TRUST
INDENTURE
THE BILTMORE GROUP OF LOUISIANA, L.L.C.
Name of Issuer
------------------
Trust Number
COLONIAL TRUST COMPANY
As Trustee
TABLE OF CONTENTS
PAGE
I. Capacities of Colonial . . . . . . . . . . . . . . . . . . . . . 1
II. Issue of Bonds and Security . . . . . . . . . . . . . . . . . . . 1
III. Description of Bonds and Liens . . . . . . . . . . . . . . . . . 2
A. Registration of Bonds and Liens . . . . . . . . . . . . . . 2
B. Bondholders' Pro Rata Lien . . . . . . . . . . . . . . . . 2
C. Trustee's Reimbursement Lien . . . . . . . . . . . . . . . 3
IV. Disbursement of Bond Proceeds . . . . . . . . . . . . . . . . . . 3
A. Bond Proceeds Account . . . . . . . . . . . . . . . . . . . 3
B. Preference of Payments Out of Bond
Proceeds Account . . . . . . . . . . . . . . . . . . . . . 4
C. Construction Draws . . . . . . . . . . . . . . . . . . . . 8
D. Surplus Bond Proceeds . . . . . . . . . . . . . . . . . . . 10
E. Overpayments . . . . . . . . . . . . . . . . . . . . . . . 10
F. Abandonment of Project . . . . . . . . . . . . . . . . . . 11
V. Payment of Bonds . . . . . . . . . . . . . . . . . . . . . . . . 11
A. Priorities of Issuer's Payments . . . . . . . . . . . . . . 11
B. Priority of Charges against Sinking Fund . . . . . . . . . 12
C. Method of Payments into Sinking Fund . . . . . . . . . . . 12
D. Expenses of Default . . . . . . . . . . . . . . . . . . . . 13
E. Issuer's Payment Secured by its Revenues . . . . . . . . . 13
F. When Sinking Fund Balance May Be Paid
to Issuer . . . . . . . . . . . . . . . . . . . . . . . . . 13
G. Bond Reserve Account . . . . . . . . . . . . . . . . . . . 13
H. First Six Month Operating Fund Reserve Account . . . . . . 15
VI. Bondholders' Failure to Surrender Matured
Bonds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
A. No Interest After Maturity . . . . . . . . . . . . . . . . 16
B. Escheat After Three Years . . . . . . . . . . . . . . . . . 16
VII. Issuer's Covenants . . . . . . . . . . . . . . . . . . . . . . . 17
A. Issuer Shall Maintain and Insure the
Property . . . . . . . . . . . . . . . . . . . . . . . . . 17
B. Trustee May Cure . . . . . . . . . . . . . . . . . . . . . 18
C. Issuer May Not Merge . . . . . . . . . . . . . . . . . . . 18
D. Issuer's . . . . . . . . . . . . . . . . . . . . . . . . . 19
VIII. Defaults and Remedies . . . . . . . . . . . . . . . . . . . . . . 19
A. Events of Default Defined . . . . . . . . . . . . . . . . . 19
B. Waiver of Notice by Issuer; Trustee's
Remedies . . . . . . . . . . . . . . . . . . . . . . . . . 20
C. Legal Ownership of Rights to Prosecution
and Enforcement in Trustee Alone . . . . . . . . . . . . . 24
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D. Trustee's Discretion to Advise Bond-
holders of Default . . . . . . . . . . . . . . . . . . . . 24
E. Bondholders' Rights in Event of
Trustee's Failure to Act . . . . . . . . . . . . . . . . . 24
F. Trustee's Right to Stop Payment on
Outstanding Checks . . . . . . . . . . . . . . . . . . . . 25
G. Penalty Interest . . . . . . . . . . . . . . . . . . . . . 25
H. Trustee Has No Duty to Cure; Trustee's
Rights in Event of Overdraft or
Overpayment . . . . . . . . . . . . . . . . . . . . . . . . 25
I. Application of Sinking Fund Balances
Upon Default . . . . . . . . . . . . . . . . . . . . . . . 26
IX. Issuer's Prepayment Privileges . . . . . . . . . . . . . . . . . 28
A. Entire Series in Full or Partial at
Random . . . . . . . . . . . . . . . . . . . . . . . . . . 28
B. No Pre-Payment Penalty; Additional
Trustee's Fee . . . . . . . . . . . . . . . . . . . . . . . 28
C. Disposition of Unpresented Bonds . . . . . . . . . . . . . 28
D. Over- and Under-Deposit of Funds . . . . . . . . . . . . . 28
E. Trustee's Release of Lien . . . . . . . . . . . . . . . . . 29
X. Replacement of Bonds . . . . . . . . . . . . . . . . . . . . . . 29
A. Exchange of Mutilated or Defaced Bonds . . . . . . . . . . 29
B. Lost, Stolen or Destroyed Bonds . . . . . . . . . . . . . . 29
C. Remedies are Exclusive . . . . . . . . . . . . . . . . . . 29
XI. Additional Parity Bonds . . . . . . . . . . . . . . . . . . . . . 30
A. Conditions for Issuance . . . . . . . . . . . . . . . . . . 30
B. Right of First Refusal . . . . . . . . . . . . . . . . . . 31
XII. Sale of Property . . . . . . . . . . . . . . . . . . . . . . . . 31
A. For Fair Market Value Only . . . . . . . . . . . . . . . . 31
B. Application of Sale Proceeds . . . . . . . . . . . . . . . 32
C. Value of Pledged Property to be
Sufficient to Secure Bonds Then
Outstanding . . . . . . . . . . . . . . . . . . . . . . . . 32
XIII. Substitution of Collateral . . . . . . . . . . . . . . . . . . . 32
A. For Fair Market Value Only . . . . . . . . . . . . . . . . 33
B. Must Become Part of the Lien . . . . . . . . . . . . . . . 33
XIV. Condemnation of Property . . . . . . . . . . . . . . . . . . . . 33
A. Condemnation of All the Property . . . . . . . . . . . . . 33
B. Condemnation of a Portion of the Property . . . . . . . . . 33
XV. Duties of Trustee, Paying Agent and Registrar . . . . . . . . . . 34
A. Trustee's Administrative Duties . . . . . . . . . . . . . . 34
B. Paying Agent's Duties . . . . . . . . . . . . . . . . . . . 35
C. Registrart's Duties . . . . . . . . . . . . . . . . . . . 36
XVI. Limitation of Trustee's Liability . . . . . . . . . . . . . . . . 36
XVII. Ancillary/Co-Trustee; Resignation and Removal;
Successor Trustee . . . . . . . . . . . . . . . . . . . . . . . . 39
A. Trustee May Appoint Ancillary and
Co-Trustees . . . . . . . . . . . . . . . . . . . . . . . . 39
B. Voluntary Resignation and Involuntary
Removal of Trustee . . . . . . . . . . . . . . . . . . . . 39
XVIII. Illegal Interest . . . . . . . . . . . . . . . . . . . . . . . . 42
XIX. Release of the Lien . . . . . . . . . . . . . . . . . . . . . . . 43
XX. Investment of Funds; Trustee's Fees . . . . . . . . . . . . . . . 43
A. Permitted Investments . . . . . . . . . . . . . . . . . . . 43
B. Base Fees of Trustee, Paying Agent and
Registrar . . . . . . . . . . . . . . . . . . . . . . . . . 43
C. Additional Fees to be Charged for
Extraordinary Services . . . . . . . . . . . . . . . . . . 43
XXI. Supplemental Indentures . . . . . . . . . . . . . . . . . . . . . 44
A. Not Requiring Bondholder Consent . . . . . . . . . . . . . 44
B. Requiring Bondholder Consent . . . . . . . . . . . . . . . 44
C. Requisites of Notice to Bondholders . . . . . . . . . . . . 45
D. Only Substantial Consent Required . . . . . . . . . . . . . 46
XXII. Bondholder Lists and Reports; Evidence
of Rights of Bondholders . . . . . . . . . . . . . . . . . . . . 46
A. Form of Bondholder Action . . . . . . . . . . . . . . . . . 46
B. Issuer Owned or Controlled Bonds to be
Disregarded . . . . . . . . . . . . . . . . . . . . . . . . 47
C. Third-Party Communiques to Bondholders . . . . . . . . . . 47
D. Bondholder Identities Not to be
Disclosed . . . . . . . . . . . . . . . . . . . . . . . . . 48
XXIII. Miscellaneous Provisions . . . . . . . . . . . . . . . . . . . . 48
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TRUST INDENTURE
STATE OF ARIZONA
COUNTY OF MARICOPA
THIS TRUST INDENTURE made and entered into between THE BILTMORE
GROUP OF LOUISIANA, L.L.C., a Louisiana limited liability company, c/o Arbor
Group, L.L.C., 507 Trenton Street, West Monroe, Louisiana 71291, acting
through its duly authorized agents and representatives, hereinafter called
"Issuer," and COLONIAL TRUST COMPANY, a trust company organized under
the laws of the state of Arizona, having its principal office and post
office address respectively at 5336 North 19th Avenue, Phoenix, Arizona
85015, and P.O. Box 33487, Phoenix, Maricopa County, Arizona 85067-3487,
hereinafter called either "Colonial" or "Trustee,"
WITNESSETH:
I.
CAPACITIES OF COLONIAL
Colonial will serve in the multiple capacities of Trustee for the
benefit of the Bondholders (hereinafter called "Trustee"), Registrar with
respect to the transfer of the Bonds and maintenance of the Bond Register
(hereinafter called "Registrar"), and Paying Agent with respect to
distribution of interest and principal payments to or for the Bondholders
(hereinafter called "Paying Agent"). The duties and responsibilities of
Colonial for its service in each of such capacities, as well as the
compensation to be paid to Colonial therefor, are hereinafter set forth;
provided that, unless the context otherwise requires, all such terms are used
interchangeably and collectively, the term for one capacity including as
well the other two terms and capacities.
II.
ISSUE OF BONDS AND SECURITY
Issuer has agreed and does hereby agree to issue Bonds of serial
maturities in the total amount of $9,900,000.00, hereinafter called the
"Bonds," secured, in accordance with the terms and provisions of this Trust
Indenture by a deed of trust(s) or mortgage(s) and security agreement(s),
hereinafter called the "Lien," recorded in the proper State and County or
Parish or other recording office, on and covering properties of Issuer more
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described in such mortgage(s) or deed(s) of trust executed or to be
executed by Issuer and filed of record to secure the Bond Issue governed
by this Trust Indenture (hereinafter called the "Property"), and incorporated
herein by reference. The Property shall include the following projects:
(A)The Minden, Louisiana Project;
(B)The Sedona, Arizona Project;
(C)The Bastrop, Louisiana Project;
(D)The Natchitoches, Louisiana Project; and
(E)The Farmerville, Louisiana Project.
The Mortgage(s) and/or Deeds of Trust relative to each of the above-mentioned
projects as originally executed and as amended or modified, from time
to time, are incorporated herein by reference and made a part hereof.
All moneys received and maintained by the Trustee hereunder shall be
trust funds held for the benefit of the Bondholders and shall not be subject
to lien or attachment of any creditor of Issuer or Trustee.
III.
DESCRIPTION OF BONDS AND LIENS
(A) All of the Bonds shall be issued pursuant to the prospectus or
offering circular in the names of the holders thereof as registered on the
books and records of the Registrar. No principal or interest payable upon
the Bonds shall be paid to any persons other than the registered holders.
Payments of principal and/or interest upon the Bonds shall be made by
check drawn upon the Sinking Fund Account to be maintained by Trustee,
which check shall be mailed, postage prepaid, to the registered holders
of the Bonds at their registered addresses.
(B) The Bonds will be secured by a lien upon the property and
facility acquired with the proceeds of the bonds, as follows:
(1) Series 1999-I bonds in the amount of $1,800,000.00 will be
secured by a first and superior lien against the property
comprising the Minden, Louisiana facility;
(2) Series 1999-II bonds in the amount of $2,700,000.00 will be
secured by a first and superior lien against the property
comprising the Sedona, Arizona facility;
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(3) Series 1999-III bonds in the amount of $1,800,000.00 will
be secured by a first and superior lien against the
property comprising the Bastrop, Louisiana facility;
(4) Series 1999-IV bonds in the amount of $1,800,000.00 will
be secured by a first and superior lien against the
property comprising the Natchitoches, Louisiana facility;
and
(5) Series 1999-V bonds in the amount of $1,800,000.00 will be
secured by a first and superior lien against the property
comprising the Farmerville, Louisiana facility.
Futhermore, issuer pledges the first revenues and receipts from each of
the above described properties and facilities to secure the payment of the
bonds. Such revenues shall be first applied to the payment of the bonds
the proceeds of which were used to obtain or construct the facility or
property producing such revenues and receipts and thereafter to the payment
of the remaining bonds; first to any other bonds the payment of which is
in default and if none, or thereafter, to the payment of such other bonds
as the Trustee, in the Trustee's discretion, may select.
