles.
SECTION 5.11. Compliance with Law. The Company agrees to use
its best efforts to comply in all material respects with all
applicable laws, rules and regulations and orders of any
governmental authority, non-compliance with which would have a
material adverse effect on its business, financial condition or
results of operations (to the extent the Company deems it can
reasonably comply while maintaining its public utility
operations) or would materially adversely affect the Company's
ability to perform its obligations under this Participation
Agreement or under the Note, except laws, rules, regulations or
orders being contested in good faith or laws, rules, regulations
or orders which the Company has applied for variances from, or
exceptions to.
SECTION 5.12. Consolidation, Merger or Sale of Assets. The
Company will not consolidate with or permit itself to be merged
into or be acquired or purchased by any other company or
companies, or convey, transfer, lease or otherwise dispose of all
or substantially all of its properties and assets (any such
conveyance, transfer, lease or other disposition is hereafter
called a "Transfer"), except in the manner and upon the terms and
conditions set forth in this Section 5.12.
Nothing contained in this Participation Agreement shall
prevent (and this Participation Agreement shall be construed as
permitting and authorizing, without acceleration of the maturity
of the Note) any lawful consolidation or merger of the Company
with or into, or acquisition or purchase by, any other company or
companies lawfully authorized to acquire and operate the
properties of the Company, or a series of consolidations or
mergers, or successive consolidations or mergers, in which the
Company or its successor or successors shall be a party, or any
Transfer as an entirety to a company lawfully authorized to
acquire and operate the same; provided, that, upon any
consolidation, merger, acquisition or purchase, or Transfer, the
company formed by such consolidation, or into which such merger
may be made if other than the Company, or the company which is
acquiring or purchasing the Company, or which is a transferee,
shall execute and deliver to the Trustee and the Credit Facility
Issuer an instrument, in form satisfactory to the Trustee,
whereby such company shall effectually assume the due and
punctual payment of the principal of and premium, if any, and
interest on the Note according to its tenor and the due and
punctual performance and observance of all covenants and
agreements to be performed by the Company pursuant to this
Participation Agreement on the part of the Company to be
performed and observed and, thereupon, such company shall succeed
to and be substituted for the Company hereunder and under the
Note, with the same effect as if such successor company had been
named herein as obligor.
Each such successor company shall possess, and may exercise,
from time to time, each and every right and power hereunder and
under the Note of the Company, in its name or otherwise; and any
act, proceeding, resolution or certificate by any of the terms
hereof and the
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Note required or provided to be done, taken and performed or made, executed or
verified by any board or officer of the Company shall and may be done, taken and
performed or made, executed and verified with like force and effect by the
corresponding board or officer of any such successor company.
If consolidation, merger or Transfer is made as permitted by
this Section 5.12, the provisions of this Section 5.12 shall
continue in full force and effect and no further consolidation,
merger or Transfer shall be made except in compliance with the
provisions of this Section 5.12.
SECTION 5.13. Financial Statements of Company. The Company
agrees to have an annual audit made by its regular independent
public accountants and to furnish the Trustee, the Authority and
the Bond Insurer with a balance sheet and statements of income,
retained earnings and changes in cash flows showing the financial
condition of the Company and its consolidated subsidiaries, if
any, at the close of each fiscal year, and the results of
operations of the Company and its consolidated subsidiaries, if
any, for each fiscal year, as audited by said accountants, on or
before the last day of the third month following the close of the
fiscal year or as soon thereafter as they are reasonably
available.
SECTION 5.14. Company Agrees to Perform Obligations Imposed
by Indenture. The Company agrees to perform such obligations as
may be required of it by the provisions of the Indenture. The
Authority agrees to exercise its rights under Article XV of the
Indenture upon the request of the Company.
SECTION 5.15. Certificates as to Defaults. The Company shall
file with the Trustee and the Bond Insurer, on or before January
1 of each year, commencing on January 1, 2000, a certificate
signed by an Authorized Company Representative stating that, to
the best of his/her knowledge, information and belief, the
Company has kept, observed, performed and fulfilled each and
every one of its covenants and obligations contained in this
Participation Agreement, the Tax Regulatory Agreement and in the
Note and, to the best of his/her knowledge, information and
belief, there does not exist at the date of such certificate any
Default by the Company under this Participation Agreement or any
Event of Default hereunder or other event which, with notice or
the lapse of time specified in Section 7.1 hereof, or both, would
become an Event of Default or, if any such Default or Event of
Default or other event shall so exist, specifying the same and
the nature and status thereof.
SECTION 5.16. Limited Obligation of Authority;
Indemnification of Authority, Registrar and Paying Agent, Auction
Agent and Trustee. The Bonds shall not be general obligations of
the Authority, and shall not constitute an indebtedness of or a
charge against the general credit of the Authority or give rise
to any pecuniary liability of the Authority. The liability of the
Authority under the Bonds shall be enforceable only to the extent
provided in the Indenture, and the Bonds shall be payable solely
from the Note Payments and any other funds held by the Trustee
under the Indenture and available for such payment. The Bonds
shall not be a debt of the State of New York, and the State of
New York shall not be liable thereon.
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No member, officer, agent or employee of the Authority shall
be personally liable for the payment of the Bonds or any money or
damages hereunder or related hereto. Notwithstanding the fact
that it is the intention of the parties hereto that the Authority
and all officers and employees thereof shall not incur pecuniary
liability by reason of the terms of this Participation Agreement,
or the undertakings required of the Authority hereunder or any
officer or employee thereof, by reason of the issuance of the
Bonds, the execution and delivery of any document, including, but
not limited to, the Indenture, the Tax Regulatory Agreement, this
Participation Agreement, the Note, the Auction Agency Agreement,
the Market Agent Agreement, the Bond Purchase Trust Agreement,
any Broker-Dealer Agreement or any final official statement, or
by reason of the performance or non-performance of any act
required of it by this Participation Agreement or any such other
agreement, or the performance or non-performance of any act
requested of it by the Company, including all claims, liabilities
or losses arising in connection with the violation of any
statutes or regulations pertaining to the foregoing;
nevertheless, if the Authority (including any person at any time
serving as an officer or employee of the Authority) should incur
any such pecuniary liability, then in such event the Company
shall indemnify and hold harmless the Authority (including any
person at any time serving as an officer or employee of the
Authority) against all claims by or on behalf of any person, firm
or corporation or other legal entity, arising out of the same,
and all costs and expenses incurred in connection with any such
claim or in connection with any action or proceeding brought
thereon.
The Company releases the Authority (including any person at
any time serving as an officer or employee of the Authority), the
Registrar and Paying Agent, the Auction Agent and the Trustee
(including any person at any time serving as an officer or
employee of the Trustee, the Registrar and Paying Agent or the
Auction Agent) from, agrees that the Authority (including any
person at any time serving as an officer or employee of the
Authority), the Registrar and Paying Agent, the Auction Agent and
the Trustee (including any person at any time serving as an
officer or employee of the Trustee, the Registrar and Paying
Agent or the Auction Agent) shall not be liable for, and agrees
to indemnify and hold the Authority (including any person at any
time serving as an officer or employee of the Authority) and the
Trustee, the Auction Agent, the Registrar and Paying Agent
(including any person at any time serving as an officer or
employee of the Trustee, Auction Agent or the Registrar and
Paying Agent) harmless, to the fullest extent permitted by law
from any losses, costs, charges, expenses (including reasonable
attorneys' and agents' fees and expenses), by reason of (i) any
liability for any loss or damage to property or any injury to, or
death of, any person that may be occasioned by any cause
whatsoever arising out of the construction or operation of the
Project, or (ii) judgments and liabilities in connection with any
action, suit or proceeding instituted or threatened in connection
with the transactions contemplated by this Participation
Agreement and the Note, provided, however, that the Company shall
not be liable as the result of the negligence of the Authority,
the Trustee, the Registrar and Paying Agent, the Market Agent or
the Auction Agent or bad faith or wilful misconduct of the
Authority, the Trustee, the Registrar and Paying Agent, the
Market Agent or the Auction Agent (including any person at any
time serving as an officer or employee of the Authority or the
Trustee, the Registrar and Paying Agent, the Market Agent or the
Auction Agent). If any such claim is asserted, the Authority, any
individual indemnified herein, the Trustee, the Registrar and
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Paying Agent, the Market Agent or the Auction Agent, as the case may be, shall
give prompt notice to the Company and permit the Company to participate in the
defense thereof at its own expense. The Company will reimburse the indemnified
parties for any legal or other expenses reasonably incurred by the indemnified
parties in investigating or defending against any such claim, provided that the
Company shall not be required to reimburse any of the indemnified parties for
fees and expenses of counsel other than one counsel selected by the Trustee in
its sole discretion for all indemnified parties in which proceedings are brought
or threatened to be brought unless and to the extent there are actual or
potential conflicts of interest between or among indemnified parties or defenses
available to some indemnified parties that are not available to other
indemnified parties in which case, the Company will reimburse the indemnified
parties for any legal or other expenses reasonably incurred by the indemnified
parties in investigating or defending against any such claim by each counsel of
each of the indemnified parties affected. The obligation of the parties hereto
under this Section shall survive the termination of this Participation
Agreement.
SECTION 5.17. Financing Statements. On or before January 1
of the fifth year which follows the delivery of the Bonds and on
or before January 1 of every fifth year thereafter, so long as
any of the Bonds are Outstanding, the Company shall file or cause
to be filed all financing statements, continuation statements and
other instruments or memoranda referred to in Section 10.08 of
the Indenture as is necessary to maintain the assignments, liens,
pledges and charges of the Indenture or furnish an opinion of
counsel (which may be counsel to the Company) stating that in the
opinion of such counsel no action is required to maintain such
assignments, liens, pledges and charges.
SECTION 5.18. Provision of Information. The Company shall
provide the Trustee with the forms of any notices required to be
sent to holders of Bonds in connection with any redemption of
Bonds, a change in the Auction Period, the Interest Period or
change in the Interest Rate Mode pursuant to Articles III, III-A,
IV and V of the Indenture or the establishment of a Fixed Rate on
the Bonds pursuant to Section 4.02 of the Indenture.
SECTION 5.19. Ratings. During any Auction Rate Period or any
Auction Rate Inverse Rate Period, the Company on behalf of the
Authority shall take all reasonable action necessary to enable at
least two nationally recognized, statistical rating organizations
(as that term is used in the rules and regulations of the
Commission under the Exchange Act) to provide ratings for the
Auction Rate Bonds during an Auction Rate Period or Auction
Rate-Inverse Rate Bonds during an Auction Rate-Inverse Rate
Period, as the case may be.
SECTION 5.20. Notices. The Company on behalf of the
Authority shall provide the Trustee and the Bond Insurer and, so
long as no Event of Default has occurred and is continuing and
the ownership of any Auction Rate Bonds is maintained in
book-entry form by the Securities Depository, the Auction Agent,
with notice of any change in (a) the Statutory Corporate Tax Rate
under the Indenture, (b) the Applicable Percentage, or (c) the
maximum rate permitted by law on the Bonds. There is currently no
such maximum rate.
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ARTICLE VI
OPTIONAL AND MANDATORY PREPAYMENTS;
REDEMPTION OF BONDS
SECTION 6.1. Redemption of Bonds. If the Company is not in
default in making installment payments under Sections 4.2(a),
(b), (c), (d) and (e) hereof and under the Note, the Authority
and the Trustee, at the request of the Company, at any time the
aggregate monies in the Bond Fund are sufficient to effect a
redemption of Bonds and if the same are then redeemable under the
provisions of the Indenture and the Bonds, shall forthwith take
all steps that may be necessary under the applicable redemption
provisions of Article V of the Indenture to effect redemption of
all or part of the then Outstanding Bonds as may be specified by
the Company on such redemption date.
SECTION 6.2. Prepayment of Note Payments. The Note may be
prepaid, in whole or in part, at the option of the Company in
connection with an optional redemption of the Bonds pursuant to
Article V of the Indenture and shall be prepaid, in whole or in
part, in connection with any mandatory redemption of the Bonds
pursuant to Article V of the Indenture other than a mandatory
redemption pursuant to Section 5.07 of the Indenture. Prepayment
of the Note pursuant to the preceding sentence shall be with or
without premium, as required to provide sufficient funds to
redeem the Bonds being redeemed pursuant to Article V of the
Indenture. The Note also may be prepaid in whole or in part at
any time, without premium, at the option of the Company
subsequent to the redemption of the Bonds with moneys furnished
by the State of New York pursuant to Section 5.07 of the
Indenture.
The Company shall give notice to the Trustee and the
Authority of any intention to prepay the Note in whole or in part
and of the principal amount to be prepaid not more than sixty
(60) nor less than thirty-five (35) days prior to the date on
which such prepayment is to be made on the Note. Such optional
prepayment may be made not later than one (1) Business Day prior
to the date of prepayment of the Bonds.
The Company may also elect to provide for the defeasance of
the Bonds in accordance with Article XV of the Indenture and upon
the defeasance of the Bonds, the Note will be deemed paid, in
whole or in applicable part.
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ARTICLE VII
EVENTS OF DEFAULT AND REMEDIES
SECTION 7.1. Events of Default Defined. The following shall
be an "Event of Default" under this Participation Agreement and
the terms "Event of Default" or "Default" shall mean, whenever
they are used in this Participation Agreement, any one or more of
the following events:
(a) Failure by the Company to pay or cause to be paid, when
due and payable, any installment of Note Payments and, in the case of
failure to pay any installment of interest on the Note, continuance
of such failure for three (3) Business Days.
(b) Failure by the Company to observe and perform any
covenant, condition or agreement in this Participation Agreement or
the Note on its part to be observed or performed, other than as
referred to in subsection (a) of this Section 7.1 (and other than
failure to pay the amounts due under Sections 4.2(e), 4.2(f), 5.16
and 7.4 of this Participation Agreement), for a period of ninety (90)
days after written notice, specifying such failure and requesting
that it be remedied, has been given to the Company unless the Trustee
(with any required consent of Bondholders under the provisions of the
Indenture) shall agree in writing to an extension of such time prior
to its expiration, provided that if any such failure shall be such
that it cannot be cured or corrected within such ninety-day period,
it shall not constitute an Event of Default hereunder if curative or
corrective action is instituted within such period and diligently
pursued until the failure of performance is cured or corrected.
(c) The dissolution or liquidation of the Company or the
filing by the Company of a voluntary petition in bankruptcy, or
failure by the Company promptly to discharge or cause to be
discharged any execution, garnishment or attachment of such
consequence as will impair its ability to carry on its operations
generally or the commission by the Company of any act of bankruptcy,
or adjudication of the Company as a bankrupt, or assignment by the
Company for the benefit of its creditors, or the entry by the Company
into an agreement of compromise with its creditors, or the approval
by a court of competent jurisdiction of a petition applicable to the
Company in any proceeding for its reorganization instituted under the
provisions of the federal bankruptcy laws. The term "dissolution or
liquidation of the Company", as used in this subsection, shall not be
construed to include the cessation of the limited liability company
existence of the Company resulting either from a merger or
consolidation of the Company into or with another company or
corporation or a dissolution or liquidation of the Company following
a transfer of all or substantially all of its assets as an entirety,
under the conditions permitting such action with respect to the
Company contained in Section 5.12 hereof.
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(d) The occurrence of an event of default as defined in
Section 12.01 of the Indenture.
Subsection (b) of this Section 7.1 is subject to the
following limitations: Except for the obligations of the Company
contained in Article IV and Article VI hereof, if by reason of
force majeure the Company is unable in whole or in part to carry
out the agreements on its part herein contained, the Company
shall not be deemed in default during the continuance of such
inability. The term "force majeure" as used herein shall include
the following: acts of God; strikes, lockouts or other industrial
disturbances; acts of public enemies; orders of any kind of the
government of the United States or of the State of New York or
any of their departments, agencies, or officials, or any civil or
military authority; insurrections; riots; epidemics; landslides;
lightning; earthquake; fire; typhoons; storms; floods; washouts;
droughts; arrests; civil disturbances; explosions; breakage or
accident to machinery, transmission pipes or canals; partial or
entire failure of utilities; or any other cause or event not
reasonably within the control of the Company. The Company agrees,
however, to remedy with all reasonable dispatch the cause or
causes preventing the Company from carrying out its agreements;
provided, that the settlement of strikes, lockouts and other
industrial disturbances shall be entirely within the discretion
of the Company, and the Company shall not be required to make
settlement of strikes, lockouts and other industrial disturbances
by acceding to the demands of the opposing party or parties when
such course is in the judgment of the Company unfavorable to the
Company.
SECTION 7.2. Remedies on Default. In the event any of the
Bonds shall at the time be Outstanding and unpaid and provision
for the payment thereof shall not have been made in accordance
with the provisions of the Indenture, whenever any Event of
Default referred to in Section 7.1 hereof shall have happened and
be existing, the Authority or the Trustee, following acceleration
of the Bonds in accordance with provisions of Section 12.03 of
the Indenture where so provided, may take any one or more of the
following remedial steps:
(a) The Authority or the Trustee as provided in the
Indenture may, at its option, with the consent of the Credit Facility
Issuer, or shall, to the extent required by the Indenture, declare
all payments payable under Section 4.2 hereof and the Note for the
remainder of the term of this Participation Agreement to be
immediately due and payable, whereupon the same shall become
immediately due and payable.
(b) The Trustee, with the written consent of the Credit
Facility Issuer, may take whatever action at law or in equity that
may appear necessary or desirable to collect the amounts then due and
thereafter to become due, or to enforce performance and observance of
any obligation, agreement or covenant of the Company under this
Participation Agreement or the Note whether for specific performance
of any covenant or agreement contained herein or therein or in aid of
the execution of any power herein granted.
Any amounts collected pursuant to action taken under this Section
7.2 shall be paid into the Bond Fund and applied in accordance
with the provisions of the Indenture.
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If any such declaration of acceleration of the Bonds
shall have been annulled pursuant to the terms of the
Indenture and if, at any time after such declaration, but
before all the Bonds shall have matured by their terms, all
arrears of interest upon the Note, and interest on overdue
installments of interest (to the extent enforceable under
applicable law) at the rate or rates per annum specified for
the Note and the principal of and premium, if any, on the
Note which shall have become due and payable otherwise than
by acceleration, and all other sums payable hereunder,
except the principal of, and interest on, the Note which
pursuant to such declaration shall have become due and
payable, shall have been paid by or on behalf of the Company
or provision satisfactory to the Trustee shall have been
made for such payment, then such acceleration of the Note
shall ipso facto be deemed to be rescinded and any such
Default and its consequences shall ipso facto be deemed to
be annulled, but no such annulment shall extend to or affect
any subsequent Default or impair or exhaust any right or
remedy consequent thereon.
SECTION 7.3. No Remedy Exclusive. No remedy herein
conferred upon or reserved to the Authority or to the
Trustee is intended to be exclusive of any other available
remedy or remedies, but each and every such remedy shall be
cumulative and shall be in addition to every other remedy
given under this Participation Agreement or now or hereafter
existing at law or in equity or by statute. No delay or
omission to exercise any right or power accruing upon any
Default shall impair any such right or power or shall be
construed to be a waiver thereof, but any such right and
power may be exercised from time to time and as often as may
be deemed expedient. In order to entitle the Authority or
the Trustee to exercise any remedy reserved to it in this
Article, it shall not be necessary to give any notice, other
than such notice as may be herein expressly required. Such
rights and remedies as are given the Authority hereunder
shall also extend to the Trustee and the Trustee and the
Holders of the Bonds issued under the Indenture shall be
deemed third party beneficiaries of all covenants and
agreements herein contained.
In case the Trustee (as assignee of the Authority under
the Indenture) or the Authority shall have proceeded to
enforce its rights under this Participation Agreement and
such proceedings shall have been discontinued or abandoned
for any reason or shall have been determined adversely to
the Trustee or the Authority, then and in every such case,
the Company, the Authority and the Trustee shall be restored
respectively to their several positions and rights
hereunder, and all rights, remedies and powers of the
Company, the Authority and the Trustee shall continue as
though no such proceeding had been taken.
The Company covenants that, in case an Event of Default
shall occur with respect to any Note Payments payable under
Sections 4.2(a), (b) and (c) hereof and the Note, then, upon
demand of the Trustee (as assignee of the Authority under
the Indenture), the Company will pay to the Trustee the
whole amount that then shall have become due and payable
under said Sections, with interest (to the extent permitted
by law) on said amount at the rate of interest then borne by
the Bonds pursuant to the Indenture, but not exceeding the
maximum rate permitted by law, until paid, and in addition
thereto, such further amounts as shall be sufficient to
cover the costs and expenses of collection, including
reasonable compensation to the Trustee, its agents,
attorneys,
-25-
and counsel, and any other expenses or liabilities
incurred by the Trustee other than those incurred through
bad faith or negligence.
In case the Company shall fail forthwith to pay such amounts upon
such demand, the Authority or the Trustee (as assignee of the
Authority under the Indenture) shall be entitled and empowered to
institute any action or proceeding at law or in equity for the
collection of the sums so due and unpaid, and may prosecute any
such action or proceeding to judgment or final decree, and may
enforce any such judgment or final decree against the Company and
collect, in the manner provided by law out of the property of the
Company, the monies adjudged or decreed to be payable.
In case there shall be pending proceedings for the bankruptcy or
for the reorganization of the Company under the Federal
bankruptcy laws or any other applicable law, or in case a
receiver or trustee shall have been appointed for the property of
the Company or in the case of any other similar judicial
proceedings relative to the Company or to the creditors or
property of the Company, the Trustee shall be entitled and
empowered, by intervention in such proceedings or otherwise, to
file and provide a claim or claims for the whole amount owing and
unpaid pursuant to this Participation Agreement and, in case of
any judicial proceedings, to file such proofs of claim and other
papers or documents as may be necessary or advisable in order to
have the claims of the Holders and the Trustee allowed in such
judicial proceedings relative to the Company, its creditors, or
its property, and to collect and receive any monies or other
property payable or deliverable on any such claims, and to
distribute the same after the deduction of its charges and
expenses; and any receiver, assignee or trustee in bankruptcy or
reorganization is hereby authorized to make such payments to the
Trustee, and to pay to the Trustee any amount due it for
compensation and expenses, including reasonable counsel fees and
expenses incurred by it up to the date of such distribution.
Nothing herein contained shall be construed to prevent the
Authority from enforcing directly any of its rights under
Sections 4.2, 5.16 and 7.4 hereof; provided that, in case the
Company shall have failed to pay amounts required to be paid
under Sections 4.2(e), 4.2(f), 5.16 and 7.4 hereof which event
shall have continued for a period of thirty (30) days after the
date on which written notice of such failure, requiring the
Company to remedy the same, shall have been given to the Company
by the Authority or the Trustee, the Authority or the Trustee may
take whatever action at law or in equity as may appear necessary
or desirable to enforce performance or observance of any
obligations or agreements of the Company under Sections 4.2(e),
4.2(f), 5.16 and 7.4 hereof.
SECTION 7.4. Agreement to Pay Attorneys' Fees and
Expenses. In the event the Company should default under any
of the provisions of this Participation Agreement and the
Authority or the Trustee should employ attorneys or incur
other expenses for the collection of installment payments
payable pursuant to Articles IV, VI or VII hereof and the
Note or the enforcement of performance or observance of any
obligation or agreement on the part of the Company contained
herein or in the Note, the Company agrees that it will on
demand therefor pay
-26-
to the Authority or the Trustee the reasonable fees and expenses of such
attorneys and such other expenses so incurred by the Authority or the Trustee.
SECTION 7.5. No Additional Waiver Implied by One
Waiver. In the event any agreement contained herein or in
the Note should be breached by any party and thereafter
waived by the other party, such waiver shall be limited to
the particular breach so waived and shall not be deemed to
waive any other breach hereunder.
SECTION 7.6. Consent of Credit Facility Issuer
Required. To the extent the consent, approval or direction
of the Credit Facility Issuer is required by any provision
of this Participation Agreement, the Credit Facility Issuer
shall have the right to give, and the discretion to
withhold, such consent, approval or direction only if (i)
the Credit Facility Issuer is not party to any proceeding
for the rehabilitation, liquidation, conservation or
dissolution of the Credit Facility Issuer pursuant to the
U.S. Bankruptcy Code or similar provision of State law; (ii)
the Credit Facility is in full force and effect; (iii) the
Credit Facility Issuer shall have made and be continuing to
make all payments and meet all of its obligations under the
Credit Facility; and (iv) any Bonds insured by the Credit
Facility Issuer remain outstanding; provided, however, that
Bonds held by or for the account of the Company shall be
deemed outstanding for purposes of this section and provided
further that nothing contained in this Section shall affect
any rights that the Initial Credit Facility Issuer may have
as a bondholder by virtue of its rights of subrogation. So
long as those conditions are met the Credit Facility Issuer
shall also be treated as a third party beneficiary hereunder
and as a party entitled to (i) notify the Trustee of the
occurrence of an Event of Default and (ii) request the
Trustee to intervene in judicial proceedings that affect the
Bonds, the payment of which is guaranteed by the Credit
Facility Issuer, and the security therefor; provided that
the Trustee shall be entitled to indemnity from the Credit
Facility Issuer satisfactory to it; and the Trustee shall
accept notice of an Event of Default from the Credit
Facility Issuer.
-27-
ARTICLE VIII
MISCELLANEOUS
SECTION 8.1. Notices. All notices, certificates or
other communications required or permitted to be given under
this Participation Agreement or the Indenture shall be
sufficiently given and shall be deemed given when delivered
or mailed by first class mail, postage prepaid, addressed as
follows: if to the Authority, at Corporate Plaza West, 286
Washington Avenue Extension, Albany, New York 12203-6399,
Attention: Chair; if to the Company, at One MetroTech
Center, Brooklyn, New York 11201, Attention: Treasurer; if
to the Trustee, at 450 West 33rd Street, 15th Floor, New
York, New York 10001, Attention: Corporate Trust
Administration; if to the Bond Insurer, the Market Agent or
the Registrar and Paying Agent at such address as shall be
designated by it pursuant to the Indenture; and if to any
other Support Facility issuer, at the address stated in the
Support Facility. A duplicate copy of each notice,
certificate, request or other communication given hereunder
to the Authority, the Company, the Trustee, the Market
Agent, the Registrar and the Paying Agent or any Support
Facility Issuer shall also be given to the others. The
Authority, the Company, any Support Facility Issuer and the
Trustee, may, by notice given hereunder, designate any
further or different addresses to which subsequent notices,
certificates or other communications shall be sent.
SECTION 8.2. Binding Effect. This Participation
Agreement shall inure to the benefit of and shall be binding
upon the Authority and the Company and their respective
successors and assigns, except to the extent set forth in
Section 7.3.
SECTION 8.3. Severability. If any clause, provision or
section of this Participation Agreement is held illegal,
invalid or unenforceable by any court or administrative
body, this Participation Agreement shall be construed and
enforced as if such illegal or invalid or unenforceable
clause, provision or section had not been contained in this
Participation Agreement. In case any agreement or obligation
contained in this Participation Agreement is held to be in
violation of law, then such agreement or obligation shall be
deemed to be the agreement or obligation of the Authority or
the Company, as the case may be, to the full extent
permitted by law.
SECTION 8.4. Amounts Remaining in Bond Fund. It is
agreed by the parties hereto that any amounts remaining in
the Bond Fund upon expiration of this Participation
Agreement after payment in full of the Bonds (or provision
for payment thereof having been made in accordance with the
provisions of Section 15.01 of the Indenture) and the fees
and expenses of the Trustee, the Auction Agent, the Market
Agent, the Registrar and Paying Agent and any other paying
agents in accordance with the Indenture, shall belong to and
be paid to the Company by the Trustee as the return of an
overpayment of the amounts payable pursuant to Section 4.2
hereof and the Note.
-28-
SECTION 8.5. Further Assurances and Corrective
Instruments. The Authority and the Company agree that they
will, from time to time, execute, acknowledge and deliver,
or cause to be executed, acknowledged and delivered, such
supplements hereto and such further instruments as may
reasonably be required for correcting any inadequate or
incorrect description of the Project or for carrying out the
expressed intention of this Participation Agreement in
accordance with the provisions of the Indenture.
SECTION 8.6. Amendments, Changes and Modifications.
Except as otherwise provided in this Participation Agreement
or in the Indenture, subsequent to the issuance of the Bonds
and prior to the payment in full of the Bonds (or provision
for the payment thereof having been made in accordance with
the provisions of the Indenture), this Participation
Agreement and the Note may be amended, changed, modified,
altered or terminated only in accordance with the provisions
of the Indenture.
SECTION 8.7. Execution of Counterparts. This Agreement
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 8.8. Delegation of Duties by Authority. It is
agreed that under the terms of this Participation Agreement
and also under the terms of the Indenture the Authority has
delegated certain of its duties hereunder to the Company.
The fact of such delegation shall be deemed a sufficient
compliance by the Authority to satisfy the duties so
delegated and the Authority shall not be liable in any way
by reason of acts done or omitted by the Company or any
Authorized Company Representative. The Authority shall have
the right at all times to act in reliance upon the
authorization, representation or certification of an
Authorized Company Representative unless such reliance is in
bad faith.
SECTION 8.9. Applicable Law. THIS PARTICIPATION
AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE
WITH THE LAW OF THE STATE OF NEW YORK.
SECTION 8.10. Captions. The captions and headings in
this Participation Agreement are for convenience only and in
no way define, limit or describe the scope or intent of any
provisions or sections of this Participation Agreement.
-29-
IN WITNESS WHEREOF, the Authority and the Company have
caused this Participation Agreement to be executed in their
respective names and their respective seals to be hereunto
affixed and attested by their duly authorized officers, all
as of the date first above written.
NEW YORK STATE ENERGY RESEARCH
AND DEVELOPMENT AUTHORITY
By __________________________________
President
(SEAL)
Attest:
- -------------------------------
Secretary to the Board and
Vice President for
Governmental Relations
KEYSPAN GENERATION LLC
By __________________________________
Title:
Name:
(SEAL)
Attest:
Name:
Title:
-30-
EXHIBIT A
(To Participation Agreement,
dated as of October 1, 1999,
between the Authority and the Company)
DESCRIPTION OF PROJECT
EXEMPT FACILITIES
1. Glenwood (Glenwood Landing)
An industrial wastewater treatment facility consisting primarily of a
batch holding tank, air sparging system, an automatic feed system for pH
neutralization, analyzers, pH controller, pumps, piping, filtration device,
oil/water separator, flow elements, monitoring devices, degritting device,
storage and impoundment facilities, rooms for staff and equipment, and all
facilities functionally related and subordinate thereto.
A sewage disposal facility consisting primarily of piping, pumps,
holding tank and sewage treatment plant to treat sewage effluent prior to
discharge to harbor.
2. Far Rockaway
An industrial wastewater treatment facility which will consist
primarily of a degritting device and storage and impoundment facilities, and all
facilities functionally related and subordinate thereto.
3. E.F. Barrett (Island Park)
An industrial wastewater treatment facility which will consist
primarily of pumps, sumps, piping systems, a surge pond, a holding pond,
oil/water skimmer, agitators, pH neutralization system, monitoring equipment,
granular media filters, chemical analyzer, degritting device, impoundment
facilities, reaction tank, reactor clarifier, sludge dewatering system, and all
facilities functionally related and subordinate thereto.
In addition to the foregoing, miscellaneous facilities will be
installed which will include a building which will house certain pollution
control facilities.
4. Northport
An industrial wastewater treatment facility which will consist
primarily of pumps, sumps, piping systems, a surge pond, a holding pond,
oil/water skimmer, agitators, pH neutralization
A-1
system, monitoring equipment, granular media filters, chemical analyzer,
degritting device, impoundment facilities, reaction tank, ferrous sulfate feed
system, reactor clarifier, sludge dewatering system, and all facilities
functionally related and subordinate thereto.
An electrostatic precipator and soot reinjection system to prevent
the discharge of soot and particulates to the atmosphere installed at Unit No.
1, Unit No. 2 and Unit No. 3.
In addition to the foregoing, miscellaneous facilities will be
installed which will include a building which will house certain pollution
control facilities.
5. Port Jefferson
An industrial wastewater treatment facility which will consist
primarily of pumps, sumps, piping systems, a surge pond, a holding pond,
oil/water skimmer, agitators, pH neutralization system, monitoring equipment,
granular media filters, chemical analyzer, degritting device, impoundment
facilities, reaction tank, ferrous sulfate feed system, reactor clarifier,
sludge dewatering system, and all facilities functionally related and
subordinate thereto.
In addition to the foregoing, miscellaneous facilities will be
installed which will include a building which will house certain pollution
control facilities.
6. Such additional or substituted facilities for pollution control which because
of changes in technology, cost, plant processes and the like, the Company
determines shall be added to or substituted for the equipment and property
described in paragraphs 1-5 above.
A-2
EXHIBIT B
(To Participation Agreement dated as of October 1, 1999 between
New York State Energy Research and Development Authority and
KeySpan Generation LLC, relating to the Bonds)
KEYSPAN GENERATION LLC
$41,125,000 PROMISSORY NOTE
FOR
POLLUTION CONTROL REFUNDING REVENUE BONDS
(KEYSPAN GENERATION LLC PROJECTS), 1999 Series A
New York, New York
October 27, 1999
FOR VALUE RECEIVED, KeySpan Generation LLC, a limited liability
company duly organized under and validly existing under and by
virtue of the laws of the State of New York (the "Company"),
promises to pay to the order of The Chase Manhattan Bank, as
trustee (the "Trustee") under the hereinafter referred to
Indenture, in lawful money of the United States, the principal
sum of $41,125,000 (the "Loan Amount"), together with: (a)
interest thereon at such rate or rates as in the aggregate will
produce an amount equal to the total of all interest becoming due
and payable on $41,125,000 principal amount of the New York State
Energy Research and Development Authority's Pollution Control
Refunding Revenue Bonds (KeySpan Generation LLC Projects), 1999
Series A, dated as of October 27, 1999 (the "Bonds"), issued
pursuant to a Trust Indenture (the "Indenture") dated as of
October 1, 1999, between the New York State Energy Research and
Development Authority (the "Authority") and the Trustee; and (b)
such redemption premiums and other amounts allocable to the Loan
Amount as are required to be paid by the Company to the Authority
as part of the payments provided in the Participation Agreement
dated as of October 1, 1999, between the Company and the
Authority (the "Participation Agreement"). The terms and
provisions of the Participation Agreement are incorporated herein
by reference and made a part hereof. The foregoing amounts shall
be paid in installments and in the amounts which shall be due and
payable as provided below.
The Company shall make Note Payments by 12:00 noon, New
York City time, one
Business Day (two Business Days during any Auction Rate Period or any Auction
Rate-Inverse Rate Period) next preceding each Interest Payment Date to the Bond
Fund for credit by the Trustee to the Interest Account of the Bond Fund
established pursuant to Section 9.01 of the Indenture,
B-1
in the aggregate amount required, together with other funds available therefor
in the Interest Account in the Bond Fund, to pay the interest payable on each
such Outstanding Bond on each such Interest Payment Date.
In addition, the Company shall pay an additional amount to the
Trustee for deposit in the Bond Fund and credit to the Principal
Account, Interest Account, Redemption Account or to be applied to
the payment of the principal of and premium, if any, and interest
payable upon redemption of any Bond pursuant to Article V of the
Indenture.
The payment obligations of the Company under this note shall be
deemed to be discharged and this note shall be cancelled in the
event that the Bonds shall have been accelerated under the
Indenture and the Company shall have paid or caused to be paid
all amounts required under the Participation Agreement to be paid
upon the occurrence of such acceleration.
In the event the Company should fail to make any of the payments
required by this note or the Participation Agreement to be made
to the Authority, the item or installment so in default shall
continue as an obligation of the Company until the amount in
default shall have been fully paid, and the Company agrees to pay
the same with interest thereon at the rate of interest borne by
the Bonds, to the extent, but not exceeding the maximum rate,
permitted by law, until paid; provided, however, that if such
failure to pay results in a payment of principal of, or premium,
if any, or interest on the Bonds not being made when due and
payable, the Company shall pay the same with interest thereon,
which interest shall also constitute an obligation of the Company
at the same rate of interest per annum as that payable on the
Bonds; provided, further, if during an Auction Rate Period or
Auction Rate-Inverse Rate Period such failure results in payment
of principal of, or premium, if any, or interest on Auction Bonds
or the Auction Rate- Inverse Rate Bonds, as the case may be, not
being made when due and payable, the Company shall pay the same
with interest thereon, which interest shall also constitute an
obligation of the Company, at the Overdue Rate.
This note shall finally mature on October 1, 2028 unless paid
earlier as permittedby the Participation Agreement and the
Indenture.
This Note is subject to optional and mandatory prepayment and to
acceleration as provided in the Participation Agreement.
If the Company should default in the payment of any installment
of principal of, premium, if any, and interest due under this
note or if any one or more of the events of default specified in
the Participation Agreement should occur, and if any such default
is not remedied as provided in the Participation Agreement, the
Authority or the Trustee then, or at any time thereafter, may
give notice to the Company declaring all unpaid amounts of this
note then outstanding, together with all other unpaid amounts
outstanding under the Participation Agreement, to be immediately
due and payable, and thereupon, without further notice or demand,
all such amounts shall become and be immediately due and payable.
Any failure to exercise this
B-2
option shall not constitute a waiver of the right to exercise the same at any
time in the event of any continuing or subsequent default. In the event of
default in the payment of this note, the undersigned hereby agrees to pay all
costs incurred in connection with the collection of the amounts then due hereon,
including reasonable attorneys' fees. The payments hereunder shall be payable at
the principal office of the Trustee in New York, New York.
The obligation of the Company to make payments under this note
shall be an absolute, direct, general obligation, and shall be
unconditional and shall not be abated, rebated, set off, reduced,
abrogated, waived, diminished or otherwise modified in any manner
or to any extent whatsoever other than for prior payment.
The Company hereby waives presentment for payment, demand, demand
and protest and notice of protest, demand and dishonor and
nonpayment of this note.
This note and all instruments securing the same are to
be construed according to the law of the State of New York.
KEYSPAN GENERATION LLC
(SEAL) By___________________________________
Name:
Title:
____________________
Name:
Title:
B-3
TABLE OF CONTENTS
Page
ARTICLE I
DEFINITIONS; EFFECTIVE DATE AND DURATION
OF PARTICIPATION AGREEMENT
SECTION 1.1. Definitions......................................................................... 3
SECTION 1.2. Effective Date and Duration of Participation
Agreement......................................................................... 3
ARTICLE II
REPRESENTATIONS AND WARRANTIES
SECTION 2.1. Representations and Warranties by the Authority..................................... 4
SECTION 2.2. Representations and Warranties by the Company....................................... 4
ARTICLE III
THE PROJECT; ISSUANCE OF BONDS
SECTION 3.1. The Project......................................................................... 6
SECTION 3.2. Sale of Bonds and Deposit of Proceeds............................................... 6
SECTION 3.3. Disbursements from Project Fund and Rebate
Fund................................................................................ 6
SECTION 3.4. Adequacy of Project Fund............................................................ 7
SECTION 3.5. Ownership and Possession of the Project............................................. 7
SECTION 3.6. Operation, Maintenance and Repair................................................... 7
SECTION 3.7. Investment of Monies in Funds Under the
Indenture......................................................................... 7
ARTICLE IV
NOTE AND PAYMENTS
SECTION 4.1. Execution and Delivery of Note to Trustee........................................... 8
SECTION 4.2. Payments Payable; Note Payments; Additional
Payments.......................................................................... 8
SECTION 4.3. Notice to Pay; Medium of Payment; Acceleration...................................... 11
(i)
Page
SECTION 4.4. Advance Payments.................................................................... 11
SECTION 4.5. Company's Payments as Trust Funds................................................... 11
SECTION 4.6. Absolute Obligation to Make Payments................................................ 12
SECTION 4.7. Assignment of Authority's Rights.................................................... 13
SECTION 4.8. Actions with Respect to or by or on behalf of the
Authority under the Indenture..................................................... 13
SECTION 4.9. Agreements of Company relating to Support
Facilities........................................................................ 13
SECTION 4.10. Project not Security for Bonds...................................................... 14
ARTICLE V
SPECIAL COVENANTS AND REPRESENTATIONS
SECTION 5.1. No Warranty as to Suitability of the Project........................................ 15
SECTION 5.2. Authority's Rights to Inspect the Project and Plans
and Specifications................................................................ 15
SECTION 5.3. Company Consent to Amendment of Indenture........................................... 15
SECTION 5.4. Tax Covenant........................................................................ 15
SECTION 5.5. Maintenance of Office or Agency..................................................... 15
SECTION 5.6. Further Assurances.................................................................. 15
SECTION 5.7. Payment of Taxes and Other Charges.................................................. 16
SECTION 5.8. Maintenance of Properties........................................................... 16
SECTION 5.9. Insurance........................................................................... 16
SECTION 5.10. Proper Books of Record and Account.................................................. 16
SECTION 5.11. Compliance with Law................................................................. 17
SECTION 5.12. Consolidation, Merger or Sale of Assets............................................. 17
SECTION 5.13. Financial Statements of Company..................................................... 18
SECTION 5.14. Company Agrees to Perform Obligations Imposed
by Indenture...................................................................... 18
SECTION 5.15. Certificates as to Defaults......................................................... 18
SECTION 5.16. Limited Obligation of Authority; Indemnification of
Authority, Registrar and Paying Agent, Auction Agent and Trustee.................. 18
SECTION 5.17. Financing Statements................................................................ 20
SECTION 5.18. Provision of Information............................................................ 20
SECTION 5.19. Ratings............................................................................. 20
SECTION 5.20. Notices............................................................................. 20
(ii)
Page
ARTICLE VI
OPTIONAL AND MANDATORY PREPAYMENTS;
REDEMPTION OF BONDS
SECTION 6.1. Redemption of Bonds................................................................. 21
SECTION 6.2. Prepayment of Note Payments......................................................... 21
SECTION 6.3. Option to Prepay Payments for Redemption of
Bonds............................................................................. 21
SECTION 6.4. Mandatory Prepayment of Payments for Redemption
of Bonds.......................................................................... 22
ARTICLE VII
EVENTS OF DEFAULT AND REMEDIES
SECTION 7.1. Events of Default Defined........................................................... 23
SECTION 7.2. Remedies on Default................................................................. 24
SECTION 7.3. No Remedy Exclusive................................................................. 25
SECTION 7.4. Agreement to Pay Attorneys' Fees and Expenses....................................... 26
SECTION 7.5. No Additional Waiver Implied by One Waiver.......................................... 27
SECTION 7.6. Consent of Credit Facility Issuer Required.......................................... 27
ARTICLE VIII
MISCELLANEOUS
SECTION 8.1. Notices............................................................................. 28
SECTION 8.2. Binding Effect...................................................................... 28
SECTION 8.3. Severability........................................................................ 28
SECTION 8.4. Amounts Remaining in Bond Fund...................................................... 28
SECTION 8.5. Further Assurances and Corrective Instruments....................................... 29
SECTION 8.6. Amendments, Changes and Modifications............................................... 29
SECTION 8.7. Execution of Counterparts........................................................... 29
SECTION 8.8. Delegation of Duties by Authority................................................... 29
SECTION 8.9. Applicable Law...................................................................... 29
SECTION 8.10. Captions............................................................................ 29
(iii)
Page
EXHIBIT A - Description of Project Exempt Facilities
EXHIBIT B - KeySpan Generation LLC $41,125,000 Promissory Note For Pollution Control
Refunding Revenue Bonds (KeySpan Generation LLC Projects), 1999 Series A
(iv)
EXECUTION COPY
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
TRUST INDENTURE
BETWEEN
NEW YORK STATE ENERGY RESEARCH
AND DEVELOPMENT AUTHORITY
AND
THE CHASE MANHATTAN BANK,
as Trustee
Dated as of October 1, 1999
-relating to-
$41,125,000 Pollution Control Refunding Revenue Bonds
(KeySpan Generation LLC Projects), 1999 Series A
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
THIS TRUST INDENTURE, made and dated as of the first day of
October, 1999, by and between New York State Energy Research and Development
Authority (the "Authority"), a body corporate and politic, constituting a public
benefit corporation, and The Chase Manhattan Bank, as trustee (the "Trustee"), a
corporation organized and existing under and by virtue of the laws of the State
of New York with its principal corporate trust office located in The City of New
York.
W I T N E S S E T H T H A T:
WHEREAS, pursuant to special act of the Legislature of the
State of New York (Title 9 of Article 8 of the Public Authorities Law of the
State of New York, as from time to time amended and supplemented, herein called
the "Act"), the Authority has been established as a body corporate and politic,
constituting a public benefit corporation; and
WHEREAS, pursuant to the Act, the Authority is also empowered
to extend credit and make loans from bond proceeds to any person for the
construction, acquisition, and installation of, or for the reimbursement to any
person for costs in connection with, any special energy project, including, but
not limited to, any land, works, system, building, or other improvement and all
real and personal properties of any nature or any interest in any of them which
are suitable for or related to the furnishing, generation or production of
energy; and
WHEREAS, the Authority is also authorized under the Act to
borrow money and issue its negotiable bonds and notes to provide sufficient
monies for achieving its corporate purposes including the refunding of
outstanding obligations of the Authority; and
WHEREAS, the Authority is also authorized under the Act to
enter into any contracts and to execute all instruments necessary or convenient
for the exercise of its corporate powers and the fulfillment of its corporate
purposes; and
WHEREAS, the Authority issued 7 1/2%Pollution Control Revenue
Bonds (Long Island Lighting Company Projects), Series A in the principal amount
of $28,375,000 (the "Series A Bonds"), which were used, in part, to finance
certain costs primarily associated with the acquisition, construction, and
installation of various systems to abate, control, and reduce pollution and to
dispose of sewage and solid waste at Northport Power Station, Glenwood Landing
Power Station and at the former Shoreham Nuclear Power Station and miscellaneous
facilities at the former Mitchell Gardens Power Station; and
WHEREAS, there is currently outstanding $26,375,000 aggregate principal
amount of the Series A Bonds; and
WHEREAS, the Authority issued Pollution Control Revenue Bonds
(Long Island Lighting Company Projects), Series B in the principal amount of
$19,100,000 (the "Series B Bonds", and collectively with the Series A Bonds, the
"Prior Bonds"), which were used, in part, to finance certain costs primarily
associated with the acquisition, construction, and installation of various
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systems to abate, control, and reduce pollution and to dispose of sewage
and solid waste at the Glenwood Landing Power Station, Far Rockaway Power
Station, E.F. Barrett Power Station, Northport Power Station, and Port Jefferson
Power Station; and
WHEREAS, all of the Series B Bonds are currently outstanding; and
WHEREAS, KeySpan Generation LLC (formerly known as MarketSpan
Generation LLC) (the "Company") is the current owner of all the assets financed
by the Prior Bonds other than the facilities at the former Shoreham Nuclear
Power Station and the former Mitchell Gardens Power Station, having acquired on
May 28, 1998, pursuant to the Agreement and Plan of Merger, dated as of June 26,
1997, by and among MarketSpan Corporation d/b/a KeySpan (formerly known as BL
Holding Corp.) ("KeySpan"), Long Island Lighting Company ("LILCO"), Long Island
Power Authority and LIPA Acquisition Corp. (the "Merger Agreement"), all of the
non-nuclear electric generation businesses, among other assets, of LILCO; and
WHEREAS, pursuant to the Merger Agreement and in connection
with the transfer by LILCO of its generating assets to the Company, the Company,
KeySpan and other Transferee Subsidiaries (as defined in the Merger Agreement)
(collectively, the "KeySpan Notes Obligors") have executed and delivered to
LILCO promissory notes relating to the Prior Bonds and evidencing the joint and
several obligation of the KeySpan Notes Obligors to pay to LILCO amounts which
would be sufficient to pay principal of, and premium, if any, and interest on,
the Prior Bonds when due (the "KeySpan Notes"); and
WHEREAS, the Company has requested that the Authority issue bonds for the
purpose of refunding the Prior Bonds; and
WHEREAS, contemporaneously with the execution hereof, the
Company and the Authority have entered into a Participation Agreement of even
date herewith (herein referred to as the "Participation Agreement"); and
WHEREAS, the Participation Agreement provides that the
Authority will issue its bonds and make the proceeds of such bonds available to
the Company; and
WHEREAS, the Company proposes to achieve the refunding of the
Prior Bonds by applying the proceeds of the Bonds together with other monies
advanced from its own funds to the prepayment of the KeySpan Notes; and
WHEREAS, LILCO has agreed to direct redemption of the Prior
Bonds and use the proceeds received from the prepayment of the KeySpan Notes to
refund the Prior Bonds; and
WHEREAS, simultaneously with the issuance and delivery of such
bonds, the Company will execute and deliver a promissory note dated the date of
issuance of such bonds (the
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"Note") as evidence of its obligation to make certain payments required by the
Participation Agreement; and
WHEREAS, pursuant to Resolution No. 952 adopted September 27,
1999, the Authority has determined to issue $41,125,000 aggregate principal
amount of Pollution Control Refunding Revenue Bonds (KeySpan Generation LLC
Projects), 1999 Series A (the "Bonds") for the purpose of applying the proceeds
thereof together with other monies advanced by the Company to the prepayment of
the KeySpan Notes and causing LILCO to use the proceeds received from the
prepayment of the KeySpan Notes to pay all or a portion of the redemption price
of the Prior Bonds; and
WHEREAS, Ambac Assurance Corporation has agreed to issue a
municipal bond insurance policy in favor of the Trustee to provide for the
payment of such amounts as are specified therein with respect to the regularly
scheduled principal of and interest on the Bonds when due; and
WHEREAS, all acts, conditions and things necessary or required
by the Constitution and statutes of the State of New York, or otherwise, to
exist, happen, and be performed as prerequisites to the passage of this
Indenture, do exist, have happened, and have been performed; and
WHEREAS, the Trustee has accepted the trusts created by this
Trust Indenture and in evidence thereof has joined in the execution hereof;
NOW, THEREFORE, THIS TRUST INDENTURE WITNESSETH:
That in order to declare the terms and conditions upon which
the Bonds are authenticated, issued and delivered, and in consideration of the
premises and the acceptance by the Trustee of the trusts hereby created and of
the purchase and acceptance of the Bonds by the Holders (as hereinafter defined)
thereof, and for other good and valuable consideration, the receipt of which is
hereby acknowledged, and in order to secure payment of the principal of and
premium, if any, and interest on the Bonds according to their tenor and effect
and the performance and observance by the Authority of all covenants, agreements
and conditions herein and in the Bonds contained, the Authority has
acknowledged, executed, signed and delivered this Indenture and hereby assigns,
confirms, pledges with and sets over and entrusts to the Trustee hereunder, its
successors in trust and assigns, subject to the provisions of this Indenture
(the following being called the "Trust Estate"): (1) the Revenues (as
hereinafter defined); (2) the Participation Agreement and the Note and all
rights, remedies and interest of the Authority under the Participation Agreement
and the Note, and any other agreement relating to the Project (exclusive of the
Additional Payments and the Authority's rights with respect to (a)
administrative compensation, attorneys' fees and indemnification, (b) the
receipt of notices, opinions, reports, copies of instruments and other items of
a similar nature required to be delivered to the Authority under the
Participation Agreement, (c) granting approvals and consents and making
determinations when required under the Participation Agreement, (d) making
requests for information and inspections in accordance with the Participation
Agreement, (e) Article III and Sections 4.2, 5.16 and 7.4 of the Participation
Agreement, and (f) the right to
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amend the Participation Agreement); (3) the Tax Regulatory Agreement, and all
rights, remedies and interest of the Authority thereunder, subject to the
provisions of the Tax Regulatory Agreement relating to the amendment thereof and
to a reservation by the Authority of the right to enforce the obligations of the
Company thereunder independently of the Trustee; (4) all other monies, rights
and properties held by the Trustee or other depositary under this Indenture and
the securities (and the interest, income and profits therefrom) in which such
monies may from time to time be invested (exclusive of the proceeds of or
amounts under any Credit Facility issued in the form of a municipal bond
insurance policy or any amounts on deposit in the Rebate Fund (as hereinafter
defined) or the Project Fund (as hereinafter defined)); and (5) any and all
other real or personal property of every nature from time to time hereafter by
delivery or by writing of any kind specially mortgaged, pledged, or
hypothecated, as and for additional security hereunder, by the Company in favor
of the Trustee or the Authority which are hereby authorized to receive any and
all such property at any and all times and to hold and apply the same subject to
the terms hereof.
TO HAVE AND TO HOLD, all and singular of said Trust Estate
unto the Trustee, its successors in trust and assigns, forever, in trust,
nevertheless, to inure to the use and benefit of the Holders of all the Bonds
and the Bond Insurer as their respective interests appear , for the securing of
the observance or performance of all the terms, provisions and conditions
therein and herein contained and for the equal and proportionate benefit and
security of all and singular the present and future Holders of the Bonds and the
Bond Insurer, without preference, priority, prejudice or distinction as to lien
or otherwise of any Bond over any other Bond, to the end that each Holder of a
Bond and the Bond Insurer shall have the same rights, privileges and lien under
and by virtue of this Trust Indenture, except as hereinafter otherwise
specifically provided;
AND CONDITIONED THAT, if the Authority shall cause to be paid
fully and promptly and indefeasibly when due all of its indebtedness,
liabilities, obligations and sums at any time secured hereby, including
interest, its Trustee's fees and reasonable expenses (including its reasonable
attorneys' fees and expenses), and shall promptly, faithfully and strictly keep,
perform and observe, or cause to be kept, performed and observed, all of its
covenants, obligations, warranties and agreements contained herein, then and in
such event, this Trust Indenture shall be and become void and of no further
force and effect, otherwise the same shall remain in full force and effect.
THIS TRUST INDENTURE FURTHER WITNESSETH, and it is expressly
declared, that all Bonds issued and secured hereunder are to be issued,
authenticated and delivered and all said income and Revenues hereby pledged are
to be dealt with and disposed of under, upon and subject to the terms,
conditions, stipulations, covenants, agreements, trusts, uses and purposes as
hereinafter expressed, and the Authority has agreed and covenanted, and does
hereby agree and covenant, with the Trustee and with the respective Holders,
from time to time, of the said Bonds, or any part thereof, as follows (provided
that in the performance of the agreements of the Authority herein contained any
obligation it may thereby incur for the payment of money shall never constitute
a general or moral obligation of the State of New York or any political
subdivision thereof within the meaning of any state constitutional provision or
statutory limitation, and shall not be secured directly or indirectly by the
full faith and credit, the general credit or any revenue or taxes of the State
of New York or any
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political subdivision thereof, but shall be payable solely out of the income and
Revenues derived under the Participation Agreement, the Note and the Credit
Facility, if any, and other monies, rights and properties of the Trust Estate),
that is to say:
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ARTICLE I
DEFINITIONS; COMPUTATIONS; CERTIFICATES
AND OPINIONS; EVIDENCE OF ACTION BY AUTHORITY
SECTION 1.01. Definitions of Specific Terms. Unless the
context shall clearly indicate some other meaning or may otherwise require, the
terms defined in this Section shall, for all purposes of this Indenture and of
any indenture, resolution or other instrument amendatory hereof or supplemental
hereto and of any certificate, opinion, instrument or document herein or therein
mentioned, have the meanings herein specified, with the following definitions to
be equally applicable to both the singular and plural forms of any terms herein
defined and vice versa.
"'AA' Composite Commercial Paper Rate," on any date of
determination, shall mean with respect to Auction Rate Bonds during an Auction
Rate-Inverse Rate Period (i) the interest equivalent of the 30-day rate on
commercial paper placed on behalf of issuers whose corporate bonds are rated AA
by S&P, or the equivalent of such rating by S&P, as made available on a discount
basis or otherwise by the Federal Reserve Board for the Business Day immediately
preceding such date of determination, or (ii) if the Federal Reserve Board does
not make available any such rate, then the arithmetic average of such rates, as
quoted on a discount basis or otherwise, by the Commercial Paper Dealers, to the
Auction Agent for the close of business on the Business Day immediately
preceding such date of determination.
If any Commercial Paper Dealer does not quote a commercial
paper rate required to determine the "AA" Composite Commercial Paper Rate, the
"AA" Composite Commercial Paper Rate shall be determined on the basis of such
quotation or quotations furnished by the remaining Commercial Paper Dealer or
Commercial Paper Dealers and any Substitute Commercial Paper Dealer or
Substitute Commercial Paper Dealers selected by the Authority at the request of
the Company to provide such quotation or quotations not being supplied by any
Commercial Paper Dealer or Commercial Paper Dealers, as the case may be, or if
the Authority does not select any such Substitute Commercial Paper Dealer or
Substitute Commercial Paper Dealers, by the remaining Commercial Paper Dealer or
Commercial Paper Dealers. For purposes of this definition, the "interest
equivalent" of a rate stated on a discount basis (a "discount rate") for
commercial paper of a given day's maturity shall be equal to the product of (A)
100 times (B) the quotient (rounded upwards to the next higher one-thousandth
(.001) of 1%) of (x) the discount rate (expressed in decimals) divided by (y)
the difference between (1) 1.00 and (2) a fraction the numerator of which shall
be the product of the discount rate (expressed in decimals) times the number of
days in which such commercial paper matures and the denominator of which shall
be 360.
"Act" shall mean the New York State Energy Research and
Development Authority Act, Title 9 of Article 8 of the Public Authorities Law of
the State of New York, as from time to time amended and supplemented.
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"Act of Bankruptcy" shall mean the filing of a petition
commencing a case by or against the Company or an Affiliate of the Company or
the Authority under the Bankruptcy Code or the filing of a petition or the
seeking of relief by or against the Company or an Affiliate of the Company or
the Authority under any state bankruptcy or insolvency law.
"Additional Payments" shall mean the Additional Payments as
defined in Section 4.2(e) of the Participation Agreement.
"Adjustable Rate" shall mean any of the following types of
interest rates: a Commercial Paper Rate, an Auction Rate (during an Auction Rate
Period), an Auction Rate and a related Inverse Rate (during an Auction
Rate-Inverse Rate Period), a Daily Rate, a Weekly Rate, a Monthly Rate, a
Semi-annual Rate and a Term Rate.
"Administration Fees" shall mean the amounts payable by the
Company to the Authority pursuant to Section 4.2(e) of the Participation
Agreement to defray a portion of the expenses incurred by the Authority in
conducting and administering its special energy project programs and the amount
payable as state bond issuance charge pursuant to Section 4.2(e) of the
Participation Agreement.
"Affiliate" of any specified person shall mean any other
person directly or indirectly controlling or controlled by or under direct or
indirect common control with such specified person. For purposes of this
definition, "control" when used with respect to any specified person 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 "controlling" and "controlled" have meanings
correlative to the foregoing, provided, that, when used in connection with
Auction Rate Bonds and Auction Rate-Inverse Rate Bonds, "Affiliate" shall mean
any person known to the Auction Agent to be controlled by, in control of or
under common control with the Company; provided that no Broker-Dealer controlled
by, in control of or under common control with the Company shall be an Affiliate
nor shall any corporation or any person controlled by, in control of or in
common control with such corporation be an Affiliate solely because a director
or executive officer of such Broker-Dealer is also a director or manager of the
Company.
"After-Tax Equivalent Rate" on any date of determination shall
mean with respect to Auction Rate Bonds during an Auction Rate-Inverse Rate
Period, the interest rate per annum equal to the product of (x) "AA" Composite
Commercial Paper Rate on such date and (y) (1.00 minus the Statutory Corporate
Tax Rate on such date).
"Agent Member" shall mean a member of, or participant in, the
Securities Depository.
"Alternate Liquidity Facility" shall mean any Liquidity
Facility obtained pursuant to the provisions of Section 6.02 in replacement of
an existing Liquidity Facility, including a letter of credit, committed line of
credit, surety bond or standby bond purchase agreement, or any combination of
the foregoing, and issued by a bank or banks, municipal bond or financial
guarantee
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insurance company, other financial institution or institutions, or any
combination of the foregoing which provides payment of the purchase price equal
to the principal of and accrued interest on Bonds purchased during the term
thereof upon any mandatory or optional tender for purchase pursuant to Sections
5.02, 5.03 and 5.06.
"Alternate Support Facility" shall mean any Support Facility
obtained pursuant to the provisions of Section 6.02 in replacement of an
existing Support Facility.
"Applicable Percentage" on any date of determination shall
mean the percentage determined as set forth below (as such percentage may be
adjusted (i) for Auction Rate Bonds during an Auction Rate Period pursuant to
Section 3.10 and (ii) for Auction Rate Bonds during an Auction Rate-Inverse Rate
Period pursuant to Section 3A.09) based on the prevailing long-term rating of
the Auction Rate Bonds during an Auction Rate Period or the Auction Rate Bonds
during an Auction Rate-Inverse Rate Period, as the case may be, in effect at the
close of business on the Business Day immediately preceding such date of
determination:
Auction Rate-Inverse
Rate Period Auction Rate Period
Prevailing Rating Applicable Percentage Applicable Percentage
AAA/"Aaa" 175% 65%
AA/"Aa" 175% 70%
A/"A" 175% 85%
Below A/"A" - 100%
BBB/"Baa" 200% -
Below BBB/"Baa" 265% -
For purposes of this definition, the "prevailing rating" of
the Auction Rate Bonds during an Auction Rate Period or the Auction Rate Bonds
during an Auction Rate-Inverse Rate Period, as the case may be, will be (a)
AAA/"Aaa," if the Auction Rate Bonds during an Auction Rate Period or the
Auction Rate Bonds during an Auction Rate-Inverse Rate Period, as the case may
be, have a rating of AAA by S&P and a rating of "Aaa" by Moody's, or the
equivalent of such ratings by a substitute rating agency or agencies selected as
provided below, (b) if not AAA/"Aaa," then AA/"Aa" if the Auction Rate Bonds
during an Auction Rate Period or the Auction Rate Bonds during an Auction
Rate-Inverse Rate Period, as the case may be, have a rating of AA- or better by
S&P and a rating of "Aa3" or better by Moody's, or the equivalent of such
ratings by a substitute rating agency or agencies selected as provided below,
(c) if not AAA/"Aaa" or AA/"Aa," then A/"A" if the Auction Rate Bonds during an
Auction Rate Period or the Auction Rate Bonds during an Auction Rate-Inverse
Rate Period, as the case may be, have a rating of A- or better by S&P and a
rating of "A3" or better by Moody's, or the equivalent of such ratings by a
substitute rating agency or agencies selected as provided below, (d) if not
AAA/"Aaa," AA/"Aa" or A/"A," then (1) Below A/"A", in the case of Auction Rate
Bonds during an Auction Rate Period, whether or not the Auction Rate Bonds are
rated by any securities rating agency or (2) BBB/"Baa," if, in the case of
Auction
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Rate Bonds during an Auction Rate-Inverse Rate Period, the Auction Rate Bonds
during an Auction Rate-Inverse Rate Period have a rating of BBB- or better by
S&P and a rating of "Baa3" or better by Moody's, or the equivalent of such
ratings by a substitute rating agency or agencies selected as provided below,
and (e) if, in the case of Auction Rate Bonds during an Auction Rate-Inverse
Rate Period, not AAA/"Aaa," AA/"Aa", A/"A" or BBB/"Baa," then Below BBB/"Baa,"
whether or not the Auction Rate Bonds during an Auction Rate-Inverse Rate Period
are rated by any securities rating agency.
If (x) the Auction Rate Bonds during an Auction Rate Period or
the Auction Rate Bonds during any Auction Rate-Inverse Rate Period, as the case
may be, are rated by a rating agency or agencies other than Moody's or S&P and
(y) the Company has delivered on behalf of the Authority to the Trustee and the
Auction Agent an instrument designating one or two of such rating agencies to
replace Moody's or S&P, or both, then for purposes of the definition of
"prevailing rating" Moody's or S&P, or both, will be deemed to have been
replaced in accordance with such instrument; provided, however, that such
instrument must be accompanied by the consent of the Market Agent. For purposes
of this definition, S&P's rating categories of AAA, AA-, A- and BBB-, and
Moody's rating categories of "Aaa," "Aa3," "A3" and "Baa3," refer to and include
the respective rating categories correlative thereto in the event that either or
both of such rating agencies have changed or modified their generic rating
categories. If the prevailing ratings for the Bonds are split between the
categories set forth above, the lower rating will determine the prevailing
rating.
"Auction" shall mean each periodic implementation of the
Auction Procedures for Auction Rate Bonds during an Auction Rate Period or the
Auction Rate Bonds during any Auction Rate-Inverse Rate Period.
"Auction Agency Agreement" shall mean the Auction Agency
Agreement (A) dated October 27, 1999, entered into between the Company and The
Chase Manhattan Bank, as Auction Agent, with respect to the Auction Rate Bonds
during the initial Auction Rate Period, or (B) between the Trustee and the
Auction Agent with respect to the Auction Rate-Inverse Rate Bonds during an
Auction Rate-Inverse Rate Period.
"Auction Agent" shall mean any entity appointed as such
pursuant to Section 11.21 and its successors and assigns.
"Auction Date" shall mean:
(A) with respect to each Auction Period for the Auction Rate
Bonds during an Auction Rate Period, (i) if the Auction Rate Bonds are in a
daily Auction Period, each Business Day, and (ii) if the Auction Rate Bonds are
in any other Auction Period, the last Thursday of the immediately preceding
Auction Period (or such other day that the Market Agent shall establish as the
Auction Date therefor pursuant to Section 3.05); provided, that if such day is
not a Business Day, the Auction Date shall be the next succeeding Business Day
other than for:
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(i) each Interest Period commencing after the ownership of the
Auction Rate Bonds is no longer maintained in book-entry form by the
Securities Depository;
(ii) each Interest Period commencing after the occurrence and during the
continuance of a Payment Default; or
(iii) any Interest Period commencing less than two Business
Days after the cure of a Payment Default pursuant to Section 12.01;
provided further that on the Business Day preceding the conversion from a daily
Auction Period to another Auction Period, there will be two Auctions, one for
the last daily Auction Period and one for the first Auction Period following the
conversion.
(B) with respect to the Auction Rate-Inverse Rate Bonds during
an Auction Rate- Inverse Rate Period, the Business Day immediately preceding the
first day of each Interest Period, other than:
(i) an Interest Period which is immediately preceded by a Regular
Record Date at the close of business on which all of the beneficial
ownership of the Auction Rate Bonds was Linked with all of the beneficial
ownership of the Inverse Rate Bonds;
(ii) each Interest Period commencing after the ownership of
the Auction Rate Bonds is no longer maintained in book-entry form by
the Securities Depository;
(iii) each Interest Period commencing after the occurrence and during
the continuance of a Payment Default; or
(iv) any Interest Period commencing less than two Business
Days after the cure of a Payment Default pursuant to Section 12.01.
"Auction Period" shall mean;
--------------
(A) in the event the Bonds are issued initially as Auction
Rate Bonds during an Auction Rate Period, the period from and including the
Closing Date to and including the initial Auction Date; and
(B) thereafter, or after a Change in the Interest Rate Mode to
an Auction Rate, during an Auction Rate Period, until the effective date of a
Change in the Interest Rate Mode or the maturity of the Bonds;
(i) with respect to Auction Rate Bonds in a daily Auction
Period, a period beginning on each Business Day and extending to but
not including the next succeeding Business Day; and
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(ii) with respect to Auction Rate Bonds not in a daily Auction
Period, each period from and including the last Interest Payment Date
for the immediately preceding Auction Period or Calculation Period, as
the case may be, to and including the next succeeding Auction Date or,
in the event of a Change in the Interest Rate Mode, to but excluding
the effective date of such change;
provided, if any day that would be the last day of any such period does not
immediately precede a Business Day, such period shall end on the next day which
immediately precedes a Business Day.
"Auction Procedures" shall mean (i) with respect to the
Auction Rate Bonds during an Auction Rate Period the procedures set forth in
Sections 3.06 through 3.09, and (ii) with respect to the Auction Rate Bonds
during an Auction Rate-Inverse Rate Period the procedures set forth in Section
3A.03.
"Auction Rate" shall mean:
(A) With respect to Auction Rate Bonds and each
Auction Period for such Auction Rate Bonds during an Auction
Rate Period, the rate of interest per annum determined for the
Bonds pursuant to Article III; and
(B) With respect to Auction Rate Bonds and each Interest
Period for such Auction Rate Bonds during an Auction Rate-Inverse Rate
Period (other than the Initial Interest Period after the Closing Date
if the Bonds initially are offered as Auction Rate-Inverse Rate Bonds,
or an Initial Interest Period after a Change in the Interest Rate Mode
to an Auction Rate- Inverse Rate), the rate of interest per annum
determined for the Bonds pursuant to Article IIIA.
"Auction Rate Bonds" shall mean:
------------------
(A) With respect to an Auction Rate Period, any Bonds or subseries of
Bonds which bear the Auction Rate determined pursuant to Article III;
(B) With respect to an Auction Rate-Inverse Rate Period, any
Bonds or subseries of Bonds which bear the Auction Rate determined
pursuant to Article IIIA.
"Auction Rate-Inverse Rate Bonds" shall mean any Bonds which
bear an Auction Rate and a related Inverse Rate during an Auction Rate-Inverse
Rate Period.
"Auction Rate-Inverse Rate Period" shall mean any period
during which the Auction Rate-Inverse Rate Bonds bear interest at an Auction
Rate and a related Inverse Rate determined pursuant to the implementation of
Auction Procedures established under Article IIIA, which period shall commence
on the Closing Date if the Bonds initially are offered as Auction Rate-Inverse
Rate Bonds, or on the effective date of a Change in the Interest Rate Mode to an
Auction Rate and a related Inverse Rate, and shall extend through the day
immediately preceding the earlier of (a) the effective date of a Change in the
Interest Rate Mode or (b) the Fixed Rate Conversion Date.
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"Auction Rate Period" shall mean any period during which the
Auction Rate Bonds bear interest at an Auction Rate determined pursuant to the
implementation of Auction Procedures established under Article III, which period
shall commence on the Closing Date if the Bonds initially are offered as Auction
Rate Bonds, or on the effective date of a Change in the Interest Rate Mode to an
Auction Rate and shall extend through the day immediately preceding the earlier
of (a) the effective date of a Change in the Interest Rate Mode or (b) the Fixed
Rate Conversion Date.
"Auction Rate Period Record Date" shall mean, with respect to
each Interest Payment Date during an Auction Rate Period (other than during a
daily Auction Period), the Business Day next preceding such Interest Payment
Date, and with respect to each Interest Payment Date during a daily Auction
Period, the last Business Day of the month preceding such Interest Payment Date.
"Authority" shall mean New York State Energy Research and
Development Authority, the public benefit corporation created by the Act, and
its successors and assigns.
"Authorized Company Representative" shall mean any officer or
other employee of the Company at the time designated to act on behalf of the
Company by written certificate furnished to the Authority and the Trustee
containing the specimen signature of such person and signed on behalf of the
Company by its Chairman, President or a Vice President and its Secretary or an
Assistant Secretary.
"Authorized Officer" shall mean the Chair, Vice-Chair,
President, Treasurer, Assistant Treasurer or Secretary to the Board and Vice
President for Governmental Relations.
"Available Auction Rate Bonds" shall mean (i) with respect to
the Auction Rate Bonds during an Auction Rate Period, Available Auction Rate
Bonds as defined in Section 3.08, and (ii) with respect to Auction Rate Bonds
during an Auction Rate-Inverse Rate Period, Available Auction Rate Bonds as
defined in Section 3A.03.
"Available Moneys" shall mean (i) moneys which have been paid
to the Trustee by the Company or any Affiliate of the Company and have been
continuously on deposit with the Trustee for at least 123 consecutive days in
any separate and segregated account or accounts or sub-account or sub-accounts
in which no other moneys which were not Available Moneys were at any time held,
during and prior to which period no Act of Bankruptcy shall have occurred
(unless the proceeding arising from such Act of Bankruptcy shall have been
dismissed and such dismissal shall be final and not subject to appeal), and have
not been commingled with any other funds, and the proceeds from the investment
of such moneys once such moneys become Available Moneys, provided that such
investment proceeds shall be considered to be Available Moneys only to the
extent that the Trustee, the Bond Insurer and any Rating Agencies then rating
the Bonds shall have received an opinion of counsel acceptable to any such
Rating Agencies to the effect that application of such investment proceeds does
not result in an avoidable preference with respect to the Company or any
Affiliate of the Company or the Authority pursuant to the provisions of Section
547 of the
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Bankruptcy Code, (ii) moneys drawn under the Credit Facility which were at all
times since their deposit with the Trustee held in a separate and segregated
account or accounts or sub-account or sub-accounts in which no moneys other than
those drawn under the Credit Facility were at any time held, and have not been
commingled with any other funds, (iii) moneys drawn under any Direct-Pay
Facility which were at all times since their deposit with the Trustee held in a
separate and segregated account or accounts or sub-account or sub-accounts in
which no moneys other than those drawn under such Direct-Pay Facility were at
any time held, and have not been commingled with any other funds, or (iv) the
proceeds of any obligations issued by the Authority to refund the Bonds, and the
proceeds of the investment of such moneys, provided that (x) such proceeds of
such obligations shall be deposited by the Trustee directly in a segregated
account maintained by the Trustee over which the Company (or any Affiliates of
the Company) or the Authority shall have no right to withdraw moneys or control
the investment of moneys, (y) such proceeds may not be used to pay the purchase
price of any Bonds tendered or deemed tendered for purchase pursuant to this
Indenture and (z) at or prior to the deposit of such proceeds an opinion of
counsel satisfactory to the Rating Agencies then rating the Bonds shall have
been provided to the Trustee, the Bond Insurer and such Rating Agencies to the
effect that such application of such proceeds will not constitute an avoidable
preference with respect to the Company or any Affiliate of the Company or the
Authority under Section 547 of the Bankruptcy Code.
"Bank Bond" or "Bank Bonds" means any Bond or Bonds purchased
by the Liquidity Facility Issuer pursuant to the initial Liquidity Facility or
any Bond or Bonds purchased pursuant to any Alternate Liquidity Facility.
"Bank Bond Interest Rate" or "Bank Rate", at any date of
determination, has the meaning ascribed thereto in the Liquidity Facility or an
agreement providing for the issuance thereof, provided that the Bank Bond
Interest Rate shall in no event exceed 15% per annum.
"Bid" shall mean (i) with respect to the Auction Rate Bonds
during an Auction Rate Period, Bid as defined in Section 3.06, and (ii) with
respect to Auction Rate Bonds during an Auction Rate-Inverse Rate Period, Bid as
defined in Section 3A.03.
"Bidder" shall mean (i) with respect to the Auction Rate Bonds
during an Auction Rate Period, Bidder as defined in Section 3.06, and (ii) with
respect to Auction Rate Bonds during an Auction Rate-Inverse Rate Period, Bidder
as defined in Section 3A.03.
"Bond Counsel" shall mean an attorney or firm or firms of
attorneys, satisfactory to the Authority and the Trustee, experienced in matters
relating to tax exemption of interest on bonds issued by states and their
political subdivisions.
"Bond Fund" shall mean the special trust fund of the Authority
designated as "KeySpan Generation LLC Project Bond Fund 1999 Series A" created
and established under, and to be held and administered by the Trustee as
provided in, Section 9.01 and, unless the context shall
I-8
clearly indicate otherwise, shall include the "Interest Account," the "Principal
Account," and the "Redemption Account" created and established therein.
"Bondholder", "Holder of a Bond" or "Holder" shall mean any registered
owner of a Bond.
"Bond Insurer" shall mean Ambac Assurance Corporation, or any
successor thereto.
"Bond Purchase Agreement" shall mean the Bond Purchase
Agreement, dated October 21, 1999, among the Authority, the Company and the
underwriters for the Bonds.
"Bond Purchase Fund" shall mean the Bond Purchase Fund
established pursuant to the Bond Purchase Trust Agreement.
"Bond Purchase Trust Agreement" shall mean the Bond Purchase
Trust Agreement dated as of the Closing Date between the Authority and the
Registrar and Paying Agent, as from time to time amended or supplemented.
"Bonds" shall mean, the "Pollution Control Refunding Revenue
Bonds (KeySpan Generation LLC Projects), 1999 Series A" presently to be issued
as authorized in Section 2.02 at any time Outstanding.
"Bond Year" shall have the meaning set forth in the Tax
Regulatory Agreement.
"Broker-Dealer" shall mean any broker-dealer (as defined in
the Securities Exchange Act), commercial bank or other entity permitted by law
to perform the functions required of a Broker-Dealer set forth in the Auction
Procedures (i) that is an Agent Member (or an affiliate of an Agent Member),
(ii) that has been selected by the Auction Agent and the Company with the
consent of the Authority, (iii) that has entered into a Broker-Dealer Agreement
with the Auction Agent and the Company that remains effective and (iv) after the
occurrence and during the continuance of a Company Downgrade Event that is
reasonably acceptable to the initial Bond Insurer.
"Broker-Dealer Agreement" shall mean each agreement applicable
to the Auction Rate Bonds during an Auction Rate Period or the Auction Rate
Bonds during an Auction Rate- Inverse Rate Period, as the case may be, among a
Broker-Dealer, the Company and the Auction Agent pursuant to which the
Broker-Dealer, among other things, agrees to participate in Auctions as set
forth in the Auction Procedures, as from time to time amended and supplemented.
"Business Day" shall mean any day other than a Saturday,
Sunday or other day on which the New York Stock Exchange or banks are authorized
or obligated by law or executive order to close in New York, New York, or any
city in which is located the principal corporate trust office of the Trustee or
the office of an issuer of a Liquidity Facility at which demands for a draw on,
or borrowing or payment under, the Liquidity Facility will be made; provided,
however, that with
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respect to Auction Rate-Inverse Rate Bonds during an Auction Rate-Inverse Rate
Period or Auction Rate Bonds during an Auction Rate Period, the term "Business
Day" shall further exclude April 14, April 15, December 30 and December 31.
"Calculation Period" shall mean (a) during any Commercial
Paper Rate Period, any period or periods from and including a Business Day to
and including any day not more than 270 days thereafter which is a day
immediately preceding a Business Day established by the Market Agent pursuant to
Section 3.02; (b) during any Daily Rate Period, the period from and including a
Business Day to but not including the next succeeding Business Day; (c) during
any Weekly Rate Period, with respect to the period after the Closing Date, the
period from and including the Closing Date and to and including the following
Tuesday and, thereafter, the period from and including the Wednesday of each
week to and including the following Tuesday and with respect to a Change in the
Interest Rate Mode to a Weekly Rate, the period from and including the effective
date of the Change in the Interest Rate Mode to and including the following
Tuesday, and, thereafter, the period from and including Wednesday of each week
to and including the following Tuesday; provided, however, in each case if such
Wednesday is not a Business Day, such next succeeding Calculation Period shall
begin on the Business Day next succeeding such Wednesday and such Calculation
Period shall end on the day before such next succeeding Calculation Period; (d)
during any Monthly Rate Period, with respect to a Change in the Interest Rate
Mode to a Monthly Rate, the period from and including the effective date of the
Change in the Interest Rate Mode to but excluding the first Business Day of the
following month, and, thereafter each period from and including the first
Business Day of the month to but excluding the first Business Day of the
following month; (e) during any Semi-annual Rate Period, with respect to a
Change in the Interest Rate Mode to a Semi-annual Rate, the period from and
including the effective date of the Change in the Interest Rate Mode to but
excluding the next succeeding Interest Payment Date and, thereafter, each period
from and including the day following the end of the last Calculation Period to
but excluding the next succeeding Interest Payment Date; and (f) during any Term
Rate Period, any period of not less than 365 days from and including a Business
Day to and including any day (established by the Market Agent pursuant to
Section 4.01.1) not later than the day prior to the maturity date of the Bonds.
"Change in the Interest Rate Mode" shall mean any change in
the type of interest rate borne by the Bonds pursuant to Section 4.01.
"Change of Preference Law" shall mean any amendment to the
Code or other statute enacted by the Congress of the United States or any
temporary, proposed or final regulation promulgated by the United States
Treasury, after the date hereof which (a) changes or would change any deduction,
credit or other allowance allowable in computing liability for any federal tax
with respect to, or (b) imposes, or would impose, reduces or would reduce, or
increases or would increase any federal tax (including, but not limited to,
preference or excise taxes) upon, any interest earned by any holder of bonds the
interest on which is excluded from federal gross income under Section 103 of the
Code.
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"Closing Date" shall mean the date on which the Note becomes
legally effective, the same being the date on which the Bonds are paid for by
and delivered to the original purchasers thereof.
"Code" shall mean the Internal Revenue Code of 1986, as
amended from time to time. Each reference to a section of the Code herein shall
be deemed to include the United States Treasury Regulations proposed or in
effect thereunder and applied to the Bonds or the use of proceeds thereof, and
also includes all amendments and successor provisions unless the context clearly
requires otherwise.
"Commercial Paper Dealer" means Goldman, Sachs & Co. or, in lieu
thereof, affiliates or successors, provided that any such entity is a
commercial paper dealer.
"Commercial Paper Index," on any date of determination, shall
mean, with respect to Auction Rate Bonds during an Auction Rate-Inverse Rate
Period, the interest index published by the Market Agent representing the
weighted average of the yield on tax-exempt commercial paper, or tax-exempt
bonds bearing interest at a commercial paper rate or pursuant to a commercial
paper mode, having a range of maturities or mandatory purchase dates between 25
and 36 days traded during the immediately preceding five Business Days.
"Commercial Paper Period Record Date" shall mean, with respect
to each Interest Payment Date during a Commercial Paper Rate Period, the
Business Day next preceding such Interest Payment Date.
"Commercial Paper Rate" shall mean with respect to the first
day of each Calculation Period during a Commercial Paper Rate Period, a rate or
rates of interest equal to the rate or rates of interest per annum established
and certified to the Trustee (with a copy to the Authority, the Registrar and
Paying Agent, the Credit Facility Issuer and the Company) by the Market Agent no
later than 12:00 noon (New York City time) on and as of such day as the minimum
rate or rates of interest per annum which, in the opinion of the Market Agent,
taking into account the Calculation Period or Calculation Periods for the Bonds,
would be necessary on and as of such day to remarket Bonds in a secondary market
transaction at a price equal to the principal amount thereof; provided that such
rate or rates of interest shall not exceed the lesser of 110% of the Commercial
Paper Rate Index on and as of such date and 15% per annum.
"Commercial Paper Rate Index" shall mean with respect to the
first day of each Calculation Period during a Commercial Paper Rate Period, the
average of yield evaluations at par, determined by the Indexing Agent, of
securities (whether or not actually issued) all of which shall have a term as
near as practicable to such Calculation Period or which are subject to optional
or mandatory tender by the owner thereof at the end of a term as near as
practicable to such Calculation Period, the interest on which is not included in
gross income for federal income tax purposes, of no fewer than ten Component
Issuers selected by the Indexing Agent, including issuers of commercial paper,
project notes, bond anticipation notes and tax anticipation notes, computed by
the Indexing
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Agent on and as of such day. If the Bonds are rated by a Rating Agency in its
highest note or commercial paper rating category or one of its two highest
long-term debt rating categories, each Component Issuer must (a) have
outstanding securities rated by a Rating Agency in its highest note or
commercial paper rating category or (b) not have outstanding notes or commercial
paper rated by a Rating Agency but have outstanding securities rated by a Rating
Agency in one of its two highest long-term debt rating categories. If the Bonds
are rated by a Rating Agency in a rating category that is lower than its highest
note or commercial paper rating category or its two highest long-term debt
rating categories (and the Bonds are not rated in one of such categories by the
other Rating Agency), each Component Issuer must (a) have outstanding securities
rated by a Rating Agency in its note or commercial paper rating category which
is the same or correlative, in the Indexing Agent's judgment, to the note or
commercial paper rating category or the long-term debt rating category of the
Bonds or (b) have outstanding securities rated by a Rating Agency in the same
long-term debt rating category as the Bonds are rated by that Rating Agency and
not have any outstanding notes or commercial paper rated by such Rating Agency.