Notwithstanding the above, the Bonds are cross-collateralized to the
extent and at the option of Trustee as provided in Paragraph VIII(B) (5)
hereof.
(C) Hereinafter the phrase "Reimbursement Lien" will be used to
identify a lien against the Property in favor of Trustee securing Trustee's
right to reimbursement for its own or borrowed funds advanced or expended,
said Reimbursement Lien being likewise secured by the Property but being
superior to the Lien securing the Bondholders until such funds advanced or
expended are repaid in full. All such advances and expenditures secured by
the Reimbursement Lien shall, subject to Article XVIII, bear interest at the
rate equal to two (2%) percent per annum in excess of the "Prime Rate"
quoted daily in the money rate column of the Wall Street Journal as said
note may from day to day in Trustee's sole discretion be adjusted upward
and downward. All such principal and interest accrued and/or collected
by Trustee in reimbursement from Issuer shall be Trustee's sole property.
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IV.
DISBURSEMENT OF BOND PROCEEDS
(A) As the Bonds are sold (or if the Bond proceeds are placed in
an escrow account to be released to Trustee only after the conditions of the
escrow agreement have been met), the proceeds from the sale of the Bonds
shall be delivered to Trustee to be deposited into a Bond Proceeds Account in
the name and under the exclusive control of Trustee in a depository selected
by Trustee, including its own commercial banking division. Trustee shall
disburse the Bond proceeds in accordance with the provisions of paragraph
(B) below.
(B) Out of the proceeds from the sale of the Bonds, Trustee shall
first pay the following items in the order and preference listed:
(1) The Series 1999-I Bonds (being used for the Minden,
Louisiana project) as follows:
(a) The Dealer's fee, commissions and related financing
costs due the broker/dealer assisting Issuer in the sale of the Bonds
(hereinafter called "Broker") under the terms of a written agreement between
Issuer and Broker.
(b) The reimbursement to Trustee of any expenses incurred
by Trustee including attorney's fees incurred in the examination by its legal
counsel of all documents required to issue the Bonds.
(c) The establishment of a First Six Month Operating
Fund Payments Reserve in the amount of $90,000.00 to be used to pay the
sinking fund payments during the first six months of the project.
(d) The principal and interest payable by Issuer upon
promissory notes or other obligations of Issuer or others secured by existing
liens upon the Property, including any interim construction loans secured by
an equal parity lien with the bonds. Upon payment of such obligations, Trustee
shall be subrogated to the rights of the prior owners thereof.
(e) The payment of remaining costs of construction.
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(f) To reimburse Issuer pre-opening costs not to exceed
$75,000.00.
(g) To the Bond Reserve Account in the amount of
$140,000.00 for a period of time as disclosed in the offering circular
pursuant to which the bonds were sold.
(h) After the payment of the foregoing, the Trustee
shall, subject to statutory retainage, disburse the funds remaining in
Issuer's Bond Proceeds Account (hereinafter called the "Net Bond Proceeds")
for the remaining purposes of the Bond offering as set forth and described in
the prospectus or offering circular used in connection with the Bond offering,
if any, and the balance to the Issuer; provided, that in the event of any
conflict in this regard between the terms of said prospectus or offering
circular and this Trust Indenture, this Trust Indenture shall be deemed to
control.
(2) The Series 1999-II Bonds (being used for the Sedona,
Arizona as follows:
(a) The Dealer's fee, commissions and related financing
costs due the broker/dealer assisting Issuer in the sale of the Bonds
(hereinafter called "Broker") under the terms of a written agreement between
Issuer and Broker.
(b) The reimbursement to Trustee of any expenses
incurred by Trustee, including attorney's fees incurred in the examination by
its legal counsel of all documents required to issue the Bonds.
(c) The establishment of a First Six Month Operating
Fund Payments Reserve in the amount of $125,000.00 to be used to pay the
sinking fund payments during the first six months of the project.
(d) The principal and interest payable by Issuer upon
promissory notes or other obligations of Issuer or others secured by existing
liens upon the Property, including any interim loan secured by an equal parity
lien with the bonds owing to Church Loans & Investments Trust. Upon payment
of such obligations, Trustee shall be subrogated to the rights of the
prior owners thereof.
(e) The payment of a line of credit in the amount of
$189,000.00 used for interim loan interest costs and renovations.
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(f) After the payment of the foregoing, the Trustee
shall, subject to statutory retainage, disburse the funds remaining in
Issuer's Bond Proceeds Account (hereinafter called the "Net Bond Proceeds")
for the remaining purposes of the Bond offering as set forth and described in
the prospectus or offering circular used in connection with the Bond offering,
if any, and the balance to the Issuer; provided, that in the event of any
conflict in this regard between the terms of said prospectus or offering
circular and this Trust Indenture, this Trust Indenture shall be deemed to
control.
(3) The Series 1999-III Bonds (being used for the Bastrop,
Louisiana project) as follows:
(a) The Dealer's fee, commissions and related financing
costs due the broker/dealer assisting Issuer in the sale of the Bonds
(hereinafter called "Broker") under the terms of a written agreement between
Issuer and Broker.
(b) The reimbursement to Trustee of any expenses incurred
by Trustee, including attorney's fees incurred in the examination by its legal
counsel of all documents required to issue the Bonds.
(c) The establishment of a First Six Month Operating Fund
Payments Reserve in the amount of $90,000.00 to be used to pay the sinking
fund payments during the first six months of the project.
(d) The principal and interest payable by Issuer upon
promissory notes or other obligations of Issuer or others secured by existing
liens upon the Property, including any interim construction loans secured by
an equal parity lien with the bonds. Upon payment of such obligations,
Trustee shall be subrogated to the rights of the prior owners thereof.
(e) The payment of remaining costs of construction.
(f) To reimburse Issuer pre-opening costs not to exceed
$75,000.00.
(g) To the Bond Reserve Account in the amount of
$140,000.00 for a period of time as disclosed in the offering circular
pursuant to which the bonds were sold.
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(h) After the payment of the foregoing, the Trustee
shall, subject to statutory retainage, disburse the funds remaining in
Issuer's Bond Proceeds Account (hereinafter called the "Net Bond Proceeds")
for the remaining purposes of the Bond offering as set forth and described in
the prospectus or offering circular used in connection with the Bond offering,
if any, and the balance to the Issuer; provided, that in the event of any
conflict in this regard between the terms of said prospectus or offering
circular and this Trust Indenture, this Trust Indenture shall be deemed to
control.
(4) The Series 1999-IV bonds (being used for the Natchitoches,
Louisiana Project) as follows:
(a) The Dealer's fee, commissions and related financing
costs due the broker/dealer assisting Issuer in the sale of the Bonds
(hereinafter called "Broker") under the terms of a written agreement between
Issuer and Broker.
(b) The reimbursement to Trustee of any expenses
incurred by Trustee, including attorney's fees incurred in the examination by
its legal counsel of all documents required to issue the Bonds.
(c) The establishment of a First Six Month Operating
Fund Payments Reserve in the amount of $90,000.00 to be used to pay the
sinking fund payments during the first six months of the project.
(d) The principal and interest payable by Issuer upon
promissory notes or other obligations of Issuer or others secured by existing
liens upon the Property, including any interim construction loans secured by
an equal parity lien with the bonds. Upon payment of such obligations, Trustee
shall be subrogated to the rights of the prior owners thereof.
(e) The payment of remaining costs of construction.
(f) To reimburse Issuer pre-opening costs not to exceed
$75,000.00.
(g) To the Bond Reserve Account in the amount of
$140,000.00 for a period of time as disclosed in the offering circular
pursuant to which the bonds were sold.
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(h) After the payment of the foregoing, the Trustee
shall, subject to statutory retainage, disburse the funds remaining in
Issuer's Bond Proceeds Account (hereinafter called the "Net Bond Proceeds")
for the remaining purposes of the Bond offering as set forth and described in
the prospectus or offering circular used in connection with the Bond offering,
if any, and the balance to the Issuer; provided, that in the event of any
conflict in this regard between the terms of said prospectus or offering
circular and this Trust Indenture, this Trust Indenture shall be deemed to
control.
(5) The Series 1999-V bonds (being used for the Farmerville,
Louisiana Project) as follows:
(a) The Dealer's fee, commissions and related financing
costs due the broker/dealer assisting Issuer in the sale of the Bonds
(hereinafter called "Broker") under the terms of a written agreement between
Issuer and Broker.
(b) The reimbursement to Trustee of any expenses
incurred by Trustee, including attorney's fees incurred in the examination by
its legal counsel of all documents required to issue the Bonds.
(c) The establishment of a First Six Month Operating
Fund Payments Reserve in the amount of $90,000.00 to be used to pay the
sinking fund payments during the first six months of the project.
(d) The principal and interest payable by Issuer upon
promissory notes or other obligations of Issuer or others secured by
existing liens upon the Property, including any interim construction loans
secured by an equal parity lien with the bonds. Upon payment of such
obligations, Trustee shall be subrogated to the rights of the prior owners
thereof.
(e) The payment of remaining costs of construction.
(f) To reimburse Issuer pre-opening costs not to exceed
$75,000.00.
(g) To the Bond Reserve Account in the amount of
$140,000.00 for a period of time as disclosed in the offering circular
pursuant to which the bonds were sold.
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(h) After the payment of the foregoing, the Trustee
shall, subject to statutory retainage, disburse the funds remaining in
Issuer's Bond Proceeds Account (hereinafter called the "Net Bond Proceeds")
for the remaining purposes of the Bond offering as set forth and described
in the prospectus or offering circular used in connection with the Bond
offering, if any, and the balance to the Issuer; provided, that in the event
of any conflict in this regard between the terms of said prospectus or
offering circular and this Trust Indenture, this Trust Indenture shall be
deemed to control.
(C) The disbursement by Trustee of the Net Bond Proceeds from
Issuer's Bond Proceeds Account shall be subject to and in accordance with the
following provisions:
(1) Issuer shall furnish to Trustee at Issuer's expense and
Trustee's election an attorney's title opinion or a mortgagee's title policy
in favor of Trustee reflecting that Trustee holds the Lien on the Property
as trustee for the benefit of the Bondholders, subject to no prior liens
or encumbrances other than those agreed upon in writing between Issuer
and Trustee.
(2) If Issuer is remodeling and/or constructing new
improvements with all or any portion of the Net Bond Proceeds, Issuer shall
file with Trustee a written estimate of the cost of such construction, and
Issuer shall provide builder's risk insurance during the period of
construction with loss payable clause in favor of Trustee.
(a) If Issuer enters into a contract for such
construction which provides for (or if Issuer later determines such
construction will actually result in) a total cost greater than the Net Bond
Proceeds, Issuer will promptly notify Trustee of such fact.
(b) Should Trustee be so advised or determine in its
sole discretion that the Net Bond Proceeds will be insufficient to complete
the contemplated use thereof, Trustee shall not be required to disburse any
funds from Issuer's Bond Proceeds Account until such time as Issuer
demonstrates to Trustee's satisfaction that the amount necessary for
completion of the project as originally contemplated is equal to or less than
the Net Bond Proceeds.
(c) Provided that, notwithstanding the foregoing,
Trustee may make such construction and/or purchase disbursements from the
Net Bond Proceeds as it deems in its sole
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discretion to be in the best collective interest of the Bondholders.
(3) Together with such supporting photographs and contractor's
and architect's affidavits and other information and material as Trustee may
from time to time require, Trustee shall be furnished an affidavit which
shall be signed and approved by an authorized representative of Issuer,
showing the estimate of the improvements completed in accordance with the
plans and specifications up to the date of such affidavit.
(a) Such affidavit shall be accompanied by Issuer's duly
executed written request for Trustee to make a construction payment, whereupon
Trustee is authorized to pay out of Issuer's Bond Proceeds Account the amount
of the estimate shown to be due for such labor performed or materials
furnshed or such other percentage of such estimate, less any applicable
retainage.
(b) When the representative of Issuer certifies that all
improvements have been completed in accordance with the plans and
specifications therfor and have been accepted by Issuer, Trustee is authorized
to pay out of Issuer's Bond Proceeds Account the final balance shown by the
affidavit to be due and owing.
(c) Disbursements may be made to the contractor and/or
Issuer, as Trustee may determine to be in the best interest of the Bondholders.
(4) Trustee shall be subrogated to the rights of all
laborers', materialmen's and contractors' liens which it may reduce or
discharge by such payments, and the acceptance of any such payments shall be
binding and conclusive upon the recipients and Issuer as to such rights of
Trustee.
(5) If Issuer is purchasing real property with all or any
portion of the proceeds from the sale of such Bonds, Trustee shall, upon like
certification, disburse such funds as are necessary to close such purchase,
provided that such purchased real property shall be subjected to and become a
part of the Lien and any mortgage or deed of trust upon the Property, as
evidenced at Trustee's election and at Issuer's sole expense by an attorney's
title opinion or a mortgagee's title policy in favor of Trustee reflecting
no liens or encumbrances prior to the Lien other than as agreed upon in
writing between Issuer and Trustee.
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(D) Any funds remaining in Issuer's Bond Proceeds Account after all
the aforesaid payments, if not usable in further improvement of the Property,
shall in the sole discretion of Trustee be distributed to Issuer, or may
be retained by Trustee in the Bond Proceeds Account until so usable or
until such remaining funds, together with any additional funds delivered
to Trustee under the provisions of Article IX hereof, are used to redeem
Bonds.
(E) If for any reason other than the gross negligence or willful
misconduct of Trustee, more funds are disbursed from the Bond Proceeds
Account for the items listed in this Article IV than are deposited into said
Account:
(1) Trustee shall promptly upon discovery thereof notify
Issuer of such fact by furnishing a statement showing how said overexpenditure
occurred;
(2) Within thirty (30) days of the receipt of such notice,
Issuer shall remit to Trustee funds sufficient to cover the overexpenditure;
and
(3) Until such time, Trustee shall have its Reimbursement
Lien therefor.
(F) If after receipt by Trustee of the proceeds from the sale of
all or any portion of Issuer's Bonds, Issuer abandons or for any reason is
legally restrained or prohibited from undertaking or proceeding with the
purposes for which such Bonds were issued or any series of Bonds:
(1) Before any disbursements are made by Trustee therefrom,
Issuer shall be obligated to pay and agrees promptly to pay all dealer's fees
due and expenses the broker/dealer assisting Issuer in the sale of the bonds
and any expenses incurred by the Trustee, including attorney's fees, in
regard to the offering, and Trustee shall return the gross bond proceeds to
the holders of such Bonds in full payment and redemption thereof.
(2) After any disbursements have been made therefrom in good
faith by Trustee, the provisions of subparagraphs IV(B), (C), (D), (E) and
this subparagraph (F) shall then be applicable to the disbursement and
return of the excess funds remaining, if any.
In neither event shall the Bondholders be entitled, in
addition to the principal so returned after payment of such
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costs and expenses, to interest on such principal. Return of such principal
to the Bondholders, net of any applicable expenses, shall operate as a
complete discharge of the Trustee; and Issuer hereby indemnities and
agrees to hold Trustee from any and all claims therefor, including all
costs of maintaining a legal defense.
V.
PAYMENT OF BONDS
(A) Issuer shall pay directly and in the order and preference
listed:
(1) All expenses incurred by Broker and any escrow agent in
connection with the escrowing of the Bond proceeds;
(2) The charges of any depository bank selected by Trustee;
(3) The service charges and fees of Trustee described in
Article XX; and
(4) The Sinking Fund Account maintained by Trustee for
payment of the principal and interest on the Bonds as such indebtedness
matures on successive Bondholder payment dates.
(B) Issuer shall remit to Trustee amounts (hereinafter
collectively referred to as "Sinking Fund Payments") as set forth in the
Schedule of Payments set forth in the Offering Circular pursuant to which
the bonds were sold and a copy of which said schedule may also be attached
hereto, and if so, as EXHIBIT "C", which said amounts, if timely paid, will
accumulate to be sufficient on each Bondholder payment date to pay the
following in the order and preference listed:
(1) Any unpaid charges of the depository bank;
(2) Any unpaid Trustee, Registrar and Paying Agent fees and
charges and any other compensation, repayment or reimbursement payable to
Trustee hereunder; and
(3) The installments of principal and interest on all Bonds
then due for payment.
(C) Issuer shall deliver to Trustee its required Sinking Fund
Payments to be deposited into a Sinking Fund Account in the
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name of and under the exclusive control of Trustee in a depository or
depositories selected by Trustee, including its own commercial banking
division. Trustee shall cause disbursement of the sinking funds for the
purpose of paying the items described above and such other items as are
expressly provided to be paid from the Sinking Fund Account by other
provisions of this Trust Indenture. Issuer shall remit the Sinking Fund
Payments to Trustee by one of the following exclusive methods:
(1) Monthly installments to be transmitted electronically
through the Automated Clearing House ("ACH") network; or
(2) Monthly installments to be paid by check or bank draft.
(D) In the event Issuer defaults in the payment of the principal
and/or interest upon any outstanding Bond(s) issued hereunder or any of the
other requirements of this Trust Indenture, and Trustee consequently resorts
to its remedies, Issuer hereby agrees to pay the reasonable costs of cure,
collection and/or foreclosure upon the Property, including without limitation
court costs, the fees of attorneys, legal stenographers, expert witnesses,
appraisers, surveyors and realtors, the travel expenses of such persons
and Trustee's own personnel and the costs of preserving, maintaining,
insuring and paying taxes on the Property; and Trustee shall have its
Reimbursement Lien therefor.
(E) Issuer agrees to pay the required installments into the
Sinking Fund Account as required herein before it disburses funds for any
other purposes whatsoever.
(1) To further secure the timely payment of the sinking fund
installments and Issuer's other obligations hereunder, Issuer hereby
unconditionally assigns, sets over, and pledges its first revenues from any
and all sources.
(2) So long as the sinking fund installments and other
expenditures required of Issuer are promptly and properly made, the first
revenues received by Issuer shall be handled by Issuer without any
interference by Trustee; but should Issuer fail to make the required sinking
fund installments, then Trustee may elect to demand payment to it of Issuer's
first revenues; and after receipt of such written demand Issuer shall,
promptly and without contest, deliver all of its receipts directly to Trustee
until the Sinking Fund Account delinquency is remedied, after which Issuer
may again deal with its receipts as before such default.
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(3) In the event that issuer shall default in the payment
of any required sinking fund payment and/or any payment of principal or
interest upon any outstanding Bond(s), then Trustee shall apply any revenues
and receipts received by Trustee, first, to the payment of the bonds the
proceeds of which were used to construct or obtain the facility from which
the revenues or receipts were received; second, to the payment of any
other bonds the payment of which are then in default; and, third, as the
Trustee may determine, in the Trustee's sole discretion.
(F) Any balance remaining in the Sinking Fund Account shall be
paid to Issuer whenever (i) all matured principal and interest (including
any unforgiven penalty interest) on the Bonds has been paid in full or
provision for such payment satisfactory to Trustee has been made, (ii) all
obligations, expenses, fees, costs and charges of Trustee, Paying Agent,
Registrar and all depositories incurred hereunder have been paid, and (iii)
Issuer is current in its installments required to be paid into the Sinking
Fund Account.
(G) In regard to the Series 1999-I, 1999-III, 1999-IV and 1999-V
offerings, Issuer agrees to maintain with the Trustee a Bond Reserve account
funded in the amounts set forth above for the periods disclosed in the
offering circular pursuant to which the bonds were sold, which shall be
for the purpose of providing for, in part, the debt service requirements
to pay the principal and interest due on any semiannual payment date of
the bonds herein authorized. Such account shall be held, administered and
distributed as follows:
(1) The Issuer shall fund from the proceeds of the sale of
the bonds and the Trustee will accept and maintain in the Bond Reserve
Account (hereinafter referred to as the "Reserve Account") the applicable
amounts as set forth above in Article IV pursuant to the terms and conditions
hereof.
(2) During the applicable period of the Reserve Account, the
Reserve Account shall be applied only to the payment of principal and
interest on the bonds in the event that as of a semiannual payment date the
Issuer has failed to deposit with the Trustee in the Sinking Fund Account
sufficient sums to enable the Trustee to pay the principal and interest due
as of such payment date. In the event that as of a certain semiannual
payment date the Issuer has not deposited sufficient sums with the Trustee to
pay the principal and interest then due, as defined in the Trust Indenture,
but the total bonds owing have not been accelerated, then Trustee shall
apply, to the extent available, funds from the
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Reserve Account to the payment of the principal and interest then owing on
the bonds as of such payment date.
(3) In the event that there are not sufficient funds in the
Reserve Account to remedy any existing default in the payment of the sinking
fund payments required to pay the bonds and as a result, the total amount
owing on the bonds or a series of bonds has been accelerated, then the funds
held in the Reserve Account shall be held, administered and distributed for
the benefit of all bondholders whose bonds have been accelerated as part of
the proceeds from the collateral. No portion of the Reserve Account shall
inure to or benefit any interim note holder who is in a co-first mortgage
position with the Trustee, unless and except that the Issuer and the Trustee
may agree to use funds available in the Reserve Account to pay off any
such interim lender.
(4) Any interest earned on the Reserve Account shall be
retained in the Reserve Account.
(5) Provided that the Issuer is current in the payment of its
sinking fund obligation, all funds on hand in the Reserve Account after the
term provided for in the Prospectus for
the maintaining of the applicable Reserve Account ("the term of the Reserve")
shall be transferred by the Trustee into the Sinking Fund Account to be
used to pay off existing bonds. In the event that the Issuer is not current
in its sinking fund payments as of the date of the termination of the
term of a Reserve Account, then the Trustee shall continue to hold the
funds in the Reserve Account pursuant to the terms and conditions hereof
until the Issuer is current in its sinking fund payments and maintains
a current status for six (6) consecutive months.
(6) In the event that the Trustee uses funds from the Reserve
Account to pay the principal and interest on the bonds due at a particular
paydate, then the Issuer shall pay to the Trustee, within one hundred eighty
(180) days from the date of such paydate, an amount necessary to replenish
such Reserve Account. Failure to replenish such Reserve Account within such
one hundred eighty (180) day period shall be an event of default hereunder
and shall entitle the Trustee to continue to hold such Reserve Account,
in addition to its other remedies.
(7) In addition to the payment of the principal and interest
due the bondholders, Trustee may pay from the Reserve Account before
transferring a Reserve Account to the Sinking Fund Account any and all late
charges, trustees fees, collection charges, attorney's fees and other
out-of-pocket expenses due and
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owing to the Trustee or incurred by the Trustee in regard to this issue.
(8) Although the Reserve Account is funded by a specific
amount from the proceeds of the four series of bonds issued, the Trustee may
use any amount toward the payment of maturities of any of the five offerings.
(H) Issuer agrees to maintain with the Trustee the First Six Month
Operating Fund reserve accounts in the amounts set forth in Article IV above
which shall be for the purpose of providing for the debt service requirements
to pay the principal and interest due on the first semiannual payment
date of the bonds herein authorized. During the applicable period of
such reserve accounts, monies from such applicable accounts shall be applied
only to the payment of principal and interest on the bonds in the event
that as of the first semiannual payment date the Issuer has failed to
deposit with the Trustee in the Sinking Fund Account sufficient sums to
enable the Trustee to pay the principal and interest due as of such first
payment date. In the event that as of the first semiannual payment date
the Issuer has not deposited sufficient sums with the Trustee to pay
the principal and interest then due, as defined in the Trust Indenture, but
the total bonds owing have not been accelerated, then Trustee shall apply,
to the extent available, funds from the applicable account to the payment
of the principal and interest then owing on the bonds as of such payment
date. In the event that the total amount owing on the bonds or a series of
bonds has been accelerated, then the funds held in such accounts shall be
held, administered and distributed for the benefit of all bondholders
where bonds have been accelerated as part of the proceeds from the
collateral. No portion of the accounts shall inure to or benefit any interim
note holder who is in a co-first mortgage position with the Trustee, unless
and except that the Issuer and the Trustee may agree to use funds available
in the accounts to pay off any such interim lender.
Any interest earned on the accounts shall be retained in the
accounts.
Provided that the Issuer is current in the payment of its sinking
fund obligation, all funds on hand in these accounts after the first six
month payment date shall be disbursed by the Trustee for the purposes and in
the order set forth for the disbursement of bond proceeds as provided
in the appropriate provision of Article IV above.
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VI.
FAILURE TO SURRENDER MATURED BONDS FOR PAYMENT
As to checks representing payments of principal and/or interest
mailed by Paying Agent to the registered holders of the Bonds which are not
thereafter presented for payment, Trustee shall set aside and retain in a
separate account a sum equal to such maturing installment of principal or
interest.
(A) No interest shall accrue or be payable from or after such
payment date either upon such matured installment or such funds in said
separate account.
(B) After three (3) years from such separation of funds, any
separated funds remaining unclaimed shall be escheated and delivered by
Trustee to the appropriate state which delivery shall operate as a complete
discharge of Trustee; and Issuer hereby indemnifies and agrees to hold
Trustee harmless from any and all subsequent claims therefor or resulting
therefrom asserted by any Bondholder(s) and/or governmental agency or
agencies, including all costs of maintaining a legal defense.
VII.