The Indexing Agent may change the Component Issuers from time to time in its
discretion, subject to the foregoing requirements. In addition, at the request
of the Company and upon delivery to the Trustee of an Opinion of Bond Counsel
that such action will not adversely affect the exclusion of interest on the
Bonds from gross income of the owners thereof for federal income tax purposes,
the Authority, with the consent of the Company, may designate a new method of
setting the Commercial Paper Rate Index in the event any of the above-described
methods are determined by the Authority to be unavailable, impracticable or
unrealistic in the market place. Upon the occurrence and during the continuance
of a Company Downgrade Event, the Bond Insurer shall have the right to consent
to any change to the Component Issuers and any change in the method of setting
the Commercial Paper Rate Index, which consent shall not be unreasonably
withheld.
"Commercial Paper Rate Period" shall mean any period during
which the Bonds bear interest at a Commercial Paper Rate or Rates, which period
shall commence on the effective date of a Change in the Interest Rate Mode to a
Commercial Paper Rate or Rates, as the case may be, and extend through the day
immediately preceding the earlier of (a) the effective date of another Change in
the Interest Rate Mode, (b) the Fixed Rate Conversion Date or (c) the maturity
date of the Bonds.
"Commercial Paper/Treasury Rate" on any date of determination
shall mean with respect to Auction Rate Bonds during an Auction Rate Period (i)
in the case of any Auction Period of less than 180 days, the interest equivalent
of the 7-day rate on commercial paper placed on behalf of issuers whose
corporate bonds are rated "AA" by S&P, or the equivalent of such rating by
Moody's or another rating agency, as made available on a discount basis or
otherwise by the Federal Reserve Board for the Business Day immediately
preceding such date of determination, or in the event that the Federal Reserve
Board does not make available any such rate, then the arithmetic average of such
rates, as quoted on a discount basis or otherwise, by the Commercial Paper
Dealers, to the Auction Agent for the close of business on the Business Day
immediately preceding such date of determination or (ii) in the case of any
Auction Period of 180 days or more, the Treasury Rate for such Auction Period.
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If any Commercial Paper Dealer does not quote a commercial
paper rate required to determine the Commercial Paper/Treasury Rate, the
Commercial Paper/Treasury Rate shall be determined on the basis of a commercial
paper quotation or quotations furnished by the remaining Commercial Paper Dealer
or Commercial Paper Dealers and any Substitute Commercial Paper Dealer or
Substitute Commercial Paper Dealers selected by the Authority at the request of
the Company (which request shall be accompanied by the consent of the Bond
Insurer after the occurrence and during the continuance of a Company Downgrade
Event; provided that such consent shall not be unreasonably withheld) to provide
such quotation or quotations not being supplied by any Commercial Paper Dealer
or Commercial Paper Dealers, as the case may be, or if the Authority does not
select any such Substitute Commercial Paper Dealer or Substitute Commercial
Paper Dealers, by the remaining Commercial Paper Dealer or Commercial Paper
Dealers. For purposes of this definition, the "interest equivalent" of a rate
stated on a discount basis (a "discount rate") for commercial paper of a given
day's maturity shall be equal to the product of (A) 100 times (B) the quotient
(rounded upwards to the next higher one-thousandth (.001) of 1%) of (x) the
discount rate (expressed in decimals) divided by (y) the difference between (1)
1.00 and (2) a fraction the numerator of which shall be the product of the
discount rate (expressed in decimals) times the number of days in which such
commercial paper matures and the denominator of which shall be 360.
"Commission" shall mean the Securities and Exchange
Commission.
"Company" shall mean KeySpan Generation LLC, and any
surviving, resulting or transferee company as provided in Section 5.12 of the
Participation Agreement.
"Company Downgrade Event" shall mean the unsecured senior debt
rating of the Company shall be withdrawn or reduced either below "Baa3" (or its
equivalent) by Moody's if the Company is then rated by Moody's, below "BBB-" (or
its equivalent) by S&P if the Company is then rated by S&P or below investment
grade by another rating agency if the Company is then rated by another rating
agency.
"Component Issuers" shall mean issuers of securities, the
interest on which is excluded from gross income for federal income tax purposes,
selected by the Indexing Agent.
"Computation Date" shall mean each date which is one (1)
Business Day prior to any Determination Date.
"Computation Period" shall have the meaning set forth in the
Tax Regulatory Agreement.
"Credit Facility" shall mean initially the municipal bond
insurance policy issued by the Bond Insurer insuring the payment when due of
regularly scheduled principal and interest on the Bonds, as provided therein,
and shall mean any other instrument satisfactory to the Authority entered into
or obtained in connection with the Bonds in order to obtain a rating or ratings
on the Bonds, such as a letter of credit, committed line of credit or insurance
policy, and issued by a bank or banks,
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insurance company or other financial institution or institutions, which
instrument provides for the payment of principal of and interest on all Bonds
coming due and payable during the term thereof.
"Credit Facility Issuer" shall mean an issuer of a Credit
Facility.
"Current Adjustable Rate" shall mean the interest rate borne
by Bonds immediately prior to a Change in the Interest Rate Mode or the
establishment of a Fixed Rate.
"Daily Period Record Date" shall mean, with respect to each
Interest Payment Date during a Daily Rate Period, the Business Day next
preceding such Interest Payment Date.
"Daily Rate" shall mean with respect to the first day of each
Calculation Period during a Daily Rate Period, a rate of interest equal to the
rate of interest per annum established and certified to the Trustee (with a copy
to the Authority, the Registrar and Paying Agent and the Company) by the Market
Agent no later than 12:00 noon (New York City time) on and as of such day as the
minimum rate of interest per annum which, in the opinion of the Market Agent,
would be necessary on and as of such day to remarket Bonds in a secondary market
transaction at a price equal to the principal amount thereof plus accrued
interest thereon; provided that such rate of interest shall not exceed the
lesser of 110% of the Daily Rate Index on and as of such day and 15% per annum.
"Daily Rate Index" shall mean with respect to the first day of
each Calculation Period during a Daily Rate Period, the average of one-day yield
evaluations at par, determined by the Indexing Agent, of securities (whether or
not actually issued), the interest on which is not included in gross income for
federal income tax purposes, of no fewer than ten Component Issuers selected by
the Indexing Agent and which have redemption or tender provisions comparable to
the then applicable provisions of the Bonds, computed by the Indexing Agent on
and as of such day. If the Bonds are rated by a Rating Agency or are subject to
the benefits of a Support Facility and the issuer of such Support Facility has
issued support facilities to support other debt obligations rated by a Rating
Agency, each Component Issuer must have outstanding securities rated by a Rating
Agency in a short-term debt rating category which is the same as the short-term
debt rating category in which the Bonds or other debt obligations supported by
support facilities issued by the issuer of a Support Facility are rated. The
specific issuers included in the Component Issuers may be changed from time to
time by the Indexing Agent in its discretion and shall be issuers whose
securities, in the judgment of the Indexing Agent, have characteristics similar
to the Bonds. In addition, at the request of the Company and upon delivery to
the Trustee and the Bond Insurer of an Opinion of Bond Counsel that such action
will not adversely affect the exclusion of interest on the Bonds from gross
income of the owners thereof for federal income tax purposes, the Authority,
with the consent of the Company, may designate a new method of setting the Daily
Rate Index in the event any of the above-described methods are determined by the
Authority to be unavailable, impracticable or unrealistic in the market place.
Upon the occurrence and during the continuance of a Company Downgrade Event, the
Bond Insurer shall have the right to consent to any change to the Component
Issuers and any change in the method of setting the Daily Rate Index provided
that such consent shall not be unreasonably withheld.
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"Daily Rate Period" shall mean any period during which the
Bonds bear interest at a Daily Rate which period shall commence on the effective
date of the Change in the Interest Rate Mode to a Daily Rate and extend through
the day immediately preceding the earlier of (a) the effective date of another
Change in the Interest Rate Mode or (b) the Fixed Rate Conversion Date.
"description", when used with respect to the Project, means
the description set forth in Exhibit B and Exhibit C to the Participation
Agreement, as such Exhibits may be amended in accordance with the Participation
Agreement.
"Determination Date" shall mean, for any Calculation Period,
the first Business Day occurring during such Calculation Period.
"Determination of Taxability" shall have the meaning set forth
in Section 5.06.1.
"Differential Interest Amount" shall mean any amount of
interest payable by the Company under any agreement with the issuer of a
Liquidity Facility in excess of 15% per annum.
"Direct-Pay Facility" shall mean any instrument satisfactory
to the Authority (in addition to any Credit Facility or Liquidity Facility)
delivered or caused to be delivered to the Trustee by the Authority or the
Company (i) pursuant to which a person, other than the Company or any Affiliate
of the Company (such person, the "Issuer"), is obligated, at the request of the
Trustee, to pay any sum of money to the Trustee for application to the payment
of the principal of (and premium, if any, on), purchase price, of and/or accrued
interest on the Bonds (as may be specified in such instrument) and (ii) in
respect of which the Authority or the Company shall have delivered to the
Trustee, the Bond Insurer and the Rating Agencies then rating the Bonds an
Opinion of Bond Counsel (or an opinion of other counsel satisfactory to the
Trustee and the Rating Agencies then rating the Bonds) satisfactory to the
Rating Agencies then rating the Bonds to the effect that payments thereunder by
the Issuer to the Trustee would not constitute "property of the estate" (within
the meaning of the Bankruptcy Code) of the Company or any Affiliate of the
Company or the Authority and should not constitute a voidable "preference"
(within the meaning of the Bankruptcy Code) with respect to the Company or any
Affiliate of the Company or the Authority.
"Event of Default" shall mean Event of Default as defined in
Section 12.01.
"Existing Holder" shall mean with respect to Auction Rate
Bonds during an Auction Rate Period and Auction Rate Bonds during an Auction
Rate-Inverse Rate Period a person who has signed a Purchaser's Letter and is
listed as the beneficial owner of Auction Rate Bonds (which in the case of
Auction Rate Bonds during an Auction Rate-Inverse Rate Period are not linked
with Inverse Rate Bonds) in the records of the Auction Agent.
"Failure to Deposit" shall mean any failure to make the
deposit required by Section 9.02(a)(i) or 9.02(b)(i) by the time specified
therein.
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"Fiscal Year" shall mean the fiscal year of the Company as
established from time to time by the Company which as of the Closing Date is the
twelve-month period commencing on October 1 of each calendar year and ending on
September 30 of the next calendar year.
"Fixed Rate" shall mean, with respect to the Fixed Rate
Conversion Date, the rate of interest per annum established and certified to the
Trustee (with a copy to the Authority, the Registrar and Paying Agent, the
Credit Facility Issuer and the Company) by the Market Agent no later than 12:00
noon (New York City time) on and as of such date as the minimum rate of interest
per annum which, in the opinion of the Market Agent, would be necessary on and
as of such date to remarket the Bonds in a secondary market transaction at a
price equal to 100% of the Outstanding principal amount thereof; provided that
such rate of interest shall not exceed the lesser of 110% of the Fixed Rate
Index on and as of such date and 18% per annum;
"Fixed Rate Conversion Date" shall have the meaning set forth
in Section 4.02.
"Fixed Rate Index" shall mean with respect to each of (i) the
Fixed Rate Conversion Date, or (ii) a Change in the Interest Rate Mode to an
Auction Rate-Inverse Rate Period, as the case may be, the average of the yield
evaluations (on the basis of full coupon securities trading at par with a term
approximately equal to the Fixed Rate Period, or with respect to any Change in
the Interest Rate Mode to an Auction Rate-Inverse Rate Period, a term
approximately equal to a period commencing on the effective date of such Change
in the Interest Rate Mode and ending on the maturity date of the Bonds) of
securities (whether or not actually issued), the interest on which is not
included in gross income for federal income tax purposes, of no fewer than ten
Component Issuers selected by the Indexing Agent and which have a rating by a
Rating Agency in the same rating category as the Bonds are rated at the time by
such Rating Agency or, if the Bonds are not so rated, shall be debt which, in
the judgment of the Indexing Agent, is of credit quality comparable to that of
the Bonds, computed by the Indexing Agent on and as of the applicable date set
forth in (i) or (ii) above. In the event that the Indexing Agent fails to
compute the Fixed Rate Index and no other qualified municipal securities
evaluation service can be appointed Indexing Agent by the Authority, the Fixed
Rate Index shall be determined by the Market Agent and shall be 90% of the
average yield shown for the most recent calendar month for United States
Treasury notes or bonds having the same number of years to maturity as the
number of 12-month periods (or months if the Fixed Rate Period is less than one
year) in the Fixed Rate Period, as published in the Federal Reserve Bulletin in
the last issue before the applicable date set forth in (i) or (ii) above. If
that issue does not contain such a yield, the Fixed Rate Index will be
determined by linear interpolation between the yields shown in that issue for
United States Treasury notes and bonds having the next shorter and next longer
number of years (or months) to maturity. In addition, at the request of the
Company and upon delivery to the Trustee and the Bond Insurer of an Opinion of
Bond Counsel that such action will not adversely affect the exclusion of
interest on the Bonds from gross income of the owners thereof for federal income
tax purposes, the Authority, with the consent of the Company, may designate a
new method of setting the Fixed Rate Index in the event any of the
above-described methods are determined by the Authority to be unavailable,
impracticable or unrealistic in the market place. After the occurrence and
during the continuance of a Company Downgrade Event, the Bond Insurer shall
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have the right to consent to any change to the Component Issuers and any change
in the method of setting the Fixed Rate Index, which consent shall not be
unreasonably withheld.
"Fixed Rate Period" shall mean the period, if any, during
which the Bonds bear interest at a Fixed Rate which period shall commence on the
Fixed Rate Conversion Date and extend through the maturity date of the Bonds.
"Fixed Rate Record Date" shall mean, with respect to each
Interest Payment Date during the Fixed Rate Period, the fifteenth day of the
month next preceding such Interest Payment Date, or, if such day shall not be a
Business Day, the next preceding Business Day.
"Governmental Obligations" shall mean (a) direct obligations
of, or obligations the payment of the principal of and interest on which is
unconditionally guaranteed by, the United States of America and (b) bonds,
debentures or notes issued by Government National Mortgage Association, Federal
Financing Bank, Federal Farm Credit Bank, Federal Land Bank, Federal Home Loan
Bank, Farmers Home Administration, Federal Home Mortgage Corporation or any
other comparable federal agency hereafter created to the extent that said
obligations are unconditionally guaranteed by the United States of America.
"Hold Order" shall mean (i) with respect to the Auction Rate
Bonds during an Auction Rate Period, Hold Order as defined in Section 3.06, and
(ii) with respect to the Auction Rate Bonds during an Auction Rate-Inverse Rate
Period, Hold Order as defined in Section 3A.03.
"Indenture" shall mean this Trust Indenture dated as of
October 1, 1999 between the Authority and the Trustee, as the same may be
amended or supplemented.
"Indexing Agent" shall mean the Indexing Agent appointed in
accordance with Section 11.24.
"Ineligible Moneys" shall mean any moneys from time to time
deposited with the Trustee by the Company for the specified purpose of becoming
"Available Moneys" for purposes of this Indenture, provided, that upon becoming
"Available Moneys" such moneys shall cease to be considered to be "Ineligible
Moneys".
"Initial Liquidity Facility" shall mean an instrument or
instruments satisfactory to the Authority entered into or obtained in connection
with the Bonds on or prior to a Change in the Interest Rate Mode to an
Adjustable Rate other than an Auction Rate during an Auction Rate Period or an
Auction Rate during an Auction Rate-Inverse Rate Period in order to obtain a
rating or ratings on the Bonds, including a letter of credit, committed line of
credit, surety bond or standby bond purchase agreement, or any combination of
the foregoing, and issued by a bank or banks, municipal bond or financial
guarantee insurance company, other financial institution or institutions, or any
combination of the foregoing which provides payment of the purchase price equal
to the principal of and accrued interest on Bonds purchased during the term
thereof upon any mandatory or optional tender for purchase pursuant to Sections
5.02, 5.03 and 5.06.
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"Insurance Agreement" shall mean the Insurance Agreement,
dated as of October 27, 1999, by and between the Company and the Bond Insurer.
"Interest Payment Date" shall mean:
---------------------
(a) during each Commercial Paper Rate Period, the Business Day
immediately succeeding any Calculation Period;
(b) during an Auction Rate Period (i) for an Auction Period
that is a daily Auction Period, the first Business Day of the month
immediately succeeding such Auction Period, (ii) for an Auction Period
of 91 days or less (other than a daily Auction Period), the Business
Day immediately succeeding such Auction Period and (iii) for an Auction
Period of more than 91 days, each 13th Friday after the first day of
such Auction Period and the Business Day immediately succeeding such
Auction Period;
(c) during any Auction Rate-Inverse Rate Period, the date determined
pursuant to Section 3A.02;
(d) during each Daily Rate Period, the first Business Day of each
month thereof;
(e) during each Weekly Rate Period, the first Wednesday of each month
thereof;
(f) during each Monthly Rate Period, the first Business Day of each
month thereof;
(g) during each Semi-annual Rate Period, (i) the first
Business Day of the sixth calendar month following the month in which
the first day of such Semi-annual Rate Period occurred, (ii) each
anniversary of the date so determined, and (iii) each anniversary of
the first day of the first month of such Semi-annual Rate Period;
(h) during each Term Rate Period, (i) the first Business Day
of the sixth calendar month following the month in which the first day
of such Term Rate Period occurred, (ii) each anniversary of the date so
determined, (iii) each anniversary of the first day of the first month
of such Term Rate Period, and (iv) the Business Day immediately
succeeding such Term Rate Period;
(i) the June 1 or December 1 next succeeding the Fixed Rate
Conversion Date and each June 1 and December 1 thereafter; provided,
however, that if the June 1 or December 1 next succeeding the Fixed
Rate Conversion Date occurs less than twenty-one (21) days after the
Fixed Rate Conversion Date, the first Interest Payment Date shall be
the second such date following the Fixed Rate Conversion Date;
(j) the Fixed Rate Conversion Date;
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(k) any day on which Bonds are subject to mandatory tender for
purchase pursuant to Section 5.03 or 5.08 or redemption in whole
pursuant to Section 5.01, 5.04, 5.05, 5.06 or 5.07;
(l) the final maturity date of the Bonds; and
(m) with respect to Bank Bonds, the dates, if any, set forth in the
Liquidity Facility;
provided, however, that if any such date determined in any of the foregoing
clauses is not a Business Day, the Interest Payment Date shall be the next
succeeding day which is a Business Day.
"Interest Period" shall mean with respect to Auction Rate
Bonds during an Auction Rate Period each period from and including one Interest
Payment Date to but excluding the next succeeding Interest Payment Date.
"Investment Securities" shall mean any of the following which
at the time are legal investments under the laws of the State of New York for
the monies held hereunder:
(a) any obligation issued or guaranteed by, or backed by the full
faith and credit of, the United States of America (including any
certificates or any other evidence of an ownership interest in any such
obligation or in specified portions thereof, which may consist of specified
portions of the principal thereof or the interest thereon);
(b) deposit accounts in, or certificates of deposit issued by,
and bankers acceptance of, any bank, trust company or national banking
association which is a member of the Federal Reserve System (which may
include the Trustee), having capital stock and surplus aggregating not
less than $50,000,000;
(c) deposit accounts in, or certificates of deposit issued by
and bankers acceptances of, any bank or trust company having capital
stock and surplus aggregating not less than $50,000,000 and whose
obligations are rated not lower than "A" or equivalent by Moody's or
S&P;
(d) obligations issued or guaranteed by any person controlled
or supervised by and acting as an instrumentality of the United States
of America pursuant to the authority granted by the Congress of the
United States;
(e) commercial paper rated in the highest investment grade or next
highest investment grade by Moody's or S&P;
(f) obligations rated not lower than "A" or equivalent by
Moody's or S&P issued or guaranteed by any state of the United States
or the District of Columbia, or any political
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subdivision, agency or instrumentality of any such state or District, or issued
by any corporation;
(g) obligations of a public housing authority fully secured by
contracts with the United States;
(h) repurchase agreements with any bank or trust company
organized under the laws of any state of the United States of America
or any national banking association (including the Trustee) or any
government bond dealer reporting to, trading with and recognized as a
primary dealer by, the Federal Reserve Bank of New York with respect to
any of the foregoing obligations or securities. Any repurchase
agreement entered into pursuant to this Indenture shall, by its terms,
permit the Trustee to sell the related obligations or securities if the
other party to such repurchase agreement shall fail to repurchase
promptly such obligation or security on the day required by the
repurchase agreement. All such repurchase agreements shall also provide
for the delivery of the related obligations or securities to the
Trustee or a depositary of the Trustee;
(i) money market or bond mutual funds, which funds have a
composite investment grade rated not lower than "A" or equivalent by
Moody's or S&P; or
(j) investment agreements with any bank or trust company
organized under the laws of any state of the United States of America
or any national banking association (including the Trustee) or any
governmental bond dealer reporting to, trading with and recognized as a
primary dealer by, the Federal Reserve Bank of New York, which has, or
the parent company of which has, long-term debt rated at least "A" or
its equivalent by S&P or Moody's, with respect to any of the
obligations or securities specified in (a), (d), (e), (f) and (g)
above. Any investment agreement entered into pursuant to this Indenture
shall, by its terms provide that (i) the invested funds are available
for withdrawal without penalty or premium, at any time upon not more
than seven days' prior notice (which notice may be amended or withdrawn
at any time prior to the specified withdrawal date), and (ii) the
investment agreement is the unconditional and general obligation of,
and is not subordinated to any other obligation of, the provider
thereof.
Any such Investment Securities may be held by the Trustee in book entry form,
whereby certificated securities are held by an independent custodian and the
Trustee is the beneficial owner of all or a portion of such certificated
securities.
"Linked Rate" shall mean, with respect to Auction Rate-Inverse
Rate Bonds during an Auction Rate-Inverse Rate Period, the rate of interest
determined and certified to the Trustee (with a copy to the Authority, the
Registrar and Paying Agent and the Company) by the Market Agent no later than
12:00 noon on and as of the effective date of such Change in the Interest Rate
Mode as the minimum rate of interest per annum (calculated on a 365-day basis)
which, in the opinion of the Market Agent, would be necessary on and as of such
date to remarket the Auction Rate Bonds and
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the Inverse Rate Bonds as Regular Linked Auction Rate Bonds and Inverse Rate
Bonds at a price equal to 100% of the Outstanding principal amount thereof;
provided that the Linked Rate on the Auction Rate-Inverse Rate Bonds during any
Auction Rate-Inverse Rate Period shall not exceed the lesser of 110% of the
Fixed Rate Index minus .28% per annum on and as of such date and 18% per annum.
"Liquidity Facility" shall mean the Initial Liquidity Facility
and each Alternate Liquidity Facility.
"Liquidity Facility Issuer" shall mean each issuer of a
Liquidity Facility.
"Market Agent" or "Market Agents" shall mean any remarketing
agent or agents or any market agent or market agents appointed pursuant to
Section 11.14, its or their successors or assigns.
"Market Agent Agreement" shall mean (A) the Market Agent
Agreement, dated as of October 27, 1999, by and between the Company and Goldman,
Sachs & Co. relating to Auction Rate Bonds, and any similar agreement with a
successor Market Agent or Market Agents, as from time to time amended and
supplemented, (B) any market agent agreement between the Trustee and the Market
Agent or Market Agents with respect to Auction Rate-Inverse Rate Bonds during an
Auction Rate-Inverse Rate Period or (C) any market agent agreement, remarketing
agreement, or similar agreement between the Company and the Market Agent or
Market Agents with respect to Bonds bearing interest at one or more Adjustable
Rates.
"Maximum Auction Rate" shall mean the maximum rate permitted
by law or if there is no legal limit applicable to the interest rate borne by
the Bonds, then 18%.
"Minimum Auction Rate" shall mean on any date of determination
with respect to Auction Rate Bonds during an Auction Rate Period the rate per
annum equal to 55% (as such percentage may be adjusted pursuant to Section 3.10)
of the Commercial Paper/Treasury Rate on such date, provided, however, that in
no event shall such Minimum Auction Rate exceed the maximum rate, if any,
permitted by applicable law.
"Monthly Period Record Date" shall mean, with respect to each
Interest Payment Date during a Monthly Period, the Business Day next preceding
such Interest Payment Date.
"Monthly Rate" shall mean with respect to the first day of
each Calculation Period during a Monthly Rate Period, a rate of interest equal
to the rate of interest per annum established and certified to the Trustee (with
a copy to the Authority, the Registrar and Paying Agent, and the Company) by the
Market Agent no later than 12:00 noon (New York City time) on and as of such day
as the minimum rate of interest per annum which, in the opinion of the Market
Agent, would be necessary on and as of such day to remarket Bonds in a secondary
market transaction at a price equal
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to the principal amount thereof; provided that such rate of interest shall not
exceed the lesser of 110% of the Monthly Rate Index on and as of such date and
15% per annum.
"Monthly Rate Index" shall mean with respect to the first day
of each Calculation Period during a Monthly Rate Period, the average of 30-day
yield evaluations at par, determined by the Indexing Agent, of securities
(whether or not actually issued), the interest on which is not included in gross
income for federal income tax purposes, of no fewer than ten Component Issuers
selected by the Indexing Agent, including issuers of commercial paper, project
notes, bond anticipation notes and tax anticipation notes, computed by the
Indexing Agent on and as of such day. If the Bonds are rated by a Rating Agency
in its highest note or commercial paper rating category or one of its two
highest long-term debt rating categories, each Component Issuer must (a) have
outstanding securities rated by a Rating Agency in its highest note or
commercial paper rating category or (b) not have outstanding notes or commercial
paper rated by a Rating Agency but have outstanding securities rated by a Rating
Agency in one of its two highest long- term debt rating categories. If the Bonds
are rated by a Rating Agency in a rating category that is lower than its highest
note or commercial paper rating category or its two highest long-term debt
rating categories (and the Bonds are not rated in one of such categories by the
other Rating Agency), each Component Issuer must (a) have outstanding securities
rated by a Rating Agency in its note or commercial paper rating category which
is the same or correlative, in the Indexing Agent's judgment, to the note or
commercial paper rating category or the long-term debt rating category of the
Bonds or (b) have outstanding securities rated by a Rating Agency in the same
long-term debt rating category as the Bonds are rated by that Rating Agency and
not have any outstanding notes or commercial paper rated by such Rating Agency.
The Indexing Agent may change the Component Issuers from time to time in its
discretion, subject to the foregoing requirements. In addition, at the request
of the Company and upon delivery to the Trustee of an Opinion of Bond Counsel
that such action will not adversely affect the exclusion of interest on the
Bonds from gross income of the owners thereof for federal income tax purposes,
the Authority, with the consent of the Company, may designate a new method of
setting the Monthly Rate Index in the event any of the above-described methods
are determined by the Authority to be unavailable, impracticable or unrealistic
in the market place. Upon the occurrence and during the continuance of a Company
Downgrade Event, the Bond Insurer shall have the right to consent to any change
to the Component Issuers and any change in the method of setting the Monthly
Rate Index, which consent shall not be unreasonably withheld.
"Monthly Rate Period" shall mean any period during which the
Bonds bear interest at a Monthly Rate which period shall commence with the
effective date of the Change in the Interest Rate Mode to a Monthly Rate and
shall extend through the day immediately preceding the earlier of (a) the
effective date of another Change in the Interest Rate Mode or (b) the Fixed Rate
Conversion Date.
"Moody's" shall mean Moody's Investors Service, a division of
Dun & Bradstreet Corporation and its successor or successors, and if such
corporation shall for any reason no longer perform the functions of a securities
rating agency or if Moody's shall be replaced, subject to the definition of
"prevailing rating" in the definition of Applicable Percentage, by some other
nationally
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recognized rating agency by the Authority at the request of the Company,
"Moody's" shall be deemed to refer to such other nationally recognized rating
agency designated by the Authority at the request of the Company.
"Municipal Bond Insurance Policy" or "Policy" shall mean the
municipal bond insurance policy issued by the Bond Insurer insuring the payment
when due of regularly scheduled principal and interest on the Bonds, as provided
therein.
"No Auction Rate" shall mean on any date of determination with
respect to Auction Rate Bonds during an Auction Rate Period, the interest rate
per annum equal to the Applicable Percentage of the Commercial Paper/Treasury
Rate determined on such date. In no event shall the No Auction Rate be greater
than the Maximum Auction Rate.
"Non-Bankruptcy Certificate" shall mean a certificate of the
Company to the effect that during the 124-day period then ended the Company has
not filed in any court having jurisdiction a voluntary petition in bankruptcy or
any petition or other pleading seeking a readjustment, liquidation or similar
relief for itself, and the Company has not been served notice of any pleading
being filed against it seeking an adjudication of bankruptcy, reorganization,
composition, readjustment, liquidation or similar relief under any law or
regulation.
"Note" shall mean the promissory note of the Company to be
executed by the Company and assigned by the Authority to the Trustee, to
evidence the obligations of the Company to repay the loan to be made by the
Authority pursuant to the Participation Agreement and to make the Additional
Payments.
"Note Payments" shall mean the portion of the Payments
required to be paid by the Company into the Bond Fund as provided in Section 4.2
of the Participation Agreement and the Note.
"Notice of Election to Tender" shall mean the notice given by
a Holder of Bonds pursuant to Section 5.02.
"Notice of Fee Rate Change" shall mean a notice of a change in
the Auction Agent Fee Rate or the Broker-Dealer Fee Rate.
"Opinion of Bond Counsel" shall mean a written opinion of Bond
Counsel.
"Option to Convert" shall mean the Authority's right and
option to convert the rate of interest payable on the Bonds from an Adjustable
Rate to the Fixed Rate as provided in Section 4.02.
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"Order" shall mean (i) with respect to Auction Rate Bonds
during an Auction Rate Period, Order as defined in Section 3.06, and (ii) with
respect to Auction Rate Bonds during any Auction Rate-Inverse Rate Period, Order
as defined in Section 3A.03.
"Outstanding", whether appearing in upper or lower case, when
used with respect to any Bond shall mean, as of any date, any Bond theretofore
or thereupon being authenticated and delivered pursuant to this Indenture,
except:
(A) a Bond canceled by the Trustee or delivered to the Trustee for
cancellation at or prior to such date;
(B) a Bond in lieu of or in substitution for which another Bond shall
have been
issued under Sections 5.09, 7.03 , 7.04 or 7.05; and
(C) a Bond or portion thereof deemed to have been paid in accordance
with Section 15.01;
provided, however, that with respect to Auction Rate Bonds either during an
Auction Rate Period or an Auction Rate-Inverse Rate Period (i) for the purposes
of the Auction Procedures on any Auction Date, (x) Auction Rate Bonds as to
which the Company or any person known to the Auction Agent to be an Affiliate of
the Company is the Existing Holder thereof and, with respect to Auction Rate
Bonds during an Auction Rate-Inverse Rate Period, Auction Rate Bonds which were
Linked with Inverse Rate Bonds at the close of business on the Regular Record
Date immediately preceding such Auction Date, shall be disregarded and deemed
not to be Outstanding and (y) Auction Rate Bonds which have been defeased
pursuant to Section 15.01 shall be deemed to be Outstanding and (ii) for the
purposes of selecting Auction Rate Bonds and Inverse Rate Bonds to be redeemed
on any Redemption Date, Auction Rate Bonds and Inverse Rate Bonds which have
been defeased pursuant to Section 15.01 shall be deemed to be Outstanding.
"Overdue Rate" shall mean on any date of determination with
respect to Auction Rate Bonds during an Auction Rate-Inverse Rate Period, the
interest rate per annum equal to 265% of the Commercial Paper Index on such
date;provided that in no event shall the Overdue Rate (x) as of the first day of
the Interest Period commencing on or immediately prior to the date on which a
Payment Default occurs, exceed the lesser of (i) the excess of (A) the Maximum
Auction Rate-Inverse Rate over (2) the Service Charge Rate as of such date and
(ii) the excess of (A) the maximum rate on such date permitted by New York law,
as the same may be modified by United States law of general application, over
(B) the Service Charge Rate on such date, and (y) on the first day of any other
Interest Period, exceed the lesser of (i) the Maximum Auction Rate-Inverse Rate
and (ii) the maximum rate permitted by New York law, as the same may be modified
by United States law of general application.
"Participation Agreement" shall mean the Participation
Agreement dated as of October 1, 1999, between the Authority and the Company, as
amended and supplemented by Supplemental Participation Agreements from time to
time.
I-24
"Payment Default" shall mean the default in the due and
punctual payment of (a) any installment of interest on the Auction Rate Bonds or
the Inverse Rate Bonds during an Auction Rate- Inverse Rate Period or on the
Auction Rate Bonds during an Auction Rate Period or (b) any principal of,
premium, if any, or interest on, the Auction Rate Bonds or the Inverse Rate
Bonds at their maturity (whether at the Stated Maturity, prior redemption or
otherwise) during an Auction Rate- Inverse Rate Period or any principal of,
premium, if any, or interest on, the Auction Rate Bonds at their maturity
(whether at the Stated Maturity, prior redemption or otherwise) during an
Auction Rate Period, which default shall continue for a period of two Business
Days.
"Payments" shall mean collectively the Note Payments and the
Additional Payments.
"Potential Holder" shall mean with respect to any Auction Rate
Bonds during an Auction Rate Period and Auction Rate Bonds during an Auction
Rate-Inverse Rate Period, any person, including any Existing Holder, (A) who
shall have executed a Purchaser's Letter (or whose Broker-Dealer shall have
executed a Purchaser's Letter), and (B) who may be interested in acquiring the
beneficial ownership of Auction Rate Bonds or, in the case of an Existing Holder
thereof, the beneficial ownership of an additional principal amount of Auction
Rate Bonds.
"Principal Corporate Trust Office" shall mean the office of
the Trustee at which at any particular time its corporate trust business shall
be principally administered, which office at the date hereof for The Chase
Manhattan Bank, as Trustee, is located at 450 W. 33rd Street, 15th Floor, New
York, New York 10001.
"Project" shall mean the facilities so identified and
described in Exhibit A to the Participation Agreement.
"Project Fund" shall mean the special trust fund designated as
"KeySpan Generation LLC 1999 Series A Project Fund" created and established
under, and to be held and administered by the Trustee as provided in, Section
8.01.
"Purchaser's Letter" shall mean with respect to any Auction
Rate Bonds during an Auction Rate Period and any Auction Rate Bonds during an
Auction Rate-Inverse Rate Period a letter (including a Master Purchaser's
Letter), substantially in the form set forth in Exhibit D hereto, addressed to,
among others, the Authority, the Auction Agent and a Broker-Dealer.
"rate index" shall mean the Daily Rate Index, the Fixed Rate
Index, the Commercial Paper Rate Index, the Monthly Rate Index, the Semi-annual
Rate Index, the Term Rate Index or the Weekly Rate Index.
"Rating Agency" shall mean Moody's, if the Bonds are then
rated by Moody's, and S&P, if the Bonds are then rated by S&P.
I-25
"rating category" shall mean one of the generic rating
categories of a Rating Agency, without regard to any refinement or gradation of
such rating category by a numerical modifier, plus or minus sign, or otherwise.
"Rebate Fund" shall mean the fund established pursuant to
Section 9.01(a)(2).
"Record Date", at any time, shall mean each Commercial Paper
Period Record Date during a Commercial Paper Rate Period, each Auction Rate
Period Record Date during an Auction Rate Period, each Auction Rate-Inverse Rate
Period Record Date during an Auction Rate-Inverse Rate Period, each Daily Period
Record Date during a Daily Rate Period, each Weekly Period Record Date during a
Weekly Rate Period, each Monthly Period Record Date during a Monthly Rate
Period, each Semi-annual Period Record Date during a Semi-annual Rate Period,
Term Period Record Date during a Term Rate Period and each Fixed Rate Record
Date during the Fixed Rate Period.
"Registrar and Paying Agent" shall mean The Chase Manhattan
Bank in its separate capacity as Registrar and Paying agent for the Bonds, or
its successors or assigns.
"Revenues" shall mean and include all income, revenues and
monies derived by the Authority under the Participation Agreement and the Note
(except administrative compensation and indemnification payable under the
Participation Agreement), and, without limiting the generality of the foregoing,
shall include (a) earnings on the investment of the proceeds of Bonds and (b) to
the extent provided in this Indenture, earnings on the investment of monies held
under this Indenture and the proceeds of the sale of any such investments. The
term "Revenues" shall not include monies received as proceeds from the sale of
the Bonds or any other bonds, notes or evidences of indebtedness or as grants or
gifts or amounts payable to or on deposit in the Rebate Fund or amounts
representing Additional Payments in each case.
"S&P" shall mean Standard & Poor's Ratings Services, a
division of The McGraw Hill Companies, Inc. and its successor or successors, and
if such corporation shall for any reason no longer perform the functions of a
securities rating agency or if S&P shall be replaced, subject to the definition
of "prevailing rating" in the definition of Applicable Percentage, by some other
nationally recognized rating agency by the Authority at the request of the
Company, "S&P" shall be deemed to refer to such other nationally recognized
rating agency designated by the Authority at the request of the Company.
"Securities Depository" shall mean The Depository Trust
Company and its successors and assigns or if (i) the then Securities Depository
resigns from its functions as depository of the Bonds or (ii) the Authority
discontinues use of the then Securities Depository pursuant to Section 2.03, any
other securities depository, which agrees to follow the procedures required to
be followed by a Securities Depository in connection with the Bonds and which is
selected by the Authority, with the consent of the Company, the Trustee, the
Auction Agent and the Market Agent pursuant to Section 2.03.
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"Securities Exchange Act" shall mean the Securities Exchange
Act of 1934, as amended.
"Sell Order" shall mean (i) with respect to Auction Rate Bonds
during an Auction Rate Period, Sell Order as defined in Section 3.06 and (ii)
with respect to Auction Rate Bonds during an Auction Rate-Inverse Rate Period,
Sell Order as defined in Section 3A.03.
"Semi-annual Period Record Date" shall mean, with respect to
each Interest Payment Date during a Semi-annual Rate Period, the fifteenth day
of the calendar month next preceding such Interest Payment Date.
"Semi-annual Rate" shall mean with respect to the first day of
each Calculation Period during a Semi-annual Rate Period, a rate of interest
equal to the rate of interest per annum established and certified to the Trustee
(with a copy to the Authority, the Bond Insurer, the Registrar and Paying Agent
and the Company) by the Market Agent no later than 12:00 noon (New York City
time) on and as of such day as the minimum rate of interest per annum which, in
the opinion of the Market Agent, would be necessary on and as of such day to
remarket Bonds in a secondary market transaction at a price equal to the
principal amount thereof; provided that such rate of interest shall not exceed
the lesser of 110% of the Semi-annual Rate Index on and as of such date and 15%
per annum.
"Semi-annual Rate Index" shall mean with respect to the first
day of each Calculation Period during a Semi-annual Rate Period, the average of
six-month yield evaluations at par, determined by the Indexing Agent, of
securities (whether or not actually issued), the interest on which is not
included in gross income for federal income tax purposes, of no fewer than ten
Component Issuers selected by the Indexing Agent, including issuers of
commercial paper, project notes, bond anticipation notes and tax anticipation
notes, computed by the Indexing Agent on and as of such day. If the Bonds are
rated by a Rating Agency in its highest note or commercial paper rating category
or one of its two highest long-term debt rating categories, each Component
Issuer must (a) have outstanding securities rated by a Rating Agency in its
highest note or commercial paper rating category or (b) not have outstanding
notes or commercial paper rated by a Rating Agency but have outstanding
securities rated by a Rating Agency in one of its two highest long-term debt
rating categories. If the Bonds are rated by a Rating Agency in a rating
category that is lower than its highest note or commercial paper rating category
or its two highest long-term debt rating categories (and the Bonds are not rated
in one of such categories by the other Rating Agency), each Component Issuer
must (a) have outstanding securities rated by a Rating Agency in its note or
commercial paper rating category which is the same or correlative, in the
Indexing Agent's judgment, to the note or commercial paper rating category or
the long-term debt rating category of the Bonds or the other debt obligations
supported by support facilities issued by the issuer of a Support Facility or
(b) have outstanding securities rated by a Rating Agency in the same long-term
debt rating category as the Bonds are rated by that Rating Agency and not have
any outstanding notes or commercial paper rated by such Rating Agency. The
Indexing Agent may change the Component Issuers from time to time in its
discretion, subject to the foregoing requirements. In addition, at the request
of the
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Company and upon delivery to the Trustee of an Opinion of Bond Counsel that such
action will not adversely affect the exclusion of interest on the Bonds from
gross income of the owners thereof for federal income tax purposes, the
Authority, with the consent of the Company, may designate a new method of
setting the Semi-annual Rate Index in the event any of the above- described
methods are determined by the Authority to be unavailable, impracticable or
unrealistic in the market place. Upon the occurrence and during the continuance
of a Company Downgrade Event, the Bond Insurer shall have the right to consent
to any change to the Component Issuers and any change in the method of setting
the Semi-annual Rate Index, which consent shall not be unreasonably withheld.
"Semi-annual Rate Period" shall mean any period during which
the Bonds bear interest at a Semi-annual Rate, which period shall commence on
the effective date of a Change in the Interest Rate Mode to a Semi-annual Rate,
and shall extend through the day immediately preceding the earlier of (a) the
effective date of another Change in the Interest Rate Mode or (b) the Fixed Rate
Conversion Date.
"Standard Auction Period" initially shall mean an Auction
Period of 7 days and after the establishment of a different Standard Auction
Period pursuant to Section 3.04, shall mean such different Standard Auction
Period.
"Stated Maturity," shall mean October 1, 2028; provided, in
any case where the date of maturity of premium of, interest on, or principal of,
the Bonds or the date fixed for redemption of any Bonds shall be on a day other
than a Business Day, then payment of interest, principal and premium, if any,
need not be made on such date but may be made (without additional interest) on
the next succeeding Business Day, with the same force and effect as if made on
the date of maturity or the date fixed for redemption. Notwithstanding anything
in this Indenture to the contrary, in no event shall the final maturity date of
the Bonds extend beyond October 1, 2028, and the length of any Interest Period
or Auction Period, as the case may be, shall be reduced at the discretion of the
Authority to the extent necessary to ensure compliance with the provisions of
this sentence.
"Statutory Corporate Tax Rate" shall mean as of any date of
determination the highest tax rate bracket (expressed in decimals) now or
hereafter applicable in each taxable year on the taxable income of every
corporation as set forth in Section 11 of the Code or any successor section
without regard to any minimum additional tax provision or provisions regarding
changes in rates during a taxable year, which on the date hereof is .35. Any
change in the Statutory Corporate Tax Rate shall be evidenced by a certificate
of the Company.
"Submission Deadline" shall mean 1:00 p.m., New York City
time, on the Business Day preceding any Auction Date or such other time on the
Business Day preceding any Auction Date by which Broker-Dealers are required to
submit Orders to the Auction Agent as specified by the Auction Agent from time
to time.
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"Submitted Bid" shall mean (i) with respect to Auction Rate
Bonds during an Auction Rate Period, Submitted Bid as defined in Section 3.08,
and (ii) with respect to Auction Rate Bonds during an Auction Rate-Inverse Rate
Period, Submitted Bid as defined in Section 3A.03.
"Submitted Hold Order" shall mean (i) with respect to Auction
Rate Bonds during an Auction Rate Period, Submitted Hold Order as defined in
Section 3.08, and (ii) with respect to Auction Rate Bonds during an Auction
Rate-Inverse Rate Period, Submitted Hold Order as defined in Section 3A.03.
"Submitted Order" shall mean (i) with respect to Auction Rate
Bonds during an Auction Rate Period, Submitted Order as defined in Section 3.08,
and (ii) with respect to Auction Rate Bonds during an Auction Rate-Inverse Rate
Period, Submitted Order as defined in Section 3A.03.
"Submitted Sell Order" shall mean (i) with respect to Auction
Rate Bonds during an Auction Rate Period, Submitted Sell Order as defined in
Section 3.08, and (ii) with respect to Auction Rate Bonds during an Auction
Rate-Inverse Rate Period, Submitted Sell Order as defined in Section 3A.03.
"Substitute Commercial Paper Dealers" shall mean J.P. Morgan
Securities Inc. and Merrill Lynch, Pierce, Fenner & Smith Incorporated, or their
respective affiliates or successors, if such person is a commercial paper
dealer, provided that neither such person nor any of its affiliates or
successors shall be a Commercial Paper Dealer.
"Substitute U.S. Government Securities Dealer" shall mean the
dealer or dealers in U.S. Government securities specified by the Authority at
the request of the Company at the time of the Change in the Interest Rate Mode
to an Auction Rate during an Auction Rate Period or an Auction Rate-Inverse Rate
during an Auction Rate-Inverse Rate Period, or their respective affiliates or
successors, if such person is a dealer in U.S. Government securities, provided
that neither such person nor any of its affiliates or successors is a U.S.
Government Securities Dealer.
"Sufficient Clearing Bids" shall mean (i) with respect to
Auction Rate Bonds during an Auction Rate Period, Sufficient Clearing Bids as
defined in Section 3.08, and (ii) with respect to Auction Rate Bonds during an
Auction Rate-Inverse Rate Period, Sufficient Clearing Bids as defined in Section
3A.03.
"Supplemental Indenture" shall mean any other indenture
between the Trustee and the Authority entered into pursuant to and in compliance
with the provisions of Article XIV hereof amending or supplementing the
provisions of this Indenture as originally executed or as theretofore amended or
supplemented.
"Supplemental Participation Agreement" shall mean an agreement
supplementing or amending the Participation Agreement.
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"Support Facility" shall mean each Credit Facility and each
Liquidity Facility in effect at the time of determination.
"Support Facility Issuer" shall mean any bank or banks,
insurance company, or other financial institution or institutions which is the
issuer of any Support Facility.
"Tax Regulatory Agreement" shall mean the Tax Regulatory
Agreement, dated the Closing Date, between the Authority and the Company, and
any and all modifications, alterations, amendments and supplements thereto.
"Terminating Event" shall mean any event or events under the
terms of a Support Facility or any agreement providing for the issuance of such
Support Facility (provided such Support Facility is not a municipal bond
insurance policy) which would cause the termination or expiration of such
Support Facility but would specifically allow for the mandatory tender of Bonds
pursuant to Section 5.08 with a draw on or borrowing or payment under such
Support Facility prior to such termination or expiration.
"Term Period Record Date" shall mean, with respect to each
Interest Payment Date during a Term Rate Period, the fifteenth day of the month
next preceding such Interest Payment Date.
"Term Rate" shall mean with respect to the first day of each
Calculation Period during a Term Rate Period, a rate of interest equal to the
rate of interest per annum established and certified to the Trustee (with a copy
to the Authority, the Registrar and Paying Agent and the Company) by the Market
Agent no later than 12:00 noon (New York City time) on and as of such day as the
minimum rate of interest per annum which, in the opinion of the Market Agent,
would be necessary on and as of such day to remarket such Bonds in a secondary
market transaction at a price equal to the principal amount thereof; provided
that such rate of interest shall not exceed the lesser of 110% of the Term Rate
Index on and as of such date and 15% per annum.
"Term Rate Index" shall mean with respect to the first day of
each Calculation Period during a Term Rate Period, the average of the yield
evaluations at par, determined by the Indexing Agent, of securities (whether or
not actually issued), having a term approximately equal to the Term Rate Period
or which are subject to optional or mandatory tender by the owner thereof at the
end of a term approximately equal to the Term Rate Period, the interest on which
is not included in gross income for federal income tax purposes, of no fewer
than ten Component Issuers selected by the Indexing Agent, computed by the
Indexing Agent on and as of such day. If the Bonds are rated by a Rating Agency
in one of its two highest long-term debt rating categories, each Component
Issuer must have outstanding securities rated by a Rating Agency in one of its
two highest long- term debt rating categories. If the Bonds are rated by a
Rating Agency in a rating category that is lower than its two highest long-term
debt rating categories (and the Bonds are not rated in one of the two highest
such categories by the other Rating Agency), each Component Issuer must have
outstanding securities rated by a Rating Agency in the same long-term debt
rating category as the Bonds are rated by that Rating Agency. The Indexing Agent
may change the
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Component Issuers from time to time in its discretion, subject to the foregoing
requirements. In addition, at the request of the Company and upon delivery to
the Trustee of an Opinion of Bond Counsel that such action will not adversely
affect the exclusion of interest on the Bonds from gross income of the owners
thereof for federal income tax purposes, the Authority, with the consent of the
Company, may designate a new method of setting the Term Rate Index in the event
any of the above-described methods are determined by the Authority to be
unavailable, impracticable or unrealistic in the market place. Upon the
occurrence and during the continuance of a Company Downgrade Event, the Bond
Insurer shall have the right to consent to any change to the Component Issuers
and any change in the method of setting the Term Rate Index, which consent shall
not be unreasonably withheld.
"Term Rate Period" shall mean any period during which the
Bonds bear interest at a Term Rate which period shall commence with the
effective date of the Change in the Interest Rate Mode to a Term Rate and shall
extend through the day immediately preceding the earlier of (a) the effective
date of another Change in the Interest Rate Mode, (b) the Fixed Rate Conversion
Date or (c) the maturity date of the Bonds.
"Treasury Rate" on any date, shall mean (i) the yield,
calculated in accordance with prevailing industry convention, of the rate on the
most recently auctioned direct obligations of the U.S. Government having a
maturity at the time of issuance of six months, as quoted in The Bond Buyer on
such date for the Business Day next preceding such date; or (ii) in the event
that any such rate is not published in The Bond Buyer, then the bond equivalent
yield, calculated in accordance with prevailing industry convention, as
calculated by reference to the arithmetic average of the bid price quotations of
the most recently auctioned direct obligation of the U.S. Government having a
maturity at the time of issuance of six months, based on bid price quotations on
such date obtained by the Auction Agent from a U.S. Government Securities
Dealer. If any U.S. Government Securities Dealer does not quote a rate required
to determine the Treasury Rate, the Treasury Rate shall be determined on the
basis of the quotation or quotations furnished by the remaining U.S. Government
Securities Dealer or Dealers and any Substitute U.S. Government Securities
Dealer or Dealers selected by the Authority at the request of the Company to
provide such rate or rates not being supplied by any U.S. Government Securities
Dealer or U.S. Government Securities Dealers, as the case may be, or, if the
Authority does not select any such Substitute U.S. Government Securities Dealer
or Substitute U.S. Government Securities Dealers, by the remaining U.S.
Government Securities Dealer or U.S. Government Securities Dealers.
"Trustee" shall mean the corporation having trust powers
appointed by the Authority as Trustee hereunder and serving as such hereunder,
and any surviving, resulting or transferee corporation as provided in Section
11.13. References to principal office of the Trustee shall mean the Principal
Corporate Trust Office of the Trustee.
"Trust Estate" shall mean the meaning assigned to such term in
the first paragraph following the recitals herein.
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"U.S. Government" shall mean the federal government of the United
States of America.
"U.S. Government Securities Dealers" shall mean the
Broker-Dealers for the Auction Rate Bonds, or, in lieu of any thereof, their
respective affiliates or successors, provided that any such entity is a U.S.
Government securities dealer.
"Weekly Period Record Date" shall mean, with respect to each
Interest Payment Date during a Weekly Rate Period, the Business Day next
preceding such Interest Payment Date.
"Weekly Rate" shall mean with respect to the first day of each
Calculation Period during a Weekly Rate Period, a rate of interest equal to the
rate of interest per annum established and certified to the Trustee (with a copy
to the Authority, the Registrar and Paying Agent and the Company) by the Market
Agent no later than 12:00 noon (New York City time) on and as of such day as the
minimum rate of interest per annum which, in the opinion of the Market Agent,
would be necessary on and as of such day to remarket Bonds in a secondary market
transaction at a price equal to the principal amount thereof plus accrued
interest thereon; provided that such rate of interest shall not exceed 110% of
the Weekly Rate Index on and as of such date and 15% per annum.
"Weekly Rate Index" shall mean with respect to the first day
of each Calculation Period during a Weekly Rate Period, the average of 30-day
yield evaluations at par, determined by the Indexing Agent, of securities
(whether or not actually issued), the interest on which is not included in gross
income for federal income tax purposes, of no fewer than ten Component Issuers
selected by the Indexing Agent, including issuers of commercial paper, project
notes, bond anticipation notes and tax anticipation notes, computed by the
Indexing Agent on and as of such day. If the Bonds are rated by a Rating Agency
in its highest note or commercial paper rating category or one of its two
highest long-term debt rating categories, each Component Issuer must (a) have
outstanding securities rated by a Rating Agency in its highest note or
commercial paper rating category or (b) not have outstanding notes or commercial
paper rated by a Rating Agency but have outstanding securities rated by a Rating
Agency in one of its two highest long- term debt rating categories. If the Bonds
are rated by a Rating Agency in a rating category that is lower than its highest
note or commercial paper rating category or its two highest long-term debt
rating categories (and the Bonds are not rated in one of such categories by the
other Rating Agency), each Component Issuer must (a) have outstanding securities
rated by a Rating Agency in its note or commercial paper rating category which
is the same or correlative, in the Indexing Agent's judgment, to the note or
commercial paper rating category or the long-term debt rating category of the
Bonds or (b) have outstanding securities rated by a Rating Agency in the same
long-term debt rating category as the Bonds are rated by that Rating Agency and
not have any outstanding notes or commercial paper rated by such Rating Agency.
The Indexing Agent may change the Component Issuers from time to time in its
discretion, subject to the foregoing requirements. In addition, at the request
of the Company and upon delivery to the Trustee of an Opinion of Bond Counsel
that such action will not adversely affect the exclusion of interest on the
Bonds from gross income of the owners thereof for federal income tax purposes,
the Authority, with the consent of the Company, may designate a new method of
setting the
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Weekly Rate Index in the event any of the above-described methods are determined
by the Authority to be unavailable, impracticable or unrealistic in the market
place. Upon the occurrence and during the continuance of a Company Downgrade
Event, the Bond Insurer shall have the right to consent to any change to the
Component Issuers and any change in the method of setting the Weekly Rate Index,
which consent shall not be unreasonably withheld.
"Weekly Rate Period" shall mean any period during which the
Bonds bear interest at a Weekly Rate which period shall commence on the Closing
Date and shall extend through the day immediately preceding the earlier of (a)
the effective date of a Change in the Interest Rate Mode or (b) the Fixed Rate
Conversion Date.
"Winning Bid Rate" shall mean (i) with respect to Auction Rate
Bonds during an Auction Rate Period, Winning Bid Rate as defined in Section
3.08, and (ii) with respect to Auction Rate Bonds during an Auction Rate-Inverse
Rate Period, Winning Bid Rate as defined in Section 3A.03.
SECTION 1.02. Definitions of General Terms. Whenever in this
Indenture any governmental unit including the Authority or any official,
officer, director or department of a governmental unit, is defined or referred
to, such definition or reference shall be deemed to include the governmental
unit or official, officer, board, agency, commission, body or department
succeeding to or in whom or which is vested, the functions, rights, powers,
duties and obligations of such governmental unit, official, officer, director or
department, as the case may be, encompassed by this Indenture.
Unless the context shall clearly indicate otherwise or may
otherwise require, in this Indenture words importing persons include firms,
partnerships, associations, corporations (public and private), public bodies and
natural persons, and also include executors, administrators, trustees, receivers
or other representatives.
Unless the context shall clearly indicate otherwise or may
otherwise require computation on other than an annual basis, in this Indenture
whenever any interest rate or rate of interest is defined or referred to, such
rate shall be a rate per annum.
Unless the context shall clearly indicate otherwise or may
otherwise require, in this Indenture (not including in such term wherever used
in this paragraph any Supplemental Indenture): (i) references to articles,
sections and other subdivisions, whether by number or letter or otherwise, are
to the respective or corresponding articles, sections and subdivisions of this
Indenture, as such articles, sections or subdivisions may be amended from time
to time; (ii) the terms "herein," "hereunder," "hereby," "hereto," "hereof," and
any similar terms, refer to this Indenture and to this Indenture as a whole and
not to any particular article, section or subdivision hereof; and (iii) the word
"heretofore" means before the time of effectiveness of this Indenture; and the
word "hereafter" means after the time of effectiveness of this Indenture.
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Unless the context shall clearly indicate otherwise or may
otherwise require, all references to time shall be to New York City time.
SECTION 1.03. Computations. Unless the facts shall then be
otherwise, all computations required for the purposes of this Indenture shall be
made on the assumption that the principal of and premium and interest on all
Bonds shall be paid as and when the same become due.
SECTION 1.04. Certificates and Opinions. Each certificate or
opinion with respect to compliance with a condition or covenant provided for in
this Indenture shall include: (1) a statement that the person making such
certificate or opinion has read such covenant or condition; (2) a brief
statement as to the nature and scope of the examination or investigation upon
which the statements or opinions contained in such certificate or opinion are
based; (3) a statement that, in the opinion of such person, he or she has made
such examination or investigation as is necessary to enable him or her to
express an informed opinion as to whether or not such covenant or condition has
been complied with; and (4) a statement as to whether or not, in the opinion of
such person, such condition or covenant has been complied with.
Any certificate required by or on behalf of the Authority or
the Company may be based, insofar as it relates to legal, accounting, or
engineering matters, upon an opinion or representation of counsel, accountants,
auditors or engineers, unless the person signing such certificate knows or has
reason to know that such opinion or representation is erroneous.
Any opinion of counsel required by or for the purposes of this
Indenture may be based, insofar as it relates to factual matters or information
in the possession of the Authority or the Company, upon a certificate or opinion
of, or representation by, the proper officer or officers of the Authority or the
Company unless such counsel knows or has reason to know that such certificate or
opinion or representation is erroneous. Any such certificate or opinion may be,
but need not be, combined in a single instrument with any other certificate or
opinion.
SECTION 1.05. Evidence of Action by Authority. Except as
otherwise specifically provided in this Indenture, any request, direction,
command, order, notice, certificate or other instrument of, by or from the
Authority shall be effective and binding upon it for the purposes of this
Indenture if the same shall be signed by an Authorized Officer or such other
person or persons as may be designated and authorized by an Authorized Officer
to sign for or on behalf of the Authority. Any such instrument and supporting
opinions or representations, if any, may, but need not be combined in a single
instrument with any other instrument, opinion or representation.
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ARTICLE II
AUTHORIZATION OF BONDS
SECTION 2.01. Limitation on Issuance of Bonds. No Bonds may be
issued under the provisions of this Indenture except in accordance with the
provisions of this Article.
SECTION 2.02. Authorization of Bonds. 1. There is hereby
created and established under this Indenture one issue of revenue bonds of the
Authority, which shall be issued and designated as "Pollution Control Refunding
Revenue Bonds (KeySpan Generation LLC Projects), 1999 Series A" in the principal
amount of $41,125,000. In order to distinguish between Bonds which are subject
to different interest rate determination methods and other features and to
distinguish the portion of the Bonds to be remarketed by any particular Market
Agent, the Bonds may be designated and redesignated from time to time by the
Authority in such a way as to identify one or more subseries of the Bonds. Such
subseries may be designated as subseries A-1 or subseries A-2, subseries A-3 or
may be redesignated as subseries A-1-1, A-2-1, A-3-1, as the case may be, and so
forth. Each Bond shall bear upon the face thereof such designation or
redesignation, if any. In the event any series of Bonds is designated or
redesignated from time to time as one or more subseries, all references to a
series of the Bonds in this Indenture shall refer to each such subseries unless
the context otherwise requires.
2. The Bonds shall be secured by the assignments, pledges and
charges made or created herein for the payment and security of the Bonds and by
a lien on the Participation Agreement (exclusive of the rights therein reserved
to the Authority), the proceeds of the Note, the Tax Regulatory Agreement and
the other monies, rights, properties and securities from time to time held
hereunder, subject only to the provisions of this Indenture permitting the
application of the proceeds of the Bonds, the Note and such other monies,
rights, properties and securities for the purposes and on the terms and
conditions hereof, over and ahead of any claims, encumbrances or obligations of
any nature hereafter arising or incurred. The foregoing lien, pledges, charges
and assignments shall be valid and binding from the time of the effectiveness of
this Indenture, as set forth in Section 17.11, and the Note Payments made under
the Note and the Participation Agreement shall be immediately subject thereto
upon receipt by the Trustee.
3. The Bonds are limited obligations of the Authority payable
solely from payments to be made by the Company pursuant to the Note and the
Participation Agreement and the other monies, rights and properties pledged
hereunder including the proceeds of the Support Facility, if any, obtained with
respect thereto and secured by a pledge from the Authority to the Trustee of the
Participation Agreement and the Note. The Bonds shall not be a debt of the State
of New York, and the State of New York shall not be liable thereon.
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4. The covenants and agreements herein set forth to be performed by
the Authority shall be for the benefit, security and protection of any
Holder of the Bonds and the Bond Insurer.
5. Neither the Trustee, the Bond Insurer nor any Holder of the
Bonds shall be required to see that the monies derived from such Bonds are
applied to the purpose or purposes for which such Bonds are issued.
6. The Bonds shall be issued under this Indenture for the
purpose of (i) paying certain expenses incurred in connection with the issuance
of the Bonds and (ii) prepaying the KeySpan Notes.
7. The Bonds bearing a Commercial Paper Rate, a Daily Rate, a
Weekly Rate or a Monthly Rate shall be fully registered Bonds in the
denomination of $100,000 or any integral multiple thereof. The Bonds bearing an
Auction Rate during an Auction Rate Period or an Auction Rate and an Inverse
Rate during an Auction Rate-Inverse Rate Period shall be fully registered Bonds
in the denomination of $25,000 or any integral multiple thereof. The Bonds
bearing a Semi-annual Rate, a Term Rate or a Fixed Rate shall be fully
registered Bonds in the denomination of $5,000 or any integral multiple thereof.
8. The Bonds shall be numbered consecutively from AR-1 upwards
as issued, or as otherwise provided by the Registrar and Paying Agent. If the
Bonds are redesignated to identify one or more subseries, the Bonds shall be
numbered in accordance with their subseries designation, i.e. A-1-R-1, A-2-R-1
or A-3-R-1, as the case may be. The Bonds shall mature on the Stated Maturity.
9. The Bonds shall be initially issued in fully registered
form, without coupons, and initially dated their date of first authentication
and delivery. The Bonds shall initially be issued in the form of one global bond
registered in the name of the Securities Depository or its nominee and ownership
thereof shall be maintained in book entry form by the Securities Depository for
the account of the Agent Members thereof.
10. Upon any Change in the Interest Rate Mode to an Auction
Rate for an Auction Rate Period or an Auction Rate and an Inverse Rate for an
Auction Rate-Inverse Rate Period, there shall be Outstanding an aggregate
principal amount of not less than (i) $20,000,000 for Auction Rate Bonds during
an Auction Rate Period, and (ii) at all times an equal aggregate principal
amount of Auction Rate Bonds and Inverse Rate Bonds and $20,000,000 for Auction
Rate Bonds and Inverse Rate Bonds, respectively, during an Auction Rate-Inverse
Rate Period and in the applicable denominations set forth in Section 2.02.7.
SECTION 2.03. Global Form; Securities Depository. 1. Except as
otherwise provided in this Section 2.03, the Auction Rate Bonds during any
Auction Rate Period and the Auction Rate-Inverse Rate Bonds during any
Auction Rate-Inverse Rate Period in the form of one
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separate global bond for such series or subseries, as the case may be, shall be
registered in the name of the Securities Depository or its nominee and ownership
thereof shall be maintained in book entry form by the Securities Depository for
the account of the Agent Members thereof. The Authority may elect to issue Bonds
bearing a Fixed Rate or an Adjustable Rate other than an Auction Rate (during
any Auction Rate Period) or an Auction Rate and a related Inverse Rate (during
any Auction Rate- Inverse Rate Period), in the form of one global bond of such
series or subseries, as the case may be, registered in the name of the
Securities Depository or its nominee and ownership thereof shall be maintained
in book entry form by the Securities Depository for the account of the Agent
Members thereof.
Except as provided in subsections (3) and (4) of this Section
2.03, the Auction Rate Bonds during any Auction Rate Period and the Auction
Rate-Inverse Rate Bonds during any Auction Rate-Inverse Rate Period may be
transferred, in whole but not in part, only to the Securities Depository or a
nominee of the Securities Depository, or to a successor Securities Depository
selected or approved by the Authority, with the consent of the Company, the
Trustee, the Auction Agent and the Market Agent, or to a nominee of such
successor Securities Depository. Each global certificate for the Auction Rate
Bonds and the Inverse Rate Bonds shall bear a legend substantially to the
following effect: "Except as otherwise provided in Section 2.03 of the
Indenture, this global bond may be transferred, in whole but not in part, only
to the Securities Depository as defined in the Indenture or a nominee of the
Securities Depository or to a successor Securities Depository or to a nominee of
a successor Securities Depository."
2. The Authority, the Company, the Trustee, the Registrar and
Paying Agent, the Auction Agent, any Support Facility Issuer and the Market
Agent shall have no responsibility or obligation with respect to:
(a) the accuracy of the records of the Securities Depository or any
Agent Member with respect to any beneficial ownership interest in the
Bonds;
(b) the delivery to any Agent Member, beneficial owner of the
Bonds or other person, other than the Securities Depository or its
nominee as registered owner, of any notice with respect to the Bonds;
(c) the payment to any Agent Member, beneficial owner of the
Bonds or other person, other than the Securities Depository or its
nominee as registered owner, of any amount with respect to the
principal or premium, if any, or interest on the Bonds;
(d) any consent given by the Securities Depository or other action
taken by the Securities Depository as registered owner; or
(e) the selection by the Securities Depository or any Agent
Members of any beneficial owners to receive payment in the event of a
partial redemption of Auction Rate Bonds during
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an Auction Rate Period or Auction Rate-Inverse Rate Bonds during an
Auction Rate-Inverse Rate Period, except for the Trustee's obligations
under Section 5.10.
So long as the certificates for the Bonds of this series or any subseries issued
under the Indenture are not issued pursuant to subsection (4) of this Section
2.03, the Authority, the Company, the Trustee, the Auction Agent, the Market
Agent, the Bond Insurer and the Registrar and Paying Agent may treat the
Securities Depository as, and deem the Securities Depository to be, the absolute
owner of such series or subseries of Bonds for all purposes whatsoever,
including without limitation:
(a) the payment of principal and premium, if any, and interest on such
series or subseries of the Bonds;
(b) giving notices of redemption and other matters with respect to
such series or subseries of the Bonds;
(c) registering transfers with respect to such series or subseries of
the Bonds; and
(d) obtaining consents under the Indenture.
Payment by the Trustee of principal or redemption price, if
any, of and premium, if any, and interest on such Bonds to or upon the order of
the Securities Depository or its nominee during any period when it is the
registered owner of such Bonds shall be valid and effective to satisfy and
discharge fully the Authority's obligation with respect to the amounts so paid.
3. (a) The Authority may discontinue the use of a Securities
Depository for the Auction Rate Bonds during an Auction Rate Period or
the Auction Rate-Inverse Rate Bonds during any Auction Rate-Inverse
Rate Period at the time of a Change in the Interest Rate Mode or on or
after the Fixed Rate Conversion Date.
(b) Registered ownership of the Bonds may be transferred on
the registration books of the Authority maintained by the Registrar and
Paying Agent and the Bonds may be delivered in physical form to the
following: (i) any successor Securities Depository or its nominee; or
(ii) any person, upon (A) the resignation of the Securities Depository
or (B) the termination by the Authority of the use of the Securities
Depository from its functions as depository as set forth in this
section, or (C) upon any Change in the Interest Rate Mode to any
Adjustable Rate other than an Auction Rate during an Auction Rate
Period or an Auction Rate and an Inverse Rate during an Auction
Rate-Inverse Rate Period or on the Fixed Rate Conversion Date.
(c) Upon any Change in the Interest Rate Mode to an Auction
Rate during an Auction Rate Period or an Auction Rate and an Inverse
Rate during an Auction Rate-Inverse Rate Period, the Registrar and
Paying Agent shall register the Auction Rate Bonds during an Auction
Rate Period or the Auction Rate-Inverse Rate Bonds during an Auction
Rate-Inverse
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Rate Period, as the case may be, in the name of the Securities
Depository or its nominee and on the effective date of such change
provide the Company with a list of the Existing Holders of the Auction
Rate Bonds during an Auction Rate Period or during an Auction
Rate-Inverse Rate Period, as the case may be.
4. If at any time the Securities Depository notifies the
Authority and the Company that it is unwilling or unable to continue as
Securities Depository with respect to the Bonds or if at any time the Securities
Depository shall no longer be registered or in good standing under the
Securities Exchange Act or other applicable statute or regulation and a
successor Securities Depository is not appointed by the Authority with the
consent of the Company, the Trustee, the Auction Agent and the Market Agent,
within 90 days after the Authority and the Company receive notice or become
aware of such condition, as the case may be, this Section shall no longer be
applicable and the Authority shall execute and the Registrar and Paying Agent
shall authenticate and deliver certificates representing the Bonds of such
series or subseries as provided below. In addition, the Authority may determine
at any time, at the request of the Market Agent, that the Bonds shall no longer
be represented by global bonds and that the provisions of subsections (1) and
(2) above shall no longer apply to such series or subseries of Bonds. In any
such event the Authority shall execute and the Registrar and Paying Agent shall
authenticate and deliver certificates representing the Bonds of such series or
subseries as provided below. Certificates for the Bonds of any series or
subseries issued in exchange for a global bond pursuant to this subsection shall
be registered in such names in authorized denominations as the Securities
Depository, pursuant to instructions from the Agent Members or otherwise, shall
instruct the Authority and the Registrar and Paying Agent. The Registrar and
Paying Agent shall deliver such certificates representing the Bonds of such
series or subseries to the persons in whose names such Bonds are so registered
on the Business Day immediately preceding the first day of an Auction Period
(with respect to Auction Rate Bonds during any Auction Rate Period), Interest
Period (with respect to Auction Rate-Inverse Rate Bonds during an Auction
Rate-Inverse Rate Period), the effective date of a Change in the Interest Rate
Mode (with respect to any other Change in the Interest Rate Mode), or on the
Fixed Rate Conversion Date (with respect to a conversion to a Fixed Rate), as
the case may be.
5. The Authority, the Trustee and the Registrar and Paying
Agent are hereby authorized to enter into any arrangements determined necessary
or desirable with any Securities Depository in order to effectuate this Section
and both of them shall act in accordance with this Indenture and any such
agreement. Without limiting the generality of the foregoing, any such
arrangements may alter the manner of effecting delivery of Bonds and the
transfer of funds for the payment of Bonds to the Securities Depository.
SECTION 2.04. Limitations on Transfer. (a) So long as the
ownership of the Auction Rate Bonds during any Auction Rate-Inverse Rate Period
is maintained in book-entry form by the Securities Depository, an Existing
Holder may sell, transfer or otherwise dispose of Auction Rate Bonds during an
Auction Rate-Inverse Rate Period only pursuant to a Bid or Sell Order placed in
an Auction or to or through a Broker-Dealer or to a person that has signed and
delivered a Purchaser's Letter to the Auction Agent, provided that in the case
of all transfers other than pursuant
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to Auctions such Existing Holder, its Broker-Dealer or its Agent Member advises
the Auction Agent of such transfer.
(b) So long as the ownership of the Auction Rate Bonds during
an Auction Rate Period is maintained in book-entry form by the Securities
Depository, an Existing Holder may sell, transfer or otherwise dispose of
Auction Rate Bonds only pursuant to a Bid or Sell Order placed in an Auction or
to a Broker-Dealer, provided, however, that (a) sale, transfer or other
disposition of Auction Rate Bonds from a customer of a Broker-Dealer who is
listed on the records of that Broker- Dealer as the holder of such Auction Rate
Bonds to that Broker-Dealer or another customer of that Broker-Dealer shall not
be deemed to be a sale, transfer or other disposition for purposes of this
Section 2.04 if such Broker-Dealer remains the Existing Holder of the Auction
Rate Bonds so sold, transferred or disposed of immediately after such sale,
transfer or disposition and (b) in the case of all transfers other than pursuant
to Auctions such Broker-Dealer to whom such transfer is made shall advise the
Auction Agent of such transfer.
SECTION 2.05. Application of Bond Proceeds. The proceeds of
sale of the Bonds shall be deposited with the Trustee for deposit in the Project
Fund to be paid out in accordance with Section 8.01.
SECTION 2.06. Delivery of the Bonds. The Bonds shall be
executed by the Authority substantially in the form prescribed by Section 16.01
and in the manner herein set forth and shall be deposited with the Registrar and
Paying Agent for authentication, but before the Bonds shall initially be
delivered by the Trustee, there shall be filed with the Trustee the following:
(a) an order executed by an Authorized Officer directing the
authentication and delivery of the Bonds to or upon the order of the
Securities Depository or its nominee, upon payment to the Trustee of the
purchase price therein set forth;
(b) two fully executed counterparts of this Indenture;
(c) two fully executed counterparts of the Participation Agreement;
(d) two fully executed counterparts of the Market Agent Agreement;
(e) the fully executed initial Credit Facility;
(f) two fully executed counterparts of the Bond Purchase Trust
Agreement;
(g) the fully executed Note;
(h) two fully executed counterparts of the Tax Regulatory Agreement;
(i) two fully executed counterparts of the Auction Agency Agreement;
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(j) opinion of Counsel to the Company, addressed to the Authority, the
Bond Insurer and the Trustee, substantially to the effect, and dated as,
required by Section 8(d)(7)(iii) of the Bond Purchase Agreement;
(k) opinion of counsel to the Bond Insurer, substantially to the
effect, addressed to, and dated as required by Section 8(d)(7)(vi) of
the Bond Purchase Agreement;
(l) opinion of Bond Counsel (i) as to the validity of the
Bonds, (ii) as to the exclusion of interest on the Bonds for federal
and New York State income tax purposes and (iii) that all conditions
precedent to the issuance of the Bonds have been met.
When the documents mentioned in clauses (a) to (l), inclusive,
of this Section shall have been filed with the Trustee, and when the Bonds shall
have been executed and authenticated as required by this Indenture, the Trustee
shall deliver the Bonds to the Securities Depository, but only upon payment to
the Trustee of the purchase price of the Bonds specified in said order.
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ARTICLE III
INTEREST ON BONDS
SECTION 3.01. Interest on Bonds-General. 1. While the Bonds
bear interest at a Commercial Paper Rate, a Daily Rate, a Weekly Rate, a Monthly
Rate or a Semi-annual Rate, interest accrued on such Bonds shall be computed on
the basis of a 365 or 366-day year, as applicable, for the number of days
actually elapsed. While the Bonds bear interest at a Term Rate or a Fixed Rate,
interest accrued on such Bonds shall be computed on the basis of a 360-day year,
consisting of twelve (12) thirty (30) day months. While the Bonds bear interest
at an Auction Rate during an Auction Rate Period, interest accrued on such Bonds
shall be computed on the basis of a 360-day year for the number of days actually
elapsed. Interest on the Auction Rate-Inverse Rate Bonds during any Auction
Rate-Inverse Rate Period shall be computed in accordance with Section 3A.07. The
Bonds as initially issued shall bear interest from the date of issuance thereof
payable on each Interest Payment Date. The Bonds issued upon transfers or
exchanges of Bonds shall bear interest from the Interest Payment Date next
preceding their date of authentication, unless the date of authentication is an
Interest Payment Date in which case such Bonds shall bear interest from such
date, or unless the date of authentication is after the Record Date next
preceding the next succeeding Interest Payment Date, in which case such Bonds
shall bear interest from such next succeeding Interest Payment Date.
2. The Bonds shall initially bear interest at an Auction Rate
during an Auction Rate Period. From and after any Change in the Interest Rate
Mode pursuant to Section 4.01, the Bonds of any series or subseries shall bear
interest determined in accordance with the provisions of this Indenture
pertaining to the new Adjustable Rate. The Bonds shall bear interest for each
Calculation Period, Auction Period or Interest Period, as the case may be, at
the rate of interest per annum for such Calculation Period, Auction Period or
Interest Period established in accordance with this Indenture. From and after a
Fixed Rate Conversion Date, the affected Bonds shall bear interest at the Fixed
Rate until maturity. Interest shall be payable on each Interest Payment Date by
check mailed to the registered owner at his or her address as it appears on the
registration books kept by the Registrar and Paying Agent pursuant to the
Indenture at the close of business on the applicable Record Date; provided, that
(i) while the Securities Depository is the registered owner of any Bonds, all
payments of principal of, premium, if any, and interest on such Bonds shall be
paid to the Securities Depository or its nominee by wire transfer, (ii) prior to
and including the Fixed Rate Conversion Date, interest on the Bonds shall be
payable to any registered owner of at least one million dollars ($1,000,000) in
aggregate principal amount of Bonds by wire transfer, upon written notice
received by the Registrar and Paying Agent at least five days prior to the
applicable Record Date, from such registered owner containing the wire transfer
address (which shall be in the continental United States) to which such
registered owner wishes to have such wire directed and (iii) during a Commercial
Paper Rate Period, interest shall be payable on the Bonds only upon presentation
and surrender thereof to the Registrar and Paying Agent upon purchase thereof
pursuant to Section 5.02 and if such presentation and surrender is made by 2:00
p.m. (New York City time)
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such payment shall be by wire transfer. If and to the extent that there shall be
a default in the payment of the interest due on any Interest Payment Date, such
interest shall cease to be payable to the person in whose name each Bond of such
series was registered on such applicable Record Date and shall be payable, when
and if paid to the person in whose name each Bond is registered at the close of
business on the record date fixed therefor by the Trustee, which shall be the
fifth Business Day next preceding the date of the proposed payment. Except as
provided above, payment of the principal of and premium, if any, on all Bonds
shall be made upon the presentation and surrender of such Bonds at the principal
office of the Registrar and Paying Agent as the same shall become due and
payable. The principal of and premium, if any, and interest on the Bonds shall
be payable in lawful money of the United States of America. Each holder of
Auction Rate Bonds during an Auction Rate-Inverse Rate Period, by such holder's
purchase of Auction Rate Bonds during an Auction Rate-Inverse Rate Period
appoints the Registrar and Paying Agent as its agent in connection with the
payment by such holder of its share, if any, of the amounts payable to the
Auction Agent and the Broker-Dealers pursuant to subsections (c) and (d) of
Section 3A.05.
3. Not less than one Business Day prior to each Computation
Date and two Business Days prior to the Fixed Rate Conversion Date, the Indexing
Agent shall establish and provide to the applicable Market Agent the related
rate index as set forth in the definition of such rate index in Section 1.01;
provided that, for each Calculation Period during a Daily Rate Period, the
Indexing Agent shall establish and provide the related rate index to the
applicable Market Agent on each Determination Date; and provided further that,
for each Calculation Period during a Monthly Rate Period, the Indexing Agent
shall establish and provide the related rate index to the applicable Market
Agent not less than two Business Days prior to each Computation Date.
Notwithstanding the foregoing, in the event that the Market Agent, in its sole
judgment, shall determine on a Determination Date that any Weekly Rate or any
Commercial Paper Rate Index so established is sufficiently non-representative of
current market conditions that the Bonds may not be remarketed at par if such
rate is set at a rate not greater than 110% of the applicable rate index, the
Market Agent may establish a new rate index on a Determination Date in
accordance with the procedures and standards set forth in this paragraph and for
purposes of such rate index so established, all references to Indexing Agent in
this Indenture shall be deemed to refer to the Market Agent. On any date when
any Weekly Rate or any Commercial Paper Rate Index is established by the Market
Agent pursuant to this paragraph, such rate index shall have the respective
meaning set forth in Section 1.01 (except as otherwise provided in the preceding
sentence); provided that for any Commercial Paper Rate Index, the Market Agent
shall select securities (whether or not actually issued) having a term
approximately equal to the applicable Commercial Paper Rate Period or which are
subject to optional or mandatory tender by the owner thereof at the end of a
term approximately equal to (or as close thereto as is practicably available)
the applicable Commercial Paper Rate Period. Upon the occurrence and during the
continuance of a Company Downgrade Event, the Bond Insurer shall have the right
to consent to any new rate index proposed by the Market Agent pursuant to this
paragraph, which consent shall not be unreasonably withheld.
4. By 12:00 noon (New York City time) on each Determination Date
or by 3:00 p.m. (New York City time) on each Auction Date, as the case
may be, the applicable Market Agent
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or the Auction Agent, as the case may be, shall determine in accordance with the
terms hereof and make available to the Authority, the Trustee, the Registrar and
Paying Agent, any Support Facility Issuer, the Company, any Broker-Dealer or any
registered owner of a Bond the interest rate or rates determined on such
Determination Date or Auction Date.
5. If for any reason on any Determination Date (A) any rate of
interest or a Calculation Period and related Commercial Paper Rate is not
determined by the applicable Market Agent, (B) no Market Agent is serving as
such hereunder or (C) the rate so determined is held to be invalid or
unenforceable by a final judgment of a court of competent jurisdiction, (i)
during any Daily Rate Period, the interest rate for the next succeeding
Calculation Period shall be the last interest rate in effect, or, if a Daily
Rate is not determined by the Market Agent hereunder for five or more
consecutive Business Days on the next and each succeeding Determination Date,
the Daily Rate shall be a rate per annum equal to 80% of the latest 30-day
dealer taxable commercial paper rate published by the Federal Reserve Bank of
New York on or immediately before such Determination Date, (ii) during any
Weekly Rate Period, the interest rate for the next succeeding Calculation Period
shall be the last interest rate in effect, or, if a Weekly Rate is not
determined by the Market Agent for two or more consecutive Calculation Periods,
the Weekly Rate shall be equal to 85% of the latest 30-day dealer taxable
commercial paper rate published by the Federal Reserve Bank of New York on or
before the day next preceding such Determination Date, (iii) during any Monthly
Rate, Semi-annual Rate or Term Rate Period, the interest rate per annum for the
next succeeding Calculation Period shall be equal to 85% of the rate listed in
the table most recently circulated by the United States Treasury Department
known as "Table [applicable dates shown on the most recent Table], Maximum
Interest Rate Payable on United States Treasury Certificates of Indebtedness,
Notes and Bonds-State and Local Government Series Subscribed for During Period
[applicable dates shown on the most recent Table]" or any substantially
equivalent table circulated by the United States Treasury Department for the
maturity most closely approximating the Calculation Period, and (iv) during any
Commercial Paper Rate Period, the next succeeding Calculation Period shall be a
Calculation Period which shall consist of the period from and including the
prior Interest Payment Date to but excluding the first Business Day of the
following calendar month and the Commercial Paper Rate shall be equal to 85% of
the interest rate applicable to 90-day United States Treasury Bills determined
on the basis of the average per annum discount rate at which such 90-day
Treasury Bills shall have been sold at the most recent Treasury auction within
the 30 days next preceding such Calculation Period, or if there shall have been
no such auction within the 30 days next preceding such Calculation Period, the
Commercial Paper Rate shall be equal to the rate of interest borne by such Bond
during the next preceding Calculation Period for such Bond. The rate of interest
or Calculation Period and related Commercial Paper Rate shall be established
pursuant to this subsection 5 until the Market Agent again determines the rates
of interest or Calculation Periods and related Commercial Paper Rates in
accordance with this Indenture. The Trustee shall, upon the direction of the
Company, select any person otherwise meeting the qualifications of Section 11.14
to obtain, calculate and prepare any of the information required by this
subsection 5.