ISSUER'S COVENANTS REGARDING
MAINTENANCE OF PROPERTY
AND STATUS
(A) At its own cost and expense, Issuer shall:
(1) Obtain and maintain certification from all applicable
authorities, federal, state and local, of Issuer's corporate existence and
exemptions from income tax and from ad valorem taxes on all eligible property,
provide same to Trustee upon request and promptly notify Trustee of any
cancellation or revocation thereof, and pay all license or other fees and
timely make all returns and reports necessary for that purpose;
(2) Maintain the Property in good repair and condition;
(3) Pay or discharge all taxes and assessments and any
mechanics' and materialmen's lien indebtedness that are or may become
payable with respect to the Property as same become due and payable under
any law, ordinance or regulation; and
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(4) Secure from a reputable insurance company or companies
acceptable to Trustee, and maintain in full force and effect at all times
while any of said Bonds are outstanding, fire and extended coverage insuring
the Property against such losses in an amount at least equal to the balance
outstanding on the outstanding Bonds hereunder, including accrued interest,
and in no event less than eighty (80%) percent of the fair market value
of the improvements located thereon, which policy or policies shall contain
a loss payable clause in favor of Trustee and shall be delivered to Trustee
to be kept by it until the Bonds are paid in full.
(a) In the event of any losses, the proceeds of
insurance paid to Trustee shall be applied: (i) for the replacement and/or
repair of the improvements damaged; (ii) toward the purchase of additional
property, subjected to and become a part of the Lien and any mortgage or deed
of trust upon the Property, as evidenced at Trustee's election and at
Issuer's sole expense by an attorney's title opinion or a mortgagee's title
policy in favor of Trustee reflecting no liens or encumbrances prior to the
Lien other than as agreed upon in writing between Issuer and Trustee; (iii)
for the construction of additional improvements on the Property; and/or (iv)
to call and repay outstanding Bonds in the same manner as partial
prepayments are to be applied under the provisions of Article IX without
prepayment penalty.
(b) Subject to the approval of Trustee, Issuer has the
right to select which of these alternatives it desires to exercise and shall
notify Trustee in writing in advance as to the alternatives selected.
(B) In the event that Issuer defaults in its performance of any of
the undertakings set out in paragraph VII(A) above:
(1) Trustee is hereby authorized to withdraw funds from
Issuer's Sinking Fund Account and to apply same in curing such default for
the account of Issuer. Notwithstanding anything herein to the contrary, n
the event there are no funds in Issuer's Sinking Fund Account or same are
insufficient for such purpose, Trustee may in its sole discretion withdraw
funds from any reserve account held in regard to the applicable facility
or the Trustee may borrow for and/or advance into the Sinking Fund Account
such amounts as are required for compliance, secure such loan with or
be secured for such advance by the Reimbursement Lien, and repay such
withdrawal, loan or advance, together with interest accruing thereon at
the Reimbursement Lien rate, from future payments made into Issuer's
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Sinking Fund Account; provided, that Trustee shall never, under any
circumstances whatsoever, be obligated to borrow for or advance funds to
or for Issuer's account.
(2) Issuer shall be obligated to immediately restore the
proper balance of its Sinking Fund Account by prompt payment of the amount so
withdrawn and expended.
(3) The time, amount and nature of such withdrawal and
expenditure by Trustee shall be fully established by a written notice from
Trustee to Issuer of such actions by Trustee. The exercise of this right of
withdrawal and expenditure by Trustee, however, shall not be considered or
constitute a waiver of Trustee's cumulative right hereinafter set out to
declare the entire indebtedness represented by such Bonds to be and become
due and payable at once by reason of such default on the part of Issuer.
(C) Issuer covenants that it will not merge or consolidate with or
into any other organization or corporation unless Issuer is the surviving
corporation or the surviving corporation assumes all obligations of Issuer
under this Indenture. So long as any Bonds are outstanding, Issuer shall not
merge or consolidate with any other organization without the prior written
consent of Trustee. Issuer further covenants that it will not sell, lease
or otherwise dispose of all or substantially all of its properties as an
entirety.
(D) Issuer covenants that so long as any Bonds are outstanding and
unpaid to the extent of its financial dealings or transactions in relation to
its business and the revenues derived therefrom, Issuer will keep or cause
to be kept proper books of record and account. Such books shall at all
times be open to the inspection of such accountants or other agencies
as Trustee may from time to time designate. In addition, Issuer shall
provide Trustee upon request with financial statements within ninety (90)
days of the close of Issuer's fiscal year.
VIII.
DEFAULT AND REMEDIES
(A) For purposes hereof, any one or more of the following by
Issuer shall constitute an event of default in regard to the Series of Bonds
to which such default should occur:
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(1) Failure or refusal to pay when due the principal and/or
interest on any of the Bonds in such Series;
(2) Failure or refusal to timely pay into the Sinking Fund
Account any installments required to pay any of the Bonds in such Series;
(3) Failure or refusal to pay when due any taxes, assessments,
insurance, claims, liens or encumbrances upon the Property securing the Bonds
of such Series, or to maintain the Property in good repair; or to cure the
breach of any other covenant set forth in Article VII as to such Series of
Bonds;
(4) Failure or refusal to pay when due any loan or advance by
or the fees and expenses of Trustee or of any depository or escrow agent
incurred in regard to such Series;
(5) Failure or refusal, upon any written request of Trustee,
(i) to furnish Trustee with such insurance policies, financial reports and
information concerning Issuer as may be reasonably required by Trustee, or
(ii) to grant unto Trustee, its agents, accountants and attorneys access
during normal business hours to Issuer's offices for the purpose of examining
and, within reasonable limits, photocopying such records.
(6) Making an assignment for the benefit of creditors; or
should a receiver, liquidator, or trustee be appointed to assist in the
payment of Issuer's debt; or should any petition for the bankruptcy,
reorganization, or arrangement of Issuer be filed; or should Issuer be
liquidated or dissolved, or its charter expire or be revoked;
(B) Should an event of default occur, Issuer expressly hereby
waives: demand and presentment for payment, notice of default and of intent
to accelerate and of acceleration, and protest, notice of protest, presentment
and notice of dishonor. Trustee shall be entitled to exercise the following
remedies which shall be cumulative and not exclusive; and the waiver or
forbearance by Trustee, whether mandatory or discretionary, as to any
one or more events of default shall not under any circumstances be deemed
or construed as: (i) a waiver or estoppel as to any subsequent event of
default, (ii) impairing any rights or remedies consequent thereon, or
(iii) establishing a course of dealing with Issuer:
(1) Should the default continue for a period of thirty (30)
days, Trustee may, or Trustee shall upon the receipt of
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(i) written request from the registered holders of twenty-five (25%)
percent in principal amount of the Bonds then outstanding and unpaid and
(ii) satisfactory proof of indemnity, declare to be immediately due and
payable the principal balance of all unpaid Bonds of such Series of Bonds
then in default together with all accrued interest thereon and all such
loans, advances, taxes, assessments and insurance monies unpaid applicable
to such Series then in default. This provision, however, is subject to the
condition that if at any time after the principal of said Bonds shall have
been so declared due and payable, and before any sale of the Property
shall have been made, all defaults under this Trust Indenture have been
cured and all expenses incurred by Trustee in any attempted correction of
such default and acceleration of such indebtedness have been fully paid or
reimbursed by Issuer, then Trustee shall waive such default and its
consequences.
(2) Should the default continue for a period of thirty (30)
days, upon demand of Trustee, Issuer shall forthwith peaceably surrender the
Property securing the payment of the Series of Bonds then in default and so
accelerated to Trustee, and it shall be lawful for Trustee by such officers,
agents, servants and employees as it may appoint, (i) to take possession of
the Property (with the relevant books, papers and accounts of Issuer), to
lock-out Issuer's employees and agents and/or to hold, operate and manage
such Property, any or all without having thereby committed trespass or
violated any statute otherwise applicable (which claim(s) Issuer expressly
hereby waives), (ii) to pay taxes, insurance and assessments thereon, (iii)
to make such repairs, alterations, additions, and improvements thereto as
Trustee in its sole discretion deems necessary; and (iv) to receive the
rents, income, issues and profits therefrom and out of them to pay all
proper costs and expenses of so taking, holding and managing such Property,
including without limitation reasonable compensation to and expenses of
Trustee, its agents, employees and counsel, for which Trustee shall have
its Reimbursement Lien. The remainder of the monies so received by
Trustee, if any, shall be utilized to pay interest and principal on the
Bonds. Provided, however, that it shall not be obligatory upon Trustee to
take such possession in the event of default.
(3) Should the default continue for a period of thirty (30)
days, Trustee may, or Trustee shall upon receipt of (i) written request from
the registered holders of twenty-five (25%) percent in principal amount of
the Bonds outstanding and unpaid and (ii) satisfactory proof of indemnity,
proceed to sell the Property securing the Series of Bonds then in default,
in one or more parcels, as provided by law for foreclosure under the terms
and
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provisions of the Lien. Anyone may bid and/or purchase at such sale,
including Trustee or any Bondholder.
(4) Should the default continue for a period of thirty (30)
days, Trustee may, with or without entry upon the Property as hereinbefore
provided, proceed by suit or suits at law or in equity or by any other
appropriate remedy:
(a) To recover all payments of principal, interest and
other sums which are due but have not been paid;
(b) To recover the entire principal sum of all Bonds
then outstanding which are then in default together with all accrued
interest thereon (irrespective of whether the principal and/or interest of
such Bonds shall then be due and payable as therein expressed and
irrespective of whether Trustee shall have made any demand on Issuer for
the payment of overdue principal and/or interest;
(c) To enforce payment of the Bonds then in default;
and/or
(d) To foreclose the Lien and to sell the Property
securing the Bonds then in default under the judgment or decree of a court
or courts of competent jurisdiction.
It shall be obligatory upon Trustee to take action either by such proceedings
or by the exercise of its powers with respect to entry or sale as it in
its sole discretion may determine, upon being requested so to do in writing
by the holders of twenty-five (25%) percent in principal amount of the
Bonds then in default which are then outstanding and unpaid and upon
receipt of satisfactory indemnity.
(5) Notwithstanding anything herein to the contrary, in
the event that the Issuer is in default in the payment of the principal and/
or interest on one or more series of the Bonds, but not all of the series
of the Bonds, or the Issuer is in default in the timely payment of the
installments to the Sinking Fund Account required on one or more series of
the Bonds, but not all of the series of the Bonds and should such default
continue for a period of thirty (30) days, and as a result thereof, the
Trustee has declared to be immediately due and payable the principal balance
and accrued interest of only the unpaid Bonds in the Series in default and
if the Issuer then fails to pay said amount, then the Trustee may proceed
to foreclose the lien against the property applicable to the defaulted
Series of Bonds. In such event, the
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proceeds from the sale of the property so foreclosed, after the payment of
all expenses and amounts due the Trustees, shall be first applied to the
payment of the bonds in the series secured by a superior mortgage against
the property so foreclosed as set forth in paragraph III. (B) of this
Indenture. If there remains a deficiency in the payment of the Series of
Bonds in default, then the Trustee may declare to be immediately due and
payable the principal balance due and accrued interest of any or all of the
unpaid Bonds of any or all of the remaining Series issued by the Issuer
pursuant to this Trust Indenture and any supplement hereto and if the
Issuer then fails to pay said amount, the Trustee then may proceed to
exercise any remedy provided for herein or in the mortgage securing the
Bonds, including a foreclosure of the lien securing the then accelerated
and unpaid Bonds. Upon the foreclosure of any property securing a Series
of Bonds, the proceeds received from any such foreclosure, after the payment
of all expenses and amounts due the Trustee, shall be applied first to the
payment of the Bonds secured by a superior mortgage against the property so
foreclosed as set forth in paragraph III. (B) of this Indenture; and,
secondly, to the payment of any other bonds, then in default; and,
thereafter, as the Trustee may determine, in the Trustee's discretion.
The rights contained herein, however, shall not prohibit the
Trustee from releasing any lien against any property upon the full payment of
the series of bonds secured by said property.
(6) Trustee may in good faith, if it deems such to be in the
best collective interest of the Bondholders, agree with Issuer upon a
temporarily reduced level of performance and/or payments into the Sinking
Fund Account, during which time Trustee will forbear from resorting to other
remedies even though Issuer continues in formal default; provided that such
forbearance agreement shall immediately be terminated upon Trustee's receipt
of written request from the registered holders of twenty-five percent (25%)
in principal amount of the Bonds then outstanding and unpaid directing Trustee
to resort to any other remedy.
(7) Upon a filing of a bill in equity or other commencement
of judicial proceedings to enforce the rights of Trustee on behalf of the
Bondholders, Trustee, as a matter of right and without regard to the
sufficiency of the security, shall be entitled at its sole election to the
appointment (immediately and without notice to Issuer, which is hereby waived)
of a receiver of the Property and of the income, rents, issues and profits
thereof pending such proceedings, with such powers as may be required to
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protect the interest of the Bondholders as the court making such
appointment shall confer.
(8) In case of the pendency of any receivership, insolvency,
liquidation, bankruptcy, reorganization, arrangement, adjustment, composition
or other judicial proceeding relative to Issuer, or of any other obligor
upon the Bonds or the Property or of such other obligor or their creditors,
Trustee (irrespective of whether the principal and/or interest of the Bonds
shall then be due and payable as therein expressed or by declaration or
otherwise, and irrespective of whether Trustee shall have made any demand
on Issuer for the payment of overdue principal and/or interest) shall be
entitled and empowered, by intervention in such proceeding or otherwise:
(i) to represent the interests of the Bondholders as a class in any such
judicial proceedings; (ii) to file and prove a claim for the whole amount of
principal and interest owing and unpaid in respect of the Bonds and to file
such other papers or documents as may be necessary or advisable in order to
have the claims of Trustee (including any claim for the reasonable
compensation, expenses, disbursements and advances of Trustee, its agents,
employees and counsel) and of the Bondholders allowed in such judicial
proceedings; and (iii) to collect and receive monies or other property payable
or deliverable on any such claims and to distribute the same. Any receiver,
assignee, trustee, liquidator, sequestrator (or other similar official) in
any such judicial proceeding is hereby authorized by each Bondholder to make
such payments to Trustee, and in the event that Trustee shall consent to the
making of such payments directly to the Bondholders, to pay to Trustee
any amount due to it for the reasonable compensation, expenses, disbursements
and advances due Trustee, its agents, employees and counsel, and any other
amount due Trustee hereunder. Nothing herein contained shall be deemed
to authorize Trustee to authorize or consent to or accept or adopt on
behalf of any Bondholder any plan of reorganization, arrangement, adjustment
or compensation affecting the Bonds or the rights of any Bondholder
thereof, or to authorize Trustee to vote in respect of the claim of any
Bondholder in any such proceeding.
(9) In the event Trustee determines in good faith that Issuer
and any other actual or potential obligor(s) upon the Bonds (e.g., obligor's
personnel and members of its governing body in the event of defalcation, fraud
or other malfeasance) have no other material assets worth more than the
costs and expenses of obtaining and executing upon any judgment which might
result from a foreclosure sale of the Property and/or a suit for damages,
each Bondholder hereby expressly authorizes Trustee to bid on the Property
at any foreclosure sale the total amount of indebtedness
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then secured by the Lien, in full and complete discharge of the liability
of Issuer and any such obligor(s) upon the Bonds; and Trustee shall
thereby be relieved of any duty whatsoever to pursue a deficiency against
Issuer or any person. This clause shall under no circumstances be
construed as limiting the liability of Issuer and/or its principals or
sureties to the collateral or otherwise waiving personal recourse against
such persons should Trustee elect to pursue same.
(C) It is the intention of Issuer, the Bondholders and Trustee to
create hereby an express trust as defined by the Arizona Trust Statutes and
to which said Arizona Trust Statutes are applicable as they now exists or
may hereafter be amended; and to that end legal ownership of the collective
rights and choses in action created hereunder is vested in Trustee for
the equitable benefit of the Bondholders, including the rights to repayment
and to proceed against any and all collateral securing same and any and
all persons liable therefor, of which the bonds are only an indicia of
each individual Bondholder's equitable ownership. All rights of action
and claims under this Trust Indenture or the Bonds may be prosecuted and
enforced by Trustee as legal owner thereof without the possession of any
of the Bonds or the production thereof in any proceeding relating thereto;
and any such proceeding instituted by Trustee shall be brought in its
own name as Trustee of this express trust.
(D) After the occurrence of any event of default hereunder of
which Trustee has knowledge or is required to notice, Trustee may, but shall
not be obligated to, transmit by mail to all Bondholders, as their names and
addresses appear in the Bond register, notice of such default and Trustee's
intentions with respect thereto. Trustee shall be protected in withholding
such notice so long as Trustee in good faith determines that the withholding
of such notice is in the best collective interest of the Bondholders.
(E) No bondholder individually or as part of group may institute
any proceeding (judicial or otherwise) with respect to the Bonds and/or the
Indenture or seek any remedy thereunder, unless: (i) such Bondholder(s)
has notified Trustee of an event of default continuing thirty (30) days
or more, (ii) the Bondholders of at least twenty-five (25%) percent in
principal amount of the Bonds then in default which are then outstanding
and unpaid have given written notice to Trustee to institute proceedings
in respect of such event of default, (iii) such Bondholder in subparagraph
(i) and/or Bondholders in subparagraph (ii) have offered in writing and
demonstrated to Trustee's satisfaction the ability to indemnify
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Trustee against the costs Trustee may incur in complying with such request,
and (iv) during the sixty (60) day period following Trustee's receipt of the
notice in subparagraphs (i) - (iii) , Trustee fails to institute a
proceeding or take action as permitted hereunder in respect to such event
of default.
(F) If, at any Bondholder payment date, Issuer has failed to make
the sinking fund installments required to pay all of the principal and/or
interest maturing on said date, Trustee shall have the right, among other
remedies, to authorize and direct the depository bank to stop payment
on any and all checks therefor which may have been issued by Trustee to
the Bondholders and which are outstanding at such time even though the
funds which are on deposit are sufficient to pay some of those checks.
When Issuer has deposited with Trustee sums sufficient to permit payment
in full of all such Bondholders, Trustee's compensation and any reimbursement
then due, and any charges of the depository bank, Trustee may revoke its
stop payment instructions and authorize said bank to proceed to honor
any checks drawn upon such Sinking Fund Account.
(G) Notwithstanding any provisions) of the Bonds to the contrary,
should Issuer fail for any reason to timely pay the principal and/or interest
upon the Bonds at the time such payment becomes due, and should Trustee
elect not to loan or advance the requisite funds and secure same with
its Reimbursement Lien, Issuer shall pay as a penalty for the benefit
of the Bondholders additional interest upon the past due principal and/or
interest of said Bonds at the rate, subject to Article XVIII, equal to
two (2%) percent per annum in excess of the highest rate of interest payable
by said Issuer upon the Bonds from and after the date that said indebtedness
becomes due and payable until such time as said indebtedness is paid in
full; provided that Trustee may waive such penalty interest for additional
consideration or if Trustee otherwise determines in its sole discretion
that to do so is in the best collective interest of the Bondholders.
(H) Trustee shall have no duty, obligation or liability under any
circumstances whatsoever to pay any principal and/or interest upon the Bonds
issued hereunder nor to correct or cure any default. Should Trustee, however,
for any reason pay any principal and/or interest upon said Bonds, whether
intentionally or inadvertently (excluding only overpayment), or in its
sole discretion incur any expenses, including without limitation attorney
fees and other legal costs, in attempting to correct or cure such default
or collect any delinquent payment or foreclose upon the Lien, Trustee
shall have its Reimbursement Lien to secure
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the repayment of such sum advanced or expended to be repayable by Issuer
and otherwise from Issuer's Sinking Fund Account and, to the extent then
necessary, from Issuer's Bond Proceeds Account, anything to the contrary
herein notwithstanding. In the event of an overpayment to a Bondholder(s),
Trustee shall look to the Bondholder(s) and not Issuer for repayment, but
shall have the right of offset against other funds at any time held for
distribution to such individual overpaid Bondholder(s).
(I) All moneys received by Trustee pursuant to any right given or
action taken under the provisions of this Article in respect of an event of
default shall, after payment of the costs and expenses of the proceedings
resulting in the collection of such moneys and of the fees, expenses,
liabilities and advances incurred or made by Trustee or at its discretion, be
deposited into the Sinking Fund Account applicable to the Series of Bonds
secured by the superior mortgage against the Property from which such moneys
were derived; and all such moneys in the Sinking Fund Account (other than
moneys for the payment of Bonds which have matured or otherwise become
payable prior to such event of default, which moneys shall be applied to
such payment) shall during the continuance of an event of default be
applied as follows:
(1) Unless the principal of all the bonds of such Series
shall have become or shall have been declared due and payable, all such
moneys shall be applied:
FIRST -- To the payment in full of all series of interest
payments then due on the applicable Series of Bonds, in
order of maturity, and if the amount available shall
not be sufficient to pay in full the eligible series
having the most recent maturity, then to the ratable
payment of such series, without other discrimination
or privilege; and
SECOND -- To the payment in full of all series of
principal payments then due on the applicable Series
of Bonds, in order of maturity, and if the amount
available shall not be sufficient to pay in full the
latest series having the most recent maturity, then to
the ratable payment of such series, without other
discrimination or privilege.
(2) If the principal of all of such Series of Bonds shall
have become due or shall have been declared due and payable,
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all such moneys shall be applied to the payment of the principal and interest
then accrued and unpaid upon all unpaid Bonds of such Series, without
preference or priority of principal over interest or of interest over
principal, or of any series or maturity over any other series or maturity,
or of any bond over any other bond, whether simple or compound, ratably,
according to the combined amount respectively due thereon for both
principal and interest, to the persons entitled thereto without any
discrimination or privilege.
Whenever moneys are to be applied pursuant to the provisions
of this paragraph (I), such moneys may be applied at such times and from time
to time, as Trustee may determine in its sole discretion, having due regard
to the amount of such moneys available for such application and the likelihood
of additional moneys becoming available for such application in the future.
Whenever Trustee so applies funds, it shall fix the date (which shall
be a principal and/or interest payment date unless Trustee in its sole
discretion deems another date more suitable) upon which such application
is to be made, and upon such date interest on the amounts of principal
and interest to be paid on such dates shall cease to accrue. Trustee
may give such notice as it deems appropriate of the deposit with it of
any such moneys and of the fixing of any such date, and Trustee shall
not be required to make payment to the holder of any unpaid Bond until
such Bond shall be presented to Trustee for appropriate endorsement or
cancellation.
Notwithstanding anything herein to the contrary, in the event
that a Bondholder paydate distribution shall not have been made because of
insufficient funds in Issuer's Sinking Fund Account, should funds thereafter
accumulate in the Sinking Fund Account sufficient to meet such prior
Bondholder payment in whole or in part, Trustee may nonetheless continue to
hold such funds until it is able to make a good faith determination, based
in its sole discretion upon its negotiations with Issuer and its perception
of Issuer's ability to meet Issuer's future obligations hereunder:(i) to
disburse such funds pursuant to subparagraph (I)(1), or (ii) to accelerate the
entire indebtedness effective as of either the date of the event of default
or the Bondholder payment date, as Trustee elects, and later disburse such
funds along with other proceeds pursuant to subparagraph (I)(2).
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IX.
PREPAYMENT PRIVILEGES
(A) If Issuer is not in default and upon thirty (30) days written
notice from the Issuer to the Trustee, accompanied by payment in full of all
moneys required to effect the redemption, the Bonds shall be subject to
redemption at any time in whole or in part (in such manner as the Trustee
deems appropriate) at the redemption price of 100% of the principal amount
redeemed plus accrued interest to the redemption date. Provided that
the Issuer has made available moneys to effect the redemption, the Trustee
shall give notice to the bondholders by first class mail at least fifteen
(15) days prior to the redemption date. After the redemption date, no
interest shall accrue on the Bonds. The Trustee shall pay the principal
and accrued interest on the Bonds to the holders thereof as soon as practical,
such payment to be made by check mailed by first class mail. All expenses
of redemption shall be paid by the Issuer.
(B) Except as may be otherwise provided in the prospectus,
offering circular and/or Bonds themselves, there shall be no penalty for
prepayment of all or any portion of the Bonds, but Issuer may be charged a
reasonable fee therefor in addition to and notwithstanding those fees set
forth in Article XX.
(C) As to any Bonds called for prepayment which are not presented
to Trustee for payment, Trustee shall set aside and retain in a separate
account a sum equal to the unpaid principal and accrued interest thereof.
(1) No interest shall accrue or be payable from or after such
payment date either upon such called Bonds or such funds in said separate
account.
(2) After three (3) years from such separation of funds, any
separated funds remaining unclaimed shall be escheated and delivered by
Trustee to the State of Arizona; such delivery shall operate as a complete
discharge of Trustee as between the Bondholders and Issuer; and Issuer hereby
indemnifies and agrees to hold Trustee harmless from any and all subsequent
claims therefor or resulting therefrom asserted by any Bondholder(s) or
governmental agency or agencies, including all costs of maintaining a legal
defense.
(D) Should Issuer deposit funds for the prepayment of outstanding
bonds in an amount which Trustee ultimately determines
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to be in excess of the funds actually required to effect said prepayment, then
Trustee, immediately upon discovering this fact, shall remit such excess
payment to Issuer or to such other persons or firms to whom Issuer is
obligated with respect thereto. Should Issuer deposit funds for such
prepayment which are insufficient to accomplish same, Issuer shall
immediately remit to Trustee such additional funds as may be required to
complete the prepayment, even if such underpayment was the result of the
reliance by Issuer on prepayment calculations furnished it by Trustee. In
the event that Issuer does not promptly remit such additional funds, then
Trustee may, at its option, stop payment on the checks given by it to pay
the principal and interest upon said Bonds which have not been paid, or it
may borrow and/or advance such additional funds as will permit said Bonds to
be prepaid. In the latter event Issuer agrees to promptly reimburse Trustee,
and Trustee shall have its Reimbursement Lien therefor.