6. The determination of any rate of interest by the Market Agent
in accordance with this Indenture or by the Auction Agent in
accordance with the Auction Procedures applicable
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to Auction Rate Bonds during an Auction Rate Period and Auction Rate-Inverse
Rate Bonds during an Auction Rate-Inverse Rate Period, as the case may be, or
the establishment of Calculation Periods, Auction Periods or Interest Periods by
the Market Agent as provided in this Indenture shall be conclusive and binding
upon the Authority, the Company, the Trustee, the Registrar and Paying Agent,
the Market Agent, the Auction Agent, any issuer of a Support Facility, all
Broker-Dealers and the registered or beneficial owners of the Bonds. Failure of
the Market Agent, the Trustee, the Registrar and Paying Agent, the Auction Agent
or the Securities Depository or any Securities Depository participant to give
any of the notices described in this Indenture, or any defect therein, shall not
affect the interest rate to be borne by any of the Bonds nor the applicable
Calculation Period, Auction Period or Interest Period nor in any way change the
rights of the registered owners of the Bonds to tender their Bonds for purchase
or to have them redeemed in accordance with this Indenture.
7. No transfer or exchange of Bonds shall be required to be
made by the Registrar and Paying Agent after a Record Date until the next
succeeding Interest Payment Date.
8. Except as otherwise provided in this subsection 8, the
Trustee shall calculate and notify the Registrar and Paying Agent of the amount
of interest due and payable on each Interest Payment Date or date on which a
Bond is subject to purchase by 10:00 a.m. on the Business Day next preceding
such Interest Payment Date or date set for purchase, as the case may be. In
preparing such calculation the Trustee may rely on calculations or other
services provided by the Auction Agent, the Market Agent, the Company or any
person or persons selected by the Trustee in its discretion. During a Commercial
Paper Rate Period, the Market Agent shall notify the Trustee, the Registrar and
Paying Agent and the Company of the amount of interest due and payable on each
Interest Payment Date by 10:00 a.m. on the Business Day next preceding such
Interest Payment Date. During an Auction Rate Period, the Auction Agent shall
notify the Trustee at least seven days prior to each Interest Payment Date of
the Auction Rate and the aggregate amount of interest payable on such Interest
Payment Date.
9. Anything herein to the contrary notwithstanding, in no
event shall the interest rate borne by any Bond exceed the lesser of (i) the
maximum rate allowable by applicable law or (ii) the maximum rate of interest
provided for by any Liquidity Facility in effect at any time.
SECTION 3.02. Commercial Paper Rate. 1. During any Commercial
Paper Rate Period, at or prior to 12:00 noon (New York City time) on each
Determination Date, the Market Agent shall establish Calculation Periods and
related Commercial Paper Rates. In determining Calculation Periods, the Market
Agent shall take the following factors into account: (i) existing short-term
taxable and tax-exempt market rates and indices of such short-term rates, (ii)
the existing market supply and demand for short-term tax-exempt securities,
(iii) existing yield curves for short- term and long-term tax-exempt securities
or obligations having a credit rating that is comparable to the Bonds, (iv)
general economic conditions, (v) economic and financial factors present in the
securities industry that may affect or that may be relevant to the Bonds and
(vi) any information available to the Market Agent pertaining to the Company
regarding any events or anticipated events
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which could have a direct impact on the marketability of or interest rates on
the Bonds. The Market Agent shall select the Calculation Periods and the
applicable Commercial Paper Rates that, together with all other Calculation
Periods and related Commercial Paper Rates, in the sole judgment of the Market
Agent, will result in the lowest overall borrowing cost on the Bonds or are
otherwise in the best financial interests of the Company, as determined in
consultation with the Company. Any Calculation Period established hereunder may
not extend beyond the Fixed Rate Conversion Date, the expiration date of the
Support Facility, if any, or the day prior to the maturity date of the Bonds. To
the extent a Liquidity Facility provides for the payment of accrued interest on
the Bonds for a term less than the established Calculation Period, such
Calculation Period will not extend beyond the coverage provided by the Liquidity
Facility.
2. The Authority, at the request of the Company, may place
such limitations upon the establishment of Calculation Periods pursuant to
subsection 1 hereof as may be set forth in a written direction from the
Authority, which direction must be received by the Trustee and the Market Agent
prior to 10:00 a.m. (New York City time) on the day prior to any Determination
Date to be effective on such date, but only if the Trustee receives an Opinion
of Bond Counsel to the effect that such action is authorized by this Indenture,
is permitted under the Act and will not have an adverse effect on the exclusion
of interest on the Bonds from gross income for federal income tax purposes.
SECTION 3.03. Auction Rate Period - Auction Rate: Auction
Period - General.1. The Bonds shall be issued initially as Auction Rate Bonds
during an Auction Rate Period. During any Auction Rate Period, the Bonds shall
bear interest at the Auction Rate determined as set forth in this Section 3.03
and through implementation of the Auction Procedures. The Auction Rate for the
initial Auction Period shall be 3.95% per annum. The initial Auction Period
shall commence from and include the date of original issuance of the Bonds and
shall expire on and include January 13, 2000. The initial Auction Date will be
on January 13, 2000. After the initial Auction Period, each Auction Period shall
be a Standard Auction Period. The Auction Rate for any initial Auction Period
immediately after any Change in the Interest Rate Mode to an Auction Rate for an
Auction Rate Period, shall be the rate of interest per annum determined and
certified to the Trustee (with a copy to the Authority, the Registrar and Paying
Agent, the Bond Insurer and the Company) by the Market Agent on a date not later
than the effective date of such Change in the Interest Rate Mode as the minimum
rate of interest which, in the opinion of the Market Agent, would be necessary
as of such date to market Auction Rate Bonds in a secondary market transaction
at a price equal to the principal amount thereof; provided that such interest
rate shall not exceed the lesser of 110% of the sum of the Commercial Paper
Index and .50% per annum. For any other Auction Period, the Auction Rate shall
be the rate of interest per annum that results from implementation of the
Auction Procedures. If on any Auction Date the Auction Agent shall fail to take
any action necessary to determine, or take any action which effectively prevents
the determination of, a rate of interest pursuant to the Auction Procedures, the
Auction Rate for the next succeeding Auction Period shall equal the No Auction
Rate on and as of such Auction Date. If a Payment Default shall have occurred,
the rate of interest for (1) the Auction Period commencing on or immediately
prior to the date on which such Payment Default occurs shall equal the Maximum
Auction Rate, and (2) for each
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Auction Period commencing thereafter to and including the Auction Period, if
any, during which, or commencing less than two Business Days after, all Payment
Defaults are cured, shall equal the Maximum Auction Rate.
2. Auction Periods may be established pursuant to Section 3.04
at any time unless a Payment Default has occurred and has not been cured. Each
Auction Period shall be a Standard Auction Period unless a different Auction
Period is established pursuant to Section 3.04 and each Auction Period which
immediately succeeds a non-Standard Auction Period shall be a Standard Auction
Period unless a different Auction Period is established pursuant to Section
3.04.
SECTION 3.04. Auction Rate Period - Auction Rate Bonds: Change
of Auction Period by Authority. 1. During an Auction Rate Period the Authority,
at the request of the Company, may change the length of a single Auction Period
or the Standard Auction Period by means of a written notice delivered at least
10 days prior to the Auction Date for such Auction Period to the Trustee, the
Market Agent, the Auction Agent, the Company and the Securities Depository in
substantially the form attached hereto as, or containing substantially the
information contained in, Exhibit E. If such notice specifies a change in the
length of the Standard Auction Period, such notice shall be effective only if it
is accompanied by the written consent of the Market Agent to such change. The
length of an Auction Period or the Standard Auction Period may not be changed
pursuant to this Section 3.04 unless Sufficient Clearing Bids existed at both
the Auction immediately preceding the date the notice of such change was given
and the Auction immediately preceding such changed Auction Period.
2. The change in length of an Auction Period or the Standard
Auction Period shall take effect only if (A) the Trustee, the Bond Insurer and
the Auction Agent receive, by 11:00 a.m. (New York City time) on the Business
Day immediately preceding the Auction Date for such Auction Period, a
certificate from the Company, on behalf of the Authority, by telecopy or similar
means in substantially the form attached hereto as, or containing substantially
the information contained in, Exhibit G authorizing the change in the Auction
Period or the Standard Auction Period, which shall be specified in such
certificate, and confirming that Bond Counsel expects to be able to give the
Opinion of Bond Counsel on the first day of such Auction Period referred to in
(D) below, (B) the Trustee shall not have delivered to the Auction Agent by
12:00 noon (New York City time) on the Auction Date for such Auction Period
notice that a Failure to Deposit has occurred, (C) Sufficient Clearing Bids
exist at the Auction on the Auction Date for such Auction Period, and (D) the
Trustee, the Bond Insurer and the Auction Agent receive by 9:30 a.m. (New York
City time) on the first day of such Auction Period, an opinion of Bond Counsel
to the effect that the change in the Auction Period or the Standard Auction
Period is authorized by this Indenture, is permitted under the Act and will not
have an adverse effect on the exclusion of interest on such Bonds from gross
income for federal income tax purposes. If the condition referred to in (A)
above is not met, the Auction Rate for the next succeeding Auction Period shall
be determined pursuant to the Auction Procedures and the next succeeding Auction
Period shall be a Standard Auction Period. If any of the conditions referred to
in (B), (C) or (D) above is not met, the Auction Rate for the next succeeding
Auction Period shall equal the Maximum Auction Rate.
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SECTION 3.05. Auction Rate Period - Auction Rate Bonds: Change
of Auction Date by Market Agent. During an Auction Rate Period the Market Agent,
with the written consent of the Company, may change, in order to conform with
then-current market practice with respect to similar securities or to
accommodate economic and financial factors that may affect or be relevant to the
day of the week constituting an Auction Date, the Auction Date for all future
Auction Periods to a different day, so long as the first such Auction Date will
be a Business Day in the calendar week in which the next succeeding Auction Date
is then scheduled to occur. If a change in an Auction Date is undertaken in
conjunction with a change in an Auction Period and the conditions for the
establishment of such change in Auction Period are not met, the Auction Date may
be, and the next succeeding Auction Period may be adjusted to end on, a Business
Day in the calendar week in which such Auction Date was scheduled to occur and
such Auction Period was scheduled to end to accommodate the change in the
Auction Date. The Market Agent shall deliver a written notice of its
determination to change an Auction Date at least 10 days prior to the Auction
Date immediately preceding such Auction Date to the Authority, the Trustee, the
Auction Agent, the Company, the Bond Insurer and the Securities Depository which
shall state (i) the determination of the Market Agent to change the Auction
Date, (ii) the new Auction Date and (iii) the date on which such Auction Date
shall be changed. If as a result of any proposed change in the Auction Date any
Auction Period would be less than 28 days in duration, such notice shall be
effective only if it is accompanied by a written statement of the Auction Agent,
the Registrar and Paying Agent, the Trustee, the Market Agent and the Securities
Depository to the effect that they are capable of performing their duties
hereunder and under the Market Agent Agreement and Auction Agency Agreement with
respect to any such Auction Period. Notice of a change in the Auction Date may
be in substantially the form attached hereto as, or containing substantially the
information contained in, Exhibit S.
SECTION 3.06. Auction Rate Period - Auction Rate Bonds: Orders by
Existing Holders and Potential Holders. (a) Prior to the Submission
Deadline on each Auction Date during the Auction Rate Period, the
following orders may be submitted:
(i) each Existing Holder may submit to the Broker-Dealer by
telephone or otherwise information as to:
(A) the principal amount of Outstanding Auction Rate
Bonds, if any, held by such Existing Holder which such
Existing Holder desires to continue to hold without regard to
the Auction Rate for the next succeeding Auction Period;
(B) the principal amount of Outstanding Auction Rate
Bonds, if any, held by such Existing Holder which such
Existing Holder offers to sell if the Auction Rate for the
next succeeding Auction Period shall be less than the rate per
annum specified by such Existing Holder and/or
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(C) the principal amount of Outstanding Auction Rate
Bonds, if any, held by such Existing Holder which such
Existing Holder offers to sell without regard to the Auction
Rate for the next succeeding Auction Period;
(ii) for the purpose of implementing the
Auctions, the Broker-Dealers may contact Potential
Holders by telephone or otherwise to determine the
principal amount of Auction Rate Bonds which each
such Potential Holder irrevocably offers to purchase
if the Auction Rate for the next succeeding Auction
Period shall not be less than the interest rate per
annum specified by such Potential Holder.
For the purposes hereof, the communication to a Broker-Dealer of information
referred to in clause (i)(A), (i)(B) or (i)(C) or clause (ii) above is
hereinafter referred to as an "Order" and collectively as "Orders" and each
Existing Holder and each Potential Holder placing an Order is hereinafter
referred to as a "Bidder" and collectively as "Bidders"; an Order containing the
information referred to in clause (i)(A) above is hereinafter referred to as a
"Hold Order" and collectively as "Hold Orders"; an Order containing the
information referred to in clause (i)(B) or clause (ii) above is hereinafter
referred to as a "Bid" and collectively as "Bids"; and an Order containing the
information referred to in clause (i)(C) above is hereinafter referred to as a
"Sell Order" and collectively as "Sell Orders". The submission by a
Broker-Dealer of an Order to the Auction Agent shall likewise be referred to
herein as an "Order" and collectively as "Orders" and an Existing Holder or
Potential Holder who places an Order with the Auction Agent or on whose behalf
an Order is placed with the Auction Agent shall likewise be referred to herein
as a "Bidder" and collectively as "Bidders."
(b)(i) Subject to the provisions of Section 3.07, a Bid by an
Existing Holder shall constitute an irrevocable offer to sell:
(A) the principal amount of
Outstanding Auction Rate Bonds specified in
such Bid if the Auction Rate determined on
such Auction Date shall be less than the
interest rate per annum specified therein;
or
(B) such principal amount or a lesser principal
amount of Outstanding Auction Rate Bonds to be determined as
set forth in subsection (a)(iv) of Section 3.09 if the Auction
Rate determined on such Auction Date shall be equal to the
interest rate per annum specified therein; or
(C) such principal amount of Outstanding Auction Rate
Bonds if the interest rate per annum specified therein shall
be higher than the Maximum Auction Rate, or such principal
amount or a lesser principal amount of Outstanding Auction
Rate Bonds to be determined as set forth in subsection
(b)(iii) of Section 3.09 if such specified rate shall be
higher than the Maximum Auction Rate and Sufficient Clearing
Bids do not exist.
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(ii) Subject to the provisions of Section
3.07, a Sell Order by an Existing Holder shall
constitute an irrevocable offer to sell:
(A) the principal amount of Outstanding Auction Rate Bonds
specified in such Sell Order; or
(B) such principal amount or a lesser principal
amount of Outstanding Auction Rate Bonds as set forth in
subsection (b)(iii) of Section 3.09 if Sufficient Clearing
Bids do not exist.
(iii) Subject to the provisions of Section 3.07, a Bid by a
Potential Holder shall constitute an irrevocable offer to purchase:
(A) the principal amount of Outstanding Auction Rate
Bonds specified in such Bid if the Auction Rate determined on
such Auction Date shall be higher than the rate specified
therein; or
(B) such principal amount or a lesser principal
amount of Outstanding Auction Rate Bonds as set forth in
subsection (a)(v) of Section 3.09 if the Auction Rate
determined on such Auction Date shall be equal to such
specified rate.
SECTION 3.07. Auction Rate Period - Auction Rate Bonds:
Submission of Orders by Broker-Dealers to Auction Agent. (a) During an Auction
Rate Period each Broker-Dealer shall submit in writing to the Auction Agent
prior to the Submission Deadline on each Auction Date during the Auction Rate
Period, all Orders obtained by such Broker-Dealer and shall specify with respect
to each such Order:
(i) the name of the Bidder placing such Order (which shall be the
Broker-Dealer (unless otherwise permitted in writing by the Company));
(ii) the aggregate principal amount of Auction Rate Bonds that
are subject to such Order;
(iii) to the extent that such Bidder is an Existing Holder:
(A) the principal amount of Auction Rate Bonds, if any, subject
to any Hold Order placed by such Existing Holder;
(B) the principal amount of Auction Rate Bonds, if
any, subject to any Bid placed by such Existing Holder and the
rate specified in such Bid; and
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(C) the principal amount of Auction Rate Bonds, if any, subject
to any Sell Order placed by such Existing Holder; and
(iv) to the extent such Bidder is a
Potential Holder, the principal amount of Auction
Rate Bonds subject to any Bid by such Potential
Holder and the rate specified in such Bid.
(b) If any rate specified in any Bid contains more than three
figures to the right of the decimal point, the Auction Agent shall round such
rate up to the next highest one thousandth (.001) of 1%.
(c) If an Order or Orders covering all or a portion of
Outstanding Auction Rate Bonds held by an Existing Holder is not submitted to
the Auction Agent prior to the Submission Deadline, the Auction Agent shall deem
a Hold Order to have been submitted on behalf of such Existing Holder covering
the principal amount of Outstanding Auction Rate Bonds held by such Existing
Holder and not subject to Orders submitted to the Auction Agent.
(d) Neither the Authority, the Company, the Trustee nor the
Auction Agent shall be responsible for any failure of a Broker-Dealer to submit
an Order to the Auction Agent on behalf of any Existing Holder or Potential
Holder.
(e) If any Existing Holder submits through a Broker-Dealer to
the Auction Agent one or more Orders covering in the aggregate more than the
principal amount of Auction Rate Bonds held by such Existing Holder, such Orders
shall be considered valid as follows and in the following order of priority:
(i) all Hold Orders shall be considered valid, but
only up to and including the principal amount of Auction Rate Bonds
held by such Existing Holder, and, if the aggregate principal amount of
Auction Rate Bonds subject to such Hold Orders exceeds the aggregate
principal amount of Outstanding Auction Rate Bonds held by such
Existing Holder, the aggregate principal amount of Auction Rate Bonds
subject to each such Hold Order shall be reduced pro rata to cover the
aggregate principal amount of Outstanding Auction Rate Bonds held by
such Existing Holder;
(ii) (A) any Bid shall be considered valid up to and
including the excess of the principal amount of Outstanding
Auction Rate Bonds held by such Existing Holder over the
aggregate principal amount of Auction Rate Bonds subject to
any Hold Orders referred to in paragraph (i) above;
(B) subject to clause (A) above, if more
than one Bid with the same rate is submitted on
behalf of such Existing Holder and the aggregate
principal amount of Outstanding Auction Rate Bonds
subject to such Bids is greater than such excess,
such Bids shall be considered valid up to and
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including the amount of such excess, and, the
principal amount of Auction Rate Bonds subject to
each Bid with the same rate shall be reduced pro rata
to cover the principal amount of Auction Rate Bonds
equal to such excess;
(C) subject to clauses (A) and (B) above, if
more than one Bid with different rates is submitted
on behalf of such Existing Holder, such Bids shall be
considered valid in the ascending order of their
respective rates until the highest rate is reached at
which such excess exists and then at such rate up to
and including the amount of such excess; and
(D) in any such event, the aggregate
principal amount of Outstanding Auction Rate Bonds,
if any, subject to any portion of Bids not valid
under this paragraph (ii) shall be treated as the
subject of a Bid by a Potential Holder at the rate
therein specified; and
(iii) all Sell Orders shall
be considered valid up to and
including the excess of the
principal amount of Outstanding
Auction Rate Bonds held by such
Existing Holder over the aggregate
principal amount of Auction Rate
Bonds subject to valid Hold Orders
referred to in paragraph (i) of this
subsection (e) and valid Bids
referred to in paragraph (ii) of
this subsection (e).
(f) If more than one Bid for Auction Rate Bonds is submitted
on behalf of any Potential Holder, each Bid submitted shall be a separate Bid
for Auction Rate Bonds with the rate and principal amount therein specified.
(g) Any Bid or Sell Order submitted by an Existing Holder
covering an aggregate principal amount of Auction Rate Bonds not equal to
$25,000 or an integral multiple thereof shall be rejected and shall be deemed a
Hold Order. Any Bid submitted by a Potential Holder covering an aggregate
principal amount of Auction Rate Bonds not equal to $25,000 or an integral
multiple thereof shall be rejected.
(h) Any Bid submitted by an Existing Holder or a Potential
Holder specifying a rate lower than the Minimum Auction Rate, if any, shall be
treated as a Bid specifying the Minimum Auction Rate.
SECTION 3.08. Auction Rate Period - Auction Rate Bonds:
Determination of Sufficient Clearing Bids, Winning Bid Rate and Auction Rate.
(a) During an Auction Rate Period not earlier than the Submission Deadline on
each Auction Date during the Auction Rate Period, the Auction Agent shall
assemble all valid Orders submitted or deemed submitted to it by the Broker-
Dealers (each such Order as submitted or deemed submitted by a Broker-Dealer
being hereinafter
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referred to as a "Submitted Hold Order," a "Submitted Bid" or a "Submitted Sell
Order," as the case may be, or as a "Submitted Order") and shall determine:
(i) the excess of the total principal amount of
Outstanding Auction Rate Bonds over the aggregate principal
amount of Outstanding Auction Rate Bonds subject to Submitted
Hold Orders (such excess being hereinafter referred to as the
"Available Auction Rate Bonds"); and
(ii) from the Submitted Orders whether the aggregate
principal amount of Outstanding Auction Rate Bonds subject to
Submitted Bids by Potential Holders specifying one or more
rates equal to or lower than the Maximum Auction Rate exceeds
or is equal to the sum of:
(A) the aggregate principal amount of
Outstanding Auction Rate Bonds subject to Submitted
Bids by Existing Holders specifying one or more rates
higher than the Maximum Auction Rate; and
(B) the aggregate principal amount of Outstanding Auction Rate
Bonds subject to Submitted Sell Orders
(in the event of such excess or such equality (other than
because the sum of the principal amounts of Auction Rate Bonds
in clauses (A) and (B) above is zero because all of the
Outstanding Auction Rate Bonds are subject to Submitted Hold
Orders), such Submitted Bids by Potential Holders are
hereinafter referred to collectively as "Sufficient Clearing
Bids"); and
(iii) if Sufficient
Clearing Bids exist, the lowest rate
specified in the Submitted Bids (the
"Winning Bid Rate") which if:
(A)(I) each Submitted Bid from Existing
Holders specifying such lowest rate and (II) all
other Submitted Bids from Existing Holders specifying
lower rates were rejected, thus entitling such
Existing Holders to continue to hold the principal
amount of Auction Rate Bonds that are the subject of
such Submitted Bids; and
(B)(I) each Submitted Bid from Potential
Holders specifying such lowest rate and (II) all
other Submitted Bids from Potential Holders
specifying lower rates were accepted,
would result in such Existing Holders described in clause (A)
above continuing to hold an aggregate principal amount of
Outstanding Auction Rate Bonds which, when added to the
aggregate principal amount of Outstanding Auction Rate Bonds
to be
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purchased by such Potential Holders described in clause (B)
above, would equal not less than the Available Auction Rate
Bonds.
(b) Promptly after the Auction Agent has made the
determinations pursuant to subsection (a) of this Section 3.08, the Auction
Agent, by telecopy confirmed in writing, shall advise the Company, the Trustee
and the Broker-Dealers of the Auction Rate for the next succeeding Auction
Period as follows:
(i) if Sufficient Clearing Bids exist, the Auction
Rate for the next succeeding Auction Period therefor shall be
equal to the Winning Bid Rate so determined;
(ii) if Sufficient Clearing Bids do not exist (other
than because all of the Outstanding Auction Rate Bonds are the
subject of Submitted Hold Orders), the Auction Rate for the
next succeeding Auction Period therefor shall be equal to the
Maximum Auction Rate; and
(iii) if all of the Auction Rate Bonds are subject to
Submitted Hold Orders, the Auction Rate for the next
succeeding Auction Period therefor shall be equal to the
Minimum Auction Rate.
SECTION 3.09. Auction Rate Period - Auction Rate Bonds:
Acceptance and Rejection of Submitted Bids and Submitted Sell Orders and
Allocation of Auction Rate Bonds. During an Auction Rate Period Existing Holders
shall continue to hold the principal amounts of Auction Rate Bonds that are
subject to Submitted Hold Orders, and, based on the determinations made pursuant
to subsection (a) of this Section 3.09, the Submitted Bids and Submitted Sell
Orders shall be accepted or rejected and the Auction Agent shall take such other
actions as are set forth below:
(a) If Sufficient Clearing Bids exist, all Submitted Sell
Orders shall be accepted and, subject to the provisions of paragraphs
(e) and (f) of this Section 3.09, Submitted Bids shall be accepted or
rejected as follows in the following order of priority:
(i) Existing Holders' Submitted Bids specifying any
rate that is higher than the Winning Bid Rate shall be
accepted, thus requiring each such Existing Holder to sell the
aggregate principal amount of Auction Rate Bonds subject to
such Submitted Bids;
(ii) Existing Holders' Submitted Bids specifying any
rate that is lower than the Winning Bid Rate shall be
rejected, thus entitling each such Existing Holder to continue
to hold the aggregate principal amount of Auction Rate Bonds
subject to such Submitted Bids;
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(iii) Potential Holders' Submitted Bids specifying
any rate that is lower than the Winning Bid Rate shall be
accepted, thus requiring each such Potential Holder to
purchase the aggregate principal amount of Auction Rate Bonds
subject to such Submitted Bids;
(iv) each Existing Holder's Submitted Bid specifying
a rate that is equal to the Winning Bid Rate shall be
rejected, thus entitling such Existing Holder to continue to
hold the aggregate principal amount of Auction Rate Bonds
subject to such Submitted Bid, unless the aggregate principal
amount of Outstanding Auction Rate Bonds subject to all such
Submitted Bids shall be greater than the principal amount of
Auction Rate Bonds (the "remaining principal amount") equal to
the excess of Available Auction Rate Bonds over the aggregate
principal amount of the Auction Rate Bonds subject to
Submitted Bids described in paragraphs (ii) and (iii) of this
subsection (a), in which event such Submitted Bid of such
Existing Holder shall be rejected in part, and such Existing
Holder shall be entitled to continue to hold the principal
amount of Auction Rate Bonds subject to such Submitted Bid,
but only in an amount equal to the principal amount of Auction
Rate Bonds obtained by multiplying the remaining principal
amount by a fraction, the numerator of which shall be the
principal amount of Outstanding Auction Rate Bonds held by
such Existing Holder subject to such Submitted Bid and the
denominator of which shall be the sum of the principal amounts
of Auction Rate Bonds subject to such Submitted Bids made by
all such Existing Holders that specified a rate equal to the
Winning Bid Rate;
(v) each Potential Holder's Submitted Bid specifying
a rate that is equal to the Winning Bid Rate shall be accepted
but only in an amount equal to the principal amount of Auction
Rate Bonds obtained by multiplying the excess of the Available
Auction Rate Bonds over the aggregate principal amount of
Auction Rate Bonds subject to Submitted Bids described in
paragraphs (ii), (iii) and (iv) of this subsection (a) by a
fraction the numerator of which shall be the aggregate
principal amount of Auction Rate Bonds subject to such
Submitted Bid of such Potential Holder and the denominator of
which shall be the sum of the principal amount of Outstanding
Auction Rate Bonds subject to Submitted Bids made by all such
Potential Holders that specified a rate equal to the Winning
Bid Rate, and the remainder of such Submitted Bids shall be
rejected; and
(vi) each Potential Holder's Submitted Bid specifying
a rate that is higher than the Winning Bid Rate shall be
rejected.
(b) If Sufficient Clearing Bids do not exist (other than
because all of the Outstanding Auction Rate Bonds are subject to
Submitted Hold Orders), subject to the provisions of subsection (e) of
this Section 3.09, Submitted Orders shall be accepted or rejected as
follows in the following order of priority:
III-14
(i) Existing Holders' Submitted Bids
specifying any rate that is equal to or lower than
the Maximum Auction Rate shall be rejected, thus
entitling each such Existing Holder to continue to
hold the aggregate principal amount of Auction Rate
Bonds subject to such Submitted Bids;
(ii) Potential Holders' Submitted Bids specifying any
rate that is equal to or lower than the Maximum Auction Rate
shall be accepted, thus requiring each such Potential Holder
to purchase the aggregate principal amount of Auction Rate
Bonds subject to such Submitted Bids;
(iii) each Existing Holder's Submitted Bid specifying
any rate that is higher than the Maximum Auction Rate and the
Submitted Sell Order of each Existing Holder shall be
accepted, thus entitling each Existing Holder that submitted
any such Submitted Bid or Submitted Sell Order to sell the
Auction Rate Bonds subject to such Submitted Bid or Submitted
Sell Order, but in both cases only in an amount equal to the
aggregate principal amount of Auction Rate Bonds obtained by
multiplying the aggregate principal amount of Auction Rate
Bonds subject to Submitted Bids described in paragraph (ii) of
this subsection (b) by a fraction, the numerator of which
shall be the aggregate principal amount of Outstanding Auction
Rate Bonds held by such Existing Holder subject to such
Submitted Bid or Submitted Sell Order and the denominator of
which shall be the aggregate principal amount of Outstanding
Auction Rate Bonds subject to all such Submitted Bids and
Submitted Sell Orders; and
(iv) each Potential Holder's Submitted Bid specifying
a rate that is higher than the Maximum Auction Rate shall be
rejected.
(c) If all Outstanding Auction Rate Bonds are subject to
Submitted Hold Orders, all Submitted Bids shall be rejected.
(d) If (i) the Auction Agent shall fail to take any action
necessary to determine, or take any action which effectively prevents
the determination of, an interest rate pursuant to the Auction
Procedures or (ii) the conditions set forth in subsection 2 of Section
3.04 to effect a change in the Auction Period are not met, all
Submitted Bids and Submitted Sell Orders shall be rejected and the
existence of Sufficient Clearing Bids shall be of no effect.
(e) If, as a result of the procedures described in subsection
(a) or (b) of this Section 3.09, any Existing Holder would be entitled
or required to sell, or any Potential Holder would be required to
purchase, a principal amount of Auction Rate Bonds that is not equal to
$25,000 or an integral multiple thereof, the Auction Agent shall, in
such manner as, in its sole discretion, it shall determine, round up or
down the principal amount of such Auction Rate Bonds to be purchased or
sold by any Existing Holder or Potential Holder so
III-15
that the principal amount purchased or sold by each Existing Holder or
Potential Holder shall be equal to $25,000 or an integral multiple
thereof.
(f) If, as a result of the procedures described in subsection
(a) of this Section 3.09, any Potential Holder would be entitled or
required to purchase less than $25,000 in aggregate principal amount of
Auction Rate Bonds, the Auction Agent shall, in such manner as, in its
sole discretion, it shall determine, allocate Auction Rate Bonds for
purchase among Potential Holders so that only Auction Rate Bonds in
principal amounts of $25,000 or an integral multiple thereof are
purchased by any Potential Holder, even if such allocation results in
one or more of such Potential Holders not purchasing any Auction Rate
Bonds.
(g) Based on the results of each Auction, the Auction Agent
shall determine the aggregate principal amounts of Auction Rate Bonds
to be purchased and the aggregate principal amounts of Auction Rate
Bonds to be sold by Potential Holders and Existing Holders and, with
respect to each Potential Holder and Existing Holder, to the extent
that such aggregate principal amount of Auction Rate Bonds to be sold
differs from such aggregate principal amount of Auction Rate Bonds to
be purchased, determine to which other Potential Holder(s) or Existing
Holder(s) they shall deliver, or from which other Potential Holder(s)
or Existing Holder(s) they shall receive, as the case may be, Auction
Rate Bonds.
(h) The purchase price of each Auction Rate Bond sold in any
Auction shall be equal to $25,000, except that if the then ending
Auction Period is a daily Auction Period, the purchase price of each
Auction Rate Bond shall be $25,000, plus accrued and unpaid interest
thereon, unless the purchase date is also an Interest Payment Date, in
which case the purchase price of such Auction Rate Bond shall be
$25,000.
(i) None of the Authority, the Company or any Affiliate
thereof may submit an Order in any Auction except as set forth in the
next sentence. Any Broker-Dealer that is an Affiliate of the Company
may not submit Bids to purchase Auction Rate Bonds in an Auction for
its own account, provided that affiliated Broker-Dealers may submit
Hold Orders and Sell Orders in Auctions with respect to Auction Rate
Bonds otherwise acquired for its own account.
SECTION 3.10. Auction Rate Period - Auction Rate Bonds:
Adjustment in Percentage. 1. During an Auction Rate Period the Market Agent may
adjust the percentage used in determining the Minimum Auction Rate and the
Applicable Percentages used in determining the No Auction Rate if any such
adjustment is necessary, in the judgment of the Market Agent, to reflect any
Change of Preference Law or to conform to market practice such that the Minimum
Auction Rate and No Auction Rate shall have substantially equal market values
before and after such Change of Preference Law or change in market practice. In
making any such adjustment as a result of a Change of Preference Law, the Market
Agent shall take the following factors, as in existence both before and after
such Change of Preference Law, into account: (i) short-term taxable and
tax-exempt market
III-16
rates and indices of such short-term rates, (ii) the market supply and demand
for short-term tax- exempt securities, (iii) yield curves for short-term and
long-term tax-exempt securities or obligations having a credit rating that is
comparable to the Bonds, (iv) general economic conditions and (v) economic and
financial factors present in the securities industry that may affect or that may
be relevant to the Bonds. In making any such adjustment to conform to market
practice, the Market Agent shall take into account such factors as the Market
Agent deems relevant, including the terms of auction rate bonds of other
issuers. Upon the occurrence and continuance of a Company Downgrade Event, the
Bond Insurer shall have the right to consent to any change to the percentage
used in determining the Minimum Auction Rate and the Applicable Percentages
using in determining the No Auction Rate, which consent shall not be
unreasonably withheld.
2. The Market Agent shall communicate its determination to
adjust the percentage used in determining the Minimum Auction Rate and the
Applicable Percentages used in determining the No Auction Rate pursuant to
subsection 1 hereof by means of a written notice delivered at least 5 days prior
to the Auction Date on which the Market Agent desires to effect the change to
the Authority, the Trustee, the Auction Agent and the Company in substantially
the form attached hereto as, or containing substantially the information
contained in, Exhibit F. Such notice shall be effective only if it is
accompanied by the form of opinion that Bond Counsel has advised the Market
Agent that it expects to be able to give on such Auction Date to the effect that
such adjustment is authorized by this Indenture, is permitted under the Act and
will not have an adverse effect on the exclusion of interest on the Auction Rate
Bonds from gross income for federal income tax purposes. The Auction Agent is
required to mail notice thereof to the Existing Holders within two Business Days
of receipt thereof.
3. An adjustment in the percentage used in determining the
Minimum Auction Rate and the Applicable Percentages used in determining the No
Auction Rate shall take effect on an Auction Date only if (A) the Trustee, the
Bond Insurer and the Auction Agent receive, by 11:00 a.m. (New York City time)
on the Business Day immediately preceding such Auction Date, a certificate from
the Market Agent by telecopy or similar means, in substantially the form
attached hereto as, or containing substantially the information contained in,
Exhibit H, (i) authorizing the adjustment of the percentage used in determining
the Minimum Auction Rate and the Applicable Percentages used in determining the
No Auction Rate which shall be specified in such authorization, and (ii)
confirming that Bond Counsel expects to be able to give an opinion on such
Auction Date to the effect that the adjustment in the percentage used in
determining the Minimum Auction Rate and the Applicable Percentages used in
determining the No Auction Rate is authorized by this Indenture, is permitted
under the Act and will not have an adverse effect on the exclusion of interest
on the Auction Rate Bonds from gross income for federal income tax purposes, and
(B) the Trustee, the Bond Insurer and the Auction Agent receive by 9:30 a.m.
(New York City time) on such Auction Date, an opinion of Bond Counsel to the
effect that the adjustment in the percentage used in determining the Minimum
Auction Rate and the Applicable Percentages used in determining the No Auction
Rate is authorized by this Indenture, is permitted under the Act and will not
have an adverse effect on the exclusion of interest on the Auction Rate Bonds
from gross income for federal income tax purposes. If the condition referred to
in (A) above is not met, the existing percentage used in
III-17
determining the Minimum Auction Rate and the Applicable Percentages used in
determining the No Auction Rate shall remain in effect and the Auction Rate for
the next succeeding Auction Period shall be determined pursuant to the Auction
Procedures. If the condition referred to in (B) above is not met, the existing
percentage used in determining the Minimum Auction Rate and the Applicable
Percentages used in determining the No Auction Rate shall remain in effect and
the Auction Rate for the next succeeding Auction Period shall equal the Maximum
Auction Rate.
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ARTICLE IIIA
AUCTION RATE-INVERSE RATE BONDS
SECTION 3A.01. Auction Rate-Inverse Rate Bonds: Definitions of
Specific Terms. Unless the context shall clearly indicate some other meaning or
may otherwise require, the terms defined in this Section shall, for all purposes
of (i) this Article III-A, and (ii) this Indenture as such terms apply to
Auction Rate-Inverse Rate Bonds, have the meanings herein specified. Unless
otherwise defined herein, words are used as defined in Section 1.01; provided
however, with respect to a conflict between Section 1.01 and Section 3A.01 with
respect to meanings pertaining to Auction Rate-Inverse Rate Bonds, Section 3A.01
shall prevail.
"Applicable Auction Rate" shall have the meaning set forth in
Section 3A.02.
"Applicable Factor" shall mean:
(i) with respect to Regular Auction Rate Bonds and each
Interest Period commencing on the effective date of any Change in the
Interest Rate Mode to an Auction Rate-Inverse Rate Period, or
immediately preceded by an Auction Date, the excess of (A) the
Applicable Auction Rate for such Interest Period over (B) the Service
Charge Rate on such date;
(ii) with respect to Regular Auction Rate Bonds and each
Interest Period not commencing on the effective date of any Change in
the Interest Rate Mode to an Auction Rate-Inverse Rate Period, or
immediately preceded by an Auction Date, the Applicable Auction Rate
for such Interest Period;
(iii) with respect to Special Auction Rate Bonds and each
Interest Period, the Applicable Auction Rate for such Interest Period;
(iv) with respect to Regular Inverse Rate Bonds and each Interest
Period, the Applicable Inverse Rate for such Interest Period;
(v) with respect to Special Linked Auction Rate Bonds and
Inverse Rate Bonds and each Interest Period commencing on the effective
date of any Change in the Interest Rate Mode to an Auction Rate-Inverse
Rate Period, or an Auction Date, the excess of (A) the Linked Rate over
(B) the product of (x) the Service Charge Rate on such date times (y)
1/2 times (z) 365/360, rounding the resultant rate up to the next
highest one-thousandth (.001) of 1%;
(vi) with respect to Special Linked Auction Rate Bonds and
Inverse Rate Bonds and each Interest Period not immediately preceded by
the effective date of any Change in the
IIIA-1
Interest Rate Mode to an Auction Rate-Inverse Rate Period, or an
Auction Date, the Linked
Rate; and
(vii) with respect to Regular Linked Auction Rate Bonds and
Inverse Rate Bonds,
the Linked Rate.
"Applicable Inverse Rate" shall have the meaning set forth in
Section 3A.02.
"Auction Agent Fee Rate", on any Auction Date, shall mean the
rate per annum at which the fee to be paid to the Auction Agent for the services
rendered by it under the Auction Agency Agreement and the Broker-Dealer
Agreements with respect to such Auction Date accrues, which shall equal .03 of
1% per annum until changed by the Auction Agent and the Trustee (or, if the
Trustee is also serving as Auction Agent, the Market Agent) pursuant to the
Auction Agency Agreement (or, if the Trustee is also serving as Auction Agent,
the Market Agent Agreement) and, thereafter, shall equal the rate per annum most
recently agreed to by the Auction Agent and the Trustee (or the Market Agent, as
the case may be) pursuant to the Auction Agency Agreement (or the Market Agent
Agreement, as the case may be). Upon the occurrence and during the continuance
of a Company Downgrade Event, the Bond Insurer shall have the right to consent
to any increase of the Auction Agent Fee Rate, which consent shall not be
unreasonably withheld.
"Auction Rate" shall have the meaning set forth in Section
3A.02.
"Auction Rate-Inverse Rate Period Record Date" shall mean any
Regular Record Date or Redemption Record Date for the Auction Rate-Inverse Rate
Bonds during an Auction Rate- Inverse Rate Period as determined pursuant to
Article IIIA.
"Broker-Dealer Fee Rate," on any Auction Date with respect to
Auction Rate-Inverse Rate Bonds, shall mean the rate per annum at which the
service charge to be paid to the Broker- Dealers for the services rendered by
them with respect to such Auction Date accrues, which shall equal .25 of 1% per
annum until changed by the Trustee pursuant to the Auction Agency Agreement and,
thereafter, shall equal the rate per annum most recently determined by the
Trustee pursuant to the Auction Agency Agreement. Upon the occurrence and during
the continuance of a Company Downgrade Event, the Bond Insurer shall have the
right to consent to any increase of the Broker-Dealer Fee Rate, which consent
shall not be unreasonably withheld.
"Initial Interest Payment Date" shall mean the date certified
on the effective date of a Change in the Interest Rate Mode to an Auction
Rate-Inverse Rate Period as the first Interest Payment Date for the Auction Rate
Bonds to the Trustee (with a copy to the Authority, the Registrar and Paying
Agent, the Company and the Auction Agent) by the Market Agent.
"Initial Interest Period" shall mean the period commencing on
and including the date of any Change in the Interest Rate Mode to an Auction
Rate-Inverse Rate Period and ending on but excluding the Initial Interest
Payment Date therefor.
IIIA-2
"Interest Amount" means, with respect to each Interest Period,
the amount of interest distributable in respect of each $1,000 in principal
amount (taken, without rounding, to six figures to the right of the decimal
point) of Regular Auction Rate Bonds, Special Auction Rate Bonds, Regular
Inverse Rate Bonds, Regular Linked Auction Rate Bonds and Inverse Rate Bonds and
Special Linked Auction Rate Bonds and Inverse Rate Bonds for such Interest
Period.
"Interest Period" shall have the meaning set forth in Section
3A.02.
"Inverse Rate" with respect to Inverse Rate Bonds and each
Interest Period for such Inverse Rate Bonds during any Auction Rate-Inverse Rate
Period, the rate of interest per annum determined for the Inverse Rate Bonds
pursuant to Section 3A.02(c).
"Inverse Rate Bonds" shall mean during an Auction Rate-Inverse
Rate Period, any Bonds or subseries of Bonds which bear an Inverse Rate
determined pursuant to Article IIIA.
"Linked," as applied to Auction Rate-Inverse Rate Bonds, when
used with respect to:
(i) Auction Rate Bonds, shall mean (A) Regular Auction Rate
Bonds the beneficial ownership of which has been linked with the
beneficial ownership of an equal aggregate principal amount of Inverse
Rate Bonds and recorded as such under a unique CUSIP number at the
Securities Depository, or (B) Special Auction Rate Bonds the beneficial
ownership of which has been linked with the beneficial ownership of an
equal aggregate principal amount of Inverse Rate Bonds and recorded as
such under a unique CUSIP number at the Securities Depository; and
(ii) Inverse Rate Bonds, shall mean Inverse Rate Bonds the
beneficial ownership of which has been linked with the beneficial
ownership of an equal aggregate principal amount of (A) Regular Auction
Rate Bonds and recorded as such under a unique CUSIP number, or (B)
Special Auction Rate Bonds and recorded as such under a unique CUSIP
number at the Securities Depository.
"Linked Percentage," as of any Redemption Record Date with
respect to Auction Rate-Inverse Rate Bonds, shall mean the percentage obtained
by dividing the aggregate principal amount of Outstanding Bonds of each series
which are Linked on such Redemption Record Date by the aggregate principal
amount of Outstanding Bonds of each series on such Redemption Record Date.
"Maximum Auction Rate-Inverse Rate" shall mean during an
Auction Rate-Inverse Rate Period, the interest rate per annum equal to the
Linked Rate times two times 360/365, rounded to the nearest one thousandth
(.001) of 1%.
IIIA-3
"Maximum Rate" shall mean on any date of determination with
respect to Auction Rate Bonds during an Auction Rate-Inverse Rate Period, the
interest rate per annum equal to the lowest of:
(i) the Applicable Percentage of the higher of (A) the
After-Tax Equivalent Rate on such date, and (B) the Commercial Paper
Index on such date;
(ii) the excess of (A) the Maximum Auction Rate-Inverse Rate
over (B) the Service Charge Rate on such date; and
(iii) the excess of (A) the maximum rate on such date
permitted by New York law, as the same may be modified by United States
law of general application, over (B) the Service Charge Rate on such
date.
provided, that if the ownership of the Auction Rate Bonds is no longer
maintained in book-entry form by the Securities Depository, the Maximum Rate, on
any date of determination, shall equal the lowest of (x) the Applicable
Percentage multiplied by the higher of (1) the After-Tax Equivalent Rate on such
date and (2) the Commercial Paper Index on such date, (y) the Maximum Auction
Rate- Inverse Rate and (z) the maximum rate on such date permitted by New York
law, as the same may be modified by United States law of general application.
"Minimum Rate" shall mean on any date of determination with
respect to Auction Rate Bonds during an Auction Rate-Inverse Rate Period the
rate per annum equal to the lower of 70% (as such percentage may be adjusted
pursuant to Section 3A.09) of:
(i) the Commercial Paper Index on such date; and
(ii) the After-Tax Equivalent Rate on such date;
provided, however, that (x) if the Minimum Rate is applicable to Auction Rate
Bonds during an Auction Rate-Inverse Rate Period as determined pursuant to the
Auction Procedures, in no event shall such Minimum Rate exceed the excess of (A)
the lesser of (1) the Maximum Auction Rate- Inverse Rate and (2) the maximum
rate on such date permitted by New York law, as the same may be modified by
United States law of general application, over (B) the Service Charge Rate on
such date, or (y) if the Minimum Rate is applicable to Auction Rate Bonds during
an Auction Rate-Inverse Rate Period due to the linkage of all of the beneficial
ownership of Auction Rate Bonds during an Auction Rate-Inverse Rate Period with
all of the beneficial ownership of the Inverse Rate Bonds during an Auction
Rate-Inverse Rate Period, in no event shall such Minimum Rate exceed the lesser
of (A) the Maximum Auction Rate-Inverse Rate and (B) such maximum rate, as so
modified.
"Redemption Date," when used during an Auction Rate-Inverse
Rate Period with respect to any Auction Rate-Inverse Rate Bond to be redeemed,
shall mean the date fixed for such redemption as to which notice has been given
to the Trustee as contemplated by Article V.
IIIA-4
"Redemption Record Date" during an Auction Rate-Inverse Rate
Period shall have the meaning set forth in Section 5.10.2.
"Regular Auction Rate Bonds," on any Record Date, shall mean
Auction Rate Bonds the beneficial ownership of which is not Linked with Inverse
Rate Bonds and which are not Special Auction Rate Bonds and the beneficial
ownership of which is recorded under a unique CUSIP number at the Securities
Depository.
"Regular Interest Payment Date" shall have the meaning set
forth in Section 3A.02.
"Regular Inverse Rate Bonds," on any Record Date during an
Auction Rate-Inverse Rate Period, shall mean Inverse Rate Bonds the beneficial
ownership of which is not Linked with Auction Rate Bonds and the beneficial
ownership of which is recorded under a unique CUSIP number at the Securities
Depository.
"Regular Linked Auction Rate Bonds and Inverse Rate Bonds," on
any Record Date during an Auction Rate-Inverse Rate Period shall mean Auction
Rate Bonds and Inverse Rate Bonds the beneficial ownership of which is Linked
and which was Linked at the close of business on the immediately preceding
Regular Record Date and the beneficial ownership of which is recorded under a
unique CUSIP number at the Securities Depository.
"Regular Record Date," with respect to each Regular Interest
Payment Date or the Stated Maturity during an Auction Rate-Inverse Rate Period,
shall mean the second Business Day next preceding such Regular Interest Payment
Date or the Stated Maturity, as the case may be.
"Service Charge Rate" shall mean on any Auction Date or on any
effective date of a Change in the Interest Rate Mode to an Auction Rate-Inverse
Rate Period with respect to Auction Rate-Inverse Rate Bonds, the sum of:
(a) the Broker-Dealer Fee Rate on such date; and
(b) the Auction Agent Fee Rate on such date.
"Special Auction Rate Bonds," on any Record Date during an
Auction Rate-Inverse Rate Period, shall mean Auction Rate Bonds the beneficial
ownership of which is not Linked, but which was Linked, with Inverse Rate Bonds
at the close of business on the immediately preceding Regular Record Date and
the beneficial ownership of which is recorded under a unique CUSIP number at the
Securities Depository.
"Special Linked Auction Rate Bonds and Inverse Rate Bonds," on
any Record Date during an Auction Rate-Inverse Rate Period, shall mean Auction
Rate Bonds and Inverse Rate Bonds the beneficial ownership of which is Linked,
but which was not Linked at the close of business on
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the immediately preceding Regular Record Date, and the beneficial ownership of
which is recorded under a unique CUSIP number at the Securities Depository.
"Subsequent Interest Period" during an Auction Rate-Inverse
Rate Period, shall have the meaning set forth in Section 3A.02.
"Tender Date" shall have the meaning set forth in Section
3A.10.
"Tender Demand" shall have the meaning set forth in Section
3A.10.
"Tender Price" shall have the meaning set forth in Section
3A.10.
SECTION 3A.02. Auction Rate-Inverse Rate: Interest on Bonds.
(a) During any Auction Rate-Inverse Rate Period interest on the Bonds shall
accrue for each Interest Period and shall be payable in arrears, on the Initial
Interest Payment Date and on each succeeding fifth Wednesday after the Initial
Interest Payment Date (each a "Regular Interest Payment Date"), provided that
if:
(i) (A) the Securities Depository shall make available to its
participants and members, in next-day funds in New York City on
Interest Payment Dates, the amount then due as interest or shall make
available to its participants and members, in funds immediately
available in New York City, on Interest Payment Dates, such amount but
shall not have so advised the Auction Agent and the Trustee of such
availability and (B) (1) such Wednesday is not a Business Day or (2)
the Thursday following such Wednesday is not a Business Day, then the
Regular Interest Payment Date shall be the first Business Day that is
immediately preceded by a Business Day that falls after such Wednesday
and is immediately followed by a Business Day; or
(ii) (A) the Securities Depository shall make available to its
participants and members, in funds immediately available in New York
City on Interest Payment Dates, the amount then due as interest and
shall have so advised the Auction Agent and the Trustee of such
availability and (B) such Wednesday is not a Business Day, then the
Regular Interest Payment Date shall be the first Business Day that is
immediately preceded by a Business Day that falls after such Wednesday;
and
at maturity, whether on the Stated Maturity Date, upon prior redemption or
otherwise and whether or not a Regular Interest Payment Date (each Regular
Interest Payment Date and other date of payment of interest being herein
referred to as an "Interest Payment Date").
(b) During any Auction Rate-Inverse Rate Period, the Bonds
shall bear interest at an Auction Rate and a related Inverse Rate determined as
set forth in this Article IIIA. The Auction Rate on the Auction Rate-Inverse
Rate Bonds during the Initial Interest Period shall be equal to the rate per
annum determined pursuant to a certificate of the Market Agent delivered to the
Trustee
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(with a copy to the Authority, the Registrar and Paying Agent and the Company)
on a date not later than the effective date of the Change in the Interest Rate
Mode as the minimum rate of interest which, in the opinion of the Market Agent,
would be necessary as of such date to market the Auction Rate Bonds during such
Initial Interest Period in a secondary market transaction at a price equal to
the principal amount thereof; provided, however that the Auction Rate shall not
exceed the excess of the Maximum Auction Rate-Inverse Rate over the Service
Charge Rate. Commencing on and including each Initial Interest Payment Date the
rate of interest on the Auction Rate Bonds during any Auction Rate-Inverse Rate
Period for each subsequent interest period therefor (hereinafter referred to as
a "Subsequent Interest Period"; and the Initial Interest Period or any
Subsequent Interest Period being hereinafter referred to as an "Interest
Period"), which Subsequent Interest Period shall commence on the Regular
Interest Payment Date for the preceding Interest Period and shall end on but
exclude the next succeeding Interest Payment Date, shall be equal to the sum of
the rate of interest per annum that results from implementation of the Auction
Procedures (the "Auction Rate") and the Service Charge Rate; provided that
(i)(A) if a notice of an adjustment in the percentage used to
determine the Minimum Rate and the Applicable Percentage used in
determining the Maximum Rate shall have been given by the Market Agent
in accordance with Section 3A.09.3 and, because of a failure to satisfy
the condition set forth in clause (B) of Section 3A.09.3 such
adjustment shall not have taken effect, an Auction shall not be held on
the Auction Date immediately preceding the next succeeding Subsequent
Interest Period and the rate of interest for such Subsequent Interest
Period shall equal the sum of the Maximum Rate on such Auction Date and
the Service Charge Rate on such Auction Date;
(ii) [reserved];
(iii) if at the close of business on the Regular Record Date
immediately preceding any Subsequent Interest Period all Auction Rate
Bonds are Linked with Inverse Rate Bonds, an Auction shall not be held
with respect to such Subsequent Interest Period and the rate of
interest for such Subsequent Interest Period shall equal the Minimum
Rate on the Business Day immediately preceding the first day of such
Subsequent Interest Period;
(iv)(A) if any of the conditions set forth in Section
4.01.3(A)(i) or (ii) with respect to any Change in the Interest Rate
Mode from an Auction Rate-Inverse Rate Period, or if any of the
conditions set forth in Section 4.02.3(A) with respect to a conversion
to a Fixed Rate is not met, the Auction Rate for the Subsequent
Interest Period shall be determined pursuant to Auction Procedures
applicable to the Auction Rate-Inverse Rate Bonds, and (B) if any of
the conditions set forth in Section 4.01.3(A)(iii), (C) or (D) with
respect to any Change in the Interest Rate Mode from an Auction
Rate-Inverse Rate Period, or if any of the conditions set forth in
Section 4.02.3(B) with respect to a conversion to a Fixed Rate from an
Auction Rate- Inverse Rate Period is not met, an Auction shall not be
held with respect to the Subsequent Interest Period and the Auction
Rate for such Subsequent Interest Period shall equal the sum of the
Maximum Rate and the Service Charge Rate on such Auction Date; and
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(v) if on any Auction Date, an Auction is not held for any
other reason, the rate of interest for the next succeeding Subsequent
Interest Period shall equal the sum of the Maximum Rate on such Auction
Date and the Service Charge Rate on such Auction Date.
Notwithstanding the foregoing, if:
(A) the ownership of the Auction Rate Bonds is no longer
maintained in book-entry form by the Securities Depository, the rate of
interest for any Subsequent Interest Period commencing after the
delivery of certificates representing Auction Rate Bonds pursuant to
Section 2.03 hereof shall equal the Maximum Rate on the Business Day
immediately preceding the first day of such Subsequent Interest Period;
or
(B) a Payment Default shall have occurred, the rate of
interest for (1) the Subsequent Interest Period commencing on or
immediately prior to the date on which such Payment Default occurs
shall equal the sum of the Overdue Rate as of the first day of such
Subsequent Interest Period and the Service Charge Rate on the
immediately preceding Auction Date, and (2) for each Subsequent
Interest Period commencing thereafter to and including the Subsequent
Interest Period, if any, during which, or commencing less than two
Business Days after, such Payment Default is cured shall equal the
Overdue Rate on the first day of each such Subsequent Interest Period
(the rate per annum at which interest is payable on the Auction Rate Bonds for
any Interest Period being hereinafter referred to as the "Applicable Auction
Rate").
The rate of interest on the Inverse Rate Bonds during the Initial Interest
Period and for each Subsequent Interest Period, shall be equal to the excess, if
any, taken (without rounding) to one thousandth (.001) of 1%, of:
(i) two times the Linked Rate over
(ii) the product of the Applicable Auction Rate for such Interest
Period and 365/360,
provided that in no event shall such rate exceed the maximum rate on the date of
determination permitted by New York law, as the same may be modified by United
States law of general application (the rate per annum at which interest is
payable on the Inverse Rate Bonds for any Interest Period being hereinafter
referred to as the "Applicable Inverse Rate").
SECTION 3A.03. Auction Rate-Inverse Rate Bonds: Auction
Procedures. Subject to the provisions of subsection (b) of Section
3A.02, Auctions shall be conducted on each Auction Date in the
following manner:
(a)(i) Prior to the Submission Deadline on each Auction Date:
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(A) each Existing Holder of
Auction Rate Bonds may submit to a
Broker-Dealer information as to:
(I) the principal amount of Outstanding
Auction Rate Bonds, if any, held by such Existing
Holder which such Existing Holder desires to continue
to hold without regard to the Auction Rate for the
next succeeding Interest Period;
(II) the principal amount of Outstanding
Auction Rate Bonds, if any, which such Existing
Holder offers to sell if the Auction Rate for the
next succeeding Interest Period shall be less than
the rate per annum specified by such Existing Holder;
and/or
(III) the principal amount of Outstanding
Auction Rate Bonds, if any, held by such Existing
Holder which such Existing Holder offers to sell
without regard to the Auction Rate for the next
succeeding Interest Period; and
(B) for the purposes of implementing the Auctions,
the Broker-Dealers may contact Potential Holders to determine
the principal amount of Auction Rate Bonds which each such
Potential Holder offers to purchase if the Auction Rate for
the next succeeding Interest Period shall not be less than the
rate per annum specified by such Potential Holder.
For the purposes hereof, the communication to a Broker-Dealer
of information referred to in clause (A)(I), (A)(II), (A)(III) or (B)
of this paragraph (i) is hereinafter referred to as an "Order" and
collectively as "Orders" and each Existing Holder and each Potential
Holder placing an Order is hereinafter referred to as a "Bidder" and
collectively as "Bidders'; an Order containing the information referred
to in (x) clause (A)(I) of this paragraph (i) is hereinafter referred
to as a "Hold Order" and collectively as "Hold Orders," (y) clause
(A)(II) or (B) of this paragraph (i) is hereinafter referred to as a
"Bid" and collectively as "Bids" and (z) clause (A)(III) of this
paragraph (i) is hereinafter referred to as a "Sell Order" and
collectively as "Sell Orders."
(ii) (A) Subject to the provisions of subsection (b) of this
Section 3A.03, a Bid by an Existing Holder shall constitute an
irrevocable offer to sell:
(I) the principal amount of Outstanding
Auction Rate Bonds specified in such Bid if the
Auction Rate determined as provided in this Section
3A.03 shall be less than the rate specified therein;
or
(II) such principal amount or a lesser
principal amount of Outstanding Auction Rate Bonds to
be determined as set forth in clause (D) of paragraph
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(i) of subsection (d) of this Section 3A.03 if the
Auction Rate determined as provided in this Section
3A.03 shall be equal to the rate specified therein;
or
(III) such principal amount or a lesser
principal amount of Outstanding Auction Rate Bonds to
be determined as set forth in clause (C) of paragraph
(ii) of subsection (d) of this Section 3A.03 if the
rate specified therein shall be higher than the
Maximum Rate and Sufficient Clearing Bids do not
exist.
(B) Subject to the provisions of subsection (b) of
this Section 3A.03, a Sell Order by an Existing Holder shall
constitute an irrevocable offer to sell:
(I) the principal amount of Outstanding Auction Rate Bonds
specified in such Sell Order; or
(II) such principal amount or a lesser
principal amount of Outstanding Auction Rate Bonds as
set forth in clause (C) of paragraph (ii) of
subsection (d) of this Section 3A.03 if Sufficient
Clearing Bids do not exist.
(C) Subject to the provisions of subsection (b) of
this Section 3A.03, a Bid by a Potential Holder shall
constitute an irrevocable offer to purchase:
(I) the principal amount of Outstanding
Auction Rate Bonds specified in such Bid if the
Auction Rate determined as provided in this Section
3A.03 shall be higher than the rate specified
therein; or
(II) such principal amount or a lesser
principal amount of Outstanding Auction Rate Bonds as
set forth in clause (E) of paragraph (i) of
subsection (d) of this Section 3A.03 if the Auction
Rate determined as provided in this Section 3A.03
shall be equal to the rate specified therein.
(b)(i) Each Broker-Dealer shall submit in writing to the Auction
Agent prior to the Submission Deadline on each Auction Date all Orders
obtained by such Broker-Dealer and shall specify with respect to each
such Order:
(A) the name of the Bidder placing such Order;
(B) the aggregate principal amount of Auction Rate Bonds that are
the subject
of such Order;
(C) to the extent that such Bidder is an Existing
Holder:
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(I) the principal amount of Auction Rate
Bonds, if any, subject to any Hold Order placed by
such Existing Holder;
(II) the principal amount of Auction Rate
Bonds, if any, subject to any Bid placed by such
Existing Holder and the rate specified in such Bid;
and
(III) the principal amount of Auction Rate
Bonds, if any, subject to any Sell Order placed by
such Existing Holder; and
(D) to the extent such Bidder is a Potential Holder,
the rate specified in such Potential Holder's Bid.
(ii) If any rate specified in any Bid contains more than three
figures to the right of the decimal point, the Auction Agent shall
round such rate up to the next highest one thousandth (.001) of 1%.
(iii) If an Order or Orders covering all Outstanding Auction
Rate Bonds held by any Existing Holder is not submitted to the Auction
Agent prior to the Submission Deadline, the Auction Agent shall deem a
Hold Order to have been submitted on behalf of such Existing Holder
covering the principal amount of Outstanding Auction Rate Bonds held by
such Existing Holder and not subject to an Order submitted to the
Auction Agent.
(iv) None of the Authority, the Company, the Trustee or the
Auction Agent shall be responsible for any failure of a Broker-Dealer
to submit an Order to the Auction Agent on behalf of any Existing
Holder or Potential Holder.
(v) If any Existing Holder submits through a Broker-Dealer to
the Auction Agent one or more Orders covering in the aggregate more
than the principal amount of Outstanding Auction Rate Bonds held by
such Existing Holder, such Orders shall be considered valid as follows
and in the following order of priority:
(A) all Hold Orders shall
be considered valid, but only up to
and including in the aggregate the
principal amount of Auction Rate
Bonds held by such Existing Holder,
and if the aggregate principal
amount of Auction Rate Bonds subject
to such Hold Orders exceeds the
aggregate principal amount of
Outstanding Auction Rate Bonds held
by such Existing Holder, the
aggregate principal amount of
Auction Rate Bonds subject to each
such Hold Order shall be reduced pro
rata to cover the aggregate
principal amount of Outstanding
Auction Rate Bonds held by such
Existing Holder;
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(B)(I) any Bid shall be considered valid up to and
including the excess of the principal amount of Outstanding
Auction Rate Bonds held by such Existing Holder over the
aggregate principal amount of Auction Rate Bonds subject to
any Hold Orders referred to in clause (A) of this paragraph
(v);
(II) subject to subclause (I) of this clause
(B), if more than one Bid with the same rate is
submitted on behalf of such Existing Holder and the
aggregate principal amount of Outstanding Auction
Rate Bonds subject to such Bids is greater than such
excess, such Bids shall be considered valid up to and
including the amount of such excess, and the
principal amount of Auction Rate Bonds subject to
each Bid with the same rate shall be reduced pro rata
to cover the principal amount of Auction Rate Bonds
equal to such excess;
(III) subject to subclauses (I) and (II) of
this clause (B), if more than one Bid with different
rates is submitted on behalf of such Existing Holder,
such Bids shall be considered valid first in the
ascending order of their respective rates until the
highest rate is reached at which such excess exists
and then at such rate up to and including the amount
of such excess; and
(IV) in any such event, the aggregate
principal amount of Outstanding Auction Rate Bonds,
if any, subject to Bids not valid under this clause
(B) shall be treated as the subject of a Bid by a
Potential Holder at the rate therein specified; and
(C) all Sell Orders shall be considered valid up to
and including the excess of the principal amount of
Outstanding Auction Rate Bonds held by such Existing Holder
over the aggregate principal amount of Auction Rate Bonds
subject to Hold Orders referred to in clause (A) of this
paragraph (v) and valid Bids referred to in clause (B) of this
paragraph (v).
(vi) If more than one Bid for Auction Rate Bonds is submitted
on behalf of any Potential Holder, each Bid submitted shall be a
separate Bid with the rate and principal amount therein specified.
(vii) Any Bid or Sell Order submitted by an Existing Holder
covering an aggregate principal amount of Auction Rate Bonds not equal
to $25,000 or an integral multiple thereof shall be rejected and shall
be deemed a Hold Order. Any Bid submitted by a Potential Holder
covering an aggregate principal amount of Auction Rate Bonds not equal
to $25,000 or an integral multiple thereof shall be rejected.
(viii) Any Bid submitted by an Existing Holder or a Potential
Holder specifying a rate lower than the Minimum Rate shall be treated
as a Bid specifying the Minimum Rate.
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(c)(i) Not earlier than the Submission Deadline on each
Auction Date, the Auction Agent shall assemble all valid Orders submitted or
deemed submitted to it by the Broker-Dealers (each such Order as submitted or
deemed submitted by a Broker-Dealer being hereinafter referred to individually
as a "Submitted Hold Order," a "Submitted Bid" or a "Submitted Sell Order," as
the case may be, or as a "Submitted Order" and collectively as "Submitted Hold
Orders," "Submitted Bids" or "Submitted Sell Orders," as the case may be, or as
"Submitted Orders") and shall determine:
(A) the excess of the total principal amount of
Outstanding Auction Rate Bonds over the sum of the aggregate
principal amount of Outstanding Auction Rate Bonds subject to
Submitted Hold Orders (such excess being hereinafter referred
to as the "Available Auction Rate Bonds"); and
(B) from the Submitted Orders whether:
(I) the aggregate principal amount of
Outstanding Auction Rate Bonds subject to Submitted
Bids by Potential Holders specifying one or more
rates equal to or lower than the Maximum Rate;
exceeds or is equal to the sum of:
(II) the aggregate principal amount of
Outstanding Auction Rate Bonds subject to Submitted
Bids by Existing Holders specifying one or more rates
higher than the Maximum Rate; and
(III) the aggregate principal amount of
Outstanding Auction Rate Bonds subject to Submitted
Sell Orders
(in the event such excess or such equality exists (other than
because the sum of the principal amounts of Auction Rate Bonds
in subclauses (II) and (III) above is zero because all of the
Outstanding Auction Rate Bonds are subject to Submitted Hold
Orders), such Submitted Bids in subclause (I) above being
hereinafter referred to collectively as "Sufficient Clearing
Bids"); and
(C) if Sufficient Clearing Bids exist, the lowest
rate specified in such Submitted Bids (the "Winning Bid Rate")
which if:
(I) (aa) each such Submitted Bid from
Existing Holders specifying such lowest rate and (bb)
all other Submitted Bids from Existing Holders
specifying lower rates were rejected, thus entitling
such Existing Holders to continue to hold the
principal amount of Auction Rate Bonds subject to
such Submitted Bids; and
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(II) (aa) each such Submitted Bid from
Potential Holders specifying such lowest rate and
(bb) all other Submitted Bids from Potential Holders
specifying lower rates were accepted,
would result in such Existing Holders described in subclause
(I) above continuing to hold an aggregate principal amount of
Outstanding Auction Rate Bonds which, when added to the
aggregate principal amount of Outstanding Auction Rate Bonds
to be purchased by such Potential Holders described in
subclause (II) above, would equal not less than the Available
Auction Rate Bonds.
(ii) Promptly after the Auction Agent has made the
determinations pursuant to paragraph (i) of this subsection (c), the
Auction Agent, by telecopy confirmed in writing, shall advise the
Authority, the Company and the Trustee of the Maximum Rate and the
Minimum Rate and the components thereof on the Auction Date and, based
on such determinations, the Auction Rate for the next succeeding
Interest Period as follows:
(A) if Sufficient Clearing
Bids exist, that the Auction Rate
for the next succeeding Interest
Period shall be equal to the Winning
Bid Rate so determined;
(B) if Sufficient Clearing Bids do not exist (other
than because all of the Outstanding Auction Rate Bonds are
subject to Submitted Hold Orders), that the Auction Rate for
the next succeeding Interest Period shall be equal to the
Maximum Rate; or
(C) if all Outstanding Auction Rate Bonds are subject
to Submitted Hold Orders, that the Auction Rate for the next
succeeding Interest Period shall be equal to the Minimum Rate.
(d) Existing Holders shall continue to hold the principal
amount of Auction Rate Bonds that are subject to Submitted Hold
Orders, and, based on the determinations made pursuant to
paragraph (i) of subsection (c) of this Section 3A.03, Submitted
Bids and Submitted Sell Orders shall be accepted or rejected and
the Auction Agent shall take such other action as set forth
below:
(i) If Sufficient Clearing Bids have been made, all Submitted
Sell Orders shall be accepted and, subject to the provisions of
paragraphs (iv) and (v) of this subsection (d), Submitted Bids shall be
accepted or rejected as follows in the following order of priority and
all other Submitted Bids shall be rejected:
(A) Existing Holders' Submitted Bids specifying any
rate that is higher than the Winning Bid Rate shall be
accepted, thus requiring each such Existing Holder to sell the
aggregate principal amount of Auction Rate Bonds subject to
such Submitted Bids;
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(B) Existing Holders' Submitted Bids specifying any
rate that is lower than the Winning Bid Rate shall be
rejected, thus entitling each such Existing Holder to continue
to hold the aggregate principal amount of Auction Rate Bonds
subject to such Submitted Bids;
(C) Potential Holders' Submitted Bids specifying any
rate that is lower than the Winning Bid Rate shall be
accepted, thus requiring each such Potential Holder to
purchase the aggregate principal amount of Auction Rate Bonds
subject to such Submitted Bids;
(D) each Existing Holder's Submitted Bid specifying a
rate that is equal to the Winning Bid Rate shall be rejected,
thus entitling such Existing Holder to continue to hold the
aggregate principal amount of Auction Rate Bonds subject to
such Submitted Bid, unless the aggregate principal amount of
Outstanding Auction Rate Bonds subject to all such Submitted
Bids shall be greater than the principal amount of Auction
Rate Bonds (the "remaining principal amount") equal to the
excess of the Available Auction Rate Bonds over the aggregate
principal amount of Auction Rate Bonds subject to Submitted
Bids described in clauses (B) and (C) of this paragraph (i),
in which event such Submitted Bid of such Existing Holder
shall be rejected in part, and such Existing Holder shall be
entitled to continue to hold the principal amount of Auction
Rate Bonds subject to such Submitted Bid, but only in an
amount equal to the aggregate principal amount of Auction Rate
Bonds obtained by multiplying the remaining principal amount
by a fraction the numerator of which shall be the principal
amount of Outstanding Auction Rate Bonds held by such Existing
Holder subject to such Submitted Bid and the denominator of
which shall be the sum of the principal amount of Outstanding
Auction Rate Bonds subject to such Submitted Bids made by all
such Existing Holders that specified a rate equal to the
Winning Bid Rate; and
(E) each Potential Holder's Submitted Bid specifying
a rate that is equal to the Winning Bid Rate shall be accepted
but only in an amount equal to the principal amount of Auction
Rate Bonds obtained by multiplying the excess of the aggregate
principal amount of Available Auction Rate Bonds over the
aggregate principal amount of Auction Rate Bonds subject to
Submitted Bids described in clauses (B), (C) and (D) of this
paragraph (i) by a fraction the numerator of which shall be
the aggregate principal amount of Outstanding Auction Rate
Bonds subject to such Submitted Bid and the denominator of
which shall be the sum of the principal amounts of Outstanding
Auction Rate Bonds subject to Submitted Bids made by all such
Potential Holders that specified a rate equal to the Winning
Bid Rate.
(ii) If Sufficient Clearing Bids have not been made (other
than because all of the Outstanding Auction Rate Bonds are subject to
Submitted Hold Orders), subject to the provisions of paragraph (iv) of
this subsection (d), Submitted Orders shall be accepted or
IIIA-15
rejected as follows in the following order of priority and all other
Submitted Bids shall be rejected:
(A) Existing Holders'
Submitted Bids specifying any rate
that is equal to or lower than the
Maximum Rate shall be rejected, thus
entitling such Existing Holders to
continue to hold the aggregate
principal amount of Auction Rate
Bonds subject to such Submitted
Bids;
(B) Potential Holders' Submitted Bids specifying any
rate that is equal to or lower than the Maximum Rate shall be
accepted, thus requiring such Potential Holders to purchase
the aggregate principal amount of Auction Rate Bonds subject
to such Submitted Bids; and
(C) each Existing Holder's Submitted Bid specifying
any rate that is higher than the Maximum Rate and the
Submitted Sell Order of each Existing Holder shall be
accepted, thus entitling each Existing Holder that submitted
any such Submitted Bid or Submitted Sell Order to sell the
Auction Rate Bonds subject to such Submitted Bid or Submitted
Sell Order, but in both cases only in an amount equal to the
aggregate principal amount of Auction Rate Bonds obtained by
multiplying the aggregate principal amount of Auction Rate
Bonds subject to Submitted Bids described in clause (B) of
this paragraph (ii) by a fraction the numerator of which shall
be the aggregate principal amount of Outstanding Auction Rate
Bonds held by such Existing Holder subject to such Submitted
Bid or Submitted Sell Order and the denominator of which shall
be the aggregate principal amount of Outstanding Auction Rate
Bonds subject to all such Submitted Bids and Submitted Sell
Orders.
(iii) If all Outstanding Auction Rate Bonds are subject to
Submitted Hold Orders, all Submitted Bids shall be rejected.
(iv) If, as a result of the procedures described in paragraph
(i) or (ii) of this subsection (d), any Existing Holder would be
entitled or required to sell, or any Potential Holder would be entitled
or required to purchase, a principal amount of Auction Rate Bonds that
is not equal to $25,000 or an integral multiple thereof the Auction
Agent shall, in such manner as, in its sole discretion, it shall
determine, round up or down the principal amount of Auction Rate Bonds
to be purchased or sold by any Existing Holder or Potential Holder so
that the principal amount of Auction Rate Bonds purchased or sold by
each Existing Holder or Potential Holder shall be equal to $25,000 or
an integral multiple thereof.
(v) If, as a result of the procedures described in paragraph
(i) of this subsection (d), any Potential Holder would be entitled or
required to purchase less than $25,000 principal amount of Auction Rate
Bonds, the Auction Agent shall, in such manner as, in its sole
discretion, it shall determine, allocate Auction Rate Bonds for
purchase among Potential Holders so that only Auction Rate Bonds in
principal amounts of $25,000 or an integral
IIIA-16
multiple thereof are purchased by any Potential Holder, even if such
allocation results in one or more of such Potential Holders not
purchasing any Auction Rate Bonds.
(e) Based on the results of each Auction, the Auction Agent
shall determine the aggregate principal amount of Auction Rate Bonds to be
purchased and the aggregate principal amount of Auction Rate Bonds to be sold by
Potential Holders and Existing Holders on whose behalf each Broker-Dealer
submitted Bids or Sell Orders and, with respect to each Broker-Dealer, to the
extent that such aggregate principal amount of Auction Rate Bonds to be sold
differs from such aggregate principal amount of Auction Rate Bonds to be
purchased, determine to which other Broker-Dealer or Broker-Dealers acting for
one or more purchasers such Broker-Dealer shall deliver, or from which other
Broker-Dealer or Broker-Dealers acting for one or more sellers such Broker-
Dealer shall receive, as the case may be, Auction Rate Bonds.
SECTION 3A.04. Auction Rate-Inverse Rate Bonds: Certain Orders
Not Permitted; Purchases and Cancellations. (a) None of the Authority nor the
Company nor any Affiliate thereof may submit an Order in any Auction except as
set forth in the next sentence. Any Broker-Dealer that is an Affiliate of the
Company may not submit Bids to purchase Auction Rate Bonds in an Auction for its
own account, provided that affiliated Broker-Dealers may submit Hold Orders and
Sell Orders in Auctions with respect to Auction Rate Bonds otherwise acquired
during any Auction Rate-Inverse Rate Period for its own account.
(b) While the Bonds bear interest at an Auction Rate and a
related Inverse Rate during an Auction Rate-Inverse Rate Period, neither the
Authority nor the Company, nor the Trustee on behalf of the Authority or the
Company, shall purchase or otherwise acquire Auction Rate Bonds unless, on the
date of any such purchase or acquisition, the Authority, the Company or the
Trustee, as the case may be, purchases or acquires Regular Linked Auction Rate
Bonds and Inverse Rate Bonds or Special Linked Auction Rate Bonds and Inverse
Rate Bonds or an equal aggregate principal amount of Auction Rate Bonds and
Inverse Rate Bonds.
(c) Neither the Authority nor the Company shall deliver to the
Trustee for cancellation, and the Trustee, at the request of either the
Authority or the Company, shall not cancel, Auction Rate Bonds or Inverse Rate
Bonds unless (i) the Authority or the Company delivers to the Trustee for
cancellation or the Trustee cancels, as the case may be, (A) Regular Linked
Auction Rate Bonds and Inverse Rate Bonds or Special Linked Auction Rate Bonds
and Inverse Rate Bonds or (B) an equal aggregate principal amount of Auction
Rate Bonds and Inverse Rate Bonds or (ii) the Authority or the Company delivers
to the Trustee for cancellation on a Redemption Date or the Trustee, at the
request of the Authority or the Company, cancels on a Redemption Date, an
aggregate principal amount of Inverse Rate Bonds equal to the aggregate
principal amount of Auction Rate Bonds being redeemed pursuant to subsection (c)
of Section 5.01(c)(ii) on such Redemption Date.
SECTION 3A.05. Auction Rate-Inverse Rate Bonds: Deposit and
Application of Interest Payments. (a) Pursuant to Section
9.02(a)(i), the Company shall pay to the Registrar and
----------------- Paying Agent not later than 12:00 Noon, New
York City time, on the second Business Day next
IIIA-17
preceding each Regular Interest Payment Date an aggregate amount of funds
available on the next Business Day in The City of New York equal to the
aggregate amount of interest payable on the Bonds of each series on such Regular
Interest Payment Date. The aggregate amount of interest payable on the Bonds of
each series on each Interest Payment Date therefor shall be calculated by
applying the Linked Rate to the aggregate principal amount of the Outstanding
Bonds of each series for which interest is to be paid and multiplying such sum
by the actual number of days in the Interest Period concerned divided by 365 and
rounding the resultant figure to the nearest cent (half a cent being rounded
upwards).
(b) So long as no Payment Default has previously occurred and
is continuing and the ownership of the Auction Rate Bonds and Inverse Rate Bonds
is maintained in book-entry form by the Securities Depository, the Trustee shall
send by 12:15 P.M., New York City time, on the Business Day next preceding each
Regular Interest Payment Date a notice in substantially the form of Exhibit J
hereto to the Auction Agent and to the registered owners of the Bonds by
telecopy or similar means if the aggregate amount of funds available as provided
in subsection (a) of this Section 3A.05 is insufficient to pay the aggregate
amount of interest payable on the Bonds of each series on such Regular Interest
Payment Date pursuant to subsection (a) of this Section 3A.05. If such
insufficiency is cured within three Business Days after such Regular Interest
Payment Date, the Trustee shall immediately send a notice thereof in
substantially the form of Exhibit K hereto to the Auction Agent and to the
registered owners of the Bonds by telecopy or similar means.
(c) On any Initial Interest Payment Date after the effective
date of a Change in the Interest Rate Mode to an Auction Rate-Inverse Rate
Period, the Registrar and Paying Agent shall pay to the Auction Agent, on behalf
of the holders of Auction Rate Bonds, out of amounts made available to it
pursuant to subsection (a) of Section 3A.05 on the immediately preceding
Business Day on account of interest on the Auction Rate Bonds, an amount equal
to the product of (i) a fraction, the numerator of which is the number of days
in the Initial Interest Period and the denominator of which is 360, times (ii)
the Service Charge Rate on the effective date of a Change in the Interest Rate
Mode to an Auction Rate-Inverse Rate Period times (iii) the aggregate principal
amount of the Outstanding Auction Rate Bonds on the effective date of a Change
in the Interest Rate Mode to an Auction Rate-Inverse Rate Period.
(d) On the Interest Payment Date for each Subsequent Interest
Period immediately following an Auction Date, the Registrar and Paying Agent
shall pay to the Auction Agent, on behalf of the holders of Auction Rate Bonds
in respect of which interest is to be paid on such Interest Payment Date, out of
amounts made available to it pursuant to subsection (a) of Section 3A.05 on the
immediately preceding Business Day on account of interest on such Auction Rate
Bonds, an amount equal to the product of (i) a fraction, the numerator of which
is the number of days in such Interest Period and the denominator of which is
360, times (ii) the amount of the Service Charge Rate times (iii) the aggregate
principal amount of such Auction Rate Bonds which were not Linked with Inverse
Rate Bonds at the close of business on the Regular Record Date immediately
preceding such Auction Date.
IIIA-18
SECTION 3A.06. Auction Rate-Inverse Rate Bonds: Calculation of
Maximum Rate, Minimum Rate and Overdue Rate. The Auction Agent shall calculate
the Maximum Rate and the Minimum Rate on each Auction Date. If all Auction Rate
Bonds are Linked with Inverse Rate Bonds at the close of business on any Regular
Record Date, the Auction Agent shall calculate the Minimum Rate on the Business
Day immediately preceding the first day of the next succeeding Subsequent
Interest Period. If the ownership of the Auction Rate Bonds is no longer
maintained in book-entry form by the Securities Depository, the Trustee shall
calculate the Maximum Rate on the Business Day immediately preceding the first
day of each Subsequent Interest Period commencing after the delivery of
certificates representing the Auction Rate Bonds pursuant to Section 2.03. If a
Payment Default shall have occurred, the Trustee shall calculate the Overdue
Rate (i) as of the first day of the Subsequent Interest Period commencing on or
immediately prior to the date on which such Payment Default shall have occurred
and (ii) on the first day of any Subsequent Interest Period commencing after the
occurrence of such Payment Default to and including the Subsequent Interest
Period, if any, commencing less than two Business Days after the cure of such
Payment Default. The Trustee shall calculate the Applicable Factors for each
Subsequent Interest Period. The determination of the Applicable Factors shall in
the absence of manifest error be final and binding upon all parties.