(E) Trustee is authorized to execute a release of the Lien in the
event of complete prepayment of all Bonds issued pursuant to this Trust
Indenture. Such release will be prepared by or on behalf of Issuer at its
expense and submitted to Trustee for execution.
X.
REPLACEMENT OF BONDS
(A) In the event any Bond shall become mutilated or defaced,
Registrar in its discretion may, upon presentment and cancellation thereof,
issue a new Bond of like kind, maturity and date in exchange and in
substitution therefor.
(B) In the event any Bond is destroyed, lost or stolen, Registrar
in its discretion may issue, in lieu of and in substitution therefor, a new
Bond of like kind, maturity and date upon the registered holder of such
Bond (i) filing with Registrar evidence satisfactory to it that he is
the true owner of same and that such Bond has in fact been destroyed,
lost or stolen; and (ii) indemnifying through a reputable surety and holding
harmless both Issuer and Registrar and Paying Agent against any loss resulting,
directly or indirectly, from issuance of the substitute Bond.
(C) All Bonds issued under this Trust Indenture shall be held and
owned upon the express condition that the provisions of this Article are
exclusive in respect to the replacement and payment of mutilated, defaced,
destroyed, lost or stolen Bonds, and shall preclude any and all other rights
and remedies,
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notwithstanding any law or statute now existing or hereafter enacted to the
contrary respecting such replacement or payment of bonds, notes, negotiable
instruments or other securities without their surrender.
XI.
ADDITIONAL PARITY BONDS
AND OTHER BORROWINGS
(A) Subject to the following, Issuer reserves the right to issue
additional parity bonds or to incur additional debt obligations (hereinafter
collectively called "Additional Bonds" even though such debt obligations are
not in bond form) for any lawful purpose, including without limitation
refunding or prepaying any outstanding Bonds, construction of improvements
and/or the acquisition of additional real property. Such Additional Bonds,
along with the original Bonds issued under this Indenture, shall be deemed
"Bonds" for all purposes as defined in this Indenture unless the context
otherwise requires. Once issued and delivered, such Additional Bonds and the
interest thereon shall be payable from the sources described in this
Indenture and secured by the Indenture and the Lien to the same extent and
priority as, and on a parity with, all then Outstanding Bonds of the
applicable original series, regardless of the date and order of recording of
the deed(s) of trust or mortgage(s), as if such Additional Bonds had been part
of the original offering. Such Additional Bonds may be made or issued
in one or more obligations, series or issues, in various principal amounts,
bearing interest, maturing, and having such redemption features and other
provisions as may be provided in any supplemental indenture or other instrument
authorizing their making or issuance. As to such Additional Bonds, whether
a debt obligation such as a note or a series or a separate issue of bonds,
and whether governed by a note or supplement to the Indenture or a separate
indenture, a default as to any one note, bond, series or issue shall constitute
a default as to any and all other notes, bonds, series and/or issues totally
or partially secured by such a parity lien on the same collateral.
(1) Provided, no such note or series or issue of Additional
Bonds shall be made or issued unless:
(a) Any default or event which would result in default
by Issuer under the Indenture has been first cured;
(b) Any real property acquired from the proceeds of
Additional Bonds shall be subjected to and become a part
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of the applicable lien and any applicable mortgage or deed of trust upon
the Property securing the series of bonds related to the offering of
Additional Bonds, as evidenced at Trustee's election and at Issuer's sole
expense by an attorney's title opinion or a mortgagee's title policy in
favor of Trustee reflecting no liens or encumbrances prior to the Lien
other than as agreed upon in writing between Issuer and Trustee; and
(c) The ratio of the total Outstanding series of Bonds
plus the Additional Bonds related thereto shall not exceed one hundred
percent (100%) of the capitalized cost of the applicable Property, inclusive
of any new construction or improvements thereon, to secure the payment of
the Bonds.
(2) Further provided that for a period of three years from the
effective date of the offering, MMR Investment Bankers, Inc. shall have a
first right of refusal to provide investment banking services for any
additional borrowings of Issuer relative to the subject property or any
refinancing of this indebtedness.
(B) Furthermore, notwithstanding anything herein to the contrary,
Issuer has the right to obtain interim construction loans in order to
purchase/or build the five projects referred to herein and any such interim
construction loans shall be secured in parity with lien securing the
applicable series of bonds.
In such event, the Trustee is authorized to execute and deliver
such instruments and documents as is necessary to effect in any such interim
construction lender a lien of equal parity to the lien securing the bonds.
XII
SALE OF PROPERTY
Should Issuer desire to convey all or any portion of the Property,
Trustee is authorized in its sole discretion to execute a release or partial
release thereof, provided that:
(A) Any consideration received other than cash for such conveyance
must be equal to or greater than the fair market value of the property
conveyed at the time of sale and becomes part of the Lien, as evidenced at
Trustee's election and at Issuer's sole expense by an attorney's title
opinion or a mortgagee's title policy in favor of Trustee reflecting no liens
or encumbrances
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prior to the Lien other than as agreed upon in writing between Issuer and
Trustee, or is applied as in (B);
(B) Any cash proceeds derived from such conveyance shall be
delivered to Trustee to be applied either:
(1) To call and prepay outstanding Bonds in the same manner
as partial prepayments are to be applied under the provisions of Article IX;
or
(2) Paid into a trust or escrow account in a depository
designated by Trustee, to be applied:
(a) To purchase additional property subjected to and
becoming a part of the Lien and any mortgage or deed of trust upon the
Property, as evidenced at Trustee's election and at Issuer's sole expense by
an attorney's title opinion or a mortgagee's title policy in favor of Trustee
reflecting no liens or encumbrances prior to the Lien other than as agreed
upon in writing between Issuer and Trustee;
(b) To construct additional improvements on the property
remaining under the Lien; and/or
(c) To reduce any other lien indebtedness existing
against the Property.
Issuer, subject to the approval of Trustee, has the right to select from
the foregoing alternatives, and shall notify Trustee in writing and in
advance which alternatives it has selected and the respective amounts.
(C) The value of the remaining property covered by the Lien is
sufficient, in the opinion of Trustee, to secure the outstanding Bonds after
application of the sale proceeds as in (B) above.
Trustee shall not be liable for mistakes of judgment made in good
faith in reliance upon any appraisals or other information
furnished which forms a reasonable basis for Trustee's decision.
XIII.
SUBSTITUTION OF COLLATERAL
Should Issuer desire to substitute the Property, in whole or in
part, Trustee is authorized in its sole discretion to execute
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such releases, partial releases and other legal documents as may be
necessary to do so, provided that:
(A) The fair market value of the substituted property shall be
equal to or greater than the fair market value of the Property released from
the Lien at the time of substitution; and
(B) The Property substituted shall be subjected to and become a
part of the Lien and any mortgage or deed of trust upon the Property, as
evidenced at Trustee's election and at Issuer's sole expense by an attorney's
title opinion or a mortgagee's title policy in favor of Trustee reflecting no
liens or encumbrances prior to the Lien other than as agreed upon in writing
between Issuer and Trustee.
Trustee shall not be liable for mistakes of judgment made in good faith
in reliance upon any appraisals or other information furnished which forms
a reasonable basis for Trustee's decision.
XIV.
CONDEMNATION OF PROPERTY
(A) Should any governmental agency undertake to acquire by eminent
domain all of the property comprising a project, Trustee is authorized to
join with Issuer in negotiating with such governmental agency, and to execute
any and all instruments necessary or required to convey said Property to such
governmental agency, without requiring formal condemnation; provided, that the
sums received for such condemnation shall be at least sufficient to pay the
principal balance of the Bonds and accrued interest to date of pay-off.
Trustee is not authorized to agree to any non-judicial total condemnation
which will not provide funds sufficient to pay all of the Bonds then
outstanding, with accrued interest thereon.
(B) Should any governmental agency undertake to acquire by eminent
domain a portion of the property comprising a project, Trustee is authorized
to join with Issuer in negotiating with such governmental agency and to
execute such documents as may be necessary or required to transfer title
of such portion to such governmental agency without requiring formal
condemnation; provided, that any cash proceeds derived from such acquisition
shall be delivered to Trustee to be applied either:
(1) To call and prepay outstanding Bonds in the same manner
as partial prepayments are to be applied under the provisions of paragraph
IX(B); or
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(2) To be paid into a trust account maintained by Trustee to
be applied:
(a) For the purchase of additional property which shall
be subjected to and become a part of the Lien and any mortgage or deed of
trust upon the Property, as evidenced at Trustee's election and at Issuer's
sole expense by an attorney's title opinion or a mortgagee's title policy in
favor of Trustee reflecting no liens or encumbrances prior to the Lien
other than as agreed upon in writing between Issuer and Trustee;
(b) To construct additional improvements on the property
remaining under the Lien; and/or
(c) To reduce any other lien indebtedness existing
against the Property.
Issuer, subject to the approval of Trustee, has the right to select which
of the foregoing alternatives it desires to exercise, and shall notify
Trustee in writing and in advance which alternative is selected by Issuer.
XV.
DUTIES OF TRUSTEE, PAYING AGENT AND REGISTRAR
The following services will be provided for the benefit of Issuer
and the Bondholders:
(A) Trustee shall:
(1) Maintain the legal file containing Issuer's application
for financing, resolution for financing, appraisal, Issuer's organizational
documents, trust indenture, escrow instructions and agreement (if applicable),
commitment(s) for title insurance, policy(s) of title insurance or attorney's
title opinion, opinion(s) of counsel (if applicable), current fire and
extended coverage insurance policy(s), builder's risk insurance policy(s)
(if applicable), and any other written agreements that may be entered into
between Issuer and Trustee simultaneously with or after execution hereof.
(2) Hold for the benefit of the Bondholders their legal
rights to repayment and in and under the Lien; and in the event of default by
Issuer, Trustee may (or shall when required) pursue in its name on their
collective behalf all lawful remedies.
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(3) Provide Issuer an amortization schedule(s) for the
payment of the Bonds. If electronic banking is available, Trustee will
provide Issuer instructions for its use. If electronic banking is not
available, Trustee will provide Issuer a sinking fund installment book(s).
(4) Monitor all sinking fund installments and if Issuer is in
arrears, give written and/or oral notification of the delinquency.
(5) Disburse all Bond proceeds to Issuer at such time as all
the legal requirements have been met.
(6) Endorse insurance settlement checks, if any, for damages
to the insured Property when satisfied that the proceeds will be used as
required herein.
(7) Execute a release of the Lien when all Bonds have been
paid or canceled under the terms and provisions hereof.
(B) Paying Agent shall:
(1) Record all proceeds received from the sale of Bonds.
(2) Provide Issuer after the final project disbursement from
the Bond Proceeds Account with an accounting showing the deposits to and
charges against the Bond Proceeds Account.
(3) Receive and record weekly or monthly sinking fund
installments from Issuer.
(4) Provide Issuer semi-annual statements showing the deposits
to and charges against the Sinking Fund Account.
(5) Prepare and mail as required interest checks to the
registered owners of simple-interest Bonds.
(6) Prepare and mail principal checks to the registered
owners of simple-interest Bonds at maturity.
(7) Prepare and mail principal and interest checks to the
registered owners of compound-interest Bonds at maturity.
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(8) Provide Issuer with information and forms for notification
of the Bond owners in the event of a prepayment of all or a portion of the
outstanding Bonds.
(9) Prepare and mail principal and interest checks to the
registered Bond owners of Bonds that are called for prepayment prior to
maturity
(10) Prepare and mail Internal Revenue Service Form 1099's to
inform each registered owner of the Bonds of the respective amount of
interest earned and required to be reported by Trustee to the Internal Revenue
Service for that taxable year (which may be different figures from those
applicable to and reportable for income tax purposes by individual
Bondholders).
(11) Prepare and forward to applicable taxing authorities all
required information pertaining to the interest income of Bondholders.
(C)Registrar shall:
(1) Upon receipt by the Trustee of all documentation which is
prerequisite, print, issue, authenticate and mail all Bonds to the registered
owners.
(2) Record and reissue Bonds subsequently transferred to a
new owner.
(3) Maintain a permanent Bond register which reflects the
serial or other identification number, maturity date, face value, interest
rate, name and address of owner, date bought, and price reported paid (if any)
for each Bond issued.
(4) Reissue mutilated, defaced, destroyed, lost and stolen
Bonds if prior to maturity, and if matured, direct the payment of the
principal and accrued interest to the registered Bond owners, subject to all
terms and conditions hereof.
XVI.
LIMITATION OF LIABILITY
Trustee, Paying Agent and Registrar (for purposes of this Article
jointly and severally called "Trustee") accept their respective duties and
responsibilities as set forth under the terms of this Trust Indenture upon
the express conditions (to which Issuer and the Bondholders by the acceptance
of the Bonds agree)
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that Trustee shall not be responsible for any act or omission hereunder unless
due to its own gross negligence or willful default; and no implied
covenants, obligations or warranties whatsoever shall be read into this
debenture against Trustee. Without limiting the generality of the
foregoing:
(A) Trustee shall not be responsible or liable for any recitals,
statements or representations whatsoever in any prospectus or offering
circular used in connection with the sale of the Bonds. Trustee makes no
representation or warranty whatsoever, express or implied, (i) that the terms,
conditions or provisions of this Trust Indenture are, will remain or will
become in compliance with any state or federal statute or regulations
applicable or relating to this Indenture or the transactions contemplated
herein or related hereto, or (ii) regarding any individual Bondholder's
reportable amount of income from the Bonds, his tax liability thereon or the
tax consequences of any transaction relating to the Bonds, their repayment
and/or the collection thereof pursuant to Issuer's default whether through a
forbearance agreement, a court-ordered or bondholder-approved restructure of
the debt, or foreclosure and sale of the Property.
(B) Trustee shall have no liability for any losses resulting from
its reliance upon any instrument, writing or communication believed by it
in good faith to be genuine and properly authorized, nor for forgery of
any bond or unauthorized delivery by Issuer of any Bond. Trustee shall
be under no duty to investigate or inquire into any statements contained
or matters referred to in any such item.
(C) Trustee shall not be liable upon the Bonds for the payment of
the principal and/or interest due thereon.
(D) Notwithstanding any applicable statutes or regulations
relating to registered Bonds, Trustee shall have no duty to recognize any
person as a Bondholder unless such person is shown as the registered
Bondholder on the books and records of Trustee.
(E) Trustee may accept as correct any written statement made to
it by the person or persons who sign this Trust Indenture for and on behalf
of Issuer or by such other representatives of Issuer as may be from time
to time designated by Issuer to act for it, and Trustee will be fully
protected in acting upon and in conformity with such opinion.
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(F) Trustee may request and act upon the opinion or advice of its
counsel. If Trustee acts on an opinion of counsel concerning matters
relating hereto and its duties hereunder, it shall be relieved of all
liability in connection with the matters referenced herein and its duties
hereunder when acting in conformity therewith.
(G) If an event of default has occurred and is continuing, Trustee
shall, in exercising its rights and powers hereunder, use the same degree of
care and skill as a prudent person would exercise or use under the
circumstances in the conduct of his own affairs.
(H) Trustee shall not be bound to ascertain or inquire into the
performance or observances of any covenants, conditions, or agreements of
Issuer hereunder. However, Trustee may require of Issuer full information
and advice about such performance or observance.
(I) Trustee need not consider the ability to respond in damages
when selecting or approving any person or entity to render opinions, advice
and/or services pertaining hereto.
(J) Trustee shall not be responsible for recording or re-recording
or filing or re-filing this Indenture, for the validity of the execution
by Issuer of this Indenture, for the sufficiency or maintenance of the
security for the Bonds, or for the validity or enforceability of this
Indenture, the Lien or any security rights or remedies granted to Trustee
or the Bondholders hereunder or in any other Bond document. Trustee shall
have no obligation to perform any of the duties of Issuer under the Indenture.
(K) Moneys and securities held by Trustee in trust need not be
segregated from other assets except to the extent required by law or this
Indenture. Trustee shall not be liable for interest on any moneys received
by it hereunder. Trustee shall not be accountable for the use or application
of funds from Issuer's Bonds Proceeds Account after same have been disbursed
in accordance herewith.
(L) Notwithstanding anything to the contrary, if in the sole
judgment of Trustee any action it desires or is requested or demanded to take
hereunder may tend to involve liability, loss or expense, Trustee shall not
be obligated to so act unless and until it is furnished with indemnity
satisfactory to it.
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(M) The permissive right of Trustee to do certain things, whether
express or implied, shall not be construed as a duty or obligation to take
such action.
(N) Trustee shall not be required to give any bond or security in
respect hereof.
(0) Upon delivery of an executed release of the Lien to Issuer
pursuant to Article IX(G) or upon restructure of the debt or foreclosure and
final distribution of the net proceeds therefrom to the Bondholders, Trustee
shall have thereby discharged in full all its liabilities and obligations
hereunder, and this trust shall terminate along with any further duties,
obligations or liabilities of Trustee hereunder.
(P) Should liability for any of the foregoing nonetheless be
unsuccessfully judicially asserted against Trustee, it shall be reimbursed
and have the Reimbursement Lien for costs and expenses incurred in defending
itself, including without limitation attorney, stenographer and witness fees
and travel expense and court costs.
(Q) By purchasing and accepting delivery of the Bonds, each
Bondholder shall hold same subject to all terms of this Trust Indenture.
XVII.
ANCILLARY/CO-TRUSTEE; RESIGNATION AND REMOVAL;
SUCCESSOR TRUSTEES
(A) Trustee may in its sole discretion appoint an additional
individual or institution as a Co-Trustee or a separate ancillary Trustee
hereunder. Trustee will so notify Issuer of such appointment, as well as any
applicable regulatory authority. Each power or right vested in Trustee
hereunder shall be exercisable by and vest in such Co-Trustee or separate
ancillary Trustee to the extent necessary or desirable to enable it to
exercise the powers and rights necessary to carry out the purposes of this
Indenture. Provided, such Co-Trustee or ancillary Trustee may not be Issuer,
Broker nor an affiliate of either.
(B) 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 such appointment in writing by such successor Trustee
as hereinafter provided.
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(1) Subject to the foregoing, the Trustee may, at its
election, resign at any time by either:
(a) Giving to Issuer written notice thereof; or
(b) Petitioning a court of competent jurisdiction for
both (i) the permission to resign and (ii) the appointment of a qualified
successor trustee.
Provided: (i) if the Trustee shall elect to resign while
Issuer is in default hereunder, the Trustee must so petition a court as set
forth in (b) above, as Issuer may not in such event select the successor
Trustee; and provided further, no successor Trustee shall in any event be the
Broker or Issuer, or a subsidiary, affiliate or under the control of either;
and (ii) every successor Trustee appointed or succeeding pursuant to any
of the foregoing provisions shall be either a trust company or a national
or state bank with trust powers, in good standing and having combined
capital, surplus and undivided profits of at least $500,000, or a corporation,
individuals or mixture approved by a court of competent jurisdiction.
(2) If at any time (i) the Trustee shall be adjudged a
bankrupt, (ii) a receiver shall be appointed therefor by a court of competent
jurisdiction, or (iii) an authorized regulatory agency shall take charge or
control thereof, Issuer may, if not in default hereunder, appoint a qualified
successor Trustee.
(3) If at any time the Trustee shall become incapable of
acting or ineligible to act under any state or federal law or this Indenture,
it shall tender its resignation as in subparagraph (2) above, failing which
Issuer may, if not in default, petition a court of competent jurisdiction for
both (i) the removal of the Trustee and (ii) the appointment of a qualified
successor Trustee.
(4) In the event Issuer shall be disqualified by its default
from exercising its rights under subparagraphs (B)(2) or (3) above, or shall
fail to exercise such rights within thirty (30) days from occurrence of the
event giving rise to such rights, such rights shall devolve upon:
(a) Under subparagraph (B)(2), such bankruptcy Trustee,
receiver or government agency; and
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(b) Under subparagraph (B)(3), any Bondholder as set
forth in subparagraph (5) below.
(5) If, in a proper case, a successor Trustee has not been
appointed pursuant to the foregoing provisions within six months after the
resignation or removal of Trustee, any Bondholder may apply to any District
Court in and for Maricopa County, Arizona or to any succeeding court of
competent jurisdiction to appoint a successor Trustee. Such Court may
thereupon, after such notice, if any, as it may be deem proper, appoint a
successor Trustee.
(6) Any Trustee may be removed at any time by an instrument
appointing a successor Trustee executed by the holders of not less than a
majority in aggregate principal amount of all Bonds then outstanding.
(7) All provisions of this Article which refer to the
"Trustee" shall likewise always include the positions of Paying Agent and
Bond Registrar, except that the Trustee, acting voluntarily pursuant to
subparagraph (2) above, may resign as Trustee while retaining its
appointments and continuing as Paying Agent and/or Bond Registrar; or
vice versa.
(8) Issuer shall give notice or cause notice to be given of
each resignation and each removal of the Trustee and each appointment of a
successor Trustee, Paying Agent and/or Registrar by mailing written notice
of such event by first-class mail, postage prepaid, to the Registered Holders
of Bonds as their names and addresses appear in the Bond Register. Each
notice shall include the name of the successor Trustee, Paying Agent and/or
Registrar, as the case may be, and its principal address.
(9) Should Trustee change its name, or voluntarily merge or
consolidate with or its business be taken over by another corporation
chartered to exercise trust powers and legally competent to perform such
duties, then such other corporation shall succeed to all of the powers
and duties of Trustee as herein set out, without any further act.
(10) Any successor Trustee appointed hereunder shall execute
and deliver to Issuer or the Court, whichever is applicable, an instrument
accepting such appointment. Thereupon such successor Trustee, without any
further act, shall become duly vested with all of the trust estate and the
rights, powers, trusts, duties and obligations of its predecessor.
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(11) The name of any duly appointed and qualified successor
trustee shall be substituted wherever "Trustee" is used throughout this
Indenture.
XVIII.
ILLEGAL INTEREST
It is the intention of the parties hereto to comply With applicable
usury laws; notwithstanding any provisions herein to the contrary or in any
of the documents securing payment or otherwise relating to the Bonds, in no
event shall this Trust Indenture, including provisions relating to penalty
interest in the event of default or to the Reimbursement Lien rate, the
Bonds or such documents require the payment or permit the collection of
interest in excess of the maximum amount permitted by such laws.
(A) If any such excess of interest is contracted for, charged or
received under the Bonds or under any of the instruments securing payment
thereof or otherwise relating thereto, including this Trust Indenture or in
the event the maturity of the indebtedness evidenced by the Bonds is
accelerated in whole or in part, or in the event that all or part of the
principal or interest of the Bonds shall be prepaid, so that under any of
such circumstances the amount of interest contracted for, charged or received
therefrom or under any of the instruments securing payment thereof or
otherwise relating thereto, on the amount of principal actually outstanding
from time to time under the Bonds, shall exceed the maximum amount of
interest permitted by applicable usury laws, then in any such event: (i)
the provisions of this Article shall govern and control; (ii) neither Issuer
nor any other person or entity now or hereafter liable for the payment of
the Bonds shall be obligated to pay the amount of such interest to the
extent that it is in excess of the maximum amount of interest permitted by
applicable usury laws; (iii) any such excess which may have been charged
and/or collected shall be either applied as of the date charged or collected
as a credit against the then unpaid principal amount of the Bonds or
refunded to Issuer, at Issuer's option, and (iv) the effective rate of
interest shall be automatically, immediately and retroactively reduced to the
maximum lawful contract rate allowed under applicable usury laws as now or
hereafter construed by the courts having jurisdiction thereof.
(B) Without limiting the foregoing, all calculations of the rate
of interest contracted for, charged upon or received from the Bonds or under
such other documents, which calculations are made for the purpose of
determining whether such rate exceeds the
Trust Indenture
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maximum lawful contract rate, shall be made, to the extent permitted by
applicable laws, by amortizing, prorating, allocating and spreading in
equal parts during the period of the full stated term of the respective
indebtedness, all interest at any time contracted for, charged or received
by Trustee from Issuer or otherwise.
XIX.
RELEASE OF THE LIEN
When Issuer has duly made all of the payments required to be made
under the provisions of this Trust Indenture and/or the offering circular to
retire a Series of Bonds, Trustee is authorized to execute a release of
the lien securing the series of bonds so retired even if there are checks
issued for the payment of the principal and/or interest upon the Bonds
which are still uncashed; provided, that Trustee shall first satisfy itself
that the funds remaining on deposit in the Sinking Fund Account are sufficient
to pay such outstanding checks upon presentment.
XX.
INVESTMENT OF BOND PROCEEDS AND
SINKING FUND ACCOUNT FUNDS;
FEES OF TRUSTEE, ET. AL.
(A) Upon the receipt by Trustee of the proceeds from the sale of
Bonds, and upon receipt of the sinking fund installments required of Issuer,
it is expressly agreed by Issuer that Trustee may invest all or part of
such funds in United States government and government agency obligations,
federally insured time and/or demand deposits of banks and savings and
loan associations mutual and/or money market funds which invests only
in the foregoing instruments; and an investment in any such instruments
and/or fund(s) shall be deemed prudent. All moneys required to be deposited
with or paid to Trustee under any provision of the Indenture, until disbursed
or directed as permitted by the Indenture, shall be held by Trustee in
trust and may be commingled with other trust funds held by the Trustee.
(B) The fees of Trustee, Paying Agent and Registrar, the payment
of which is secured by the Reimbursement Lien and to which Issuer has agreed,
are set forth on EXHIBIT "A" attached hereto.
(C) Notwithstanding the amount of fees to be paid to Trustee as
set forth on EXHIBIT "A", should Trustee, Paying Agent
Trust Indenture
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or Registrar be required to perform extraordinary services, it shall have
the right to assess reasonable charges against Issuer for said extraordinary
services in addition to the service charges otherwise described on
EXHIBIT "A". Such services occasioned by Issuer' s prepayment under
Article IX or default shall by definition be extraordinary. Without
limiting the foregoing, Trustee shall have the right to be reimbursed by
Issuer for any fees or expenses incurred for any unusual services required
of Trustee, either in the event of prepayment, default or otherwise, and
shall specifically have the right of reimbursement and the Reimbursement
Lien for any fees, compensation or documented travel expenses paid by
Trustee to or for licensed attorneys, accountants, appraisers, realtors
surveyors, court stenographers, Trustee's own personnel or any other
persons whose services are necessary or required in order to perform such
extraordinary services. The hourly compensation of Trustee's personnel
shall be computed as base annual salary divided by two thousand (2,000)
hours.
XXI.
SUPPLEMENTAL INDENTURES
(A) Issuer and Trustee, without the consent of the Bondholders,
from time to time may enter into one or more indentures supplemental hereto
for any of the following purposes:
(1) To add to the covenants of Issuer for the benefit of the
Bondholders, or to surrender any right or power herein conferred upon Issuer;
(2) To cure any vagueness or ambiguity or to correct or
supplement any inconsistent or defective provision contained herein or in any
supplemental indenture; provided, such action shall not adversely affect the
interest of the Bondholders; or
(3) To make any change which, in the judgment of Trustee in
reliance upon opinion of counsel, does not adversely affect the rights of any
Bondholder.
(B) With the foregoing limited exceptions which permit modification
of the Trust Indenture by Issuer and Trustee alone, the Trust Indenture, the
rights and obligations of Issuer, and the rights and obligations of the
Bondholders may be modified by Issuer with the consent of the respective
holders of not less than sixty-six and two-thirds percent (66 2/3%) in principal
of the Bonds then outstanding; provided that no such modification may
be made without
Trust Indenture
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the consent of the holders of each Bond affected if such modification would:
(1) Change the stated maturity date of the principal or of any
installment of interest on any Bond; or
(2) Reduce the principal amount or rate of interest on any
Bond; or
(3) Impair the right as herein set out to institute suit for
the enforcement of payment on or with respect to the Bonds; or
(4) Reduce the percentage and principal amount of the Bonds of
which the holders' collective consent is required for any such supplemental
indenture;
(5) Except as permitted under this Indenture, permit the
creation of any lien ranking prior to or on a parity with the Lien; or
(6) Modify any of the provisions of this Article.
(C) Whenever the consent of Bondholders is required for any
proposed change, modification, addition, elimination or subordination of the
Trust Indenture or otherwise, Trustee may cause a notice specifying the,
action proposed to be mailed, first-class, postage prepaid, to the owner of
each outstanding Bond at the address shown on the Bond Register maintained by
the Registrar. Trustee shall be entitled to treat the failure of any
Bondholder to respond within thirty (30) days after completion of the mailing
of such notice as either a consent or a rejection, as indicated in the notice,
of the proposed action specified in the notice.
(1) Except as hereinafter provided in Article XXII(B),
Trustee shall be the sole judge of the validity and regularity of all consents
filed under this paragraph, and may require evidence satisfactory to it that
the signer of such consent is lawfully entitled to execute the same.
(2) Any required action or consent of Bondholders may also be
obtained by a vote of Bondholders representing the requisite percentage of
principal then outstanding who are present or represented by proxy at a
meeting called by Trustee for such purpose to be held at Trustee's principal
offices at a time and
Trust Indenture
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date specified in a notice mailed to the Bondholders as above not less than
thirty (30) days prior to such meeting.
(D) It shall not be necessary for any consent of Bondholders to
approve the particular form of any proposed supplemental indenture; rather,
it shall be sufficient if such consent approves the substance thereof.
XXII.
BONDHOLDER LISTS AND REPORTS
EVIDENCE OF RIGHTS OF BONDHOLDERS
(A) Any request, consent or other instrument which the Indenture
may require or permit to be signed and executed by the Bondholders may be in
any number of concurrent instruments of similar tenor, and may be signed or
executed by such Bondholders in person or by an attorney appointed in writing
or by a committee constituted by an agreement to which any portion of the
Bonds shall have been made subject by deposit or otherwise. Proof of the
execution of any such request or other instrument or of a writing appointing
any such agent or the holder of the Bonds shall be sufficient for any purpose
of the Indenture, if made in the following manner:
(1) The fact and date of the execution by any person of such
request in writing may be provided by any of the following documents in form
satisfactory to Trustee:
(a) The certificate under his official seal of any
notary public or other officer in any jurisdiction who by the laws thereof
has power to take acknowledgements of documents to be recorded within such
jurisdiction, that the person signing such request or other instrument
acknowledged to him the execution thereof;
(b) An affidavit of a witness of such execution; or
(c) The certification or guarantee of the authenticity of
such signature by an officer of any duly chartered trust company or
commercial bank.
(2) The ownership of registered Bonds shall be proved by the
Bond Register as hereinbefore provided.
Trust Indenture
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(3) Trustee may, nevertheless, in its discretion, (i)accept
other proof in cases where it deems such other proof sufficient or (ii)
require further proof in cases where it deems further proof desirable.
The foregoing provisions of this paragraph shall not be
construed to abrogate, modify or affect any of the exemptions or rights of
Trustee set out in Article XVI of this Indenture.
(B) For the purposes of this Indenture, in determining whether the
holders of the required percentage of the principal amount of Bonds have
concurred in any directive, amendment, modification, consent, waiver or other
action, Bonds deemed by Trustee to be owned by Issuer, or under direct or
indirect common control of Issuer or by an officer, director, trustee, eider
or member thereof, shall be disregarded, except that for the purpose of
determining whether Trustee shall be protected in relying upon any such
directive, amendment, modification, consent, waiver or other action, only
Bonds as to which Trustee has actual knowledge of such ownership or control
must be so disregarded.
(C) If either (i) Issuer or (ii) three or more Bondholders
(hereinafter referred to as "Applicant(s)") apply in writing to Trustee, and,
exclusive of Issuer, furnish to Trustee reasonable proof that each such
Applicant has owned a Bond for a period of at least six (6) months preceding
the date of such application, and such application further states that the
Applicant(s) desire to communicate with all Bondholders with respect to
their rights under this Indenture or under the Bonds and is accompanied
by a copy of the form of proxy or other communication which such Applicant(s)
propose to transmit, then Trustee shall, within ten (10) business days
after the receipt of such application, at its election, either:
(1) Afford such Applicant(s) access to such information;
(2) Inform such Applicant(s) as to the approximate number of
registered Bondholders and as to the approximate cost of mailing to such
Bondholders the form of proxy or other communication, if any, specified in
such application, in which latter event Trustee shall further elect either:
(a) Within ten (10) days after tender to Trustee of the
material to be mailed and of payment of the reasonable expenses of mailing,
to mail to such Applicants, together with a return of the material to have
been mailed to the
Trust Indenture
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Bondholders, a written statement to the effect that, in the opinion of Trustee,
such mailing would be contrary to the best collective interest of the
Bondholders or would be in violation of applicable law, such written
statement specifying the basis of such opinion; or
(b) Mail, with reasonable promptness, to each registered
Bondholder a copy of the form of proxy or other communication which is
specified in such request.
(D) Issuer, Broker, and each and every holder of the Bonds by
receiving and holding the same, agrees with Trustee and Registrar that:
(1) Each Bondholder's identity is privileged information not
subject to disclosure and such Bondholder may receive communications from
Issuer, other Bondholders or any third party only in accordance with this
Article; and
(2) Neither Trustee nor Registrar shall be held accountable
by reason of mailing any material pursuant to a request made pursuant to this
Article which Trustee in its sole discretion determines to grant.
XXIII.
MISCELLANEOUS PROVISIONS
(A) When the context requires, the singular includes the plural,
the masculine includes the female and neuter, and vice versa. Except within
a series, the conjunctive includes the disjunctive and vice versa.
(B) The headings contained in the Table of Contents and body
hereof are for convenience only and shall in no manner be construed as a part
of this Indenture.
(C) All notices required hereby as between Issuer and Trustee,
Paying Agent and/or Registrar shall be sufficient if such notices are in
writing and mailed by either registered or certified mail, return receipt
requested, postage prepaid, or by delivering in person or causing the delivery
thereof by commercial courier to such party at the address shown on the last
page or at such other address as either party may hereafter furnish in writing
to the other.
Trust Indenture
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(D) This Indenture constitutes the entire agreement between the
parties and supersedes any and all other prior agreements or understandings,
if any, whether oral or in writing, relating to the rights and liabilities
arising out of the subject matter hereof.
(E) This agreement may be amended or modified only in accordance
with the terms of this Indenture by a written instrument of even or
subsequent date hereto signed by both parties.
(F) Neither the waiver of any provision or breach hereof nor the
forbearance, failure or delay, whether intentional or inadvertent, in
exercising any right or remedy hereunder, nor the partial exercise thereof,
by either party shall be deemed a waiver of any other provision or breach or
of the subsequent or further exercise of such right or remedy or as
establishing a course of dealing.
(G) If any provision of this Trust Indenture is held to be illegal
or unenforceable, the remaining provisions shall nevertheless remain in full
force and effect. In addition, the illegal or unenforceable provisions
shall be modified so as to conform, to the greatest extent legally
permissible, to the original intent of such provision.
(H) This agreement will be binding upon and will inure to the
benefit of each party's respective successors and assigns.
(I) Each person signing below represents and warrants that he is
authorized to act in the capacity stated.
(J) ISSUER AND TRUSTEE EACH ACKNOWLEDGES AND AGREES THAT ITS
REPRESENTATIVES AND ATTORNEYS HAVE HAD THE OPPORTUNITY TO PARTICIPATE IN THE
DRAFTING AND CONSTRUCTION OF THIS INDENTURE AND THAT THE PROVISIONS HEREOF
SHALL NOT BE CONSTRUED AGAINST OR IN FAVOR OF EITHER PARTY.
(K) This Indenture shall be construed in accordance with and
governed by the laws of Arizona, with the exception of the terms and conditions
pertaining to the foreclosure of the Property set forth in Article VIII
which shall be construed in accordance with and governed by the laws of
the State in which the Property is located.
(L) As used throughout, the words or phrases "legal costs,"
"collection costs," "collection expenses, "costs of maintaining a legal
defense," "Reimbursement Lien" and words and
Trust Indenture
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phrases of like import shall be liberally construed to include all costs
and expenses reasonably incurred by Trustee, directly or indirectly, as
compensation or reimbursement to its own personnel, licensed legal counsel,
accountants, surveyors, appraisers, court reporters and other experts,
including their fees or other compensation and travel expenses, in
carrying out the purposes of this Indenture and holding Trustee harmless
from such costs and expenses.
IN TESTIMONY WHEREOF, Issuer and Trustee have caused this
instrument to be signed in duplicate originals by their duly authorized
agents and representatives this 2nd day of October, 1998.
ISSUER:
THE BILTMORE GROUP OF LOUISIANA, L.L.C.
By:
------------------------------
JoAnne M. Caldwell-Bayles,
Managing Member
Colonial:
COLONIAL TRUST COMPANY, TRUSTEE
By:
------------------------------
Its Vice-President
Trust Indenture
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STATE OF ARIZONA >
COUNTY OF MARICOPA >
This instrument was acknowledged before me on the day of , 19 , by
--- ------ ----
John Johnson, President of COLONIAL TRUST COMPANY, an Arizona corporation
with trust powers.
----------------------------------
Notary Public, State of Arizona
----------------------------------
Notary's Name, Printed or Typed
STATE OF >
----------------
PARISH OF >
---------------
This instrument was acknowledged before me on the day of ,
------ ----------
19 , by JoAnne M. Caldwell-Bayles, Managing Member of The Biltmore Group
-----
of Louisiana, L.L.C., a Louisiana limited liability company.
----------------------------------
Notary Public, State of Louisiana
----------------------------------
Notary's Name, Printed or Typed
Trust Indenture
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EXHIBIT "A"
TRUSTEE, PAYING AGENT & BOND REGISTRAR/TRANSFER AGENT
SCHEDULE OF FEES