SECTION 3A.07. Auction Rate-Inverse Rate Bonds: Computation of
Interest. (a) From and after the time that ownership of the Auction Rate Bonds
and Inverse Rate Bonds is no longer maintained in book-entry form by the
Securities Depository, the Trustee shall calculate the amount of interest
distributable to (i) holders of Regular Auction Rate Bonds for any Interest
Period by applying the Applicable Factor for Regular Auction Rate Bonds for such
Interest Period to the aggregate principal amount of Regular Auction Rate Bonds
multiplying such sum by the actual number of days in the Interest Period
concerned divided by 360 and rounding the resultant figure to the nearest cent
(half a cent being rounded upwards) and (ii) holders of Regular Inverse Rate
Bonds for any Interest Period by applying the Applicable Factor for Regular
Inverse Rate Bonds for such Interest Period to the aggregate principal amount of
Regular Inverse Rate Bonds multiplying such sum by the actual number of days in
the Interest Period concerned divided by 365 and rounding the resultant figure
to the nearest cent (half a cent being rounded upwards).
(b) So long as the ownership of the Auction Rate Bonds and
Inverse Rate Bonds is maintained in book-entry form by the Securities
Depository, the Trustee shall calculate the Interest Amount with respect to (i)
Regular Auction Rate Bonds and Special Auction Rate Bonds for each Interest
Period by applying the Applicable Factor for Regular Auction Rate Bonds and
Special Auction Rate Bonds, respectively, for such Interest Period to the
principal amount of $1,000, multiplying such sum by the actual number of days in
the Interest Period concerned divided by 360 and truncating the resultant figure
to six figures to the right of the decimal point and (ii) Regular Inverse Rate
Bonds, Regular Linked Auction Rate Bonds and Inverse Rate Bonds and Special
Linked Auction Rate Bonds and Inverse Rate Bonds, respectively, for each
Interest Period by applying the Applicable Factor for Regular Inverse Rate
Bonds, Regular Linked Auction Rate Bonds and Inverse Rate Bonds and Special
Linked Auction Rate Bonds and Inverse Rate Bonds, respectively, for such
Interest Period to the principal amount of $1,000, multiplying such sum by the
actual number of days
IIIA-19
in the Interest Period concerned divided by 365 and truncating the resultant
figure to six figures to the right of the decimal point.
SECTION 3A.08. Auction Rate-Inverse Rate Bonds: Notification
of Rates, Amounts and Payment Dates. (a) So long as the ownership of the Auction
Rate Bonds and the Inverse Rate Bonds is maintained in book-entry form by the
Securities Depository, the Trustee shall advise the Securities Depository of
each Regular Record Date at least two Business Days prior thereto and the
Registrar and Paying Agent shall request the Securities Depository to provide it
with a position listing showing at the close of business on each such Regular
Record Date the aggregate principal amounts of: Regular Auction Rate Bonds,
Special Auction Rate Bonds, Regular Inverse Rate Bonds, Regular Linked Auction
Rate Bonds and Inverse Rate Bonds and Special Linked Auction Rate Bonds and
Inverse Rate Bonds, respectively, and, in the case of the Stated Maturity, of
the aggregate principal amounts payable on the Stated Maturity to the holders of
Regular Auction Rate Bonds, Special Auction Rate Bonds, Regular Inverse Rate
Bonds, Regular Linked Auction Rate Bonds and Inverse Rate Bonds and Special
Linked Auction Rate Bonds and Inverse Rate Bonds, respectively. On the basis of
such position listing, the Registrar and Paying Agent shall determine the
aggregate amounts of interest distributable on the next succeeding Interest
Payment Date to the holders of Regular Auction Rate Bonds, Special Auction Rate
Bonds, Regular Inverse Rate Bonds, Regular Linked Auction Rate Bonds and Inverse
Rate Bonds and Special Linked Auction Rate Bonds and Inverse Rate Bonds,
respectively. In the event the Credit Facility Issuer is obligated to make
payments pursuant to the Credit Facility with respect to any Interest Period,
the Trustee shall make available to the Credit Facility Issuer any information
obtained or determined by it pursuant to this subsection (a) in order to
facilitate the payment of any amounts due under this Indenture in accordance
with the terms of the Credit Facility.
(b) Promptly after a Change in the Interest Rate Mode to an
Auction Rate-Inverse Rate Period and each Regular Interest Payment Date during
an Auction Rate-Inverse Rate Period, and in any event at least 10 days prior to
the next Interest Payment Date following a Change in the Interest Rate Mode to
an Auction Rate-Inverse Rate Period or each Regular Interest Payment Date during
an Auction Rate-Inverse Rate Period, as the case may be, the Trustee shall
advise:
(i) the Auction Agent, so long as no Payment Default
has occurred and is continuing and the ownership of the
Auction Rate Bonds is maintained in book-entry form by the
Securities Depository, and any Registrar and Paying Agent of
such next succeeding Interest Payment Date and, if such next
succeeding Interest Payment Date is not also a Regular
Interest Payment Date, of the next succeeding Regular Interest
Payment Date;
(ii) any Registrar and Paying Agent and the
Securities Depository, so long as the ownership of the Auction
Rate Bonds or the Inverse Rate Bonds is maintained in
book-entry form by the Securities Depository, of the
Applicable Factors and the Interest Amounts with respect to
each Interest Period commencing on such Change
IIIA-20
in the Interest Rate Mode or such Regular Interest Payment
Date, as the case may be; and
(iii) the Auction Agent, so long as no Payment
Default has occurred and is continuing and the ownership of
the Auction Rate Bonds is maintained in book-entry form by the
Securities Depository, and any Registrar and Paying Agent of
the amount payable to the Auction Agent pursuant to subsection
(c) or (d) of Section 3A.05 on such next succeeding Interest
Payment Date and, if such next succeeding Interest Payment
Date is not also a Regular Interest Payment Date, of the
amount so payable on the next succeeding Regular Interest
Payment Date.
In the event that any day that is scheduled to be an Interest Payment Date shall
be changed after the Trustee shall have given the notice referred to in clause
(i) of the preceding sentence, not later than 9:15 A.M., New York City time, on
the Business Day next preceding the earlier of the new Interest Payment Date or
the old Interest Payment Date, the Trustee will, by such means as the Trustee
deems practicable, give notice of such change to the Auction Agent, so long as
no Payment Default has occurred and is continuing and the ownership of the
Auction Rate Bonds is maintained in book-entry form by the Securities
Depository, and to any Registrar and Paying Agent.
(c) By 10:00 A.M., New York City time, on each Regular
Interest Payment Date, the Trustee shall advise the Auction Agent of the
Applicable Factor with respect to Regular Auction Rate Bonds and the Applicable
Inverse Rate for the Interest Period commencing on such Regular Interest Payment
Date.
SECTION 3A.09. Auction Rate-Inverse Rate Bonds: Adjustment in
Percentage. 1. The Market Agent may adjust the percentage used in determining
the Minimum Rate and the Applicable Percentage used in determining the Maximum
Rate if any such adjustment is necessary, in the judgment of the Market Agent to
reflect any Change of Preference Law or to conform to market practice such that
the Maximum Rate and Minimum Rate shall have substantially equal market values
before and after such Change of Preference Law or change in market practice. In
making any such adjustment as a result of a Change of Preference Law, the Market
Agent shall take the following factors, as in existence both before and after
such Change of Preference Law, into account: (i) short-term taxable and
tax-exempt market rates and indices of such short-term rates; (ii) the market
supply and demand for short-term tax-exempt securities; (iii) yield curves for
short- term and long-term tax-exempt securities or obligations having a credit
rating that is comparable to the Bonds; (iv) general economic conditions; and
(v) economic and financial factors present in the securities industry that may
affect or that may be relevant to the Bonds. In making any such adjustment to
conform to market practice, the Market Agent shall take into account such
factors as the Market Agent deems relevant, including the terms of auction rate
bonds of other issuers. Upon the occurrence and during the continuance of a
Company Downgrade Event, the Bond Insurer shall have the right to consent to any
adjustment to the percentage used to determine the Minimum Rate and the
Applicable Percentages used to determine the Maximum Rate, which consent shall
not be unreasonably withheld.
IIIA-21
2. The Market Agent shall communicate its determination to
adjust the percentage used in determining the Minimum Rate and the Applicable
Percentage used in determining the Maximum Rate pursuant to subsection 1 hereof
by means of a written notice delivered at least 10 days prior to the Auction
Date on which the Market Agent desires to effect the change to the Authority,
the Trustee, the Auction Agent, the Bond Insurer and the Company in
substantially the form attached hereto as, or containing substantially the
information contained in, Exhibit F. Such notice shall be effective only if it
is accompanied by the form of opinion that Bond Counsel has advised the Market
Agent that it expects to be able to give on such Auction Date to the effect that
such adjustment is authorized by this Indenture, is permitted under the Act and
will not have an adverse effect on the exclusion of interest on the Bonds of
each series from gross income for federal income tax purposes. The Auction Agent
is required to mail notice thereof to the Existing Holders within two Business
Days of receipt thereof.
3. An adjustment in the percentage used in determining the
Minimum Rate and the Applicable Percentage used in determining the Maximum Rate
shall take effect on an Auction Date only if (A) the Trustee, the Bond Insurer
and the Auction Agent receive, by 11:00 A.M. (New York City time) on the
Business Day immediately preceding such Auction Date, a certificate from the
Market Agent by telecopy or similar means, in substantially the form attached
hereto as, or containing substantially the information contained in, Exhibit H,
(i) authorizing the adjustment of the percentage used in determining the Minimum
Rate and the Applicable Percentage used in determining the Maximum Rate which
shall be specified in such authorization, and (ii) confirming that Bond Counsel
expects to be able to give an opinion on such Auction Date to the effect that
the adjustment in the percentage used in determining the Minimum Rate and the
Applicable Percentage used in determining the Maximum Rate is authorized by this
Section 3A.09, is permitted under the Act and will not have an adverse effect on
the exclusion of interest on the Bonds of each series from gross income for
federal income tax purposes and (B) the Trustee, the Bond Insurer and the
Auction Agent receive by 9:30 A.M. (New York City time) on such Auction Date, an
opinion of Bond Counsel to the effect that the adjustment in the percentage used
in determining the Minimum Rate and the Applicable Percentage used in
determining the Maximum Rate is authorized by this Indenture, is permitted under
the Act and will not have an adverse effect on the exclusion of interest on the
Bonds of each series from gross income for federal income tax purposes.
SECTION 3A.10. Mandatory Auction Rate Bonds Tender for
Purchase. So long as the ownership of the Auction Rate Bonds is maintained in
book-entry form by the Securities Depository, at any time prior to the
Submission Deadline on any Auction Date, any holder of Inverse Rate Bonds (other
than the Authority, the Company or any Affiliate thereof) (i) may notify a
Broker- Dealer that such holder intends to submit a Bid at the Minimum Rate for
a specified principal amount of Auction Rate Bonds in the Auction on such
Auction Date in order to link the same with all or a portion of its Inverse Rate
Bonds and (ii) if such Bid is unsuccessful, in whole or in part, may elect no
later than the second Business Day succeeding such Auction Date to require that
Regular Auction Rate Bonds in an aggregate principal amount equal to the
unsuccessful portion of such Bid be tendered to such holder for purchase (a
"Tender Demand") on the seventh Business Day preceding the next succeeding
Auction Date (a "Tender Date"). The purchase price shall equal the principal
IIIA-22
amount of Regular Auction Rate Bonds being purchased plus accrued and unpaid
interest thereon to the Tender Date at the Applicable Auction Rate less the
Service Charge Rate (the "Tender Price"). A holder of Regular Auction Rate Bonds
who receives notice that all or any portion of its Regular Auction Rate Bonds
has been selected for purchase by a holder of Inverse Rate Bonds who has made a
Tender Demand, shall tender such Auction Rate Bonds for purchase by such holder
of Inverse Rate Bonds at the Tender Price on the Tender Date therefor. A holder
of Inverse Rate Bonds who has made a Tender Demand shall purchase the Regular
Auction Rate Bonds tendered to it on the Tender Date for the Tender Price
therefor. Notice of a Tender Demand shall be given, and the Regular Auction Rate
Bonds to be so purchased shall be selected, by the Auction Agent in accordance
with the Auction Agency Agreement.
IIIA-23
ARTICLE IV
CHANGES IN THE ADJUSTABLE RATE
SECTION 4.01. Optional Conversion by Authority. 1. Prior to
the Fixed Rate Conversion Date, at the times specified below, the Bonds, in
whole or in part, shall cease to bear interest at the Adjustable Rate then borne
by the Bonds and shall bear interest at such different Adjustable Rate as shall
be specified by the Authority, at the request of the Company, in a written
notice delivered at least 15 days prior to the proposed effective date of the
Change in the Interest Rate Mode to the Trustee, the Market Agent, the Registrar
and Paying Agent, any Support Facility Issuer and any Rating Agency then rating
the Bonds (and to the Auction Agent and the Securities Depository if such Change
in the Interest Rate Mode is to or from an Auction Rate during an Auction Rate
Period or an Auction Rate and related Inverse Rate during an Auction
Rate-Inverse Rate Period) in substantially the form attached hereto as, or
containing substantially the information contained in, Exhibit A; provided that
during any Auction Rate-Inverse Rate Period the rate of interest on the Auction
Rate-Inverse Rate Bonds subject to such proposed Change in the Interest Rate
Mode shall not be adjusted to a different Adjustable Rate until after the
expiration of a ten (10) year no-call period which period shall commence on the
effective date of a Change in the Interest Rate Mode to such Auction
Rate-Inverse Rate Period; provided, further, that any Change in the Interest
Rate Mode from an Auction Rate-Inverse Rate Period may be effected only upon
purchase of Auction Rate Bonds and Inverse Rate Bonds subject to such proposed
Change in the Interest Rate Mode at a price equal to the principal amount
thereof plus the premium on the Inverse Rate Bonds referred to in Section
5.01(d), if any. A Change in the Interest Rate Mode may only be effected on the
last Interest Payment Date for a Calculation Period, Auction Period or Interest
Period, as the case may be; provided that a Change in the Interest Rate Mode
during a Commercial Paper Rate Period may only be effected on any Business Day
upon purchase of the Bonds pursuant to subsection 1 of Section 5.02 at a price
equal to the principal amount thereof. A notice of Change in the Interest Rate
Mode shall be effective only if it is accompanied by the form of opinion that
Bond Counsel expects to be able to give on the proposed effective date of such
Change in the Interest Rate Mode to the effect that such Change in the Interest
Rate Mode is authorized by this Indenture, is permitted under the Act and will
not have an adverse effect on the exclusion of interest on such Bonds from gross
income for federal income tax purposes. Upon the occurrence and during the
continuance of a Company Downgrade Event, the Bond Insurer shall have the right
to consent to any conversion of the Bonds to the Commercial Paper Rate or any
interest rate mode with an interest period longer than 30 days, which consent
shall not be unreasonably withheld. It also shall be a condition to any change
in the Interest Rate of Mode from any Term Rate at a time when the purchase
price payable includes an amount representing premium that (i) the Liquidity
Facility then in effect shall permit amounts to be drawn thereunder to pay such
premium or (ii) Available Moneys have been provided to the Registrar and Paying
Agent in an amount sufficient to pay such purchase price in full, including such
premium.
IV-1
In the case of any Change in the Interest Rate Mode to a Term
Rate, the notice required by this section shall specify the length of the
Calculation Period and, unless otherwise specified, such Calculation Period
shall thereafter apply to the Bonds until the earliest to occur of (i) the Fixed
Rate Conversion Date pursuant to Section 4.02, or (ii) a Change in the Interest
Rate Mode effected pursuant to this Section 4.01. Any change in the Calculation
Period during a Term Rate Period shall be deemed an optional conversion pursuant
to this Section 4.01 and may not be made unless all the requirements of a
conversion pursuant to this Section 4.01 are met.
2. The Trustee shall mail, or cause the Registrar and Paying
Agent to mail, the notice received pursuant to subsection 1 of this Section 4.01
on or before the third Business Day after receipt thereof to the Bondholders.
3. A Change in the Interest Rate Mode to an Adjustable Rate
shall be effective
pursuant to Subsection 1 of this Section 4.01 only if
(A) with respect to any Change in the Interest Rate Mode from
an Auction Rate during an Auction Rate Period or an Auction Rate and a related
Inverse Rate during an Auction Rate- Inverse Rate Period, the Trustee, any
Credit Facility Issuer (if any) and the Auction Agent shall receive:
(i) a certificate of an Authorized Company
Representative by no later than the tenth day prior to the effective
date of such Change in the Interest Rate Mode stating (x) that a
written agreement between the Company and a firm or firms of investment
bankers to remarket the Auction Rate Bonds during an Auction Rate
Period or the Auction Rate-Inverse Rate Bonds during an Auction
Rate-Inverse Rate Period on such effective date at a price of 100% of
the principal amount thereof has been entered into, which agreement (A)
may be subject to such reasonable terms and conditions which in the
judgment of the Company reflect the current market standards regarding
investment banking risk and (B) must include a provision requiring
payment of the purchase price in same-day funds for any Auction Rate
Bond during an Auction Rate Period or Auction Rate-Inverse Rate Bonds
during an Auction Rate-Inverse Rate Period, as the case may be,
tendered or deemed tendered (a "Remarketing Commitment"); (y) that a
Liquidity Facility is in effect or has been obtained by the Company
with respect to the Bonds and shall be in effect prior to such Change
in the Interest Rate Mode and thereafter for a period of at least 364
days; and (z) a remarketing agreement is or will be in effect on or
prior to such Change in the Interest Rate Mode; and
(ii) by 11:00 a.m. (New York City time) on the second
Business Day prior to the effective date of such Change in the Interest
Rate Mode by telecopy or other similar means, a certificate in
substantially the form attached hereto as, or containing substantially
the information contained in, Exhibit L, from the Company on behalf of
the Authority (x) authorizing the establishment of the new Adjustable
Rate and (y) confirming that Bond Counsel has advised the Authority
that it expects to be able to give an opinion on the effective date of
such Change in the Interest Rate Mode to the effect that such Change in
the
IV-2
Interest Rate Mode is authorized by this Indenture, is permitted under
the Act and will not have an adverse effect on the exclusion of
interest on the Auction Rate Bonds during an Auction Rate Period or the
Auction Rate-Inverse Rate Bonds during an Auction Rate-Inverse Rate
Period from gross income for federal income tax purposes and (z)
confirming that any necessary amendment to the Bond Purchase Trust
Agreement necessary to provide for the application of moneys available
under the Liquidity Facility have been agreed to by the parties hereto
and will be in effect prior to the Change in the Interest Rate Mode;
(B) with respect to any Change in the Interest Rate Mode, the
Trustee, the Bond Insurer (and the Auction Agent and the Market Agent in the
case of any Change in the Interest Rate Mode to an Auction Rate during an
Auction Rate Period, or an Auction Rate and a related Inverse Rate during an
Auction Rate-Inverse Rate Period), shall receive by 4:00 p.m., New York City
time, on the effective date of such Change in the Interest Rate Mode, a
certificate in substantially the form attached hereto as, or containing
substantially the information contained in, Exhibit O, from an Authorized
Company Representative that all of the Bonds tendered or deemed tendered have
been purchased at a price equal to the principal amount thereof plus accrued and
unpaid interest, if any, with funds provided from the remarketing of such Bonds,
from the proceeds of a Liquidity Facility, or from funds deposited with the
Trustee, and any premium, if any, has been paid from monies deposited with the
Trustee;
(C) with respect to any Change in the Interest Rate Mode, the
Trustee, any Credit Facility Issuer (and the Auction Agent and the Market Agent
in the case of any Change in the Interest Rate Mode to or from an Auction Rate
during an Auction Rate Period, or an Auction Rate and a related Inverse Rate
during an Auction Rate-Inverse Rate Period) shall receive, by 9:30 a.m. (New
York City time) on the effective date of such Change in the Interest Rate Mode,
an Opinion of Bond Counsel to the effect that such Change in the Interest Rate
Mode is authorized by this Indenture, is permitted under the Act and will not
have an adverse effect on the exclusion of interest on such Bonds from gross
income for federal income tax purposes; and
(D) with respect to any Change in the Interest Rate Mode to an
Adjustable Rate (other than to an Auction Rate during an Auction Rate Period, or
an Auction Rate and a related Inverse Rate during an Auction Rate-Inverse Rate
Period), a Liquidity Facility and a Market Agent Agreement meeting the
requirements of this Indenture and the Participation Agreement have been
delivered to the Trustee not less than one Business Day prior to the effective
date of such Change in the Interest Rate Mode and are, by their respective
terms, in effect prior to such effective date.
If any of the conditions referred to in (A)(i) or (ii) above
is not met with respect to any Change in the Interest Rate Mode from an Auction
Rate during an Auction Rate Period, or an Auction Rate and a related Inverse
Rate during an Auction Rate-Inverse Rate Period, the Auction Rate during an
Auction Rate Period, or the Auction Rate and the related Inverse Rate during an
Auction Rate-Inverse Rate Period for the next succeeding Auction Period or
Interest Period shall be determined pursuant to the Auction Procedures
applicable to the Auction Rate Bonds during an Auction Rate Period, or the
Auction Procedures applicable to the Auction Rate Bonds and related
IV-3
Inverse Rate Bonds during an Auction Rate-Inverse Rate Period, as the case may
be. If the condition referred to in (B) above is not met with respect to any
Change in the Interest Rate Mode from an Auction Rate during the Auction Rate
Period, the Auction Rate for the next succeeding Auction Period shall be equal
to the Maximum Auction Rate, and if the condition referred to in (B) above is
not met with respect to any Change in the Interest Rate Mode from an Auction
Rate and a related Inverse Rate during an Auction Rate-Inverse Rate Period, the
Auction Rate for the next succeeding Interest Period shall be equal to the sum
of the Maximum Rate and the Service Charge Rate as determined on the applicable
Auction Date. If any of the conditions referred to in (C) or (D) above is not
met with respect to any Change in the Interest Rate Mode from an Auction Rate
during an Auction Rate Period, the Auction Rate for the next succeeding Auction
Period shall equal the Maximum Auction Rate, and if any of the conditions
referred to in (C) or (D) above is not met with respect to a Change in the
Interest Rate Mode from an Auction Rate and a related Inverse Rate during an
Auction Rate-Inverse Rate Period, the Auction Rate for the next succeeding
Interest Period shall be equal to the sum of the Maximum Rate and the Service
Charge Rate as determined on the applicable Auction Date. If any of the
conditions referred to in (B), (C) or (D) above is not met with respect to any
other Change in the Interest Rate Mode, the Bonds shall continue to bear
interest at the Current Adjustable Rate and be subject to the provisions of this
Indenture applicable thereto while the Bonds bear interest at such Current
Adjustable Rate. If any of the foregoing conditions for a Change in the Interest
Rate Mode other than with respect to a Change in the Interest Rate Mode from an
Auction Rate during an Auction Rate Period or an Auction Rate and a related
Inverse Rate during an Auction Rate-Inverse Rate Period is not met, the Trustee
shall mail, or cause the Registrar and Paying Agent to mail to the Authority,
the Company and the Holders notice thereof in substantially the form attached
hereto as, or containing substantially the information contained in, Exhibit Q
within 3 Business Days after the failure to meet any of such conditions.
SECTION 4.02. Optional Conversion to Fixed Rate. 1. The
Authority reserves the right, at the request of the Company, to fix the rate of
interest per annum which the Bonds will bear, in whole or in part, for the
balance of the term thereof; provided however, that if the Bonds subject to such
proposed conversion to a Fixed Rate bear interest at an Auction Rate and a
related Inverse Rate during an Auction Rate-Inverse Rate Period, the Authority
shall not exercise such right and the Company shall not request the Authority to
exercise such right prior to the expiration of a ten (10) year no-call period
which period shall commence on the effective date of a Change in the Interest
Rate Mode to such Auction Rate-Inverse Rate Period; provided, further, that any
conversion to a Fixed Rate, in whole or in part, from an Auction Rate-Inverse
Rate Period may only be effective upon purchase of the Auction Rate Bonds and
the Inverse Rate Bonds at a price equal to the principal amount thereof plus the
premium on the Inverse Rate Bonds referred to in Section 5.01(d), if any. In the
event the Authority, at the request of the Company, as herein provided,
exercises its Option to Convert, the Bonds shall cease to bear interest at the
Adjustable Rate then borne by the Bonds and shall bear interest at the Fixed
Rate until maturity, subject to the terms and conditions hereof (the date on
which the Fixed Rate shall take effect being herein called the "Fixed Rate
Conversion Date"). The Option to Convert may be exercised at any time through a
written notice given by the Authority, at the direction of the Company, not less
than 15 nor more than 45 days prior to the proposed Fixed Rate Conversion Date
to the Trustee, the Registrar and Paying Agent, any Support Facility Issuer,
IV-4
the Market Agent and any Rating Agency then rating the Bonds at the request of
the Company (and the Auction Agent, and the Securities Depository in the case of
any change to a Fixed Rate from an Auction Rate during an Auction Rate Period or
an Auction Rate and a related Inverse Rate during an Auction Rate-Inverse Rate
Period), in substantially the form attached hereto as, or containing
substantially the information contained in, Exhibit A. The Fixed Rate Conversion
Date may only be the last Interest Payment Date for a Calculation Period,
Auction Period or Interest Period, as the case may be; provided that a Fixed
Rate Conversion Date that immediately follows a Commercial Paper Rate Period may
be on any Business Day upon purchase of the Bonds pursuant to subsection 3 of
Section 5.03 at a price equal to the principal amount thereof. A notice of
conversion to a Fixed Rate shall be effective only if it is accompanied by the
form of opinion that Bond Counsel expects to give on the Fixed Rate Conversion
Date to the effect that the establishment of the Fixed Rate is authorized by
this Indenture, is permitted under the Act and will not have an adverse effect
on the exclusion of interest on such Bonds from gross income for federal income
tax purposes. Upon the occurrence and the continuance of a Company Downgrade
Event, the Bond Insurer shall have the right to consent to any conversion of the
Bonds to the Fixed Rate, which consent shall not be unreasonably withheld.
2. The Trustee shall mail, or cause the Registrar and Paying
Agent to mail, the notice received pursuant to subsection 1 of this Section 4.02
on or before the third Business Day after receipt thereof to the Holders.
3. The Fixed Rate shall take effect only if
(A) with respect to a change to the Fixed Rate from an Auction
Rate during an Auction Rate Period or an Auction Rate and a related Inverse Rate
during an Auction Rate-Inverse Rate Period, the Trustee, the Bond Insurer and
the Auction Agent shall receive:
(i) a certificate of an Authorized Company Representative by
no later than the tenth day prior to the Fixed Rate Conversion Date
stating that a written agreement has been entered into by the Company
and a firm or firms of investment bankers to remarket the Bonds on the
Fixed Rate Conversion Date at a price of not less than 100% of the
principal amount thereof, which written agreement (i) may be subject to
reasonable terms and conditions which in the judgment of the Company
reflect current market standards regarding investment banking risk and
(ii) must include a provision requiring payment of the purchase price
in same-day funds for any Auction Rate Bond during an Auction Rate
Period or Auction Rate Bond and related Inverse Rate Bonds Bond during
any Auction Rate-Inverse Rate Period tendered or deemed tendered and a
determination of the Fixed Rate no later than 11:00 A.M. on the second
Business Day prior to the Fixed Rate Conversion Date (the "Fixed Rate
Commitment); and
(ii) by 11:00 a.m. (New York City time) on the second Business
Day prior to the Fixed Rate Conversion Date, by telecopy or other
similar means, a certificate in substantially the form attached hereto
as, or containing substantially the information contained in,
IV-5
Exhibit N, from the Authority (x) authorizing the establishment of the
Fixed Rate, (y) setting forth the Fixed Rate and (z) confirming that
Bond Counsel expects to be able to give an opinion on the Fixed Rate
Conversion Date to the effect that the change to the Fixed Rate is
authorized by this Indenture, is permitted under the Act and will not
have an adverse effect on the exclusion of interest on the Bonds from
gross income for federal income tax purposes; and
(B) with respect to any change to a Fixed Rate the Trustee,
the Bond Insurer (and the Auction Agent and the Market Agent in the case of any
change to the Fixed Rate from an Auction Rate during an Auction Rate Period or
an Auction Rate and related Inverse Rate during any Auction Rate-Inverse Rate
Period) receives on the Fixed Rate Conversion Date:
(i) by 9:30 a.m. (New York City time) an Opinion of Bond
Counsel to the effect that the conversion to the Fixed Rate is
authorized by this Indenture, is permitted under the Act and will not
have an adverse effect on the exclusion of interest on such Bonds from
gross income for federal income tax purposes; and
(ii) by 4:00 p.m. (New York City time) a certificate in
substantially the form attached hereto as, or containing substantially
the information contained in, Exhibit P, from an Authorized Company
Representative that all of the Bonds tendered or deemed tendered have
been purchased at a price equal to the principal amount thereof with
funds provided from the remarketing of such Bonds in accordance with
the Fixed Rate Commitment, and that accrued and unpaid interest, if
any, has been or shall be paid in accordance with the Indenture from
funds deposited with the Trustee, and that the premium, if any, has
been paid from monies deposited with the Trustee.
If any of the conditions referred to in (A) above is not met
with respect to any change to the Fixed Rate from an Auction Rate during an
Auction Rate Period or an Auction Rate and related Inverse Rate during any
Auction Rate-Inverse Rate Period, the Auction Rate during an Auction Rate Period
or the Auction Rate and related Inverse Rate during any Auction Rate-Inverse
Rate Period, as the case may be, for the next succeeding Auction Period shall be
determined pursuant to the Auction Procedures applicable to the Auction Rate
Bonds during an Auction Rate Period or the Auction Procedures applicable to the
Auction Rate-Inverse Rate Bonds during an Auction Rate- Inverse Rate Period, as
the case may be. If any of the conditions referred to in (B) above are not met
with respect to any change to the Fixed Rate from an Auction Rate during an
Auction Rate Period, the Auction Rate during an Auction Rate Period for the next
succeeding Auction Period shall be equal to the Maximum Auction Rate, and if any
of the condition referred to in (B) above are not met with respect to any change
to the Fixed Rate from an Auction Rate and related Inverse Rate during any
Auction Rate-Inverse Rate Period, the Auction Rate for the next succeeding
Interest Period shall be equal to the sum of the Maximum Rate and the Service
Charge Rate as determined on the applicable Auction Date. If any of the
conditions referred to in (B) above are not met with respect to any change from
any other Adjustable Rate to a Fixed Rate, the Bonds shall continue to bear
interest at the Adjustable Rate then borne by the Bonds and be subject to the
provisions of this
IV-6
Indenture applicable thereto while the Bonds bear interest at such Adjustable
Rate. If any of the foregoing conditions to the establishment of the Fixed Rate
(other than with respect to any attempted change from an Auction Rate during an
Auction Rate Period or an Auction Rate and related Inverse Rate during any
Auction Rate-Inverse Rate Period to a Fixed Rate) are not met, the Trustee shall
mail, or cause the Registrar and Paying Agent to mail to the Authority, the
Holders and the Company, notice thereof in substantially the form attached
hereto as, or containing substantially the information contained in, Exhibit R
within 3 Business Days after the failure to meet any of said conditions.
4. If the Bonds commence to bear interest at the Fixed Rate as
provided in this Section 4.02, the interest rate on such Bonds may not
thereafter be changed to an Adjustable Rate.
SECTION 4.03. Conversion Generally. 1. (A) In the event of a
Change in the Interest Rate Mode on less than all the Bonds of a series or
subseries to or from an Auction Rate and an Inverse Rate during an Auction
Rate-Inverse Rate Period or to or from an Auction Rate during an Auction Rate
Period, or (B) in the event of a conversion of the interest rate on less than
all the Bonds of a series or subseries to a Fixed Rate from an Auction Rate and
an Inverse Rate during an Auction Rate-Inverse Rate Period or from an Auction
Rate during an Auction Rate Period, the minimum aggregate principal amount of
Bonds that continue to bear, or are adjusted to bear interest at an Auction Rate
and an Inverse Rate for an Auction Rate-Inverse Rate Period, shall not be less
than $20,000,000 for such Auction Rate Bonds and such Inverse Rate Bonds,
respectively, and the minimum aggregate principal amount of Bonds that continue
to bear, or are adjusted to bear interest at an Auction Rate for an Auction Rate
Period, shall not be less than $20,000,000 for such Auction Rate Bonds.
2. Upon any Change in the Interest Rate Mode to an Auction
Rate and an Inverse Rate during an Auction Rate-Inverse Rate Period or to an
Auction Rate during an Auction Rate Period, the Authority and the Trustee shall
take all steps necessary to comply with any agreement entered into with a
Securities Depository or its nominee pursuant to Section 2.03(5) with respect to
such Change in the Interest Rate Mode, including, without limitation, the
purchase and designation of sufficient CUSIP numbers to comply with the
requirements of such Securities Depository following any such Change in the
Interest Rate Mode.
3. Except as otherwise provided in Section 4.03(4) below with
respect to Auction Rate-Inverse Rate Bonds during an Auction Rate-Inverse Rate
Period, if the interest rate on less than all Bonds is to be converted to a new
Adjustable Rate pursuant to Section 4.01 or to a Fixed Rate pursuant to Section
4.02, the particular Bonds to be converted shall be chosen by the Trustee, or
the Trustee shall direct the Registrar and Paying Agent to so choose, in such
manner as the Trustee or Registrar and Paying Agent in its discretion may deem
proper; provided, however, that the portion of any Bond to be converted shall be
in the principal amount of $100,000 or some integral multiple of $5,000 in
excess of such amount during a Commercial Paper Rate Period, a Daily Rate
Period, a Weekly Rate Period or a Monthly Rate Period, $25,000 or some integral
multiple thereof during an Auction Rate Period, or $5,000 or some integral
multiple thereof at any other time and that, in
IV-7
selecting Bonds for conversion, the Trustee or Registrar and Paying Agent shall
treat each Bond as representing that number of Bonds which is obtained by
dividing the principal amount of such registered Bond in excess of $100,000 by
$5,000 during a Commercial Paper Rate Period, a Daily Rate Period, a Weekly Rate
Period or a Monthly Rate Period, $25,000 during an Auction Rate Period, and
$5,000 at any other time (such amounts being hereinafter referred to as the
"applicable units of principal amount"). If it is determined that one or more,
but not all of the $100,000, $25,000 or $5,000 units of principal amount
represented by any such Bond is to be converted, then upon notice of intention
to convert such $100,000, $25,000 or $5,000 unit or units pursuant to Sections
4.01 or 4.02, as the case may be, the Holders of such Bonds shall forthwith
surrender such Bonds to the Registrar and Paying Agent for (1) payment of the
purchase price (including the premium, if any, and accrued and unpaid interest
to the date fixed for conversion) of the $100,000, $25,000 or $5,000 unit or
units of principal amount called for conversion and (2) exchange for a new Bond
or Bonds in the aggregate principal amount of the balance of the principal of
such Bonds not subject to conversion. If the Holders of any such Bond of a
denomination greater than $100,000, $25,000 or $5,000 shall fail to present such
Bond to the Registrar and Paying Agent, for payment and exchange as aforesaid,
such Bond shall, nevertheless, become due and payable on the date fixed for
conversion to the extent of the $100,000, $25,000 or $5,000 unit or units of
principal amount subject to such conversion (and to that extent only).
4. The interest rate on Auction Rate Bonds and Inverse Rate
Bonds during any Auction Rate-Inverse Rate Period shall be converted in minimum
denominations of $25,000 or integral multiples thereof. So long as the ownership
of the Auction Rate Bonds and the Inverse Rate Bonds during any Auction
Rate-Inverse Rate Period is maintained in book-entry form by the Securities
Depository, the Auction Rate Bonds and Inverse Rate Bonds, the interest rate on
which is subject to conversion in part, shall be selected by lot from the
Outstanding Bonds of each series as described in the following sentence. An
amount equal to the percentage obtained by dividing the aggregate principal
amount of Outstanding Bonds of each series which are Linked on the record date
selected for the purposes of such conversion, by the aggregate principal amount
of Outstanding Bonds of each series on such record date, shall be selected from
Regular Linked Auction Rate Bonds and Inverse Rate Bonds and Special Linked
Auction Rate Bonds and Inverse Rate Bonds (on a pro rata basis in accordance
with the relative principal amounts thereof), the remaining amount of Inverse
Rate Bonds to be converted shall be selected from Regular Inverse Rate Bonds and
the remaining amount of Auction Rate Bonds to be converted shall be selected
from Regular Auction Rate Bonds and Special Auction Rate Bonds (on a pro rata
basis in accordance with the relative principal amounts thereof); provided, that
if any principal amount of the Auction Rate Bonds and of the Inverse Rate Bonds
selected as provided above from Regular Linked Auction Rate Bonds and Inverse
Rate Bonds, Special Linked Auction Rate Bonds and Inverse Rate Bonds, Regular
Inverse Rate Bonds, Regular Auction Rate Bonds and Special Auction Rate Bonds is
not equal to $25,000 or an integral multiple thereof, the Trustee shall, in such
manner as, in its sole discretion, it shall determine, round up or down the
principal amounts so determined. The Trustee shall give the Securities
Depository at least two Business Days notice of the record date selected by it
for the purpose of a conversion and obtain from the Securities Depository a
position listing showing at the close of business as of such record date the
aggregate principal amounts of: Regular Auction Rate
IV-8
Bonds, Special Auction Rate Bonds, Regular Inverse Rate Bonds, Regular Linked
Auction Rate Bonds and Inverse Rate Bonds and Special Linked Auction Rate Bonds
and Inverse Rate Bonds, respectively. On the basis of such position listing, the
Trustee shall calculate the percentage obtained by dividing the aggregate
principal amount of Outstanding Bonds of each series which are Linked on such
record date by the aggregate principal amount of Outstanding Bonds of each
series on such record date, and determine therefrom the aggregate principal
amounts to be converted and purchase prices per $1,000 (plus accrued and unpaid
interest thereon to the date fixed for conversion) of Regular Auction Rate
Bonds, Special Auction Rate Bonds, Regular Inverse Rate Bonds, Regular Linked
Auction Rate Bonds and Inverse Rate Bonds and Special Linked Auction Rate Bonds
and Inverse Rate Bonds, respectively.
5. Notwithstanding anything in this Article IV to the
contrary, during a Term Rate Period, the Authority may not effect a Change in
the Interest Rate Mode pursuant to Section 4.01 and the Authority may not
exercise its option to convert to a Fixed Rate pursuant to Section 4.02 if such
action would require the payment of a premium upon purchase of Bonds pursuant to
Section 5.02 unless there shall have been deposited the full amount of such
premium in trust with the Trustee prior to any notification of a change pursuant
to Section 4.01 or 4.02. Payments from such trust fund for the payment of
premium may be made only upon receipt by the Trustee of a Non-Bankruptcy
Certificate from the Company.
6. It shall be a condition to any Change in the Interest Rate
Mode on any Bonds of from one mode to another mode that the Trustee shall have
received written confirmation from each Rating Agency then rating the Bonds that
the ratings then assigned by such Rating Agency to the Bonds will not be reduced
or withdrawn by reason of such change in the Interest Rate Mode; provided that a
withdrawal of a short-term rating from any Bonds being converted to a Fixed Rate
shall not be considered to be a withdrawal of a rating for such purpose if no
other ratings applicable to any or all of the Bonds will be reduced or
withdrawn.
IV-9
ARTICLE V
REDEMPTION AND PURCHASE OF BONDS
SECTION 5.01. Optional Redemption. The Adjustable Rate Bonds
shall be subject to redemption, in whole or in part, at the option of the
Authority upon the request of the Company, from payments made by the Company
pursuant to Section 6.2 of the Participation Agreement and any other monies held
by the Trustee and available to be applied to the redemption of Bonds as
provided in this Section 5.01:
(a) During any Commercial Paper Rate Period, such Bonds
shall be subject to redemption (i) on each Interest Payment Date,
as a whole or in part, at the principal amount thereof, or (ii)
on any Business Day, as a whole or in part, at the principal
amount thereof plus accrued interest to the date fixed for
redemption.
(b) During any Auction Rate Period, Auction Rate Bonds shall
be subject to redemption on each Interest Payment Date, as a whole or in part,
at the principal amount thereof plus accrued interest to the date fixed for
redemption.
(c) (i) During any Auction Rate-Inverse Rate Period on or
after the expiration of a ten (10) year no-call period which period shall
commence on the effective date of a Change in the Interest Rate Mode to an
Auction Rate-Inverse Rate Period, the Authority may, at its option upon the
request of the Company, at any time prior to the Stated Maturity of the Auction
Rate Bonds, redeem the Auction Rate Bonds, as a whole or from time to time in
part, on the second Business Day preceding any Regular Interest Payment Date at
100% of the principal amount thereof, together with interest accrued and unpaid
thereon to the Redemption Date; provided that at the time of such redemption,
the Authority shall simultaneously redeem an equal aggregate principal amount of
Inverse Rate Bonds.
(ii) During any Auction Rate-Inverse Rate Period, the
Authority may, at its option upon the request of the Company, at any time prior
to the Stated Maturity of the Auction Rate Bonds, redeem the Auction Rate Bonds,
as a whole or from time to time in part, without redeeming any of the Inverse
Rate Bonds, on the second Business Day preceding any Regular Interest Payment
Date at 100% of the principal amount thereof, together with interest accrued and
unpaid thereon to the Redemption Date; provided that prior to requesting the
Trustee to give notice of any such redemption, the Authority or the Company
shall have delivered to the Trustee for cancellation on the Redemption Date
pursuant to Section 3A.04 an equal aggregate principal amount of Inverse Rate
Bonds.
(d) During any Auction Rate-Inverse Rate Period on or after
the expiration of a no-call period which shall commence on the expiration of a
ten (10) year no-call period which period shall commence on the effective date
of a Change in the Interest Rate Mode to an Auction Rate- Inverse Rate Period,
the Authority may, at its option upon the request of the Company, at any time
V-1
prior to the Stated Maturity of the Inverse Rate Bonds, redeem the Inverse Rate
Bonds, as a whole or from time to time in part, on the second Business Day
preceding any Regular Interest Payment Date at a redemption price of:
(i) 104% of the principal amount thereof if redeemed
during the twelve month period ending one year after the expiration of
the no-call period;
(ii) 102% of the principal amount thereof if redeemed
during the twelve month period ending two years after the expiration of
the no-call period; and
(iii) 100% of the principal amount thereof if redeemed
thereafter,
together with, in each case, interest accrued and unpaid thereon to the
Redemption Date; provided that at the time of such redemption, the Authority
shall simultaneously redeem an equal aggregate principal amount of Auction Rate
Bonds.
(e) During any Daily Rate Period, such Bonds shall be subject
to redemption on any Business Day, as a whole or in part, at the principal
amount thereof, plus accrued interest to the date fixed for redemption, if any.
(f) During any Weekly Rate Period, such Bonds shall be subject
to redemption on any Business Day, as a whole or in part, at the principal
amount thereof, plus accrued interest to the date fixed for redemption, if any.
(g) During any Monthly Rate Period, such Bonds shall be
subject to redemption on each Interest Payment Date, as a whole or in part, at
the principal amount thereof.
(h) During any Semi-annual Rate Period, such Bonds shall be
subject to redemption on each Interest Payment Date, as a whole or in part, at
the principal amount thereof.
(i) During any Term Rate Period and after the Fixed Rate
Conversion Date, such Bonds shall be subject to redemption in whole at any time
on any Business Day or in part on any Interest Payment Date as follows: after
the No-Call Period shown below, which shall begin on the first day of the
Calculation Period applicable to such Bonds or on the Fixed Rate Conversion
Date, as the case may be, at a redemption price equal, initially, to the
principal amount thereof, plus a premium equal to the percentage of the
principal amount to be redeemed shown in the Initial Premium column. The premium
percentage shall decline by the percentage shown in the Reduction in Premium
column on each anniversary of the date on which such Bonds are first redeemable,
if the Calculation Period or period remaining to maturity after the Fixed Rate
Conversion Date is equal to or greater than five years, and on each Interest
Payment Date if the Calculation Period or period remaining to maturity after the
Fixed Rate Conversion Date is less than five years, until the Bonds shall be
redeemable without premium.
V-2
Calculation Period or Period to Maturity
Equal to or But Less No-Call Initial Reduction
Greater Than Than Period Premium in Premium
- ------------ -------- -------- ------- ----------
18 years N/A 10 Years 1 % 1/2%
12 years 18 Years 8 Years 1 1/2
7 Years 12 Years 6 Years 1 1/2
5 Years 7 Years 4 Years 1/2 1/2
4 Years 5 Years 3 Years 1/2 1/2
3 Years 4 Years 2 Years 1/2 1/8
0 Years 3 Years Not callable
If upon establishment of a Term Rate Period, or on the Fixed Rate Conversion
Date, as the case may be, the Market Agent or, in the case of the Fixed Rate
Conversion Date, the other investment bank or investment banks (selected by the
Company and approved by the Authority) party to the Fixed Rate Commitment
certifies to the Trustee, Bond Counsel and the Authority in writing that the
foregoing schedule is not consistent with then-prevailing market conditions, the
Authority at the request of the Company may revise the foregoing Initial
Premium, Reductions in Premium and No- Call Periods without the approval of the
Holders to reflect then-prevailing market conditions, upon receipt of an opinion
of Bond Counsel to the effect that any revisions pursuant to this paragraph,
either by itself or in conjunction with the establishment of a Calculation
Period or the Fixed Rate, as the case may be, are made in accordance with this
Indenture, is permitted under the Act and will not adversely affect the
exclusion of interest on the Bonds from gross income for federal income tax
purposes.
Any optional redemption shall be conditioned upon the
Trustee's receipt of funds (or, in the case of any optional redemption occurring
while the Bonds bear interest at a Daily Rate, Weekly Rate, Monthly Rate,
Semi-Annual Rate or Commercial Paper Rate, Available Moneys) sufficient to pay
the redemption price of the Bonds to be redeemed on or prior to the redemption
date.
SECTION 5.02. Tender for and Purchase upon Election of Holder.
1. During any Daily Rate Period or Weekly Rate Period, any Bond or portion
thereof in a principal amount equal to an authorized denomination (so long as
the principal amount not purchased is an authorized denomination) shall be
purchased on the demand of the Holder thereof on any Business Day at a price
equal to the principal amount thereof plus accrued interest, if any, to the date
of purchase, upon delivery to the Registrar and Paying Agent and the Market
Agent at their respective principal offices, by the close of business on any
Business Day of a Notice of Election to Tender in substantially the form
attached hereto as, or containing substantially the information contained in,
Exhibit B; provided, however, that the substance of such Notice of Election to
Tender must also be given telephonically to the Market Agent prior to or
simultaneously with delivery of such written Notice of Election to Tender to the
Market Agent. The date on which such Bond shall be purchased shall,
V-3
at the request of the Holder thereof (i) if the Bond then bears interest at a
Daily Rate, be the date of delivery of such Notice of Election to Tender if such
Notice of Election to Tender is delivered to the Registrar and Paying Agent and
the Market Agent by 10:00 a.m.(New York City time) on such date or may be any
Business Day thereafter, or (ii) if the Bond then bears interest at a Weekly
Rate, a Business Day at least seven days after the date of the delivery of such
Notice of Election to Tender to the Registrar and Paying Agent and the Market
Agent.
2. During any Monthly Rate Period or Semi-annual Rate Period
on or prior to the Fixed Rate Conversion Date, any Bond or portion thereof in a
principal amount equal to an authorized denomination (so long as the principal
amount not purchased is an authorized denomination) shall be purchased on the
demand of the Holder thereof on the first Business Day following each
Calculation Period at a price equal to the principal amount thereof, upon
delivery to the Registrar and Paying Agent and the Market Agent, at their
respective principal offices of a Notice of Election to Tender in substantially
the form attached hereto as or containing substantially the information
contained in Exhibit B on or prior to a Business Day which is not less than 10
days, in the case of Bonds bearing interest at a Semi-annual Rate, or seven
days, in the case of Bonds bearing interest at a Monthly Rate, prior to the
proposed date of purchase; provided, however, that the substance of such Notice
of Election to Tender must also be given telephonically to the Market Agent
prior to or simultaneously with delivery of such written Notice of Election to
Tender to the Market Agent.
3. Immediately upon receipt of a Notice of Election to Tender
delivered in accordance with the provisions of this Section 5.02, the Registrar
and Paying Agent shall notify, or cause to be notified, the Trustee, the
Company, the Market Agent, the Liquidity Facility Issuer and, upon request, the
Authority by telephone, promptly confirmed in writing, of such receipt,
specifying the contents thereof.
4. Any Notice of Election to Tender shall be irrevocable. If a
Holder fails to deliver the Bonds referred to in such notice to the Registrar
and Paying Agent, such Bonds shall nevertheless be deemed to have been purchased
on the date established for the purchase thereof, and, to the extent that there
shall be on deposit in the Bond Purchase Fund on such date an amount sufficient
to pay the principal amount thereof, plus accrued interest, if any, no interest
shall accrue on such Bonds from and after the date of purchase and such Holder
shall have no rights hereunder thereafter as the owner of such Bonds except the
right to receive the purchase price of such Bonds.
5. The right of a Holder to tender a Bond to the Registrar
and Paying Agent shall terminate after the Fixed Rate Conversion
Date.
SECTION 5.03. Mandatory Tender for Purchase upon Change in the
Interest Rate Mode on Business Day Following Certain Calculation Periods or
Occurrence of Fixed Rate Conversion Date. 1. Upon a Change in the Interest Rate
Mode, the Bonds bearing a Daily Rate, Weekly Rate, Monthly Rate, Semi-annual
Rate, Term Rate, Commercial Paper Rate, Auction Rate during an Auction Rate
Period, or Auction Rate and related Inverse Rate during an Auction Rate- Inverse
Rate Period shall be subject to mandatory tender for purchase in accordance with
the terms hereof, on the effective date of such Change in the Interest Rate Mode
at a price equal to the principal amount thereof plus accrued interest and
premium, if any, in accordance with Section 4.01.
2. During any Term Rate Period or Commercial Paper Rate
Period, the Bonds shall be subject to mandatory tender for purchase in
accordance with the terms hereof on the Business Day immediately following each
Calculation Period, each at a price equal to the principal amount thereof plus
accrued interest and premium, if any.
3. The Bonds shall also be subject to mandatory tender for
purchase in accordance with the terms hereof on the Fixed Rate Conversion Date
at a price equal to the principal amount thereof plus accrued interest and
premium, if any.
4. Notice of mandatory tender for purchase upon a Change in
the Interest Rate Mode or upon a conversion to a Fixed Rate shall be in
substantially the form attached hereto as, or contain substantially the
information contained in, Exhibit A.
5. Any such notice of mandatory tender for purchase required
by this Section 5.03 shall be given by the Trustee, in the name of the
Authority, or the Trustee shall cause the Registrar and Paying Agent to give
such notice (with copies thereof to be given to the Market Agent, the Registrar
and Paying Agent, the Bond Insurer, the Company, the Liquidity Facility Issuer
and any Rating Agency then rating the Bonds and in the case of Auction Rate
Bonds during an Auction Rate Period, or Auction Rate-Inverse Rate Bonds during
an Auction Rate-Inverse Rate Period, the Auction Agent, and, upon request, the
Authority) by first-class mail to the Holders of the Bonds subject to purchase
at their addresses shown on the books of registry.
6. Bank Bonds are not subject to mandatory tender for
purchase pursuant to this
Section 5.03.
7. Purchase price of tendered Bonds shall include premium
solely to the extent that (i) such Bonds bear interest at a Term Rate or Inverse
Rate and (ii) the applicable redemption price therefor would include the premium
specified in Section 5.01 if such Bonds were to be optionally redeemed on the
date such Bonds are to be purchased.
SECTION 5.04. Extraordinary Optional Redemption. During any
Term Rate Period, Fixed Rate Period or Auction Rate-Inverse Rate Period, the
Bonds are also subject to redemption prior to maturity in whole at any time at
the option of the Authority, exercised at the direction of the Company, upon
notice given as provided in the Indenture, except in the case of a redemption
pursuant to clause (iii) below, at a redemption price equal to the principal
amount thereof, together with unpaid interest accrued thereon to the date fixed
for redemption, in any of the following events:
V-4
(i) All or substantially all of the Project shall
have been damaged or destroyed or title to, or the temporary
use of, all or a substantial portion of the Project shall have
been taken under the exercise of the power of eminent domain
by any governmental authority, or person, firm or corporation
acting under governmental authority, as in each case renders
the Project unsatisfactory to the Company for its intended
use;
(ii) Unreasonable burdens or excessive liabilities
shall have been imposed upon the Authority or the Company with
respect to all or substantially all of the Project, including
without limitation the imposition of federal, state or other
ad valorem property, income or other taxes other than ad
valorem taxes in effect on the date of original issuance of
the Bonds levied upon privately owned property used for the
same general purpose as the Project, as well as any statute or
regulation enacted or promulgated after the Closing Date that
prevents the Company from deducting interest on the Company
Note for federal income tax purposes;
(iii) All or substantially all of the Project shall
be transferred or sold to any entity other than an affiliate
of the Company; in the case of redemption under this clause
(iii) of Section 5.04, the redemption price shall be equal to
101% of the principal amount of the Bonds, together with
unpaid interest accrued thereon to the date fixed for
redemption, unless a smaller or no premium would be due upon
optional redemption of the Bonds pursuant to another section
of the Indenture; or
(iv) Any court or regulatory or administrative body
shall enter or adopt, or fail to enter or adopt, a judgment,
order, approval, decree, rule or regulation, as a result of
which the Company elects to cease operation of all or
substantially all of the Project.
SECTION 5.05. Redemption if Participation Agreement or Note
Void, Unenforceable or Impossible to Perform. The Bonds shall be subject to
redemption prior to their Stated Maturity at any time on a Business Day, in
whole but not in part, upon the receipt by the Trustee of a written certificate
from the Company given in accordance with Section 6.3 of the Participation
Agreement stating that the Company intends to prepay the amounts payable under
the Participation Agreement and the Note and certifying that, within the
preceding 120 days, a change in the Constitution of the State of New York or the
Constitution of the United States of America or legislative or administrative
action (whether state or federal) or final decree, judgment or order of any
court or administrative body (whether state or federal) has occurred which
results in the Participation Agreement or the Note or both of them becoming void
or unenforceable or impossible to perform in accordance with the intent and
purpose of the parties as expressed in the Participation Agreement and the Note,
at a redemption price equal to the principal amount thereof plus accrued and
unpaid interest to the date fixed for redemption.
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Any redemption under this Section 5.05 shall be conditioned
upon the Trustee's receipt of funds (or, in the case of any such redemption
occurring while the Bonds bear interest at a Daily Rate, Weekly Rate, Monthly
Rate, Semi-Annual Rate or Commercial Paper Rate, Available Moneys) sufficient to
pay the redemption price of the Bonds to be redeemed on or prior to the
redemption date.
SECTION 5.06. Special Tax Redemption Provisions. 1. The Bonds
shall be subject to mandatory redemption prior to their stated maturity (i) in
part, at a redemption price equal to the principal amount of the Bonds to be
redeemed, plus accrued interest, if any, to the date fixed for redemption, if
such partial redemption will preserve the exclusion from gross income for
federal income tax purposes of interest on the remaining Bonds outstanding
(provided, however, in the case of Auction Rate-Inverse Rate Bonds during an
Auction Rate-Inverse Rate Period, the Authority shall redeem an equal aggregate
principal amount of Auction Rate Bonds and Inverse Rate Bonds), or (ii) in
whole, at a redemption price equal to the principal amount thereof, plus accrued
interest, if any, to the date fixed for redemption, if, in a published or
private ruling of the Internal Revenue Service or in a final, nonappealable
judicial decision by a court of competent jurisdiction (provided that the
Company has been afforded the opportunity to participate at its own expense in
the proceeding resulting in such ruling or in the litigation resulting in such
decision, as the case may be), it is determined that, as a result of a failure
by the Company to observe any covenant, agreement or representation in the Tax
Regulatory Agreement, interest on any Bond is includable for federal income tax
purposes in the gross income of the Holders thereof (other than a "substantial
user" of the Project or a "related person" as provided in Section 147(a) of the
Code) (any such event constituting a "Determination of Taxability") and, in such
event, the Bonds shall be subject to such mandatory redemption on a Business Day
not more than 180 days after the giving of notice by the Trustee or a Bondholder
to the Authority and the Company of such published or private ruling or judicial
decision and demanding redemption of the Bonds. Either the Authority or the
Company shall immediately notify the Trustee upon learning of any such
Determination of Taxability. The Trustee shall not be deemed to have knowledge
of such an event unless it has actual knowledge thereof.
2. During any Semi-annual Rate Period, Term Rate Period or
Fixed Rate Period, the Bonds will also be subject to mandatory redemption at a
redemption price equal to the principal amount thereof plus unpaid interest
accrued thereon to the redemption date if the Company reasonably concludes and
certifies to the Trustee that the business, properties, condition (financial or
otherwise), operations or business prospects of the Company will be materially
and adversely affected unless the Company takes or omits to take a specified
action and that the Company has been advised in writing by Bond Counsel that the
specified action or omission would cause the use of the Project to be such that,
pursuant to Section 150 of the Code, the Company would not be entitled to deduct
the interest on the Company Note for purposes of determining the Company's
Federal taxable income, for a period of not less than sixty (60) consecutive or
nonconsecutive days during a twenty-four month period. Such conclusion and
certification shall be evidenced by delivery to the Trustee of a written
certificate of an Authorized Company Representative to the effect that the
Company has reached such conclusion, together with a certified copy of a
resolution of the Board of Directors of the Company authorizing such certificate
and a copy of such advice of Bond Counsel. In the event
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that the Bonds become subject to redemption as provided in this paragraph, the
Bonds will be redeemed in whole unless redemption of a portion of the Bonds
outstanding would, in the opinion of Bond Counsel, have the result that interest
payable on the Company Note for the Bonds remaining outstanding after such
redemption would be deductible for purposes of determining the Federal taxable
income of the Company, and, in such event, the Bonds to be redeemed shall be
selected (in the principal amount of $5,000 or any integral multiple thereof)
from time to time at random in such manner as the Trustee shall determine in
accordance with the Indenture, in such amount as is necessary to accomplish that
result. The occurrence of an event requiring the redemption of the Bonds under
this paragraph does not constitute an event of default under any Note or under
the Indenture and the sole obligation in such event shall be for the Company to
prepay the Note in an amount sufficient to redeem the Bonds to the extent
required by this paragraph.
SECTION 5.06-A. Redemption of Bank Bonds. Any Bank Bonds held
by the Liquidity Facility Issuer shall be redeemed at the times and in the
principal amounts specified in the Liquidity Facility. Any redemption pursuant
to this Section 5.06-A shall be at a price equal to one hundred percent (100%)
of the principal amount of the Bonds so redeemed, plus accrued interest at the
Bank Bond Interest Rate to the redemption date.
SECTION 5.07. Redemption at Demand of the State. In accordance
with the provisions of Section 1864 of the Act, the State of New York may, upon
furnishing sufficient funds therefor, require the Authority to redeem prior to
maturity, as a whole, the Bonds on any Interest Payment Date not less than
twenty years after the Closing Date. The Authority shall deposit any such funds
received by it with the Trustee. The Trustee shall deposit any such funds in the
Bond Fund and, upon notice published in the manner provided in Section 1864 of
the Act, shall apply such funds to the redemption of the Bonds, at a redemption
price equal to lesser of (i) the optional redemption price, if any, applicable
on such date set forth in Section 5.01 and (ii) 105% of the principal amount
thereof, together, in either case, with accrued and unpaid interest, if any, to
the date fixed for redemption, all in the manner provided in this Article V.
Upon such redemption and notwithstanding anything to the contrary in Article XV,
the Trustee shall assign the Note relating to the Bonds to or as directed by the
Authority.
SECTION 5.08. Mandatory Tender for Purchase Upon Expiration or
Termination of any Liquidity Facility. 1. Except as otherwise set forth in the
last sentence of this subsection 1, on the date of expiration or termination
(including a date of termination evidenced by receipt by the Trustee and the
Registrar and Paying Agent of a written notice from the Liquidity Facility
Issuer or any other person authorized to deliver a notice in accordance with the
Liquidity Facility of an event which permits or mandates the termination of the
Liquidity Facility under the terms thereof and any termination arising in
connection with the delivery of an Alternate Liquidity Facility which results in
the withdrawal or reduction of any rating applicable to the Bonds) of any
Liquidity Facility (or on the next preceding Business Day, if such date of
expiration or termination is not a Business Day), the Bonds shall be subject to
mandatory purchase at a price equal to the principal amount thereof unless on or
prior to the 35th day prior to such date of expiration or termination the
Company on behalf of the Authority has furnished to the Trustee (a) an extension
of such Liquidity Facility, or
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(b) an Alternate Liquidity Facility with another bank or financial institution
providing an Alternate Liquidity Facility in replacement of the expiring
Liquidity Facility together with the confirmation of ratings referred to in
Section 6.02(1). No tender for purchase of any Bonds shall be required pursuant
to this Section 5.08 during an Auction Rate Period, or an Auction Rate-Inverse
Rate Period or if the Fixed Rate Conversion Date shall have occurred on a date
prior to such date of expiration.
2. Notice of the mandatory tender for purchase pursuant to
this Section 5.08 shall be given on or prior to the 30th day before the
expiration or termination date (including a date of termination evidenced by
receipt by the Trustee and the Registrar and Paying Agent of a written notice of
an event of default under a Liquidity Facility) of a Liquidity Facility by the
Trustee in the name of the Authority (with copies thereof given to the
Authority, the Market Agent, the issuer of the expiring Liquidity Facility, the
Company, the Bond Insurer, any Rating Agency then rating the Bonds and the
Registrar and Paying Agent) by first-class mail to the Holders of the Bonds
subject to mandatory tender for purchase at their addresses shown on the books
of registry. Such notice shall be in substantially the form attached hereto as,
or contain substantially the information contained in, Exhibit C.
3. Bank Bonds or Bonds held by or for the account of the
Company are not subject to mandatory tender for purchase pursuant
to this Section 5.08.
SECTION 5.09. General Provisions Applicable to Mandatory and
Optional Tenders for Purchase of Bonds. 1. If interest has been paid on the
Bonds, or an amount sufficient to pay interest thereon has been deposited in the
Bond Fund, or an amount sufficient to pay accrued interest thereon, if any, has
been set aside in the Bond Purchase Fund held under the Bond Purchase Trust
Agreement, and the purchase price equal to the principal of, and premium, if
any, on the Bonds shall be available in the Bond Purchase Fund for purchase of
Bonds subject to tender for purchase pursuant to Section 5.02, 5.03 or 5.08, and
if any Holder fails to deliver or does not properly deliver the Bonds to the
Registrar and Paying Agent for which a Notice of Election to Tender has been
properly filed or which are subject to mandatory tender for purchase on the
purchase date therefor, such Bonds shall nevertheless be deemed tendered and
purchased on the date established for the purchase thereof, no interest shall
accrue on such Bonds from and after the date of purchase and such former Holders
shall have no rights hereunder as the registered owners of such Bonds, except
the right to receive the purchase price of and interest to the purchase date, if
any, on such Bonds upon delivery thereof to the Registrar and Paying Agent in
accordance with the provisions hereof. The purchaser of any such Bonds
remarketed by the Market Agent, or any Support Facility Issuer, to the extent
Bonds are purchased with the proceeds of a draw on, or borrowing or payment
under, the Support Facility, shall be treated as the registered owner thereof
for all purposes of the Indenture. If the ownership of the Bonds is no longer
maintained in book-entry form by the Securities Depository the payment of Bonds
pursuant to Section 5.02 shall be subject to delivery of such Bonds duly
endorsed in blank for transfer or accompanied by an instrument of transfer
thereof in form satisfactory to the Registrar and Paying Agent executed in blank
for transfer at the principal office of the Registrar and Paying Agent at or
prior to 10:00 a.m. (11:30 a.m. for Bonds bearing interest at the Weekly Rate
and 12:00 noon, for Bonds bearing interest at the Daily Rate) (New York City
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time), on a specified purchase date. The Registrar and Paying Agent may refuse
to make payment with respect to any Bonds tendered for purchase pursuant to
Sections 5.02, 5.03 or 5.08 not endorsed in blank or for which an instrument of
transfer satisfactory to the Registrar and Paying Agent has not been provided.
2. The purchase price of Bonds subject to tender for purchase
pursuant to Section 5.02, 5.03 or 5.08 in an aggregate principal amount of at
least one million dollars ($1,000,000) shall be payable in immediately available
funds or by wire transfer upon written notice from the Holder thereof containing
the wire transfer address (which shall be in the continental United States) to
which such Holder wishes to have such wire directed, if such written notice is
received by the Registrar and Paying Agent not less than five days prior to the
related purchase date.
3. To the extent that a Liquidity Facility is required to be
in effect, Bonds tendered for purchase may not be purchased by the Authority,
the Company or any Affiliate from the Market Agent upon a remarketing of Bonds
pursuant to the Market Agent Agreement.
SECTION 5.10. Selection of Bonds to be Redeemed. 1. Except as
provided otherwise in subsections 2, 3, 4 and 5 below with respect to Auction
Rate-Inverse Rate Bonds during an Auction Rate-Inverse Rate Period, a redemption
of Bonds shall be a redemption of the whole or of any part of the Bonds from any
funds available for that purpose in a principal amount equal to an authorized
denomination (so long as the principal amount not redeemed is an authorized
denomination). If less than all Bonds shall be redeemed, the particular Bonds to
be redeemed shall be chosen by the Trustee, or the Trustee shall direct the
Registrar and Paying Agent to so choose, as hereinafter provided. If less than
all the Bonds shall be called for redemption under any provision of this
Indenture permitting such partial redemption, the particular Bonds or portions
of Bonds to be redeemed shall be selected (a) first, from Bonds held or owned by
or for any Support Facility Issuer pursuant to any Support Facility, (b) second,
from Bonds for which the Registrar and Paying Agent has received, prior to such
selection, a Notice of Election to Tender requiring the Registrar and Paying
Agent to purchase such Bonds on the date on which the Bonds being selected are
to be redeemed and (c) third, from all other Bonds then Outstanding, by lot or
on a pro rata basis by the Trustee or, upon direction of the Trustee, the
Registrar and Paying Agent, in such manner as the Trustee or Registrar and
Paying Agent in its discretion may deem proper; provided, however, that the
portion of any Bond to be redeemed shall be in the principal amount of $100,000
or some integral multiple thereof during a Commercial Paper Rate Period, a Daily
Rate Period, a Weekly Rate Period or a Monthly Rate Period, $25,000 or some
integral multiple thereof during an Auction Rate Period, or $5,000 or some
integral multiple thereof at any other time and that, in selecting Bonds for
redemption, the Trustee or Registrar and Paying Agent shall treat each Bond as
representing that number of Bonds which is obtained by dividing the principal
amount of such registered Bond in excess of $100,000 by $100,000 during a
Commercial Paper Rate Period, a Daily Rate Period, a Weekly Rate Period or a
Monthly Rate Period, $25,000 during an Auction Rate Period, and $5,000 at any
other time (such amounts being hereinafter referred to as the "applicable units
of principal amount"). If it is determined that one or more, but not all of the
$100,000, $25,000 or $5,000 units of principal amount represented by any such
Bond is to be called for redemption,
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then upon notice of intention to redeem such $100,000, $25,000 or $5,000 unit or
units, the Holders of such Bonds shall forthwith surrender such Bonds to the
Registrar and Paying Agent for (1) payment of the redemption price (including
the redemption premium, if any, and accrued and unpaid interest to the date
fixed for redemption) of the $100,000, $25,000 or $5,000 unit or units of
principal amount called for redemption and (2) exchange for a new Bond or Bonds
of the aggregate principal amount of the unredeemed balance of the principal of
such Bonds. If the Holders of any such Bond of a denomination greater than
$100,000, $25,000 or $5,000 shall fail to present such Bond to the Registrar and
Paying Agent, for payment and exchange as aforesaid, such Bond shall,
nevertheless, become due and payable on the date fixed for redemption to the
extent of the $100,000, $25,000 or $5,000 unit or units of principal amount
called for redemption (and to that extent only).
2. Auction Rate Bonds and Inverse Rate Bonds during any
Auction Rate-Inverse Rate Period shall be redeemed in minimum denominations of
$25,000 or integral multiples thereof. So long as the ownership of the Auction
Rate Bonds and Inverse Rate Bonds is maintained in book- entry form by the
Securities Depository, the Trustee shall give the Securities Depository at least
two Business Days notice of the record date selected by it for the purpose of a
redemption (each a "Redemption Record Date") and request the Securities
Depository to provide it with a position listing showing at the close of
business as of such Redemption Record Date the aggregate principal amounts of:
Regular Auction Rate Bonds, Special Auction Rate Bonds, Regular Inverse Rate
Bonds, Regular Linked Auction Rate Bonds and Inverse Rate Bonds and Special
Linked Auction Rate Bonds and Inverse Rate Bonds, respectively.
3. So long as the ownership of the Auction Rate Bonds and the
Inverse Rate Bonds during any Auction Rate-Inverse Rate Period is maintained in
book-entry form by the Securities Depository, the Auction Rate Bonds and Inverse
Rate Bonds to be redeemed in part on any Redemption Date shall be selected by
lot from the Outstanding Bonds of each series as described in the following
sentence. An amount equal to the Linked Percentage of the aggregate principal
amount of the Auction Rate Bonds and Inverse Rate Bonds to be redeemed on such
Redemption Date shall be selected from Regular Linked Auction Rate Bonds and
Inverse Rate Bonds and Special Linked Auction Rate Bonds and Inverse Rate Bonds
(on a pro rata basis in accordance with the relative principal amounts thereof),
the remaining amount of Inverse Rate Bonds to be redeemed shall be selected from
Regular Inverse Rate Bonds and the remaining amount of Auction Rate Bonds to be
redeemed shall be selected from Regular Auction Rate Bonds and Special Auction
Rate Bonds (on a pro rata basis in accordance with the relative principal
amounts thereof); provided, that if any principal amount of the Auction Rate
Bonds and of the Inverse Rate Bonds selected as provided above from Regular
Linked Auction Rate Bonds and Inverse Rate Bonds, Special Linked Auction Rate
Bonds and Inverse Rate Bonds, Regular Inverse Rate Bonds, Regular Auction Rate
Bonds and Special Auction Rate Bonds is not equal to $25,000 or an integral
multiple thereof, the Trustee shall, in such manner as, in its sole discretion,
it shall determine, round up or down the principal amounts so determined. On the
basis of the position listing obtained by the Trustee pursuant to subsection 2
above, the Trustee shall calculate the Linked Percentage as of the Redemption
Record Date and determine therefrom the aggregate principal amounts to be
redeemed and redemption prices per $1,000 (plus accrued and unpaid interest
thereon to the Redemption Date) of Regular Auction Rate
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Bonds, Special Auction Rate Bonds, Regular Inverse Rate Bonds, Regular Linked
Auction Rate Bonds and Inverse Rate Bonds and Special Linked Auction Rate Bonds
and Inverse Rate Bonds, respectively.
4. So long as the ownership of the Auction Rate Bonds and the
Inverse Rate Bonds is maintained in book-entry form by the Securities
Depository, Auction Rate Bonds to be redeemed in part on any Redemption Date
pursuant to subsection (c)(ii) of Section 5.01 shall be selected by lot from
Special Auction Rate Bonds and Regular Auction Rate Bonds on a pro rata basis in
accordance with the relative principal amounts thereof as of the Redemption
Record Date; provided, that if any principal amount of the Auction Rate Bonds
selected as provided above from Regular Auction Rate Bonds and Special Auction
Rate Bonds is not equal to $25,000 or an integral multiple thereof, the Trustee
shall, in such manner as, in its sole discretion, it shall determine, round up
or down the principal amounts so determined. On the basis of the position
listing obtained by the Trustee pursuant to subsection 2 above, the Trustee
shall determine therefrom the aggregate principal amounts to be redeemed and
aggregate redemption prices (plus accrued and unpaid interest thereon to the
Redemption Date) of Regular Auction Rate Bonds and Special Auction Rate Bonds,
respectively.
5. Except as otherwise provided by subsections 3 and 4 above,
redemption of Auction Rate Bonds and Inverse Rate Bonds during any Auction
Rate-Inverse Rate Period shall be in the manner specified in 1 above; provided,
however, that the portion of any Auction Rate Bonds or Inverse Rate Bonds to be
redeemed shall be in the principal amount of $25,000 or some integral multiple
of $25,000.
SECTION 5.11. Notice of Redemption. 1. Notice of redemption
shall be given by the Trustee or the Registrar and Paying Agent by mailing a
copy of the redemption notice by first- class mail at least 30 days prior to the
date fixed for redemption to the Bond Insurer and the Holders of the Bonds to be
redeemed at the addresses shown on the registration books maintained by the
Registrar and Paying Agent; provided, however, with respect to Auction
Rate-Inverse Rate Bonds during an Auction Rate-Inverse Rate Period such notice
shall be given after the Regular Interest Payment Date next preceding the
Redemption Date but not less than thirty (30) days prior to the Redemption Date.
2. The Registrar and Paying Agent shall not be required to
transfer or exchange Bonds during any period beginning at the opening of
business fifteen (15) days before the day of mailing of a notice of redemption
and ending at the close of business on the day fixed for redemption; provided,
however, that the foregoing shall not apply during a Daily Rate Period, a Weekly
Rate Period, a Commercial Paper Rate Period, an Auction Rate Period or an
Auction Rate- Inverse Rate Period.
3. Except as otherwise provided with respect to Auction
Rate-Inverse Rate Bonds in subsection 4 below, each notice of
redemption shall state: (i) the full title of the Bonds, the
redemption date, the place of redemption and the redemption price
payable upon such redemption;
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(ii) that the interest on the Bonds, or on the principal amount thereof to be
redeemed, shall cease to accrue from and after such redemption date; and (iii)
that on said date there will become due and payable on the Bonds the principal
amount thereof to be redeemed and the interest accrued on such principal amount
to the redemption date, if any, and the premium, if any, thereon. Each notice of
redemption mailed to the Holder of the Bonds shall, if less than the entire
principal sum thereof is to be redeemed, also state the principal amount thereof
and the distinctive numbers of the Bonds to be redeemed and that such Bonds must
be surrendered to the Registrar and Paying Agent in exchange for the payment of
the principal amount thereof to be redeemed and the issuance of a new Bond
equalling in principal amount that portion of the principal sum not to be
redeemed of the Bonds to be surrendered. The failure to give notice to any
Holder of a Bond or any defects in such notice shall not affect the proceedings
for the redemption of the Bonds for which notice has been given.
4. With respect to Auction Rate-Inverse Rate Bonds, each
notice of redemption shall (i) specify (A) in the case of a partial redemption
of Inverse Rate Bonds and Auction Rate Bonds, the aggregate principal amounts of
Regular Auction Rate Bonds, Special Auction Rate Bonds, Regular Inverse Rate
Bonds, Regular Linked Auction Rate Bonds and Inverse Rate Bonds and Special
Linked Auction Rate Bonds and Inverse Rate Bonds to be redeemed, (B) in the case
of a partial redemption of Auction Rate Bonds, the aggregate principal amounts
of Regular Auction Rate Bonds and Special Auction Rate Bonds to be redeemed, (C)
the Redemption Date, (D) the redemption price per $1,000 principal amount (plus
accrued and unpaid interest thereon to the Redemption Date) of Regular Auction
Rate Bonds, Special Auction Rate Bonds, Regular Inverse Rate Bonds, Regular
Linked Auction Rate Bonds and Inverse Rate Bonds and Special Linked Auction Rate
Bonds and Inverse Rate Bonds, respectively, and (E) the place or places where
amounts due upon such redemption will be payable and (ii) state that on the
Redemption Date, if sufficient moneys are available for such redemption, the
Bonds or the portions thereof which are to be redeemed shall cease to bear
interest.
5. In the case of any optional redemption or any redemption
pursuant to Section 5.05, such notice shall also state that such redemption
shall be conditioned upon the Trustee's receipt of funds (or, in the case of any
optional redemption occurring while the Bonds bear interest at a Daily Rate,
Weekly Rate, Monthly Rate, Semi-annual Rate or Commercial Paper Rate, Available
Moneys) sufficient to pay the redemption price of the Bonds to be redeemed on or
prior to the redemption date.
6. Failure to give any required notice of redemption as to any
particular Bonds will not affect the validity of the call for redemption of any
Bonds in respect to which no such failure occurs. Notice of redemption shall
also be mailed by first-class mail to the Credit Facility Issuer and to each
Rating Agency then rating the Bonds, which notice shall include the principal
amounts, maturities and CUSIP numbers of Bonds to be redeemed. Any notice mailed
as provided in this Section shall be conclusively presumed to have been duly
given, whether or not the Registered Owner, the Credit Facility Issuer or a
Rating Agency actually receives the notice.
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SECTION 5.12. Bonds Purchased by Liquidity Facility Issuer.
Bonds subject to purchase pursuant to Sections 5.02, 5.03 and 5.08 shall be
deemed purchased by the Liquidity Facility Issuer in a principal amount equal to
the amount of a draw on, or borrowing or payment under, the Liquidity Facility
for the payment of Bonds subject to purchase, upon the deposit with the Trustee
of the proceeds of such draw on, or borrowing or payment under, the Liquidity
Facility in an amount equal to the principal of such Bonds plus accrued and
unpaid interest thereon to the redemption date, and such Bonds shall not be
deemed paid and shall remain outstanding hereunder until the Liquidity Facility
Issuer has been reimbursed for such draws on, or borrowings or payments under,
the Liquidity Facility to pay such principal and interest. Any Bonds purchased
by the Liquidity Facility Issuer shall become Bank Bonds, shall bear interest at
the Bank Bond Interest Rate and shall be subject to the terms and provisions of,
and have all rights with respect to Bank Bonds under, the applicable Liquidity
Facility. In the event that the Liquidity Facility is in a form other than a
standby bond purchase agreement, unless the Liquidity Facility Issuer shall
otherwise direct, any Bonds purchased by the Liquidity Facility Issuer shall be
immediately registered in the name of the Liquidity Facility Issuer as a Holder
and the Liquidity Facility Issuer shall have all rights of a Holder of Bonds
except that such Bonds will bear interest at the Bank Rate under this Indenture.
SECTION 5.13. Effect of Redemption. If the Bonds have been
duly called for redemption and notice of the redemption thereof has been duly
given or provided for as hereinbefore provided and if monies for the payment of
the Bonds (or of the principal amount thereof to be redeemed) and the interest
to accrue to the redemption date on the Bonds (or of the principal amount
thereof to be redeemed), if any, and the premium, if any, thereon are held for
the purpose of such payment by the Trustee, then the Bonds (or the principal
amount thereof to be redeemed) shall on the redemption date designated in such
notice, become due and payable and interest on the Bonds (or the principal
amount thereof to be redeemed) so called for redemption shall cease to accrue
from such date and the Holder thereof shall thereafter have no rights hereunder
as the Holder of such Bonds (or the principal amount thereof to be redeemed)
except to receive the principal amount thereof and premium (if any) thereon and
interest to the redemption date.
SECTION 5.14. Cancellation of Redeemed Bonds. Any Bonds
surrendered or redeemed pursuant to the provisions of this
Article shall be cancelled by the Registrar and Paying Agent.
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ARTICLE VI
SUPPORT FACILITY PROVISIONS
SECTION 6.01. Support Facility - General. Pursuant to the
Participation Agreement, the Company has obtained a Credit Facility and agrees
to maintain a Liquidity Facility meeting the requirements of the Participation
Agreement with respect to the Bonds at all times except during any Auction Rate
Period, an Auction Rate-Inverse Rate Period or the Fixed Rate Period. A
Liquidity Facility relating to the affected Bonds must be in effect prior to any
Change in the Interest Rate Mode from an Auction Rate and a related Inverse Rate
during an Auction Rate-Inverse Rate Period, or from an Auction Rate during an
Auction Rate Period to another Adjustable Rate (other than a Change in the
Interest Rate Mode to an Auction Rate Period or an Auction Rate-Inverse Rate
Period or a conversion to a Fixed Rate). If at any time the Company obtains a
Liquidity Facility with respect to the Bonds which were previously not entitled
to the benefit thereof, the Company shall submit such Liquidity Facility to
Moody's, S&P or such other Rating Agency as the Company may select for the
purposes of obtaining a rating on such Bonds. Upon obtaining a rating or ratings
on the basis of such Liquidity Facility the provisions of Sections 5.08 and 6.02
shall become applicable to such Bonds. The Trustee shall be furnished with a
certified copy of any Liquidity Facility obtained pursuant to this Section 6.01
together with evidence of any rating or ratings obtained on the Bonds in
connection therewith.
Any Support Facility Issuer not located in New York State
shall provide the Trustee with a list of holidays on which it is closed through
the next succeeding January 1 at the beginning of the term of such Support
Facility and by January 1 of each year thereafter.
SECTION 6.02. Liquidity Facility. 1. At any time following the
Closing Date, the Company with the consent of the Bond Insurer, may provide for
the delivery to the Trustee of a Liquidity Facility that is issued by a
financial institution with a long term debt rating of at least A from S&P and A2
from Moody's and that supports ratings at least the equivalent of A-1 from S&P
and P-1 from Moody's. The expiration date of such Liquidity Facility shall be a
date not earlier than 364 days from its date of issuance, subject to earlier
termination upon the occurrence of (a) a Terminating Event or another event of
default under the related reimbursement agreement or other corresponding
agreement pursuant to which such Liquidity Facility is issued, (b) the issuance
of an Alternate Liquidity Facility, (c) payment in full of the Outstanding Bonds
or (d) a Change in the Interest Rate Mode to an Auction Rate during an Auction
Rate Period, an Auction Rate and a related Inverse Rate during an Auction
Rate-Inverse Rate Period, or a Fixed Rate. If, between the effective date of a
Liquidity Facility and the effective date of an Alternate Liquidity Facility,
there occurs a Change in the Interest Rate Mode, such Alternate Liquidity
Facility shall comply with the requirements applicable to a Liquidity Facility
in effect with respect to the new Interest Rate Mode. On or prior to the date of
the delivery of a Liquidity Facility or an amendment to a Liquidity Facility
(other than an amendment which only extends the expiration date of an existing
Liquidity Facility) (a "Liquidity Facility Amendment") to the Trustee, the
Company shall furnish to the Trustee and the
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Bond Insurer on behalf of the Authority (a) an opinion of Bond Counsel stating
that the delivery of such Liquidity Facility or Liquidity Facility Amendment to
the Trustee is authorized under this Indenture and complies with the terms
hereof, (b) written confirmation from S&P, if the Bonds are then rated by S&P,
and from Moody's, if the Bonds are then rated by Moody's, and from another
rating agency, if the Bonds are then rated by such rating agency, to the effect
that such rating agency has reviewed the proposed Alternate Liquidity Facility
or Liquidity Facility Amendment and that the substitution of the proposed
Alternate Liquidity Facility for the existing Liquidity Facility or the delivery
of the Liquidity Facility Amendment will not, by itself, result in a reduction
or withdrawal of its long- or short-term rating of the Bonds below the rating of
S&P or Moody's or such other rating agency, as the case may be, then in effect
with respect to the Bonds, and (c) written consent of the Bond Insurer to such
Liquidity Facility or Liquidity Facility Amendment.
2. In the event that the Company, delivers an Alternate
Liquidity Facility in substitution for a Liquidity Facility or a Liquidity
Facility Amendment which will result in a reduction in or withdrawal of the
short-term or long-term rating or both assigned to such Bonds by Moody's or S&P
or such other rating agency as a result of the Alternate Liquidity Facility or
Liquidity Facility Amendment, all Outstanding Bonds (unless the Bonds bear an
Auction Rate during an Auction Rate Period, Auction Rate during an Auction
Rate-Inverse Rate Period or Fixed Rate) shall be subject to mandatory tender for
purchase pursuant to Section 5.08. It shall be a condition to the delivery of
such an Alternate Liquidity Facility or Liquidity Facility Amendment that (i)
the Opinion of Bond Counsel referred to in the preceding paragraph be obtained
and (ii) the prior written consent of the Bond Insurer be obtained. The
Authority, or the Company on behalf of the Authority, shall deliver notice to
the Trustee of the substitution of an Alternate Liquidity Facility or the
delivery of a Liquidity Facility Amendment which will result in a reduction or
withdrawal in the short-term or long-term ratings assigned to the Bonds pursuant
to this Section 6.02 at least 45 days before the date of substitution or
amendment.
3. In the event that any Liquidity Facility Issuer (other than
a municipal bond or financial guarantee insurance company) should fail to
maintain short-term ratings equivalent to A-1 from S&P and P-1 from Moody's, and
such Liquidity Facility Issuer is not replaced within 4 months, all Bonds shall
be subject to mandatory tender for purchase pursuant to Section 5.08. No Bond so
tendered shall be remarketed unless and until an Alternate Liquidity Facility is
delivered to the Trustee and a prior written consent of the Bond Insurer is
obtained.
SECTION 6.03. Trustee not Responsible for Enforcement of
Support Facility. Except as may otherwise be expressly agreed by the Trustee,
the Trustee shall have no responsibility with respect to the enforcement of any
Support Facility obtained hereunder.
SECTION 6.04. Payments Pursuant to the Municipal Bond
Insurance Policy. 1. As long as a Policy shall be in effect, the
Trustee shall, at least one day prior to each Interest Payment
Date, determine whether there will be sufficient funds in the
Bond Fund to pay the principal of or interest on the Bonds on
such Interest Payment Date or on the date on which the Bonds are
subject to redemption pursuant to Section 5.06.1. If the Trustee
determines that there will be insufficient
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funds in the Bond Fund, the Trustee shall so notify the Bond Insurer. Such
notice shall specify the amount of the anticipated deficiency, the Bonds to
which such deficiency is applicable and whether such Bonds will be deficient as
to principal or interest, or both. If the Trustee has not so notified the Bond
Insurer at least one day prior to an Interest Payment Date, the Bond Insurer
will make payments of principal or interest due on the Bonds on or before the
first Business Day next following the date on which the Bond Insurer shall have
received notice of nonpayment from the Trustee.
2. The Trustee shall after giving notice to the Bond Insurer
as provided in paragraph 1 of this Section 6.04, make available to the Bond
Insurer and, at the Bond Insurers direction, to the United States Trust Company
of New York, as insurance trustee for the Bond Insurer or any successor
insurance trustee (the "Insurance Trustee"), the registration books of the
Authority maintained by the Trustee and all records relating to the Bond Fund.
3. The Trustee shall provide to the Bond Insurer and the
Insurance Trustee a list of registered owners of the Bonds entitled to receive
principal or interest payments from the Bond Insurer under the terms of the
Policy, and shall make arrangements with the Insurance Trustee (i) to mail
checks or drafts to the registered owners of the Bonds entitled to receive full
or partial interest payments from the Bond Insurer and (ii) to pay principal
upon Bonds surrendered to the Insurance Trustee by the registered owners of
Bonds entitled to receive full or partial principal payments from the Bond
Insurer.
4. The Trustee shall, at the time it provides notice to the
Bond Insurer pursuant to paragraph 1 of this Section 6.04, notify registered
owners of Bonds entitled to receive the payment of principal or interest thereon
from the Bond Insurer (i) as to the fact of such entitlement, (ii) that the Bond
Insurer will remit to them all or a part of the interest payments next coming
due upon proof of the Bondholders entitlement to interest payments and delivery
to the Insurance Trustee, in form satisfactory to the Insurance Trustee, of an
appropriate assignment of the registered owner's right to payment, (iii) that
should they be entitled to receive full payment of principal from the Bond
Insurer, they must surrender their Bonds (along with appropriate instrument of
assignment in form satisfactory to the Insurance Trustee to permit ownership of
such Bonds to be registered in the name of the Bond Insurer) for payment to the
Insurance Trustee, and not the Trustee, and (iv) that should they be entitled to
receive partial payment of principal from the Bond Insurer, they must surrender
their Bonds for payment thereon first to the Trustee, who shall note on such
Bonds the portion of the principal paid by the Trustee and then, along with an
appropriate instrument of assignment in form satisfactory to the insurance
trustee, to the Insurance Trustee, which will then pay the unpaid portion of
principal.
5. In the event that the Trustee has notice that any payment
of principal of or interest on a Bond which has become Due for Payment (as
defined in the Policy) and which is made to a Holder of a Bond by or on behalf
of the Authority has been deemed a preferential transfer and theretofore
recovered from its registered owner pursuant to the United States Bankruptcy
Code by a trustee in bankruptcy in accordance with the final, nonappealable
order of a court having competent jurisdiction, the Trustee shall, at the time
the Bond insurer is notified pursuant to paragraph 1 of this
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Section 6.04, notify all registered owners of the Bonds that in the event that
any registered owner's payment is so recovered, such registered owner will be
entitled to payment from the Bond Insurer to the extent of such recovery if
sufficient funds are not otherwise available, and the Trustee shall furnish to
the Bond Insurer its records evidencing the payments of principal of and
interest on the Bonds which have been made by the Trustee and subsequently
recovered from registered owners of the Bonds and the dates on which such
payments were made.
6. In addition to those rights granted to the Bond Insurer
under this Indenture, the Bond Insurer shall, to the extent it makes payment of
principal of or interest on Bonds, become subrogated to the rights of the
recipients of such payments in accordance with the terms of the Policy, and to
evidence such subrogation (i) in the case of subrogation as to claims for past
due interest, the Trustee shall note the Bond Insurer's rights as subrogee on
the registration books upon receipt from the Bond Insurer of proof of the
payment of interest thereon to the registered owners of the Bonds, and (ii) in
the case of subrogation as to claims for past due principal, the Trustee shall
note the Bond Insurer's rights as subrogee on the registration books upon
surrender of the Bonds by the registered owners thereof together with proof of
the payment of principal thereof.
SECTION 6.05 Provisions with Respect to the Bond Insurer. With
respect to any Bonds, the payment of which is insured by the Bond Insurer in
accordance with the terms of the Policy, notwithstanding anything else to the
contrary herein, the following additional provisions shall apply:
(a) A copy of any notice given by the Authority or the Company
under this Indenture to the Holders of the Bonds shall also be given to the Bond
Insurer.
(b) The Trustee shall notify the Bond Insurer of any failure
of the Authority or the Company to provide a notice to the Bond Insurer pursuant
to any provision of this Indenture.
(c) Notwithstanding any other provision of this Indenture, the
Trustee shall immediately notify the Bond Insurer upon the occurrence of an
Event of Default.
(d) Any action under this Indenture that is subject to the
prior consent of the Holders of the Bonds shall also be subject to the prior
written consent of the Bond Insurer.
(e) Notwithstanding any other provision of this Indenture, in
determining whether the rights of the Holders of the Bonds will be adversely
affected by any action taken pursuant to the terms and provisions of this
Indenture, the Trustee shall consider the effect on the Holders of the Bonds as
if there were no Municipal Bond Insurance Policy.
(f) To the extent this Indenture confers upon or gives or
grants to the Bond Insurer any right, remedy or claim under or by reason of this
Indenture, the Bond Insurer is hereby explicitly recognized as being a
third-party beneficiary hereunder, and notwithstanding anything to the contrary
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contained in this Indenture may enforce any such right remedy or claim
conferred, given or granted hereunder.
(g) Notwithstanding any other provision in this Indenture,
upon the occurrence and continuance of an Event of Default, the Bond Insurer
shall be entitled to control and direct the enforcement of all rights and
remedies granted to the Holders of the Bonds or the Trustee for the benefit of
the Holders of the Bonds under this Indenture, including without the limitation:
(i) the right to control and direct the declaration of the principal of and
accrued interest on all the Bonds then Outstanding to be due and payable
immediately pursuant to Section 12.03, and (ii) the right to rescind and annul
any such declaration in clause (i) of this paragraph and its consequences
pursuant to Section 12.03; provided, however, that the Bond Insurer shall not be
entitled to control and direct the enforcement of any such rights and remedies
if the Bond Insurer is in default under the Policy or if the Bond Insurer is a
party to any proceeding for the rehabilitation, liquidation, conservation or
dissolution of the Bond Insurer pursuant to the U.S. Bankruptcy Code or similar
provision of law.
(h) The Trustee shall permit the Bond Insurer to have access
to and to make copies of all books and records relating to the Bonds at any
reasonable time.
(i) Any reorganization or liquidation plan with respect to the
Company must be acceptable to the Bond Insurer. In the event of any
reorganization or liquidation, the Bond Insurer shall have the right to vote on
behalf of all Holders of the Bonds absent a default by the Bond Insurer under
the Policy.
SECTION 6.06. Payments Pursuant to any Direct Pay Facility;
Condition to Delivery of Direct Pay Facility. The Trustee shall draw upon any
Direct-Pay Facility, from time to time, to the extent that it may do so under
the terms of such Direct-Pay Facility. The Trustee shall apply moneys
constituting Available Moneys pursuant to clause (i), (iii) or (iv) of the
definition thereof as and to the extent necessary to pay the principal of (or
premium, if any), and accrued interest on, the Bonds, as the same shall become
due and payable either at maturity, upon redemption, by declaration or otherwise
(provided that moneys paid to the Trustee under any Direct-Pay Facility shall,
to the extent so specified in such Direct-Pay Facility, be applied only to the
payment of particular payments of principal of (or premium, if any on), or
accrued interest on, the Bonds). The Trustee shall apply moneys constituting
Available Moneys pursuant to clause (i) or (to the extent permitted by the terms
of any Direct-Pay Facility then in effect) or clause (iii) of the definition
thereof as and to the extent necessary to pay the purchase price of Bonds
tendered or deemed tendered to the Registrar and Paying Agent pursuant to the
Bond Purchase Trust Agreement (but only after application of proceeds of
remarketing as provided in Section 2.03 thereof) as the same shall become due
and payable in accordance with this Indenture. Notwithstanding anything in this
Indenture to the contrary, it shall be a condition to the delivery of any Direct
Pay Facility to the Trustee that (i) the Trustee and the Bond Insurer shall have
received from each Rating Agency then rating the Bonds written confirmation to
the effect that such Rating Agency has reviewed such Direct Pay Facility and
that delivery of such Direct Pay Facility will not result in a reduction or
withdrawal
VI-5
of any rating then assigned to the Bonds and (ii) the Bond Insurer shall have
consented to the delivery of such Direct Pay Facility.
VI-6
ARTICLE VII
GENERAL TERMS AND PROVISIONS OF BONDS
SECTION 7.01. Execution and Authentication of Bonds. The Bonds
shall be executed on behalf of the Authority by the manual or facsimile
signature of its Chair, Vice-Chair, President or Treasurer and shall be sealed
with the seal of the Authority, or in lieu thereof shall bear a lithographed,
engraved or otherwise reproduced facsimile of such seal attested by the manual
or facsimile signature of its Secretary or an Assistant Secretary.
Bonds bearing the manual signature of the officer of the
Authority authorized to execute such Bonds in office on the date of such manual
signing thereof and Bonds bearing the facsimile signature of the officer of the
Authority authorized to execute such Bonds in office on the date of the
reproducing of such facsimile signature on such Bonds, shall be valid and
binding obligations in accordance with their terms, notwithstanding that before
the delivery thereof and payment therefor the person whose signature appears
thereon shall have ceased to be such officer.
Only Bonds having endorsed thereon a certificate of
authentication substantially in the form set forth in Article XVI, duly executed
by the Registrar and Paying Agent, shall be entitled to any right or benefit
under this Indenture. No Bonds shall be valid or obligatory for any purpose
unless and until such certificate of authentication shall have been duly
executed by the Registrar and Paying Agent, and such certificate of the
Registrar and Paying Agent upon a Bond shall be conclusive evidence that such
Bond has been duly authenticated and delivered under this Indenture and that the
Holder thereof is entitled to the benefits of this Indenture. The Registrar and
Paying Agent's certificate of authentication on any Bond shall be deemed to have
been duly executed if signed by an authorized officer of the Registrar and
Paying Agent.
SECTION 7.02. Books of Registry. The Registrar and Paying
Agent shall keep or cause to be kept at its principal office books (herein
referred to as the "books of registry" or "registration books") for the
registration and transfer of the Bonds. Upon presentation at its principal
office for such purpose the Registrar and Paying Agent, under such reasonable
regulations as it may prescribe, shall register or transfer, or cause to be
registered or transferred, on said books of registry, the Bonds as hereinafter
set forth. The books of registry shall at all times during business hours be
open for inspection by the Authority, the Company, the Bond Insurer and the
Trustee or their duly authorized agents or representatives.
SECTION 7.03. Transfer, Registration and Exchange of Bonds.
The transfer of the Bonds may be registered only upon the books of registry
required to be kept pursuant to Section 7.02 upon surrender thereof to the
Registrar and Paying Agent, together with an assignment duly executed by the
Holder thereof or his or her duly authorized agent and accompanied by a
guarantee of signature, each in such form as shall be satisfactory to the
Registrar and Paying Agent. Upon any such registration of transfer the Authority
shall execute and the Registrar and Paying Agent shall
VII-1
authenticate and deliver in exchange for such Bonds a new Bond or Bonds of the
same subseries, if any, registered in the name of the transferee or transferees
for a like aggregate principal amount, of any denomination or denominations
authorized by this Indenture. No transfer of any Bond shall be effective until
entered on the books of registry.
Any Bond surrendered in any such registration of transfer
shall forthwith be cancelled by the Registrar and Paying Agent. Any Bonds
registered and transferred to a new Holder pursuant to this Section shall be
delivered to the Holder at the principal office of the Registrar and Paying
Agent or sent by first-class mail to the Holder at his or her request, risk and
expense.
Bonds, upon surrender thereof at the principal corporate trust
office of the Registrar and Paying Agent, together with an assignment duly
executed by the Holder or his or her authorized agent and accompanied by a
guarantee of signature, each in such form as shall be satisfactory to the
Registrar and Paying Agent, may, at the option of the Holder thereof, be
exchanged for an equal aggregate principal amount of Bonds of the same
subseries, if any, of any denomination or denominations authorized by this
Indenture and in the same form as the Bonds surrendered for exchange. All Bonds
so surrendered pursuant to this Section shall be cancelled by the Registrar and
Paying Agent.
Any Bonds to be delivered to the Holder upon any such exchange
shall be delivered to the Holder at the principal office of the Registrar and
Paying Agent or sent by first-class mail to the Holder thereof at his or her
request, risk and expense.
Any taxes or other governmental charges required to be paid
with respect to the registration of transfer or exchange of the Bonds shall be
paid by the Holder requesting registration of such transfer or exchange, as a
condition precedent to the exercise of such privilege. The Authority or the
Registrar and Paying Agent, or both, may charge the Company for every
registration of transfer or exchange sufficient to reimburse it for any and all
costs required to be paid in respect thereof.
SECTION 7.04. Mutilated, Lost, Stolen, or Destroyed Bonds. In
the event any Bond shall be lost, stolen, destroyed, wholly or in part, or so
defaced as to impair its value to the Holder, the Registrar and Paying Agent
shall, upon compliance with the terms provided by law, authenticate and deliver
a new Bond of like series or subseries, if any, date and tenor in exchange or
replacement therefor against delivery for cancellation of such mutilated Bond,
or in lieu of and in replacement of a destroyed, stolen or lost Bond, and upon
payment by the Holder of the reasonable expenses of the Registrar and Paying
Agent and the Authority and the reasonable charges of the Registrar and Paying
Agent in connection therewith and, in the event that the Bond is destroyed,
stolen or lost, the Holder's filing with the Registrar and Paying Agent of
evidence satisfactory to it that the Bond was destroyed, stolen or lost, of the
Holder's ownership thereof, and furnishing the Registrar and Paying Agent, the
Bond Insurer and the Authority such security and indemnity as is satisfactory to
them which shall name the Authority as an additional secured and indemnified
party. Any replacement Bond issued under the provisions of this Section in
exchange or substitution for the defaced,
VII-2
mutilated or partly destroyed Bond or in substitution, for the allegedly lost,
stolen or wholly destroyed Bond shall be entitled to the identical benefits
under this Indenture as was the original Bond in lieu of which such replacement
Bond is issued. Each such replacement Bond shall be prepared in substantially
the same manner as the original.
Notwithstanding the foregoing provisions of this Section, if
the lost, stolen, destroyed, defaced or mutilated Bond has matured or been
called for redemption and the date fixed for redemption thereof has arrived, at
the option of the Registrar and Paying Agent, payment of the amount due thereon
may be made without the issuance of any replacement Bond upon receipt of like
evidence, indemnity, security and payment of expenses and the surrender for
cancellation of the defaced or mutilated or partly destroyed Bond and upon such
other conditions as the Registrar and Paying Agent may prescribe.
Except as provided in this sentence and as permitted in the
following paragraph, any replacement Bond shall be in the form of the Bond being
replaced, and be dated the date of its authentication and bear such number as
shall be assigned thereto by the Registrar and Paying Agent, which number shall
have the letters "AR" prefixed thereto together with such other subseries
designation, if any, as may be deemed appropriate by the Registrar and Paying
Agent. The Registrar and Paying Agent shall make an appropriate notation in the
books of registry that a replacement Bond has been issued in exchange or
substitution for the defaced, mutilated, lost, stolen, or wholly or partly
destroyed Bond.
There may be imprinted or affixed on the face and the panel
portion of any duplicate Bond a mark to identify such Bond as a replacement
Bond.
Prior to arranging for the preparation or printing of a
replacement Bond, the Registrar and Paying Agent may require a deposit by the
Holder to secure the Registrar and Paying Agent and the Authority for costs and
expenses incurred by them in the preparation, printing, execution and issuance
of such replacement Bond. Any amount of such deposit received by the Registrar
and Paying Agent in excess of the amount required to reimburse the Registrar and
Paying Agent or the Authority for costs and expenses shall be returned to the
party which made the deposit.
Any defaced, mutilated or partly destroyed Bond surrendered to
the Registrar and Paying Agent in substitution for a new Bond pursuant to this
Section shall be cancelled by the Registrar and Paying Agent.
SECTION 7.05. Temporary Bonds. Pending the preparation of
definitive Bonds, interim receipts or certificates (herein referred to as
"temporary Bonds") may initially be issued, exchangeable for definitive Bonds
when the latter are ready for delivery. Such temporary Bonds may be printed,
lithographed or typewritten, shall be of such denomination or denominations as
may be determined by the Authority and may contain such references to any of the
provisions of this Indenture as may be appropriate. If temporary Bonds are
issued, the Authority will cause to be furnished duly executed definitive Bonds
without delay, and thereupon the temporary Bonds may
VII-3
be surrendered for cancellation at the principal office of the Registrar and
Paying Agent in exchange for definitive Bonds and without charge for such
exchange, and the Registrar and Paying Agent shall deliver in exchange for such
temporary Bonds so surrendered an equal aggregate principal amount of definitive
duly executed Bonds, of authorized denominations. Until so exchanged, the
temporary Bonds shall be entitled to the same benefits under this Indenture as
definitive Bonds.
Nothing in this Indenture shall prevent the Authority from
delivering, and the Authority is hereby expressly permitted to deliver, Auction
Rate Bonds during an Auction Rate Period or Auction Rate-Inverse Rate Bonds
during an Auction Rate-Inverse Rate Period in typewritten form to the Securities
Depository as registered owner thereof.
SECTION 7.06. Disposition of Bonds. Any Bond surrendered to
the Registrar and Paying Agent for payment shall be cancelled upon such payment
by the Registrar and Paying Agent. The Registrar and Paying Agent shall destroy
any cancelled Bond which has been paid and which bears any date two (2) years
prior to the date of destruction. The Bonds shall be destroyed by burning,
machine shredding, chemical disintegration or such other method as is approved
by the Authority. The Authority may require that such destruction be done in the
presence of its appointee. When the Registrar and Paying Agent shall destroy any
Bond, it shall deliver a certificate of such destruction to the Authority, the
Bond Insurer and the Company.
VII-4
ARTICLE VIII
ESTABLISHMENT OF THE PROJECT FUND
SECTION 8.01. Project Fund. 1. There is hereby created and
established a special trust fund to be designated "KeySpan Generation LLC 1999
Series A Project Fund" (hereinafter referred to as the "Project Fund") to be
held by the Trustee. All income or gain on monies deposited in the Project Fund
shall be retained therein.
2. There shall be deposited into the Project Fund the proceeds
of the Bonds issued hereunder, net of underwriter's discount and accrued
interest, if any, which, pursuant to Section 2.02.6 of this Indenture, is to be
used and applied together with other moneys advanced by the Company to the
prepayment of the KeySpan Notes, the proceeds of which prepayment are to be used
to pay the redemption price of the Prior Bonds. The accrued interest, if any, on
the Bonds shall be deposited in the Interest Account of the Bond Fund.
3. The monies on deposit from time to time in the Project Fund
shall be held under this Indenture, but shall not be subject to the liens,
pledges, charges, assignments and trusts created hereby for the security and
benefit of the Holders of the Bonds and shall not be available for the payment
of Bonds within the meaning of the Indenture, and shall be used and applied
solely for the purpose of financing the prepayment of the KeySpan Notes and in
accordance with the remaining provisions of this Section and any excess shall be
used for the cost of issuance of the Bonds.
4. The Trustee is authorized and directed to make payments
from the Project Fund which together with moneys advanced by the Company will be
sufficient to pay the principal amount and interest payment due under the
KeySpan Notes (the "Prepayment Price") or costs incurred in connection therewith
and the refunding of the Prior Bonds, upon the order of the Company, but only
upon receipt from time to time of requisitions signed by an Authorized Company
Representative, stating with respect to each payment to be made from the Project
Fund:
(a) the requisition number;
(b) the nature of the disbursement;
(c) the payee, with address, which may be the Company in the
case of reimbursements for advances and payments made by the
Company;
(d) the amount of such payment;
(e) that the disbursement will be used to pay, or
reimburse the Company for, part of the Prepayment Price or
costs incurred in connection with the prepayment of the
KeySpan Notes and the redemption of the Prior Bonds; and
VIII-1
(f) that the disbursement will not be used in a
manner that would result in a violation of any representation
or any covenant contained in Section 5.4 of the Participation
Agreement or be contrary to any material representation or
warranty contained in the Tax Regulatory Agreement.
5. For seven years from the dates thereof, the Trustee shall
retain in its possession all requisitions received by it as herein required,
subject to the inspection of the Authority, its agents and representatives, the
Company, the Bond Insurer and the Holders and their representatives at all
reasonable times at the Principal Corporate Trust Office.
6. All monies remaining in the Project Fund after the payment
or provision for payment of the Prepayment Price and all other costs to be paid
from such Project Fund shall, at the written direction of the Company, be
deposited in the Bond Fund for credit to the Redemption Account to be applied
solely in accordance with and subject to the restrictions contained in Article V
and Article IX hereof to the payment of principal of and premium, if any, and
interest on the Bonds; except for amounts retained in the Project Fund by the
Trustee with the approval of the appropriate Authorized Company Representative
for payment of items permitted to be financed from such Fund but not then due
and payable, any balance remaining of such retained funds in the Project Fund
after full payment or provision of payment of part of the Prepayment Price shall
be paid to the Trustee for deposit in the Bond Fund for credit to the Redemption
Account and applied by the Trustee as described above. At such time as all
monies have been paid from the Project Fund, the Trustee shall close the Project
Fund and thereupon all of its right, title and interest hereunder shall cease,
determine and become void and the Trustee shall execute such documents to
evidence such release as may reasonably be required.
VIII-2
ARTICLE IX
CREATION OF SPECIAL FUNDS AND ACCOUNTS;
APPLICATION AND INVESTMENT OF REVENUES
SECTION 9.01. Creation of Funds and Accounts. (a) The
following funds and accounts, which shall be special funds or accounts to be
held by the Trustee, are hereby created and designated as set forth below:
(1) Bond Fund
(a) Interest Account
(b) Principal Account
(c) Redemption Account
(2) Rebate Fund
The designation of each fund set forth above shall include the
term "KeySpan Generation LLC 1999 Series A," which term shall precede the
designation as set forth above. Each such fund and account is, however,
sometimes referred to as set forth above.
(b) The funds and accounts shall be held in the custody of the
Trustee. All monies required to be deposited with or paid to the Trustee under
any provision of this Indenture shall be held by the Trustee in trust and
applied only in accordance with the provisions of this Indenture and shall be
trust funds for the purposes of this Indenture.
SECTION 9.02. Deposit of Note Payments. The Trustee shall
deposit the Note Payments or other money set forth below in the Bond Fund and
credit the Accounts set forth below in the order set forth below:
The Company shall deposit, or cause to be deposited, the
following in immediately available funds with the Trustee as the Note Payments
become due under the Participation Agreement and the Note unless sufficient
amounts are then available in such Accounts to make the required payments
therefrom:
(a) (i) During an Auction Rate Period or Auction Rate-Inverse
Rate Period, no later than 12:00 noon (New York City time) on the second
Business Day next preceding each Interest Payment Date, into the Bond Fund for
credit to the Interest Account an aggregate amount of funds available on the
next Business Day in The City of New York equal to the aggregate amount required
for the payment of the interest payable on the Outstanding Auction Rate Bonds
during an Auction Rate Period, or the Outstanding Auction Rate-Inverse Rate
Bonds during an Auction Rate-Inverse Rate Period, as the case may be, on such
Interest Payment Date. In the event such deposit is not
IX-1
made in accordance with this paragraph (i), the Trustee shall immediately send a
notice of such event to the Auction Agent and to the registered owners of the
Bonds by telex, telecopy or similar means. If such deposit is made by the
Company within 3 Business Days of the Business Day immediately preceding the
Interest Payment Date, the Trustee shall immediately send a notice of such
deposit to the Auction Agent and to the registered owners of the Bonds by telex,
telecopy or similar means.
(ii) By 12:00 noon, on the Business Day next preceding each
Interest Payment Date other than during an Auction Rate Period or an Auction
Rate-Inverse Rate Period, into the Bond Fund for credit to the Interest Account
the amount required for the payment of the interest payable on the Outstanding
Bonds on such Interest Payment Date.
At such time as the Company elects to obtain, and there is in
effect, a Credit Facility in the form of a letter of credit, and to the extent
necessary to obtain or maintain the rating or ratings on the Bonds resulting
from such Credit Facility, amounts required to be deposited in the Bond Fund for
credit to the Interest Account shall be derived solely from the following
sources of funds in the priority indicated and shall be so deposited and
credited to the Interest Account on the date indicated:
(I) On the date such monies are received, amounts, if
any, paid by the Company pursuant to Section 4.3 of the Participation
Agreement or otherwise paid to the Trustee for such purpose; provided,
that prior to withdrawal for the payment of interest, such money must
be on deposit under the Indenture for at least 124 days and that on the
date such money is to be applied to such payment, the Company must
deliver a Non-Bankruptcy Certificate to the Trustee;
(II) On each Interest Payment Date, the proceeds of a
draw, borrowing or payment under the Credit Facility; and
(III) On each Interest Payment Date, any other monies
provided by the Company for such purpose.
Such amounts shall otherwise be provided solely from the sources of funds
referred to in (III) above.
(iii) After the Fixed Rate Conversion Date, by 12:00 noon (New
York City time) on the Business Day next preceding each Interest Payment Date to
the Bond Fund for credit to the Interest Account the amount required, together
with other funds available therefor in the Interest Account, to pay the interest
payable on the Outstanding Bonds on such Interest Payment Date.
(b)(i) During an Auction Rate Period or an Auction
Rate-Inverse Rate Period, no later than 12:00 noon (New York City time) on the
second Business Day next preceding each Auction Date, into the Bond Fund for
credit to the Redemption Account an aggregate amount of funds available on the
next Business Day in The City of New York equal to the aggregate amount required
to pay the principal of and premium, if any, and accrued interest on any Auction
Rate Bonds during an Auction Rate Period, or any Auction Rate-Inverse Rate Bonds
during an Auction Rate- Inverse Rate Period, as the case may be, called for
redemption; provided, however if the scheduled date of such deposit to the
Redemption Account by the Company is not a Business Day then the date for such
deposit to the Redemption Account by the Company shall be the first Business Day
immediately preceding the scheduled date of such deposit to the Redemption
Account by the Company. In the event such deposit is not made in accordance with
this paragraph (i), the Trustee shall immediately send a notice of such event to
the Auction Agent by telex, telecopy or similar means. If such deposit is made
by the Company within 3 Business Days of the second Business Day immediately
preceding the Auction Date the Trustee shall immediately send a notice of such
deposit to the Auction Agent by telex, telecopy or similar means.
(ii) Prior to the Fixed Rate Conversion Date other than during
an Auction Rate Period or an Auction Rate-Inverse Rate Period, into the Bond
Fund for credit to the Redemption Account the amount required to pay principal
of and premium, if any, and accrued and unpaid interest on any Bonds called for
redemption.
At such time as the Company elects to obtain, and there is in
effect, a Credit Facility in the form of a letter of credit and to the extent
necessary to obtain or maintain the rating or ratings on the Bonds resulting
from such Credit Facility, amounts required to be deposited in the Bond Fund for
credit to the Redemption Account shall be derived solely from the following
sources of funds in the priority indicated and shall be so deposited and
credited in the Redemption Account on the date indicated:
(I) On the date any redemption is scheduled to occur,
Available Moneys, if any, on deposit in the Bond Fund;
(II) On the date any redemption is scheduled to
occur, the proceeds of a draw, borrowing or payment under the Credit
Facility; and
(III) On the date any redemption is scheduled to
occur, any other monies provided by the Company for such purpose.
Such amounts shall otherwise be provided solely from the sources of funds
referred to in (III) above.
(iii) After the Fixed Rate Conversion Date, on the last
Business Day prior to the day on which any redemption is to occur, into the Bond
Fund for credit to the Redemption Account the amount required, with other funds
available therefor in said Redemption Account, to pay the redemption price of
the Bonds then being redeemed.
(c) On the date such funds are received, into the Rebate
Fund, the amounts, if any, paid by the Company pursuant to
Section 7.3(H) of the Tax Regulatory Agreement in order to ensure
compliance with Section 7.4 thereof.
Each installment of Note Payments shall be increased as may be
necessary to make up any previous deficiency in any of the required payments.
IX-2
If other monies are received by the Trustee as advance
payments of Note Payments to be applied to the redemption of all or a portion of
the Bonds, such monies shall be deposited in the Bond Fund for credit to the
Redemption Account therein.
SECTION 9.03. Application of Monies in the Bond Fund. The Bond
Fund shall be used for the purpose of making scheduled payments of principal of
and premium, if any, and interest on the Bonds and of making payments of the
redemption price of Bonds then subject to redemption in the manner herein
provided. The monies in the Bond Fund shall be applied as follows:
(a) Interest Account. On or prior to the Fixed Rate
Conversion Date, on each Interest Payment Date, the Trustee shall
apply the amount of monies then credited to the Interest Account
equal to the interest then payable on the Bonds to the payment of
such interest on such Interest Payment Date from funds described
under Section 9.02(a)(ii), or, in the case of Auction Rate Bonds
during an Auction Rate Period or Auction Rate-Inverse Rate Bonds
during an Auction Rate- Inverse Rate Period, as the case may be,
from funds described under Section 9.02(a)(i). In the event a
Credit Facility in the form of a letter of credit is in place and
payments are required to be made in the order specified in
Section 9.02 (a)(ii)(I), (II) and (III) and if sufficient funds
are not available under Section 9.02(a)(ii)(I) to pay such
interest, the Trustee shall request a draw, borrowing or payment
under such Credit Facility in accordance with the terms thereof
in an amount equal to the amount required, together with the
amounts, if any, available under Section 9.02(a)(ii)(I), to pay
the interest payable on the Outstanding Bonds on such Interest
Payment Date and shall notify the Company of the amount and date
of such request. If sufficient funds are not available under
Section 9.02(a)(ii)(I) and (II) to pay such interest, the Trustee
shall apply funds, if any, available pursuant to Section
9.02(a)(ii)(III), to the extent necessary, to such payment of
interest.
(b) Principal Account. If the Fixed Rate has not been
established prior to such date, on the Stated Maturity, the Trustee shall apply
the amount of monies then credited to the Principal Account equal to the
principal amount of Bonds then payable to the payment of such principal on such
date. In the event a Credit Facility in the form of a letter of credit is in
place and payments are required to be made in the order specified in Section
9.02(b) (ii) (I), (II) and (III) and if sufficient funds are not available under
Section 9.02(b)(ii)(I) to pay such principal, the Trustee shall request a draw,
borrowing or payment under such Credit Facility in accordance with the terms
thereof in the amount required, together with the amounts, if any, available
under Section 9.02(b)(ii)(I) to pay such principal amount and shall notify the
Company of the amount and date of such request. If sufficient funds are not
available under Section 9.02(b)(ii)(I) or (II) to pay such principal, the
Trustee shall apply funds, if any, available pursuant to Section
9.02(b)(ii)(III), to the extent necessary, to such payment.
(c) Redemption Account. The Trustee shall redeem on the date
set for the redemption thereof, as provided in Article V of this Indenture, a
principal amount of Bonds then subject to redemption. The Trustee shall apply an
amount credited to the Redemption Account equal to the principal amount and
premium, if any, of Bonds then subject to redemption, together with accrued
interest thereon to the redemption date, to the payment of such Bonds on the
redemption date from funds described in Section 9.02(b).
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All monies in the Redemption Account on the last Business Day
prior to the Stated Maturity shall be transferred to the Principal Account.
On or prior to the Fixed Rate Conversion Date, in the event a
Credit Facility in the form of a letter of credit is in place and payments are
required to be made in the order specified in Section 9.02(b)(ii) (I),(II) or
(III), if sufficient amounts to make such payment are not available under
Sections 9.02(b)(ii)(I), the Trustee shall request a draw under such Credit
Facility in accordance with the terms thereof, in an amount equal to the amount
required, together with amounts, if any, available under Sections
9.02(b)(ii)(I), to pay the principal amount of Bonds then to be redeemed,
together with accrued interest thereon to the date set for redemption and shall
notify the Company of the date and amount of such request. If sufficient amounts
to make such payment are not available under Section 9.02(b)(ii)(I) or (II), the
Trustee shall apply amounts, if any, available pursuant to Section 9.02
(b)(ii)(III), to the extent necessary, to such payment. Such redemption shall be
made pursuant to the provisions of Article V.
After the Fixed Rate Conversion Date, the Trustee shall make
all such redemption payments to the Holders in accordance with the terms of this
Indenture from funds described in Section 9.02(b)(iii).
Upon the retirement of any portion of the Bonds by redemption
pursuant to the provisions of this Section 9.03, the Trustee shall file with the
Authority, the Bond Insurer and the Company a statement stating the amounts of
the Bonds so redeemed and setting forth the date of their redemption and the
amount paid as principal, premium and interest thereon. The expenses in
connection with the redemption of the Bonds shall be paid by the Company as
Additional Payments.
SECTION 9.04. Application of Monies in the Rebate Fund. 1. The
Rebate Fund and the amounts deposited therein shall not be subject to a claim
and charge in favor of the Trustee or any Bondholders and shall be applied
solely in accordance with the provisions of the Tax Regulatory Agreement and
shall not be available for the payment of Bonds within the meaning of this
Indenture. Amounts deposited in the Rebate Fund shall be applied solely to pay
amounts payable to the United States pursuant to Section 7.4 of the Tax
Regulatory Agreement in accordance with subsection (2) of this Section 9.04
except to the extent otherwise permitted by this Section 9.04.
2. In the event that on the first day of any Bond Year the
amount on deposit in the Rebate Fund exceeds the Rebate Amount (as defined in
the Tax Regulatory Agreement), the Trustee, upon the receipt of written
instructions from an Authorized Company Representative specifying the amount of
such excess, shall withdraw such excess amount and deposit it in the Bond Fund.
Pending such application, such monies may be invested at the
direction of an Authorized Company Representative in accordance with the
provisions of Section 9.05; provided that such investment will not be in
violation of the covenants made to the Authority by the Company in the Tax
Regulatory Agreement.
IX-4
SECTION 9.05. Investment of Funds. Monies in the Bond Fund and
the accounts in such Bond Fund and in the Rebate Fund shall be invested and
reinvested by the Trustee, at the direction of the Company, promptly confirmed
in writing, so long as the Company is not in default hereunder or under the
Participation Agreement, to the extent reasonable and practicable in Investment
Securities selected by the Company and maturing in the amounts and at the times
as determined by the Company so that the payments required to be made from such
funds and accounts may be made when due and subsequent to the occurrence of an
Event of Default hereunder or under the Participation Agreement, the Trustee
shall invest and reinvest monies in the Bond Fund and the Rebate Fund in
Investment Securities maturing in such amounts and at such times as the Trustee
determines so that payment required to be made from such funds may be made when
due. Investment earnings shall be considered on deposit in any Fund or Account
as of the date they are actually received by the Trustee.
Notwithstanding the foregoing, Available Moneys or moneys
provided by the State of New York in accordance with Section 5.07 hereof held by
the Trustee or the Registrar and Paying Agent, to the extent permitted to be
invested, shall be invested solely in direct obligations issued by the United
States of America maturing in such amounts and at such times as the Trustee
determines so that payments required to be made from such Available Moneys or
such moneys provided by the State of New York may be made when due.
Monies on deposit in the Project Fund and the accounts in such
Fund shall be invested and reinvested by the Trustee at the express direction of
the Company, promptly confirmed in writing, so long as the Company is not in
default under the Participation Agreement, to the extent reasonable and
practicable, in Investment Securities maturing in such amounts and at such times
as it is anticipated by the Company that such monies together with monies
advanced by the Company will be required to pay the redemption price of the
Prior Bonds.
The Company may at any time and from time to time deposit
Ineligible Moneys with the Trustee. Ineligible Moneys shall at all times be held
by the Trustee in the manner contemplated by clause (i) of the definition of the
term "Available Moneys" and Available Moneys shall at all times prior to the
application thereof in accordance with the terms hereof be held by the Trustee
in the manner contemplated by clause (i), (ii), (iii) or (iv) (as appropriate to
the source of such Available Moneys) of the definition of the term "Available
Moneys".
The Trustee, with the consent of the Company, shall be
authorized to sell any investment when necessary to make the payments to be made
from the funds and accounts therein. All earnings on and income from monies in
said funds and accounts (other than the Project Fund and the Rebate Fund)
created hereby shall be considered to be Revenues and shall be held in the
respective account in the Bond Fund for use and application as are all other
monies deposited in such accounts. The Trustee shall, in the statement required
by Section 11.07, set forth the Investment Securities held separately in, and
the earnings realized on investment for, each fund and account hereunder. The
Trustee shall not be liable for any depreciation in the value of the Investment
Securities acquired hereunder or any loss suffered in connection with any
investment of funds made
IX-5
by it in accordance herewith, including, without limitation, any loss suffered
in connection with the sale of any investment pursuant hereto.
The Trustee may make any such investments through its own
investment department upon direction of the Company.
All Investment Securities shall constitute a part of the
respective fund and accounts therein from which the investment in Investment
Securities was made.
IX-6
ARTICLE X
PARTICULAR COVENANTS OF THE AUTHORITY
SECTION 10.01. Payment of Principal of and Interest and
Redemption Premium on Bonds. The Authority will promptly pay solely from the
Note Payments and other monies held by the Trustee and available therefor, the
principal of, and the interest on, every Bond issued under and secured by the
Indenture and any premium required to be paid for the retirement of said Bonds
by redemption, at the places, on the dates and in the manner specified in this
Indenture and in said Bonds according to the true intent and meaning thereof,
subject, however, to the provisions of Section 2.02.3.
SECTION 10.02. Performance of Covenants. The Authority will
faithfully perform at all times all covenants, undertakings, stipulations and
provisions contained in this Indenture, in any and every Bond and in all
proceedings of the Authority pertaining thereto.
SECTION 10.03. Further Instruments. The Authority will from
time to time execute and deliver such further instruments and take such further
action as may be reasonable and as may be required to carry out the purpose of
this Indenture; provided, however, that no such instruments or actions shall
pledge the credit of the Authority or the State of New York or the taxing power
of the State of New York or otherwise be inconsistent with the provisions of
Section 2.02.3.
SECTION 10.04. Inspection of Project Books. All books and
documents in the possession of the Authority relating to the Bonds, this
Indenture or the Participation Agreement shall at all times be open to
inspection by the Bond Insurer and the Trustee and such accountants or other
agents as the Trustee may from time to time designate.
SECTION 10.05. No Extension of Time of Payment of Interest. In
order to prevent any accumulation of claims for interest after maturity, the
Authority will not directly or indirectly extend or assent to the extension of
the time of payment of any claims for interest on, any of the Bonds and will not
directly or indirectly be a party to or approve any such arrangement by
purchasing such claims for interest or in any other manner. In case any such
claim for interest shall be extended in violation hereof, such claim for
interest shall not be entitled, in case of any default hereunder, to the benefit
or security of this Indenture except subject to the prior payment in full of the
principal of, and premium, if any, on, all Bonds issued and outstanding
hereunder, and of all claims for interest which shall not have been so extended
or funded.
SECTION 10.06. Trustee's, Auction Agent's, Market Agent's,
Broker-Dealers', Registrar and Paying Agent's and Indexing Agent's Fees, Charges
and Expenses. Pursuant to the provisions of Section 4.2 of the Participation
Agreement, the Company has agreed to pay the fees and the expenses (including,
in the case of the Trustee, the Registrar and Paying Agent and the Market Agent,
the reasonable fees and expenses of counsel and accountants) of the Trustee, the
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Registrar and Paying Agent, Indexing Agent, and in the case of Auction Rate
Bonds during an Auction Rate Period, the Auction Agent, Market Agent, and
Broker-Dealers, in the amounts set forth more fully therein, and the Authority
shall have no liability for the payment of any fees or expenses of the Trustee,
the Registrar and Paying Agent, Indexing Agent and in the case of Auction Rate
Bonds during an Auction Rate Period, the Auction Agent, Market Agent, and
Broker-Dealers. In the case of Auction Rate Bonds and Inverse Rate Bonds during
an Auction Rate-Inverse Rate Period, the Authority shall have no liability for
the payment of fees and expenses of the Auction Agent and the Broker-Dealers
except as, and from the sources, provided in Section 3A.05 of the Indenture and
any applicable sections of the Auction Agency Agreement.
SECTION 10.07. Agreement of the State of New York. In
accordance with the provisions of subdivision 11 of Section 1860 of the Act, the
Authority, on behalf of the State of New York, does hereby pledge to and agree
with the Bondholders that the State of New York will not limit or alter the
rights and powers vested by the Act in the Authority to fulfill the terms of any
contract made with Bondholders, or in any way impair the rights and remedies of
such Bondholders, until the Bonds, together with the premium, if any, and
interest thereon, with (to the extent permitted by law) interest on any unpaid
installments of interest, and all costs and expenses in connection with any
action or proceeding by or on behalf of such Bondholders, are fully met and
discharged.
SECTION 10.08. Recording and Filing. Pursuant to the
Participation Agreement, the Company covenants that it will cause all financing
statements related to this Indenture and all supplements thereto and the
Participation Agreement and all supplements thereto, as well as such other
security agreements, financing statements and all supplements thereto and other
instruments as may be required from time to time to be kept, to be recorded and
filed in such manner and in such places as may from time to time be required by
law in order to preserve and protect fully the security of Holders and the
rights of the Trustee hereunder, and to take or cause to be taken any and all
other action necessary to perfect the security interest created by this
Indenture. The Company is obligated under Section 5.17 of the Participation
Agreement to file all such financing statements and other security agreements.
SECTION 10.09. Rights Under the Participation Agreement and
the Note. The Participation Agreement, a duly executed counterpart of which has
been filed with the Trustee, sets forth the covenants and obligations of the
Authority and the Company and reference is hereby made to the same for a
detailed statement of said covenants and obligations of the Company thereunder.
Subsequent to the issuance of Bonds and prior to their payment in full or
provision for payment thereof in accordance with the provisions hereof, neither
the Participation Agreement nor the Note may be effectively amended, changed,
modified, altered or terminated except in accordance with the provisions of
Article XIV hereof. The Authority agrees that the Trustee, in its name or in the
name of the Authority, may enforce all rights of the Authority and all
obligations of the Company under and pursuant to the Participation Agreement
(exclusive of the rights therein reserved to the Authority) and the Note for and
on behalf of the Holders and the Bond Insurer as their respective rights appear,
whether or not the Authority is in default hereunder. The Note heretofore
delivered to the Trustee evidences the obligations of the Company to make
certain specified payments under
X-2
the Participation Agreement. Nothing herein contained shall be construed to
prevent the Authority from enforcing directly any or all of its rights to
notices, administrative compensation or indemnification under the Participation
Agreement.
X-3
ARTICLE XI
CONCERNING THE TRUSTEE; APPOINTMENT OF
REGISTRAR AND PAYING AGENT, MARKET AGENT,
AUCTION AGENT AND INDEXING AGENT
SECTION 11.01. Appointment of Trustee. The Chase Manhattan
Bank is hereby appointed the Trustee, hereunder and by the execution of this
Indenture accepts such appointment and without further act, deed or conveyance,
shall be fully vested with all the estate, properties, rights, powers, trusts,
duties and obligations of the Trustee hereunder.
The Trustee shall set up suitable accounts for the deposit of
the Note Payments and for the payment of the Bonds and the interest thereon and
for all other payments provided or required by this Indenture, including,
without limiting the generality of any of the foregoing, setting up of the Funds
created by Articles VIII and IX.
SECTION 11.02. Indemnification of Trustee as Condition for
Remedial Action. The Trustee shall be under no obligation to institute any suit,
or to take any remedial proceeding under this Indenture, or to enter any
appearance or in any way defend in any suit in which it may be made defendant,
or to take any steps in the execution of the trusts hereby created or in the
enforcement of any rights and powers hereunder, until it shall be indemnified to
its satisfaction against any and all costs and expenses, outlays and counsel
fees and other reasonable disbursements, and against all liability; the Trustee
may, nevertheless, begin suit, or appear in and defend suit, or do anything else
in its judgment proper to be done by it as such Trustee, without indemnity, and
in such case the Trustee shall be reimbursed from the Additional Payments
required to be made pursuant to the Participation Agreement for all costs and
expenses, outlays and counsel fees and other reasonable disbursements incurred
in connection therewith. If the Company shall fail to make such reimbursement,
the Trustee may reimburse itself from any monies in its possession under the
provisions of this Indenture and shall be entitled to a preference over the
Bonds; provided, however, that the proceeds of a Support Facility shall be
applied solely as set forth elsewhere herein and in such Support Facility and
shall not be applied to the reimbursement set forth in this Section 11.02.
Notwithstanding any other provision of this Indenture or the
Bond Purchase Trust Agreement, no right of the Trustee or the Registrar and
Paying Agent to indemnification shall relieve the Trustee or the Registrar and
Paying Agent from responsibility for (a) making payments on the Bonds when due
from moneys available to it, (b) accelerating the Bonds as required pursuant to
Article XII, (c) drawing on the Liquidity Facility in accordance with the Bond
Purchase Trust Agreement, (d) making any claim under the Credit Facility or (e)
sending notices of mandatory tenders of Bonds in accordance with this Indenture.
SECTION 11.03. Trustee Not Liable for Failure of the
Authority or Company to Act. The Trustee shall not be liable or
responsible because of the failure of the Authority or the
Company
XI-1
or any of their employees or agents to make any collections or deposits or to
perform any act herein required of the Authority or the Company. The Trustee
shall not be responsible for the application of any of the proceeds of the Bonds
or any other monies deposited with it and paid out, withdrawn or transferred
hereunder if such application, payment, withdrawal or transfer shall be made in
accordance with the provisions of this Indenture. The immunities and exemptions
from liability of the Trustee hereunder shall extend to its directors, officers,
employees and agents.
SECTION 11.04. Certain Duties and Responsibilities of the
Trustee. (a) Except during the continuance of an Event of Default
specified in Section 12.01 of which the Trustee has been notified
or is deemed to have notice as provided in Section 11.08,
(1) the Trustee shall undertake to perform such duties and
only such duties as are specifically set forth in this Indenture, and
no implied covenants or obligations shall be read into this Indenture
against the Trustee; and
(2) in the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the
correctness of the opinions expressed therein, upon certificates or
opinions furnished to the Trustee and conforming to the requirements of
this Indenture; but in the case of any such certificates or opinions
which by any provision hereof are specifically required to be furnished
to the Trustee, the Trustee shall be under a duty to examine the same
to determine whether or not they conform to the requirements of this
Indenture.
(b) In case an Event of Default specified in Section 12.01 has
occurred and is continuing of which the Trustee has been notified or is deemed
to have notice as provided in Section 11.08, the Trustee shall exercise such of
the rights and powers vested in it by this Indenture, and use the same degree of
care and skill in such exercise, as a prudent man would exercise or use under
the circumstances in the conduct of his own affairs.
(c) None of the provisions of this Indenture shall be
construed to relieve the Trustee from liability for negligent action, negligent
failure to act, or willful misconduct, except that
(1) this subsection (c) shall not be construed to limit the
effect of subsection (a) of this Section;
(2) the Trustee shall not be liable for any error of
judgment made in good faith by any one of its officers, unless it
shall be proved that the Trustee was negligent;
(3) in the absence of bad faith on its part, the Trustee shall
be protected and shall incur no liability in acting or proceeding or in
not acting or not proceeding upon any resolution, order, notice,
telegram, request, consent, waiver, certificate, statement, affidavit,
voucher requisition, bond or other paper or document which the Trustee
shall believe to be genuine and to have been adopted or signed by the
proper board or person or to have been
XI-2
prepared and furnished pursuant to any of the provisions of this
Indenture, or upon the written opinion of any attorney, engineer,
accountant or other expert believed by the Trustee to be qualified in
relation to the subject matter, and the Trustee shall be under no duty
to make any investigation or inquiry as to any statements contained or
matters referred to in any such instrument but may accept and rely upon
the same as conclusive evidence of the truth and accuracy of such
statements;
(4) the Trustee shall not be liable with respect to any action
taken or omitted to be taken by it in good faith in accordance with the
direction of the Holders of not less than a majority in aggregate
principal amount of the Outstanding Bonds relating to the time, method
and place of conducting any proceeding for any remedy available to the
Trustee, or exercising any trust or power conferred upon the Trustee,
under the provisions of this Indenture; and
(5) no provision of this Indenture shall require the Trustee
to expend or risk its own funds or otherwise incur any financial
liability in the performance of its duties hereunder, or in the
exercise of any of its rights or powers, if it shall have reasonable
grounds for believing that repayment of such funds or adequate
indemnity against such risk or liability is not reasonably assured to
it.
(d) Notwithstanding anything contained elsewhere in this
Indenture, the Trustee shall have the right to reasonably require, in respect of
the payment or withdrawal of any monies or the taking of any action whatsoever
within the purview of this Indenture, any showings, certificates, opinions,
appraisals or other information, or corporate action or evidence thereof, in
addition to that required by the terms hereof as a condition of such action by
the Trustee.
(e) The Trustee may execute any of the trusts or powers hereof
and perform any of its duties by or through attorneys, agents or receivers, and
the Trustee shall not be responsible for any negligence or misconduct on the
part of any such attorney, agent or receiver appointed by it if the Trustee
shall have exercised due care and diligence in appointing or selecting such
person, and the Trustee shall be entitled to advice of counsel concerning all
matters of the trusts hereof and the duties hereunder, and may in all cases pay
such reasonable compensation to all such attorneys, agents and receivers as may
reasonably be employed in connection with the trusts hereof. The Trustee may act
upon the opinion or advice of any attorney or attorneys (who may be the attorney
or attorneys for the Authority or the Company), approved by the Trustee in the
exercise of reasonable care, and the Trustee shall not be responsible for any
loss or damage resulting from any action or nonaction in good faith in reliance
upon such opinion or advice.
(f) Whenever in the administration of this Indenture the
Trustee shall deem it desirable that a matter be proved or established prior to
taking, suffering or omitting any action hereunder, the Trustee (unless other
evidence be herein specifically prescribed) may, in the absence of bad faith on
its part, rely upon a certificate of an Authorized Company Representative or an
Authorized Officer.
XI-3
(g) The Trustee shall not be accountable for the use by the
Company of any proceeds of the Bonds authenticated or delivered
hereunder.
(h) The Trustee shall not be required to give any bonds or
surety in respect of the execution of its trusts and powers
hereunder.
SECTION 11.05. Limitations on Obligations and Responsibilities
of Trustee. The Trustee shall be under no obligation to effect or maintain
insurance or to renew any policies of insurance or to inquire as to the
sufficiency of any policies of insurance carried by the Company, or to report,
or make or file claims or proof of loss for, any loss or damage insured against
or which may occur, or to keep itself informed or advised as to the payment of
any taxes or assessments, or to require any such payment to be made. The
Trustee, except as to the acceptance of the trusts by its execution of this
Indenture and the performance of its responsibilities hereunder, shall have no
responsibility in respect of the validity, sufficiency, due execution or
acknowledgment of this Indenture, or in respect of the validity of the Bonds or
the due execution or issuance thereof. The Trustee shall be under no obligation
to see that any duties herein or in the Participation Agreement, the Market
Agent Agreement, the Auction Agency Agreement, the Broker-Dealer Agreement or
any Support Facility imposed upon the Authority, the Company, any Support
Facility Issuer, or any party other than itself in its capacity as Trustee, or
any covenants herein contained on the part of any party other than itself in its
capacity as Trustee to be performed, shall be done or performed, and the Trustee
shall be under no obligation for failure to see that any such duties or
covenants are so done or performed.
SECTION 11.06. Compensation and Indemnification of Trustee.
The Company has agreed in the Participation Agreement (1) to pay to the Trustee
from time to time reasonable compensation for all services rendered by it
hereunder (which compensation shall not be limited by any provision of law in
regard to the compensation of a trustee of an express trust); (2) except as
otherwise expressly provided herein, to reimburse the Trustee upon its request
for all reasonable expenses, disbursements and advances incurred or made by the
Trustee in accordance with any provision of this Indenture (including the
reasonable compensation and the expenses and disbursements of its agents and
counsel), except any such expense, disbursement or advance as may be
attributable to its negligence or bad faith; and (3) to indemnify the Trustee
for, and to hold it harmless against, any loss, liability or expense incurred
without negligence or bad faith on its part, arising out of or in connection
with the acceptance or administration of this trust, including the costs and
expenses of defending itself against any claim or liability in connection with
the exercise or performance of any of its powers or duties hereunder. The
Trustee acknowledges that it has no claim for compensation, reimbursement or
indemnity from the proceeds of remarketing of Bonds or from moneys drawn under
any Support Facility.
SECTION 11.07. Statements from Trustee. It shall be the duty
of the Trustee, on or about the fifteenth (15th) day of each month, and at such
other reasonable time or times as may be determined by the Authority or the
Company, to file with the Authority, upon the written request
XI-4
thereof, the Bond Insurer and the Company a statement setting forth in respect
of the preceding calendar month:
(a) the amount withdrawn or transferred by it and the amount
received by it and held on account of each Fund under the
provisions of this Indenture;
(b) the amount on deposit with it at the end of such
calendar month to the credit
of each such Fund or Account;
(c) a monthly account of reconciliation and income which includes
a brief description of all obligations held by it as an investment of
monies in each such Fund or Account;
(d) the amount applied to the redemption of the Bonds under the
provisions of Article V and Section 9.03 and the amount of the Bonds
remaining Outstanding; and
(e) any other information which the Authority, the Bond Insurer
or the Company
may reasonably request.
All records and files pertaining to the Bonds and the Company
in the custody of the Trustee shall be open at all reasonable times to the
inspection of the Authority, the Company, the Bond Insurer and their agents and
representatives.
SECTION 11.08. Notice of Default. Except upon the happening of
any Event of Default specified in clauses (a) through (d) of Section 12.01, the
Trustee shall not be obliged to take notice or be deemed to have notice of any
Event of Default hereunder, unless specifically notified in writing of such
Event of Default by any Support Facility Issuer, the Market Agent, the Auction
Agent or the Holders of not less than twenty-five percent (25%) in aggregate
principal amount of the Bonds Outstanding and such written notice shall state
that it is a "notice of default."
SECTION 11.09. Trustee May Deal in Bonds. The bank or trust
company acting as Trustee under this Indenture, and its directors, officers,
employees or agents, may in good faith buy, sell, own, hold and deal in the
Bonds issued under and secured by this Indenture, and may join in the capacity
of a Holder of a Bond in any action which any Holder of a Bond may be entitled
to take with like effect as if such bank or trust company were not the Trustee
under this Indenture.
SECTION 11.10. Trustee Not Responsible For Recitals. The
recitals, statements and representations contained herein and in the Bonds shall
be taken and construed as made by and on the part of the Authority, and not by
the Trustee, and the Trustee assumes, and shall be under, no responsibility for
the correctness of the same or for the recording or re-recording or filing or
refiling of the Indenture or any supplements thereto or any instruments of
further assurance (including financing statements) except as otherwise provided
herein. The Trustee makes no representations as to the value of any property
pledged hereunder to the payment of Bonds or as to the title of the
XI-5
Authority or the Company thereto or as to the validity, sufficiency or adequacy
of the security afforded thereby or hereby or as to the validity of this
Indenture, the Note, the Participation Agreement, any Support Facility or of the
Bonds.
SECTION 11.11. Qualification of the Trustee. There shall at
all times be a Trustee hereunder which shall be a bank and/or trust company,
having combined capital and unimpaired surplus of at least $75,000,000, duly
authorized to exercise corporate trust powers and subject to examination by
federal or state authority. The Trustee hereunder shall not be required to
maintain, and any successor Trustee shall not be required to have, an office in
the city in which the principal office of the initial Trustee hereunder is
located.
If at any time the Trustee shall cease to be eligible in
accordance with the provisions of this Section 11.11, it shall resign
immediately in the manner and with the effect specified in Section 11.12.
SECTION 11.12. Resignation and Removal of Trustee. (a) No
resignation or removal of the Trustee and no appointment of a successor Trustee
pursuant to this Article shall become effective until the acceptance of
appointment by the successor Trustee under Section 11.13.
(b) The Trustee may resign at any time by giving written
notice thereof to the Authority, the Bond Insurer and the Company. If an
instrument of acceptance by a successor Trustee shall not have been delivered to
the Trustee within thirty (30) days after the giving of such notice of
resignation, the retiring Trustee may petition any court of competent
jurisdiction for the appointment of a successor Trustee.
(c) The Trustee may be removed at any time by demand of the
Bond Insurer or the Holders of a majority in aggregate principal amount of the
Bonds then Outstanding, signed in person by such Holders or by their attorneys,
legal representatives or agents and delivered to such Trustee, the Authority,
the Bond Insurer and the Company (such demand to be effective only when received
by the Trustee, the Authority, the Bond Insurer and the Company).
(d) If at any time:
(1) the Trustee shall cease to be eligible under
Section 11.11 and shall fail to resign after written request by the
Authority, the Bond Insurer or by a Holder who shall have been a bona
fide Holder for at least six months, or
(2) the Trustee shall become incapable of acting or
shall be adjudged a bankrupt or insolvent or a receiver of the Trustee
or of its property shall be appointed, or any public officer shall take
charge or control of the Trustee or of its property or affairs for the
purpose of rehabilitation, conservation or liquidation,
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then, in either such case, (i) the Authority may remove, and the Company or the
Bond Insurer may request the Authority to remove, the Trustee, or (ii) any
Holder who has been a bona fide Holder for at least six months may, on behalf of
herself and all other similarly situated, petition any court of competent
jurisdiction for the removal of the Trustee and the appointment of a successor.
(e) If the Trustee shall resign, be removed or become
incapable of acting, or if a vacancy shall occur in the office of the Trustee
for any cause, the Authority shall promptly appoint a successor; the Company or
the issuer of any Support Facility or both of them, having the right to request
the appointment of a particular qualified institution as such successor. Within
one year after such resignation, removal or incapability, or the occurrence of
such vacancy, a successor Trustee may be appointed by an instrument or
concurrent instruments in writing executed by the Holders of a majority in
principal amount of the Bonds then Outstanding delivered to the Authority and
the retiring Trustee, and, upon such delivery, the successor Trustee so
appointed shall, forthwith upon its acceptance of such appointment, become the
successor Trustee and supersede the successor Trustee appointed by the
Authority.
(f) The Authority shall give notice to the Company, the Market
Agent, the Registrar and Paying Agent, the Auction Agent, any Rating Agency then
rating the Bonds, the Bondholders and the issuer of any Support Facilities of
each resignation and each removal of a Trustee and each appointment of a
successor Trustee in the manner set forth in Section 17.03 with respect to
Bondholders and Section 17.09 with respect to the Company, the Auction Agent,
the Market Agent and any Rating Agency then rating the Bonds. Each notice shall
include the name and address of the Principal Corporate Trust Office of the
successor Trustee.
(g) The Trustee at any time other than during the continuance
of an Event of Default and for any reason may be removed by an instrument in
writing, executed by an Authorized Officer of the Authority, appointing a
successor, filed with the Trustee so removed.
SECTION 11.13. Successor Trustee. Every successor Trustee
appointed hereunder shall execute, acknowledge and deliver to its predecessor,
and also to the Authority and the Company, an instrument in writing accepting
such appointment hereunder, and thereupon such successor Trustee, without any
further act, shall become fully vested with all the rights, immunities, powers
and trusts and subject to all the duties and obligations, of its predecessor;
but such predecessor shall, nevertheless, on written request of its successor or
of the Authority and upon payment of expenses, charges and other disbursements
of such predecessor which are payable pursuant to the provisions of Sections
11.02 and 11.06, execute and deliver an instrument transferring to such
successor Trustee all the rights, immunities, powers and trusts of such
predecessor hereunder; and every predecessor Trustee shall deliver all property
and monies held by it hereunder to its successor, subject, nevertheless, to its
first lien and preference provided for in Sections 11.02 and 11.06. Should any
instrument in writing from the Authority be required by any successor Trustee
for more fully vesting in such Trustee the rights, immunities, powers and trusts
hereby vested or intended to be vested in the predecessor Trustee, any such
instrument in writing shall and will, on request, be executed, acknowledged and
delivered by the Authority.
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Upon the occurrence and during the continuance of a Company
Downgrade Event, the consent of the initial Bond Insurer shall be required with
respect to the appointment of a successor Trustee, which consent shall not be
unreasonably withheld.
Notwithstanding any of the foregoing provisions of this
Article, any bank or trust company having power to perform the duties and
execute the trusts of this Indenture and otherwise qualified to act as Trustee
hereunder with or into which the bank or trust company acting as Trustee may be
converted, merged or consolidated, or to which the corporate trust business
assets as a whole or substantially as a whole of such bank or trust company may
be sold, shall be deemed the successor of the Trustee.
SECTION 11.14. Appointment of Market Agent. Goldman, Sachs &
Co. is hereby appointed as the Market Agent for the Bonds to serve as such under
the terms and provisions hereof and of the Market Agent Agreement. The Market
Agent, including any successor or successors appointed pursuant hereto, shall be
a member of the National Association of Securities Dealers, Inc. having
capitalization of at least $25,000,000, and be authorized by law to perform all
the duties imposed upon it by this Indenture and the related Market Agent
Agreement. During the Auction Rate-Inverse Rate Period, any one of the Market
Agents may be removed at any time by the Trustee, acting at the direction of the
beneficial owners of at least 66-2/3% of the aggregate principal amount of the
Bonds, provided that such removal shall not take effect until the appointment of
a successor Market Agent or Agents. Any one of the Market Agents may resign upon
30 days', written notice delivered to the Company, the Authority, the Trustee
and the Registrar and Paying Agent or such lesser period of notice as may be
provided in the respective Market Agent Agreement. During the Auction
Rate-Inverse Rate Period, the Trustee shall use its best efforts to appoint a
successor Market Agent effective as of the effectiveness of any such resignation
or removal. Other than during the Auction Rate-Inverse Rate Period, any one of
the Market Agents may be removed at any time upon 30 days' written notice by the
Authority acting at the request of the Company by an instrument signed by the
Authority and filed with the Trustee, the Registrar and Paying Agent, the Market
Agent and the Company, provided, that, during an Auction Rate Period, such
removal shall not take effect until the appointment of a successor Market Agent
or Agents. Other than during the Auction Rate-Inverse Rate Period, the Authority
shall use its best efforts to appoint a successor Market Agent or Agents that is
a qualified institution, effective as of the effectiveness of any such
resignation or removal. Each successor Market Agent or Agents shall be a
qualified institution selected and appointed by the Trustee or the Company, as
the case may be, subject to approval by the Authority. The Company shall give
notice to Moody's (if the Bonds are then rated by Moody's) as provided in
Section 17.09, of the appointment of any successor Market Agent.
SECTION 11.15. Appointment of Registrar and Paying Agent. The
Chase Manhattan Bank in New York, New York is hereby appointed to serve as the
Registrar and Paying Agent hereunder. The Company shall have the right to
request the appointment of a particular qualified institution to serve as
successor thereto in the event of the removal or resignation of such Registrar
and Paying Agent.
XI-8
The Trustee hereby appoints any Registrar and Paying Agent
appointed hereunder as authenticating agent.
Upon the occurrence and continuance of a Company Downgrade
Event, the consent of the initial Bond Insurer shall be required with respect to
the appointment of a successor Registrar and Paying Agent, which consent shall
not be unreasonably withheld.
SECTION 11.16. General Provisions Regarding Registrar and Paying Agent.
(a) The Registrar and Paying Agent shall:
(i) hold all Bonds delivered to it for purchase hereunder in
trust for the benefit of the respective Bondholders which shall have so
delivered such Bonds until monies representing the purchase price of
such Bonds shall have been delivered to or for the account of or to the
order of such Holders and deliver said Bonds in accordance with the
provisions of this Indenture;
(ii) hold all monies delivered to it for the purchase of
Bonds, in trust for the benefit of the person or entity who has
delivered such monies until the Bonds purchased with such monies have
been delivered to or for the account of such person or entity as
provided in this Indenture;
(iii) maintain the books of registry and keep such books and
records as shall be consistent with prudent industry practice to among
other things, enable the Registrar and Paying Agent to ascertain the
source and date of deposit of moneys deposited in the Bond Purchase
Fund and make such books and records available for inspection by the
Trustee, the Market Agent, the Authority, the Bond Insurer and the
Company at all reasonable times; and
(iv) perform the duties and undertake the obligations provided in Sections
7.02 through 7.06;
(b) The Registrar and Paying Agent may deem and treat the Holder of any
Bonds as set forth in the books of registry hereunder as the absolute owner
thereof;
(c) The Registrar and Paying Agent may in good faith hold any
other form of indebtedness issued by the Authority or any security issued by the
Company, or any affiliate of the Company; own, accept or negotiate any drafts,
bills of exchange, acceptances or obligations thereof; and make disbursements
therefor and enter into any commercial or business arrangement therewith; all
without any liability on the part of such Registrar and Paying Agent for any
real or apparent conflict of interest by reason of any such actions; and
(d) The Registrar and Paying Agent agrees to cooperate with the Trustee and
the Company in preparing and conveying information necessary in order to allow
the Registrar and
XI-9
Paying Agent to draw under any Support Facility. To the extent that any other
certificate to be submitted by the Trustee to a Support Facility Issuer in
connection with a drawing under the Support Facility requires the Trustee to
state that the Registrar and Paying Agent has certified certain information to
the Trustee, the Registrar and Paying Agent agrees to provide such certification
to the Trustee to the extent such information is known to it.
SECTION 11.17. Payment of Registrar and Paying Agent;
Indemnification. The Authority will cause the Company to agree in the
Participation Agreement to pay all reasonable fees, charges and expenses of the
Registrar and Paying Agent for acting under and pursuant to this Indenture. In
addition, the Authority will cause the Company to agree in the Participation
Agreement to indemnify the Registrar and Paying Agent and its directors,
officers and employees against and save them harmless from any and all losses,
costs, charges, expenses, judgments and liabilities incurred while carrying out
the transactions contemplated by this Indenture, except that said indemnity does
not apply to the extent that they are caused by the negligent action, negligent
failure to act or willful misconduct of the Registrar and Paying Agent or its
directors, officers, employees or agents.
SECTION 11.18. Registrar and Paying Agent's Performance; Duty
of Care. The duties and obligations of the Registrar and Paying Agent shall be
determined solely by the provisions of this Indenture and the Bond Purchase
Trust Agreement. None of the provisions of this Indenture or the Bond Purchase
Trust Agreement shall be construed to relieve the Registrar and Paying Agent
from liability for negligent action, negligent failure to act or willful
misconduct, except that (a) the Registrar and Paying Agent shall not be liable
except for the performance of such duties and obligations as are specifically
set forth in this Indenture, and, in the absence of bad faith on the part of the
Registrar and Paying Agent, the Registrar and Paying Agent may conclusively
rely, as to the truth of the statements expressed therein, upon any document
furnished to the Registrar and Paying Agent and conforming to the requirements
of this Indenture and the Registrar and Paying Agent may rely and shall be
protected in acting upon any document believed by it to be genuine and to have
been signed or presented by the proper party or parties, provided that, in the
case of any such document which by any provision of this Indenture is
specifically required to be furnished to the Registrar and Paying Agent, the
Registrar and Paying Agent shall be under a duty to examine the same to
determine whether or not it conforms to the requirements of this Indenture, and
(b) no provisions of this Indenture shall require the Registrar and Paying Agent
to expend or risk its own funds or otherwise incur any financial liability in
the performance of any of its duties hereunder. The Registrar and Paying Agent
may act upon the opinion or advice of any attorney or attorneys (who may be the
attorney or attorneys for the Authority or the Company), approved by the Trustee
in the exercise of reasonable care, and the Trustee shall not be responsible for
any loss or damage resulting from any action or nonaction in good faith in
reliance upon such opinion or advice.
Notwithstanding any other provision of this Indenture or the
Bond Purchase Trust Agreement, no right of the Trustee or the Registrar and
Paying Agent to indemnification shall relieve the Trustee or the Registrar and
Paying Agent from responsibility for (a) making payments on the Bonds when due
from moneys available to it, (b) accelerating the Bonds as required pursuant to
XI-10
Article XII, (c) drawing on the Liquidity Facility in accordance with the Bond
Purchase Trust Agreement, (d) making any claim under the Credit Facility or (e)
sending notices of mandatory tenders of Bonds in accordance with this Indenture.
SECTION 11.19. Qualifications of Registrar and Paying Agent.
The Registrar and Paying Agent, including any successor appointed pursuant to
this Indenture, shall be a corporation constituting a bank with trust powers or
a trust company duly organized under the laws of the United States of America or
any state or territory thereof, having a combined capital and unimpaired surplus
of at least $50,000,000 and authorized by law to perform all the duties imposed
upon it by this Indenture. Unless the Bonds bear an Auction Rate during an
Auction Rate Period, an Auction Rate or a related Inverse Rate during an Auction
Rate-Inverse Rate Period or a Fixed Rate, the Registrar and Paying Agent shall
have an office or agency in New York, New York capable of performing its
obligations hereunder.
SECTION 11.20. Resignation or Removal of Registrar and Paying
Agent and Successor to Registrar and Paying Agent; Termination of Registrar and
Paying Agent's Obligations. The Registrar and Paying Agent may at any time
resign and be discharged of the duties and obligations created hereunder and
under the Bond Purchase Trust Agreement by giving at least sixty days' notice to
the Authority, the Company, the Trustee, issuers of any Support Facilities and
the Market Agent. The Registrar and Paying Agent may be removed at any time upon
and pursuant to the request of the Company by an instrument, signed by the
Authority and filed with the Trustee and the Company, provided that such removal
shall not take effect until the appointment of a successor Registrar and Paying
Agent. The Authority at the request of the Company shall appoint a successor
Registrar and Paying Agent effective as of the effectiveness of any such
resignation or removal. Each successor Registrar and Paying Agent shall be a
qualified institution selected by the Company with, so long as any Support
Facilities are in effect, the consent of the issuer of the Support Facilities
which consent shall not be unreasonably withheld, and approved and appointed by
the Authority. Such successor Registrar and Paying Agent, once approved and
appointed by the Authority, shall assume the responsibilities and duties
relating to the Liquidity Facility as set forth in the Bond Purchase Trust
Agreement and the Indenture. The Company shall give notice to any Rating Agency,
if the Bonds are then rated by any Rating Agency then rating the Bonds, as
provided in Section 17.09, of the appointment of any successor Registrar and
Paying Agent.
In the event of the resignation or removal of the Registrar
and Paying Agent, the Registrar and Paying Agent shall pay over and deliver any
monies and Bonds held by it in such capacity to its successor or, if there is no
successor, to the Trustee. In the event that there is no successor to the
Registrar and Paying Agent on the effective date of its resignation, the entity
acting as Trustee shall perform the functions of the Registrar and Paying Agent;
provided that monies held by the Trustee pursuant to this paragraph shall not be
deemed to be held by the Trustee in its capacity as Trustee.
SECTION 11.21. Appointment of Auction Agent; Qualifications of Auction
Agent, Resignation; Removal. (1) The Chase Manhattan Bank is hereby appointed as
the Auction Agent
XI-11
for the initial Auction Rate Period. Prior to any Change in the Interest Rate
Mode to an Auction Rate Period or to an Auction Rate-Inverse Rate Period, the
Company, with the approval of the Authority, shall appoint the Auction Agent for
the Bonds. The Auction Agent shall be (a) a bank or trust company duly organized
under the laws of the United States of America or any state or territory thereof
having its principal place of business in the Borough of Manhattan, in The City
of New York and having a combined capital stock, surplus and undivided profits
of at least $15,000,000 or (b) a member of the National Association of
Securities Dealers, Inc., having a capitalization of at least $15,000,000 and,
in either case, authorized by law to perform all the duties imposed upon it
under the Auction Agency Agreement. The Auction Agent may at any time resign and
be discharged of the duties and obligations created by this Indenture by giving
at least 90 days' notice to the Trustee, the Company, the Authority, and in the
case the Auction Agent is also serving as Trustee, to the Market Agent. During
an Auction Rate-Inverse Rate Period, the Auction Agent may be removed at any
time by an instrument signed by the Trustee acting at the direction of the
holders of at least 66-2/3% of the aggregate principal amount of the Bonds then
Outstanding and filed with the Auction Agent, the Market Agent, the Company, the
Authority and the Registrar and Paying Agent upon at least 90 days' notice;
provided that, the Trustee shall have entered into an agreement in substantially
the form of the Auction Agency Agreement with a successor Auction Agent. During
the Auction Rate Period, the Auction Agent may be removed at any time by the
Authority acting at the request of the Company by an instrument signed by the
Authority and filed with the Company, the Auction Agent, the Market Agent and
the Registrar and Paying Agent upon at least 90 days' notice; provided that if
required by the Market Agent, an agreement in substantially the form of the
Auction Agency Agreement shall be entered into with a successor Auction Agent.
Upon the occurrence and during the continuance of a Company Downgrade Event, the
Bond Insurer shall have the right to consent to the appointment of any successor
Auction Agent, which consent shall not be unreasonably withheld.
(2) With respect to Auction Rate Bonds and Inverse Rate Bonds
during an Auction Rate-Inverse Rate Period in the event that the Auction Agent
and the Trustee (or, if the Trustee is also serving as Auction Agent, the Market
Agent) agree to a change in the Auction Agent Fee Rate pursuant to the Auction
Agency Agreement (or Section 4 of the Market Agent Agreement, as the case may
be), the Auction Agent shall give a Notice of Fee Rate Change to the Existing
Holders in accordance with the Auction Agency Agreement and the Trustee shall
mail a Notice of Fee Rate Change to all Bondholders within two Business Days of
such change.
SECTION 11.22. Appointment of Broker-Dealers. (1) Goldman,
Sachs & Co. and Merrill Lynch, Pierce, Fenner & Smith Incorporated are hereby
appointed as the initial Broker- Dealers. The Company may select, with the
approval of the initial lead Broker-Dealer or any successor, from time to time
one or more additional persons to serve as Broker-Dealers under the
Broker-Dealer Agreements. Upon the occurrence and during the continuance of a
Company Downgrade Event, the Bond Insurer shall have the right to consent to the
appointment of any Broker-Dealer, which consent shall not be unreasonably
withheld.
XI-12
(2) Prior to any Change in the Rate Period to an Auction Rate
Period or to an Auction Rate-Inverse Rate Period, the Company with the approval
of the Authority shall appoint an initial Broker-Dealer and any additional
initial Broker-Dealers. Thereafter, the Company may select, with the approval of
the initial lead Broker-Dealer or any successor, from time to time one or more
additional persons to serve as Broker-Dealers under Broker-Dealer Agreements.
Upon the occurrence and during the continuance of a Company Downgrade Event, the
Bond Insurer shall have the right to consent to the appointment of any
Broker-Dealer, which consent shall not be unreasonably withheld.
(3) In the event that the Trustee determines to change the
Broker-Dealer Fee Rate established pursuant to the Auction Agency Agreement, the
Auction Agent shall give a Notice of Fee Rate Change to the Existing Holders in
accordance with the Auction Agency Agreement and the Trustee shall mail a Notice
of Fee Rate Change to the registered owners of Auction Rate Bonds and Inverse
Rate Bonds during an Auction Rate-Inverse Rate Period within two Business Days
of such change. Upon the occurrence and during the continuance of a Company
Downgrade Event, the Bond Insurer shall have the right to consent to any
increase of the Broker-Dealer Fee Rate, which consent shall not be unreasonably
withheld.
SECTION 11.23. Appointment of Additional Paying Agents; Each
Paying Agent to Hold Money in Trust. The Authority may, at the request of the
Company appoint an additional Paying Agent or Paying Agents for the Bonds. Each
such Paying Agent shall hold in trust subject to the provisions of the Indenture
for the benefit of the Holders all sums held by such Paying Agent for the
payment of the principal of and interest on the Bonds. Any such Paying Agent may
be any person or corporation authorized to perform such functions, including to
the extent permitted by law, the Company.
SECTION 11.24. Appointment and Duties of Indexing Agents. The
Authority shall, with the approval of the Company, appoint an Indexing Agent,
subject to the conditions set forth in this Section. There may be separate
Indexing Agents for the purpose of calculating each of the interest indices set
forth in Section 1.01. The Indexing Agent shall designate to the Trustee its
principal office and signify its acceptance of the duties and obligations
imposed upon it hereunder by a written instrument of acceptance delivered to the
Authority, the Trustee, the Company, the Bond Insurer and the Market Agent under
which the Indexing Agent will agree, particularly:
(a) to compute the Daily Rate Index, the Commercial Paper Rate
Index, the Weekly Rate Index, the Monthly Rate Index, the Semi-Annual
Rate Index, the Term Rate Index or the Fixed Rate Index, as the case
may be, pursuant to and in accordance with Section 3.01, and to give
notice to the Trustee, the Market Agent and the Company of such Index
on the date of the computation thereof in accordance with Section 3.01;
and
(b) to keep such books and records as shall be consistent with
prudent industry practice and to make such books and records available
for inspection by the Authority, the Trustee, the Market Agent, the
Bond Insurer and the Company at all reasonable times.
XI-13
The Indexing Agent will perform the duties provided for in
Section 3.01. Whenever the Indexing Agent makes a computation under that
Section, it will promptly notify the Trustee, the Authority, the Market Agent
(and during any Auction Rate Period or Auction Rate-Inverse Rate Period, the
Auction Agent), and the Company of the results and date of computation. The
Indexing Agent will keep adequate records pertaining to the performance of its
duties and allow the Trustee, the Authority, the Market Agent, the Bond Insurer
and the Company (and, if appropriate, the Auction Agent) to inspect the records
at reasonable times.
SECTION 11.25. Qualifications of Indexing Agents. Each
Indexing Agent shall be a commercial bank, a member of the National Association
of Securities Dealers, Inc. or a nationally recognized municipal securities
evaluation service authorized by law to perform all the duties imposed upon it
by the Indenture. Any Indexing Agent may at any time resign and be discharged of
the duties and obligations created by the Indenture by giving at least sixty
(60) days' notice to the Authority, the Company, the Market Agent, the Bond
Insurer and the Trustee. The Indexing Agent may be removed at any time, at the
written direction of the Company, by an instrument, signed by the Authority,
filed with the Company, the Indexing Agent, the Market Agent, the Trustee and
the issuer of a Support Facility, if any. Upon the occurrence and during the
continuance of a Company Downgrade Event, the Bond Insurer shall have the right
to direct the Company to direct the Authority to remove the Indexing Agent as
provided in this paragraph by delivery of an instrument in writing to the
Company.
XI-14
ARTICLE XII
EVENTS OF DEFAULT; REMEDIES UPON
OCCURRENCE THEREOF
SECTION 12.01. Events of Default. Each of the following is hereby defined
as and declared to be and shall constitute an "Event of Default":
(a) Payment of the principal of and premium, if any, on any
Bond (whether by maturity, proceedings for redemption, purchase in accordance
with Article V hereof or the Market Agent Agreement, or otherwise) shall not be
made when the same shall become due and payable and with respect to any payment
of principal of, premium or accrued interest payable on Bonds called for
redemption, such non-payment shall continue for three (3) Business Days;
provided that in the case of any payment of principal or accrued interest
payable on Bonds called for redemption upon Determination of Taxability pursuant
to Section 5.06.1 an Event of Default shall occur if such nonpayment shall
continue for one (1) Business Day; or
(b) Payment of any installment of interest on any Bond shall
not be made when the same shall become due and payable and such nonpayment shall
continue for three (3) Business Days; or
(c) The Trustee shall receive written notice from the Bond
Insurer of the occurrence of an event of default under the Insurance Agreement
directing that the Trustee declare an Event of Default; or
(d) Receipt by the Trustee of written notice from the
financial institution providing any Credit Facility (other than a municipal bond
insurance policy) following a draw on or borrowing or payment under such Credit
Facility for the payment of interest on the Bonds that the amount so drawn has
not been reimbursed to the financial institution providing such Credit Facility
within the period specified in the agreement providing for the issuance of the
Credit Facility, together with interest thereon, if any, owing pursuant to the
agreement providing for the issuance of such Credit Facility; or
(e) The Authority shall fail in the due and punctual
performance of any of the covenants, conditions, agreements, provisions or
obligations, other than as set forth in (a) and (b) above, contained in the
Bonds or in this Indenture or in any Supplemental Indenture on the part of the
Authority to be performed, and such failure shall continue for ninety (90) days
after written notice specifying such failure and requiring the same to be
remedied shall have been given to the Authority, the Company, the Bond Insurer,
the Governor, the Comptroller and the Attorney General of the State of New York,
by the Trustee or to the Trustee, the Authority, the Bond Insurer, and the
Company by the Holders of not less than twenty-five percent (25%) in aggregate
principal amount of the Bonds then Outstanding as provided for in Section 13.03;
provided that if any such failure
XII-1
shall be such that it cannot be cured or corrected within such ninety (90) day
period, it shall not constitute an Event of Default hereunder if curative or
corrective action is instituted within such period and diligently pursued until
the failure of performance is cured or corrected; or
(f) The occurrence of an event of default as defined in Section 7.1 of the
Participation Agreement.
SECTION 12.02. Notice to Holders and Others Upon Occurrence of
an Event of Default or a Failure to Deposit. 1. The Trustee shall give notice to
the Bondholders of all Events of Default within sixty (60) days after the
Trustee has been notified thereof or is deemed to have notice thereof as
provided in Section 11.08, unless the Event of Default shall have been cured
before the giving of such notice or unless the Trustee shall deem it in the best
interest of the Holders to defer or withhold notice under this Section;
provided, however, that if a notice of an Event of Default is given to any
Bondholder, the Trustee shall concurrently therewith cause a copy to be provided
to all Bondholders. The Trustee shall immediately give notice to the Bond
Insurer of the occurrence of any Event of Default of which it has notice.
2. So long as ownership of the Auction Rate Bonds during an
Auction Rate Period or the Auction Rate-Inverse Rate Bonds during an Auction
Rate-Inverse Rate Period is maintained in book-entry form by the Securities
Depository, upon the occurrence of a Payment Default, the Trustee shall
immediately send a notice thereof in substantially the form of Exhibit I to the
Auction Agent and to the registered holders of the Bonds by telecopy or similar
means.
3. So long as the ownership of the Auction Rate Bonds during
an Auction Rate Period or the Auction Rate-Inverse Rate Bonds during an Auction
Rate-Inverse Rate Period is maintained in book-entry form by the Securities
Depository, the Trustee shall immediately send a notice in substantially the
form of Exhibit M to the Auction Agent and to the registered holders of the
Bonds by telecopy or similar means if a Payment Default has been cured.
4. Upon the occurrence of a Failure to Deposit, or in the
event such failure to deposit is cured, the Trustee shall give the Auction Agent
the notices referred to in Section 9.02(a)(i) or (b)(i), as the case may be.
SECTION 12.03. Declaration of Principal and Interest As Due.
Upon the occurrence and continuation of any Event of Default of which the
Trustee has been notified or is deemed to have notice as provided in Section
11.08, then and in every case the Trustee by a notice in writing to the
Authority, the Company and (to addresses then specified by the Authority) the
Governor, the Comptroller and the Attorney General of the State of New York may,
with the written consent of the Bond Insurer, and upon the written request or
direction of the Bond Insurer or upon the written request or direction of the
Holders of not less then twenty-five percent (25%) in principal amount of the
Bonds then Outstanding (determined in accordance with the provisions of Section
13.03) and the written consent of the Bond Insurer shall, declare the principal
of and accrued interest on all the Bonds then Outstanding (if not then due and
payable) to be due and payable immediately, and upon
XII-2
such declaration the same shall become due and be immediately due and payable,
anything contained in the Bonds or in this Indenture to the contrary
notwithstanding. If, however, at any time after the principal of the Bonds shall
have been so declared to be due and payable, and before the entry of final
judgment or decree in any suit, action or proceeding instituted on account of
such Event of Default, or before the completion of the enforcement of any other
remedy under this Indenture, monies shall have accumulated in the Bond Fund
sufficient to pay the principal of and any premium (or redemption price) on all
Bonds (or portions of the principal amount thereof) then or theretofore required
to be redeemed pursuant to any provisions of this Indenture (excluding principal
not then due except by reason of the aforesaid declaration) and all arrears of
interest and interest then due, if any, upon Bonds then Outstanding and if the
fees, compensation, expenses, disbursements, advances and liabilities of the
Trustee and all other amounts then payable by the Company under the
Participation Agreement, the Note and the Insurance Agreement shall have been
paid or a sum sufficient to pay the same shall have been deposited with the
Trustee, and every other Event of Default known to the Trustee in the observance
or performance of any covenant, condition or agreement contained in the Bonds or
in this Indenture (other than default in the payment of the principal of such
Bonds then due only because of a declaration under this Section) shall have been
remedied to the satisfaction of the Trustee and the Bond Insurer or, the Company
shall be taking, or shall be causing to be taken, appropriate action in good
faith to effect its cure, then and in every such case the Trustee may, with the
written consent of the Bond Insurer and upon the written request or direction of
the Bond Insurer or upon the written request or direction of the Holders of not
less than a majority in aggregate principal amount of the Bonds then Outstanding
(determined in accordance with the provisions of Section 13.03) and the written
consent of the Bond Insurer shall, by written notice to the Authority, rescind
and annul such declaration and its consequences; provided, however, that
notwithstanding any such rescission and annulment during an Auction Rate Period
the Bonds shall continue to bear interest at the Maximum Auction Rate and during
an Auction Rate-Inverse Rate Period, the Bonds shall continue to bear interest
at the Overdue Rate for the applicable period of time determined pursuant to
Article IIIA. No such rescission or annulment pursuant to the next preceding
sentence shall extend to or affect any subsequent default or impair any right
consequent thereto.
SECTION 12.04. Action by Trustee Upon Occurrence of Event of
Default. Upon the occurrence and continuation of an Event of Default the Trustee
(i) for and on behalf of the Holders of the Bonds and the Bond Insurer, shall
have the same rights hereunder which are possessed by any Holders of the Bonds;
(ii) shall be authorized to proceed, in its own name and as trustee of an
express trust; (iii) may pursue any available remedy by action at law or suit in
equity to enforce the payment of the principal of and interest and premium, if
any, on the Bonds; (iv) may file such proofs of claim and other papers or
documents as may be necessary or advisable in order to have the claims of such
Trustee and of the Bondholders and of the Bond Insurer allowed in any judicial
proceedings relative to the Company, its creditors, its property or the Bonds;
and (v) may with the written consent of the Bond Insurer, and upon the written
request or direction of the Holders of not less than twenty-five percent (25%)
in principal amount of the Bonds then Outstanding (determined in accordance with
the provisions of Section 13.03) and with the written consent of the Bond
Insurer, shall proceed to protect and enforce all rights of the Holders, the
Bond Insurer and the Trustee under
XII-3
and as permitted by this Indenture and the laws of the State of New York, by
such means or appropriate judicial proceedings as shall be suitable or deemed by
it most effective in the premises, including the appointment of temporary
trustees and any actions, suits or special proceedings at law or in equity or in
bankruptcy or by proceedings in the office of any board or officer having
jurisdiction, or otherwise, whether for the specific enforcement of any covenant
or agreement contained in this Indenture, or in aid of execution of any power
granted in this Indenture or to enforce any other legal or equitable right or
remedy vested in the Holders of the Bonds and the Bond Insurer or the Trustee by
this Indenture or by such laws, or for the appointment of a receiver. All rights
of action (including the right to file proofs of claim) under this Indenture or
under any of the Bonds may be enforced by the Trustee without the possession of
any of the Bonds or the of the Bond Insurer production thereof in any trial or
other proceedings relating thereto. Any such suit or proceeding instituted by
the Trustee shall be brought in its name and as trustee of an express trust
without the necessity of joining as plaintiffs or defendants any Holders of the
Bonds or the Bond Insurer, and any recovery or judgment shall be for the equal
benefit of the Holders of the Outstanding Bonds and the Bond Insurer as their
respective interests appear.
In the enforcement of any remedy under this Indenture the
Trustee shall be entitled to sue for, enforce payment of and receive any and all
amounts, then or during any Event of Default becoming, and at any time
remaining, due from the Company and unpaid under the Participation Agreement and
the Note for principal, premium, interest or otherwise under any of the
provisions of this Indenture or of the Bonds, with interest on overdue payments
if such interest then is permitted by the laws of the State of New York,
together with any and all costs and expenses of collection and of all
proceedings hereunder and under such Bonds, without prejudice to any other right
or remedy of the Trustee, of the Bond Insurer or of the Holders, and to recover
and enforce judgment or decree against the Company which is in default of its
respective obligations under the Participation Agreement and the Note, but
solely as provided herein and in such Bonds, for any portion of such amounts
remaining unpaid, with interest, costs and expenses, and to collect in any
manner provided by law, the monies adjudged or decreed to be payable. Any such
judgment shall be recovered by the Trustee, in its own name and as trustee of an
express trust.
SECTION 12.05. Powers of Trustee With Respect to Participation
Agreement and Other Agreements. If the payments required to be paid to the
Trustee under the Participation Agreement and the Note or other agreement
pledged and assigned hereunder, as the case may be, are not paid when due or
upon the happening and continuance of an Event of Default set forth in clause
(a) or (b) of Section 12.01, the Trustee, in its own name and as trustee of an
express trust, shall be entitled and empowered to institute any action or
proceedings at law or in equity for the collection of all payments due and
unpaid under the Participation Agreement and the Note or other agreement, as the
case may be, and required to be paid to the Trustee and may prosecute any such
action or proceedings to judgment or final decree, and may enforce any such
judgment or final decree against the Company or the obligor under any other
agreement, as the case may be, and collect in the manner provided by law out of
the property of the Company or such obligor wherever situated, the monies
adjudged or decreed to be payable.
XII-4
In case there shall be pending proceedings for the bankruptcy
or for the reorganization of the Company under the Participation Agreement or an
obligor under any other agreement pledged and assigned hereunder, as the case
may be, under the Federal Bankruptcy Act or any other applicable law, or in case
a receiver or trustee shall have been appointed for the property of the Company
under the Participation Agreement and the Note or an obligor under any other
agreement pledged and assigned hereunder, as the case may be, the Trustee,
regardless of whether the principal of the Bonds shall then be due and payable
as therein expressed or by declaration or otherwise and regardless of whether
the Trustee shall have made any demand pursuant to the power vested in it by
this Indenture, shall be entitled and empowered, by intervention in such
proceedings or otherwise, to file and prove a claim or claims for the whole
amount owing and unpaid under the Participation Agreement and the Note by the
Company or under such other agreement by such obligor, as the case may be, and
to file such other papers or documents as may be necessary or advisable in order
to have the claims of the Trustee (including any claim for reasonable
compensation to the Trustee, its agents, attorneys and counsel, and for
reimbursement of all expenses and liabilities incurred, and all advances made,
by the Trustee except as a result of its negligence, wilful misconduct or bad
faith) and of the Holders allowed in any such judicial proceedings relative to
the Company or other obligor, as the case may be, or to the creditors or
property of the Company or other obligor, as the case may be, and to collect and
receive any monies or other property payable or deliverable on such claims, and
to distribute in accordance with the provisions hereof all amounts received with
respect to the claims of the Holders and of the Trustee on their behalf, and any
receiver, assignee or trustee in bankruptcy or reorganization is hereby
authorized to make such payments to the Trustee.
Nothing herein contained shall be deemed to authorize the
Trustee to authorize or consent to or accept or adopt on behalf of the Bond
Insurer or any Holders any plan of reorganization, arrangement, adjustment or
composition affecting the Bonds or the rights of the Bond Insurer or any Holder
thereof, or to authorize the Trustee to vote in respect of the claim of the Bond
Insurer or any Holders in any such proceeding.
The provisions of this Section shall not be construed as in
any way limiting the powers of the Trustee, with respect to defaults by the
Authority or by the Company under the Participation Agreement and the Note, or
an obligor under any other agreement pledged and assigned hereunder, as the case
may be, whether such powers be expressly or implicitly granted to the Trustee
elsewhere in this Indenture or in the Participation Agreement or the Note or
other agreement, as the case may be, or as a denial that the Trustee has any
such other powers, but the powers granted to the Trustee by this Section shall
be supplemental, additional and cumulative to all other powers possessed by the
Trustee with respect to defaults under this Indenture or under the Participation
Agreement, the Note or other agreement pledged and assigned hereunder, as the
case may be.
SECTION 12.06. Disposition of Monies in Event of
Insufficiencies in Funds and Accounts. All monies (other than proceeds of any
Credit Facility and amounts held in or payable to the Rebate Fund) received by
the Trustee pursuant to any right given or action taken under the provisions of
this Article, after payment of the costs and expenses of the proceedings
resulting in the collection of such monies and of the expenses, fees and
advances incurred or made by the Trustee
XII-5
hereunder, shall be deposited in the Bond Fund. If at any time the monies in the
Bond Fund shall not be sufficient to pay the interest or principal or premium,
if any (or the redemption price), of the Bonds as the same become due and
payable (whether at maturity or upon proceedings for the redemption thereof or
by acceleration or otherwise), the monies in such fund, together with any other
monies then available or thereafter becoming available for such purpose, whether
through the exercise of the remedies provided for in this Article XII or
otherwise, shall be applied as follows:
(a) Unless the principal of all the Bonds shall have become
due and payable or shall have been declared due and payable pursuant to the
provisions of Section 12.03, all such monies shall be applied:
First: to the payment to the persons entitled thereto of all
installments of interest then due, in the order of the maturity of the
installments of such interest, and if the amount available shall not be
sufficient to pay in full any particular installment, then to the
payment ratably, according to the amounts due on such installment, to
the persons entitled thereto, without any discrimination or preference;
and
Second: to the payment of the interest and premium, if any, on and the
principal of the Bonds, to the purchase and retirement of Bonds and to the
redemption of Bonds, all in accordance with the provisions of this Indenture.
(b) If the principal of all the Bonds shall have become due
and payable or shall have been declared due and payable pursuant to the
provisions of Section 12.03, all such monies shall be applied ratably to the
payment of the principal and interest then due and unpaid, with interest on such
principal as aforesaid, without preference or priority of principal over
interest or of interest over principal, or of any installment of interest over
any other installment of interest, or of any Bond over any other Bond, according
to the amounts due respectively for principal and interest, to the persons
entitled thereto without any discrimination or preference except as to any
difference in the respective rates of interest specified in the Bonds.
(c) If the principal of all the Bonds shall have been declared
due and payable pursuant to the provisions of Section 12.03, and if such
declaration shall thereafter have been rescinded and annulled pursuant to the
provisions of such Section 12.03, then, subject to the provisions of
subparagraph (b) above of this paragraph in the event that the principal of all
the Bonds shall later become due and payable or be declared due and payable
pursuant to the provisions of Section 12.03, the monies then held in the Bond
Fund shall be applied to the payment of the principal of and premium (or
redemption price) on all matured Bonds and all Bonds (or portions of the
principal amount thereof) then or theretofore required to be redeemed pursuant
to any provisions of this Indenture (excluding principal not then due except by
reason of such declaration) and all arrears of interest and interest then due,
if any, upon all Bonds then Outstanding, and any monies thereafter deposited in
the Bond Fund shall be applied in accordance with the provisions of Article IX.
XII-6
Whenever monies are to be applied by the Trustee pursuant to
the provisions of subparagraphs (a) and (b) of this Section, (i) such monies
shall be applied by the Trustee at such times, and from time to time, as the
Trustee in its sole discretion shall determine, having due regard to the amount
of such monies available for application and the likelihood of additional monies
becoming available for such application in the future; (ii) the deposit of such
monies, in trust for the proper purpose, shall constitute proper application by
the Trustee; and (iii) the Trustee shall incur no liability whatsoever to the
Authority, to any Holder or to any other person for any delay in applying any
such monies, so long as the Trustee acts with reasonable diligence, having due
regard to the circumstances, and ultimately applies the same in accordance with
such provisions of this Indenture as may be applicable at the time of
application by the Trustee. Whenever the Trustee shall exercise such discretion
in applying such monies, it shall fix the date (which shall be an Interest
Payment Date unless the Trustee shall deem another date more suitable) upon
which such application is to be made and upon such date interest on the amounts
of principal to be paid on such date shall cease to accrue. The Trustee shall
give such notice as it may deem appropriate of the fixing of any such date, and
shall not be required to make payment to the Holder of any unpaid Bond until
such Bond shall be surrendered to the Trustee for appropriate endorsement, or
for cancellation if fully paid.
SECTION 12.07. Effect of Delay or Omission; Waiver of Default;
Direction of Remedial Proceedings by the Holders. No delay or omission of the
Trustee, the Bond Insurer or of any Holder of the Bonds to exercise any right or
power accruing upon any default or Event of Default shall impair any such right
or power or shall be construed to be a waiver of any such default or
acquiescence therein.
Anything in this Indenture to the contrary notwithstanding,
the Bond Insurer or the Holders of not less than a majority in principal amount
of the Bonds at the time Outstanding (determined in accordance with the
provisions of Section 13.03), with the prior consent of the Bond Insurer shall
be authorized and empowered and have the right, by an instrument or concurrent
instruments in writing delivered to the Trustee on behalf of the Bond Insurer or
the Holders of the Bonds then Outstanding and the Bond Insurer to consent to the
waiver of any Event of Default or its consequences, and the Trustee shall waive
any Event of Default and its consequences upon the written request of the Bond
Insurer or the Holders of such majority with the prior consent of the Bond
Insurer; provided, however, that there shall not be waived (i) any default in
payment of principal or premium when due or (ii) any default in payment when due
of interest unless, in either case, prior to such waiver all arrears in
principal, premium, if any, and interest, with additional interest, to the
extent permitted by law, at the rate then borne by the Bonds (which, in the case
of Auction Rate Bonds during an Auction Rate Period shall be the Maximum Auction
Rate and in the case of Auction Rate-Inverse Rate Bonds during an Auction
Rate-Inverse Rate Period shall be the Overdue Rate), and all fees and expenses
of the Trustee shall have been paid or provided for; provided, however, that
notwithstanding any such waiver, any Auction Rate Bonds during an Auction Rate
Period shall continue to bear interest at the Maximum Auction Rate and any
Auction Rate-Inverse Rate Bonds during an Auction Rate-Inverse Rate Period shall
continue to bear interest at the Overdue Rate until cured or waived. No such
waiver shall extend to or affect any other
XII-7
existing or subsequent default or Event of Default or impair any rights or
remedies consequent thereon.
Anything in this Indenture to the contrary notwithstanding,
the Bond Insurer or the Holders of not less than twenty-five percent (25%) in
aggregate principal amount of the Bonds at the time Outstanding (determined in
accordance with the provisions of Section 13.03) with the prior consent of the
Bond Insurer, shall be authorized and empowered and have the right, by an
instrument or concurrent instruments in writing delivered to the Trustee to
direct the time and method of conducting any proceeding for any remedy to be
taken by the Trustee or available to the Trustee or available to the Bond
Insurer or the Holders of the Bonds, or exercising any trust or power conferred
upon the Trustee hereunder provided: (1) such direction shall not be in conflict
with any rule of law or with this Indenture or expose the Trustee to personal
liability, or be unduly prejudicial to Holders not joining therein, and (2) the
Trustee may take any other action deemed proper by the Trustee which is not
inconsistent with such direction.
SECTION 12.08. Suits or Actions by Holders; Any Holder May
Enforce Overdue Payment of His Bond or Interest Thereon. Neither the Bond
Insurer nor the Holder of any of the Bonds shall have any right to institute any
suit, action or proceeding in equity or at law for the execution of any trust
hereunder or for any other remedy hereunder unless there shall have occurred an
Event of Default of which the Trustee has been notified or is deemed to have
notice as provided in Section 11.08, and the Bond Insurer or such Holder
previously shall have given to the Trustee written notice of the Event of
Default on account of which such suit, action or proceeding is to be instituted,
and unless also the Holders of not less than twenty-five percent (25%) in
principal amount of the Bonds then Outstanding shall have made written request
of the Trustee after the right to exercise such powers or right of action, as
the case may be, shall have accrued, shall have obtained the prior written
consent of the Bond Insurer to the institution of any such suit, action or
proceeding in equity or at law, and shall have afforded the Trustee a period of
60 days either to proceed to exercise the powers hereinabove granted or to
institute such action, suit or proceeding in its or their name, the Trustee
shall have been indemnified by Holders against the costs, expenses and
liabilities to be incurred in compliance with such request, and shall not have
received an inconsistent direction from the Holders of not less than twenty-five
percent (25%) in principal amount of the Bonds and the Trustee shall have
refused or neglected to comply with such request within a reasonable time. It is
understood and intended that no one or more Holders of the Bonds hereby secured
shall have any right in any manner whatever by the action of such Holder or
Holders to affect, disturb or prejudice the security of this Indenture, or to
enforce any right hereunder except in the manner herein provided; that all
proceedings at law or in equity shall be instituted, had and maintained in the
manner herein provided and for the benefit of all Holders of such Outstanding
Bonds; and that any individual rights of action or other right given to one or
more of such Holders by law are restricted by this Indenture to the rights and
remedies herein provided. Notwithstanding the foregoing, the Trustee shall be
under no obligation to exercise any of the rights or powers vested in it by this
Indenture at the request or direction of the Bond Insurer or any of the Holders,
unless the Bond Insurer or such Holders shall have offered to the Trustee
reasonable security or indemnity against
XII-8
the costs, expenses and liabilities which might be incurred by it in compliance
with such request or direction.
Notwithstanding any other provision of this Indenture, the
right of any Holder of a Bond to receive payment of the principal of, premium,
if any, and interest on such Bond, on or after the respective due dates
expressed in such Bond, or to institute suit for the enforcement of any such
payment on or after such respective dates, shall not be impaired or affected
without the consent of such Holder, except that no Holder of any such Bond shall
have the right to institute any such suit, if and to the extent that the
institution or prosecution thereof or the entry of judgment therein would, under
applicable law, result in the surrender, impairment, waiver, or loss of the lien
of this Indenture.
SECTION 12.09. Remedies Not Exclusive. No remedy by the terms
of this Indenture conferred upon or reserved to the Trustee, the Bond Insurer or
the Holders of the Bonds is intended to be exclusive of any other remedy so
conferred or reserved or to be exclusive of other remedies now or hereafter
existing at law or in equity or by statute, and each and every such remedy shall
be cumulative and shall be in addition to any other remedy given hereunder to
the Trustee or to the Holders of the Bonds or now or hereafter existing at law
or in equity or by statute. Every such right, power and remedy given hereunder
or by law or in equity or by statute may be exercised from time to time and as
often as may be deemed expedient.
SECTION 12.10. Effect of Abandonment of Proceedings on
Default. In case any proceeding taken by the Trustee, the Bond Insurer or the
Holders of the Bonds on account of any Event of Default shall have been
discontinued or abandoned for any reason, then and in every such case the
Authority, the Trustee, the Bond Insurer and the Holders shall be restored to
their former positions and rights hereunder, respectively, and all rights,
remedies, powers and duties of the Trustee shall continue as though no such
proceeding had been taken.
SECTION 12.11. Interest on Overdue Amounts. To the extent
permitted by law all amounts which are due and payable but which have not been
so paid under this Indenture shall bear interest at the then current rate of
interest on the Bonds until paid; provided, however, that during any Auction
Rate Period all amounts which are due and owing but unpaid hereunder shall bear
interest at the Maximum Auction Rate and during any Auction Rate-Inverse Rate
Period all amounts which are due and owing but unpaid hereunder shall bear
interest at the Overdue Rate until paid.
XII-9
ARTICLE XIII
EXECUTION OF INSTRUMENTS BY BONDHOLDERS AND
OWNERSHIP OF BONDS; EXCLUSION OF BONDS
OWNED BY THE AUTHORITY OR THE COMPANY
SECTION 13.01. Execution of Requests, Directions and Consents
and Other Instruments and Proof of Same; Ownership of Bonds and Proof of Same.
Any request, direction, consent or other instrument required by this Indenture
to be signed or executed by Holders of Bonds may be signed or executed by such
Holders in person or by agent or agents duly appointed in writing, and may be in
any number of concurrent writings of substantially similar tenor. Proof of the
execution of any such request, direction, consent or other instrument or of a
writing appointing any such agent, and of the holding or ownership of Bonds,
shall be sufficient for any purpose of this Indenture and shall be conclusive in
favor of the Trustee hereunder with regard to any action taken by it under such
request, direction, consent or other instrument or of writing appointing any
such agent, if made in the following manner:
(a) the fact and date of the execution by any person of any
such request, direction, consent or other instrument in writing may be
proved in any reasonable manner which the Trustee deems sufficient;
(b) the ownership of Bonds shall be proved by the books of registry kept
under the provisions of this Indenture.
Any request, direction, consent or vote of the Holder of any
Bond shall bind and be conclusive upon the Holder of such Bond giving such
request, direction or consent or casting such vote and upon every future Holder
of the same Bond in respect of anything done or suffered to be done by the
Trustee or otherwise, or by the Holders of other Bonds, in pursuance of such
request, direction, consent or vote, and whether or not such future Holder has
knowledge of or information as to such request, direction, consent or vote;
provided that any request, direction, consent or vote of the Holder of a Bond
required by any of the provisions hereof may be revoked by the Holder giving
such request, direction, consent or vote or by a subsequent Holder if such
revocation in writing is filed with the Trustee, prior to the time when the
request, direction, consent or vote of the percentage of the Holders of the
Bonds required by such provision shall have been given and action taken by the
Trustee or otherwise, or by the Holders of other Bonds, under authority of such
request, direction, consent or vote.
The payment of or on account of principal to or upon the order
of the person in whose name the Bonds shall at the time be registered on said
books of registry and the payment of interest to or upon the order of any person
in whose name the Bonds shall at the time be registered on said books of
registry, shall be valid and effectual fully to satisfy and discharge all
liability hereunder or upon the Bonds to the extent of the sum or sums so paid.
XIII-1
The Authority at the request of the Company may establish a
record date for the taking of any action by the Holders.
SECTION 13.02. Meetings of Holders. The Trustee or the Holders
of not less than twenty percent (20%) in aggregate principal amount of the Bonds
then Outstanding may at any time call a meeting of the Holders of the Bonds for
the purpose of the consenting to, the approving, the requesting, or the
directing by the Holders of the Bonds of any action required to be consented to
or approved by them hereunder or which they may request or direct hereunder to
be taken, or for the making by the Holders of any appointments they may make
hereunder, or for the purpose of taking any other action which the Holders may
take hereunder, or for any other purpose concerning the payment and security of
the Bonds hereunder. Every such meeting shall be held at such place in The City
of New York, State of New York, as may be specified in the notice calling such
meeting. Written notice of such meeting, stating the place and time of the
meeting and in general terms the business to be submitted, shall be mailed to
the Holders whose names and addresses then appear upon the books of registry by
the Registrar and Paying Agent or the Holders calling such meeting, not less
than 20 days nor more than 60 days before such meeting. Any meeting of Holders
shall, however, be valid without notice if the Holders of all Bonds then
Outstanding are present in person or by proxy or if notice is waived before or
within 30 days after the meeting by those not so present.
Attendance and voting by Holders at meetings thereof may be in
person or by proxy. Holders of Bonds may, by an instrument in writing under
their hands, appoint any person or persons, with full power of substitution, as
their proxy to attend and vote at any meeting for them.
Persons named by the Trustee, or elected by the Holders of a
majority in principal amount of the Bonds represented at the meeting in person
or by proxy in the event the Trustee is not represented at such meeting, shall
act as temporary Chairman and temporary Secretary of any meeting of Holders. A
permanent Chairman and a permanent Secretary of such meeting shall be elected by
the Holders of a majority in aggregate principal amount of the Bonds represented
at such meeting in person or by proxy. The permanent Chairman of the meeting
shall appoint two (2) Inspectors of Votes who shall count all votes cast at such
meeting, except votes on the election of Chairman and Secretary as aforesaid,
and who shall make and file with the Secretary of the meeting and the Trustee
their verified report of all such votes cast at the meeting.
The Holders of not less than the aggregate principal amount of
the Bonds required by the provisions hereof to consent to, approve, request or
direct any action to be taken at a meeting of Holders, or required by the
provisions hereof to make any appointments to be made at such meeting, or
required by the provisions hereof to take any other action to be taken at such
meeting, must be present at such meeting in person or by proxy in order to
constitute a quorum for the transaction of such business. Less than a quorum,
however, shall have power to adjourn the meeting from time to time without
notice of such adjournment other than the announcement thereof at the meeting;
provided, however, that if such meeting is adjourned by less than a quorum for
more than ten (10) days, notice of such adjournment shall be given by the
Trustee at least five (5) days prior to the adjourned date of the meeting.
XIII-2
Any Holder of a Bond shall be entitled in person or by proxy
to attend and vote at such meeting as Holder of the Bond or Bonds registered in
his or her name without producing such Bond or Bonds. Such persons and their
proxies shall, if required, produce such proof of personal identity as shall be
satisfactory to the Secretary of the meeting.
All proxies presented at such meeting shall be delivered to
the Inspector of Votes and filed with the Secretary of the meeting. The right of
a proxy for a Holder to attend the meeting and act and vote thereat may be
proved (subject to the Trustee's right to require additional proof) by a written
proxy executed by such Holder as aforesaid.
The officers or nominees of the Trustee may be present or
represented at such meeting and take part therein, but shall not be entitled to
vote thereat, except for such officers or nominees who are Holders or proxies
for Holders (including the Trustee).
The vote at any such meeting of the Holder of any Bond, or his
or her proxy, entitled to vote thereat shall be binding upon such Holder and
upon every subsequent Holder of such Bond (whether or not such subsequent Holder
has notice thereof).
SECTION 13.03. Exclusion of Bonds Held by or for the
Authority, the Company and of Bonds No Longer Deemed Outstanding Hereunder. In
determining whether the Holders of the requisite aggregate principal amount of
Bonds have concurred in any demand, request, direction, consent, vote or waiver
under this Indenture, any Bonds which are owned by or on behalf of or for the
account of the Authority, the Company and, except for the purposes of Section
15.01, any Bonds which are deemed no longer Outstanding hereunder shall be
disregarded and not included for the purpose of any such determination, and such
Bonds shall not be entitled to vote upon, consent to or concur in any action
provided in this Indenture, except that for the purposes of determining whether
the Trustee shall be protected in relying on any such demand, request,
direction, consent, vote or waiver only Bonds which the Trustee knows are owned
as aforesaid shall be disregarded. The Trustee may require each Holder of a Bond
or Bonds, before such Holder's demand, request, direction, consent, vote or
waiver shall be deemed effective, to reveal if the Bonds as to which such
demand, request, direction, consent, vote or waiver is made, granted, cast or
given are disqualified as provided in this Section.
XIII-3
ARTICLE XIV
AMENDING AND SUPPLEMENTING THE INDENTURE,
THE PARTICIPATION AGREEMENT, THE MARKET AGENT AGREEMENT,
AUCTION AGENCY AGREEMENT, BROKER-DEALER AGREEMENTS,
BOND PURCHASE TRUST AGREEMENT
SECTION 14.01. Amending and Supplementing Indenture Without
Consent of Holders. The Authority and the Trustee, from time to time and at any
time and without the consent or concurrence of any Holder but with the written
consent (which consent shall not be unreasonably withheld) of the Bond Insurer,
may enter into a Supplemental Indenture, (i) to make any changes, modifications,
amendments or deletions to this Indenture that may be required to permit the
Indenture to be qualified under the Trust Indenture Act of 1939 of the United
States of America or (ii) for any one or more of the following purposes:
(a) (x) to make any changes or corrections
in this Indenture or any Supplemental Indenture as to
which the Authority shall have been advised by Bond
Counsel that the same are required for the purpose of
curing or correcting any ambiguity or defective or
inconsistent provision or omission or mistake or
manifest error contained in this Indenture or
Supplemental Indenture, or (y) to insert in this
Indenture such provisions clarifying matters or
questions arising under this Indenture as are
necessary or desirable if such provisions shall not
materially and adversely affect the rights of the
Holders;
(b) to add additional covenants and agreements of the Authority for the
purpose of further securing the payment of the Bonds;
(c) to surrender any right, power or privilege reserved to or conferred
upon the Authority by the terms of this Indenture;
(d) to confirm as further assurance any lien, pledge or
charge, or the subjection to any lien, pledge or charge, created or to
be created by the provisions of this Indenture or any Supplemental
Indenture;
(e) to grant to or confer upon the Holders any additional
rights, remedies, powers, authority or security that lawfully may be
granted to or conferred upon them, or to grant to or to confer upon the
Trustee for the benefit of the Holders any additional rights, duties,
remedies, power or authority;
(f) to provide for the issuance of Bonds in book entry or coupon form, if
at the time permitted by applicable law;
XIV-1
(g) to provide for the substitution of rating agencies;
(h) to provide for any new administrative or procedural
provisions made necessary or desirable by the issuance of a Support
Facility or an Alternate Support Facility, other credit, liquidity or
support facility, including, but not limited to, any amendment
necessary to obtain a rating on the Bonds based upon such facility;
(i) to make any changes in this Indenture to any provisions
relating to any Adjustable Rate so long as no Bonds are then
outstanding bearing such Adjustable Rate; and
(j) to modify, amend or supplement the Indenture in such
manner as to permit the qualification of the Bonds for deposit with a
Securities Depository, and, in connection therewith, if they so
determine, to add to the Indenture, such other terms, conditions and
provisions as may be required to permit such qualification.
No Supplemental Indenture shall be entered into unless in the
opinion of Bond Counsel which shall be delivered to the Trustee and the Bond
Insurer (which opinion may be combined with the opinion required by Section
14.04) the execution of such Supplemental Indenture is permitted by the
foregoing provisions of this Section and the provisions of such Supplemental
Indenture do not materially and adversely affect the rights of the Holders of
the Bonds and the Trustee may rely on any such opinion.
SECTION 14.02. Amending and Supplementing Indenture with
Consent of Holders. With the consent of the Holders of not less than fifty-one
percent (51%) in aggregate principal amount of the Bonds then Outstanding, the
Authority and the Trustee, with the prior written consent of the Bond Insurer
and prior written notice to each Rating Agency then rating the Bonds at the
request of the Company, from time to time and at any time may enter into a
Supplemental Indenture for the purpose of adding any provisions, to, or changing
in any manner or eliminating any of the provisions, of, this Indenture, or
modifying or amending the rights and obligations of the Authority hereunder, or
modifying or amending in any manner the rights of the Holders; provided that,
without the specific consent of the Bond Insurer and the Holders of all Bonds
Outstanding which would be affected thereby no Supplemental Indenture amending
or supplementing the provisions hereof shall: (a) change the fixed maturity date
for the payment of the principal of any Bond, or the dates for the payment of
interest thereon or the terms of the purchase or redemption thereof, or reduce
the principal amount of any Bond or the rate of interest thereon or the method
of calculating the same except as otherwise provided in this Indenture; or (b)
reduce the aforesaid percentage of Bonds, the Holders of which are required to
consent to any Supplemental Indenture amending or supplementing the provisions
of this Indenture; or (c) give to any Bond any preference over any other Bond
secured hereby; or (d) authorize the creation of any pledge of Note Payments
prior or superior to the pledge of a lien and charge thereon assigned herein for
the payment of the Bonds; or (e) effect any change in the purchase or redemption
provisions relating to the Bonds; or (f) deprive any Holders in any material
respect of the security afforded by this Indenture. A modification or amendment
of the provisions of Article IX hereof with respect to the Bond Fund or
XIV-2
any other Funds or Accounts established thereby shall not be deemed a change in
the terms of payment; provided that no such modification or amendment shall,
except upon the consent of the Bond Insurer and the Holders of all Bonds
Outstanding affected thereby, reduce the amount or amounts required to be
deposited in the Bond Fund. Nothing in this paragraph contained, however, shall
be construed as making necessary the approval of the Holders of the execution of
any Supplemental Indenture authorized by the provisions of Section 14.01.
The proof of the giving of any consent by any Holder required
by this Section and of the holding of the Bonds for the purpose of giving
consents shall be made in accordance with the provisions of Article XIII. It
shall not be necessary that the consent of the Holders approve the particular
form of wording of the proposed Supplemental Indenture effecting such amendment
or supplement, but it shall be sufficient if such consent approves the substance
of the proposed amendment or supplement. After the Holders of the required
percentage of Bonds shall have filed their consents to the amending or
supplementing hereof pursuant to this Section, the Authority shall mail a copy
of notice of such consent, postage prepaid, to each Holder at his or her address
as it appears upon the books of registry and to the Trustee. Nothing in this
paragraph contained, however, shall be construed as requiring the giving of
notice of any amending or supplementing of this Indenture authorized by this
Section. A record of the consents shall be filed with the Trustee, and shall be
proof of the matters therein stated until the contrary is proved. No action or
proceeding to set aside or invalidate such Supplemental Indenture or any of the
proceedings for its adoption shall be instituted or maintained unless such
action or proceeding is commenced within sixty (60) days after the mailing of
the notice required by this paragraph.
Copies of any Supplemental Indenture authorized by the
provisions of Section 14.02 shall be given to the Rating Agency or Agencies then
rating the Bonds.
SECTION 14.03. Notation upon Bonds; New Bonds Issued upon
Amendments. The Bonds delivered after the effective date of any action taken as
provided in this Article, if any, may and shall if required by the Trustee bear
a notation as to such action, by endorsement or otherwise and in form approved
by the Authority. In that case, upon demand of any Holder at such effective date
and upon presentation of Bonds at the principal office of the Trustee or other
transfer agent or registrar hereunder for such Bonds, and at such additional
offices, if any, as the Authority may select and designate for that purpose, a
suitable notation shall be made on the Bonds.
SECTION 14.04. Effectiveness of Supplemental Indentures. Upon
the execution pursuant to this Article by the Authority and the Trustee of any
Supplemental Indenture amending or supplementing the provisions of this
Indenture and the delivery to the Trustee and the Bond Insurer of an opinion of
Bond Counsel that such Supplemental Indenture is in due form, has been duly
executed in accordance with the provisions hereof and applicable law and that
the provisions thereof are valid (upon which opinion the Trustee, subject to the
provisions of Section 11.04, shall be fully protected in relying), or upon such
later date as may be specified in such Supplemental Indenture, (i) this
Indenture and the Bonds shall be modified and amended in accordance with such
Supplemental Indenture; (ii) the respective rights, limitations of rights,
obligations, duties and
XIV-3
immunities under this Indenture of the Authority, the Trustee, and the Holders
shall thereafter be determined, exercised and enforced under this Indenture
subject in all respects to such modifications and amendments; and (iii) all of
the terms and conditions of any such Supplemental Indenture shall be a part of
the terms and conditions of the Bonds and of this Indenture for any and all
purposes.
SECTION 14.05. Supplemental Indenture Affecting Support
Facility Provider. No Supplemental Indenture in any way materially and adversely
affecting any Support Facility Issuer (so long as such Support Facility is in
effect) may be entered into by the Authority and the Trustee or be consented to
by the Holders without written consent of such Support Facility Issuer.
SECTION 14.06. Supplemental Participation Agreements Not
Requiring the Consent of the Holders. The Authority and the Company may, with
the written consent of the Trustee but without notice to or consent of any
Holder, from time to time and at any time, agree to such supplemental agreements
supplementing the Participation Agreement or amendments to the Participation
Agreement as shall not be inconsistent with the terms and provisions of the
Participation Agreement or this Indenture and, in the opinion of the Authority,
shall not be detrimental to the interests of the Holders (which Supplemental
Participation Agreements shall thereafter form a part of the Participation
Agreement):
(a) to cure any ambiguity or formal defect or omission in the Participation
Agreement or in any supplemental agreement;
(b) to grant to or confer upon the Trustee for the benefit of
the Holders any additional rights, remedies, powers, authority or
security that may lawfully be granted to or conferred upon the Holders
or the Trustee;
(c) to provide for any new administrative, security or procedural
provisions necessitated by the issuance of an Alternate Support Facility; or
(d) to provide for or add any further changes or corrections that are
necessary or desirable to comply with any Supplemental Indenture entered
into pursuant to Section 14.01;
provided that no such Supplemental Participation Agreement or the amendment to
the Note which materially and adversely affects any Support Facility Issuer (so
long as such Support Facility is in effect) shall be effective prior to the
receipt by such parties of the written consent of the issuer of such Support
Facility.
SECTION 14.07. Notice and Consent for Supplemental
Participation Agreements Requiring the Consent of the Holders. Except for
Supplemental Participation Agreements or amendments provided for in Section
14.06, neither the Authority nor the Trustee shall agree or consent, as the case
may be, to any Supplemental Participation Agreement or amendment to the
Participation Agreement unless notice of the proposed execution of such
Supplemental Participation Agreement or amendment shall have been given and the
Bond Insurer and the Holders shall have
XIV-4
consented to and approved the execution thereof in the same manner and form as
provided for in Section 14.02 in the case of Supplemental Indentures; provided
that no such Supplemental Participation Agreement which materially and adversely
affects any Support Facility Issuer (so long as the issuer of such Support
Facility is in effect) shall be effective prior to the receipt by such parties
of the written consent of such Support Facility Issuer.
SECTION 14.08. Effectiveness of Supplemental Participation
Agreement. Upon the execution pursuant to this Article and of applicable law by
the Authority and the Company of any Supplemental Participation Agreement
amending or supplementing the provisions of the Participation Agreement and the
delivery to the Trustee and the Bond Insurer of an Opinion of Bond Counsel that
such Supplemental Participation Agreement is in due form, has been duly executed
in accordance with the provisions hereof and applicable law and that the
provisions thereof are valid (upon which opinion the Trustee, subject to the
provisions of Section 11.04, shall be fully protected in relying), or upon such
later date as may be specified in such Supplemental Participation Agreement, (i)
the Participation Agreement shall be modified and amended in accordance with
such Supplemental Participation Agreement; (ii) the respective rights,
limitations of rights, obligations, duties and immunities thereunder of the
Authority and the Company shall thereafter be determined, exercised and enforced
thereunder subject in all respects to such modifications and amendments; and
(iii) all of the terms and conditions of any such Supplemental Participation
Agreement shall be a part of the terms and conditions thereof for any and all
purposes.
SECTION 14.09. Amending and Supplementing the Market Agent
Agreement, Auction Agency Agreement, Broker-Dealer Agreements or Bond Purchase
Trust Agreement. Amendments of or supplements to the Market Agent Agreement, the
Auction Agency Agreement, any Broker-Dealer Agreement or the Bond Purchase Trust
Agreement shall be made only in accordance with the terms thereof.
SECTION 14.10. Notice of Certain Amendments to Rating
Agencies. No amendment to the Indenture, the Participation Agreement, the Credit
Facility or a Liquidity Facility (including any related Confirming Agreement)
shall take effect unless prior written notice shall have been given to each
Rating Agency then rating the Bonds.
XIV-5
ARTICLE XV
DEFEASANCE; MONEYS HELD FOR PAYMENT OF
DEFEASED BONDS
SECTION 15.01. Discharge of Liens and Pledges; Bonds No Longer
Deemed to be Outstanding Hereunder. Bonds purchased on or before the Fixed Rate
Conversion Date pursuant to Section 5.02, 5.03 or 5.08 shall continue to be
Outstanding hereunder until such Bonds shall be cancelled in accordance with
Section 5.14 or paid at maturity or redeemed pursuant to Article V or otherwise
defeased. The obligations of the Authority under this Indenture and the liens,
pledges, charges, trusts, covenants and agreements of the Authority, herein made
or provided for, shall be, subject to the terms of Section 15.02, fully
discharged and satisfied as to the Bonds or portion thereof and the Bonds shall
no longer be deemed to be Outstanding hereunder:
(a) when the Bonds shall have been cancelled, or shall have
been surrendered for cancellation and are subject to cancellation, or shall have
been redeemed by the Trustee from monies held by it under this Indenture; or
(b) if the Bonds have not been cancelled or so surrendered for
cancellation or subject to cancellation, or so redeemed, when payment of the
principal of and premium, if any, on the Bonds, plus interest on such principal
to the due date thereof (whether such due date be by reason of maturity or upon
redemption or prepayment, or otherwise) either (i) shall have been made or
caused to be made in accordance with the terms thereof, or (ii) shall have been
provided for by irrevocably depositing with the Trustee in trust, and
irrevocably appropriating and setting aside exclusively for such payments (1)
monies sufficient to make such payment without investment or reinvestment, or
(2) Governmental Obligations maturing as to principal and interest in such
amounts and at such times as will insure the availability of sufficient and
timely monies to make such payments when due, or (3) a combination of both such
monies and Governmental Obligations, whichever the Authority deems to be in its
best interest, and all necessary and proper fees, compensation and expenses of
the Trustee pertaining to the Bonds or portion thereof with respect to which
such deposit is made, shall have been paid or the payment thereof provided to
the satisfaction of the Trustee. Notwithstanding the foregoing, Bonds shall not
be deemed defeased hereunder unless the Trustee and the Bond Insurer shall have
received a verification report of an independent certified public accountant
relating to the sufficiency of the escrowed funds to be used for defeasance in
form and substance reasonably satisfactory to them, written evidence from each
Rating Agency then rating the Bonds that the current rating on the Bonds will
not be lowered or withdrawn, and an opinion of Bond Counsel, which may rely on
such verification report substantially to the effect that the Bonds are no
longer outstanding under the Indenture. Any escrow agreement entered into under
this Section 15.01 shall not permit the use of any forward supply contract
providing for the delivery and purchase of Government Obligations in an escrow
fund without the approval of the Authority and the Bond Insurer.
XV-1
At such time as the Bonds shall be deemed to be no longer
Outstanding hereunder, as aforesaid, such Bonds shall cease to accrue interest
from the due date thereof (whether such due date occurs by reason of maturity,
or upon redemption or prepayment or otherwise) and, except for the purposes of
any such payment from such monies or Governmental Obligations and except, in the
case of Auction Rate Bonds and Inverse Rate Bonds, to the extent provided in the
definition of Outstanding in Article I shall no longer be secured by or entitled
to the benefits of this Indenture.
Any such monies so deposited with the Trustee as provided in
this Section may at the direction of the Company also be invested in
Governmental Obligations, maturing in the amounts and times as hereinbefore set
forth, and all income from all Governmental Obligations in the hands of the
Trustee pursuant to this Section which is not required for the payment of the
Bonds and interest thereon with respect to which such monies shall have been so
deposited shall be paid to the Company or if any Bonds are then Outstanding, be
deposited in the Bond Fund and credited to the Principal Account as and when
realized and collected, for use and application as are other monies credited to
such Account.
Anything in Article XIV to the contrary not-withstanding, if
monies or Governmental Obligations have been deposited or set aside with the
Trustee pursuant to this Section for the payment of the Bonds, the Bonds shall
be deemed to have been paid in full. No amendment to the provisions of this
Article shall be made without the consent of the Holders of the Bonds affected
thereby.
Notwithstanding anything in this Indenture to the contrary,
unless payment of such Bonds (or provision for such payment) shall have been
made with Available Moneys, no Bonds bearing interest at a Daily Rate, a Weekly
Rate, a Monthly Rate, a Semi-annual Rate or a Commercial Paper Rate shall be
deemed to be paid within the meaning of this Section unless and until at least
123 days shall have elapsed subsequent to payment or provision for payment of
such Bonds shall have been made in accordance with this Section 15.01 during
which no Act of Bankruptcy shall have occurred or be continuing. The occurrence
or continuance of an Act of Bankruptcy shall be evidenced by delivery of a
certificate of the Company.
Notwithstanding anything to the contrary, in the event that
the principal and/or interest due on the Bonds shall be paid by the Bond Insurer
pursuant to the Municipal Bond Insurance Policy, the Bonds shall remain
Outstanding for all purposes, not be defeased or otherwise satisfied and not be
considered paid by the Company, and obligations of the Authority under this
Indenture and the liens, pledges, charges, trusts, covenants and agreements of
the Authority, herein made or provided for shall continue to exist and shall run
to the benefit of the Bond Insurer, and the Bond Insurer shall be subrogated to
the rights of the Holders of the Bonds.
The Trustee shall promptly surrender any Support Facility (if
appropriate for the type of instrument or instruments then serving as Support
Facility) to the issuer of such Support Facility for cancellation or shall
otherwise take appropriate action to terminate the Support Facility following
any such defeasance.
XV-2
SECTION 15.02. Release of Indenture, Termination of Right,
Title and Interest of Trustee. When all Bonds shall be deemed to be paid in
accordance with the provisions of Section 15.01, then and in the case all right,
title and interest of the Trustee under this Indenture shall thereupon cease,
terminate and become void, and the Trustee in such case shall release this
Indenture, shall execute such documents to evidence such release as may be
reasonably required by the Authority and furnish the Authority with the same,
and shall turn over to the Company any surplus monies and balances remaining in
any of the Funds and Accounts created in or held under this Indenture, other
than monies and Governmental Obligations held by it pursuant to Section 15.01 or
the provisions of Section 15.03 for the redemption, payment or prepayment of the
Bonds and, except to the extent provided in the Tax Regulatory Agreement, monies
held in the Investment Proceeds Account and in the Rebate Fund; otherwise, this
Indenture shall be, continue and remain in full force and effect.
Notwithstanding the satisfaction and discharge of this
Indenture, the rights of the Trustee and the Registrar and Paying Agent under
Sections 11.02, 11.06 and 11.17 shall survive defeasance of the Bonds hereunder.
SECTION 15.03. Bonds Not Presented for Payment When Due;
Monies Held for the Bonds after Due Date of Bonds. Subject to the provisions of
the next sentence of this paragraph, if the Bonds shall not be presented for
payment when the principal thereof shall become due, whether at maturity or at
the date fixed for the redemption thereof, or otherwise, and if monies or
Governmental Obligations shall at such due date be held by the Trustee in trust
for that purpose sufficient and available to pay the principal of and premium,
if any, on the Bonds, together with all interest due on such principal to the
due date thereof or to the date fixed for redemption thereof, all liability of
the Authority and the Company for such payment shall forthwith cease, determine
and be completely discharged, and thereupon it shall be the duty of the Trustee
to hold said monies or Governmental Obligations without liability to the Holders
for interest thereon, in trust for the benefit of the Holders, which thereafter
shall be restricted exclusively to said monies or Governmental Obligations for
any claim of whatever nature on its part on or with respect to the Bonds,
including for any claim for the payment thereof. Any such monies or Governmental
Obligations held by the Trustee for the Holders after the principal of the Bonds
or any portion thereof with respect to which such monies or Governmental
Obligations have been so set aside has become due and payable (whether at
maturity or upon redemption or prepayment or otherwise) shall be deemed
abandoned property when such monies or Governmental Obligations shall have
remained unpaid or undelivered to the Holder or Holders entitled thereto for
three years from the date the principal of the Bonds or any portion thereof has
become due and payable and shall be subject to the laws of the State of New York
relating to disposition of unclaimed property.
SECTION 15.04. Special Defeasance Provisions. The following
provisions shall be applicable to the extent that a Support Facility is in
effect with respect to the Bonds and compliance with the following provisions
are necessary to maintain the rating assigned to the Bonds as a result of
obtaining such Support Facility.
XV-3
In the event (a) any Bonds are defeased pursuant to Section
15.01 other than during an Auction Rate Period or an Auction Rate-Inverse Rate
Period or (b) the purchase price of Bonds tendered for purchase pursuant to
Section 5.02 or 5.03 is paid with money supplied by the Company, the Company on
behalf of the Authority shall provide (i) an opinion of counsel experienced in
bankruptcy matters acceptable to the Trustee that such deposit will not result
in avoidable preferential payments to Bondholders under the Bankruptcy Code as
then in existence or (ii) a Non- Bankruptcy Certificate with respect to amounts
to be applied to the payment of the Bonds.
XV-4
ARTICLE XVI
FORM OF BONDS
AND ENDORSEMENT AND ASSIGNMENT PROVISIONS
SECTION 16.01. Form of Bonds and Endorsement and Assignment
Provisions. The form of Bond, the form of the certificate of authentication
thereof, the form of endorsement to appear thereon and the form of assignment
thereof shall be substantially as set forth in Appendix A hereto.
XVI-1
ARTICLE XVII
MISCELLANEOUS
SECTION 17.01. Benefits of Indenture Limited to Authority,
Company, Trustee, Registrar, Paying Agent, Auction Agent, any Support Facility
Issuer and Holders of the Bonds. With the exception of rights or benefits herein
expressly conferred, nothing expressed or mentioned in or to be implied from
this Indenture or the Bonds is intended or should be construed to confer upon or
give to any person other than the Authority, the Company, the Trustee, the
Registrar and Paying Agent, the Market Agent, the Auction Agent, any Support
Facility Issuer and the Holders of the Bonds any legal or equitable right,
remedy or claim under or by reason of or in respect to this Indenture or any
covenant, condition, stipulation, promise, agreement or provision herein
contained. Unless otherwise expressly set forth herein, this Indenture and all
of the covenants, conditions, stipulations, promises, agreements and provisions
hereof are intended to be and shall be for and inure to the sole and exclusive
benefit of the Authority, the Company, the Trustee, the Registrar and Paying
Agent, the Market Agent, the Auction Agent, any Support Facility Issuer and the
Holders of the Bonds as herein and therein provided.
SECTION 17.02. Indenture a Contract; Indenture Binding Upon
Successors or Assigns of the Authority. In consideration of the acceptance of
the Bonds by any person who shall hold the same from time to time, each of the
obligations, duties, limitations and restraints imposed by this Indenture upon
the Authority or any employee thereof shall be deemed to be a covenant between
the Authority and every Holder and this Indenture and every provision and
covenant hereof shall be a contract by the Authority with the Holders of the
Bonds issued hereunder to secure the full and final payment of the principal of,
premium, if any, of and the interest on the Bonds executed and delivered
hereunder. The provisions of the Act shall be a contract by the Authority with
the Holders and the duties of the Authority and any employee thereof under the
Act shall be enforceable by the Holders. This Indenture shall be enforceable by
the Holders, by mandamus or other appropriate suit, action or proceeding in any
court of competent jurisdiction. The covenants and agreements herein set forth
to be performed by the Authority and any employee thereof, shall be for the
benefit, security and protection of the Holders. All the terms, provisions,
conditions, covenants, warranties and agreements contained in this Indenture
shall be binding upon the assigns of the Authority, and shall inure to the
benefit of the Trustee, its successors or substitutes in trust and assigns, and
the Holders.
SECTION 17.03. Notice to Holders of Bonds. Except as is
otherwise provided in this Indenture, any provision for the mailing of a notice
or other paper to the Holders shall be fully complied with if it is mailed
postage prepaid, to the Holder of the Bonds at such Holder's address appearing
upon the books of registry kept pursuant to Article VII.
SECTION 17.04. Waiver of Notice. Whenever in this Indenture the
giving of notice by mail, publication, or otherwise is required, the
giving of such notice may be waived by the
XVII-1
person entitled to receive such notice, and in any case the giving or receipt of
such notice shall not be a condition precedent to the validity of any action
taken in reliance upon such waiver.
SECTION 17.05. Effect of Saturdays, Sundays and Non-Business
Days. Except as otherwise specifically provided herein, whenever this Indenture
requires any action to be taken on a Saturday, Sunday or other day which is not
a Business Day, such action shall be taken on the first Business Day occurring
thereafter. Except as otherwise specifically provided herein, whenever in this
Indenture the time within which any action is required to be taken or within
which any right will lapse or expire shall terminate on a Saturday, Sunday or
other day which is not a Business Day, such time shall continue to run until
midnight on the next succeeding Business Day.
SECTION 17.06. Partial Invalidity. If any one or more of the
covenants or agreements or portions thereof provided in this Indenture on the
part of the Authority or the Trustee to be performed should be determined by a
court of competent jurisdiction to be contrary to law, then such covenant or
covenants, or such agreement or agreements, or such portions thereof, shall be
deemed severable from the remaining covenants and agreements or portions thereof
provided in this Indenture and the invalidity thereof shall in no way affect the
validity of the other provisions of this Indenture or of the Bonds, but the
Holders shall retain all the rights and benefits accorded to them hereunder and
under any applicable provisions of law.
If any provisions of this Indenture shall be held or deemed to
be or shall, in fact, be inoperative or unenforceable or invalid in any
particular case in any jurisdiction or jurisdictions or in all jurisdictions, or
in all cases because it conflicts with any constitution or statute or rule of
public policy, or for any other reason, such circumstances shall not have the
effect of rendering the provision in question inoperative or unenforceable or
invalid in any other case or circumstance, or of rendering any other provision
or provisions herein contained inoperative or unenforceable or invalid to any
extent whatsoever.
SECTION 17.07. Law and Place of Enforcement of Indenture. This
Indenture shall be construed and interpreted in accordance with the laws of the
State of New York and all suits and actions arising out of this Indenture shall
be instituted in a court of competent jurisdiction in the State of New York.
SECTION 17.08. Requests, Approvals and Directions of
Authority. Whenever in this Indenture a request, approval, direction or other
action is required of the Authority, such request, approval, direction or other
action shall be in the form of and evidenced by a certificate of an Authorized
Officer of the Authority unless otherwise provided herein.
SECTION 17.09. Notices, Demands; Requests. Except as otherwise
set forth herein, all notices, demands, directions and requests to be given to
or made hereunder by the Company, the Authority, the Trustee, the Market Agent,
the Auction Agent, any Support Facility Issuer, the Registrar and Paying Agent
shall be given or made in writing and shall be deemed to be
XVII-2
properly given or made if sent by first class United States mail, postage
prepaid, addressed as follows:
(a) As to the Company One MetroTech Center
Brooklyn, New York 11201-3851
Attention: Treasurer
(b) As to the Authority 286 Washington Avenue Extension
Albany, New York 12203
Attention: President
(c) As to the Trustee 450 W. 33rd Street
15th Floor
New York, New York 10001
(d) As to the Auction Agent As shall be specified in the
Auction Agent Agreement
(e) As to the Market Agent(s) As shall be specified in the Market Agent
Agreement.
(f) As to the Registrar 450 W. 33rd Street
and Paying Agent 15th Floor
New York, New York 10001
(g) As to the Credit Facility As shall be specified in the
Insurance Agreement
(h) As to Moody's Moody's Investors Service
99 Church Street
New York, New York 10007
Attention: Structured Finance
(i) As to S&P Standard & Poor's Ratings Service
25 Broadway, 13th Floor
New York, New York 10004
Attention: Letter of Credit Surveillance Group
Any such notice, demand, direction or request may also be
transmitted to the appropriate above-mentioned party by telegram, telecopy,
telex or similar means and shall be deemed
XVII-3
to be properly given or made at the time of such transmission if, and only if,
such transmission of notice shall be in writing and sent as specified above and
in the case of a Non-Bankruptcy Certificate by telex, telecopy or other form of
electronic transmission for receipt by the Trustee by 11:00 a.m. (New York City
time) on the date specified for receipt of such Non-Bankruptcy Certificate.
Any notice, demand, direction or request given or transmitted
to the Trustee or the Authority shall be effective only upon receipt.
Any of such addresses may be changed at any time upon written
notice of such change sent by first-class United States mail, postage prepaid,
to the other parties by the party affecting the change.
Failure of the Credit Facility Issuer to receive any notice or
give any consent contemplated by this Indenture shall not affect the validity of
any notice given or action taken in accordance with this Indenture.
SECTION 17.10. Effect of Article and Section Headings and
Table of Contents. The heading or titles of the several Articles and Sections
hereof, and any table of contents appended hereto or to copies hereof, shall be
solely for convenience of reference and shall not affect the meaning,
construction, interpretation or effect of this Indenture.
SECTION 17.11. Indenture May be Executed in Counterparts;
Effectiveness of Indenture. This Indenture may be simultaneously executed in
counterparts. Each such counterpart so executed shall be deemed to be an
original, and all together shall constitute but one and the same instrument.
This Indenture shall take effect immediately upon the execution and delivery
hereof. Notwithstanding the actual effective date hereof, for convenience and
purposes of reference this Indenture shall be dated as of October 1, 1999 and
may be cited and referred to as the "Indenture dated as of October 1, 1999".
SECTION 17.12. Liability of Authority Limited to Revenues.
Notwithstanding anything in this Indenture or in the Bonds contained, the
Authority shall not be required to advance any monies derived from any source
other than the Revenues and other assets pledged under this Indenture for any of
the purposes in this Indenture mentioned, whether for the payment of the
principal or redemption price of or interest on the Bonds or for any other
purpose of this Indenture. Pursuant to Section 5.16 of the Participation
Agreement, the Company has agreed to indemnify and hold harmless the Authority
and the Trustee from all liability arising hereunder.
SECTION 17.13 Waiver of Personal Liability. No member,
officer, agent or employee of the Authority shall be individually or personally
liable for the payment of the principal of or premium, if any, or interest on
the Bonds or be subject to any personal liability or accountability by reason of
the issuance thereof; but nothing herein contained shall relieve any such
XVII-4
member, officer, agent or employee from the performance of any official duty
provided by law or by this Indenture.
XVII-5
IN WITNESS WHEREOF, the Authority has caused this Indenture to
be executed by its Chair, Vice-Chair, President or Treasurer and its corporate
seal to be hereunto affixed and attested by its duly authorized officer, and the
Trustee has caused this Indenture to be executed by its authorized officer and
its corporate seal to be hereunto affixed and attested by one of its Assistant
Secretaries, all as of the date first above written.
NEW YORK STATE ENERGY RESEARCH
AND DEVELOPMENT AUTHORITY
By___________________________________
President
(SEAL)
Attest:
- -------------------------------
Secretary to the Board
and Vice President for
Governmental Relations
(SEAL)
THE CHASE MANHATTAN BANK
as Trustee,
Attest:
_______________________________ By_____________________________
Name: Name:
Title: Title:
XVII-6
TABLE OF CONTENTS
Page
ARTICLE I
DEFINITIONS; COMPUTATIONS; CERTIFICATES
AND OPINIONS; EVIDENCE OF ACTION BY AUTHORITY
SECTION 1.01. Definitions of Specific Terms.........I-1
SECTION 1.02. Definitions of General Terms.........I-34
SECTION 1.03. Computations.........................I-34
SECTION 1.04. Certificates and Opinions............I-35
SECTION 1.05. Evidence of Action by Authority......I-35
ARTICLE II
AUTHORIZATION OF BONDS
SECTION 2.01. Limitation on Issuance of Bonds................II-1
SECTION 2.02. Authorization of Bonds.........................II-1
SECTION 2.03. Global Form; Securities Depository..............II-2
SECTION 2.04. Limitations on Transfer........................II-5
SECTION 2.05. Application of Bond Proceeds...................II-6
SECTION 2.06. Delivery of the Bonds..........................II-6
ARTICLE III
INTEREST ON BONDS
SECTION 3.01. Interest on Bonds-General......................................................................III-1
SECTION 3.02. Commercial Paper Rate..........................................................................III-4
SECTION 3.03. Auction Rate Period - Auction Rate: Auction Period - General...................................III-5
SECTION 3.04. Auction Rate Period - Auction Rate Bonds: Change of Auction
Period by Authority................................................................III-6
SECTION 3.05. Auction Rate Period - Auction Rate Bonds: Change of
Auction Date by Market Agent.......................................................III-7
SECTION 3.06. Auction Rate Period - Auction Rate Bonds: Orders by Existing
Holders and Potential Holders......................................................III-7
SECTION 3.07. Auction Rate Period - Auction Rate Bonds: Submission of
Orders by Broker-Dealers to Auction Agent..........................................III-9
SECTION 3.08. Auction Rate Period - Auction Rate Bonds: Determination of
Sufficient Clearing Bids, Winning Bid Rate and Auction Rate.......................III-11
(i)
Page
SECTION 3.09. Auction Rate Period - Auction Rate Bonds: Acceptance and
Rejection of Submitted Bids and Submitted Sell Orders and
Allocation of Auction Rate Bonds..................................................III-13
SECTION 3.10. Auction Rate Period - Auction Rate Bonds: Adjustment in
Percentage........................................................................III-16
ARTICLE IIIA
AUCTION RATE-INVERSE RATE BONDS
SECTION 3A.01. Auction Rate-Inverse Rate Bonds: Definitions of Specific Terms...............................IIIA-1
SECTION 3A.02. Auction Rate-Inverse Rate: Interest on Bonds.................................................IIIA-6
SECTION 3A.03. Auction Rate-Inverse Rate Bonds: Auction Procedures..........................................IIIA-9
SECTION 3A.04. Auction Rate-Inverse Rate Bonds: Certain Orders
Not Permitted; Purchases and Cancellations.......................................IIIA-17
SECTION 3A.05. Auction Rate-Inverse Rate Bonds: Deposit and Application
of Interest Payments.............................................................IIIA-18
SECTION 3A.06. Auction Rate-Inverse Rate Bonds: Calculation of Maximum
Rate, Minimum Rate and Overdue Rate..............................................IIIA-19
SECTION 3A.07. Auction Rate-Inverse Rate Bonds: Computation of Interest....................................IIIA-19
SECTION 3A.08. Auction Rate-Inverse Rate Bonds: Notification of Rates,
Amounts and Payment Dates........................................................IIIA-20
SECTION 3A.09. Auction Rate-Inverse Rate Bonds: Adjustment in Percentage...................................IIIA-22
SECTION 3A.10. Mandatory Auction Rate Bonds Tender for Purchase............................................IIIA-23
ARTICLE IV
CHANGES IN THE ADJUSTABLE RATE
SECTION 4.01. Optional Conversion by Authority................................................................IV-1
SECTION 4.02. Optional Conversion to Fixed Rate...............................................................IV-4
SECTION 4.03. Conversion Generally............................................................................IV-7
ARTICLE V
REDEMPTION AND PURCHASE OF BONDS
SECTION 5.01. Optional Redemption..............................................................................V-1
SECTION 5.02. Tender for and Purchase upon Election of Holder..................................................V-3
SECTION 5.03. Mandatory Tender for Purchase upon Change in the Interest
Rate Mode on Business Day Following Certain Calculation
Periods or Occurrence of Fixed Rate Conversion Date..................................V-4
SECTION 5.04. Extraordinary Optional Redemption.............................................................V-5
Page
SECTION 5.05. Redemption if Participation Agreement or Note Void,
Unenforceable or Impossible to Perform...............................................V-6
SECTION 5.06. Special Tax Redemption Provisions................................................................V-7
SECTION 5.06-A. Redemption of Bank Bonds.......................................................................V-8
SECTION 5.07. Redemption at Demand of the State................................................................V-8
SECTION 5.08. Mandatory Tender for Purchase Upon Expiration or
Termination of any Liquidity Facility................................................V-8
SECTION 5.09. General Provisions Applicable to Mandatory and Optional
Tenders for Purchase of Bonds........................................................V-9
SECTION 5.10. Selection of Bonds to be Redeemed...............................................................V-10
SECTION 5.11. Notice of Redemption............................................................................V-12
SECTION 5.12. Bonds Purchased by Liquidity Facility Issuer....................................................V-14
SECTION 5.13. Effect of Redemption............................................................................V-14
SECTION 5.14. Cancellation of Redeemed Bonds..................................................................V-14
ARTICLE VI
SUPPORT FACILITY PROVISIONS
SECTION 6.01. Support Facility - General......................................................................VI-1
SECTION 6.02. Liquidity Facility..............................................................................VI-1
SECTION 6.03. Trustee not Responsible for Enforcement of Support Facility.....................................VI-2
SECTION 6.04. [Reserved]......................................................................................VI-2
SECTION 6.05. Payments Pursuant to any Direct Pay Facility; Condition
to Delivery of Direct Pay Facility..................................................VI-3
ARTICLE VII
GENERAL TERMS AND PROVISIONS OF BONDS
SECTION 7.01. Execution and Authentication of Bonds..................................................VII-1
SECTION 7.02. Books of Registry...............................................................................VII-1
SECTION 7.03. Transfer, Registration and Exchange of Bonds....................................................VII-1
SECTION 7.04. Mutilated, Lost, Stolen, or Destroyed Bonds.....................................................VII-2
SECTION 7.05. Temporary Bonds.................................................................................VII-3
SECTION 7.06. Disposition of Bonds............................................................................VII-4
ARTICLE VIII
ESTABLISHMENT OF THE PROJECT FUND
SECTION 8.01. Project Fund..........................................................................VIII-1
Page
ARTICLE IX
CREATION OF SPECIAL FUNDS AND ACCOUNTS;
APPLICATION AND INVESTMENT OF REVENUES
SECTION 9.01. Creation of Funds and Accounts...................................................................IX-1
SECTION 9.02. Deposit of Note Payments.........................................................................IX-1
SECTION 9.03. Application of Monies in the Bond Fund...........................................................IX-4
SECTION 9.04. Application of Monies in the Rebate Fund.........................................................IX-5
SECTION 9.05. Investment of Funds..............................................................................IX-6
ARTICLE X
PARTICULAR COVENANTS OF THE AUTHORITY
SECTION 10.01. Payment of Principal of and Interest and Redemption Premium
on Bonds.............................................................................X-1
SECTION 10.02. Performance of Covenants.........................................................................X-1
SECTION 10.03. Further Instruments..............................................................................X-1
SECTION 10.04. Inspection of Project Books......................................................................X-1
SECTION 10.05. No Extension of Time of Payment of Interest......................................................X-1
SECTION 10.06. Trustee's, Auction Agent's, Market Agent's, Broker-Dealers',
Registrar and Paying Agent's and Indexing Agent's Fees,
Charges and Expenses.................................................................X-1
SECTION 10.07. Agreement of the State of New York...............................................................X-2
SECTION 10.08. Recording and Filing.............................................................................X-2
SECTION 10.09. Rights Under the Participation Agreement and the Note............................................X-2
ARTICLE XI
CONCERNING THE TRUSTEE; APPOINTMENT OF
REGISTRAR AND PAYING AGENT, MARKET AGENT,
AUCTION AGENT AND INDEXING AGENT
SECTION 11.01. Appointment of Trustee..........................................................................XI-1
SECTION 11.02. Indemnification of Trustee as Condition for Remedial Action.....................................XI-1
SECTION 11.03. Trustee Not Liable for Failure of the Authority or Company to Act...............................XI-2
SECTION 11.04. Certain Duties and Responsibilities of the Trustee..............................................XI-2
SECTION 11.05. Limitations on Obligations and Responsibilities of Trustee......................................XI-4
SECTION 11.06. Compensation and Indemnification of Trustee.....................................................XI-4
SECTION 11.07. Statements from Trustee.........................................................................XI-5
SECTION 11.08. Notice of Default...............................................................................XI-5
SECTION 11.09. Trustee May Deal in Bonds.......................................................................XI-5
SECTION 11.10. Trustee Not Responsible For Recitals............................................................XI-6
Page
SECTION 11.11. Qualification of the Trustee....................................................................XI-6
SECTION 11.12. Resignation and Removal of Trustee..............................................................XI-6
SECTION 11.13. Successor Trustee...............................................................................XI-7
SECTION 11.14. Appointment of Market Agent.....................................................................XI-8
SECTION 11.15. Appointment of Registrar and Paying Agent.......................................................XI-9
SECTION 11.16. General Provisions Regarding Registrar and Paying Agent.........................................XI-9
SECTION 11.17. Payment of Registrar and Paying Agent; Indemnification.........................................XI-10
SECTION 11.18. Registrar and Paying Agent's Performance; Duty of Care.........................................XI-10
SECTION 11.19. Qualifications of Registrar and Paying Agent...................................................XI-11
SECTION 11.20. Resignation or Removal of Registrar and Paying Agent and
Successor to Registrar and Paying Agent; Termination of
Registrar and Paying Agent's Obligations...........................................XI-11
SECTION 11.21. Appointment of Auction Agent; Qualifications of Auction Agent,
Resignation; Removal..............................................................XI-12
SECTION 11.22. Appointment of Broker-Dealers..................................................................XI-13
SECTION 11.23. Appointment of Additional Paying Agents; Each Paying Agent
to Hold Money in Trust.............................................................XI-13
SECTION 11.24. Appointment and Duties of Indexing Agents.....................................................XI-13
SECTION 11.25. Qualifications of Indexing Agents.............................................................XI-14
ARTICLE XII
EVENTS OF DEFAULT; REMEDIES UPON
OCCURRENCE THEREOF
SECTION 12.01. Events of Default.............................................................................XII-1
SECTION 12.02. Notice to Holders and Others Upon Occurrence of an
Event of Default or a Failure to Deposit...........................................XII-2
SECTION 12.03. Declaration of Principal and Interest As Due..................................................XII-2
SECTION 12.04. Action by Trustee Upon Occurrence of Event of Default.........................................XII-3
SECTION 12.05. Powers of Trustee With Respect to Participation Agreement
and Other Agreements...............................................................XII-4
SECTION 12.06. Disposition of Monies in Event of Insufficiencies in Funds
and Accounts.......................................................................XII-5
SECTION 12.07. Effect of Delay or Omission; Waiver of Default; Direction
of Remedial Proceedings by the Holders.............................................XII-7
SECTION 12.08. Suits or Actions by Holders; Any Holder May Enforce
Overdue Payment of His Bond or Interest Thereon....................................XII-8
SECTION 12.09. Remedies Not Exclusive........................................................................XII-9
SECTION 12.10. Effect of Abandonment of Proceedings on Default...............................................XII-9
SECTION 12.11. Interest on Overdue Amounts...................................................................XII-9
Page
ARTICLE XIII
EXECUTION OF INSTRUMENTS BY BONDHOLDERS AND
OWNERSHIP OF BONDS; EXCLUSION OF BONDS
OWNED BY THE AUTHORITY OR THE COMPANY
SECTION 13.01. Execution of Requests, Directions and Consents and
Other Instruments and Proof of Same; Ownership of Bonds
and Proof of Same.................................................................XIII-1
SECTION 13.02. Meetings of Holders..........................................................................XIII-2
SECTION 13.03. Exclusion of Bonds Held by or for the Authority, the Company
and of Bonds No Longer Deemed Outstanding Hereunder...............................XIII-3
ARTICLE XIV
AMENDING AND SUPPLEMENTING THE INDENTURE,
THE PARTICIPATION AGREEMENT, THE MARKET AGENT AGREEMENT,
AUCTION AGENCY AGREEMENT, BROKER-DEALER AGREEMENTS,
BOND PURCHASE TRUST AGREEMENT
SECTION 14.01. Amending and Supplementing Indenture Without Consent
of Holders.........................................................................XIV-1
SECTION 14.02. Amending and Supplementing Indenture with Consent
of Holders.........................................................................XIV-2
SECTION 14.03. Notation upon Bonds; New Bonds Issued upon Amendments.........................................XIV-3
SECTION 14.04. Effectiveness of Supplemental Indentures......................................................XIV-3
SECTION 14.05. Supplemental Indenture Affecting Support Facility Provider....................................XIV-4
SECTION 14.06. Supplemental Participation Agreements Not Requiring the
Consent of the Holders............................................................XIV-4
SECTION 14.07. Notice and Consent for Supplemental Participation Agreements
Requiring the Consent of the Holders...............................................XIV-4
SECTION 14.08. Effectiveness of Supplemental Participation Agreement.........................................XIV-5
SECTION 14.09. Amending and Supplementing the Market Agent Agreement,
Auction Agency Agreement, Broker-Dealer Agreements
or Bond Purchase Trust Agreement...................................................XIV-5
SECTION 14.10. Notice of Certain Amendments to Rating Agencies...............................................XIV-5
ARTICLE XV
DEFEASANCE; MONEYS HELD FOR PAYMENT OF
DEFEASED BONDS
SECTION 15.01. Discharge of Liens and Pledges; Bonds No Longer Deemed to be
Outstanding Hereunder...............................................................XV-1
Page
SECTION 15.02. Release of Indenture, Termination of Right, Title and Interest
of Trustee..........................................................................XV-2
SECTION 15.03. Bonds Not Presented for Payment When Due; Monies Held for the
Bonds after Due Date of Bonds.......................................................XV-3
SECTION 15.04. Special Defeasance Provisions..................................................................XV-3
ARTICLE XVI
FORM OF BONDS
AND ENDORSEMENT AND ASSIGNMENT PROVISIONS
SECTION 16.01. Form of Bonds and Endorsement and Assignment Provisions.......................................XVI-1
ARTICLE XVII
MISCELLANEOUS
SECTION 17.01. Benefits of Indenture Limited to Authority, Company, Trustee,
Registrar, Paying Agent, Auction Agent, any Support Facility
Issuer and Holders of the Bonds...................................................XVII-1
SECTION 17.02. Indenture a Contract; Indenture Binding Upon Successors or
Assigns of the Authority..........................................................XVII-1
SECTION 17.03. Notice to Holders of Bonds...................................................................XVII-1
SECTION 17.04. Waiver of Notice.............................................................................XVII-1
SECTION 17.05. Effect of Saturdays, Sundays and Non-Business Days...........................................XVII-2
SECTION 17.06. Partial Invalidity...........................................................................XVII-2
SECTION 17.07. Law and Place of Enforcement of Indenture....................................................XVII-2
SECTION 17.08. Requests, Approvals and Directions of Authority..............................................XVII-2
SECTION 17.09. Notices, Demands; Requests...................................................................XVII-2
SECTION 17.10. Effect of Article and Section Headings and Table of Contents.................................XVII-4
SECTION 17.11. Indenture May be Executed in Counterparts; Effectiveness
of Indenture......................................................................XVII-4
SECTION 17.12. Liability of Authority Limited to Revenues...................................................XVII-4
SECTION 17.13. Waiver of Personal Liability.................................................................XVII-4
Exhibit 4.11
EXECUTION COPY
- -------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
NEW YORK STATE ENERGY RESEARCH
AND DEVELOPMENT AUTHORITY
AND
THE CHASE MANHATTAN BANK,
as Trustee
--------------------------------------
FIRST SUPPLEMENTAL TRUST INDENTURE
Dated as of January 1, 2000
to
TRUST INDENTURE
Dated as of January 1, 1997
---------------------------------------
relating to
$125,000,000 Gas Facilities Revenue Bonds, 1997 Series A
(The Brooklyn Union Gas Company Project)
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
TABLE OF CONTENTS
Page
Parties1
Recitals1
ARTICLE I
AUTHORIZATION; DEFINITIONS
SECTION 1.01. Supplemental Indenture........................2
SECTION 1.02. Definitions...................................2
ARTICLE II
AMENDMENTS TO THE INDENTURE
SECTION 2.01. Amendment to Section 1.01 of the Indenture......................2
SECTION 2.02. Amendment to Section 1.01 of the Indenture......................3
SECTION 2.03. Amendment to the definition of "Auction Period" in
Section 1.01 of the Indenture...................................3
SECTION 2.04. Amendment to the definition of "Broker-Dealer" in
Section 1.01 of the Indenture...................................3
SECTION 2.05. Amendment to the definition of "Broker-Dealer Agreement"
in Section 1.01 of the Indenture................................3
SECTION 2.06. Amendment to the definition of "Commercial
Paper/Treasury Rate" in Section 1.01 of the Indenture..... 4
SECTION 2.07. Amendment to the definition of "Interest Payment Date" in
Section 1.01 of the Indenture...................................4
SECTION 2.08. Replacement of the definition of "Lehman Brothers Money
Market Municipal Index" with the definition of "Short Term
Tax-Exempt Rate Index" in Section 1.01 of the Indenture.........4
SECTION 2.09. Replacement of the term "Lehman Brothers Money Market
Municipal Index" with the term "Short-Term Tax-Exempt
Rate Index" throughout the Indenture............................5
SECTION 2.10. Amendment to the definition of "Potential Holder" in
Section 1.01 of the Indenture...................................5
SECTION 2.11. Amendment to the definition of "SAVRS Rate Period" in
Section 1.01 of the Indenture...................................6
(i)
SECTION 2.12. Amendment to the definition of "Support Facility" in
Section 1.01 of the Indenture...................................6
SECTION 2.13. Amendment to Section 3.04 of the Indenture......................6
SECTION 2.14. Amendment to Section 3.05 of the Indenture......................7
SECTION 2.15. Amendment to Section 3.06 of the Indenture......................8
SECTION 2.15. Amendment to paragraph (a) of Section 3.07
of the Indenture................................................9
SECTION 2.16. Amendment to paragraph (a) of Section 3.08
of the Indenture...............................................10
SECTION 2.17. Amendment to paragraph (b) of Section 3.08
of the Indenture...............................................11
SECTION 2.18. Amendment to Section 3.09 of the Indenture.................... 11
SECTION 2.19. Amendment to Section 4.01 of the Indenture.....................12
ARTICLE III
MISCELLANEOUS
SECTION 3.01. Effective Date; counterparts...................................12
SECTION 3.02. Acceptance.....................................................12
(ii)
THIS FIRST SUPPLEMENTAL TRUST INDENTURE, made and dated as of January 1,
2000 (the "First Supplemental Indenture") to the TRUST INDENTURE made and dated
as of January 1, 1997 (the "Indenture") by and between NEW YORK STATE ENERGY
RESEARCH AND DEVELOPMENT AUTHORITY (the "Authority"), a body corporate and
politic, constituting a public benefit corporation, and THE CHASE MANHATTAN BANK
(together with any successor trustee appointed in accordance with the terms of
such Indenture of Trust, hereinafter referred to as the "Trustee"), a
corporation organized and existing under and by virtue of the laws of the State
of New York, with its corporate trust office located in New York, New York, as
trustee,
W I T N E S S E T H T H AT:
WHEREAS, pursuant to special act of the Legislature of the State of New
York (Title 9 of Article 8 of the Public Authorities Law of New York, as from
time to time amended and supplemented, herein called the "Act"), the Authority
has been established as a body corporate and politic, constituting a public
benefit corporation; and
WHEREAS, pursuant to the Act, the Authority is empowered to contract with
any gas company to participate in the construction of facilities to be used for
the furnishing of gas to the extent required by the public interest in
development, health, recreation, safety, conservation of natural resources and
aesthetics; and
WHEREAS, the Authority and The Brooklyn Union Gas Company (the "Company")
have entered into a Participation Agreement, dated as of January 1, 1997 (herein
raftered to as the "Participation Agreement"), providing for the refunding of
Gas Facilities Revenue Bonds (The Brooklyn Union Gas Company Project) Series
1985 I in the principal amount of $62,500,000 and Series 1985 II in the
principal amount of $62,500,000 (the "Prior Bonds") of the Authority which were
issued to finance the acquisition, construction and installation of certain
facilities for the furnishing of gas within the Company's service area and as
part of such participation, that the Authority issue bonds pursuant to the Act
to provide funds to refund the Prior Bonds; and
WHEREAS, the Authority issued its Gas Facilities Revenue Bonds, 1997 Series
A (The Brooklyn Union Gas Company Project) (the "Bonds"), in an aggregate
principal amount of $125,000,000 (the "Bonds") under and pursuant to Resolution
No. 886 of the Authority, adopted December 2, 1996 (the "Resolution"), for the
purpose of paying all or portion of the redemption price of the Prior Bonds; and
WHEREAS, Section 14.02 of the Indenture provides that the Authority and the
Trustee may, in accordance with the terms thereof, modify, amend or supplement
the Indenture; and
WHEREAS, the Company has requested that the Indenture be amended to clarify
certain terms of the Indenture and conform certain terms of the Indenture
relating to SAVRS
1
Bonds during a SAVRS Rate Period with the current market standards for such
SAVRS Bonds; and
WHEREAS, all acts, conditions and things necessary or required by the
Constitution and statutes of the State of New York or otherwise, to exist,
happen, and be performed as prerequisites to the execution of this First
Supplemental Indenture, do exist, have happened, and have been performed; and
WHEREAS, all consents and notices required to be obtained and given as
conditions to the passage of this First Supplemental Indenture pursuant to the
Indenture and all other documents relating to the Bonds have been obtained and
given;
NOW, THEREFORE, for and in consideration of the premises and of the mutual
covenants and agreements hereinafter set forth, the Authority agrees with the
Trustee and with the respective owners, from time to time, of the Bonds or any
part thereof as follows:
ARTICLE I
AUTHORIZATION; DEFINITIONS
SECTION 1.01.Supplemental Indenture. This First Supplemental Indenture
----------------------------
is supplemental to, and is entered into in accordance
with Article XIV of the Indenture; and except as modified, amended and
supplemented by this First Supplemental Indenture, the provisions of the
Indenture are in all respects ratified and confirmed and shall remain in full
force and effect.
SECTION 1.02. Definitions. Unless the context shall otherwise require, all
terms which are defined in Section 1.01 of the Indenture shall have
the same meanings, respectively, in this First Supplemental Indenture as such
terms are given in said Section 1.01 of the Indenture.
ARTICLE II
AMENDMENTS TO THE INDENTURE (1)
SECTION 2.01. Amendment to Section 1.01 of the Indenture. Section 1.01
is hereby amended to add the
following definition:
(1)Striked-out language reflects language deleted by this First
Supplemental Indenture from the Indenture and underscored language reflects
language added by this First Supplemental Indenture to the Indenture.
2
""Beneficial Owner" shall mean with respect to the SAVRS Bonds during a SAVRS
------------------
Rate Period, a customer of a Broker-Dealer who is listed on the records of that
Broker-Dealer (or, if applicable, the Auction Agent) as a holder of the SAVRS
Bonds."
SECTION 2.02. Amendment to Section 1.01 of the Indenture. Section 1.01is hereby
amended to add the following definition:
""BMA Index" shall mean The Bond Market Association Municipal Swap
Index released by Municipal Market Data to its subscribers."
SECTION 2.03. Amendment to the definition of "Auction Period" in Section 1.01 of
the Indenture. The definition of "Auction Period" in Section 1.01 of the
Indenture is hereby amended to read as follows:
""Auction Period" shall mean (i) in the event the Bonds are issued initially as
SAVRS Bonds during a SAVRS Rate Period, the period from and including the
Closing Date to and including the initial Auction Date and (ii) thereafter, or
after a Change in the Interest Rate Mode to a SAVRS Rate, during a SAVRS Rate
Period, until the effective date of a Change in the Interest Rate Mode, the
effective date of a conversion to the Fixed Rate or the maturity of the Bonds,
each period from and including the last Interest Payment Date for the
immediately preceding Auction Period or Calculation Period, as the case may be,
to and including the next succeeding Auction Date or, in the event of a Change
in the Interest Rate Mode or a conversion to a Fixed Rate, to but excluding the
effective date of such change or conversion, provided, if any day that would be
the last day of any such period does not immediately precede a Business Day,
such period shall end on the next day which immediately precedes a Business
Day."
SECTION 2.04. Amendment to the definition of "Broker-Dealer" in Section
1.01 of the Indenture. The definition of "Broker-Dealer" in Section 1.01 of
the Indenture is hereby amended to read as follows:
""Broker-Dealer" shall mean any broker-dealer (as defined in the Securities
Exchange Act), commercial bank or other entity permitted by law to perform
the functions required of a Broker-Dealer set forth in the Auction
Procedures (i) that is an Agent Member (or an affiliate of an Agent
Member), (ii) that has been selected by the Auction Agent and the Company
with the consent of the Authority, (iii) that has entered into a Broker-
Dealer Agreement with the Auction Agent and the Company that remains
effective and (iv) after the occurrence and during the continuance of a
Company Downgrade Event that is reasonably acceptable to the Bond Insurer."
SECTION 2.05. Amendment to the definition of "Broker-Dealer Agreement" in
Section 1.01 of the Indenture. The definition of "Broker-Dealer Agreement"
in Section 1.01 of the Indenture is hereby amended to read as follows:
3
""Broker-Dealer Agreement" shall mean each agreement applicable to the
SAVRS Bonds during a SAVRS Rate Period or the SAVRS
Bonds during a SAVRS-RIBS Rates Period, as the case may be, among a
Broker-Dealer, the Company and the Auction Agent pursuant to which the
Broker-Dealer, among other things, agrees to participate in Auctions as set
forth in the Auction Procedures, as from time to time amended and
supplemented."
SECTION 2.06. Amendment to the definition of "Commercial Paper/Treasury
Rate" in Section 1.01 of the Indenture. The second sentence in the first
paragraph of the definition of "Commercial Paper/Treasury Rate" in Section
1.01 of the Indenture is hereby amended to read as follows:
" The foregoing rates shall in all cases, except with respect to the
Treasury Rate, be rates on commercial paper placed on behalf of issuers
whose corporate bonds are rated "AA" by S&P, or the equivalent of such
rating by Moody's, as made available on a discount basis or otherwise by
the Federal Reserve Bank of New York for the Business Day immediately
preceding such date of determination, or in the event that the Federal
Reserve Bank of New York does not make available any such rate, then the
arithmetic average of such rates, as quoted on a discount basis or
otherwise, by the Commercial Paper Dealers, to the Auction Agent for the
close of business on the Business Day immediately preceding such date of
determination."
SECTION 2.07. Amendment to the definition of "Interest Payment Date" in
Section 1.01 of the Indenture. Paragraph (b) of the definition of "Interest
Payment Date" in Section 1.01 of the Indenture is hereby amended to read as
follows:
"(b) during a SAVRS Rate Period (i) for an Auction Period of 91 days or
less, the Business Day immediately succeeding such Auction Period and (ii)
for an Auction Period of more than 91 days, each 91st day after the first
day of such Auction Period and the Business Day immediately succeeding such
Auction Period"
SECTION 2.08. Replacement of the definition of "Lehman Brothers Money
Market Municipal Index" with the definition of "Short Term Tax-Exempt Rate
Index" in Section 1.01 of the Indenture. Section 1.01 of the Indenture is
hereby amended to replace the definition of "Lehman Brothers Money Market
Municipal Index" with the following definition:
"Short Term Tax-Exempt Rate Index" shall mean:
---------------------------------------------
(i) with respect to a SAVRS Rate during a SAVRS Rate Period and a 7-day
Auction Period, on the date of the calculation of the Maximum Auction Rate,
the Minimum Auction Rate or the Overdue Rate, the most recent BMA Index;
and
(ii) with respect to a SAVRS Rate during a SAVRS Rate Period and an Auction
Period that exceeds 7 days, and with respect to a SAVRS Rate during a SAVRS
Rate-RIBS Rate Period, the average of yield evaluations at par, determined
by the Indexing Agent on the date of
4
the calculation of the Maximum Rate, the Minimum Rate, the Maximum SAVRS Rate,
the Minimum SAVRS Rate or Overdue Rate, of securities (whether or not actually
issued) all of which shall have a term as near as practicable to then effective
Auction Period or Interest Period or which are subject to optional or mandatory
tender by the owner thereof at the end of a term as near as practicable to such
Auction Period or Interest Period, the interest on which is not included in
gross income for federal income tax purposes, of no fewer than twenty Component
Issuers selected by the Indexing Agent, including issuers of commercial paper,
project notes, bond anticipation notes and tax anticipation notes, computed by
the Indexing Agent on and as of such day. If the Bonds are rated by a Rating
Agency in its highest note or commercial paper rating category or one of its two
highest long-term debt rating categories, each Component Issuer must (a) have
outstanding securities rated by a Rating Agency in its highest note or
commercial paper rating category or (b) not have outstanding notes or commercial
paper rated by a Rating Agency but have outstanding securities rated by a Rating
Agency in one of its two highest long-term debt rating categories. If the Bonds
are rated by a Rating Agency in a rating category that is lower than its highest
note or commercial paper rating category or its two highest long-term debt
rating categories (and the Bonds are not rated in one of such categories by the
other Rating Agency), each Component Issuer must (a) have outstanding securities
rated by a Rating Agency in its note or commercial paper rating category which
is the same or correlative, in the Indexing Agent's judgment, to the note or
commercial paper rating category or the long-term debt rating category of the
Bonds or (b) have outstanding securities rated by a Rating Agency in the same
long-term debt rating category as the Bonds are rated by that Rating Agency and
not have any outstanding notes or commercial paper rated by such Rating Agency.
The Indexing Agent may change the Component Issuers from time to time in its
discretion, subject to the foregoing requirements. In addition, at the request
of the Company and upon delivery to the Trustee and the Bond Insurer of an
Opinion of Bond Counsel that such action will not adversely affect the exclusion
of interest on the Bonds from gross income of the owners thereof for federal
income tax purposes, the Authority, with the consent of the Company, may
designate a new method of setting the Short Term Tax-Exempt Rate Index in the
event any of the above-described methods are determined by the Authority to be
unavailable, impracticable or unrealistic in the market place. Upon the
occurrence and during the continuance of a Company Downgrade Event, the Bond
Insurer shall have the right to consent to any change to the Component Issuers
and any change in the method of setting the Short Term Tax-Exempt Rate Index,
which consent shall not be unreasonably withheld."
SECTION 2.09. Replacement of the term "Lehman Brothers Money Market
Municipal Index" with the term "Short-Term Tax-Exempt Rate Index"
throughout the Indenture. The Indenture is hereby amended to replace the
term "Lehman Brothers Money Market Municipal Index" with the term "Short
Term Tax-Exempt Rate Index" throughout the Indenture.
SECTION 2.10. Amendment to the definition of "Potential Holder" in Section
1.01 of the Indenture. The definition of "Potential Holder" in Section 1.01
of the Indenture is hereby amended to read as
follows:
5
""Potential Holder" shall mean (i) with respect to any SAVRS Bonds during a
SAVRS and related RIBS Rate Period, any person, including
any Existing Holder, (A) who shall have executed a Purchaser's Letter (or
whose Broker-Dealer shall have executed a Purchaser's Letter), and (B) who
may be interested in acquiring the beneficial ownership of SAVRS Bonds or,
in the case of an Existing Holder thereof, the beneficial ownership of an
additional principal amount of SAVRS Bonds and (ii) with respect to any
SAVRS Bonds during a SAVRS Rate Period, a Broker-Dealer that is not an
Existing Holder or that is an Existing Holder that wishes to become an
Existing Holder of an additional principal amount of SAVRS Bonds."
SECTION 2.11. Amendment to the definition of "SAVRS Rate Period" in Section
1.01 of the Indenture. The definition of "SAVRS Rate Period" in Section
1.01 of the Indenture is hereby amended to read as follows:
""SAVRS Rate Period" shall mean any period during which the SAVRS Bonds
-----------------
bear interest at a SAVRS Rate determined pursuant to the implementation of
Auction Procedures established under Article III, which period shall commence on
the Closing Date if the Bonds initially are offered as SAVRS Bonds, or on the
effective date of a Change in the Interest Rate Mode to a SAVRS Rate, as the
case may be, and shall extend through the day immediately preceding the earlier
of (a) the effective date of a Change in the Interest Rate Mode, (b) the Fixed
Rate Conversion Date, or (c) the Stated Maturity."
SECTION 2.12. Amendment to the definition of "Support Facility" in Section
1.01 of the Indenture. The definition of "Support Facility" in Section 1.01
of the Indenture is hereby amended to read as
follows:
""Support Facility" shall mean any instrument satisfactory to the Authority
entered into or obtained in connection with the Bonds in order to obtain a
rating or ratings on the Bonds, such as a letter of credit, committed line
of credit, insurance policy, surety bond or standby bond purchase
agreement, or any combination of the foregoing, and issued by a bank or
banks, insurance company, other financial institution or institutions, or
any combination of the foregoing which Support Facility provides for the
payment of (i) the purchase price equal to the principal of and accrued
interest on Bonds delivered to the Registrar and Paying Agent and/or (ii)
principal of and interest on all Bonds coming due and payable during the
term thereof."
SECTION 2.13. Amendment to Section 3.04 of the Indenture. Clause (A) in
Paragraph 2 of Section 3.04 of the Indenture is hereby amended to read as
follows:
"(A) the Trustee, the Bond Insurer and the Auction Agent
receive, by 11:00 a.m.
(New York City time) on the Business Day immediately preceding the Auction Date
for such Auction Period, a certificate from the Authority, on behalf of the
Company, by telecopy or similar means in substantially the form attached hereto
as, or containing
6
substantially the information contained in, Exhibit J authorizing the change in
the Auction Period or the Standard Auction Period, which shall be specified in
such certificate, and confirming that Bond Counsel expects to be able to give an
Opinion of Bond Counsel on the first day of such Auction Period,"; and
Section 3.04 of the Indenture is hereby amended to add a new paragraph 3 to
read as follows:
"3. In the event of a Change in the Interest Rate Mode to a SAVRS Rate
during a SAVRS Rate Period, the Authority, at the request of the Company,
shall determine the length of the initial Auction Period and may change the
length of a single Auction Period or the Standard Auction Period by means
of a written notice delivered on or prior to the effective date of such
Change in the Interest Rate Mode to a SAVRS Rate during a SAVRS Rate Period
to the Trustee, the Market Agent, the Auction Agent, the Bond Insurer and
the Securities Depository. Notwithstanding anything to the contrary in
paragraphs 1 and 2 of this Section 3.04, the determination of the initial
Auction Period shall take effect on the effective date of such Change in
the Interest Rate Mode to a SAVRS Rate during a SAVRS Rate Period.
Notwithstanding anything to the contrary in paragraphs 1 and 2 of this
Section 3.04, the change in the length of a single Auction Period or the
Standard Auction Period shall take effect only if the Trustee, the Bond
Insurer and the Auction Agent receive on the effective date of such Change
in the Interest Rate Mode to a SAVRS Rate during a SAVRS Rate Period, an
opinion of Bond Counsel to the effect that the change in the Auction Period
or the Standard Auction Period is authorized by this Indenture, is
permitted under the Act and will not have an adverse effect on the
exclusion of interest on such Bonds from gross income for federal income
tax purposes."
SECTION 2.14. Amendment to Section 3.05 of the Indenture. The third and
fourth sentence in Section 3.05 of the Indenture are hereby amended to read
as follows:
"The Market Agent shall communicate its determination to change an
Auction Date by means of a written notice delivered at least 10 days
prior to the Auction Date immediately preceding such Auction Date, or
with respect to a Change in the Interest Rate Mode to a SAVRS Rate
during a SAVRS Rate Period on or prior to the effective date of such
Change in the Interest Rate Mode, to the Authority, the Trustee, the
Auction Agent, the Company, the Bond Insurer and the Securities
Depository which shall state (i) the determination of the Market Agent
to change the Auction Date, (ii) the new Auction Date and (iii) the
date on which such Auction Date shall be changed. If after any
proposed change in the Auction Date any Auction Period would be less
than 28 days in duration, such notice shall be effective only if it is
accompanied by a written statement of the Auction Agent, the Registrar
and Paying Agent and the Trustee to the effect that they are capable
of performing their duties hereunder and under the Auction Agency
Agreement with respect to any such Auction Period."
SECTION 2.15. Amendment to Section 3.06 of the Indenture. Section 3.06
of the Indenture is hereby amended to read as follows:
"(a) Prior to the Submission Deadline on each Auction Date during the
SAVRS Rate Period, the following orders may be submitted:
(i) each Beneficial Owner may submit to the Broker-Dealer information
as to:
(A) the principal amount of SAVRS Bonds, if any,
held by such Beneficial Owner which such Beneficial Owner
desires to continue to hold without regard to the SAVRS
Rate for the next succeeding Auction Period;
(B) the principal amount of SAVRS Bonds, if any,
held by such Beneficial Owner which such Beneficial Owner
offers to sell if the SAVRS Rate for the next succeeding
Auction Period shall be less than the rate per annum
specified by such Beneficial Owner and/or
(C) the principal amount of SAVRS Bonds, if any,
held by such Beneficial Owner which such Beneficial Owner
offers to sell without regard to the SAVRS Rate for the
next succeeding Auction Period;
(ii) one or more Broker-Dealers may contact Potential
Beneficial Owners by telephone or otherwise to determine the
principal amount of SAVRS Bonds which each such Potential Beneficial
Owner offers to purchase if the SAVRS Rate for the next succeeding
Auction Period shall not be less than the interest rate per annum
specified by such Potential Beneficial Owner.
For the purposes hereof, the communication to a Broker-Dealer of information
referred to in clause (i)(A), (i)(B) or (i)(C) or clause (ii) above is
hereinafter referred to as an "Order" and each Beneficial Owner and Potential
Beneficial Owner placing an Order is hereinafter referred to as a "Bidder"; an
Order containing the information referred to in clause (i)(A) above is
hereinafter referred to as a "Hold Order"; an Order containing the information
referred to in clause (i)(B) or clause (ii) above is hereinafter referred to as
a "Bid"; and an Order containing the information referred to in clause (i)(C)
above is hereinafter referred to as a "Sell Order". The submission by a
Broker-Dealer of an Order to the Auction Agent shall likewise be referred to
herein as an "Order" and an Existing Holder or Potential Holder who places an
Order with the Auction Agent shall likewise be referred to herein as a "Bidder."
Orders may be submitted in principal amounts of $50,000 or any
integral multiple thereof.
(b) (i) Subject to the provisions of Section 3.07, a Bid by
a Beneficial Owner or an Existing Holder shall constitute an
irrevocable offer to sell:
(A) the principal amount of Outstanding SAVRS
Bonds specified in such Bid if the SAVRS Rate determined on
such Auction Date shall be less than the interest rate per
annum specified therein; or
(B) such principal amount or a lesser principal
amount of Outstanding SAVRS Bonds to be determined as set
forth in subsection (a)(iv) of Section 3.09 if the SAVRS
Rate determined on such Auction Date shall be equal to the
interest rate per annum specified therein; or
(C) such principal amount or a lesser principal
amount of Outstanding SAVRS Bonds to be determined as set
forth in subsection (b)(iii) of Section 3.09 if such
specified rate shall be higher than the Maximum SAVRS Rate
and Sufficient Clearing Bids do not exist.
(ii) Subject to the provisions of Section 3.07, a Sell
Order by a Beneficial Owner or an Existing Holder shall constitute an
irrevocable offer to sell:
(A) the principal amount of SAVRS Bonds specified in such Sell
Order; or
(B) such principal amount or a lesser principal
amount of SAVRS Bonds as set forth in subsection (b)(iii)
of Section 3.09 if Sufficient Clearing Bids do not exist.
(iii) Subject to the provisions of Section 3.07,
a Bid by a Potential Beneficial Owner or a Potential Holder
shall constitute an irrevocable offer to purchase:
(A) the principal amount of SAVRS Bonds specified
in such Bid if the SAVRS Rate determined on such Auction
Date shall be higher than the rate specified therein; or
(B) such principal amount or a lesser principal
amount of SAVRS Bonds as set forth in subsection (a)(v) of
Section 3.09 if the SAVRS Rate determined on such Auction
Date shall be equal to such specified rate."
SECTION 2.15. Amendment to paragraph (a) of Section 3.07 of
the Indenture. Paragraph (a) of Section 3.08 of the
Indenture is hereby amended to read as follows:
9
"(a) During a SAVRS Rate Period each Broker-Dealer shall
submit in writing to the Auction Agent prior to the
Submission Deadline on each Auction Date during the SAVRS
Rate Period, all Orders obtained by such Broker-Dealer,
designating itself as (a) an Existing Holder in respect of
the principal amount of SAVRS Bonds subject to Orders
submitted or deemed submitted to it by Beneficial Owners or
(b) a Potential Holder in respect of the principal amount of
the SAVRS Bonds subject to Orders submitted or deemed
submitted to it by Potential Beneficial Owners, and shall
specify with respect to each such Order:
(i) the name of the Bidder placing such Order;
(ii) the aggregate principal amount of SAVRS Bonds that are
subject to such Order;
(iii) to the extent that such Bidder is a Beneficial Owner:
(A) the principal amount of SAVRS Bonds, if any, subject to
any Hold Order placed by such Existing Holder;
(B) the principal amount of SAVRS Bonds, if any, subject to
any Bid placed by such Existing Holder and the rate
specified in such Bid; and
(C) the principal amount of SAVRS Bonds, if any, subject to
any Sell Order placed by such Existing Holder; and
(iv) to the extent such Bidder is a Potential
Beneficial Owner, the rate specified in such Potential
Holder's Bid."
SECTION 2.16. Amendment to paragraph (a) of Section 3.08 of the Indenture.
Clauses (i) and (ii) of paragraph (a) of Section 3.08 of the Indenture are
hereby amended to read as follows:
"(v) the excess of the total principal amount of
Outstanding SAVRS Bonds over the aggregate principal amount of
Outstanding SAVRS Bonds subject to Submitted Hold Orders (such excess
being hereinafter referred to as the "Available SAVRS Bonds"); and
(ii) from the Submitted Orders whether the aggregate
principal amount of SAVRS Bonds subject to Submitted Bids by
Potential Holders specifying one or more rates equal to or lower than
the Maximum SAVRS Rate exceeds or is equal to the sum of:
(D) the aggregate principal amount of SAVRS Bonds subject
to Submitted Bids by Existing Holders specifying one or
more rates higher than the Maximum SAVRS Rate; and
10
(E) the aggregate principal amount of SAVRS Bonds subject to
Submitted Sell Orders
(in the event of such excess or such equality (other than because the
sum of the principal amounts of SAVRS Bonds in clauses (A) and (B)
above is zero because all of the Outstanding SAVRS Bonds are subject
to Submitted Hold Orders), such Submitted Bids by Potential Holders
are hereinafter referred to collectively as "Sufficient Clearing
Bids");"
SECTION 2.17 Amendment to paragraph (b) of Section 3.08 of the Indenture.
Clauses (ii)and (iii) of paragraph (b) of Section 3.08 of the Indenture are
hereby amended to read as follows:
"(ii) if Sufficient Clearing Bids do not exist (other than
because all of the Outstanding SAVRS Bonds are the subject of
Submitted Hold Orders), the SAVRS Rate for the next succeeding
Auction Period therefor shall be equal to the Maximum SAVRS Rate; and
(iii) if all of the Outstanding SAVRS Bonds are subject to
Submitted Hold Orders, the SAVRS Rate for the next succeeding Auction
Period therefor shall be equal to the Minimum SAVRS Rate."
SECTION 2.18. Amendment to Section 3.09 of the Indenture. Paragraphs
(b) and (c) of Section 3.09 of the Indenture are hereby amended to read as
follows:
"(b) If Sufficient Clearing Bids have not been made (other than
because all of the Outstanding SAVRS Bonds are subject to Submitted Hold
Orders), subject to the provisions of subsection (e) of this Section 3.09,
Submitted Orders shall be accepted or rejected as follows in the following
order of priority and all other Submitted Bids shall be rejected:
(i) Existing Holders' Submitted Bids specifying
any rate that is equal to or lower than the Maximum SAVRS
Rate shall be rejected, thus entitling each such Existing
Holder to continue to hold the aggregate principal amount
of SAVRS Bonds subject to such Submitted Bids;
(ii) Potential Holders' Submitted Bids specifying
any rate that is equal to or lower than the Maximum SAVRS
Rate shall be accepted, thus requiring each such Potential
Holder to purchase the aggregate principal amount of SAVRS
Bonds subject to such Submitted Bids; and
(iii) each Existing Holder's Submitted Bid
specifying any rate that is higher than the Maximum SAVRS
Rate and the Submitted Sell Order of each Existing Holder
shall be accepted, thus entitling each Existing Holder that
submitted any such Submitted Bid or Submitted Sell Order to
sell the SAVRS Bonds subject to
11
such Submitted Bid or Submitted Sell Order, but in both
cases only in an amount equal to the aggregate principal
amount of SAVRS Bonds obtained by multiplying the aggregate
principal amount of SAVRS Bonds subject to Submitted Bids
described in paragraph (ii) of this subsection (b) by a
fraction, the numerator of which shall be the aggregate
principal amount of SAVRS Bonds held by such Existing
Holder subject to such Submitted Bid or Submitted Sell
Order and the denominator of which shall be the aggregate
principal amount of Outstanding SAVRS Bonds subject to all
such Submitted Bids and Submitted Sell Orders.
(c) If all Outstanding SAVRS Bonds are subject to Submitted Hold
Orders, all Submitted Bids shall be rejected."
SECTION 2.19. Amendment to Section 4.01 of the Indenture. Subparagraph
(ii) of Section 4.01.3(A) of the Indenture are hereby amended to read
as follows:
"(ii) by 11:00 a.m. (New York City time) on the second Business Day
prior to the effective date of such Change in the Interest Rate Mode by
telecopy or other similar means, a certificate in substantially the form
attached hereto as, or containing substantially the information contained
in, Exhibit Q, from the Authority on behalf of the Company (y) authorizing
the establishment of the new Adjustable Rate and (z) confirming that Bond
Counsel has advised the Authority that it expects to be able to give an
opinion on the effective date of such Change in the Interest Rate Mode to
the effect that such Change in the Interest Rate Mode is authorized by this
Indenture, is permitted under the Act and will not have an adverse effect
on the exclusion of interest on the SAVRS Bonds during a SAVRS Rate Period
or the SAVRS-RIBS Bonds during a SAVRS-RIBS Rates Period from gross income
for federal income tax purposes;"
ARTICLE III
MISCELLANEOUS
SECTION 3.01. Effective Date; counterparts. This First Supplemental
Indenture shall become effective upon execution and delivery and may be
executed in several counterparts, each of which shall be an original and
all of which shall constitute but one and the same instrument.
SECTION 3.02. Acceptance. The Trustee accepts the trusts created by
the Indenture, as supplemented by this First Supplemental Indenture, and
agrees to perform the same upon the terms and conditions in the Indenture,
as so supplemented. The Trustee shall not be responsible in any manner
whatsoever for or in respect of the validity or sufficiency of this First
Supplemental Indenture or the due execution hereof by the Authority or for
or in respect of the recitals contained herein, all of which are made by
the Authority solely.
12
IN WITNESS WHEREOF, the Authority has caused this First Supplemental
Indenture to be executed by its President and its corporate seal to be
hereunto affixed and attested by its Secretary, and the Trustee has caused
this First Supplemental Indenture to be executed and attested by its duly
Authorized officers, all as of the date first above written.
NEW YORK STATE ENERGY RESEARCH
AND DEVELOPMENT AUTHORITY
By
President
(SEAL)
Attest:
Secretary to the Board and
Vice President for
Governmental Relations
THE CHASE MANHATTAN BANK,
as Trustee
By
Name:
Title:
Attest:
Name:
Title:
A-1
Exhibit 4.12
EXECUTION COPY
$700,000,000
CREDIT AGREEMENT
among
KEYSPAN CORPORATION,
as Borrower,
The Several Lenders
from Time to Time Parties Hereto,
CITIBANK, N.A.,
as Syndication Agent,
EUROPEAN AMERICAN BANK,
as Documentation Agent,
and
THE CHASE MANHATTAN BANK,
as Administrative Agent
Dated as of November 8, 1999
CHASE SECURITIES INC., Lead Arranger and Book Manager
509253-0191-02261-99A5F10H-CRA
i
Page
TABLE OF CONTENTS
Page
SECTION 1. DEFINITIONS......................................................................1
1.1 Defined Terms...................................................................1
1.2 Other Definitional Provisions..................................................13
SECTION 2. AMOUNT AND TERMS OF COMMITMENTS.................................................14
2.1 Commitments....................................................................14
2.2 Competitive Bid Procedure......................................................14
2.3 Procedure for Loan Borrowing...................................................16
2.4 Facility Fees, etc. ...........................................................16
2.5 Termination or Reduction of Commitments........................................17
2.6 Optional Prepayments...........................................................17
2.7 Conversion and Continuation Options............................................17
2.8 Limitations on Eurodollar Tranches.............................................18
2.9 Interest Rates and Payment Dates...............................................18
2.10 Computation of Interest and Fees..............................................18
2.11 Inability to Determine Interest Rate..........................................19
2.12 Pro Rata Treatment and Payments...............................................19
2.13 Requirements of Law...........................................................20
2.14 Taxes.........................................................................21
2.15 Indemnity.....................................................................23
2.16 Change of Lending Office......................................................23
2.17 Replacement of Lenders........................................................24
SECTION 3. REPRESENTATIONS AND WARRANTIES..................................................24
3.1 Financial Condition............................................................24
3.2 No Change......................................................................25
3.3 Corporate Existence; Compliance with Law.......................................25
3.4 Corporate Power; Authorization; Enforceable Obligations........................25
3.5 No Legal Bar...................................................................25
3.6 Litigation.....................................................................25
3.7 No Default.....................................................................26
3.8 Ownership of Property; Liens...................................................26
3.9 Intellectual Property..........................................................26
3.10 Taxes.........................................................................26
3.11 Federal Regulations...........................................................26
3.12 Labor Matters.................................................................26
3.13 ERISA.........................................................................26
3.14 Investment Company Act; Other Regulations.....................................27
3.15 Subsidiaries..................................................................27
3.16 Use of Proceeds...............................................................27
3.17 Environmental Matters.........................................................27
3.18 Accuracy of Information, etc..................................................28
3.19 Year 2000 Matters.............................................................28
SECTION 4. CONDITIONS PRECEDENT............................................................29
- i -
509253-0191-02261-99A5F10H-CRA
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Page
4.1 Conditions to Initial Extension of Credit......................................29
4.2 Conditions to
Each Extension of Credit....................................................................30
SECTION 5. AFFIRMATIVE COVENANTS...........................................................30
5.1 Financial Statements...........................................................30
5.2 Certificates; Other Information................................................31
5.3 Payment of Obligations.........................................................31
5.5 Maintenance of Property; Insurance.............................................32
5.6 Inspection of Property; Books and Records; Discussions.........................32
5.7 Notices........................................................................32
5.8 Environmental Laws.............................................................33
5.9 Transaction with Affiliates. .................................................33
SECTION 6. NEGATIVE COVENANTS..............................................................33
6.1 Financial Condition Covenant...................................................33
6.2 Liens..........................................................................33
6.3 Fundamental Changes............................................................34
6.4 Disposition of Property........................................................34
6.5 Negative Pledge Clauses........................................................35
6.6 Limitation on Restrictions on Distributions from Subsidiaries. ................35
SECTION 7. EVENTS OF DEFAULT...............................................................35
SECTION 8. THE ADMINISTRATIVE AGENT........................................................37
8.1 Appointment....................................................................37
8.2 Delegation of Duties...........................................................38
8.3 Exculpatory Provisions.........................................................38
8.4 Reliance by Administrative Agent...............................................38
8.5 Notice of Default..............................................................38
8.6 Non-Reliance on Administrative Agent and Other Lenders.........................39
8.7 Indemnification................................................................39
8.8 Administrative Agent in Its Individual Capacity................................40
8.9 Successor Administrative Agent.................................................40
SECTION 9. MISCELLANEOUS...................................................................40
9.1 Amendments and Waivers.........................................................40
9.2 Notices........................................................................41
9.3 No Waiver; Cumulative Remedies.................................................41
9.4 Survival of Representations and Warranties.....................................42
9.5 Payment of Expenses and Taxes..................................................42
9.6 Successors and Assigns; Participations and Assignments.........................43
9.7 Adjustments; Set-off...........................................................45
9.8 Counterparts...................................................................45
9.9 Severability...................................................................45
9.10 Integration...................................................................45
9.11 GOVERNING LAW.................................................................45
9.12 Submission To Jurisdiction; Waivers...........................................46
- ii -
509253-0191-02261-99A5F10H-CRA
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Page
9.13 Acknowledgements..............................................................46
9.14 Confidentiality...............................................................46
9.15 WAIVERS OF JURY TRIAL.........................................................47
SCHEDULES:
1.1A Commitments
3.4 Consents, Authorizations, Filings and Notices
3.15 Subsidiaries
6.2(f) Existing Liens
6.5 Existing Negative Pledge Clauses
6.6 Existing Limitations on Restrictions on Distributions from Subsidiaries
EXHIBITS:
A Form of Closing Certificate
B Form of Assignment and Acceptance
C Form of Legal Opinion of Steven L. Zelkowitz
D Form of Exemption Certificate
- iii -
509253-0191-02261-99A5F10H-CRA
1
CREDIT AGREEMENT, dated as of November 8, 1999, among KEYSPAN
CORPORATION, a New York corporation (the "Borrower"), the several banks and
other financial institutions or entities from time to time parties to this
Agreement (the "Lenders"), CITIBANK, N.A., as syndication agent, EUROPEAN
AMERICAN BANK, as Documentation Agent, and THE CHASE MANHATTAN BANK, as
administrative agent.
The parties hereto hereby agree as follows:
SECTION 1. DEFINITIONS
1.1 Defined Terms. As used in this Agreement, the terms
listed in this Section 1.1 shall have the respective
meanings set forth in this Section 1.1.
"ABR": for any day, a rate per annum (rounded upwards, if
necessary, to the next 1/16 of 1%) equal to the greatest of (a) the Prime Rate
in effect on such day, (b) the Base CD Rate in effect on such day plus 1% and
(c) the Federal Funds Effective Rate in effect on such day plus 1/2 of 1%. For
purposes hereof: "Prime Rate" shall mean the rate of interest per annum publicly
announced from time to time by the Reference Lender as its prime rate in effect
at its principal office in New York City (the Prime Rate not being intended to
be the lowest rate of interest charged by the Reference Lender in connection
with extensions of credit to debtors); "Base CD Rate" shall mean the sum of (a)
the product of (i) the Three-Month Secondary CD Rate and (ii) a fraction, the
numerator of which is one and the denominator of which is one minus the C/D
Reserve Percentage and (b) the C/D Assessment Rate; and "Three-Month Secondary
CD Rate" shall mean, for any day, the secondary market rate for three-month
certificates of deposit reported as being in effect on such day (or, if such day
shall not be a Business Day, the next preceding Business Day) by the Board
through the public information telephone line of the Federal Reserve Bank of New
York (which rate will, under the current practices of the Board, be published in
Federal Reserve Statistical Release H.15(519) during the week following such
day), or, if such rate shall not be so reported on such day or such next
preceding Business Day, the average of the secondary market quotations for
three-month certificates of deposit of major money center banks in New York City
received at approximately 10:00 A.M., New York City time, on such day (or, if
such day shall not be a Business Day, on the next preceding Business Day) by the
Reference Lender from three New York City negotiable certificate of deposit
dealers of recognized standing selected by it. Any change in the ABR due to a
change in the Prime Rate, the Three-Month Secondary CD Rate or the Federal Funds
Effective Rate shall be effective as of the opening of business on the effective
day of such change in the Prime Rate, the Three-Month Secondary CD Rate or the
Federal Funds Effective Rate, respectively.
"ABR Loans": Loans the rate of interest applicable to which is
based upon the ABR.
"Administrative Agent": The Chase Manhattan Bank, together with
its affiliates, as the administrative agent for the Lenders under this Agreement
and the other Loan Documents, together with any of its successors.
"Affiliate": as to any Person, any other Person that, directly or
indirectly, is in control of, is controlled by, or is under common control with,
such Person. For purposes of this definition, "control" of a Person means the
power, directly or indirectly, either to (a) vote 10% or more of the securities
having ordinary voting power for the election of directors (or persons
performing similar functions) of such Person or (b) direct or cause the
direction of the management and policies of such Person, whether by contract or
otherwise.
509253-0191-02261-99A5F10H-CRA
2
"Aggregate Exposure": with respect to any Lender at any time, an
amount equal to the amount of such Lender's Commitment then in effect or, if the
Commitments have been terminated, the amount of such Lender's Loans then
outstanding.
"Aggregate Exposure Percentage": with respect to any
Lender at any time, the ratio (expressed as a percentage) of
such Lender's Aggregate Exposure at such time to the
Aggregate Exposure of all Lenders at such time.
"Agreement": this Credit Agreement, as amended,
supplemented or otherwise modified from time to time.
"Applicable Margin": for each Type of Loan, the rate per annum
set forth under the relevant column heading below which corresponds with the
most current rating of the Borrower's senior unsecured long-term debt issued by
S&P and Moody's respectively; provided that for each day the aggregate principal
amount of Loans outstanding is greater than the amount equal to 33% of the Total
Commitments, the Applicable Margin then in effect will be increased by 0.125%
per annum.
Applicable Margin Applicable Margin
Ratings For Eurodollar Loans for ABR Loans
================== ======================= ========================
A/A2 0.305% 0.000%
A-/A3 0.425% 0.000%
BBB+/Baa1 0.525% 0.000%
BBB/Baa2 0.625% 0.000%
<BBB-/Baa3 0.975% 0.000%
- -
================== ======================= ========================
Changes in the Applicable Margin shall become effective on the
date on which S&P and/or Moody's changes the rating it has issued for the
Borrower's senior unsecured long-term debt. In the event of split ratings, the
lower of such ratings shall apply; if only one S&P and Moody's issues a rating
of the Borrower's senior unsecured long-term debt, such rating shall apply.
"Approved Fund": with respect to any Lender that is a fund that
invests in commercial loans, any other fund that invests in commercial loans and
is managed or advised by the same investment advisor as such Lender or by an
Affiliate of such investment advisor.
"Assignee": as defined in Section 9.6(c).
--------
509253-0191-02261-99A5F10H-CRA
3
"Assignment and Acceptance": an Assignment and
Acceptance, substantially in the form of Exhibit B.
"Assignor": as defined in Section 9.6(c).
--------
"Available Commitment": as to any Lender at any time,
an amount equal to the excess, if any, of (a) such Lender's
Commitment then in effect over (b) such Lender's Loans then
outstanding.
"Benefitted Lender": as defined in Section 9.7(a).
-----------------
"Board": the Board of Governors of the Federal Reserve
System of the United States (or any successor).
"Borrower": as defined in the preamble hereto.
--------
"Borrowing Date": any Business Day specified by the
Borrower as a date on which the Borrower requests the
relevant Lenders to make Loans hereunder.
"Business": as defined in Section 3.17(b).
--------
"Business Day": a day other than a Saturday, Sunday or other day
on which commercial banks in New York City are authorized or required by law to
close, provided, that with respect to notices and determinations in connection
with, and payments of principal and interest on, Eurodollar Loans, such day is
also a day for trading by and between banks in Dollar deposits in the interbank
eurodollar market.
"Capital Lease Obligations": as to any Person, the obligations of
such Person to pay rent or other amounts under any lease of (or other
arrangement conveying the right to use) real or personal property, or a
combination thereof, which obligations are required to be classified and
accounted for as capital leases on a balance sheet of such Person under GAAP
and, for the purposes of this Agreement, the amount of such obligations at any
time shall be the capitalized amount thereof at such time determined in
accordance with GAAP.
"Capital Stock": any and all shares, interests, participations or
other equivalents (however designated) of capital stock of a corporation, any
and all equivalent ownership interests in a Person (other than a corporation)
and any and all warrants, rights or options to purchase any of the foregoing.
"Cash Equivalents": (a) marketable direct obligations issued by,
or unconditionally guaranteed by, the United States Government or issued by any
agency thereof and backed by the full faith and credit of the United States, in
each case maturing within one year from the date of acquisition; (b)
certificates of deposit, time deposits, eurodollar time deposits or overnight
bank deposits having maturities of six months or less from the date of
acquisition issued by any Lender or by any commercial bank organized under the
laws of the United States or any state thereof having combined capital and
surplus of not less than $500,000,000; (c) commercial paper of an issuer rated
at least A-1 by Standard & Poor's Ratings Services ("S&P") or P-1 by Moody's
Investors Service, Inc. ("Moody's"), or carrying an equivalent rating by a
nationally recognized rating agency, if both of the two named rating agencies
cease publishing ratings of commercial paper issuers generally, and maturing
within six months from the date
509253-0191-02261-99A5F10H-CRA
4
of acquisition; (d) repurchase obligations of any Lender or of any commercial
bank satisfying the requirements of clause (b) of this definition, having a term
of not more than 30 days, with respect to securities issued or fully guaranteed
or insured by the United States government; (e) securities with maturities of
one year or less from the date of acquisition issued or fully guaranteed by any
state, commonwealth or territory of the United States, by any political
subdivision or taxing authority of any such state, commonwealth or territory or
by any foreign government, the securities of which state, commonwealth,
territory, political subdivision, taxing authority or foreign government (as the
case may be) are rated at least A by S&P or A2 by Moody's; (f) securities with
maturities of six months or less from the date of acquisition backed by standby
letters of credit issued by any Lender or any commercial bank satisfying the
requirements of clause (b) of this definition; or (g) shares of money market
mutual or similar funds which invest exclusively in assets satisfying the
requirements of clauses (a) through (f) of this definition.
"C/D Assessment Rate": for any day as applied to any ABR Loan,
the annual assessment rate in effect on such day that is payable by a member of
the Bank Insurance Fund maintained by the Federal Deposit Insurance Corporation
(the "FDIC") classified as well-capitalized and within supervisory subgroup "B"
(or a comparable successor assessment risk classification) within the meaning of
12 C.F.R. ss. 327.4 (or any successor provision) to the FDIC (or any successor)
for the FDIC's (or such successor's) insuring time deposits at offices of such
institution in the United States.
"C/D Reserve Percentage": for any day as applied to any ABR Loan,
that percentage (expressed as a decimal) which is in effect on such day, as
prescribed by the Board, for determining the maximum reserve requirement for a
Depositary Institution (as defined in Regulation D of the Board as in effect
from time to time) in respect of new non-personal time deposits in Dollars
having a maturity of 30 days or more.
"Closing Date": the date on which the conditions
precedent set forth in Section 4.1 shall have been
satisfied, which date is November 18, 1999.
"Code": the Internal Revenue Code of 1986, as amended
from time to time.
"Commitment": as to any Lender, the obligation of such Lender, if
any, to make Loans in an aggregate principal amount not to exceed the amount set
forth under the heading "Commitment" opposite such Lender's name on Schedule
1.1A or in the Assignment and Acceptance pursuant to which such Lender became a
party hereto, as the same may be changed from time to time pursuant to the terms
hereof.
"Commitment Period": the period from and including the
Closing Date to the Revolving Termination Date.
"Commonly Controlled Entity": an entity, whether or not
incorporated, that is under common control with the Borrower within the meaning
of Section 4001 of ERISA or is part of a group that includes the Borrower and
that is treated as a single employer under Section 414 of the Code.
"Competitive Loans": a loan made pursuant to Section 2.2.
-----------------
509253-0191-02261-99A5F10H-CRA
5
"Competitive Bid": means an offer by a Lender to make a
Competitive Loan in accordance with Section 2.2.
"Competitive Bid Rate": means, with respect to any Competitive Bid, the
Margin or Fixed Rate, as applicable, offered by the Lender making such
Competitive Bid.
"Competitive Bid Request": means a request by the Borrower for Competitive
Bids in accordance with Section 2.2.
"Confidential Information Memorandum": the Confidential Information
Memorandum dated October 1999 and furnished to the Lenders.
"Consolidated Capitalization": at any date, the sum of Consolidated Net
Worth and Consolidated Total Debt.
"Consolidated Net Worth": at any date, all amounts that would, in
conformity with GAAP, be included on a consolidated balance sheet of the
Borrower and its Subsidiaries under stockholders' equity at such date.
"Consolidated Total Debt": at any date, the aggregate principal amount of
all liabilities of the Borrower and its Subsidiaries at such date, determined on
a consolidated basis in accordance with GAAP, as reflected on the balance sheet.
"Contractual Obligation": as to any Person, any provision of any security
issued by such Person or of any agreement, instrument or other undertaking to
which such Person is a party or by which it or any of its property is bound.
"Core Gas Distribution Business": the distribution and sale at
retail to customers of natural gas in the New York City boroughs of Brooklyn,
Queens and Staten Island and the Long Island counties of Nassau and Suffolk, as
such business is conducted by Brooklyn Union Gas and Brooklyn Union East on the
date hereof.
"Default": any of the events specified in Section 7, whether or not any
requirement for the giving of notice, the lapse of time, or both, has been
satisfied.
"Disposition": with respect to any property, any sale, lease, sale and
leaseback, assignment, conveyance, transfer or other disposition thereof. The
terms "Dispose" and "Disposed of" shall have correlative meanings.
"Dollars" and "$": dollars in lawful currency of the United
States.
"Environmental Laws": any and all foreign, Federal, state, local
or municipal laws, rules, orders, regulations, statutes, ordinances, codes,
decrees, requirements of any Governmental Authority or other Requirements of Law
(including common law) regulating, relating to or imposing liability or
standards of conduct concerning protection of human health or the environment,
as now or may at any time hereafter be in effect.
509253-0191-02261-99A5F10H-CRA
6
"ERISA": the Employee Retirement Income Security Act of 1974, as amended
from time to time.
"Eurocurrency Reserve Requirements": for any day as applied to a
Eurodollar Loan, the aggregate (without duplication) of the maximum rates
(expressed as a decimal fraction) of reserve requirements in effect on such day
(including basic, supplemental, marginal and emergency reserves under any
regulations of the Board or other Governmental Authority having jurisdiction
with respect thereto) dealing with reserve requirements prescribed for
eurocurrency funding (currently referred to as "Eurocurrency Liabilities" in
Regulation D of the Board) maintained by a member bank of the Federal Reserve
System.
"Eurodollar Base Rate": with respect to each day during each
Interest Period pertaining to a Eurodollar Loan, the rate per annum determined
on the basis of the rate for deposits in Dollars for a period equal to such
Interest Period commencing on the first day of such Interest Period appearing on
Page 3750 of the Dow Jones Markets screen as of 11:00 A.M., London time, two
Business Days prior to the beginning of such Interest Period. In the event that
such rate does not appear on Page 3750 of the Dow Jones Markets screen (or
otherwise on such screen), the "Eurodollar Base Rate" shall be determined by
reference to such other comparable publicly available service for displaying
eurodollar rates as may be selected by the Administrative Agent or, in the
absence of such availability, by reference to the rate at which the
Administrative Agent is offered Dollar deposits at or about 11:00 A.M., New York
City time, two Business Days prior to the beginning of such Interest Period in
the interbank eurodollar market where its eurodollar and foreign currency and
exchange operations are then being conducted for delivery on the first day of
such Interest Period for the number of days comprised therein.
"Eurodollar Competitive Loan": a Competitive Loan which bears interest
based upon the Eurodollar Rate.
"Eurodollar Loans": Loans the rate of interest applicable to which is based
upon the Eurodollar Rate.
"Eurodollar Rate": with respect to each day during each Interest
Period pertaining to a Eurodollar Loan, a rate per annum determined for such day
in accordance with the following formula (rounded upward to the nearest 1/100th
of 1%):
Eurodollar Base Rate
1.00 - Eurocurrency Reserve Requirements
"Eurodollar Tranche": the collective reference to Eurodollar
Loans the then current Interest Periods with respect to all of which begin on
the same date and end on the same later date (whether or not such Loans shall
originally have been made on the same day).
"Event of Default": any of the events specified in Section 7, provided that
any requirement for the giving of notice, the lapse of time, or both, has been
satisfied.
"Facility": the Commitments and the Loans made thereunder.
509253-0191-02261-99A5F10H-CRA
7
"Facility Fee Rate": the rate per annum set forth below which corresponds
with the most current rating of the Borrower's senior unsecured long-term debt
issued by S&P and Moody's respectively.
Ratings Facility Fee
================== ========================
A/A2 0.070%
A-/A3 0.075%
BBB+/Baa1 0.100%
BBB/Baa2 0.125%
<BBB-/Baa3 0.150%
- -
================== ========================
Changes in the Facility Fee shall become effective on the date on
which S&P and/or Moody's changes the rating it has issued for the Borrower's
senior unsecured long-term debt. In the event of split ratings, the lower of
such ratings shall apply; if only one S&P and Moody's issues a rating of the
Borrower's senior unsecured long-term debt, such rating shall apply.
"Federal Funds Effective Rate": for any day, the weighted average
of the rates on overnight federal funds transactions with members of the Federal
Reserve System arranged by federal funds brokers, as published on the next
succeeding Business Day by the Federal Reserve Bank of New York, or, if such
rate is not so published for any day that is a Business Day, the average of the
quotations for the day of such transactions received by the Reference Lender
from three federal funds brokers of recognized standing selected by it.
"Final Maturity Date": the date that is the one year anniversary of the
Revolving Termination Date.
"Fixed Rate" means, with respect to a Competitive Loan, the fixed
rate of interest per annum specified by the Lender making such Competitive Loan
in its related Competitive Bid.
"Funding Office": the office of the Administrative Agent specified in
Section 9.2 or such other office as may be specified from time to time by the
Administrative Agent as its funding office by written notice to the Borrower and
the Lenders.
"GAAP": generally accepted accounting principles in the United
States as in effect from time to time, except that for purposes of Section 6.1,
GAAP shall be determined on the basis of such principles in effect on the date
hereof and consistent with those used in the preparation of the most recent
audited financial statements delivered pursuant to Section 5.1(a). In the event
that any "Accounting
509253-0191-02261-99A5F10H-CRA
8
Change" (as defined below) shall occur and such change results in a change in
the method of calculation of financial covenants, standards or terms in this
Agreement, then the Borrower and the Administrative Agent agree to enter into
negotiations in order to amend such provisions of this Agreement so as to
equitably reflect such Accounting Changes with the desired result that the
criteria for evaluating the Borrower's financial condition shall be the same
after such Accounting Changes as if such Accounting Changes had not been made.
Until such time as such an amendment shall have been executed and delivered by
the Borrower, the Administrative Agent and the Required Lenders, all financial
covenants, standards and terms in this Agreement shall continue to be calculated
or construed as if such Accounting Changes had not occurred. "Accounting
Changes" refers to changes in accounting principles required by the promulgation
of any rule, regulation, pronouncement or opinion by the Financial Accounting
Standards Board of the American Institute of Certified Public Accountants or, if
applicable, the SEC.
"Governmental Authority": any nation or government, any state or
other political subdivision thereof, any agency, authority, instrumentality,
regulatory body, court, central bank or other entity exercising executive,
legislative, judicial, taxing, regulatory or administrative functions of or
pertaining to government, any securities exchange and any self-regulatory
organization (including the National Association of Insurance Commissioners).
"Guarantee Obligation": as to any Person (the "guaranteeing
person"), any obligation of (a) the guaranteeing person or (b) another Person
(including any bank under any letter of credit) to induce the creation of which
the guaranteeing person has issued a reimbursement, counterindemnity or similar
obligation, in either case guaranteeing or in effect guaranteeing any
Indebtedness, leases, dividends or other obligations (the "primary obligations")
of any other third Person (the "primary obligor") in any manner, whether
directly or indirectly, including any obligation of the guaranteeing person,
whether or not contingent, (i) to purchase any such primary obligation or any
property constituting direct or indirect security therefor, (ii) to advance or
supply funds (1) for the purchase or payment of any such primary obligation or
(2) to maintain working capital or equity capital of the primary obligor or
otherwise to maintain the net worth or solvency of the primary obligor, (iii) to
purchase property, securities or services primarily for the purpose of assuring
the owner of any such primary obligation of the ability of the primary obligor
to make payment of such primary obligation or (iv) otherwise to assure or hold
harmless the owner of any such primary obligation against loss in respect
thereof; provided, however, that the term Guarantee Obligation shall not include
endorsements of instruments for deposit or collection in the ordinary course of
business. The amount of any Guarantee Obligation of any guaranteeing person
shall be deemed to be the lower of (a) an amount equal to the stated or
determinable amount of the primary obligation in respect of which such Guarantee
Obligation is made and (b) the maximum amount for which such guaranteeing person
may be liable pursuant to the terms of the instrument embodying such Guarantee
Obligation, unless such primary obligation and the maximum amount for which such
guaranteeing person may be liable are not stated or determinable, in which case
the amount of such Guarantee Obligation shall be such guaranteeing person's
maximum reasonably anticipated liability in respect thereof as determined by the
Borrower in good faith.
"Hedge Agreements": all interest rate swaps, caps or collar
agreements or similar arrangements dealing with interest rates or currency
exchange rates or the exchange of nominal interest obligations, either generally
or under specific contingencies.
"Indebtedness": of any Person at any date, without duplication, (a) all
indebtedness of such Person for borrowed money, (b) all obligations of such
Person for the deferred purchase price of
509253-0191-02261-99A5F10H-CRA
9
property or services (other than current trade payables incurred in the ordinary
course of such Person's business), (c) all obligations of such Person evidenced
by notes, bonds, debentures or other similar instruments, (d) all indebtedness
created or arising under any conditional sale or other title retention agreement
with respect to property acquired by such Person (even though the rights and
remedies of the seller or lender under such agreement in the event of default
are limited to repossession or sale of such property), (e) all Capital Lease
Obligations of such Person, (f) all obligations of such Person, contingent or
otherwise, as an account party under acceptances, letters of credit, surety
bonds or similar arrangements, (g) the liquidation value of all preferred
Capital Stock of such Person that is redeemable at the option of the holder
thereof or that has any mandatory dividend, redemption or other required payment
that could be required thereunder prior to the date that is one year after the
Final Maturity Date, (h) all Guarantee Obligations of such Person in respect of
obligations of the kind referred to in clauses (a) through (g) above, (i) all
obligations of the kind referred to in clauses (a) through (h) above secured by
(or for which the holder of such obligation has an existing right, contingent or
otherwise, to be secured by) any Lien on property (including accounts and
contract rights) owned by such Person, whether or not such Person has assumed or
become liable for the payment of such obligation, and (j) for the purposes of
Sections 7(e) only, all obligations of such Person in respect of Hedge
Agreements. The Indebtedness of any Person shall include the Indebtedness of any
other entity (including any partnership in which such Person is a general
partner) to the extent such Person is liable therefor as a result of such
Person's ownership interest in or other relationship with such entity, except to
the extent the terms of such Indebtedness expressly provide that such Person is
not liable therefor.
"Insolvency": with respect to any Multiemployer Plan, the condition that
such Plan is insolvent within the meaning of Section 4245 of ERISA.
"Insolvent": pertaining to a condition of Insolvency.
"Intellectual Property": the collective reference to all rights,
priorities and privileges relating to intellectual property, whether arising
under United States, multinational or foreign laws or otherwise, including
copyrights, copyright licenses, patents, patent licenses, trademarks, trademark
licenses, technology, know-how and processes, and all rights to sue at law or in
equity for any infringement or other impairment thereof, including the right to
receive all proceeds and damages therefrom.
"Interest Payment Date": (a) as to any ABR Loan, the last day of
each March, June, September and December to occur while such Loan is outstanding
and the final maturity date of such Loan, (b) as to any Eurodollar Loan having
an Interest Period of three months or less, the last day of such Interest
Period, (c) as to any Eurodollar Loan having an Interest Period longer than
three months, each day that is three months, or a whole multiple thereof, after
the first day of such Interest Period and the last day of such Interest Period
and (d) as to any Eurodollar Loan, the date of any repayment or prepayment made
in respect thereof.
"Interest Period": as to any Eurodollar Loan, (a) initially, the
period commencing on the borrowing or conversion date, as the case may be, with
respect to such Eurodollar Loan and ending one, two, three or six months
thereafter, as selected by the Borrower in its notice of borrowing or notice of
conversion, as the case may be, given with respect thereto; and (b) thereafter,
each period commencing on the last day of the next preceding Interest Period
applicable to such Eurodollar Loan and ending one, two, three or six months
thereafter, as selected by the Borrower by irrevocable notice to the
509253-0191-02261-99A5F10H-CRA
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Administrative Agent not less than three Business Days prior to the last day of
the then current Interest Period with respect thereto; provided that, all of the
foregoing provisions relating to Interest Periods are subject to the following:
(i) if any Interest Period would otherwise end on a day that
is not a Business Day, such Interest Period shall be extended to the
next succeeding Business Day unless the result of such extension would
be to carry such Interest Period into another calendar month in which
event such Interest Period shall end on the immediately preceding
Business Day;
(ii) the Borrower may not select an Interest Period that would extend
beyond the Revolving Termination Date;
(iii) any Interest Period that begins on the last Business Day
of a calendar month (or on a day for which there is no numerically
corresponding day in the calendar month at the end of such Interest
Period) shall end on the last Business Day of a calendar month; and
(iv) the Borrower shall select Interest Periods so as not to
require a payment or prepayment of any Eurodollar Loan during an
Interest Period for such Loan.
"Lender Percentage": as to any Lender at any time, the percentage
which such Lender's Commitments then constitutes of the Total Commitments (or,
at any time after the Commitments have expired or terminated, the percentage
which the aggregate principal amount of such Lender's Loans then outstanding
constitutes of the aggregate principal amount of the Loans then outstanding).
"Lenders": as defined in the preamble hereto.
-------
"Lien": any mortgage, pledge, hypothecation, assignment, deposit
arrangement, encumbrance, lien (statutory or other), charge or other security
interest or any preference, priority or other security agreement or preferential
arrangement of any kind or nature whatsoever (including any conditional sale or
other title retention agreement and any capital lease having substantially the
same economic effect as any of the foregoing).
"Loans": as defined in Section 2.1(a).
-----
"Loan Documents": this Agreement and the Notes.
--------------
"Margin" means, with respect to any Competitive Loan bearing
interest at a rate based on the Eurodollar Rate, the marginal rate of interest,
if any, to be added to or subtracted from the Eurodollar Rate to determine the
rate of interest applicable to such Loan, as specified by the Lender making such
Loan in its related Competitive Bid.
"Material Adverse Effect": a material adverse effect on the
business, property, operations, condition (financial or otherwise) or prospects
of the Borrower and its Subsidiaries taken as a whole or the validity or
enforceability of this Agreement or any of the other Loan Documents or the
rights or remedies of the Administrative Agent or the Lenders hereunder or
thereunder.
509253-0191-02261-99A5F10H-CRA
11
"Materials of Environmental Concern": any gasoline or petroleum
(including crude oil or any fraction thereof) or petroleum products or any
hazardous or toxic substances, materials or wastes, defined or regulated as such
in or under any Environmental Law, including asbestos, polychlorinated biphenyls
and urea-formaldehyde insulation.
"Multiemployer Plan": a Plan that is a multiemployer plan as defined in
Section 4001(a)(3) of ERISA.
"Moody's": Moody's Investors Service, Inc. and any successor thereto.
"Non-Excluded Taxes": as defined in Section 2.14(a).
"Non-U.S. Lender": as defined in Section 2.14(d).
"Notes": the collective reference to any promissory note evidencing Loans.
"Obligations": the unpaid principal of and interest on (including
interest accruing after the maturity of the Loans and interest accruing after
the filing of any petition in bankruptcy, or the commencement of any insolvency,
reorganization or like proceeding, relating to the Borrower, whether or not a
claim for post-filing or post-petition interest is allowed in such proceeding)
the Loans and all other obligations and liabilities of the Borrower to the
Administrative Agent or to any Lender, whether direct or indirect, absolute or
contingent, due or to become due, or now existing or hereafter incurred, which
may arise under, out of, or in connection with, this Agreement, any other Loan
Document or any other document made, delivered or given in connection herewith
or therewith, whether on account of principal, interest, reimbursement
obligations, fees, indemnities, costs, expenses (including all fees, charges and
disbursements of counsel to the Administrative Agent or to any Lender that are
required to be paid by the Borrower pursuant hereto) or otherwise.
"Other Taxes": any and all present or future stamp or documentary
taxes or any other excise or property taxes, charges or similar levies arising
from any payment made hereunder or from the execution, delivery or enforcement
of, or otherwise with respect to, this Agreement or any other Loan Document.
"Participant": as defined in Section 9.6(b).
-----------
"PBGC": the Pension Benefit Guaranty Corporation established pursuant to
Subtitle A of Title IV of ERISA (or any successor).
"Person": an individual, partnership, corporation, limited liability
company, business trust, joint stock company, trust, unincorporated
association, joint venture, Governmental Authority or other entity of whatever
nature.
"Plan": at a particular time, any employee benefit plan that is
covered by ERISA and in respect of which the Borrower or a Commonly Controlled
Entity is (or, if such plan were terminated at such time, would under Section
4069 of ERISA be deemed to be) an "employer" as defined in Section 3(5) of
ERISA.
509253-0191-02261-99A5F10H-CRA
12
"Properties": as defined in Section 3.17(a).
----------
"Reference Lender": The Chase Manhattan Bank.
----------------
"Register": as defined in Section 9.6(d).
--------
"Regulation U": Regulation U of the Board as in effect from time
to time.
"Reorganization": with respect to any Multiemployer Plan, the condition
that such plan is in reorganization within the meaning of Section 4241 of ERISA.
"Reportable Event": any of the events set forth in Section 4043(b) of
ERISA, other than those events as to which the thirty day notice period is
waived under subsections .27, .28, .29, .30, .31, .32, .34 or .35 of PBGC
Reg.ss. 4043.
"Required Lenders": at any time, the holders of more than 50% of
the Commitments then in effect; provided that (i) for purposes of declaring the
Loans to be due and payable, and/or the Commitments to be terminated pursuant to
Section 7, and (ii) for all purposes after the Commitments have been terminated,
such term shall mean the holders of more than 50% of the Loans outstanding.
"Requirement of Law": as to any Person, the Certificate of
Incorporation and By-Laws or other organizational or governing documents of such
Person, and any law, treaty, rule or regulation or determination of an
arbitrator or a court or other Governmental Authority, in each case applicable
to or binding upon such Person or any of its property or to which such Person or
any of its property is subject.
"Responsible Officer": the chief executive officer, president, treasurer,
secretary or chief financial officer of the Borrower, but in any event, with
respect to financial matters, the treasurer or chief financial officer of the
Borrower.
"Revolving Termination Date": November 6, 2000.
--------------------------
"S&P": Standard & Poor's Rating Services, a division of McGraw-Hill, Inc.
"SEC": the Securities and Exchange Commission, any successor thereto and
any analogous Governmental Authority.
"Significant Subsidiary": at any particular time, each of Brooklyn Union
Gas and Brooklyn Union East, and any other Affiliate of the Borrower which is
engaged in the Core Gas Distribution Business.
"Single Employer Plan": any Plan that is covered by Title IV of ERISA, but
that is not a Multiemployer Plan.
"Solvent": when used with respect to any Person, means that, as
of any date of determination, (a) the amount of the "present fair saleable
value" of the assets of such Person will, as of such date, exceed the amount of
all "liabilities of such Person, contingent or otherwise", as of such date, as
such quoted terms are determined in accordance with applicable federal and state
laws governing
509253-0191-02261-99A5F10H-CRA
13
determinations of the insolvency of debtors, (b) the present fair saleable value
of the assets of such Person will, as of such date, be greater than the amount
that will be required to pay the liability of such Person on its debts as such
debts become absolute and matured, (c) such Person will not have, as of such
date, an unreasonably small amount of capital with which to conduct its
business, and (d) such Person will be able to pay its debts as they mature. For
purposes of this definition, (i) "debt" means liability on a "claim", and (ii)
"claim" means any (x) right to payment, whether or not such a right is reduced
to judgment, liquidated, unliquidated, fixed, contingent, matured, unmatured,
disputed, undisputed, legal, equitable, secured or unsecured or (y) right to an
equitable remedy for breach of performance if such breach gives rise to a right
to payment, whether or not such right to an equitable remedy is reduced to
judgment, fixed, contingent, matured or unmatured, disputed, undisputed, secured
or unsecured.
"Subsidiary": as to any Person, a corporation, partnership,
limited liability company or other entity of which shares of stock or other
ownership interests having ordinary voting power (other than stock or such other
ownership interests having such power only by reason of the happening of a
contingency) to elect a majority of the board of directors or other managers of
such corporation, partnership or other entity are at the time owned, or the
management of which is otherwise controlled, directly or indirectly through one
or more intermediaries, or both, by such Person. Unless otherwise qualified, all
references to a "Subsidiary" or to "Subsidiaries" in this Agreement shall refer
to a Subsidiary or Subsidiaries of the Borrower.
"Total Commitments": at any time, the aggregate amount of the Commitments
then in effect.
"Transferee": any Assignee or Participant.
----------
"Type": as to any Loan, its nature as an ABR Loan or a Eurodollar Loan.
"United States": the United States of America.
-------------
1.2 Other Definitional Provisions. (a) Unless otherwise specified
therein, all terms defined in this Agreement shall have the defined meanings
when used in the other Loan Documents or any certificate or other document made
or delivered pursuant hereto or thereto.
(b) As used herein and in the other Loan Documents, and any
certificate or other document made or delivered pursuant hereto or thereto, (i)
accounting terms relating to the Borrower and its Subsidiaries not defined in
Section 1.1 and accounting terms partly defined in Section 1.1, to the extent
not defined, shall have the respective meanings given to them under GAAP, (ii)
the words "include", "includes" and "including" shall be deemed to be followed
by the phrase "without limitation", (iii) the word "incur" shall be construed to
mean incur, create, issue, assume, become liable in respect of or suffer to
exist (and the words "incurred" and "incurrence" shall have correlative
meanings), and (iv) the words "asset" and "property" shall be construed to have
the same meaning and effect and to refer to any and all tangible and intangible
assets and properties, including cash, Capital Stock, securities, revenues,
accounts, leasehold interests and contract rights.
(c) The words "hereof", "herein" and "hereunder" and words of
similar import when used in this Agreement shall refer to this Agreement as a
whole and not to any particular provision of this
509253-0191-02261-99A5F10H-CRA
14
Agreement, and Section, Schedule and Exhibit references are to this Agreement
unless otherwise specified.
(d) The meanings given to terms defined herein shall be equally
applicable to both the singular and plural forms of such terms.
SECTION 2. AMOUNT AND TERMS OF COMMITMENTS
2.1 Commitments. (a) Subject to the terms and conditions hereof,
each Lender severally agrees to make revolving credit loans ("Loans") to the
Borrower from time to time during the Commitment Period in an aggregate
principal amount at any one time outstanding which does not exceed the amount of
such Lender's Commitment. During the Commitment Period the Borrower may use the
Commitments by borrowing, prepaying the Loans in whole or in part, and
reborrowing, all in accordance with the terms and conditions hereof. The Loans
may from time to time be Eurodollar Loans, ABR Loans or Competitive Loans, as
determined by the Borrower and notified to the Administrative Agent in
accordance with Sections 2.3 and 2.7.
(b) Any Loans outstanding on the Revolving Termination Date will
mature and be payable on the Final Maturity Date.
2.2 Competitive Bid Procedure. (a) Subject to the terms and
conditions set forth herein, from time to time the Borrower may request
Competitive Bids and may (but shall not have any obligation to) accept
Competitive Bids and borrow Competitive Loans; provided that while Competitive
Loans are outstanding, the Available Commitments shall be reduced by the
aggregate amount of such Competitive Loans. To request Competitive Bids, the
Borrower shall notify the Administrative Agent of such request by telephone, in
the case of a Eurodollar Loan, not later than 11:00 a.m., New York City time,
four Business Days before the date of the proposed Borrowing and, in the case of
an ABR Loan, not later than 10:00 a.m., New York City time, one Business Day
before the date of the proposed Borrowing; provided that the Borrower may submit
up to (but not more than) three Competitive Bid Requests on the same day, but a
Competitive Bid Request shall not be made within five Business Days after the
date of any previous Competitive Bid Request, unless any and all such previous
Competitive Bid Requests shall have been withdrawn or all Competitive Bids
received in response thereto rejected. Each such telephonic Competitive Bid
Request shall be confirmed promptly by hand delivery or telecopy to the
Administrative Agent of a written Competitive Bid Request in a form approved by
the Administrative Agent and signed by the Borrower. Each such telephonic and
written Competitive Bid Request shall specify the following information:
(i) the aggregate amount of the requested Loan;
(ii) the date of such Loan, which shall be a Business Day;
iii) whether such Loan is to be a Eurodollar Loan or a Fixed Rate Loan;
iv) the maturity for such Loan, which shall range from 7 to 360
days (but not to extend past the Revolving Termination Date; and
509253-0191-02261-99A5F10H-CRA
15
(v) the Interest Period, if applicable, for such Loan, which
shall be a period contemplated by the definition of the term "Interest
Period".
Promptly following receipt of a Competitive Bid Request in accordance with this
Section, the Administrative Agent shall notify the Lenders of the details
thereof by telecopy, inviting the Lenders to submit Competitive Bids.
(b) Each Lender may (but shall not have any obligation to) make
one or more Competitive Bids to the Borrower in response to a Competitive Bid
Request. Each Competitive Bid by a Lender must be in a form approved by the
Administrative Agent and must be received by the Administrative Agent by
telecopy, in the case of a Eurodollar Loan, not later than 9:30 a.m., New York
City time, three Business Days before the proposed date of such Competitive
Loan, and in the case of an ABR Loan, not later than 9:30 a.m., New York City
time, on the proposed date of such Competitive Loan. Competitive Bids that do
not conform substantially to the form approved by the Administrative Agent may
be rejected by the Administrative Agent, and the Administrative Agent shall
notify the applicable Lender as promptly as practicable. Each Competitive Bid
shall specify (i) the principal amount (which shall be a minimum of $5,000,000
and an integral multiple of $1,000,000 and which may equal the entire principal
amount of the Competitive Loan requested by the Borrower) of the Competitive
Loan or Loans that the Lender is willing to make, (ii) the Competitive Bid Rate
or Rates at which the Lender is prepared to make such Loan or Loans (expressed
as a percentage rate per annum in the form of a decimal to no more than four
decimal places) and (iii) the Interest Period applicable to each such Loan and
the last day thereof.
(c) The Administrative Agent shall promptly notify the Borrower
by telecopy of the Competitive Bid Rate and the principal amount specified in
each Competitive Bid and the identity of the Lender that shall have made such
Competitive Bid.
(d) Subject only to the provisions of this paragraph, the
Borrower may accept or reject any Competitive Bid. The Borrower shall notify the
Administrative Agent by telephone, confirmed by telecopy in a form approved by
the Administrative Agent, whether and to what extent it has decided to accept or
reject each Competitive Bid, in the case of a Eurodollar Loan, not later than
10:30 a.m., New York City time, three Business Days before the date of the
proposed Competitive Borrowing, and in the case of an ABR Loan, not later than
10:30 a.m., New York City time, on the proposed date of the Competitive Loan;
provided that (i) the failure of the Borrower to give such notice shall be
deemed to be a rejection of each Competitive Bid, (ii) the Borrower shall not
accept a Competitive Bid made at a particular Competitive Bid Rate if the
Borrower rejects a Competitive Bid made at a lower Competitive Bid Rate, (iii)
the aggregate amount of the Competitive Bids accepted by the Borrower shall not
exceed the aggregate amount of the requested Competitive Loan specified in the
related Competitive Bid Request, (iv) to the extent necessary to comply with
clause (iii) above, the Borrower may accept Competitive Bids at the same
Competitive Bid Rate in part, which acceptance, in the case of multiple
Competitive Bids at such Competitive Bid Rate, shall be made pro rata in
accordance with the amount of each such Competitive Bid, and (v) except pursuant
to clause (iv) above, no Competitive Bid shall be accepted for a Competitive
Loan unless such Competitive Loan is in a minimum principal amount of $5,000,000
and an integral multiple of $1,000,000; provided further that if a Competitive
Loan must be in an amount less than $5,000,000 because of the provisions of
clause (iv) above, such Competitive Loan may be for a minimum of $1,000,000 or
any integral multiple thereof, and in calculating the pro rata allocation of
acceptances of portions of multiple Competitive Bids at a
509253-0191-02261-99A5F10H-CRA
16
particular Competitive Bid Rate pursuant to clause (iv) the amounts shall be
rounded to integral multiples of $1,000,000 in a manner determined by the
Borrower. A notice given by the Borrower pursuant to this paragraph shall be
irrevocable.
(e) The Administrative Agent shall promptly notify each bidding
Lender by telecopy whether or not its Competitive Bid has been accepted (and, if
so, the amount and Competitive Bid Rate so accepted), and each successful bidder
will thereupon become bound, subject to the terms and conditions hereof, to make
the Competitive Loan in respect of which its Competitive Bid has been accepted.
(f) If the Administrative Agent shall elect to submit a
Competitive Bid in its capacity as a Lender, it shall submit such Competitive
Bid directly to the Borrower at least one quarter of an hour earlier than the
time by which the other Lenders are required to submit their Competitive Bids to
the Administrative Agent pursuant to paragraph (b) of this Section.
2.3 Procedure for Loan Borrowing. The Borrower may borrow under
the Commitments during the Commitment Period on any Business Day, provided that
the Borrower shall give the Administrative Agent irrevocable notice (which
notice must be received by the Administrative Agent prior to 12:00 Noon, New
York City time, (a) three Business Days prior to the requested Borrowing Date,
in the case of Eurodollar Loans, or (b) one Business Day prior to the requested
Borrowing Date, in the case of ABR Loans), specifying (i) the amount and Type of
Loans to be borrowed, (ii) the requested Borrowing Date and (iii) in the case of
Eurodollar Loans, the respective amounts of each such Type of Loan and the
respective lengths of the initial Interest Period therefor. Any Loans made on
the Closing Date shall initially be ABR Loans. Each borrowing under the
Commitments shall be in an amount equal to (x) in the case of ABR Loans,
$1,000,000 or a whole multiple thereof (or, if the then aggregate Available
Commitments are less than $1,000,000, such lesser amount) and (y) in the case of
Eurodollar Loans, $10,000,000 or a whole multiple of $1,000,000 in excess
thereof. Upon receipt of any such notice from the Borrower, the Administrative
Agent shall promptly notify each Lender thereof. Each Lender will make the
amount of its pro rata share of each borrowing available to the Administrative
Agent for the account of the Borrower at the Funding Office prior to 12:00 Noon,
New York City time, on the Borrowing Date requested by the Borrower in funds
immediately available to the Administrative Agent. Such borrowing will then be
made available to the Borrower by the Administrative Agent crediting the account
of the Borrower on the books of such office with the aggregate of the amounts
made available to the Administrative Agent by the Lenders and in like funds as
received by the Administrative Agent.
2.4 Facility Fees, etc. (a) The Borrower agrees to pay to the
Administrative Agent for the account of each Lender a facility fee for the
period from and including the Closing Date until all of the Obligations have
been repaid and the Commitments have been terminated, computed at the Facility
Fee Rate on the Lender Percentage of such Lender of the total amount of the
Facility (drawn or undrawn), payable quarterly in arrears on the last day of
each March, June, September and December and on the Final Maturity Date,
commencing on the first of such dates to occur after the date hereof.
(b) The Borrower agrees to pay to the Administrative Agent the
fees in the amounts and on the dates previously agreed to in writing by the
Borrower and the Administrative Agent.
2.5 Termination or Reduction of Commitments. The Borrower shall have the
right, upon not less than three Business Days' notice to the Administrative
Agent, to terminate the
509253-0191-02261-99A5F10H-CRA
17
Commitments or, from time to time, to reduce the amount of the Commitments;
provided that no such termination or reduction of Commitments shall be permitted
if, after giving effect thereto and to any prepayments of the Loans made on the
effective date thereof, the aggregate principal amount of (i) the Loans
outstanding and (ii) any Competitive Loans outstanding, would exceed the Total
Commitments. Any such reduction shall be in an amount equal to $1,000,000, or a
whole multiple thereof, and shall reduce permanently the Commitments then in
effect.
2.6 Optional Prepayments. The Borrower may at any time and from
time to time prepay the Loans, in whole or in part, without premium or penalty,
upon irrevocable notice delivered to the Administrative Agent at least three
Business Days prior thereto in the case of Eurodollar Loans and at least one
Business Day prior thereto in the case of ABR Loans, which notice shall specify
the date and amount of prepayment and whether the prepayment is of Eurodollar
Loans or ABR Loans; provided, that if a Eurodollar Loan is prepaid on any day
other than the last day of the Interest Period applicable thereto, the Borrower
shall also pay any amounts owing pursuant to Section 2.15. Upon receipt of any
such notice, the Administrative Agent shall promptly notify each Lender thereof.
If any such notice is given, the amount specified in such notice shall be due
and payable on the date specified therein, together with (except in the case of
Loans that are ABR Loans) accrued interest to such date on the amount prepaid.
Partial prepayments of Loans shall be in an aggregate principal amount of
$1,000,000 or a whole multiple thereof. Competitive Loans may not be prepaid
without the consent of the Relevant Lender.
2.7 Conversion and Continuation Options. (a) The Borrower may
elect from time to time to convert Eurodollar Loans to ABR Loans by giving the
Administrative Agent at least two Business Days' prior irrevocable notice of
such election, provided that any such conversion of Eurodollar Loans may only be
made on the last day of an Interest Period with respect thereto. The Borrower
may elect from time to time to convert ABR Loans to Eurodollar Loans by giving
the Administrative Agent at least three Business Days' prior irrevocable notice
of such election (which notice shall specify the length of the initial Interest
Period therefor), provided that no ABR Loan may be converted into a Eurodollar
Loan when any Event of Default has occurred and is continuing and the
Administrative Agent or the Required Lenders have determined in its or their
sole discretion not to permit such conversions. Upon receipt of any such notice
the Administrative Agent shall promptly notify each relevant Lender thereof.
(b) Any Eurodollar Loan may be continued as such upon the
expiration of the then current Interest Period with respect thereto by the
Borrower giving irrevocable notice to the Administrative Agent, in accordance
with the applicable provisions of the term "Interest Period" set forth in
Section 1.1, of the length of the next Interest Period to be applicable to such
Loans, provided that no Eurodollar Loan may be continued as such when any Event
of Default has occurred and is continuing and the Administrative Agent has or
the Required Lenders have determined in its or their sole discretion not to
permit such continuations, and provided, further, that if the Borrower shall
fail to give any required notice as described above in this paragraph or if such
continuation is not permitted pursuant to the preceding proviso such Loans shall
be automatically converted to ABR Loans on the last day of such then expiring
Interest Period. Upon receipt of any such notice the Administrative Agent shall
promptly notify each relevant Lender thereof.
2.8 Limitations on Eurodollar Tranches. Notwithstanding anything to the
contrary in this Agreement, all borrowings, conversions and continuations of
Eurodollar Loans hereunder and all selections of Interest Periods hereunder
shall be in such amounts and be made pursuant to such elections
509253-0191-02261-99A5F10H-CRA
18
so that, (a) after giving effect thereto, the aggregate principal amount of the
Eurodollar Loans comprising each Eurodollar Tranche shall be equal to $5,000,000
or a whole multiple of $1,000,000 in excess thereof and (b) no more than ten
Eurodollar Tranches shall be outstanding at any one time.
2.9 Interest Rates and Payment Dates. (a) Each Eurodollar Loan
shall bear interest for each day during each Interest Period with respect
thereto at a rate per annum equal to the Eurodollar Rate determined for such day
plus the Applicable Margin.
(b) Each ABR Loan shall bear interest at a rate per annum equal
to the ABR plus the Applicable Margin.
(c) Each Competitive Loan shall bear interest in accordance with
the applicable Competitive Bid Rate.
(d) (i) If all or a portion of the principal amount of any Loan
shall not be paid when due (whether at the stated maturity, by acceleration or
otherwise), such overdue amount shall bear interest at a rate per annum equal to
the rate that would otherwise be applicable thereto pursuant to the foregoing
provisions of this Section plus 2%, and (ii) if all or a portion of any interest
payable on any Loan or any facility fee or other amount payable hereunder shall
not be paid when due (whether at the stated maturity, by acceleration or
otherwise), such overdue amount shall bear interest at a rate per annum equal to
the rate then applicable to ABR Loans plus 2%, in each case, with respect to
clauses (i) and (ii) above, from the date of such non-payment until such amount
is paid in full.
(e) Interest shall be payable in arrears on each Interest Payment
Date, provided that interest accruing pursuant to paragraph (c) of this Section
shall be payable from time to time on demand.
2.10 Computation of Interest and Fees. (a) Interest and fees
payable pursuant hereto shall be calculated on the basis of a 360-day year for
the actual days elapsed, except that, with respect to ABR Loans the rate of
interest on which is calculated on the basis of the Prime Rate, the interest
thereon shall be calculated on the basis of a 365- (or 366-, as the case may be)
day year for the actual days elapsed. The Administrative Agent shall as soon as
practicable notify the Borrower and the relevant Lenders of each determination
of a Eurodollar Rate. Any change in the interest rate on a Loan resulting from a
change in the ABR or the Eurocurrency Reserve Requirements shall become
effective as of the opening of business on the day on which such change becomes
effective. The Administrative Agent shall as soon as practicable notify the
Borrower and the relevant Lenders of the effective date and the amount of each
such change in interest rate.
(b) Each determination of an interest rate by the Administrative
Agent pursuant to any provision of this Agreement shall be conclusive and
binding on the Borrower and the Lenders in the absence of manifest error. The
Administrative Agent shall, at the request of the Borrower, deliver to the
Borrower a statement showing the quotations used by the Administrative Agent in
determining any interest rate pursuant to Section 2.9(a).
2.11 Inability to Determine Interest Rate. If prior to the first day of any
Interest Period:
(a) the Administrative Agent shall have determined (which
determination shall be conclusive and binding upon the Borrower) that,
by reason of circumstances affecting the
509253-0191-02261-99A5F10H-CRA
19
relevant market, adequate and reasonable means do not exist for
ascertaining the Eurodollar Rate for such Interest Period, or that such
Eurodollar rate is not available; or
(b) the Administrative Agent shall have received notice from the
Required Lenders (or, in the case of a Eurodollar Competitive Loan, the
Lender that is required to make such Loan) that the Eurodollar Rate
determined or to be determined for such Interest Period will not
adequately and fairly reflect the cost to such Lenders or Lender, as the
case may be (as conclusively certified by such Lenders, or Lender as the
case may be) of making or maintaining their affected Loans during such
Interest Period,
the Administrative Agent shall give telecopy or telephonic notice thereof to the
Borrower and the relevant Lenders as soon as practicable thereafter. If such
notice is given (w) any Eurodollar Loans requested to be made on the first day
of such Interest Period shall be made as ABR Loans, (x) any Loans that were to
have been converted on the first day of such Interest Period to Eurodollar Loans
shall be continued as ABR Loans, (y) any outstanding Eurodollar Loans shall be
converted, on the last day of the then-current Interest Period, to ABR Loans and
(z) any request by the Borrower for a Eurodollar Competitive Loan shall be
ineffective. Until such notice has been withdrawn by the Administrative Agent,
no further Eurodollar Loans shall be made or continued as such, nor shall the
Borrower have the right to convert Loans to Eurodollar Loans.
2.12 Pro Rata Treatment and Payments. (a) Each borrowing by the
Borrower from the Lenders hereunder, each payment by the Borrower on account of
any facility fee and any reduction of the Commitments of the Lenders shall be
made pro rata according to the respective Lender Percentage of the Lenders.
(b) Each payment (including each prepayment) by the Borrower on
account of principal of and interest on the Loans shall be made pro rata
according to the respective outstanding principal amounts of the Loans then held
by the Lenders.
(c) All payments (including prepayments) to be made by the
Borrower hereunder, whether on account of principal, interest, fees or
otherwise, shall be made without setoff or counterclaim and shall be made prior
to 12:00 Noon, New York City time, on the due date thereof to the Administrative
Agent, for the account of the Lenders, at the Funding Office, in Dollars and in
immediately available funds. The Administrative Agent shall distribute such
payments to the Lenders promptly upon receipt in like funds as received. If any
payment hereunder (other than payments on the Eurodollar Loans) becomes due and
payable on a day other than a Business Day, such payment shall be extended to
the next succeeding Business Day. If any payment on a Eurodollar Loan becomes
due and payable on a day other than a Business Day, the maturity thereof shall
be extended to the next succeeding Business Day unless the result of such
extension would be to extend such payment into another calendar month, in which
event such payment shall be made on the immediately preceding Business Day. In
the case of any extension of any payment of principal pursuant to the preceding
two sentences, interest thereon shall be payable at the then applicable rate
during such extension.
(d) Unless the Administrative Agent shall have been notified in
writing by any Lender prior to a borrowing that such Lender will not make the
amount that would constitute its share of such borrowing available to the
Administrative Agent, the Administrative Agent may assume that such Lender is
making such amount available to the Administrative Agent, and the Administrative
Agent may, in
509253-0191-02261-99A5F10H-CRA
20
reliance upon such assumption, make available to the Borrower a corresponding
amount. If such amount is not made available to the Administrative Agent by the
required time on the Borrowing Date therefor, such Lender shall pay to the
Administrative Agent, on demand, such amount with interest thereon at a rate
equal to the daily average Federal Funds Effective Rate for the period until
such Lender makes such amount immediately available to the Administrative Agent.
A certificate of the Administrative Agent submitted to any Lender with respect
to any amounts owing under this paragraph shall be conclusive in the absence of
manifest error. If such Lender's share of such borrowing is not made available
to the Administrative Agent by such Lender within three Business Days of such
Borrowing Date, the Administrative Agent shall also be entitled to recover such
amount with interest thereon at the rate per annum applicable to ABR Loans, on
demand, from the Borrower.
(e) Unless the Administrative Agent shall have been notified in
writing by the Borrower prior to the date of any payment being made hereunder
that the Borrower will not make such payment to the Administrative Agent, the
Administrative Agent may assume that the Borrower is making such payment, and
the Administrative Agent may, but shall not be required to, in reliance upon
such assumption, make available to the Lenders their respective pro rata shares
of a corresponding amount. If such payment is not made to the Administrative
Agent by the Borrower within three Business Days of such required date, the
Administrative Agent shall be entitled to recover, on demand, from each Lender
to which any amount which was made available pursuant to the preceding sentence,
such amount with interest thereon at the rate per annum equal to the daily
average Federal Funds Effective Rate. Nothing herein shall be deemed to limit
the rights of the Administrative Agent or any Lender against the Borrower.
2.13 Requirements of Law. (a) If the adoption of or any change in
any Requirement of Law or in the interpretation or application thereof or
compliance by any Lender with any request or directive (whether or not having
the force of law) from any central bank or other Governmental Authority made
subsequent to the date hereof:
(i shall subject any Lender to any tax of any kind
whatsoever with respect to this Agreement or any Eurodollar Loan made by
it, or change the basis of taxation of payments to such Lender in
respect thereof (except for Non-Excluded Taxes covered by Section 2.14
and changes in the rate of tax on the overall net income of such
Lender);
(ii shall impose, modify or hold applicable any reserve,
special deposit, compulsory loan or similar requirement against assets
held by, deposits or other liabilities in or for the account of,
advances, loans or other extensions of credit by, or any other
acquisition of funds by, any office of such Lender that is not otherwise
included in the determination of the Eurodollar Rate hereunder; or
(iii shall impose on such Lender any other condition;
and the result of any of the foregoing is to increase the cost to such Lender,
by an amount that such Lender deems to be material, of making, converting into,
continuing or maintaining Eurodollar Loans, or to reduce any amount receivable
hereunder in respect thereof, then, in any such case, the Borrower shall
promptly pay such Lender, upon its demand, any additional amounts necessary to
compensate such Lender for such increased cost or reduced amount receivable. If
any Lender becomes entitled to claim
509253-0191-02261-99A5F10H-CRA
21
any additional amounts pursuant to this paragraph, it shall promptly notify the
Borrower (with a copy to the Administrative Agent) of the event by reason of
which it has become so entitled.
(b) If any Lender shall have determined that the adoption of or
any change in any Requirement of Law regarding capital adequacy or in the
interpretation or application thereof or compliance by such Lender or any
corporation controlling such Lender with any request or directive regarding
capital adequacy (whether or not having the force of law) from any Governmental
Authority made subsequent to the date hereof shall have the effect of reducing
the rate of return on such Lender's or such corporation's capital as a
consequence of its obligations hereunder to a level below that which such Lender
or such corporation could have achieved but for such adoption, change or
compliance (taking into consideration such Lender's or such corporation's
policies with respect to capital adequacy) by an amount deemed by such Lender to
be material, then from time to time, after submission by such Lender to the
Borrower (with a copy to the Administrative Agent) of a written request
therefor, the Borrower shall pay to such Lender such additional amount or
amounts as will compensate such Lender for such reduction; provided that the
Borrower shall not be required to compensate a Lender pursuant to this paragraph
for any amounts incurred more than six months prior to the date that such Lender
notifies the Borrower of such Lender's intention to claim compensation therefor;
and provided further that, if the circumstances giving rise to such claim have a
retroactive effect, then such six-month period shall be extended to include the
period of such retroactive effect.
(c) Notwithstanding the foregoing provisions of this Section, a
Lender shall not be entitled to compensation pursuant to this Section in respect
of any Competitive Loan if the Requirement of Law that would otherwise entitle
it to such compensation shall have been publicly announced prior to submission
of the Competitive Bid pursuant to which such Loan was made.
(d) A certificate as to any additional amounts payable pursuant
to this Section submitted by any Lender to the Borrower (with a copy to the
Administrative Agent) shall be conclusive in the absence of manifest error. The
obligations of the Borrower pursuant to this Section shall survive the
termination of this Agreement and the payment of the Loans and all other amounts
payable hereunder.
2.14 Taxes. (a) All payments made by the Borrower under this
Agreement shall be made free and clear of, and without deduction or withholding
for or on account of, any present or future income, stamp or other taxes,
levies, imposts, duties, charges, fees, deductions or withholdings, now or
hereafter imposed, levied, collected, withheld or assessed by any Governmental
Authority, excluding net income taxes and franchise taxes (imposed in lieu of
net income taxes) imposed on the Administrative Agent or any Lender as a result
of a present or former connection between the Administrative Agent or such
Lender and the jurisdiction of the Governmental Authority imposing such tax or
any political subdivision or taxing authority thereof or therein (other than any
such connection arising solely from the Administrative Agent or such Lender
having executed, delivered or performed its obligations or received a payment
under, or enforced, this Agreement or any other Loan Document). If any such
non-excluded taxes, levies, imposts, duties, charges, fees, deductions or
withholdings ("Non-Excluded Taxes") or Other Taxes are required to be withheld
from any amounts payable to the Administrative Agent or any Lender hereunder,
the amounts so payable to the Administrative Agent or such Lender shall be
increased to the extent necessary to yield to the Administrative Agent or such
Lender (after payment of all Non- Excluded Taxes and Other Taxes) interest or
any such other amounts payable hereunder at the rates or in the amounts
specified in this Agreement, provided, however, that the Borrower shall not be
required to increase any such amounts payable to any Lender with respect to any
Non-Excluded Taxes (i) that are
509253-0191-02261-99A5F10H-CRA
22
attributable to such Lender's failure to comply with the requirements of
paragraph (d) or (e) of this Section or (ii) that are United States withholding
taxes imposed on amounts payable to such Lender at the time the Lender becomes a
party to this Agreement, except to the extent that such Lender's assignor (if
any) was entitled, at the time of assignment, to receive additional amounts from
the Borrower with respect to such Non-Excluded Taxes pursuant to this paragraph.
(b) In addition, the Borrower shall pay any Other Taxes to the
relevant Governmental Authority in accordance with applicable law.
(c) Whenever any Non-Excluded Taxes or Other Taxes are payable by
the Borrower, as promptly as possible thereafter the Borrower shall send to the
Administrative Agent for its own account or for the account of the relevant
Lender, as the case may be, a certified copy of an original official receipt
received by the Borrower showing payment thereof. If the Borrower fails to pay
any Non- Excluded Taxes or Other Taxes when due to the appropriate taxing
authority or fails to remit to the Administrative Agent the required receipts or
other required documentary evidence, the Borrower shall indemnify the
Administrative Agent and the Lenders for any incremental taxes, interest or
penalties that may become payable by the Administrative Agent or any Lender as a
result of any such failure.
(d) Each Lender (or Transferee) that is not a citizen or resident
of the United States of America, a corporation, partnership or other entity
created or organized in or under the laws of the United States of America (or
any jurisdiction thereof), or any estate or trust that is subject to federal
income taxation regardless of the source of its income (a "Non-U.S. Lender")
shall deliver to the Borrower and the Administrative Agent (or, in the case of a
Participant, to the Lender from which the related participation shall have been
purchased) two copies of either U.S. Internal Revenue Service Form 1001 or Form
4224, or, in the case of a Non-U.S. Lender claiming exemption from U.S. federal
withholding tax under Section 871(h) or 881(c) of the Code with respect to
payments of "portfolio interest", a statement substantially in the form of
Exhibit D and a Form W-8, or any subsequent versions thereof or successors
thereto, properly completed and duly executed by such Non-U.S. Lender claiming
complete exemption from, or a reduced rate of, U.S. federal withholding tax on
all payments by the Borrower under this Agreement and the other Loan Documents.
Such forms shall be delivered by each Non-U.S. Lender on or before the date it
becomes a party to this Agreement (or, in the case of any Participant, on or
before the date such Participant purchases the related participation). In
addition, each Non-U.S. Lender shall deliver such forms promptly upon the
obsolescence or invalidity of any form previously delivered by such Non-U.S.
Lender. Each Non-U.S. Lender shall promptly notify the Borrower at any time it
determines that it is no longer in a position to provide any previously
delivered certificate to the Borrower (or any other form of certification
adopted by the U.S. taxing authorities for such purpose). Notwithstanding any
other provision of this paragraph, a Non-U.S. Lender shall not be required to
deliver any form pursuant to this paragraph that such Non-U.S. Lender is not
legally able to deliver.
(e) A Lender that is entitled to an exemption from or reduction
of non-U.S. withholding tax under the law of the jurisdiction in which the
Borrower is located, or any treaty to which such jurisdiction is a party, with
respect to payments under this Agreement shall deliver to the Borrower (with a
copy to the Administrative Agent), at the time or times prescribed by applicable
law or reasonably requested by the Borrower, such properly completed and
executed documentation prescribed by applicable law as will permit such payments
to be made without withholding or at a reduced rate, provided that such Lender
is legally entitled to complete, execute and deliver such documentation and in
509253-0191-02261-99A5F10H-CRA
23
such Lender's judgment such completion, execution or submission would not
materially prejudice the legal position of such Lender.
(f) The agreements in this Section shall survive the termination
of this Agreement and the payment of the Loans and all other amounts payable
hereunder.
2.15 Indemnity. The Borrower agrees to indemnify each Lender and
to hold each Lender harmless from any loss or expense that such Lender may
sustain or incur as a consequence of (a) default by the Borrower in making a
borrowing of, conversion into or continuation of Eurodollar Loans after the
Borrower has given a notice requesting the same in accordance with the
provisions of this Agreement, (b) default by the Borrower in making any
prepayment of or conversion from Eurodollar Loans after the Borrower has given a
notice thereof in accordance with the provisions of this Agreement, (c) the
making of a prepayment of Eurodollar Loans on a day that is not the last day of
an Interest Period with respect thereto or (d) the making of a prepayment of a
Competitive Loan. Such indemnification may include an amount equal to the
excess, if any, of (i) the amount of interest that would have accrued on the
amount so prepaid, or not so borrowed, converted or continued, for the period
from the date of such prepayment or of such failure to borrow, convert or
continue to the last day of such Interest Period (or, in the case of a failure
to borrow, convert or continue, the Interest Period that would have commenced on
the date of such failure) in each case at the applicable rate of interest for
such Loans provided for herein (excluding, however, the Applicable Margin
included therein, if any) over (ii) the amount of interest (as reasonably
determined by such Lender) that would have accrued to such Lender on such amount
by placing such amount on deposit for a comparable period with leading banks in
the interbank eurodollar market. A certificate as to any amounts payable
pursuant to this Section submitted to the Borrower by any Lender shall be
conclusive in the absence of manifest error. This covenant shall survive the
termination of this Agreement and the payment of the Loans and all other amounts
payable hereunder.
2.16 Change of Lending Office. Each Lender agrees that, upon the
occurrence of any event giving rise to the operation of Section 2.13 or 2.14(a)
with respect to such Lender, it will, if requested by the Borrower, use
reasonable efforts (subject to overall policy considerations of such Lender) to
designate another lending office for any Loans affected by such event with the
object of avoiding the consequences of such event; provided, that such
designation is made on terms that, in the sole judgment of such Lender, cause
such Lender and its lending office(s) to suffer no economic, legal or regulatory
disadvantage, and provided, further, that nothing in this Section shall affect
or postpone any of the obligations of any Borrower or the rights of any Lender
pursuant to Section 2.13 or 2.14(a).
2.17 Replacement of Lenders. The Borrower shall be permitted to
replace any Lender that (a) requests reimbursement for amounts owing pursuant to
Section 2.13 or 2.14(a) or (b) defaults in its obligation to make Loans
hereunder, with a replacement financial institution; provided that (i) such
replacement does not conflict with any Requirement of Law, (ii) no Event of
Default shall have occurred and be continuing at the time of such replacement,
(iii) prior to any such replacement, such Lender shall have taken no action
under Section 2.16 so as to eliminate the continued need for payment of amounts
owing pursuant to Section 2.13 or 2.14(a), (iv) the replacement financial
institution shall purchase, at par, all Loans and other amounts owing to such
replaced Lender on or prior to the date of replacement, (v) the Borrower shall
be liable to such replaced Lender under Section 2.15 if any Eurodollar Loan or
Eurodollar Competitive Loan owing to such replaced Lender shall be purchased
other than on the last day of the Interest Period relating thereto, (vi) the
replacement financial institution, if not already a Lender, shall be
509253-0191-02261-99A5F10H-CRA
24
reasonably satisfactory to the Administrative Agent, (vii) the replaced Lender
shall be obligated to make such replacement in accordance with the provisions of
Section 9.6 (provided that the Borrower shall be obligated to pay the
registration and processing fee referred to therein), (viii) until such time as
such replacement shall be consummated, the Borrower shall pay all additional
amounts (if any) required pursuant to Section 2.13 or 2.14(a), as the case may
be, and (ix) any such replacement shall not be deemed to be a waiver of any
rights that the Borrower, the Administrative Agent or any other Lender shall
have against the replaced Lender.
SECTION 3. REPRESENTATIONS AND WARRANTIES
To induce the Administrative Agent and the Lenders to enter into
this Agreement and to make the Loans, the Borrower hereby represents and
warrants to the Administrative Agent and each Lender that:
3.1 Financial Condition. The audited consolidated and
unconsolidated balance sheets of the Borrower as at March 31, 1998 and December
31, 1998, and the related consolidated and unconsolidated statements of income
and of cash flows for the fiscal years ended on such dates, reported on by and
accompanied by an unqualified report from Ernst & Young and Arthur Andersen,
respectively, present fairly the consolidated and unconsolidated financial
condition of the Borrower as at such date, and the consolidated and
unconsolidated results of its operations and its consolidated and unconsolidated
cash flows for the respective fiscal years then ended. The unaudited
consolidated and unconsolidated balance sheet of the Borrower as at June 30,
1999, and the related unaudited consolidated and unconsolidated statements of
income and cash flows for the six-month period ended on such date, present
fairly the consolidated and unconsolidated financial condition of the Borrower
as at such date, and the consolidated and unconsolidated results of its
operations and its consolidated cash flows for the six- month period then ended
(subject to normal year-end audit adjustments). All such financial statements,
including the related schedules and notes thereto, have been prepared in
accordance with GAAP applied consistently throughout the periods involved
(except as approved by the aforementioned firm of accountants and disclosed
therein). The Borrower and its Subsidiaries do not have any material Guarantee
Obligations, contingent liabilities and liabilities for taxes, or any long-term
leases or unusual forward or long-term commitments, including any interest rate
or foreign currency swap or exchange transaction or other obligation in respect
of derivatives, that are not reflected in the most recent financial statements
referred to in this paragraph, except Guarantee Obligations of Indebtedness of
the Borrower and/or any of its Subsidiaries so long as the Indebtedness in
respect of which such Guarantee Obligations arise is reflected in such financial
statements. During the period from June 30, 1999 to and including the date
hereof there has been no Disposition by the Borrower of any material part of its
business or property.
3.2 No Change. Since December 31, 1998 there has been no development or
event that has had or could reasonably be expected to have a Material Adverse
Effect.
3.3 Corporate Existence; Compliance with Law. Each of the
Borrower and its Significant Subsidiaries (a) is duly organized, validly
existing and in good standing under the laws of the jurisdiction of its
organization, (b) has the corporate power and authority, and the legal right, to
own and operate its property, to lease the property it operates as lessee and to
conduct the business in which it is currently engaged, (c) is duly qualified as
a foreign corporation and in good standing under the laws of each jurisdiction
where its ownership, lease or operation of property or the conduct of its
business
509253-0191-02261-99A5F10H-CRA
25
requires such qualification and (d) is in compliance with all Requirements of
Law except to the extent that the failure to comply therewith could not, in the
aggregate, reasonably be expected to have a Material Adverse Effect.
3.4 Corporate Power; Authorization; Enforceable Obligations. The
Borrower has the corporate power and authority, and the legal right, to make,
deliver and perform the Loan Documents and to borrow hereunder. The Borrower has
taken all necessary corporate action to authorize the execution, delivery and
performance of the Loan Documents and to authorize the borrowings on the terms
and conditions of this Agreement. No consent or authorization of, filing with,
notice to or other act by or in respect of, any Governmental Authority or any
other Person is required in connection with the borrowings hereunder or with the
execution, delivery, performance, validity or enforceability of this Agreement
or any of the Loan Documents, except consents, authorizations, filings and
notices described in Schedule 3.4, which consents, authorizations, filings and
notices have been obtained or made and are in full force and effect. Each Loan
Document has been duly executed and delivered on behalf of the Borrower. This
Agreement constitutes, and each other Loan Document upon execution will
constitute, a legal, valid and binding obligation of the Borrower, enforceable
against the Borrower in accordance with its terms, except as enforceability may
be limited by applicable bankruptcy, insolvency, reorganization, moratorium or
similar laws affecting the enforcement of creditors' rights generally and by
general equitable principles (whether enforcement is sought by proceedings in
equity or at law).
3.5 No Legal Bar. The execution, delivery and performance of this
Agreement and the other Loan Documents, the borrowings hereunder and the use of
the proceeds thereof will not violate any Requirement of Law or any Contractual
Obligation of the Borrower or any of its Subsidiaries and will not result in, or
require, the creation or imposition of any Lien on any of their respective
properties or revenues pursuant to any Requirement of Law or any such
Contractual Obligation. No Requirement of Law or Contractual Obligation
applicable to the Borrower or any of its Subsidiaries could reasonably be
expected to have a Material Adverse Effect.
3.6 Litigation. No litigation, investigation or proceeding of or
before any arbitrator or Governmental Authority is pending or, to the knowledge
of the Borrower, threatened by or against the Borrower or any of its
Subsidiaries or against any of their respective properties or revenues (a) with
respect to any of the Loan Documents or any of the transactions contemplated
hereby or thereby, or (b) that could reasonably be expected to have a Material
Adverse Effect.
3.7 No Default. Neither the Borrower nor any of its Subsidiaries
is in default under or with respect to any of its Contractual Obligations in any
respect that could reasonably be expected to have a Material Adverse Effect. No
Default or Event of Default has occurred and is continuing.
3.8 Ownership of Property; Liens. Each of the Borrower and its
Subsidiaries has title in fee simple to, or a valid leasehold interest in, all
its real property, and good title to, or a valid leasehold interest in, all its
other property, except to the extent failure to have such title could not
reasonably be expected to have a Material Adverse Effect, and none of such
property is subject to any Lien except as permitted by Section 6.2.
3.9 Intellectual Property. The Borrower and each of its
Subsidiaries owns, or is licensed to use, all Intellectual Property necessary
for the conduct of its business as currently conducted, except to the extent
failure to have such ownership or license could not reasonably be expected to
have a Material
509253-0191-02261-99A5F10H-CRA
26
Adverse Effect. No material claim has been asserted and is pending by any Person
challenging or questioning the use of any Intellectual Property or the validity
or effectiveness of any Intellectual Property, except to the extent any such
claim could not reasonably be expected to have a Material Adverse Effect, nor
does the Borrower know of any valid basis for any such claim. The use of
Intellectual Property by the Borrower and its Subsidiaries does not infringe on
the rights of any Person in any material respect, except to the extent any such
infringement could not reasonably be expected to have a Material Adverse Effect.
3.10 Taxes. Each of the Borrower and each of its Subsidiaries has
filed or caused to be filed all Federal, state and other material tax returns
that are required to be filed and has paid all taxes shown to be due and payable
on said returns or on any assessments made against it or any of its property and
all other taxes, fees or other charges imposed on it or any of its property by
any Governmental Authority (other than any the amount or validity of that are
currently being contested in good faith by appropriate proceedings and with
respect to which reserves in conformity with GAAP have been provided on the
books of the Borrower or its Subsidiaries, as the case may be); no material tax
Lien has been filed, and, to the knowledge of the Borrower, no material claim is
being asserted, with respect to any such tax, fee or other charge.
3.11 Federal Regulations. No part of the proceeds of any Loans
will be used for "buying" or "carrying" any "margin stock" within the respective
meanings of each of the quoted terms under Regulation U as now and from time to
time hereafter in effect or for any purpose that violates the provisions of the
Regulations of the Board.
3.12 Labor Matters. Except as, in the aggregate, could not
reasonably be expected to have a Material Adverse Effect: (a) there are no
strikes or other labor disputes against the Borrower or any of its Subsidiaries
pending or, to the knowledge of the Borrower, threatened; (b) hours worked by
and payment made to employees of the Borrower and its Subsidiaries have not been
in violation of the Fair Labor Standards Act or any other applicable Requirement
of Law dealing with such matters; and (c) all payments due from the Borrower or
any of its Subsidiaries on account of employee health and welfare insurance have
been paid or accrued as a liability on the books of the Borrower or the relevant
Subsidiary.
3.13 ERISA. Neither a Reportable Event nor an "accumulated
funding deficiency" (within the meaning of Section 412 of the Code or Section
302 of ERISA) has occurred during the five-year period prior to the date on
which this representation is made or deemed made with respect to any Plan, and
each Plan has complied in all material respects with the applicable provisions
of ERISA and the Code. No termination of a Single Employer Plan has occurred,
and no Lien in favor of the PBGC or a Plan has arisen, during such five-year
period. The present value of all accrued benefits under each Single Employer
Plan (based on those assumptions used to fund such Plans) did not, as of the
last annual valuation date prior to the date on which this representation is
made or deemed made, exceed the value of the assets of such Plan allocable to
such accrued benefits by a material amount. Neither the Borrower nor any
Commonly Controlled Entity has had a complete or partial withdrawal from any
Multiemployer Plan that has resulted or could reasonably be expected to result
in a material liability under ERISA, and neither the Borrower nor any Commonly
Controlled Entity would become subject to any material liability under ERISA if
the Borrower or any such Commonly Controlled Entity were to withdraw completely
from all Multiemployer Plans as of the valuation date most closely preceding the
date on
509253-0191-02261-99A5F10H-CRA
27
which this representation is made or deemed made. No such Multiemployer
Plan is in Reorganization or Insolvent.
3.14 Investment Company Act; Other Regulations. Neither the
Borrower nor any of its Subsidiaries is (i) an "investment company", or a
company "controlled" by an "investment company", within the meaning of the
Investment Company Act of 1940. The Borrower and each of its Subsidiaries are
exempt from registration as a "holding company" under the Public Utility Holding
Company Act of 1935, as amended. Neither the Borrower nor any of its
Subsidiaries is subject to regulation under any Requirement of Law (other than
Regulation X of the Board) that limits its ability to incur Indebtedness.
3.15 Subsidiaries. Except as disclosed to the Administrative
Agent by the Borrower in writing from time to time after the Closing Date, (a)
Schedule 3.15 sets forth the name and jurisdiction of incorporation of each
Significant Subsidiary and, as to each such Subsidiary, the percentage of each
class of Capital Stock owned by the Borrower and (b) there are no outstanding
subscriptions, options, warrants, calls, rights or other agreements or
commitments (other than stock options granted to employees or directors and
directors' qualifying shares) of any nature relating to any Capital Stock of the
Borrower or any Significant Subsidiary, except as created by the Loan Documents.
3.16 Use of Proceeds. The proceeds of the Loans shall be used for
general corporate purposes (including commercial paper back-up liquidity) of the
Borrower and its Subsidiaries in the ordinary course of business.
3.17 Environmental Matters. Except as, in the aggregate, could not
reasonably be expected to have a Material Adverse Effect:
(a) the facilities and properties owned, leased or operated by
the Borrower or any of its Subsidiaries (the "Properties") do not
contain, and have not previously contained, any Materials of
Environmental Concern in amounts or concentrations or under
circumstances that constitute or constituted a violation of, or could
give rise to liability under, any Environmental Law;
(b) neither the Borrower nor any of its Subsidiaries has received
or is aware of any notice of violation, alleged violation,
non-compliance, liability or potential liability regarding environmental
matters or compliance with Environmental Laws with regard to any of the
Properties or the business operated by the Borrower or any of its
Subsidiaries (the "Business"), nor does the Borrower have knowledge or
reason to believe that any such notice will be received or is being
threatened;
(c) Materials of Environmental Concern have not been transported
or disposed of from the Properties in violation of, or in a manner or to
a location that could give rise to liability under, any Environmental
Law, nor have any Materials of Environmental Concern been generated,
treated, stored or disposed of at, on or under any of the Properties in
violation of, or in a manner that could give rise to liability under,
any applicable Environmental Law;
(d) no judicial proceeding or governmental or administrative
action is pending or, to the knowledge of the Borrower, threatened,
under any Environmental Law to which the Borrower or any Subsidiary is
or will be named as a party with respect to the Properties or the
Business, nor are there any consent decrees or other decrees, consent
orders, administrative orders or other
509253-0191-02261-99A5F10H-CRA
28
orders, or other administrative or judicial requirements outstanding under
any Environmental Law with respect to the Properties or the Business;
(e) there has been no release or threat of release of Materials
of Environmental Concern at or from the Properties, or arising from or
related to the operations of the Borrower or any Subsidiary in
connection with the Properties or otherwise in connection with the
Business, in violation of or in amounts or in a manner that could give
rise to liability under Environmental Laws;
(f) the Properties and all operations at the Properties are in
compliance, and have in the last five years been in compliance, with all
applicable Environmental Laws, and there is no contamination at, under
or about the Properties or violation of any Environmental Law with
respect to the Properties or the Business; and
(g) neither the Borrower nor any of its Subsidiaries has assumed
any liability of any other Person under Environmental Laws.
3.18 Accuracy of Information, etc. No statement or information
contained in this Agreement, the Notes, the Confidential Information Memorandum
or any other document, certificate or statement furnished by or on behalf of the
Borrower to the Administrative Agent or the Lenders, or any of them, for use in
connection with the transactions contemplated by this Agreement, contained as of
the date such statement, information, document or certificate was so furnished
(or, in the case of the Confidential Information Memorandum, as of the date of
this Agreement), any untrue statement of a material fact or omitted to state a
material fact necessary to make the statements contained herein or therein not
misleading. There is no fact known to the Borrower that could reasonably be
expected to have a Material Adverse Effect that has not been expressly disclosed
herein, in the Confidential Information Memorandum or in any other documents,
certificates and statements furnished to the Administrative Agent and the
Lenders for use in connection with the transactions contemplated hereby.
3.19 Year 2000 Matters. Any reprogramming required to permit the
proper functioning (but only to the extent that such proper functioning would
otherwise be impaired by the occurrence of the year 2000) in and following the
year 2000 of computer systems and other equipment containing embedded
microchips, in either case owned or operated by the Borrower or any of its
Subsidiaries or used or relied upon in the conduct of their business (including
any such systems and other equipment supplied by others or with which the
computer systems of the Borrower or any of its Subsidiaries interface), and the
testing of all such systems and other equipment as so reprogrammed, has been
completed. The costs to the Borrower and its Subsidiaries that have not been
incurred as of the date hereof for reasonably foreseeable consequences to them
of any improper functioning of other computer systems and equipment containing
embedded microchips due to the occurrence of the year 2000 could not reasonably
be expected to result in a Default or Event of Default or to have a Material
Adverse Effect. Except for any reprogramming referred to above, the computer
systems of the Borrower and its Subsidiaries are and, with ordinary course
upgrading and maintenance, will continue for the term of this Agreement to be,
sufficient for the conduct of their business as currently conducted.
509253-0191-02261-99A5F10H-CRA
29
SECTION 4. CONDITIONS PRECEDENT
4.1 Conditions to Initial Extension of Credit. The agreement of
each Lender to make the initial extension of credit requested to be made by it
is subject to the satisfaction, prior to or concurrently with the making of such
extension of credit on the Closing Date (but in any event no later than November
19, 1999), of the following conditions precedent:
(a) Credit Agreement. The Administrative Agent shall have received this
Agreement, executed and delivered by the Administrative Agent, the Borrower and
each Person listed on Schedule 1.1A.
(b) Existing Credit Facilities. The Administrative Agent shall
have received satisfactory evidence that the Borrower's existing
bilateral credit facilities shall have been terminated and that all
amounts thereunder shall have been paid in full.
(c) Financial Statements. The Lenders shall have received (i)
audited consolidated and unconsolidated financial statements of the
Borrower for the 1997 and 1998 fiscal years and (ii) unaudited interim
consolidated and unconsolidated financial statements of the Borrower for
each quarterly period ended subsequent to the date of the latest
applicable financial statements delivered pursuant to clause (i) of this
paragraph as to which such financial statements are available, and such
financial statements shall not, in the reasonable judgment of the
Lenders, reflect any material adverse change in the consolidated
financial condition of the Borrower, as reflected in the financial
statements or projections contained in the Confidential Information
Memorandum.
(d) Approvals. All governmental and third party approvals
necessary in connection with the continuing operations of the Borrower
and its Subsidiaries and the transactions contemplated hereby shall have
been obtained and be in full force and effect.
(e) Fees. The Lenders and the Administrative Agent shall have
received all fees required to be paid, and all expenses for which
invoices have been presented (including the reasonable fees and expenses
of legal counsel), on or before the Closing Date.
(f) Closing Certificate. The Administrative Agent shall have
received, with a counterpart for each Lender, a certificate of the
Borrower, dated the Closing Date, substantially in the form of Exhibit
A, with appropriate insertions and attachments.
(g) Legal Opinions. The Administrative Agent shall have received
the executed legal opinion of Steven L. Zelkowitz, deputy general
counsel of the Borrower and its Subsidiaries, substantially in the form
of Exhibit C. Such legal opinion shall cover such other matters incident
to the transactions contemplated by this Agreement as the Administrative
Agent may reasonably require.
(h) The Borrower shall have received a rating of its commercial
paper of at least A2 from S&P and P2 from Moody's.
509253-0191-02261-99A5F10H-CRA
30
4.2 Conditions to Each Extension of Credit. The agreement of each
Lender to make any extension of credit requested to be made by it on any date
(including its initial extension of credit) is subject to the satisfaction of
the following conditions precedent:
(a) Representations and Warranties. Each of the representations
and warranties made by the Borrower in or pursuant to this Agreement
shall be true and correct on and as of such date as if made on and as of
such date.
(b) No Default. No Default or Event of Default shall have
occurred and be continuing on such date or after giving effect to the
extensions of credit requested to be made on such date.
Each borrowing by the Borrower hereunder shall constitute a representation and
warranty by the Borrower as of the date of such extension of credit that the
conditions contained in this Section 4.2 have been satisfied.
SECTION 5. AFFIRMATIVE COVENANTS
The Borrower hereby agrees that, so long as the Commitments
remain in effect or any Loan or other amount is owing to any Lender or the
Administrative Agent hereunder, the Borrower shall and shall cause each of its
Subsidiaries to:
5.1 Financial Statements. Furnish to the Administrative Agent and each
Lender:
(a) as soon as available, but in any event within 120 days after
the end of each fiscal year of the Borrower, a copy of the audited
consolidated balance sheet of the Borrower and its consolidated
Subsidiaries as at the end of such fiscal year and the related audited
consolidated statements of income and of cash flows for such fiscal
year, setting forth in each case in comparative form the figures for the
previous fiscal year, reported on without a "going concern" or like
qualification or exception, or qualification arising out of the scope of
the audit, by Arthur Andersen or other independent certified public
accountants of nationally recognized standing; and
(b) as soon as available, but in any event not later than 60 days
after the end of each of the first three quarterly periods of each
fiscal year of the Borrower, the unaudited consolidated balance sheet of
the Borrower and its consolidated Subsidiaries as at the end of such
quarter and the related unaudited consolidated statements of income and
of cash flows for such quarter and the portion of the fiscal year
through the end of such quarter, setting forth in each case in
comparative form the figures for the previous year, certified by a
Responsible Officer as being fairly stated in all material respects
(subject to normal year-end audit adjustments).
All such financial statements shall be complete and correct in all material
respects and shall be prepared in reasonable detail and in accordance with GAAP
applied consistently throughout the periods reflected therein and with prior
periods (except as approved by such accountants or officer, as the case may be,
and disclosed therein).
509253-0191-02261-99A5F10H-CRA
31
5.2 Certificates; Other Information. Furnish to the Administrative Agent
and each Lender (or, in the case of clause (c), to the relevant Lender):
(a) concurrently with the delivery of any financial statements
pursuant to Section 5.1, (i) a certificate of a Responsible Officer
stating that, to the best of each such Responsible Officer's knowledge,
the Borrower during such period has observed or performed all of its
covenants and other agreements, and satisfied every condition, contained
in this Agreement to be observed, performed or satisfied by it, and that
such Responsible Officer has obtained no knowledge of any Default or
Event of Default except as specified in such certificate and (ii) in the
case of quarterly or annual financial statements, a compliance
certificate containing all information and calculations necessary for
determining compliance with the provisions of Section 6.1 of this
Agreement referred to therein as of the last day of the fiscal quarter
or fiscal year of the Borrower, as the case may be;
(b) within five days after the same are sent, copies of all
financial statements and reports that the Borrower sends to the holders
of any class of its debt securities or public equity securities and,
within five days after the same are filed, copies of all financial
statements and reports that the Borrower may make to, or file with, the
SEC; and
(c) promptly, such additional financial and other information as
any Lender may from time to time reasonably request.
5.3 Payment of Obligations. Pay, discharge or otherwise satisfy
at or before maturity or before they become delinquent, as the case may be, all
its material obligations of whatever nature, except where (i) the amount or
validity thereof is currently being contested in good faith by appropriate
proceedings and reserves in conformity with GAAP with respect thereto have been
provided on the books of the Borrower or its Subsidiaries, as the case may be or
(ii) the failure to do so could not reasonably be expected to have a Material
Adverse Effect.
5.4 Maintenance of Existence; Compliance. (a) In the case of the
Borrower and each of its Significant Subsidiaries, (i) preserve, renew and keep
in full force and effect its corporate existence and (ii) take all reasonable
action to maintain all rights, privileges and franchises necessary or desirable
in the normal conduct of its business, except, in each case, as otherwise
permitted by Section 6.3 and except, in the case of clause (ii) above, to the
extent that failure to do so could not reasonably be expected to have a Material
Adverse Effect; and (b) comply with all Contractual Obligations and Requirements
of Law except to the extent that failure to comply therewith could not, in the
aggregate, reasonably be expected to have a Material Adverse Effect.
5.5 Maintenance of Property; Insurance. (a) Keep all property
useful and necessary in its business in good working order and condition,
ordinary wear and tear excepted and (b) maintain with financially sound and
reputable insurance companies insurance on all its property in at least such
amounts and against at least such risks (but including, in any event, public
liability, product liability and business interruption) as are usually insured
against in the same general area by companies engaged in the same or a similar
business.
5.6 Inspection of Property; Books and Records; Discussions. (a) Keep proper
books of records and account in which full, true and correct entries in
conformity with GAAP and all
509253-0191-02261-99A5F10H-CRA
32
Requirements of Law shall be made of all dealings and transactions in relation
to its business and activities and (b) permit representatives of any Lender to
visit and inspect any of its properties and examine and make abstracts from any
of its books and records at any reasonable time and as often as may reasonably
be desired and to discuss the business, operations, properties and financial and
other condition of the Borrower and its Subsidiaries with officers and employees
of the Borrower and its Subsidiaries and with its independent certified public
accountants.
5.7 Notices. Promptly give notice to the Administrative Agent and each
Lender of:
(a) the occurrence of any Default or Event of Default;
(b) any (i) default or event of default under any Contractual
Obligation of the Borrower or any of its Subsidiaries or (ii)
litigation, investigation or proceeding that may exist at any time
between the Borrower or any of its Subsidiaries and any Governmental
Authority, that, in either case, if not cured or if adversely
determined, as the case may be, could reasonably be expected to have a
Material Adverse Effect;
(c) any litigation or proceeding affecting the Borrower or any of
its Subsidiaries in which the amount involved is $25,000,000 or more and
not covered by insurance or in which injunctive or similar relief is
sought;
(d) the following events, as soon as possible and in any event
within 30 days after the Borrower knows or has reason to know thereof:
(i) the occurrence of any Reportable Event with respect to any Plan, a
failure to make any required contribution to a Plan, the creation of any
Lien in favor of the PBGC or a Plan or any withdrawal from, or the
termination, Reorganization or Insolvency of, any Multiemployer Plan or
(ii) the institution of proceedings or the taking of any other action by
the PBGC or the Borrower or any Commonly Controlled Entity or any
Multiemployer Plan with respect to the withdrawal from, or the
termination, Reorganization or Insolvency of, any Plan; and
(e) any development or event that has had or could reasonably be
expected to have a Material Adverse Effect.
Each notice pursuant to this Section 5.7 shall be accompanied by a statement of
a Responsible Officer setting forth details of the occurrence referred to
therein and stating what action the Borrower or the relevant Subsidiary proposes
to take with respect thereto.
5.8 Environmental Laws. (a) Comply in all material respects with,
and ensure compliance in all material respects by all tenants and subtenants, if
any, with, all applicable Environmental Laws, and obtain and comply in all
material respects with and maintain, and ensure that all tenants and subtenants
obtain and comply in all material respects with and maintain, any and all
licenses, approvals, notifications, registrations or permits required by
applicable Environmental Laws.
(b) Conduct and complete all investigations, studies, sampling
and testing, and all remedial, removal and other actions required under
Environmental Laws and promptly comply in all material respects with all lawful
orders and directives of all Governmental Authorities regarding Environmental
Laws.
509253-0191-02261-99A5F10H-CRA
33
5.9 Transaction with Affiliates. Enter into any transaction,
including any purchase, sale, lease or exchange of property, the rendering of
any service or the payment of any management, advisory or similar fees, with any
Affiliates (other than the Borrower) upon fair and reasonable terms no less
favorable to the Borrower or such Subsidiary, as the case may be, than it would
obtain in a comparable arm's length transaction with a Person that is not an
Affiliate.
SECTION 6. NEGATIVE COVENANTS
The Borrower hereby agrees that, so long as the Commitments
remain in effect or any Loan or other amount is owing to any Lender or the
Administrative Agent hereunder, the Borrower shall not, and shall not permit any
of its Subsidiaries to, directly or indirectly:
6.1 Financial Condition Covenant. Permit the ratio of Consolidated Total
Debt to Consolidated Capitalization as at the last day of any fiscal quarter to
exceed 0.65:1.0.
6.2 Liens. Create, incur, assume or suffer to exist any Lien upon
any of its property, whether now owned or hereafter acquired, except for:
(a) Liens for taxes not yet due or that are being contested in
good faith by appropriate proceedings, provided that adequate reserves
with respect thereto are maintained on the books of the Borrower or its
Subsidiaries, as the case may be, in conformity with GAAP;
(b) carriers', warehousemen's, mechanics', materialmen's,
repairmen's or other like Liens arising in the ordinary course of
business that are not overdue for a period of more than 30 days or that
are being contested in good faith by appropriate proceedings;
(c) pledges or deposits in connection with workers' compensation,
unemployment insurance and other social security legislation;
(d) deposits to secure the performance of bids, trade contracts
(other than for borrowed money), leases, statutory obligations, surety
and appeal bonds, performance bonds and other obligations of a like
nature incurred in the ordinary course of business;
(e) easements, rights-of-way, restrictions and other similar
encumbrances incurred in the ordinary course of business that, in the
aggregate, are not substantial in amount and that do not in any case
materially detract from the value of the property subject thereto or
materially interfere with the ordinary conduct of the business of the
Borrower or any of its Subsidiaries;
(f) Liens in existence on the date hereof listed on Schedule
6.2(f), securing Indebtedness outstanding on the date hereof, provided
that no such Lien is spread to cover any additional property after the
Closing Date and that the amount of Indebtedness secured thereby is not
increased;
(g) Liens securing Indebtedness of the Borrower or any other
Subsidiary incurred to finance the acquisition of fixed or capital
assets (including, without limitation, Capital Lease Obligations),
provided that (i) such Liens shall be created substantially
simultaneously with the
509253-0191-02261-99A5F10H-CRA
34
acquisition of such fixed or capital assets and (ii) such Liens do not
at any time encumber any property other than the property financed by
such Indebtedness;
(h) any interest or title of a lessor under any lease entered
into by the Borrower or any other Subsidiary in the ordinary course of
its business and covering only the assets so leased; and
(i) Liens not otherwise permitted by this Section so long as
neither (i) the aggregate outstanding principal amount of the
obligations secured thereby nor (ii) the aggregate fair market value
(determined as of the date such Lien is incurred) of the assets subject
thereto exceeds (as to the Borrower and all Subsidiaries) $25,000,000 at
any one time.
6.3 Fundamental Changes. In the case of the Borrower and any
Significant Subsidiary, enter into any merger, consolidation or amalgamation, or
liquidate, wind up or dissolve itself (or suffer any liquidation or
dissolution), or Dispose of, all or substantially all of its property or
business, except that:
(a) any Subsidiary of the Borrower may be merged or consolidated
with or into the Borrower (provided that the Borrower shall be the
continuing or surviving corporation);
(b) any Subsidiary of the Borrower may Dispose of any or all of its assets
(upon voluntary liquidation or otherwise) to the Borrower; and
(c) any Disposition permitted under Section 6.4.
6.4 Disposition of Property. Dispose of any of the Borrower's or
any Significant Subsidiaries' property, whether now owned or hereafter acquired,
or, in the case of any Significant Subsidiary, issue or sell any shares of such
Significant Subsidiary's Capital Stock to any Person, except:
(a) the Disposition of obsolete or worn out property in the ordinary course
of business;
(b) the sale of inventory in the ordinary course of business;
(c) Dispositions permitted by Section 6.3(b); and
(d) the sale or issuance of any Significant Subsidiary's Capital
Stock to the Borrower or any other Significant Subsidiary.
6.5 Negative Pledge Clauses. Enter into or suffer to exist or
become effective any agreement that prohibits or limits the ability of the
Borrower or any of its Subsidiaries to create, incur, assume or suffer to exist
any Lien upon any of its property or revenues, whether now owned or hereafter
acquired, other than (a) this Agreement, (b) any agreements governing any
purchase money Liens or Capital Lease Obligations otherwise permitted hereby (in
which case, any prohibition or limitation shall only be effective against the
assets financed thereby) and (c) any agreements listed on Schedule 6.5 and any
extensions, renewals or replacements thereof having substantially similar
provisions with respect thereto.
509253-0191-02261-99A5F10H-CRA
35
6.6 Limitation on Restrictions on Distributions from
Subsidiaries. Create or otherwise cause or permit to exist or become effective
any consensual encumbrance or consensual restriction on the ability of any
Subsidiary to pay dividends or make any other distribution on its Capital Stock,
other than any encumbrance or restriction pursuant to an agreement in effect on
the Closing Date as set forth on Schedule 6.6.
SECTION 7. EVENTS OF DEFAULT
If any of the following events shall occur and be continuing:
(a) the Borrower shall fail to pay any principal of any Loan when
due in accordance with the terms hereof; or the Borrower shall fail to
pay any interest on any Loan, or any other amount payable hereunder or
under any other Loan Document, within five days after any such interest
or other amount becomes due in accordance with the terms hereof; or
(b) any representation or warranty made or deemed made by the
Borrower herein or that is contained in any certificate, document or
financial or other statement furnished by it at any time under or in
connection with this Agreement shall prove to have been inaccurate in
any material respect on or as of the date made or deemed made; or
(c) the Borrower shall default in the observance or performance
of any agreement contained in clause (i) or (ii) of Section 5.4(a),
Section 5.7(a) or Section 6 of this Agreement; or
(d) the Borrower shall default in the observance or performance
of any other agreement contained in this Agreement or any other Loan
Document (other than as provided in paragraphs (a) through (c) of this
Section), and such default shall continue unremedied for a period of 30
days after notice to the Borrower from the Administrative Agent or any
Lender; or
(e) the Borrower or any of its Subsidiaries shall (i) default in
making any payment of any principal of any Indebtedness (including any
Guarantee Obligation, but excluding the Loans) on the scheduled or
original due date with respect thereto; or (ii) default in making any
payment of any interest on any such Indebtedness beyond the period of
grace, if any, provided in the instrument or agreement under which such
Indebtedness was created; or (iii) default in the observance or
performance of any other agreement or condition relating to any such
Indebtedness or contained in any instrument or agreement evidencing,
securing or relating thereto, or any other event shall occur or
condition exist, the effect of such default or other event or condition
is to cause, or to permit the holder or beneficiary of such Indebtedness
(or a trustee or agent on behalf of such holder or beneficiary) to
cause, with the giving of notice if required, such Indebtedness to
become due prior to its stated maturity or (in the case of any such
Indebtedness constituting a Guarantee Obligation) to become payable;
provided, that a default, event or condition described in clause (i),
(ii) or (iii) of this paragraph (e) shall not at any time constitute an
Event of Default unless, at such time, one or more defaults, events or
conditions of the type described in clauses (i), (ii) and (iii) of this
paragraph (e) shall have occurred and be continuing with respect to
Indebtedness the outstanding principal amount of which exceeds in the
aggregate $25,000,000; or
509253-0191-02261-99A5F10H-CRA
36
(f) (i) the Borrower or any of its Subsidiaries shall commence
any case, proceeding or other action (A) under any existing or future
law of any jurisdiction, domestic or foreign, relating to bankruptcy,
insolvency, reorganization or relief of debtors, seeking to have an
order for relief entered with respect to it, or seeking to adjudicate it
bankrupt or insolvent, or seeking reorganization, arrangement,
adjustment, winding-up, liquidation, dissolution, composition or other
relief with respect to it or its debts, or (B) seeking appointment of a
receiver, trustee, custodian, conservator or other similar official for
it or for all or any substantial part of its assets, or the Borrower or
any of its Subsidiaries shall make a general assignment for the benefit
of its creditors; or (ii) there shall be commenced against the Borrower
or any of its Subsidiaries any case, proceeding or other action of a
nature referred to in clause (i) above that (A) results in the entry of
an order for relief or any such adjudication or appointment or (B)
remains undismissed, undischarged or unbonded for a period of 60 days;
or (iii) there shall be commenced against the Borrower or any of its
Subsidiaries any case, proceeding or other action seeking issuance of a
warrant of attachment, execution, distraint or similar process against
all or any substantial part of its assets that results in the entry of
an order for any such relief that shall not have been vacated,
discharged, or stayed or bonded pending appeal within 60 days from the
entry thereof; or (iv) the Borrower or any of its Subsidiaries shall
take any action in furtherance of, or indicating its consent to,
approval of, or acquiescence in, any of the acts set forth in clause
(i), (ii), or (iii) above; or (v) the Borrower or any of its
Subsidiaries shall generally not, or shall be unable to, or shall admit
in writing its inability to, pay its debts as they become due; or
(g) (i) any Person shall engage in any "prohibited transaction"
(as defined in Section 406 of ERISA or Section 4975 of the Code)
involving any Plan, (ii) any "accumulated funding deficiency" (as
defined in Section 302 of ERISA), whether or not waived, shall exist
with respect to any Plan or any Lien in favor of the PBGC or a Plan
shall arise on the assets of the Borrower or any Commonly Controlled
Entity, (iii) a Reportable Event shall occur with respect to, or
proceedings shall commence to have a trustee appointed, or a trustee
shall be appointed, to administer or to terminate, any Single Employer
Plan, which Reportable Event or commencement of proceedings or
appointment of a trustee is, in the reasonable opinion of the Required
Lenders, likely to result in the termination of such Plan for purposes
of Title IV of ERISA, (iv) any Single Employer Plan shall terminate for
purposes of Title IV of ERISA, (v) the Borrower or any Commonly
Controlled Entity shall, or in the reasonable opinion of the Required
Lenders is likely to, incur any liability in connection with a
withdrawal from, or the Insolvency or Reorganization of, a Multiemployer
Plan or (vi) any other event or condition shall occur or exist with
respect to a Plan; and in each case in clauses (i) through (vi) above,
such event or condition, together with all other such events or
conditions, if any, could, in the sole judgment of the Required Lenders,
reasonably be expected to have a Material Adverse Effect; or
(h) one or more judgments or decrees shall be entered against the
Borrower or any of its Subsidiaries involving in the aggregate a
liability (not paid or fully covered by insurance as to which the
relevant insurance company has acknowledged coverage) of $25,000,000 or
more, and all such judgments or decrees shall not have been vacated,
discharged, stayed or bonded pending appeal within 30 days from the
entry thereof; or
(i) any "person" or "group" (as such terms are used in Sections
13(d) and 14(d) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act")) shall become, or obtain rights (whether by means or
warrants, options or otherwise) to become, the "beneficial owner"
509253-0191-02261-99A5F10H-CRA
37
(as defined in Rules 13(d)-3 and 13(d)-5 under the Exchange Act),
directly or indirectly, of more than 20% of the outstanding common stock
of the Borrower;
then, and in any such event, (A) if such event is an Event of Default specified
in clause (i) or (ii) of paragraph (f) above with respect to the Borrower,
automatically the Commitments shall immediately terminate and the Loans
hereunder (with accrued interest thereon) and all other amounts owing under this
Agreement and the other Loan Documents shall immediately become due and payable,
and (B) if such event is any other Event of Default, either or both of the
following actions may be taken: (i) with the consent of the Required Lenders,
the Administrative Agent may, or upon the request of the Required Lenders, the
Administrative Agent shall, by notice to the Borrower declare the Commitments to
be terminated forthwith, whereupon the Commitments shall immediately terminate;
and (ii) with the consent of the Required Lenders, the Administrative Agent may,
or upon the request of the Required Lenders, the Administrative Agent shall, by
notice to the Borrower, declare the Loans hereunder (with accrued interest
thereon) and all other amounts owing under this Agreement and the other Loan
Documents to be due and payable forthwith, whereupon the same shall immediately
become due and payable. Except as expressly provided above in this Section,
presentment, demand, protest and all other notices of any kind are hereby
expressly waived by the Borrower.
SECTION 8. THE ADMINISTRATIVE AGENT
8.1 Appointment. Each Lender hereby irrevocably designates and
appoints the Administrative Agent as the agent of such Lender under this
Agreement and the other Loan Documents, and each such Lender irrevocably
authorizes the Administrative Agent, in such capacity, to take such action on
its behalf under the provisions of this Agreement and the other Loan Documents
and to exercise such powers and perform such duties as are expressly delegated
to the Administrative Agent by the terms of this Agreement and the other Loan
Documents, together with such other powers as are reasonably incidental thereto.
Notwithstanding any provision to the contrary elsewhere in this Agreement, the
Administrative Agent shall not have any duties or responsibilities, except those
expressly set forth herein, or any fiduciary relationship with any Lender, and
no implied covenants, functions, responsibilities, duties, obligations or
liabilities shall be read into this Agreement or any other Loan Document or
otherwise exist against the Administrative Agent.
8.2 Delegation of Duties. The Administrative Agent may execute
any of its duties under this Agreement and the other Loan Documents by or
through agents or attorneys-in-fact and shall be entitled to advice of counsel
concerning all matters pertaining to such duties. The Administrative Agent shall
not be responsible for the negligence or misconduct of any agents or attorneys
in-fact selected by it with reasonable care.
8.3 Exculpatory Provisions. Neither the Administrative Agent nor
any of its officers, directors, employees, agents, attorneys-in-fact or
affiliates shall be (i) liable for any action lawfully taken or omitted to be
taken by it or such Person under or in connection with this Agreement or any
other Loan Document (except to the extent that any of the foregoing are found by
a final and nonappealable decision of a court of competent jurisdiction to have
resulted from its or such Person's own gross negligence or willful misconduct)
or (ii) responsible in any manner to any of the Lenders for any recitals,
statements, representations or warranties made by the Borrower or any officer
thereof contained in this Agreement or any other Loan Document or in any
certificate, report, statement or other document referred to or provided for in,
or received by the Administrative Agent under or in connection with, this
Agreement or
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any other Loan Document or for the value, validity, effectiveness, genuineness,
enforceability or sufficiency of this Agreement or any other Loan Document or
for any failure of the Borrower to perform its obligations hereunder or
thereunder. The Administrative Agent shall not be under any obligation to any
Lender to ascertain or to inquire as to the observance or performance of any of
the agreements contained in, or conditions of, this Agreement or any other Loan
Document, or to inspect the properties, books or records of the Borrower.
8.4 Reliance by Administrative Agent. The Administrative Agent
shall be entitled to rely, and shall be fully protected in relying, upon any
instrument, writing, resolution, notice, consent, certificate, affidavit,
letter, telecopy, telex or teletype message, statement, order or other document
or conversation believed by it to be genuine and correct and to have been
signed, sent or made by the proper Person or Persons and upon advice and
statements of legal counsel (including counsel to the Borrower), independent
accountants and other experts selected by the Administrative Agent. The
Administrative Agent may deem and treat the payee of any Note as the owner
thereof for all purposes unless a written notice of assignment, negotiation or
transfer thereof shall have been filed with the Administrative Agent. The
Administrative Agent shall be fully justified in failing or refusing to take any
action under this Agreement or any other Loan Document unless it shall first
receive such advice or concurrence of the Required Lenders (or, if so specified
by this Agreement, all Lenders) as it deems appropriate or it shall first be
indemnified to its satisfaction by the Lenders against any and all liability and
expense that may be incurred by it by reason of taking or continuing to take any
such action. The Administrative Agent shall in all cases be fully protected in
acting, or in refraining from acting, under this Agreement and the other Loan
Documents in accordance with a request of the Required Lenders (or, if so
specified by this Agreement, all Lenders), and such request and any action taken
or failure to act pursuant thereto shall be binding upon all the Lenders and all
future holders of the Loans.
8.5 Notice of Default. The Administrative Agent shall not be
deemed to have knowledge or notice of the occurrence of any Default or Event of
Default hereunder unless the Administrative Agent has received notice from a
Lender or the Borrower referring to this Agreement, describing such Default or
Event of Default and stating that such notice is a "notice of default". In the
event that the Administrative Agent receives such a notice, the Administrative
Agent shall give notice thereof to the Lenders. The Administrative Agent shall
take such action with respect to such Default or Event of Default as shall be
reasonably directed by the Required Lenders (or, if so specified by this
Agreement, all Lenders); provided that unless and until the Administrative Agent
shall have received such directions, the Administrative Agent may (but shall not
be obligated to) take such action, or refrain from taking such action, with
respect to such Default or Event of Default as it shall deem advisable in the
best interests of the Lenders.
8.6 Non-Reliance on Administrative Agent and Other Lenders. Each
Lender expressly acknowledges that neither the Administrative Agent nor any of
its officers, directors, employees, agents, attorneys-in-fact or affiliates have
made any representations or warranties to it and that no act by the
Administrative Agent hereinafter taken, including any review of the affairs of
the Borrower or any affiliate of the Borrower, shall be deemed to constitute any
representation or warranty by the Administrative Agent to any Lender. Each
Lender represents to the Administrative Agent that it has, independently and
without reliance upon the Administrative Agent or any other Lender, and based on
such documents and information as it has deemed appropriate, made its own
appraisal of and investigation into the business, operations, property,
financial and other condition and creditworthiness of the Borrower and its
affiliates and made its own decision to make its Loans hereunder and enter into
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39
this Agreement. Each Lender also represents that it will, independently and
without reliance upon the Administrative Agent or any other Lender, and based on
such documents and information as it shall deem appropriate at the time,
continue to make its own credit analysis, appraisals and decisions in taking or
not taking action under this Agreement and the other Loan Documents, and to make
such investigation as it deems necessary to inform itself as to the business,
operations, property, financial and other condition and creditworthiness of the
Borrower and its affiliates. Except for notices, reports and other documents
expressly required to be furnished to the Lenders by the Administrative Agent
hereunder, the Administrative Agent shall not have any duty or responsibility to
provide any Lender with any credit or other information concerning the business,
operations, property, condition (financial or otherwise), prospects or
creditworthiness of the Borrower or any affiliate of the Borrower that may come
into the possession of the Administrative Agent or any of its officers,
directors, employees, agents, attorneys-in-fact or affiliates.
8.7 Indemnification. The Lenders agree to indemnify the
Administrative Agent in its capacity as such (to the extent not reimbursed by
the Borrower and without limiting the obligation of the Borrower to do so),
ratably according to their respective Aggregate Exposure Percentages in effect
on the date on which indemnification is sought under this Section (or, if
indemnification is sought after the date upon which the Commitments shall have
terminated and the Loans shall have been paid in full, ratably in accordance
with such Aggregate Exposure Percentages immediately prior to such date), from
and against any and all liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements of any kind
whatsoever that may at any time (whether before or after the payment of the
Loans) be imposed on, incurred by or asserted against the Administrative Agent
in any way relating to or arising out of, the Commitments, this Agreement, any
of the other Loan Documents or any documents contemplated by or referred to
herein or therein or the transactions contemplated hereby or thereby or any
action taken or omitted by the Administrative Agent under or in connection with
any of the foregoing; provided that no Lender shall be liable for the payment of
any portion of such liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements that are found by a
final and nonappealable decision of a court of competent jurisdiction to have
resulted from the Administrative Agent's gross negligence or willful misconduct.
The agreements in this Section shall survive the payment of the Loans and all
other amounts payable hereunder.
8.8 Administrative Agent in Its Individual Capacity. The
Administrative Agent and its affiliates may make loans to, accept deposits from
and generally engage in any kind of business with the Borrower as though the
Administrative Agent was not the Administrative Agent. With respect to its Loans
made or renewed by it, the Administrative Agent shall have the same rights and
powers under this Agreement and the other Loan Documents as any Lender and may
exercise the same as though it were not the Administrative Agent, and the terms
"Lender" and "Lenders" shall include the Administrative Agent in its individual
capacity.
8.9 Successor Administrative Agent. The Administrative Agent may
resign as Administrative Agent upon 30 days' notice to the Lenders and the
Borrower. If the Administrative Agent shall resign as Administrative Agent under
this Agreement, then the Required Lenders shall appoint from among the Lenders a
successor agent for the Lenders, which successor agent shall (unless an Event of
Default under Section 7(a) or Section 7(f) with respect to the Borrower shall
have occurred and be continuing) be subject to approval by the Borrower (which
approval shall not be unreasonably withheld or delayed), whereupon such
successor agent shall succeed to the rights, powers and duties of the
Administrative Agent, and the term "Administrative Agent" shall mean such
successor agent effective
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upon such appointment and approval, and the former Administrative Agent's
rights, powers and duties as Administrative Agent shall be terminated, without
any other or further act or deed on the part of such former Administrative Agent
or any of the parties to this Agreement or any holders of the Loans. If no
successor agent has accepted appointment as Administrative Agent by the date
that is 30 days following a retiring Administrative Agent's notice of
resignation, the retiring Administrative Agent's resignation shall nevertheless
thereupon become effective and the Lenders shall assume and perform all of the
duties of the Administrative Agent hereunder until such time, if any, as the
Required Lenders appoint a successor agent as provided for above. After any
retiring Administrative Agent's resignation as Administrative Agent, the
provisions of this Section 8 shall inure to its benefit as to any actions taken
or omitted to be taken by it while it was Administrative Agent under this
Agreement and the other Loan Documents.
SECTION 9. MISCELLANEOUS
9.1 Amendments and Waivers. Neither this Agreement, any other
Loan Document, nor any terms hereof or thereof may be amended, supplemented or
modified except in accordance with the provisions of this Section 9.1. The
Required Lenders and the Borrower may, or, with the written consent of the
Required Lenders, the Administrative Agent and the Borrower may, from time to
time, (a) enter into written amendments, supplements or modifications hereto for
the purpose of adding any provisions to this Agreement or changing in any manner
the rights of the Lenders or of the Borrower hereunder or (b) waive, on such
terms and conditions as the Required Lenders or the Administrative Agent, as the
case may be, may specify in such instrument, any of the requirements of this
Agreement or any Default or Event of Default and its consequences; provided,
however, that no such waiver and no such amendment, supplement or modification
shall (i) eliminate or reduce any voting rights under this Section 9.1, forgive
the principal amount or extend the final scheduled date of maturity of any Loan,
reduce the stated rate of any interest or fee payable hereunder or extend the
scheduled date of any payment thereof, or increase the amount or extend the
expiration date of any Lender's Commitment, in each case without the consent of
each Lender directly affected thereby; (ii) reduce any percentage specified in
the definition of Required Lenders, consent to the assignment or transfer by the
Borrower of any of its rights and obligations under this Agreement and the other
Loan Documents, in each case without the consent of all Lenders; (iii) amend,
modify or waive any provision of Section 8 without the consent of the
Administrative Agent. Any such waiver and any such amendment, supplement or
modification shall apply equally to each of the Lenders and shall be binding
upon the Borrower, the Lenders, the Administrative Agent and all future holders
of the Loans. In the case of any waiver, the Borrower, the Lenders and the
Administrative Agent shall be restored to their former position and rights
hereunder and under the other Loan Documents, and any Default or Event of
Default waived shall be deemed to be cured and not continuing; but no such
waiver shall extend to any subsequent or other Default or Event of Default, or
impair any right consequent thereon.
9.2 Notices. All notices, requests and demands to or upon the
respective parties hereto to be effective shall be in writing (including by
telecopy), and, unless otherwise expressly provided herein, shall be deemed to
have been duly given or made when delivered, or three Business Days after being
deposited in the mail, postage prepaid, or, in the case of telecopy notice, when
received, addressed as follows in the case of the Borrower and the
Administrative Agent, and as set forth in an administrative questionnaire
delivered to the Administrative Agent in the case of the Lenders, or to such
other address as may be hereafter notified by the respective parties hereto:
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The Borrower: KeySpan Corporation
One MetroTech Center
Brooklyn, New York 11201
Attention: Norma Rodriguez
Telecopy: (718) 858-7105
The Administrative Agent: The Chase Manhattan Bank
Brooklyn Middle Market Bank Group
Four MetroTech Center
Brooklyn, New York 11245
Attention: Peter D'Agostino
Telecopy: (718) 242-3837
with a copy to: The Chase Manhattan Bank
Agency Bank Services
One Chase Manhattan Plaza
New York, New York
Telecopy: (212) 552-7400
provided that any notice, request or demand to or upon the Administrative Agent
or the Lenders shall not be effective until received.
9.3 No Waiver; Cumulative Remedies. No failure to exercise and no
delay in exercising, on the part of the Administrative Agent or any Lender, any
right, remedy, power or privilege hereunder or under the other Loan Documents
shall operate as a waiver thereof; nor shall any single or partial exercise of
any right, remedy, power or privilege hereunder preclude any other or further
exercise thereof or the exercise of any other right, remedy, power or privilege.
The rights, remedies, powers and privileges herein provided are cumulative and
not exclusive of any rights, remedies, powers and privileges provided by law.
9.4 Survival of Representations and Warranties. All
representations and warranties made hereunder and in any document, certificate
or statement delivered pursuant hereto or in connection herewith shall survive
the execution and delivery of this Agreement and the making of the Loans and
other extensions of credit hereunder.
9.5 Payment of Expenses and Taxes. The Borrower agrees (a) to pay
or reimburse the Administrative Agent for all its out-of-pocket costs and
expenses incurred in connection with the development, preparation and execution
of, and any amendment, supplement or modification to, this Agreement and the
other Loan Documents and any other documents prepared in connection herewith or
therewith, and the consummation and administration of the transactions
contemplated hereby and thereby, including the reasonable fees and disbursements
of counsel to the Administrative Agent and filing and recording fees and
expenses, with statements with respect to the foregoing to be submitted to the
Borrower prior to the Closing Date (in the case of amounts to be paid on the
Closing Date) and from time to time thereafter on a quarterly basis or such
other periodic basis as the Administrative Agent shall deem appropriate, (b) to
pay or reimburse each Lender and the Administrative Agent for all its costs and
expenses incurred in connection with the enforcement or preservation of any
rights under this Agreement, the other Loan Documents and any such other
documents, including the fees and
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42
disbursements of counsel (including the allocated fees and expenses of in-house
counsel) to each Lender and of counsel to the Administrative Agent, (c) to pay,
indemnify, and hold each Lender and the Administrative Agent harmless from, any
and all recording and filing fees and any and all liabilities with respect to,
or resulting from any delay in paying, stamp, excise and other taxes, if any,
that may be payable or determined to be payable in connection with the execution
and delivery of, or consummation or administration of any of the transactions
contemplated by, or any amendment, supplement or modification of, or any waiver
or consent under or in respect of, this Agreement, the other Loan Documents and
any such other documents, and (d) to pay, indemnify, and hold each Lender and
the Administrative Agent and their respective officers, directors, employees,
affiliates, agents and controlling persons (each, an "Indemnitee") harmless from
and against any and all other liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements of any
kind or nature whatsoever with respect to the execution, delivery, enforcement,
performance and administration of this Agreement, the other Loan Documents and
any such other documents, including any of the foregoing relating to the use of
proceeds of the Loans or the violation of, noncompliance with or liability
under, any Environmental Law applicable to the operations of the Borrower any of
its Subsidiaries or any of the Properties and the reasonable fees and expenses
of legal counsel in connection with claims, actions or proceedings by any
Indemnitee against the Borrower under any Loan Document (all the foregoing in
this clause (d), collectively, the "Indemnified Liabilities"), provided, that
the Borrower shall have no obligation hereunder to any Indemnitee with respect
to Indemnified Liabilities to the extent such Indemnified Liabilities are found
by a final and nonappealable decision of a court of competent jurisdiction to
have resulted from the gross negligence or willful misconduct of such
Indemnitee. Without limiting the foregoing, and to the extent permitted by
applicable law, the Borrower agrees not to assert and to cause its Subsidiaries
not to assert, and hereby waives and agrees to cause its Subsidiaries to so
waive, all rights for contribution or any other rights of recovery with respect
to all claims, demands, penalties, fines, liabilities, settlements, damages,
costs and expenses of whatever kind or nature, under or related to Environmental
Laws, that any of them might have by statute or otherwise against any
Indemnitee. All amounts due under this Section 9.5 shall be payable promptly
after written demand therefor. The agreements in this Section 9.5 shall survive
repayment of the Loans and all other amounts payable hereunder.
9.6 Successors and Assigns; Participations and Assignments. (a)
This Agreement shall be binding upon and inure to the benefit of the Borrower,
the Lenders, the Administrative Agent, all future holders of the Loans and their
respective successors and assigns, except that the Borrower may not assign or
transfer any of its rights or obligations under this Agreement without the prior
written consent of each Lender.
(b) Any Lender may, without the consent of the Borrower, in
accordance with applicable law, at any time sell to one or more banks, financial
institutions or other entities (each, a "Participant") participating interests
in any Loan owing to such Lender, any Commitment of such Lender or any other
interest of such Lender hereunder and under the other Loan Documents. In the
event of any such sale by a Lender of a participating interest to a Participant,
such Lender's obligations under this Agreement to the other parties to this
Agreement shall remain unchanged, such Lender shall remain solely responsible
for the performance thereof, such Lender shall remain the holder of any such
Loan for all purposes under this Agreement and the other Loan Documents, and the
Borrower and the Administrative Agent shall continue to deal solely and directly
with such Lender in connection with such Lender's rights and obligations under
this Agreement and the other Loan Documents. In no event shall any Participant
under any such participation have any right to approve any amendment or waiver
of any
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43
provision of any Loan Document, or any consent to any departure by the Borrower
therefrom, except to the extent that such amendment, waiver or consent would
reduce the principal of, or interest on, the Loans or any fees payable
hereunder, or postpone the date of the final maturity of the Loans, in each case
to the extent subject to such participation. The Borrower agrees that if amounts
outstanding under this Agreement and the Loans are due or unpaid, or shall have
been declared or shall have become due and payable upon the occurrence of an
Event of Default, each Participant shall, to the maximum extent permitted by
applicable law, be deemed to have the right of setoff in respect of its
participating interest in amounts owing under this Agreement to the same extent
as if the amount of its participating interest were owing directly to it as a
Lender under this Agreement, provided that, in purchasing such participating
interest, such Participant shall be deemed to have agreed to share with the
Lenders the proceeds thereof as provided in Section 9.7(a) as fully as if it
were a Lender hereunder. The Borrower also agrees that each Participant shall be
entitled to the benefits of Sections 2.13, 2.14 and 2.15 with respect to its
participation in the Commitments and the Loans outstanding from time to time as
if it was a Lender; provided that, in the case of Section 2.14, such Participant
shall have complied with the requirements of said Section and provided, further,
that no Participant shall be entitled to receive any greater amount pursuant to
any such Section than the transferor Lender would have been entitled to receive
in respect of the amount of the participation transferred by such transferor
Lender to such Participant had no such transfer occurred.
(c) Any Lender (an "Assignor") may, in accordance with applicable
law, at any time and from time to time assign to any Lender, any affiliate of
any Lender or any Approved Fund or, with the consent of the Borrower and the
Administrative Agent (which, in each case, shall not be unreasonably withheld or
delayed), to an additional bank, financial institution or other entity (an
"Assignee") all or, except in the case of an outstanding Competitive Loan, any
part of its rights and obligations under this Agreement pursuant to an
Assignment and Acceptance, executed by such Assignee, such Assignor and any
other Person whose consent is required pursuant to this paragraph, and delivered
to the Administrative Agent for its acceptance and recording in the Register;
provided that no such assignment to an Assignee (other than any Lender, any
affiliate of any Lender or any Approved Fund) shall be in an aggregate principal
amount of less than $5,000,000 (other than in the case of an assignment of all
of a Lender's interests under this Agreement), unless otherwise agreed by the
Borrower and the Administrative Agent. For purposes of the proviso contained in
the preceding sentence, the amount described therein shall be aggregated in
respect of each Lender and its related Approved Funds, if any. Upon such
execution, delivery, acceptance and recording, from and after the effective date
determined pursuant to such Assignment and Acceptance, (x) the Assignee
thereunder shall be a party hereto and, to the extent provided in such
Assignment and Acceptance, have the rights and obligations of a Lender hereunder
with a Commitment and/or Loans as set forth therein, and (y) the Assignor
thereunder shall, to the extent provided in such Assignment and Acceptance, be
released from its obligations under this Agreement (and, in the case of an
Assignment and Acceptance covering all of an Assignor's rights and obligations
under this Agreement, such Assignor shall cease to be a party hereto).
Notwithstanding any provision of this Section 9.6, the consent of the Borrower
shall not be required for any assignment that occurs when an Event of Default
pursuant to Section 7(f) shall have occurred and be continuing with respect to
the Borrower.
(d) The Administrative Agent shall, on behalf of the Borrower,
maintain at its address referred to in Section 9.2 a copy of each Assignment and
Acceptance delivered to it and a register (the "Register") for the recordation
of the names and addresses of the Lenders and the Commitment of, and the
principal amount of the Loans owing to, each Lender from time to time. The
entries in the Register
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shall be conclusive, in the absence of manifest error, and the Borrower, each
other Loan Party, the Administrative Agent and the Lenders shall treat each
Person whose name is recorded in the Register as the owner of the Loans and any
Notes evidencing the Loans recorded therein for all purposes of this Agreement.
Any assignment of any Loan, whether or not evidenced by a Note, shall be
effective only upon appropriate entries with respect thereto being made in the
Register (and each Note shall expressly so provide). Any assignment or transfer
of all or part of a Loan evidenced by a Note shall be registered on the Register
only upon surrender for registration of assignment or transfer of the Note
evidencing such Loan, accompanied by a duly executed Assignment and Acceptance,
and thereupon one or more new Notes shall be issued to the designated Assignee.
(e) Upon its receipt of an Assignment and Acceptance executed by
an Assignor, an Assignee and any other Person whose consent is required by
Section 9.6(c), together with payment to the Administrative Agent of a
registration and processing fee of $3,500, the Administrative Agent shall (i)
promptly accept such Assignment and Acceptance and (ii) record the information
contained therein in the Register on the effective date determined pursuant
thereto.
(f) For avoidance of doubt, the parties to this Agreement
acknowledge that the provisions of this Section 9.6 concerning assignments of
Loans and Notes relate only to absolute assignments and that such provisions do
not prohibit assignments creating security interests, including any pledge or
assignment by a Lender of any Loan or Note to any Federal Reserve Bank in
accordance with applicable law.
(g) The Borrower, upon receipt of written notice from the
relevant Lender, agrees to issue Notes to any Lender requiring Notes to
facilitate transactions of the type described in paragraph (f) above.
9.7 Adjustments; Set-off. (a) Except to the extent that this
Agreement expressly provides for payments to be allocated to a particular
Lender, if any Lender (a "Benefitted Lender") shall, at any time after the Loans
and other amounts payable hereunder shall immediately become due and payable
pursuant to Section 7, receive any payment of all or part of the Obligations
owing to it (whether voluntarily or involuntarily, by set-off, pursuant to
events or proceedings of the nature referred to in Section 7(f), or otherwise),
in a greater proportion than any such payment to any other Lender, if any, in
respect of the Obligations owing to such other Lender, such Benefitted Lender
shall purchase for cash from the other Lenders a participating interest in such
portion of the Obligations owing to each such other Lender, as shall be
necessary to cause such Benefitted Lender to share the excess payment ratably
with each of the Lenders; provided, however, that if all or any portion of such
excess payment is thereafter recovered from such Benefitted Lender, such
purchase shall be rescinded, and the purchase price returned, to the extent of
such recovery, but without interest.
(b) In addition to any rights and remedies of the Lenders
provided by law, each Lender shall have the right, without prior notice to the
Borrower, any such notice being expressly waived by the Borrower to the extent
permitted by applicable law, upon any amount becoming due and payable by the
Borrower hereunder (whether at the stated maturity, by acceleration or
otherwise), to set off and appropriate and apply against such amount any and all
deposits (general or special, time or demand, provisional or final), in any
currency, and any other credits, indebtedness or claims, in any currency, in
each case whether direct or indirect, absolute or contingent, matured or
unmatured, at any time held or owing by such Lender or any branch or agency
thereof to or for the credit or the account of the Borrower,
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45
as the case may be. Each Lender agrees promptly to notify the Borrower and the
Administrative Agent after any such setoff and application made by such Lender,
provided that the failure to give such notice shall not affect the validity of
such setoff and application.
9.8 Counterparts. This Agreement may be executed by one or more
of the parties to this Agreement on any number of separate counterparts, and all
of said counterparts taken together shall be deemed to constitute one and the
same instrument. Delivery of an executed signature page of this Agreement by
facsimile transmission shall be effective as delivery of a manually executed
counterpart hereof. A set of the copies of this Agreement signed by all the
parties shall be lodged with the Borrower and the Administrative Agent.
9.9 Severability. Any provision of this Agreement that is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
9.10 Integration. This Agreement and the other Loan Documents
represent the agreement of the Borrower, the Administrative Agent and the
Lenders with respect to the subject matter hereof, and there are no promises,
undertakings, representations or warranties by the Administrative Agent or any
Lender relative to subject matter hereof not expressly set forth or referred to
herein or in the other Loan Documents.
9.11 GOVERNING LAW. THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS
OF THE PARTIES UNDER THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED AND
INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.
9.12 Submission To Jurisdiction; Waivers. The Borrower hereby irrevocably
and unconditionally:
(a) submits for itself and its property in any legal action or
proceeding relating to this Agreement and the other Loan Documents, or
for recognition and enforcement of any judgment in respect thereof, to
the non-exclusive general jurisdiction of the courts of the State of New
York, the courts of the United States for the Southern District of New
York, and appellate courts from any thereof;
(b) consents that any such action or proceeding may be brought in
such courts and waives any objection that it may now or hereafter have
to the venue of any such action or proceeding in any such court or that
such action or proceeding was brought in an inconvenient court and
agrees not to plead or claim the same;
(c) agrees that service of process in any such action or
proceeding may be effected by mailing a copy thereof by registered or
certified mail (or any substantially similar form of mail), postage
prepaid, to the Borrower, as the case may be at its address set forth in
Section 9.2 or at such other address of which the Administrative Agent
shall have been notified pursuant thereto;
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46
(d) agrees that nothing herein shall affect the right to effect
service of process in any other manner permitted by law or shall limit
the right to sue in any other jurisdiction; and
(e) waives, to the maximum extent not prohibited by law, any
right it may have to claim or recover in any legal action or proceeding
referred to in this Section any special, exemplary, punitive or
consequential damages.
9.13 Acknowledgements. The Borrower hereby acknowledges that:
----------------
(a) it has been advised by counsel in the negotiation, execution and
delivery of this Agreement and the other Loan Documents;
(b) neither the Administrative Agent nor any Lender has any
fiduciary relationship with or duty to the Borrower arising out of or in
connection with this Agreement or any of the other Loan Documents, and
the relationship between the Administrative Agent and the Lenders, on
one hand, and the Borrower, on the other hand, in connection herewith or
therewith is solely that of debtor and creditor; and
(c) no joint venture is created hereby or by the other Loan
Documents or otherwise exists by virtue of the transactions contemplated
hereby among the Lenders or among the Borrower and the Lenders.
9.14 Confidentiality. Each of the Administrative Agent and each
Lender agrees to keep confidential all non-public information provided to it by
the Borrower pursuant to this Agreement that is designated by the Borrower as
confidential; provided that nothing herein shall prevent the Administrative
Agent or any Lender from disclosing any such information (a) to the
Administrative Agent, any other Lender, any affiliate of any Lender or any
Approved Fund, (b) to any Transferee or prospective Transferee that agrees to
comply with the provisions of this Section, (c) to its employees, directors,
agents, attorneys, accountants and other professional advisors or those of any
of its affiliates, (d) upon the request or demand of any Governmental Authority,
(e) in response to any order of any court or other Governmental Authority or as
may otherwise be required pursuant to any Requirement of Law, (f) if requested
or required to do so in connection with any litigation or similar proceeding,
(g) that has been publicly disclosed, (h) to the National Association of
Insurance Commissioners or any similar organization or any nationally recognized
rating agency that requires access to information about a Lender's investment
portfolio in connection with ratings issued with respect to such Lender, or (i)
in connection with the exercise of any remedy hereunder or under any other Loan
Document.
9.15 WAIVERS OF JURY TRIAL. THE BORROWER, THE ADMINISTRATIVE
AGENT AND THE LENDERS HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVE TRIAL BY JURY
IN ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS AGREEMENT OR ANY OTHER LOAN
DOCUMENT AND FOR ANY COUNTERCLAIM THEREIN.
(End of Page)
509253-0191-02261-99A5F10H-CRA
47
IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be duly executed and delivered by their proper and duly authorized officers
as of the day and year first above written.
KEYSPAN CORPORATION
By:
Name:
itle:
THE CHASE MANHATTAN BANK, as Administrative
Agent and as a Lender
By:
Name:
Title:
509253-0191-02261-99A5F10H-CRA
48
CITIBANK, NA
By:
Name:
Title:
509253-0191-02261-99A5F10H-CRA
49
MORGAN GUARANTY TRUST COMPANY OF
NEW YORK
By:
Name:
Title:
509253-0191-02261-99A5F10H-CRA
50
ABN AMRO BANK, N.V.
By:
Name:
Title:
By:
Name:
Title:
509253-0191-02261-99A5F10H-CRA
51
THE BANK OF NEW YORK
By:
Name:
Title:
509253-0191-02261-99A5F10H-CRA
52
THE BANK OF NOVA SCOTIA
By:
Name:
Title:
509253-0191-02261-99A5F10H-CRA
53
BANK ONE, NA (MAIN OFFICE-CHICAGO)
By:
Name:
Title:
509253-0191-02261-99A5F10H-CRA
54
BARCLAYS BANK PLC
By:
Name:
Title:
509253-0191-02261-99A5F10H-CRA
55
CARIPLO - CASSA DI RISPARMIO DELLE
PROVINCIE LOMBARDE S.p.A.
By:
Name:
Title:
By:
Name:
Title:
509253-0191-02261-99A5F10H-CRA
56
THE DAI ICHI KANGYO BANK, LTD.
By:
Name:
Title:
509253-0191-02261-99A5F10H-CRA
57
EAB
By:
Name: FREDRIC J. HUGUE
Title: GROUP VICE PRESIDENT
509253-0191-02261-99A5F10H-CRA
58
FLEET NATIONAL BANK
By:
Name: ROBERT D. LANIGAN
Title: SENIOR VICE PRESIDENT
509253-0191-02261-99A5F10H-CRA
59
THE INDUSTRIAL BANK OF JAPAN, LTD.
By:
Name:
Title:
509253-0191-02261-99A5F10H-CRA
60
MELLON BANK, N.A.
By:
Name:
Title:
509253-0191-02261-99A5F10H-CRA
61
THE ROYAL BANK OF SCOTLAND PLC
By:
Name:
Title:
509253-0191-02261-99A5F10H-CRA
62
ROYAL BANK OF CANADA
By:
Name: LINDA M. STEPHENS
Title: MANAGING DIRECTOR
509253-0191-02261-99A5F10H-CRA
63
BANK HAPOALIM B.M.
By:
Name:
Title:
By:
Name:
Title:
509253-0191-02261-99A5F10H-CRA
64
CREDIT LYONNAIS NEW YORK BRANCH
By:
Name:
Title:
509253-0191-02261-99A5F10H-CRA
65
PNC BANK, NATIONAL ASSOCIATION
By:
Name:
Title: