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EXHIBIT 10.57
EXECUTION COPY
LOAN AND TRUST AGREEMENT
among
MASSACHUSETTS DEVELOPMENT FINANCE AGENCY
and
FREQUENCY & TIME SYSTEMS, INC.
and
WELLS FARGO BANK MINNESOTA, NATIONAL ASSOCIATION, as Trustee
Dated as of May 1, 2001
And Providing for the Issue of:
$2,725,000
Massachusetts Development Finance Agency
Variable Rate Demand Revenue Bonds
Frequency & Time Systems Issue, Series 2001
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TABLE OF CONTENTS
Page
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ARTICLE I: INTRODUCTION AND DEFINITIONS........................................ 1
Section 101. Description of the Agreement and the Parties................ 1
Section 102. Definitions................................................. 1
ARTICLE II: LOAN OF BOND PROCEEDS; THE ASSIGNMENT AND PLEDGE................... 7
Section 201. Loan of Bond Proceeds....................................... 7
Section 202. Assignment and Pledge of the Issuer......................... 7
Section 203. Further Assurances.......................................... 8
Section 204. Defeasance.................................................. 8
ARTICLE III: THE BORROWING..................................................... 9
Section 301. The Bonds................................................... 9
Section 302. Application of Bond Proceeds................................ 32
Section 303. Tax Status of Bonds......................................... 32
Section 304. Bond Fund................................................... 32
Section 305. Rebate Fund................................................. 33
Section 306. Reserved.................................................... 35
Section 307. Application of Moneys....................................... 35
Section 308. Payments by the Borrower.................................... 36
Section 309. Unconditional Obligation.................................... 38
Section 310. Redemption of the Bonds..................................... 38
Section 311. Purchase of Bonds Tendered.................................. 41
Section 312. Remarketing of Bonds Tendered............................... 42
Section 313. Paying Agent................................................ 43
Section 314. Remarketing Agent........................................... 43
Section 315. Investments................................................. 45
Section 316. Reserved.................................................... 46
Section 317. Credit Facilities........................................... 46
Section 318. Securities Laws............................................. 47
ARTICLE IV: THE PROJECT ....................................................... 47
Section 401. Construction Fund........................................... 47
Section 402. Construction of the Project................................. 48
Section 403. Certificate of Completion................................... 49
Section 404. Completion by the Borrower.................................. 49
Section 405. Borrower not to Impair Tax Status; Use of Project........... 49
Section 406. Compliance with Law......................................... 49
Section 407. Current Expenses............................................ 50
Section 408. Disposition and Use of Project.............................. 50
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ARTICLE V: RESERVED ........................................................... 50
ARTICLE VI: DEFAULT AND REMEDIES............................................... 50
Section 601. Default by the Borrower..................................... 50
Section 602. Remedies for Events of Default.............................. 51
Section 603. Court Proceedings........................................... 52
Section 604. Revenues after Default...................................... 52
Section 605. The Credit Facility; Acceleration........................... 52
Section 606. Rights of Bondowners........................................ 53
Section 607. Performance of Borrower's Obligations....................... 53
Section 608. Remedies Cumulative; No Waiver.............................. 53
ARTICLE VII: THE TRUSTEE....................................................... 53
Section 701. Corporate Organization, Authorization and Capacity.......... 53
Section 702. Rights and Duties of the Trustee............................ 54
Section 703. Fees and Expenses of the Trustee............................ 56
Section 704. Resignation or Removal of Trustee........................... 57
Section 705. Successor Trustee........................................... 57
Section 706. Conflicting Interests....................................... 58
ARTICLE VIII: THE ISSUER....................................................... 58
Section 801. Corporate Organization, Authorization and Power............. 58
Section 802. Covenant as to Payment; Faith and Credit of Commonwealth
Not Pledged................................................. 59
Section 803. Rights and Duties of the Issuer............................. 59
ARTICLE IX: THE BONDOWNERS..................................................... 61
Section 901. Action by Bondowners........................................ 61
ARTICLE X: THE BORROWER ....................................................... 62
Section 1001. Existence and Good Standing; Merger; Consolidation......... 62
Section 1002. Indemnification by the Borrower............................ 62
ARTICLE XI: MISCELLANEOUS...................................................... 62
Section 1101. Amendments................................................. 62
Section 1102. Notices.................................................... 64
Section 1103. Time....................................................... 64
Section 1104. Agreement Not for the Benefit of Other Parties............. 64
Section 1105. Severability............................................... 64
Section 1106. Counterparts............................................... 64
Section 1107. Captions................................................... 64
Section 1108. Governing Law.............................................. 64
SIGNATURES ..................................................................... 65
EXHIBIT A: Form of Requisition for Payment from Construction Fund............... A1
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ARTICLE I: INTRODUCTION AND DEFINITIONS
Section 101. Description of the Agreement and the Parties. This LOAN AND
TRUST AGREEMENT (the "Agreement") is entered into as of May 1, 2001 by the
Massachusetts Development Finance Agency, a body corporate and politic and a
public instrumentality of The Commonwealth of Massachusetts established by and
existing under Massachusetts General Laws Chapter 23G (with its successors, the
"Issuer"); Frequency & Time Systems, Inc. a Delaware corporation having a usual
place of business at 34 Tozer Road, Beverly, MA ("Borrower"); and Wells Fargo
Bank Minnesota, National Association, as trustee (with its successors, the
"Trustee"). This Agreement is a financing document combined with a trust
agreement as one instrument under Massachusetts General Laws Chapters 23G and
40D, each as amended (the "Act").
This Agreement provides for the following transactions:
(a) the Issuer's issue of the Bonds;
(b) the Issuer's loan of the proceeds of the Bonds to the Borrower to
finance and refinance the acquisition, construction and installation of the
Project;
(c) the Borrower's repayment of the loan of Bond proceeds from the
Issuer through payment to the Trustee of all amounts necessary to pay the Bonds
issued by the Issuer; and
(d) the Issuer's assignment to the Trustee in trust for the benefit and
security of the Bondowners of the Issuer's rights with respect to the loan to
the Borrower hereunder, including repayment of the loan to be received from the
Borrower.
At the time the Bonds are issued, the Borrower will cause an
irrevocable, transferable Letter of Credit of Bank, in the maximum aggregate
amount of Two Million Seven Hundred Fifty-Eight Thousand Five Hundred Ninety-Six
Dollars ($2,758,596), to be issued to the Trustee to be drawn upon to pay the
Purchase Price of, principal of and interest on the Bonds.
In consideration of the mutual promises contained in this Agreement, the
rights conferred and the obligations assumed hereby, and other good and valuable
consideration, the receipt of which is hereby acknowledged, each of the
Borrower, the Issuer and the Trustee agree, assign, covenant, grant, pledge,
promise, represent and warrant as set forth herein for their own benefit and for
the benefit of the Bondowners and the Bank, provided that any financial
obligation of the Issuer created by or arising out of this Agreement shall not
be a general obligation of the Issuer nor a debt or pledge of the faith and
credit of the Commonwealth, but shall be payable solely from the revenues and
funds pledged for its payment in accordance with this Agreement.
Section 102. Definitions. (a) Words. In addition to terms defined
elsewhere herein, the following terms have the following meanings in this
Agreement, unless the context otherwise requires:
"Act" has the meaning set forth in Section 101.
"Act of Bankruptcy of the Bank" means the Bank shall become insolvent or
fail to pay its debts generally as such debts become due or shall admit in
writing its inability to pay any of its
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indebtedness or shall consent to or petition for or apply to any authority for
the appointment of a receiver, liquidator, trustee or similar official for
itself or for all or any substantial part of its properties or assets or any
such trustee, receiver, liquidator or similar official is otherwise appointed or
insolvency, reorganization, arrangement or liquidation proceedings (or similar
proceedings) shall be instituted by or against the Bank.
"Adjustment Date" means, with respect to a Bond in the Weekly Mode, the
date on which a new Rate Period for that Bond takes effect. The Adjustment Date
shall initially be the date of issuance of the Bonds and thereafter each
Wednesday.
"Bank" means Wells Fargo Bank, N.A., in its capacity as issuer of the
Letter of Credit, and any other issuer of a Credit Facility.
"Bank Bond" means any Bond purchased with proceeds provided by the
Credit Facility.
"Bank Rate" means the per annum rate of interest applicable to Bank
Bonds described in the Reimbursement Agreement. In no event shall the Bank Rate
exceed the highest interest rate permitted by law. Payment of interest to the
Bank under the Reimbursement Agreement on any advances thereunder corresponding
to Bank Bonds shall satisfy the Borrower's obligation to pay interest on such
Bank Bonds.
"Bond Counsel" means Bowditch & Dewey, LLP or other nationally
recognized bond counsel selected by the Borrower.
"Bond Purchase Agreement" means the Bond Purchase Agreement among the
Borrower, the Issuer and the Underwriter.
"Bond Fund" means the fund established pursuant to Section 304.
"Bondowners", "owners" or words of similar import means the registered
owners of the Bonds from time to time as shown in the books kept by the Trustee,
as bond registrar and transfer agent, except that wherever appropriate the term
"owners" shall mean the owners of the Bonds for federal income tax purposes.
"Bonds" means the Two Million Seven Hundred Twenty Five Thousand Dollars
($2,725,000) principal amount of the Massachusetts Development Finance Agency
Variable Rate Demand Revenue Bonds Frequency & Time Systems Issue, Series 2001,
and any bond or bonds duly issued in exchange or replacement therefor.
"Book-Entry Only System" means the system of registration described in
Section 301(c)(ii).
"Borrower" means Frequency & Time Systems, Inc.
"Borrower Bond" means any Bond registered to the Borrower pursuant to
Subsection 312(a).
"Borrower Representative" means the person or persons at the time
designated to act on behalf of the Borrower in a written certificate (or any
alternate or alternates at the time so
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designated) furnished to the Trustee, containing the specimen signature of such
person or persons and signed by the Borrower.
"Business Day" means a day (i) that is not a Saturday, Sunday or legal
holiday, (ii) on which banks are not required or authorized to close in Boston,
Massachusetts or New York, New York, (iii) on which banking institutions in all
of the cities in which the principal corporate trust office of the Trustee and,
if applicable, the principal offices of the Remarketing Agent and the Bank (and,
in the case of the Bank, the office of the Bank specified in the Letter of
Credit for draws thereunder) are located are not required or authorized to
remain closed and (iv) on which the New York Stock Exchange is not closed.
"Commonwealth" means The Commonwealth of Massachusetts.
"Construction Fund" means the fund established pursuant to Section 401.
"Credit Facility" means the Letter of Credit and any substitute
irrevocable transferable letter of credit delivered to the Trustee pursuant to
this Agreement and then in effect.
"Credit Facility Fund" means the fund established pursuant to Section
308.
"DTC" means The Depository Trust Company, a limited purpose trust
company, New York, New York.
"Default" has the meaning given such term in Section 601.
"Delivery Date" means, with respect to a Bond tendered for purchase, the
Purchase Date or any subsequent Business Day on which such Bond is delivered to
the Trustee as provided in the form of Weekly Bond in Paragraph 301(a)(i).
"Determination of Taxability" means (a) receipt by the Trustee of a
written opinion of Bond Counsel to the effect that, based on written statements,
certificates, audits, filings or any other documentation furnished by a Borrower
Representative or any "principal user" of the Project or any "related person"
thereto (as such terms are used in the IRC), (i) the $10,000,000 limit of IRC
Section 144(a)(4) was exceeded or (ii) the $40,000,000 limit of IRC Section
144(a) was exceeded; or (b) receipt by the Trustee of notice from Borrower
Representative or Issuer that the enactment of a statute or promulgation of a
regulation eliminating, in whole or in part, the applicable exclusion, as such
exists on the date the Bonds were issued, for interest payable under the Bonds;
or (c) a "final determination by decision or ruling by a duly constituted
administrative authority" to the effect that such exclusion for interest payable
under the Bonds is not available, is no longer available or is contrary to law;
or (d) the expiration of the right to further administrative review of any
determination, decision or ruling to the effect that such exclusion for interest
payable on the Bonds is not available, is no longer available or is contrary to
law; or (e) receipt by the Trustee of an opinion of Bond Counsel that there is
no longer a basis for the Bondowners (or any former Bondowner, other than a
Bondowner who is or was a "substantial user" of the Project or a "related
person" thereto as such terms are used in the IRC) to claim that any interest
paid and payable on the Bonds is excluded from gross income under the laws of
the United States. The phrase "Determination of Taxability" does not mean or
include consideration of the interest payable on the Bonds for purposes of
calculating the interest expense which may be deducted by a bank or other
financial institution.
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For the purposes of clause (c) above, a "final determination by decision
or ruling by a duly constituted administrative authority" shall mean (1) the
issuance of a ruling (including, but not limited to, a revenue ruling or a
letter ruling) by the Internal Revenue Service ("IRS") or any successor thereto,
or (2) the issuance of either a preliminary notice of proposed deficiency
("30-Day Letter"), a statutory notice of deficiency letter ("90-Day Letter"), or
other written order or directive of similar force and effect by the IRS, or any
other United States governmental agency having jurisdiction therein.
Nothing in this definition of "Determination of Taxability" shall be
construed to mean that the Trustee or any Bondowner shall have any obligation to
contest or appeal any assertion or decision that any interest payable on the
Bonds is subject to taxation.
Notwithstanding the foregoing, the imposition of an alternative,
preference, minimum or other special tax on a Bondowner in the calculation of
which is included the interest of the Bonds shall not be, in and of itself,
considered a Determination of Taxability.
"Eligible Funds" means (i) amounts drawn on any Credit Facility; (ii)
amounts paid to the Trustee pursuant to this Agreement which have been held by
it for a period of at least 123 days during which no Event of Bankruptcy has
occurred and commingled only with other Eligible Funds; (iii) amounts which if
applied to the payment of the Bonds would not, in the opinion of nationally
recognized counsel experienced in bankruptcy matters selected by the Borrower,
be subject to avoidance as a preference under the United States Bankruptcy Code
upon an Event of Bankruptcy; and (iv) income derived from the investment of the
foregoing; provided that such income shall not be deemed Eligible Funds if an
injunction, restraining order, stay or similar court action is in effect
preventing the payment of such income to Bondowners. The Trustee shall maintain
records of Eligible Funds held by it.
"Event of Bankruptcy" means the filing of a petition in bankruptcy or
the commencement of a proceeding under the United States Bankruptcy Code or any
other applicable law concerning insolvency, reorganization or bankruptcy by or
against the Borrower, any affiliates thereof, any guarantor of the Bonds (other
than the Bank) or the Issuer, as debtor.
"Event of Default" has the meaning given such term in Section 601.
"Federal Tax Certificate" means the certificate executed by the Borrower
as to certain federal tax matters in connection with the original issuance of
the Bonds.
"First Optional Redemption Date" means the anniversary of the Fixed Rate
Conversion Date in the year which is the number of years after the Fixed Rate
Conversion Date equal to the number of years between the Fixed Rate Conversion
Date and the maturity date multiplied by one-half (1/2) and rounded up to the
nearest whole number; provided, however, that Bonds shall not be subject to
optional redemption if the period between the Fixed Rate Conversion Date and
their maturity date is less than ten (10) years.
"Fixed Rate" means a rate or rates of interest on the Bonds that is
fixed for the remaining term of the Bonds.
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"Fixed Rate Conversion Date" means the date upon which the Fixed Rate
first becomes effective for the Bonds.
"Fixed Rate Mode" has the meaning set forth in the form of Fixed Rate
Bond in Paragraph 301(a)(ii).
"Government Obligations" means obligations issued by, or the full and
timely payment of which are guaranteed by, the United States.
"IRC" means the Internal Revenue Code of 1986, as it may be amended from
time to time.
"Interest Accrual Period" means a calendar month or, as applicable, a
portion of a calendar month if the period is measured from the date of the Bonds
or to the maturity date of the Bonds, the Purchase Date pursuant to a mandatory
tender or the redemption or acceleration date.
"Interest Payment Date" means each date on which interest shall be
payable on the Bonds according to their terms so long as any of the Bonds shall
be Outstanding. While the Bonds bear interest in the Weekly Mode, the Interest
Payment Date shall be the first Business Day of each calendar month for the
preceding Interest Accrual Period, commencing July 2, 2001. From and after the
Fixed Rate Conversion Date, the Interest Payment Date shall be the first day of
May and November of each year, commencing on May 1 or November 1 which is at
least two but less than ten months after the Fixed Rate Conversion Date, as
specified by the Borrower in writing to the Trustee; except that for Bank Bonds
the Interest Payment Date shall be the first Business Day of each month. As to
any Bond whether before or after the Fixed Rate Conversion Date, the Interest
Payment Date shall also be the maturity date or redemption or acceleration date
thereof.
"Letter of Credit" means the irrevocable letter of credit issued by
Wells Fargo Bank, N.A. for the benefit of the Trustee in the amount of Two
Million Seven Hundred Fifty-Eight Thousand Five Hundred Ninety-Six Dollars
($2,758,596).
"Maximum Interest Rate" means the maximum interest rate on Bonds in the
Weekly Mode, other than Bank Bonds, which rate is initially 10% per annum. The
Maximum Interest Rate may be increased at any time by the Borrower by filing
with the Issuer and the Trustee a certificate of the Borrower Representative
stating the new Maximum Interest Rate and an opinion of Bond Counsel to the
effect that such increase will not adversely affect the exclusion of interest on
the Bonds from gross income of the Bondowners for federal income tax purposes.
In no event shall an increase in the Maximum Interest Rate be permitted to cause
the amount entitled to be drawn under a Credit Facility to be less than the
minimum required amount specified in Paragraph 317(b)(ii).
"Mode" means the period for and the manner in which the interest rates
on the Bonds are set and includes the Weekly Mode and the Fixed Rate Mode.
"Moody's" means Moody's Investors Service, Inc., or any of its
successors or assigns.
"Outstanding," when used to modify Bonds, refers to Bonds issued,
authenticated and delivered under this Agreement, excluding: (i) Bonds which
have been exchanged or replaced; (ii) Bonds which have been paid; (iii) Bonds
which have become due and for the payment of
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which moneys have been duly provided; (iv) Bonds deemed tendered for purchase
and not delivered to the Trustee on the Purchase Date, provided sufficient funds
for payment of the Purchase Price are on deposit with the Trustee; (v) Borrower
Bonds (except that at any time the Borrower is the owner of all of the Bonds,
Borrower Bonds shall be deemed to be "Outstanding"); and (vi) Bonds with respect
to which this Agreement has been defeased pursuant to Section 204.
"Paying Agent" means the Paying Agent designated pursuant to Section
313.
"Permitted Investments" has the meaning given such term in Section 315.
"Project" means the construction of an addition to and the renovation of
a manufacturing facility and the acquisition of manufacturing equipment to be
used by the Borrower in the manufacturing of cesium standards in Beverly,
Massachusetts.
"Project Costs" means the costs of issuing the Bonds and the costs of
carrying out the Project which may be paid from Bond proceeds under the Act,
excluding the creation of reserves and including interest during construction.
Project Costs shall also be limited to costs which are permitted to be paid or
reimbursed from Bond proceeds by the Federal Tax Certificate.
"Purchase Date" means, while the Bonds are in a Weekly Mode, the date on
which Bonds shall be required to be purchased pursuant to a mandatory or
optional tender in accordance with the provisions in the form of Weekly Rate
Bonds in Paragraph 301(a)(i).
"Purchase Price" shall have the meaning set forth in the form of Weekly
Rate Bonds.
"Rate Period" or "Period" means, when used with respect to any
particular rate of interest for a Bond in the Weekly Mode, the period during
which such rate of interest determined for such Bond will remain in effect as
described herein. A new interest rate shall take effect on each Adjustment Date.
"Reimbursement Agreement" means (a) Second Amended and Restated Credit
Agreement dated as of July 7, 2000 between Datum, Inc., a Delaware corporation,
and the Bank, and any amendments and supplements thereto and (b) any letter of
credit agreement or reimbursement agreement by and between the Borrower and any
substitute Bank, and any amendments and supplements thereto.
"Remarketing Agent" means Wells Fargo Brokerage Services, LLC, in its
capacity as remarketing agent under the Remarketing Agreement, its successors
and assigns.
"Remarketing Agreement" means the Remarketing Agreement dated as of the
date hereof among the Borrower, the Trustee and the Remarketing Agent, as the
same may be amended or supplemented from time to time.
"S&P" means Standard & Poor's, a division of The McGraw-Hill Companies,
Inc., or any of its successors or assigns or if S&P is no longer rating the
Bonds, any other nationally recognized securities rating agency which is then
rating the Bonds designated by the Borrower.
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"Tax Incidence Date" means the first date as of which interest on the
Bonds is determined to be taxable as a result of the occurrence of a
Determination of Taxability.
"Tendered Bond" means any Bond tendered or deemed tendered for purchase
pursuant to Paragraphs 301(d)(iii) or (iv).
"Trustee" means Wells Fargo Bank Minnesota, National Association, as
trustee under this Agreement and its successors in such capacity.
"UCC" means the Massachusetts Uniform Commercial Code.
"Underwriter" means Wells Fargo Brokerage Services, LLC.
"Weekly Mode" means a Rate Period with respect to the Bonds which is a
one week (or slightly shorter or longer for the initial Rate Period or in the
case of redemption, conversion or maturity) period which commences initially on
the date of issuance of the Bonds and thereafter on Wednesday of each calendar
week and ends on the following Tuesday.
"Weekly Rate" means the rate of interest determined by the Remarketing
Agent for each Rate Period to be the lowest rate which in its judgment, on the
basis of prevailing financial market conditions, would permit the sale of the
Bonds in the Weekly Mode at par on and as of the Adjustment Date, but not in
excess of the Maximum Interest Rate.
Words importing persons include firms, associations and corporations,
and the singular and plural forms of words shall be deemed interchangeable
whenever appropriate.
ARTICLE II: LOAN OF BOND PROCEEDS; THE ASSIGNMENT AND PLEDGE
Section 201. Loan of Bond Proceeds. The Issuer shall issue the Bonds
pursuant to the Act in the amount, in the form and with the terms provided
herein, and shall loan to the Borrower such amount to finance and refinance
Project Costs as hereinafter provided. The Borrower agrees to repay the loan of
the aggregate principal amount of the Bonds in the amounts and at the times
necessary to pay principal of, premium, if any, and interest on the Bonds by
making the payments required under Section 308.
Section 202. Assignment and Pledge of the Issuer. The Issuer, for
consideration paid as hereinabove acknowledged, hereby irrevocably assigns and
pledges to the Trustee in trust for the security of the Bondowners and the Bank
(as security for Borrower's reimbursement obligations under the Credit Facility)
upon the terms hereof all the Issuer's right, title and interest (i) in respect
of the loan and all payments thereon, (ii) in all moneys and securities held by
the Trustee for deposit in, or deposited in, the Bond Fund, the Credit Facility
Fund and the Construction Fund and investment earnings thereon, and (iii) in any
collateral security for, and all proceeds of, any of the foregoing. The Trustee
shall hold (1) all the rights, title and interest received under this section
and (2) all revenues (exclusive of funds to which the Trustee is entitled in its
own right as fees, reimbursement, indemnity or otherwise) received from the
Borrower or derived from the exercise of the Issuer's powers hereunder (which
shall include all payments under Subsection 308(a)) in trust for the security of
the Bondowners and the Bank in accordance with the provisions hereof.
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Section 203. Further Assurances. The Issuer shall from time to time
execute and the Borrower and the Trustee shall from time to time execute,
deliver and record and file such instruments as the Trustee may reasonably
require to confirm, perfect or maintain the security created hereby and the
assignment and pledge of rights hereunder.
Section 204. Defeasance. When there are in the Bond Fund and/or the
Credit Facility Fund sufficient funds, or non-callable and non-prepayable
Government Obligations in such principal amounts, bearing interest at such rates
and with such maturities (including, with respect to any Bonds in the Weekly
Mode, maturities no greater than seven (7) days to fund the payment of the
Purchase Price) as will provide, without reinvestment, sufficient funds to pay
the Purchase Price or principal of, premium, if any, and interest on the Bonds
in full as and when such amounts become due, and when all the rights hereunder
of the Issuer (including the right to receive payments under Paragraphs
308(b)(i) and (ii)), the Bank and of the Trustee have been provided for (1) the
Bondowners will cease to be entitled to any right, benefit or security under
this Agreement except the right to receive payment of the funds deposited and
held for payment and other rights set forth below or which rights by their
nature cannot be satisfied prior to or simultaneously with termination of the
lien hereof, (2) the security interests created by this Agreement (except in
such funds and investments) shall terminate, except to the extent that Borrower
has reimbursement obligations to Bank under the Credit Facility and (3) the
Issuer and the Trustee shall execute and deliver such instruments as may be
necessary to discharge the lien and security interests created hereunder;
provided, however, that (a) with respect to any Bonds that are supported by a
Credit Facility, all such funds and obligations in the Bond Fund and/or Credit
Facility Fund shall be Eligible Funds; (b) if any such Bonds are to be redeemed
prior to the maturity thereof, such Bonds shall have been duly called for
redemption or irrevocable written instructions for such a call shall have been
given to the Trustee; and (c) if the Bonds bear interest at the Weekly Rate, the
Trustee shall have received written confirmation from S&P, if S&P is then rating
the Bonds, that the proposed defeasance will not in and of itself cause a
reduction or withdrawal of the rating then in effect on the Bonds. Upon such
defeasance, the funds and investments required to pay or redeem the Bonds in
full shall be irrevocably set aside for that purpose. The Trustee shall cause to
be mailed to all Bondowners in the manner herein specified for redemption of
Bonds within fifteen (15) days of the conditions of this section being met a
notice stating that such conditions have been met and that the lien of this
Agreement has been discharged, and, if the Bonds are to be redeemed prior to
maturity, specifying the date of redemption and the redemption price. Any funds
or property held by the Trustee for payment of the Bonds under this section and
not required for such payment shall (unless there is an Event of Default
hereunder, in which case they shall be applied as provided in Section 604),
after satisfaction of all the rights of the Issuer and the Trustee, and payment
of the rebate, if any, due to the United States under IRC Section 148(f), and
upon such indemnification, if any, as the Issuer or the Trustee may reasonably
require, be distributed to the Borrower subject to Bank's security interest. If
Bonds are not presented for final payment when due and moneys are available in
the hands of the Trustee therefor, the Trustee shall, without liability for
interest thereon, continue to hold the moneys held for that purpose subject to
Subsection 304(c), and interest shall cease to accrue on the principal amount
represented thereby.
When there are in the Bond Fund and/or Credit Facility Fund funds or
securities as described in the preceding paragraph as are sufficient to pay the
Purchase Price, principal of, premium, if any, and interest on, some but not all
of the Bonds in full as and when such amounts become due and the other
conditions in the preceding paragraph have been met with respect to such Bonds,
the particular Bonds (or portions thereof) for which such provision for payment
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shall have been considered made shall be selected by lot by the Trustee (or, if
the Bonds are in the Book-Entry Only System, in such manner as DTC shall
determine) and thereupon the Trustee and the Issuer shall take similar action to
release the security interests created by this Agreement in respect of such
Bonds (except in such funds or securities and investments thereof), subject
however to compliance with the applicable conditions set forth above.
Notwithstanding the foregoing, those provisions relating to the maturity
of Bonds, interest payments and dates thereof, the tender of Bonds for purchase
and the Trustee's remedies with respect thereto, and provisions relating to
exchange, transfer and registration of Bonds, replacement and cancellation of
Bonds, the holding of moneys in trust and the duties of the Trustee in
connection with all of the foregoing and the fees, expenses and indemnities of
the Trustee and the Issuer and any obligation of the Borrower to make rebate
payments to the United States, shall remain in full force and effect and shall
be binding upon the Trustee, the Issuer, the Borrower and the Bondowners
notwithstanding the release and discharge of this Agreement until the Bonds have
been actually paid in full.
ARTICLE III: THE BORROWING
Section 301. The Bonds.
(a) Forms of Bonds. The Bonds shall be issued in substantially the
following forms for the Weekly and Fixed Rate Modes:
(i) Form of Weekly Bond. The Bonds may be issued in the Weekly Mode in
substantially the form prescribed below.
$____________ No. R-
ANY BONDOWNER WHO FAILS TO DELIVER THIS BOND FOR PURCHASE AT THE TIMES AND AT
THE PLACE REQUIRED HEREIN SHALL HAVE NO FURTHER RIGHTS HEREUNDER EXCEPT THE
RIGHT TO RECEIVE THE PURCHASE PRICE HEREOF UPON PRESENTATION AND SURRENDER OF
THIS BOND TO THE TRUSTEE AS DESCRIBED HEREIN, AND SHALL HOLD THIS BOND AS AGENT
FOR THE TRUSTEE.
UNITED STATES OF AMERICA
THE COMMONWEALTH OF MASSACHUSETTS
MASSACHUSETTS DEVELOPMENT FINANCE AGENCY
Variable Rate Demand Revenue Bond
Frequency & Time Systems Issue, Series 2001
REGISTERED OWNER: CEDE & CO.
PRINCIPAL AMOUNT:
INTEREST PAYMENT DATES: (i) the first Business Day of each calendar
month, commencing July 2, 2001, and (ii) the
Maturity Date or redemption or acceleration
date.
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13
MATURITY DATE: May 1, 2021
DATE OF THIS BOND: May ___, 2001
(Date as of which Bonds of this
series were initially issued.)
MODE: Weekly
CUSIP:
THIS BOND DOES NOT CONSTITUTE A GENERAL OBLIGATION OF THE MASSACHUSETTS
DEVELOPMENT FINANCE AGENCY OR A DEBT OR PLEDGE OF THE FAITH AND CREDIT OF THE
COMMONWEALTH OF MASSACHUSETTS; THE PRINCIPAL OF AND INTEREST AND PREMIUM, IF
ANY, ON THIS BOND ARE PAYABLE SOLELY FROM THE REVENUES AND FUNDS PLEDGED FOR
THEIR PAYMENT IN ACCORDANCE WITH THE LOAN AND TRUST AGREEMENT. THE ISSUER HAS NO
TAXING POWER.
The Massachusetts Development Finance Agency (the "Issuer"), for value
received, promises to pay to the REGISTERED OWNER, or registered assigns, but
solely from the moneys to be provided under the Agreement mentioned below, upon
presentation and surrender hereof, in lawful money of the United States of
America, the PRINCIPAL AMOUNT on the MATURITY DATE, unless paid earlier as
provided below, with interest from the most recently completed Interest Accrual
Period, as defined below, for which interest has been paid or duly provided for
or, if no interest has been paid, from the DATE OF THIS BOND set forth above,
until paid in full, at the rates set forth below, payable on each INTEREST
PAYMENT DATE until the date on which this bond becomes due, whether at maturity
or by acceleration or redemption. From and after that date, any unpaid principal
will bear interest at the rate last established for this bond before principal
became overdue until paid or duly provided for. Until conversion to the Fixed
Rate Mode as provided below, this bond shall bear interest at the Weekly Rate.
The Weekly Rate for this bond shall be the rate of interest determined by the
Remarketing Agent designated as provided in the Agreement (herein, with its
successors, the "Remarketing Agent"), for each Rate Period, as defined below, to
be the lowest rate which in its judgment, on the basis of prevailing financial
market conditions, would permit the sale of the Bonds, as defined below, in the
Weekly Mode at par on and as of the Adjustment Date, as defined below, but not
in excess of the Maximum Interest Rate. If this bond is converted to the Fixed
Rate Mode, it shall bear interest at the Fixed Rate as defined in the Agreement.
The Remarketing Agent shall determine the initial Weekly Rate on or before the
date of issue of the Bonds, which rate shall remain in effect as provided in the
Agreement. Thereafter, the Remarketing Agent shall redetermine the Weekly Rate
for each Rate Period as provided below. The amount of interest due on any
INTEREST PAYMENT DATE shall be the amount of unpaid interest accrued on this
bond for the preceding Interest Accrual Period.
This bond is one of a series of Variable Rate Demand Revenue Bonds,
Frequency & Time Systems Issue, Series 2001 (the "Bonds") in the aggregate
principal amount of Two Million Seven Hundred Twenty Five Thousand Dollars
($2,725,000) issued under Massachusetts General Laws, Chapters 23G and 40D, as
amended (the "Act"). The proceeds of the Bonds are being loaned to Frequency &
Time Systems, Inc. ("Borrower") pursuant to a Loan and Trust
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Agreement (the "Agreement") dated as of May 1, 2001 among the Borrower, the
Issuer and Wells Fargo Bank Minnesota, National Association, as Trustee (the
"Trustee"). Pursuant to the Agreement, the Borrower has unconditionally agreed
to repay such loan in the amounts and at the times necessary to pay the
principal of, premium, if any, and interest on the Bonds when due. Reference is
hereby made to the Agreement for the provisions thereof with respect to the
rights, limitations of rights, duties, obligations and immunities of the
Borrower, the Issuer, the Trustee and the Bondowners, including the order of
payments in the event of insufficient funds, the disposition of unclaimed moneys
held by the Trustee and restrictions on the rights of owners of the Bonds to
bring suit. The Agreement may be amended to the extent and in the manner
provided therein. Copies of the Agreement are available for inspection at the
principal corporate trust office of the Trustee.
The Purchase Price, as defined below, and principal of and interest on
this bond while it is in the Weekly Mode are also payable from moneys drawn by
the Trustee on an irrevocable letter of credit for the Bonds (together with any
extensions, amendments and renewals thereof, the "Letter of Credit") issued by
Wells Fargo Bank, N.A. (together with any other issuer of a Credit Facility, the
"Bank"), pursuant to the terms of a Reimbursement Agreement (the "Reimbursement
Agreement") between the parent of the Borrower and the Bank. The Trustee may
draw on the Letter of Credit presently in place for the payment of up to
forty-five (45) days' interest for Bonds in the Weekly Mode. The Letter of
Credit will expire on May 30, 2002, but may be terminated earlier upon the
occurrence of certain events set forth in the Agreement and the Reimbursement
Agreement or extended as provided in the Reimbursement Agreement. Unless the
Letter of Credit is extended or renewed or a substitute letter of credit
(collectively with the Letter of Credit, a "Credit Facility") is provided in
accordance with the Agreement, the Bonds will become subject to mandatory
purchase as described below. The Borrower may substitute a new Credit Facility
as provided in the Agreement.
In case any Event of Default occurs and is continuing, the principal
amount of this bond together with accrued interest may become or be declared
immediately due and payable in the manner and with the effect provided in the
Agreement.
Unless otherwise defined herein, capitalized terms used in this bond
shall have the meaning given them in the Agreement. The following terms are
defined as follows:
"Adjustment Date" means, with respect to a Bond in the Weekly Mode, the
date on which a new Rate Period for that Bond takes effect. The Adjustment Date
shall initially be the date of issuance of the Bonds and thereafter each
Wednesday.
"Business Day" means a day (i) that is not a Saturday, Sunday or legal
holiday, (ii) on which banks are not required or authorized to close in Boston,
Massachusetts or New York, New York, (iii) on which banking institutions in all
of the cities in which the principal corporate trust office of the Trustee and,
if applicable, the principal offices of the Remarketing Agent and the Bank (and,
in the case of the Bank, the office of the Bank specified in the Letter of
Credit for draws thereunder) are located are not required or authorized to
remain closed and (iv) on which the New York Stock Exchange is not closed.
"DTC" means The Depository Trust Company, a limited purpose trust
company, New York, New York.
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"Interest Accrual Period" means a calendar month or, as applicable, a
portion of a calendar month if the period is measured from the DATE OF THIS BOND
or to the MATURITY DATE, a Purchase Date pursuant to a mandatory tender or the
redemption or acceleration date.
"Interest Payment Date" means each date on which interest shall be
payable on the Bonds according to their terms so long as any of the Bonds shall
be Outstanding. While the Bonds bear interest in the Weekly Mode, the Interest
Payment Date shall be the first Business Day of each calendar month for the
preceding Interest Accrual Period commencing July 2, 2001. From and after the
Fixed Rate Conversion Date, the Interest Payment Date shall be the first day of
May and November of each year, commencing on an May 1 or November 1 which is at
least two but less than ten months after the Fixed Rate Conversion Date, as
specified by the Borrower in writing to the Trustee; except that for Bank Bonds
the Interest Payment Date shall be the first Business Day of each month. As to
any Bond, whether before or after the Fixed Rate Conversion Date, the Interest
Payment Date shall also be the maturity date or redemption or acceleration date
thereof.
"Maximum Interest Rate" means the maximum interest rate on Bonds in the
Weekly Mode, other than Bank Bonds, which rate is initially 10% per annum. The
Maximum Interest Rate may be increased at any time by the Borrower by filing
with the Issuer and the Trustee a certificate of the Borrower Representative
stating the new Maximum Interest Rate and an opinion of Bond Counsel to the
effect that such increase will not adversely affect the exclusion of interest on
the Bonds from gross income of the Bondowners for federal income tax purposes.
In no event shall an increase in the Maximum Interest Rate be permitted to cause
the amount entitled to be drawn under a Credit Facility to be less than the
minimum required amount specified in Paragraph 317(b)(ii) of the Agreement.
"Mode" means the period for and the manner in which the interest rates
on the Bonds are set and includes the Weekly Mode and the Fixed Rate Mode.
"Purchase Date" means, while this bond is in the Weekly Mode, the date
on which this bond shall be required to be purchased pursuant to a mandatory or
optional tender in accordance with the provisions hereof.
"Rate Period" or "Period" means, when used with respect to any
particular rate of interest for a Bond in the Weekly Mode, the period during
which such rate of interest determined for such Bond will remain in effect as
described herein. While this bond is in the Weekly Mode, a new interest rate
shall take effect on each Adjustment Date.
"S&P" means Standard & Poor's, a division of The McGraw-Hill Companies,
Inc., or any of its successors or assigns, or, if S&P is no longer rating the
Bonds, any other nationally recognized securities rating agency which is then
rating the Bonds designated by the Borrower.
"Weekly Mode" means a Rate Period with respect to the Bonds which is a
one week (or slightly shorter or longer for the initial Rate Period or in the
case of redemption, conversion or maturity) period which commences initially on
the date of issuance of the Bonds and thereafter on Wednesday of each calendar
week and ends on the following Tuesday.
At the option of the Borrower and upon certain conditions provided for
in the Agreement described below, the Bonds may be converted from the Weekly
Mode to the Fixed Rate Mode.
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While this bond is in the Weekly Mode, conversion to the Fixed Rate Mode
may take place only on an INTEREST PAYMENT DATE in any calendar month upon
written notice from the Trustee to the REGISTERED OWNER of this bond mailed at
least thirty (30) days prior to the conversion. Conversion of this bond shall be
subject to the conditions set forth in the Agreement. In the event that the
conditions for a proposed conversion are not met, (i) such conversion shall not
take effect on the proposed Fixed Rate Conversion Date, notwithstanding any
prior notice to the Bondowners of such conversion and (ii) this bond shall
remain in the Weekly Mode. In no event shall the failure of this bond to be
converted be deemed to be a Default or an Event of Default under the Agreement.
When this bond is in the Weekly Mode, the Weekly Rate in effect for each
Rate Period (the "Effective Rate" for such Rate Period) shall be determined not
later than the Adjustment Date. If for any reason the interest rate on the Bonds
cannot be established for any Rate Period as described above or is held invalid
or unenforceable by a court of law, or the Remarketing Agent fails to announce
the Effective Rate for any Rate Period, the Effective Rate for that Rate Period
shall be the same as the Effective Rate for the prior Rate Period. In no event
shall the Weekly Rate exceed the Maximum Interest Rate. The Remarketing Agent
shall announce the Effective Rate by telephone to the Trustee and the Borrower
on the date of determination thereof, and shall promptly confirm such
determination in writing. While this bond is in the Weekly Mode, any Bondowner
may ascertain the Effective Rate at any time by contacting the Trustee or the
Remarketing Agent.
Each determination and redetermination of the Weekly Rate shall be
conclusive and binding on the Issuer, the Trustee, the Bank, the Borrower and
the Bondowners.
While this bond is in the Weekly Mode, interest shall be computed on the
basis of a 365- or 366-day year, as appropriate, and actual days elapsed. From
and after the date on which this bond becomes due, any unpaid principal will
bear interest at the then effective interest rate until paid or duly provided
for, but unpaid interest shall not bear interest.
While this bond is in the Weekly Mode, unless this Bond is a Borrower
Bond or a Bank Bond, the principal of this bond is payable when due by wire or
bank transfer of immediately available funds within the continental United
States to the REGISTERED OWNER hereof but only upon presentation and surrender
of this bond at the principal corporate trust office of the Trustee. Interest on
this bond while in the Weekly Mode is payable by check mailed on the Interest
Payment Date by the Trustee to the REGISTERED OWNER, determined as of the close
of business on the applicable record date, at its address as shown on the
registration books maintained by the Trustee, unless this Bond is in the
Book-Entry Only System or the Trustee has received wiring instructions from the
owner of this Bond prior to the applicable record date, in which cases interest
is payable in immediately available funds by wire or bank transfer within the
continental United States. The Purchase Price (as defined below) of Bonds
tendered for purchase shall be paid as provided below.
The record date for payment of interest while this bond is in the Weekly
Mode is the Business Day preceding the date on which interest is to be paid.
With respect to overdue interest or interest on any overdue amount, the Trustee
may establish a special record date. The special record date may be not more
than thirty (30) days before the date set for payment. The Trustee will mail
notice of a special record date to the Bondowners at least ten (10) days before
the
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special record date. The Trustee will promptly certify to the Issuer and the
Remarketing Agent that it has mailed such notice to all Bondowners, and such
certificate will be conclusive evidence that notice was given in the manner
required hereby.
While this bond is in the Weekly Mode, unless this Bond is a Borrower
Bond or a Bank Bond, the REGISTERED OWNER shall have the right to tender this
bond or portion thereof for purchase in the principal amount of One Hundred
Thousand Dollars ($100,000) (or in its entirety only if this bond has previously
been reduced below One Hundred Thousand Dollars ($100,000) by partial
redemption) and integral multiples of Five Thousand Dollars ($5,000) in excess
thereof (provided, however, that any portion of this bond not tendered shall be
in the minimum amount of One Hundred Thousand Dollars ($100,000)) at a price
(the "Purchase Price") equal to 100% of the principal amount thereof, plus
accrued interest, if any, to the Purchase Date, upon compliance with the
conditions described below, provided that if the Purchase Date is an INTEREST
PAYMENT DATE, accrued interest for the preceding Interest Accrual Period shall
be paid separately, and not as part of the Purchase Price on such date. In order
to exercise the right to tender, the REGISTERED OWNER must deliver to the
Trustee a written irrevocable notice of tender substantially in the form of the
Bondowner's Election Notice set forth hereon or in such other form as is
satisfactory to the Trustee. While this bond is in the Weekly Mode, it will be
purchased on the Business Day specified in such Bondowner's Election Notice,
provided such date is at least seven calendar days after receipt by the Trustee
of such notice. If the REGISTERED OWNER of this bond has elected to require
purchase as provided above, the REGISTERED OWNER shall be deemed, by such
election, to have agreed irrevocably to sell this bond to any purchaser
determined in accordance with the provisions of the Agreement on the date fixed
for purchase at the Purchase Price.
Tender of this bond will not be effective and this bond will not be
purchased if at the time fixed for purchase an acceleration of the Bonds shall
have occurred and not have been annulled in accordance with the Agreement.
Notice of tender of this bond is irrevocable. All notices of tender of Bonds
shall be made to the Trustee at its office or such other address specified in
writing by the Trustee to the Bondowners. All deliveries of tendered Bonds,
including deliveries of Bonds subject to mandatory tender, shall be made to the
Trustee at its office or such other address specified in writing by the Trustee
to the Bondowners.
Unless this bond is a Borrower Bond or a Bank Bond, this bond is subject
to mandatory tender for purchase at the Purchase Price (i) on the date of
conversion to the Fixed Rate Mode and (ii) on the INTEREST PAYMENT DATE
immediately preceding the expiration (after any extensions), termination or
substitution of the Credit Facility if the Borrower has failed to provide for
delivery of an extension of the existing Credit Facility or a substitute Credit
Facility at least forty-five (45) days prior to such INTEREST PAYMENT DATE and
in connection with the substitution of a Credit Facility unless the Trustee
receives written notice from S&P (if this bond is rated by S&P) at least
forty-five (45) days prior to such INTEREST PAYMENT DATE that such substitution
will not result in a withdrawal or reduction of the rating of this bond. The
extension of the existing Credit Facility shall not cause a mandatory tender.
Notice of mandatory tender shall be given or caused to be given by the Trustee
in writing to the REGISTERED OWNER not more than forty-four (44) days and not
less than thirty (30) days prior to the mandatory Purchase Date. THE OWNER OF
THIS BOND, BY ACCEPTANCE HEREOF, AGREES TO SELL AND SURRENDER THIS BOND AT SUCH
PRICE TO ANY PURCHASER DETERMINED IN ACCORDANCE WITH THE PROVISIONS OF THE
AGREEMENT IN THE EVENT OF SUCH MANDATORY TENDER AND, ON SUCH
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PURCHASE DATE, TO SURRENDER THIS BOND TO THE TRUSTEE FOR PAYMENT OF THE PURCHASE
PRICE. From and after the Purchase Date, no further interest on this bond shall
be payable to the REGISTERED OWNER, provided that there are sufficient funds
available on the Purchase Date to pay the Purchase Price.
The Purchase Price of this bond shall be paid to the REGISTERED OWNER by
the Trustee on the Delivery Date, which shall be the Purchase Date or any
subsequent Business Day on which this bond is delivered to the Trustee. The
Purchase Price of this bond shall be paid only upon surrender of this bond to
the Trustee as provided herein; provided that for so long as this bond is in the
Book-Entry Only System, physical surrender of this bond to the Trustee shall not
be required and this bond shall be tendered pursuant to the procedures set forth
in Section 301(c) of the Agreement. From and after the Purchase Date, no further
interest on this bond shall be payable to the REGISTERED OWNER who gave notice
of tender for purchase, provided that there are sufficient funds available on
the Purchase Date to pay the Purchase Price. The Purchase Price of Bonds
tendered for purchase is payable for Bonds in the Weekly Mode by wire or bank
transfer within the continental United States in immediately available funds
from the Trustee to the REGISTERED OWNER at its address shown on the
registration books maintained by the Trustee. If on any date this bond is
subject to mandatory tender for purchase or is required to be purchased at the
election of the REGISTERED OWNER, payment of the Purchase Price of this bond to
such owner shall be made on the Purchase Date if presentation and surrender of
this bond is made prior to 10:00 A.M., Boston, Massachusetts time, on the
Purchase Date or on such later Business Day upon which presentation and
surrender of this bond is made prior to 10:00 A.M., Boston, Massachusetts time,
except as otherwise provided for Bonds in the Book-Entry Only System, as
described in the Agreement.
Bonds which are Bank Bonds shall bear interest at the applicable Bank
Rate (as defined in the Agreement) until such Bonds are no longer Bank Bonds.
Interest at the Bank Rate shall be calculated on the basis of 1/360th of the
rate thereon for each day and shall be payable on the first Business Day of each
month. Bank Bonds or Borrower Bonds (as defined in the Agreement) shall not be
subject to mandatory or optional tender for purchase.
The Bonds in the Weekly Mode are subject to mandatory redemption at any
time in whole, as soon as practicable and, in any event, within sixty days after
the Trustee's receipt of notice of a Determination of Taxability at a redemption
price of 100% of the principal amount of the Bonds so redeemed plus accrued
interest in the event of a Determination of Taxability as defined in the
Agreement.
Bonds in the Weekly Mode are subject to optional redemption in whole or
in part in integral multiples of Five Thousand Dollars ($5,000) at any time at
the direction of the Borrower at a redemption price of par plus accrued
interest.
Bonds which are Bank Bonds are subject to redemption at the option of
the Borrower in whole or in part at any time in multiples of Five Thousand
Dollars ($5,000) at a redemption price equal to 100% of the principal amount
thereof plus accrued interest to the redemption date, without premium.
Bonds in the Weekly Mode are subject to mandatory redemption in whole or
in part on any INTEREST PAYMENT DATE at a redemption price of par plus accrued
interest:
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(1) In whole or in part, to the extent excess moneys in the Construction
Fund are transferred to the Bond Fund established under the Agreement, or from
certain proceeds of the sale, lease or other disposition of the facilities
financed by the Bonds or from certain insurance or eminent domain proceeds
pursuant to the extraordinary redemption provisions set forth in the Agreement;
or
(2) If, within thirty (30) days of the occurrence of an Act of
Bankruptcy of the Bank, a substitute Credit Facility has not been issued to the
Trustee in accordance with the Agreement. In such event, the Bonds shall be
subject to redemption as a whole within one hundred thirty (130) days after the
occurrence of the Act of Bankruptcy of the Bank.
If less than all of the Outstanding Bonds are to be called for optional
or mandatory redemption, the Bonds (or portions thereof) to be redeemed shall be
selected as provided in the Agreement with Bonds in the Weekly Mode being
redeemed in increments of Five Thousand Dollars ($5,000) or integral multiples
thereof; provided, however, that no partial redemption shall result in the
portion of any Bond left Outstanding being in an amount of less than $100,000.
Bank Bonds shall be redeemed before any other Bonds.
In the event this bond (or any portion hereof) is selected for
redemption, notice will be mailed no more than sixty (60) nor less than thirty
(30) days prior to the redemption date to the REGISTERED OWNER at its address
shown on the registration books maintained by the Trustee. Failure to mail
notice to the owner of any other Bond or any defect in the notice to such an
owner shall not affect the redemption of this bond.
If this bond is of a denomination in excess of One Hundred Thousand
Dollars ($100,000), portions of the principal amount in excess of $100,000 may
be redeemed in increments of Five Thousand Dollars ($5,000). If less than all of
the principal amount is to be redeemed, unless this bond is in the Book-Entry
Only System, upon surrender of this bond to the Trustee, there will be issued to
the REGISTERED OWNER, without charge, a new Bond or Bonds, at the option of the
REGISTERED OWNER, for the unredeemed principal amount. No partial redemption
shall result in the portion of the Bond not redeemed being less than One Hundred
Thousand Dollars ($100,000).
Notice of redemption having been duly mailed, this bond, or the portion
called for redemption, will become due and payable on the redemption date at the
applicable redemption price and, moneys for the redemption having been deposited
with the Trustee, from and after the date fixed for redemption, interest on this
bond (or such portion) will no longer accrue.
IN CERTAIN CIRCUMSTANCES SET OUT HEREIN, THIS BOND (OR ANY PORTION
HEREOF) IS SUBJECT TO PURCHASE OR REDEMPTION, IN EACH CASE UPON NOTICE TO OR
FROM THE OWNER HEREOF AS OF A DATE PRIOR TO SUCH PURCHASE OR REDEMPTION. IN EACH
SUCH EVENT AND UPON DEPOSIT OF THE PURCHASE OR REDEMPTION PRICE WITH THE TRUSTEE
ON THE PURCHASE OR REDEMPTION DATE, AS THE CASE MAY BE, THIS BOND (OR PORTION
HEREOF) SHALL BE DEEMED TO HAVE BEEN TENDERED FOR PURCHASE OR REDEMPTION AND
SHALL CEASE TO BE OUTSTANDING UNDER THE AGREEMENT, INTEREST HEREON SHALL CEASE
TO ACCRUE AS OF THE PURCHASE OR REDEMPTION DATE, AND THE REGISTERED OWNER HEREOF
SHALL BE ENTITLED ONLY TO
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RECEIVE THE PURCHASE OR REDEMPTION PRICE SO DEPOSITED WITH THE TRUSTEE UPON
SURRENDER OF THIS CERTIFICATE TO THE TRUSTEE.
This bond is transferable by the REGISTERED OWNER, in person or by its
attorney duly authorized in writing, at the principal corporate trust office of
the Trustee, upon surrender of this bond to the Trustee for cancellation. Upon
the transfer, a new Bond or Bonds in authorized denominations of the same
aggregate principal amount will be issued to the transferee at the same office.
No transfer will be effective unless represented by such surrender and reissue.
This bond may also be exchanged at the principal corporate trust office of the
Trustee for a new Bond or Bonds in authorized denominations of the same
aggregate principal amount without transfer to a new registered owner. Exchanges
and transfers will be without expense to the owner except for applicable taxes
or other governmental charges, if any. The Trustee will not be required to make
an exchange or transfer of this bond (except in connection with any optional or
mandatory tender of this bond) (i) if this bond (or any portion thereof) has
been selected for redemption or (ii) during the fifteen (15) days preceding any
date fixed for selection for redemption if this bond (or any portion thereof) is
eligible to be selected for redemption.
The Bonds are issuable only in fully registered form and while in the
Weekly Mode shall be in original minimum denominations of One Hundred Thousand
Dollars ($100,000) and any multiple of Five Thousand Dollars ($5,000) in excess
thereof. No Bond in the Weekly Mode may be issued in a denomination of less than
One Hundred Thousand Dollars ($100,000).
The Issuer, the Trustee and the Borrower may treat the REGISTERED OWNER
as the absolute owner of this bond for all purposes, notwithstanding any notice
to the contrary.
No director, officer, employee or agent of the Issuer nor any person
executing this bond (by facsimile signature or otherwise) shall be personally
liable, either jointly or severally, hereon or be subject to any personal
liability or accountability by reason of the issuance hereof.
This bond will not be valid until the Certificate of Authentication has
been signed by the Trustee.
MASSACHUSETTS DEVELOPMENT FINANCE AGENCY
By:_________________________________________
Authorized Signatory
Certificate of Authentication
This bond is one of the Bonds described in the Loan and Trust Agreement.
WELLS FARGO BANK MINNESOTA, NATIONAL
ASSOCIATION, as Trustee
Date of Authentication:
By:_________________________________________
Authorized Signatory
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Assignment
For value received the undersigned sells, assigns and transfers this
bond to
________________________________________________________________________________
(Name and Address of Assignee)
________________________________________________________________________________
________________________________________________________________________________
Social Security or Other Identifying Number of Assignee
and irrevocably appoints _______________________________________________________
attorney-in-fact to transfer it on the books kept for registration of the bond,
with full power of substitution.
__________________________________________
NOTE: The signature to this assignment
must correspond with the name as written
on the face of the bond without alteration
or enlargement or other change and must be
guaranteed by a Participant in a
Recognized Signature Guaranty Medallion
Program.
Dated:
Signature Guaranteed:
____________________________________
Participant in a Recognized
Signature Guaranty Medallion Program
By:________________________________
Authorized Signature
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The following is the Bondowner's Election Notice described herein:
BONDOWNER'S ELECTION NOTICE
Massachusetts Development Finance Agency
Variable Rate Demand Revenue Bonds
Frequency & Time Systems Issue, Series 2001
Principal Principal Amount(1) Bond Purchase
Amount CUSIP Tendered for Purchase Numbers Date
- --------- ----- --------------------- ------- --------
The undersigned hereby certifies that it is the registered owner of the Bonds
described above (the "Tendered Bonds"), which are in the Weekly Mode, and hereby
agrees that the delivery of this instrument of transfer to the Trustee
constitutes an irrevocable offer to sell the Tendered Bonds to the Borrower or
its designee on the Purchase Date, which shall be a Business Day at least seven
(7) calendar days following receipt by the Trustee of this instrument, at a
purchase price equal to the unpaid principal balance thereof plus accrued and
unpaid interest thereon to the Purchase Date (the "Purchase Price"); provided,
however, that if the Purchase Date is an Interest Payment Date, accrued interest
shall be paid separately and not as part of the Purchase Price. The undersigned
acknowledges and agrees that this election notice is irrevocable and that the
undersigned will have no further rights with respect to the Tendered Bonds
except payment, upon presentation and surrender of the Tendered Bonds at the
principal corporate trust office of the Trustee, of the Purchase Price by wire
or bank transfer within the continental United States from the Trustee to the
undersigned at its address as shown on the registration books of the Trustee (i)
on the Purchase Date if the Tendered Bonds shall have been surrendered to the
Trustee prior to 10:00 A.M., Boston, Massachusetts time, on the Purchase Date or
(ii) on any Delivery Date subsequent to the Purchase Date on which Tendered
Bonds are delivered to the Trustee by 10:00 A.M., Boston, Massachusetts time,
together with an appropriate endorsement for transfer or accompanied by a bond
power endorsed in blank, provided that for so long as the Bonds are in the
Book-Entry Only System, physical surrender of the Bonds to the Trustee shall not
be required and the Bonds shall be tendered pursuant to the procedures described
in Paragraph 301(d)(iii)) of the Loan and Trust Agreement referred to below.
Except as otherwise indicated herein and unless the context otherwise
requires, the terms used herein shall have the meanings set forth in the Loan
and Trust Agreement dated as of May 1, 2001 relating to the Bonds.
- --------
(1) Must be in a minimum amount of One Hundred Thousand Dollars ($100,000) and
integral multiples of Five Thousand Dollars ($5,000) in excess thereof and must
not result in any portion of a Bond not tendered being below the minimum of One
Hundred Thousand Dollars ($100,000).
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Date: Signature(s)
------------------------------------------
------------------------------------------
------------------------------------------
------------------------------------------
Street City State Zip
IMPORTANT: The above signature(s) must correspond with the name(s) as
set forth on the face of the Tendered Bond(s) with respect to which this
Bondowner's Election Notice is being delivered without any change whatsoever. If
this notice is signed by a person other than the registered owner of any
Tendered Bond(s), the Tendered Bond(s) must be either endorsed on the Assignment
appearing on each Bond or accompanied by appropriate bond powers, in each case
signed exactly as the name or names of the registered owner or owners appear on
the bond register. The method of presenting this notice to the Trustee is the
choice of the person making such presentation. If it is made by mail, it should
be by registered mail with return receipt requested.
* * *
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(ii) Form of Fixed Rate Bond. The Bonds may be issued in the Fixed Rate
Mode in substantially the form prescribed below.
$_______________ No. R-
UNITED STATES OF AMERICA
THE COMMONWEALTH OF MASSACHUSETTS
MASSACHUSETTS DEVELOPMENT FINANCE AGENCY
Variable Rate Demand Revenue Bond
Frequency & Time Systems Issue, Series 2001
INTEREST RATE:
MATURITY DATE:
CUSIP:
DATE OF THIS BOND:
(Date as of which Bonds of this
series were initially issued.)
INTEREST PAYMENT DATES: (i) May 1 and November 1
(but not before ______, _____)
and (ii) the Maturity Date or
redemption or acceleration date
REGISTERED OWNER: CEDE & CO.
PRINCIPAL AMOUNT: DOLLARS
THIS BOND DOES NOT CONSTITUTE A GENERAL OBLIGATION OF THE MASSACHUSETTS
DEVELOPMENT FINANCE AGENCY OR A DEBT OR PLEDGE OF THE FAITH AND CREDIT OF THE
COMMONWEALTH OF MASSACHUSETTS; THE PRINCIPAL OF AND INTEREST AND PREMIUM, IF
ANY, ON THIS BOND ARE PAYABLE SOLELY FROM THE REVENUES AND FUNDS PLEDGED FOR
THEIR PAYMENT IN ACCORDANCE WITH THE LOAN AND TRUST AGREEMENT. THE ISSUER HAS NO
TAXING POWER.
The Massachusetts Development Finance Agency (the "Issuer"), for value
received promises to pay to the REGISTERED OWNER, or registered assigns, but
solely from the moneys to be provided under the Agreement mentioned below, upon
presentation and surrender hereof, in lawful money of the United States of
America, the PRINCIPAL AMOUNT on the MATURITY DATE, unless paid earlier as
provided below, with interest (computed on the basis of a 360-day year
consisting of twelve 30-day months) from the most recent INTEREST PAYMENT DATE
to which interest has been paid or duly provided for or, if no interest has
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been paid, from the DATE OF THIS BOND, at the INTEREST RATE per annum, payable
semiannually on the INTEREST PAYMENT DATES, until the date on which this bond
becomes due, whether at maturity or by acceleration or redemption. From and
after that date, any unpaid principal will bear interest at the same rate until
paid or duly provided for but unpaid interest shall not bear interest. The
principal and premium, if any, of this bond is payable by bank check upon
presentation and surrender hereof at the principal corporate trust office of
Wells Fargo Bank Minnesota, National Association, as Trustee (with its
successors, the "Trustee") at the office of the Trustee or such other address
specified in writing by the Trustee to the Bondowners unless this bond is in the
Book-Entry Only System (as defined in the Agreement) in which case payment shall
be by wire transfer of immediately available funds within the continental United
States. Interest is payable by bank check mailed on the INTEREST PAYMENT DATE by
the Trustee to the REGISTERED OWNER of this bond (or of one or more predecessor
or successor Bonds, as defined below), determined as of the close of business on
the applicable record date, at its address as shown on the registration books
maintained by the Trustee unless this bond is in the Book-Entry Only System, in
which case interest is payable by wire or bank transfer of immediately available
funds within the continental United States. If any payment, redemption or
maturity date for principal, premium or interest shall be (i) a Saturday, Sunday
or a legal holiday, or (ii) a day on which banking institutions in Boston, MA or
New York, NY are authorized pursuant to law to close or on which any principal
corporate trust office of the Trustee or the office of the Bank specified in the
Credit Facility (hereinafter defined) for draws thereunder is not open for
business, or (iii) a day on which the New York Stock Exchange is closed, then
the payment thereof may be made on the next succeeding day not a day specified
in (i) or (ii) with the same force and effect as if made on the specified
payment date and no interest shall accrue for the period after the specified
payment date.
The record date for payment of interest is the fifteenth day of the
month preceding the date on which the interest is to be paid, provided that,
with respect to overdue interest or interest on any overdue amount, the Trustee
(as defined below) may establish a special record date. The special record date
may be not more than thirty (30) days before the date set for payment. The
Trustee will mail notice of a special record date to the registered owners of
the Bonds (the "Bondowners") at least ten (10) days before the special record
date. The Trustee will promptly certify to the Issuer and the Remarketing Agent
that it has mailed such notice to all Bondowners, and such certificate will be
conclusive evidence that such notice was given in the manner required hereby.
This bond is one of a series of Variable Rate Demand Revenue Bonds
Frequency & Time Systems Issue, Series 2001 (the "Bonds") in the aggregate
principal amount of Two Million Seven Hundred Twenty Five Thousand Dollars
($2,725,000) issued under Massachusetts General Laws, Chapters 23G and 40D, as
amended (the "Act"). The proceeds of the Bonds are being loaned to Frequency &
Time Systems, Inc. ("Borrower"), pursuant to a Loan and Trust Agreement (the
"Agreement") dated as of May 1, 2001 among the Borrower, the Issuer and the
Trustee. Pursuant to the Agreement, the Borrower has unconditionally agreed to
repay such loan in the amounts and at the times necessary to pay the principal
of, premium, if any, and interest on the Bonds when due. Reference is hereby
made to the Agreement for the provisions thereof with respect to the rights,
limitations of rights, duties, obligations and immunities of the Borrower, the
Issuer, the Trustee, and the Bondowners, including the order of payments in the
event of insufficient funds, the disposition of unclaimed moneys held by the
Trustee and restrictions on the rights of owners of the Bonds to bring suit. The
Agreement may be amended to the extent and in the manner provided therein.
Copies of the Agreement are available for inspection at the
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principal corporate trust office of the Trustee. Unless otherwise defined
herein, capitalized terms shall have the meanings given them in the Agreement.
In order to provide additional security for the Bonds, [INSERT
DESCRIPTION OF CREDIT FACILITY OR SUBSTITUTE CREDIT FACILITY].
In case any Event of Default (as defined in the Agreement) occurs and is
continuing, the principal amount of this bond together with accrued interest
hereon may be declared due and payable in the manner and with the effect
provided in the Agreement.
[If applicable: The Bonds are redeemable pursuant to the Agreement prior
to maturity beginning on May 1, _____, at the option of the Borrower, as a whole
or in part at any time, at the following prices expressed in percentages of
their principal amount, plus accrued interest to the redemption date:
Period During Which Redeemed Redemption Price
---------------------------- ----------------
%
[This table shall be completed based on redemption schedule established for the
Bonds pursuant to the Agreement.]
The Bonds are subject to redemption from sinking fund installments at
their principal amounts, without premium, plus accrued interest to the
redemption date on May 1 of each of the years and in the principal amounts as
follows:
Year Principal Amount Year Principal Amount
---- ---------------- ---- ----------------
The Bonds are subject to redemption prior to maturity at a redemption
price of par plus accrued interest:
(1) In whole or in part on any date, to the extent excess moneys in the
Construction Fund are transferred to the Bond Fund established under the
Agreement, or from proceeds of the sale, lease or other disposition of the
facilities financed by the Bonds or certain insurance or eminent domain proceeds
pursuant to the extraordinary redemption provisions set forth in the Agreement;
or
(2) If, within thirty (30) days of the occurrence of an Act of
Bankruptcy of the Bank, a substitute Credit Facility has not been issued to the
Trustee in accordance with the Agreement
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the Bonds shall be subject to redemption on any date as a whole within one
hundred thirty (130) days after the occurrence of the Act of Bankruptcy of the
Bank; or
(3) In whole on any Interest Payment Date in the event of the expiration
of the Credit Facility and failure by the Borrower to provide for delivery to
the Trustee of an extension of the existing Credit Facility or a substitute
Credit Facility at least forty-five (45) days prior to the INTEREST PAYMENT DATE
immediately preceding the expiration date of the Credit Facility then in effect.
The Bonds are also subject to redemption prior to maturity upon the
occurrence of a Determination of Taxability as defined in the Agreement. In such
event, the Bonds shall be subject to redemption, as a whole, as soon as
practicable, and, in any event within sixty (60) days after the Trustee's
receipt of notice of such Determination of Taxability, at a redemption price
equal to the principal amount thereof plus a premium equal to three percent (3%)
of the principal amount thereof, plus accrued interest to the redemption date.
If any Bonds are paid at maturity or redeemed subsequent to a Tax Incidence Date
without payment of an amount at least equal to the redemption price that would
have been received if such Bonds had been redeemed as a result of a
Determination of Taxability, the Owners of such Bonds at the time of maturity or
redemption, upon establishing their then ownership thereof, shall be entitled to
receive as an additional premium thereon an amount equal to the difference
between the amounts actually received and the amounts that would have been
received if such Bonds had been redeemed as a result of a Determination of
Taxability.
If less than all of the outstanding Bonds are to be called for
redemption, the Bonds (or portions thereof) to be redeemed shall be selected as
provided in the Agreement. Mandatory or optional redemption (other than sinking
fund redemption) shall reduce the mandatory sinking fund redemption obligation
in inverse order of payment dates.
In the event this bond or any portion hereof is selected for redemption,
notice will be mailed no more than sixty (60) nor less than thirty (30) days
prior to the redemption date to the REGISTERED OWNER at its address shown on the
registration books maintained by the Trustee. Failure to mail notice to the
owner of any other Bond or any defect in the notice to such an owner shall not
affect the redemption of this bond.
If this bond is of a denomination in excess of Five Thousand Dollars
($5,000), portions of the principal amount in the amount of Five Thousand
Dollars ($5,000) or any multiple thereof may be redeemed. If less than all of
the principal amount is to be redeemed, unless this bond is in the Book-Entry
Only System, upon surrender of this bond to the Trustee, there will be issued to
the REGISTERED OWNER, without charge, a new Bond or Bonds, at the option of the
REGISTERED OWNER, for the unredeemed principal amount.
Notice of redemption having been duly mailed, this bond, or the portion
called for redemption, will become due and payable on the redemption date at the
applicable redemption price and, moneys for the redemption having been deposited
with the Trustee, from and after the date fixed for redemption, interest on this
bond (or such portion) will no longer accrue.
This bond is transferable by the REGISTERED OWNER, in person or by its
attorney duly authorized in writing, at the principal corporate trust office of
the Trustee, upon surrender of this Bond to the Trustee for cancellation. Upon
transfer, a new Bond or Bonds in authorized
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denominations of the same aggregate principal amount will be issued to the
transferee at the same office. No transfer will be effective unless represented
by such surrender and reissue. This bond may also be exchanged at the principal
corporate trust office of the Trustee for a new Bond or Bonds of the same
aggregate principal amount without transfer to a new registered owner. Exchanges
and transfers will be without expense to the holder except for applicable taxes
or other governmental charges, if any. The Trustee will not be required to make
an exchange or transfer of this bond (i) if this bond or any portion thereof has
been selected for redemption or (ii) during the fifteen (15) days preceding any
date fixed for selection for redemption if this bond (or any part thereof) is
eligible to be selected or has been selected for the redemption.
This bond is issuable only in fully registered form in the denominations
of [One Hundred Thousand Dollars ($100,000) and any integral multiple of Five
Thousand Dollars ($5,000) in excess thereof, except as a result of a partial
redemption.] [Five Thousand Dollars ($5,000) or any integral multiple thereof.]
The Issuer, the Trustee, and the Borrower may treat the REGISTERED OWNER
as the absolute owner of this bond for all purposes, notwithstanding any notice
to the contrary.
No director, officer, employee or agent of the Issuer nor any person
executing this bond (by facsimile signature or otherwise) shall be personally
liable, either jointly or severally, hereon or be subject to any personal
liability or accountability by reason of the issuance hereof.
This bond will not be valid until the Certificate of Authentication has
been signed by the Trustee.
REFERENCE IS MADE TO THE FURTHER PROVISIONS OF THIS BOND ON THE BACK,
WHICH HAVE THE SAME EFFECT AS IF SET FORTH HERE.
MASSACHUSETTS DEVELOPMENT FINANCE AGENCY
By: ________________________________________
Authorized Signatory
Certificate of Authentication
This bond is one of the Bonds described in the Loan and Trust Agreement.
WELLS FARGO BANK MINNESOTA, NATIONAL
ASSOCIATION, as Trustee
Date of Authentication:
By:_______________________________________
Authorized Signatory
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Assignment
For value received the undersigned sells, assigns and transfers this bond to
________________________________________________________________________________
(Name and Address of Assignee)
________________________________________________________________________________
________________________________________________________________________________
Social Security or Other Identifying Number of Assignee
and irrevocably appoints _______________________________________________________
attorney-in-fact to transfer it on the books kept for registration of the bond,
with full power of substitution.
__________________________________________
NOTE: The signature to this assignment
must correspond with the name as written
on the face of the bond without alteration
or enlargement or other change and must be
guaranteed by a Participant in a
Recognized Signature Guaranty Medallion
Program.
Dated:
Signature Guaranteed:
____________________________________
Participant in a Recognized
Signature Guaranty Medallion Program
By:_________________________________
Authorized Signature
(b) Details of the Bonds.
The Bonds shall be signed on behalf of the Issuer by the manual or
facsimile signature of the President, Senior Executive Vice President/Secretary,
Senior Vice President/Investment Banking or General Counsel. The Certificate of
Authentication shall be manually signed by the Trustee. No bonds shall be issued
under this Agreement other than the Bonds.
In case any officer whose manual or facsimile signature shall appear on
any Bond shall cease to be such officer before the delivery thereof, such manual
or facsimile signature shall nevertheless be valid and sufficient for all
purposes as if he or she had remained in office until after such delivery.
The Bonds shall be issued in fully registered form and shall be numbered
from R-1 upwards in the order of their issuance, or in any other manner deemed
appropriate by the
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Trustee. The Bonds shall be dated the date of original delivery thereof and
shall mature on May 1, 2021. The interest on Bonds until they come due shall be
payable on the Interest Payment Dates applicable to the Mode the Bonds are in
from time to time. Interest on overdue principal of any Bond shall bear interest
at the rate last established for that Bond before the principal became overdue
until duly paid or provided for, but unpaid interest shall not continue to bear
interest after its due date. The Bonds shall be initially in the Weekly Mode.
Except for Bonds that have been subject to partial redemption, the Bonds
shall be in the denomination of One Hundred Thousand Dollars ($100,000) or any
multiple of Five Thousand Dollars ($5,000) in excess of One Hundred Thousand
Dollars ($100,000) in the Weekly Mode and, except as provided below, after the
Fixed Rate Conversion Date.
On or after the Fixed Rate Conversion Date the Bonds may be issued in
denominations of Five Thousand Dollars ($5,000) or any multiple thereof upon
delivery to the Trustee of (A) a disclosure document relating to the Bonds, and
(B) an opinion or opinions of independent counsel to the effect that such
disclosure document fairly and accurately describes the Bonds, the security for
the Bonds and the financing documents relating to the Bonds and such security,
and that the disclosure document (except the financial and statistical data
therein as to which no opinion need be expressed) does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements therein, in light of the circumstances in which they were made,
not misleading, and (C) a certificate of the Borrower that the Borrower has
undertaken to provide continuing disclosure information as required by Rule
15(c) 2-12 under the Securities and Exchange Act of 1934 as in effect on the
Fixed Rate Conversion Date, or an opinion of Bond Counsel, who may be counsel to
the Issuer, the Remarketing Agent or the Trustee, to the effect that compliance
with the Rule is not required.
The Bonds are subject to redemption as described in Section 310 and in
the forms of Bonds.
(c) Registration of Bonds in the Book-Entry Only System.
(i) Notwithstanding any provision herein to the contrary, the
provisions of this Subsection 301(c) and the Representation Letter (as defined
below) shall apply with respect to any Bond registered to CEDE & CO. or any
other nominee of DTC while the Book-Entry Only System (meaning the system of
registration described in paragraph (ii) of this Subsection 301(c)) is in
effect. The Book-Entry Only System shall be in effect for any Mode if so
specified by the Borrower prior to conversion to that Mode, subject to the
provisions below concerning termination of the Book-Entry Only System. Until it
revokes such specifications in its discretion, the Borrower hereby specifies
that the Book-Entry Only System shall be in effect while the Bonds are in Weekly
and Fixed Rate Modes.
(ii) The Bonds in or to be in the Book-Entry Only System shall be
issued in the form of a separate single authenticated fully registered Bond for
each stated maturity in substantially the forms provided for in Subsection
301(a). Any legend required to be on the Bonds by DTC may be added by the
Trustee. On the date of original delivery thereof, the Bonds shall be registered
in the registry books of the Trustee in the name of CEDE & CO., as nominee of
DTC as agent for the Issuer in maintaining the Book-Entry Only System. With
respect to Bonds registered in the registry books kept by the Trustee in the
name of CEDE & CO., as nominee of DTC, the Issuer, the Borrower, the Bank, the
Remarketing Agent and the Trustee
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shall have no responsibility or obligation to any Participant (which means
securities brokers and dealers, banks, trust companies, clearing corporations
and various other entities, some of whom or their representatives own DTC) or to
any Beneficial Owner (which means, when used with reference to the Book-Entry
Only System, the person who is considered the beneficial owner of the Bonds
pursuant to the arrangements for book entry determination of ownership
applicable to DTC) with respect to the following: (A) the accuracy of the
records of DTC, CEDE & CO. or any Participant with respect to any ownership
interest in the Bonds, (B) the delivery to or from any Participant, any
Beneficial Owner or any other person, other than DTC, of any notice with respect
to the Bonds, including any notice of redemption or tender (whether mandatory or
optional), or (C) the payment to any Participant, any Beneficial Owner or any
other person, other than DTC, of any amount with respect to the principal or
premium, if any, or interest on the Bonds or the Purchase Price. The Trustee
shall pay all principal of and premium, if any, and interest on the Bonds or the
Purchase Price only to or upon the order of DTC, and all such payments shall be
valid and effective fully to satisfy and discharge the Issuer's obligations with
respect to the principal of and premium, if any, and interest on Bonds to the
extent of the sum or sums so paid. No person other than DTC shall be entitled to
receive an authenticated Bond evidencing the obligation of the Issuer to make
payments of principal and premium, if any, and interest pursuant to this
Agreement. Upon delivery by DTC to the Trustee of written notice to the effect
that DTC has determined to substitute a new nominee in place of CEDE & CO., the
words "CEDE & CO." in this Agreement shall refer to such new nominee of DTC.
(iii) Upon receipt by the Trustee of written notice from DTC to the
effect that DTC is unable or unwilling to discharge its responsibilities, or
that DTC has received written notice from its Participants having interests in
an aggregate amount of not less than fifty percent (50%) of the aggregate
principal amount of Bonds Outstanding to the effect that continuation of the
Book-Entry Only System is not in the best interests of the beneficial owners,
the Issuer shall issue and the Trustee shall transfer and exchange Bonds as
requested by DTC in appropriate amounts and in authorized denominations, and
whenever DTC requests the Issuer and the Trustee to do so, the Trustee and the
Issuer will, at the expense of the Borrower, cooperate with DTC in taking
appropriate action after reasonable notice (A) to arrange for a substitute bond
depository willing and able upon reasonable and customary terms to maintain
custody of the Bonds or (B) to make available for transfer and exchange Bonds
registered in whatever name or names and in whatever authorized denominations as
DTC shall designate.
(iv) In the event the Borrower determines that the Beneficial Owners
should be able to obtain Bond certificates, the Borrower may so notify DTC and
the Trustee, whereupon DTC will notify the Participants of the availability
through DTC of Bond certificates. In such event, the Issuer shall issue and the
Trustee shall transfer, at the expense of Borrower, and exchange Bond
certificates as requested by DTC in appropriate amounts and in authorized
denominations. Whenever DTC requests the Trustee to do so, the Trustee will
cooperate with DTC in taking appropriate action after reasonable notice to make
available for transfer and exchange Bonds registered in whatever name or names
and in whatever authorized denominations as DTC shall designate.
(v) Notwithstanding any other provision of this Agreement to the
contrary, so long as any Bond is registered in the name of CEDE & CO., as
nominee of DTC, all payments with respect to the principal of, Purchase Price,
premium, if any, and interest on such Bond and all notices with respect to such
Bond shall be made and given, respectively, to DTC as provided
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in the Letter of Representation (the "Representation Letter") from the Issuer to
DTC as in effect from time to time.
(vi) Notwithstanding any provision in Section 310 to the contrary,
so long as the Bonds outstanding are held in the Book-Entry Only System, if less
than all of such Bonds of a maturity are to be redeemed upon any redemption of
Bonds hereunder, the particular Bonds or portions of Bonds to be redeemed shall
be selected by DTC in such manner as DTC may determine.
(vii) So long as the Book-Entry Only System is in effect, a
Beneficial Owner who elects to have its Bonds purchased or tendered pursuant to
the Agreement shall effect delivery by causing a Participant to transfer the
Beneficial Owner's interest in the Bonds pursuant to the Book-Entry Only System.
The requirement for physical delivery of Bonds in connection with a demand for
purchase or a mandatory purchase will be deemed satisfied when the ownership
rights in the Bonds are transferred in accordance with the Book-Entry Only
System.
(viii) So long as the Book-Entry Only System is in effect, the
Remarketing Agent shall communicate to DTC information concerning the purchasers
of Tendered Bonds as may be necessary or appropriate, and, notwithstanding any
provision in the Representation Letter to the contrary, the Remarketing Agent
shall continue to remit to the Trustee interest rate determination information
pursuant to the terms of this Agreement.
(d) Weekly Mode.
(i) Determination of Weekly Rates. The Remarketing Agent shall
determine the Weekly Rate as provided in the form of Weekly Bonds not later than
the Adjustment Date and, pursuant to the Remarketing Agreement, shall notify the
Trustee and the Borrower by telephone or facsimile (followed by written
confirmation thereof) on the Adjustment Date of each change in the Weekly Rate.
Each determination and redetermination of the Weekly Rate shall be conclusive
and binding on the Issuer, the Trustee, the Bank, the Borrower and the
Bondowners.
If for any reason the Weekly Rate cannot be established for any Rate
Period as described above or is held invalid or unenforceable by a court of law,
or the Remarketing Agent fails to announce the Effective Rate as provided herein
for any Rate Period, the Effective Rate for that Rate Period shall be the same
as the Effective Rate for the prior Rate Period. In no event shall the Weekly
Rate exceed the Maximum Interest Rate.
(ii) Conversion to Fixed Rate Mode. The Bonds in the Weekly Mode may
be converted in whole, but not in part, on any Interest Payment Date applicable
to the Weekly Mode at the election of the Borrower to the Fixed Rate Mode, as
provided in the form of Weekly Rate Bonds, so long as no Default hereunder
exists as certified in writing to the Trustee by a Borrower Representative on
the Fixed Rate Conversion Date. Bonds to be converted to the Fixed Rate Mode
shall be supported by a Credit Facility. If Bonds are to be converted to the
Fixed Rate Mode, no such conversion shall be effective unless the Borrower shall
have delivered to the Trustee by 10:00 A.M., Boston, Massachusetts time on the
Fixed Rate Conversion Date a Credit Facility in the minimum required face amount
for the Fixed Rate Mode as provided in Section 317 and with an expiration date
not earlier than one year from the Fixed Rate Conversion Date,
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together with an opinion of Bond Counsel to the effect that the conversion to
the Fixed Rate Mode does not adversely effect the exclusion of interest on the
Bonds from gross income for federal income tax purposes. Written notice of the
conversion of Bonds to the Fixed Rate Mode, the identity of the provider of the
new Credit Facility and the proposed Fixed Rate Conversion Date, which date
shall be an Interest Payment Date under the Weekly Mode, shall be given by the
Borrower to the Issuer, the Trustee, the Bank, the Remarketing Agent and S&P, if
the Bonds are then rated by S&P, not fewer than forty-five (45) nor more than
sixty (60) days prior to the proposed Fixed Rate Conversion Date. Notice of a
conversion of Bonds to the Fixed Rate Mode and the mandatory tender of Bonds for
purchase on such Fixed Rate Conversion Date shall be given to the owners of such
Bonds as provided in Subparagraph 301(d)(iv)(B) and the form of Weekly Bonds.
Conversions to the Fixed Rate Mode shall also be governed by Subsection 301(e).
Notwithstanding the foregoing, if the preconditions to conversion to the
Fixed Rate Mode established by the preceding paragraph are not met by 10:00
A.M., Boston, Massachusetts time on the Fixed Rate Conversion Date, the Trustee
shall deem the proposed conversion to have failed and shall immediately notify
the Remarketing Agent, and the Bonds shall remain in the Weekly Mode. In no
event shall the failure of Bonds to be converted to the Fixed Rate Mode for any
reason be, in and of itself, deemed to be a Default or Event of Default under
this Agreement.
(iii) Bondowners' Option to Tender Bonds in Weekly Mode. Bonds in
the Weekly Mode (other than Bank Bonds or Borrower Bonds) are subject to tender,
at the election of the owner thereof, in the manner and subject to the
limitations described in the form of Weekly Bonds. The owners of Tendered Bonds
shall receive on the Delivery Date 100% of the principal amount of the Tendered
Bonds plus accrued interest to the Purchase Date, provided that if the Purchase
Date is an Interest Payment Date, accrued interest for the preceding Interest
Accrual Period shall be paid separately, and not as part of the Purchase Price
on such date. The purchase of Tendered Bonds shall not extinguish the debt
represented by such Bonds which shall remain Outstanding and unpaid under this
Agreement.
The Trustee shall accept all Tendered Bonds properly tendered to it for
purchase as provided in the form of Weekly Bonds and in this Paragraph
301(d)(iii), or for so long as the Bonds are in the Book-Entry Only System,
Bonds shall be deemed tendered if Bonds are transferred as provided in Paragraph
301(c)(vii); provided, however, that the Trustee shall not accept any Tendered
Bonds and the Purchase Price therefor shall not be paid if at the time of tender
or on the Purchase Date the principal of the Bonds shall have been accelerated
pursuant to Section 602 and such acceleration shall not have been annulled.
The Bondowner's Election Notice delivered to the Trustee as provided in
the form of Weekly Bonds prior to the Purchase Date of Tendered Bonds shall be
in substantially the form provided in the form of Weekly Bond or such other form
as the Trustee may accept.
As soon as practicable after receiving notice of a tender of Bonds under
this section, the Trustee shall notify the Remarketing Agent, the Borrower and
the Bank by telephone promptly confirmed in writing of the amount of Tendered
Bonds and the specified Purchase Date.
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(iv) Events Requiring Mandatory Tender of Weekly Bonds.
(A) Expiration of Credit Facility Without Substitution or
Replacement; Substitution of Credit Facility. The Bonds in the Weekly Mode
(other than Bank Bonds or Borrower Bonds) are subject to mandatory tender for
purchase as provided in the form of Weekly Bonds in connection with the
expiration, termination or substitution of the Credit Facility and failure by
the Borrower to provide for the delivery to the Trustee of a substitute Credit
Facility or an extension of the existing Credit Facility at least forty-five
(45) days prior to the Interest Payment Date preceding the date of such
expiration (after any extensions), termination or substitution of the Credit
Facility then in effect and in connection with the substitution of a Credit
Facility, unless the Trustee receives written notice from S&P, if the Bonds are
then rated by S&P, that such substitution will not result in a reduction or
withdrawal of the ratings on the Bonds. Not more than forty-four (44) days prior
to the mandatory tender date, and not less than thirty (30) days prior to the
mandatory tender date, the Trustee shall give notice to the Bondowners of the
mandatory tender of Bonds pursuant to this Paragraph 301(d)(iv). The extension
of an existing Credit Facility shall not constitute a substitute Credit Facility
or result in mandatory tender of Bonds.
(B) Change in Mode. In the event that Bonds in the Weekly Mode
are converted to the Fixed Rate Mode, such Bonds (other than the Bank Bonds and
Borrower Bonds) are subject to mandatory tender for purchase on the Fixed Rate
Conversion Date at the Purchase Price upon not more than forty-four (44) days'
and not less than thirty (30) days' prior written notice from the Trustee to the
Bondowners as provided in the form of Weekly Bonds, which notice shall state
that the Bonds are subject to mandatory tender for purchase.
(e) Conversion to Fixed Rate Mode. The interest rate on the Bonds may be
converted by the Borrower to the Fixed Rate as provided in the form of the
Weekly Rate Bonds, Section 301(d)(ii), and this Subsection 301(e). Upon receipt
of the notice of conversion to the Fixed Rate Mode from the Borrower, the
Remarketing Agent shall determine the Fixed Rate not later than 2:00 P.M.,
Boston, Massachusetts time two (2) Business Days before the Fixed Rate
Conversion Date. The Fixed Rate shall be the lowest rate which in the judgment
of the Remarketing Agent, on the basis of prevailing financial market
conditions, would permit the sale of the Bonds being so converted at par as of
the Fixed Rate Conversion Date on the basis of their terms as converted.
On the date of determination thereof, the Remarketing Agent shall notify
the Borrower, the Issuer and the Trustee by telephone or facsimile of the Fixed
Rate promptly confirmed in writing to the Borrower, the Issuer and the Trustee.
The determination of the Fixed Rate shall be conclusive and binding on the
Issuer, the Trustee, the Borrower and the Bondowners. The first Interest Payment
Date of Bonds converted to the Fixed Rate Mode shall be May 1 or November 1
specified by the Borrower in writing to the Trustee which is at least two (2)
months but less than ten (10) months after the Conversion Date. The Fixed Rate
shall become effective on the Fixed Rate Conversion Date and shall remain in
effect for the remaining term of the Bonds.
Notwithstanding the foregoing, if the preconditions to conversion to the
Fixed Rate Mode established by this Subsection 301(e) and Paragraph 301(d)(ii)
are not met by 10:00 A.M., Boston, Massachusetts time on the Fixed Rate
Conversion Date, the Trustee shall deem the proposed conversion to have failed
and shall proceed as such under Paragraph 301(d)(ii).
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(f) Cancellation of Bonds. All Bonds paid or redeemed, either at or
before maturity, shall be delivered to the Trustee when such payment or
redemption is made, and such Bonds, together with all Bonds purchased by the
Trustee and all Bonds surrendered in any exchanges or transfers, shall thereupon
be promptly canceled. All Bonds acquired and owned by the Borrower and delivered
to the Trustee for cancellation shall be deemed paid and shall be promptly
canceled. Bonds so canceled may, at the option of the Trustee, at any time be
cremated or otherwise destroyed by the Trustee, which shall execute a
certificate of cremation or destruction in duplicate by the signature of one of
its authorized officers describing the Bonds so cremated or otherwise destroyed,
and one executed certificate shall be returned to the Borrower.
(g) Replacement of Bonds. Replacement Bonds shall be issued pursuant to
applicable law as a result of the destruction, loss or mutilation of the Bonds.
The costs of a replacement shall be paid or reimbursed by the applicant, who
shall indemnify the Issuer, the Trustee, the Remarketing Agent and the Borrower
against all liability and expense in connection therewith.
(h) Interest on Overdue Principal. Any overdue principal of any Bond
shall bear interest after its maturity or acceleration at the last interest rate
in effect on that Bond.
(i) CUSIP Numbers. The Issuer in issuing the Bonds may use "CUSIP"
numbers (if then generally in use), and, if so, the Trustee shall use "CUSIP"
numbers in notices of redemption as a convenience to Bondowners; provided that
any such notice may state that no representation is made as to the correctness
of such numbers either as printed on the Bonds or as contained in any notice of
a redemption and that reliance may be placed only on the other identification
numbers printed on the Bonds, and any such redemption shall not be affected by
any defect in or omission of such numbers. The Borrower will promptly notify the
Trustee of any change in the "CUSIP" numbers.
Section 302. Application of Bond Proceeds. The proceeds of the sale of
the Bonds shall be deposited in the Construction Fund, constituting the loan of
the proceeds of the Bonds by the Issuer to the Borrower.
Section 303. Tax Status of Bonds. The Borrower will perform its
obligations and agreements contained in the Federal Tax Certificate as if they
were set forth herein. Any covenants, agreements or representations made by the
Borrower in the Federal Tax Certificate shall be performed and treated as if set
forth herein. The Issuer will cooperate with the Bondowner and the Borrower to
the extent deemed necessary or permitted by law in the opinion of Bond Counsel
to the Issuer in order to preserve the exclusion of interest on the Bonds from
the gross income of the owners thereof for federal income tax purposes.
Section 304. Bond Fund.
(a) Establishment and Purpose. A Bond Fund is hereby established with
the Trustee and moneys shall be deposited therein as provided in this Agreement.
The Borrower hereby grants to the Trustee for the benefit of the Bondowners and
the Bank a security interest in all deposits in the Bond Fund. The Trustee
acknowledges that it holds the Bond Fund as agent for the Bondowners and the
Bank, as their interests may appear. The Trustee shall be entitled conclusively
to rely upon a certification from the Bank as to amounts due and payable under
the Reimbursement Agreement. The moneys in the Bond Fund and any investments
held as part of
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such fund shall be held in trust and, except as otherwise provided in this
Agreement, shall be applied by the Trustee solely to pay principal of, premium,
if any, and interest on, the Bonds or to reimburse the Bank for amounts drawn
under the Credit Facility for payment of principal of and interest on the Bonds.
The Trustee shall keep separate accounts as to (A) Eligible Funds and (B) all
other funds in the Bond Fund. Proceeds of drawings upon the Credit Facility
shall not be deposited in the Bond Fund, but shall be held by the Trustee in
trust in the Credit Facility Fund pursuant to Paragraph 308(c)(iii) and applied
as provided in this Agreement.
(b) Excess in Bond Fund. If at any time the amount of Eligible Funds in
the Bond Fund exceeds the amount necessary to pay the Purchase Price or the
principal of, premium, if any, and interest on the then Outstanding Bonds in
full and all amounts owing or to be owing under this Agreement to the Issuer and
the Trustee, then the Trustee shall promptly apply such excess first to the
Bank, in fulfillment of any obligations owed to it under the Reimbursement
Agreement, as certified by the Bank, and second, if any balance remains, to the
Borrower.
(c) Unclaimed Moneys. Except as may otherwise be required by applicable
law, in case any moneys deposited with the Trustee for the payment of the
Purchase Price or principal of, premium, if any, or interest on any Bond remain
unclaimed for two years after such Purchase Price or principal of, premium, if
any, and interest has been paid or has become due and payable, the Trustee may,
and upon receipt of a written request by a Borrower Representative shall, pay
over to the Borrower the amount so deposited and thereupon the Trustee and the
Issuer shall be released from any further liability with respect to the payment
of such Purchase Price or principal, premium or interest and the owner of such
Bond shall be entitled (subject to any applicable statute of limitations) to
look only to the Borrower as an unsecured creditor for the payment thereof.
Section 305. Rebate Fund.
(a) Establishment and Purpose. A Rebate Fund is hereby established with
the Trustee for the purpose of compliance with IRC Section 148(f) as in effect
from time to time, and the requirements of this section shall be construed in
accordance therewith. Within thirty days after the close of each 12-month period
following the original delivery date of the Bonds (a "Bond Year"), the Borrower
shall compute and certify, upon which certification the Trustee shall
conclusively rely, to the Trustee the amount of Excess Earnings, as defined in
subsection (c), if any, for such Bond Year and notwithstanding any provision of
this Agreement to the contrary shall direct the Trustee, in writing, to transfer
such amount from the Construction Fund or the Bond Fund into the Rebate Fund. To
the extent funds are not available from those sources, the Borrower shall pay
the deficiency into the Rebate Fund.
(b) Excess in Rebate Fund. If at the close of any Bond Year, the amount
in the Rebate Fund exceeds the amount that would be required to be paid to the
United States under subsection (d) if the Bonds were no longer outstanding, upon
certification thereof by the Borrower to the Trustee, such excess shall promptly
be paid to the Borrower.
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(c) Excess Earnings. "Excess Earnings" for any period means the sum of
(i) the excess of
(A) the aggregate amount earned during such period on all
"Nonpurpose Obligations" (including gains on the disposition of such
Obligations) in which "Gross Proceeds" of the issue are invested (other than
amounts attributable to an excess described in this subparagraph (c)(i)), over
(B) the amount that would have been earned during such period if
the "Yield" on such Nonpurpose Obligations (other than amounts attributable to
an excess described in this subparagraph (c)(i)) had been equal to the yield on
the issue, plus
(ii) any income during such period attributable to the excess
described in subparagraph (c)(i) above.
The terms "Nonpurpose Obligations," "Gross Proceeds" and "Yield" shall
have the meanings given in IRC Section 148(f) and the regulations promulgated
thereunder and shall be applied as provided therein.
(d) Payment of Rebate to the United States.
(i) Within thirty days after the close of the fifth Bond Year, and
at least once in each five-year period thereafter, there shall be paid to the
United States on behalf of the Issuer the full amount required to be paid under
IRC Section 148(f). Within thirty days after the Bonds are no longer
outstanding, there shall be paid to the United States on behalf of the Issuer
the full amount then required to be paid under IRC Section 148(f). Each such
payment shall be filed with the Internal Revenue Service Center, Philadelphia,
Pennsylvania 19255, accompanied by a copy of the Form 8038-T filed with respect
to the Bonds.
(ii) Not later than fifteen days prior to each date on which a
payment could become due under subparagraph (i) (a "Rebate Payment Date"), the
Borrower shall deliver to the Trustee a certificate summarizing the
determination of the amount then required to be paid pursuant to subparagraph
(i) and if the amount then held in the Rebate Fund is less than the amount so
determined, payment of the amount of the difference. Upon receipt of the
foregoing, the Trustee shall make the payment provided for in subparagraph (i)
from moneys in the Rebate Fund. The Trustee shall make such payment earlier at
the request of the Borrower accompanied by the foregoing certification and
payment, if any payment is required, together with a certificate of the Borrower
that all of the Gross Proceeds of the issue have been expended for the
governmental purpose of the issue and it is not anticipated that any other Gross
Proceeds will arise during the remaining term of the issue. In the event that
the Trustee shall not have received the required certification and payment on or
within five days following the period specified in the first sentence of this
subparagraph (ii), it shall pay over to the United States within the period
prescribed in subparagraph (i) all of the funds then held in the Rebate Fund.
(e) Records. The Borrower and Trustee shall keep such records as will
enable them to fulfill their responsibilities under this section and IRC Section
148(f) and shall retain such records for at least six years following final
payment of the Bonds. For purposes of the computations
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required by subsections (a) and (d), the Trustee shall upon written request
furnish to the Borrower all information in the Trustee's control which is
necessary for such computations.
(f) No Liability. By agreeing to give the notices under this section,
the Trustee assumes no responsibility for compliance by the Borrower with the
requirements of IRC Section 148. The Borrower and the Issuer agree that any
failure by the Trustee to give any notice under this section, shall not cause
the Trustee to be responsible for any failure by the Borrower to comply with the
requirements of IRC Section 148(f).
Section 306. Reserved.
Section 307. Application of Moneys. If, in addition to moneys drawn on
the Credit Facility (if any), available moneys in the Bond Fund are not
sufficient on any day to pay all principal, premium, if any, and interest on the
Outstanding Bonds then due or overdue, such moneys shall, after payment of all
amounts owing to the Trustee and the Issuer under this Agreement, be applied
first to the payment of interest, including interest on overdue principal, in
the order in which the same became due (pro rata with respect to interest which
became due at the same time) and second to the payment of principal and
redemption premiums, if any, without regard to the order in which the same
became due in each case pro rata among Bondowners, provided, however, that
amounts drawn on the Credit Facility (if any) shall be applied exclusively to
pay interest, premium, if any, and principal on Bonds in accordance with the
Credit Facility. If the owners of any Bonds have received all payments of
principal, premium, if any, and interest that have become due and payable from a
draw on the Credit Facility, the Bank shall be treated as the owner of such
Bonds for purposes of applying this section. In the event there exist Bank Bonds
or Borrower Bonds on the date of any application of moneys under this section,
moneys otherwise to be paid to the Bank or to the Borrower pursuant to this
section shall be applied (subject to Paragraph 308(c)(iii)) as follows: first,
so long as all payments due on Bonds supported by a Credit Facility have been
made, pro rata to all Bondowners other than the Borrower (but including the Bank
to the extent provided in the preceding sentence), otherwise first, pro rata to
all Bondowners other than the Bank and the Borrower, second (and irrespective of
which clause first applies), if any balance remains, to the Bank in fulfillment
of any obligations then due and payable under the Reimbursement Agreement or any
Bank Bonds (to the extent not satisfied pursuant to clause first), and third, if
any further balance remains, to the Borrower in respect of any Borrower Bonds.
Whenever overdue interest is to be paid on the Bonds, the Trustee may establish
a special record date as provided in the forms of Bonds. The Trustee shall give
such notice as it may deem appropriate of the fixing of any such date. When
interest or a portion of the principal is to be paid on an overdue Bond, the
Trustee may require presentation of the Bond for endorsement of the payment.
Prior to any payment to be made to the Bank in fulfillment of obligations due
and payable under the Reimbursement Agreement, the Trustee may require a
certificate from the Bank as to amounts then due and payable under the
Reimbursement Agreement, and the Trustee may rely conclusively thereon.
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Section 308. Payments by the Borrower.
(a) Payments of Debt Service by the Borrower.
(i) While the Bonds are in the Weekly Mode, the Borrower shall make
payments in immediately available funds to the Trustee for deposit in the Bond
Fund no later than 11:00 A.M., Boston, Massachusetts time on each Interest
Payment Date in an amount equal to the interest payment then coming due on such
Bonds, and on each date on which principal on the Bonds is due an amount equal
to the principal then coming due on the Bonds.
The Borrower may satisfy the requirement to pay interest on Bank Bonds
by making the payments to the Bank required by the Reimbursement Agreement and
by providing written notification of same to the Trustee. If all or any portion
of principal or interest on the Bonds (including any mandatory sinking fund
installment) is paid by a draw on the Credit Facility, the Trustee will
immediately after such payment disburse to the Bank from the Bond Fund an amount
equal to the principal or interest so paid by a draw on the Credit Facility.
While the Bonds are in the Fixed Rate Mode, the Borrower shall make payments not
later than the last day of each month in an amount equal to the sum of one-sixth
(1/6) of the interest next coming due on the Bonds plus one-twelfth (1/12) of
the principal next coming due on the Bonds (including principal coming due by
mandatory redemption pursuant to Subsection 310(e)). The Borrower may make
payments to the Bond Fund earlier than required by this section, but such
payments shall not affect the accrual of interest. Any premium due upon
redemption of the Bonds shall be paid by the Borrower to the Trustee not later
than two Business Days prior to the redemption date.
(ii) The payments to be made under the foregoing paragraph shall be
appropriately adjusted to reflect the date of issue of Bonds, the date of
conversion of the Bonds to the Fixed Rate Mode, accrued interest deposited in
the Bond Fund, if any, and any purchase or redemption of Bonds. The Borrower
shall make payments to the Trustee for deposit in the Bond Fund so that there
will be available in immediately available funds no later than 11:00 A.M,
Boston, Massachusetts time on each payment date on the Bonds the amount
necessary to pay the interest, principal and redemption premium, if any, due or
coming due on the Bonds.
(iii) At any time when any principal of the Bonds is overdue, the
Borrower shall also have a continuing obligation to pay to the Trustee for
deposit in the Bond Fund an amount equal to interest on the overdue principal at
the rate in effect when such principal became overdue, but the installment
payments required under this section shall not otherwise bear interest.
Redemption premiums shall not bear interest.
(iv) In any event, the loan payments shall be sufficient to pay the
total principal or Purchase Price of, premium, if any, and interest on the Bonds
as and when due (whether at maturity, by redemption or acceleration, or
otherwise) or to reimburse the Bank for drawings under the Credit Facility. If
at any time when said payments are due the balance in the Bond Fund available
for said purpose is insufficient to make such loan payments, the Borrower will
forthwith pay to the Trustee (in immediately available funds) any such
deficiency. The Borrower shall not be required to make any loan payment to the
extent its application would result in an excess in the Bond Fund over the
amounts necessary to meet its obligations then due and payable plus any
additional amounts then required to be maintained in the Bond Fund.
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(b) Additional Payments.
(i) The Borrower shall pay the Issuer on demand for reimbursement of
any and all costs, expenses and liabilities reasonably paid or incurred by the
Issuer, including reasonable fees of counsel and disbursements thereof, in
satisfaction of any obligations of the Borrower not performed by the Borrower as
required hereunder.
(ii) The Borrower shall pay the Issuer on demand for reimbursement
or prepayment of any and all costs, expenses and liabilities paid or incurred or
to be paid or incurred by the Issuer or any of its directors, officers,
employees or agents, including reasonable fees of counsel and disbursements
thereof, and requested by the Borrower or required by this Agreement or required
by the Act with respect to the Bonds or the Project.
(iii) The Borrower shall pay to the Trustee on demand for
reimbursement or prepayment of any and all fees, costs, expenses and liabilities
paid or incurred or to be paid or incurred by the Trustee, including reasonable
fees of counsel and disbursements thereof, in the performance of its duties
hereunder.
(c) Drawings on the Credit Facility.
(i) Debt Service. The Trustee shall not later than 1:00 P.M.,
Boston, Massachusetts time, on the Business Day next preceding any date on which
payments of the principal of, premium, if any, or interest on the Bonds are due,
whether at maturity, on an Interest Payment Date, by acceleration, redemption,
or otherwise, draw on the Credit Facility an amount sufficient to pay in full
the principal, premium, if any, and interest then coming due on the Bonds, other
than Borrower Bonds or Bank Bonds. The Trustee shall immediately notify the
Borrower by telephone promptly confirmed in writing if it has not been paid by
the Bank for such a draw on the Letter of Credit by 2:00 P.M. Boston,
Massachusetts time on the date such payment on the Bonds is due. The Trustee
undertakes to give the Borrower notice at least one Business Day in advance of
the amount of any draw on the Credit Facility, but failure by the Trustee to
give any notice under this paragraph shall not affect the obligation of the
Borrower to make any payments required by this Agreement.
(ii) Tenders for Purchase. Except as provided in Paragraph
308(c)(i), drawings on the Credit Facility for the purchase of Bonds tendered
for mandatory purchase pursuant to Paragraph 301(d)(iv) or for Bonds tendered
for purchase at the Bondowner's election pursuant to Paragraph 301(d)(iii) shall
be made pursuant to Subsection 311(a).
(iii) Credit Facility Fund; Use of Credit Facility. A Credit
Facility Fund is hereby established with the Trustee. All amounts received by
the Trustee under any Credit Facility shall be held in the Credit Facility Fund
separate and apart from all other amounts held by the Trustee, shall remain
uninvested and shall be used solely to pay the Purchase Price or principal of,
premium, if any, and interest on the Bonds for which the Credit Facility is
available. Principal and Purchase Price of, premium, if any, and interest on
Borrower Bonds and Bank Bonds shall not be paid from amounts drawn on a Credit
Facility.
(d) Payment of Debt Service. The Trustee shall apply to the payment of
principal, premium, if any, and interest payable on the Bonds (whether at
maturity, upon redemption or acceleration, on an Interest Payment Date, or
otherwise) moneys made available to it in the
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following order: (i) moneys drawn on the Credit Facility, (ii) Eligible Funds on
deposit in the Bond Fund, and (iii) any other moneys in the Bond Fund; provided,
however, that except as specified in the next sentence, in no event shall the
Trustee use any moneys other than Eligible Funds to pay principal of, premium,
if any, or interest on Bonds supported by a Credit Facility. If and to the
extent that sufficient Eligible Funds, including moneys drawn on the Credit
Facility pursuant to this section and Section 605, are not available to pay in
full the principal of, premium, if any, and interest on the Bonds supported by a
Credit Facility, then other available moneys shall be so used. Immediately after
any payment on the Bonds is made from funds drawn under the Credit Facility, the
Trustee shall to the extent available pay to the Bank from amounts in the Bond
Fund an amount equal to such payment on the Bonds from the drawing on the Credit
Facility.
(e) Borrower's Purchase of Bonds. If the amount drawn on the Credit
Facility and deposited with the Trustee, together with all other amounts
(including remarketing proceeds) received by the Trustee for the purchase of
Bonds supported by a Credit Facility and tendered pursuant to Paragraph
301(d)(iii) or (iv) is not sufficient to pay the Purchase Price of such Bonds on
the Purchase Date, the Trustee shall before 2:30 P.M., Boston, Massachusetts
time on such Purchase Date, notify the Borrower and the Remarketing Agent of
such deficiency by telephone promptly confirmed in writing. The Borrower shall
pay to the Trustee in immediately available funds by 3:00 P.M., Boston,
Massachusetts time on the Purchase Date an amount equal to the Purchase Price of
such Bonds less the amount, if any, available to pay the Purchase Price in
accordance with Section 311 from the proceeds of the remarketing of such Bonds
or from drawings on the Credit Facility, as reported by the Trustee. Bonds so
purchased with moneys furnished by the Borrower shall be Borrower Bonds.
Section 309. Unconditional Obligation. The obligation of the Borrower to
make payments under this Agreement shall be absolute and unconditional, shall be
binding and enforceable in all circumstances whatsoever, shall not be subject to
setoff, recoupment or counterclaim, and shall be a general obligation of the
Borrower to which the full faith and credit of the Borrower are pledged. The
Borrower shall be obligated to make such payments whether or not the Project
becomes functional and whether or not the Project has ceased to exist or be
functional to any extent from any cause whatsoever. The Borrower shall be
obligated to make such payments regardless of whether it is in possession or
entitled to be in possession of the Project.
Section 310. Redemption of the Bonds.
(a) Extraordinary Redemption Without Premium. To the extent moneys are
transferred to the Bond Fund pursuant to Section 403 or 408 or pursuant to the
provisions of the Reimbursement Agreement, or any related documents between the
Borrower and the Bank relating to proceeds of the sale, lease or other
disposition of the Project (or a portion thereof) or receipt of certain
insurance or eminent domain proceeds relating to all or a portion of the
Project, the Borrower shall promptly direct the Trustee in writing to draw on
the Credit Facility in an amount equal to the highest multiple of Five Thousand
Dollars ($5,000) which is less than the proceeds received to redeem Bonds in
whole or in part, on any date within 60 days at a redemption price of 100% of
the principal amount of the Bonds redeemed, plus accrued interest to the
redemption date, and such moneys in the Bond Fund (and earnings thereon) shall
be used to reimburse the Bank for moneys drawn on the Credit Facility, but only
for payments of principal. If the amount so transferred in any one calendar year
is less than One Hundred
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Thousand Dollars ($100,000), the Trustee may, and upon written direction of the
Borrower shall, apply it to reimburse the Bank for drawings on the Credit
Facility for regularly scheduled payments of principal instead of calling Bonds
for redemption.
(b) Mandatory Redemption Without Premium In the Event of Act of
Bankruptcy of the Bank. The Bonds are also subject to mandatory redemption if,
within thirty (30) days of the occurrence of an Act of Bankruptcy of the Bank, a
substitute Credit Facility has not been issued to the Trustee. In such event,
the Bonds shall be subject to redemption as a whole only from Eligible Funds
within one hundred thirty (130) days after the occurrence of the Act of
Bankruptcy of the Bank, at a redemption price equal to 100% of the principal
amount thereof, plus accrued interest to the redemption date without premium.
(c) Mandatory Redemption In the Event of a Determination of Taxability.
The Bonds are subject to mandatory redemption at any time prior to maturity upon
the occurrence of a Determination of Taxability. In such event, the Bonds shall
be redeemed, as a whole only, as soon as practicable, from moneys drawn on the
Credit Facility in the case of Bonds other than Borrower Bonds or Bank Bonds and
from moneys of the Borrower in the case of Borrower Bonds or Bank Bonds, and, in
any event, within sixty (60) days after the Trustee's receipt of notice of such
determination, at a redemption price equal to (1) 100% of the principal amount
to be redeemed plus accrued interest to the date of redemption when the Bonds
bear interest at the Weekly Rate or the Bank Rate or (2) 103% of the principal
amount thereof, plus accrued interest to the redemption date when the Bonds bear
interest at the Fixed Rate. If any Bonds are paid at maturity or redeemed
subsequent to a Tax Incidence Date without payment of an amount at least equal
to the redemption price that would have been received if such Bonds had been
redeemed as a result of a Determination of Taxability, the owners of such Bonds
at the time of maturity or redemption, upon establishing their then ownership
thereof, shall be entitled to receive from the Borrower as a premium or as an
additional premium thereon, as the case may be, an amount equal to the
difference between the amounts actually received and the amounts that would have
been received if such Bonds had been redeemed as a result of a Determination of
Taxability, but such premium or additional premium shall not be payable from, or
secured by, the Credit Facility.
(d) Optional Redemption. The Bonds are also subject to redemption prior
to maturity, at the option of the Borrower, as a whole or in part on any date,
only from moneys drawn on the Credit Facility in increments of $5,000 or any
integral multiple thereof, at any time at a redemption price equal to: (i) on or
prior to the Fixed Rate Conversion Date, 100% of the principal amount to be
redeemed, plus accrued interest to the redemption date, without premium, or (ii)
from and after the Fixed Rate Conversion Date Bonds may be redeemed only on and
after First Optional Redemption Date at a redemption price of 100% of the
principal amount to be redeemed, plus accrued interest to the redemption date;
provided, however, that if the number of years between the Fixed Rate Conversion
Date and the final maturity date of the Bonds is less than ten, the Bonds shall
not be subject to optional redemption.
Except to the extent prohibited by DTC procedures so long as any Bond is
in the Book-Entry Only System, the Remarketing Agent, by giving written notice
to the Trustee and the Borrower by telephone, promptly confirmed in writing, not
later than 2:00 P.M., Boston, Massachusetts time two (2) Business Days before
the Fixed Rate Conversion Date, may (but shall not be obligated to), establish
such revised optional redemption dates and premiums as the Remarketing Agent
shall, having due regard for prevailing financial market conditions, deem
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appropriate. Notwithstanding anything to the contrary contained herein, no such
notice shall be effective unless the Borrower shall have delivered to the
Trustee at the time of delivery of such notice (1) an opinion of Bond Counsel to
the effect that the establishment of such optional redemption dates and premiums
is lawful under the Act and permitted by this Agreement and does not affect the
exclusion of the interest on the Bonds from gross income for federal income tax
purposes, and (2) a resolution of the Issuer approving such optional redemption
dates and premiums. Upon satisfaction of the conditions set forth in this
paragraph, the optional redemption dates and premiums shall be conclusive and
binding upon the Issuer, the Borrower, the Trustee and the Bondowners.
At any time during which the Bonds are Bank Bonds, the Bonds which are
Bank Bonds are subject to redemption at the option of the Borrower, in whole or
in part on any date, in integral multiples of Five Thousand Dollars ($5,000), at
a redemption price equal to 100% of the principal amount thereof plus accrued
interest, if any, to the redemption date, without premium.
(e) Reserved.
(f) Mandatory Redemption Without Premium-Expiration of Credit Facility.
The Bonds in the Fixed Rate Mode are also subject to redemption in whole prior
to maturity from funds drawn on the expiring Credit Facility in the event of the
expiration of the Credit Facility and failure by the Borrower to provide for
delivery to the Trustee of a substitute Credit Facility or notice of extension
of the existing Credit Facility at least forty-five (45) days prior to the
Interest Payment Date immediately preceding the expiration date of the Credit
Facility then in effect. In any such event the Bonds shall be redeemed in whole
and not in part on such Interest Payment Date at a redemption price equal to
100% of the principal amount thereof plus accrued interest to the redemption
date, without premium.
(g) Selection of Bonds to be Redeemed:
(1) Subject to paragraph (2) below, in the event of any partial
redemption the Bonds shall be redeemed in inverse order of maturity or, in the
case of a redemption of a maturity for which mandatory sinking fund installments
have been established, such redemption shall reduce the mandatory sinking fund
redemption obligation in inverse order of payment dates, and within any maturity
the particular Bonds or portions thereof to be redeemed shall be selected by the
Trustee not more than sixty (60) days prior to the redemption date. The Trustee
may provide for the selection for redemption of portions of any Bond in a
denomination greater than $100,000 in increments of $5,000; provided, however,
that while the Bonds are in the Weekly Mode, no partial redemption shall result
in the portion of the Bond not redeemed being less than One Hundred Thousand
Dollars ($100,000). So long as CEDE & CO., as nominee of DTC, is the Bondowner,
the particular Bonds or portions thereof to be redeemed within a maturity shall
be selected by lot by DTC, in such manner as DTC may determine.
(2) Notwithstanding the foregoing, Bank Bonds shall be redeemed
prior to the redemption of any other Bonds.
(h) Notice by the Borrower. The Borrower shall give notice of redemption
under Subsection 310(a), (b), (c) or (d) to the Trustee, the Issuer, the Bank
and the Remarketing Agent at least forty-five (45) days before the redemption
date for Bonds in the Weekly Mode and sixty (60) days before the redemption date
in the case of Bonds in the Fixed Rate Mode. Failure of the
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Borrower to give notice of a redemption under subsections (a), (b) or (c) shall
not prevent such a redemption (when the Trustee has notice of the occurrence of
events requiring such redemption).
(i) Payment of Redemption Price and Accrued Interest. Whenever Bonds are
called for redemption, the accrued interest thereon shall become due on the
redemption date. To the extent not otherwise provided, the Borrower shall
deposit with the Trustee prior to the redemption date a sufficient sum in
Eligible Funds on the redemption date to pay the redemption price of and accrued
interest on the Bonds.
(j) Notice of Redemption. When Bonds are to be redeemed, the Trustee
shall give notice to the Bondowners in the name of the Issuer, which notice
shall identify the Bonds to be redeemed, state the date fixed for redemption and
specify the office of the Trustee at which such Bonds will be redeemed. The
notice shall identify the Bonds to be redeemed (including CUSIP numbers) and
shall further state that on such date there shall become due and payable upon
each Bond to be redeemed the redemption price thereof, together with interest
accrued to the redemption date, and that moneys therefor having been deposited
with the Trustee, from and after such date, interest thereon shall cease to
accrue and that the Bonds or portions thereof called for redemption shall cease
to be entitled to any benefit under this Agreement except the right to receive
payment of the redemption price. The Trustee shall mail by first class mail the
redemption notice no more than 60 days nor less than 30 days prior to the
redemption date to the registered owners of any Bonds which are to be redeemed,
at their addresses shown on the registration books maintained by the Trustee.
Failure to mail notice to a particular Bondowner, or any defect in the notice to
such Bondowner, shall not affect the redemption of any other Bond.
Section 311. Purchase of Bonds Tendered.
(a) Procedure.
(i) Notice. The Trustee shall give immediate notice to the
Remarketing Agent of the tender of any Bonds, the principal amount of Bonds
tendered and the Purchase Date for the Tendered Bonds. The Remarketing Agent
shall give notice to the Trustee electronically or by telephone, and if by
telephone, promptly confirmed in writing, specifying the principal amount of
Tendered Bonds as to which the Remarketing Agent has found purchasers, the
amounts the Remarketing Agent has received for the purchase of Tendered Bonds,
and any deficiency in amounts available to pay the Purchase Price of Tendered
Bonds at or before (A) 2:00 P.M., Boston, Massachusetts time one (1) Business
Day before the Purchase Date for Tendered Bonds that are to be in the Weekly
Mode immediately after the Purchase Date, or (B) 2:00 P.M., Boston,
Massachusetts time two (2) Business Days before the Purchase Date for Tendered
Bonds that are to be in the Fixed Rate Mode immediately after the Purchase Date.
The Remarketing Agent shall give written notice to the Trustee of the names,
addresses and taxpayer identification numbers of the purchasers and the number
and denominations of Bonds to be delivered to each purchaser, by 2:30 P.M.,
Boston, Massachusetts time one (1) Business Day before the Purchase Date for
Tendered Bonds to be in the Weekly Mode immediately after the Purchase Date, and
by 3:00 P.M., Boston, Massachusetts time two (2) Business Days before the
Purchase Date for Tendered Bonds that are to be in the Fixed Mode immediately
after the Purchase Date.
(ii) Sources of Payments. The Trustee shall draw upon the Credit
Facility the amount necessary to purchase the Tendered Bonds for which the
Remarketing Agent has not
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received the Purchase Price not later than 3:00 P.M., Boston, Massachusetts time
one (1) Business Day before the Purchase Date. The Remarketing Agent shall
deliver to the Trustee all amounts received by the Remarketing Agent as proceeds
of the remarketing of Bonds at or before 10:00 A.M., Boston, Massachusetts time
on the Purchase Date. If the Remarketing Agent does not deliver to the Trustee
proceeds of remarketing sufficient, together with amounts received from draws
under the Credit Facility, to pay in full the Purchase Price of all Bonds due on
the Purchase Date, the Trustee shall make an additional draw on the Credit
Facility pursuant to Clause (a) of Section 602 and thereafter the Borrower shall
be liable for the shortfall.
(b) Payments by the Trustee. At or before the close of business on the
Delivery Date and upon receipt by the Trustee of the Purchase Price of the
Tendered Bonds that are delivered to it, the Trustee shall pay the Purchase
Price of the Tendered Bonds to the registered owners thereof as provided in the
applicable form of Bonds. The Trustee shall apply in order, first, moneys paid
to it by the Remarketing Agent or by new purchasers of the Tendered Bonds
tendered as proceeds of the remarketing of such Bonds by the Remarketing Agent,
second, moneys drawn on the Credit Facility for the purpose of purchasing
Tendered Bonds (including amounts drawn on the Credit Facility to pay accrued
interest on the Tendered Bonds), and third, moneys paid to it by the Borrower.
If sufficient funds are not available for the purchase of all Bonds tendered on
any Delivery Date, no purchase shall be consummated.
Section 312. Remarketing of Bonds Tendered.
(a) General. While the Bonds are in the Weekly Mode, the Remarketing
Agent shall solicit offers to purchase and use its best efforts to find a
purchaser for Tendered Bonds, Bank Bonds and Borrower Bonds, provided that Bonds
shall not be remarketed to the Issuer, the Borrower, any guarantor of the Bonds
or party obligated with the Borrower under the Reimbursement Agreement (other
than the Bank) or "insiders" of any of them as that term is defined in the
United States Bankruptcy Code. Any such purchase shall be made by payment of the
Purchase Price in immediately available funds to the Trustee at the time
specified in Paragraph 311(a)(ii). The Purchase Price shall be equal to the
principal amount to be purchased together with the interest accrued on such
principal amount to the Purchase Date. By 2:00 P.M., Boston, Massachusetts time,
on the Purchase Date, Bonds remarketed under this section shall be made
available by the Trustee to the purchasers thereof and shall be registered in
the manner directed by the recipient thereof, provided that such Bonds shall not
be delivered unless and until the Trustee has received the Purchase Price
therefor. Bonds not remarketed shall be held by the Trustee. Bonds previously
purchased with moneys drawn under the Credit Facility shall not be released by
the Trustee upon remarketing unless the Trustee has received written evidence
from the Bank that the Credit Facility has been reinstated as provided in the
following paragraph.
Bonds the Purchase Price of which is paid for with funds drawn on the
Credit Facility pursuant to Paragraph 311(a)(ii) shall be registered to the
Bank, or its designee, and held by the Trustee (whether or not such Bonds are
delivered by the tendering Bondowner) as security for the reimbursement of the
Bank for moneys drawn under the Credit Facility and shall be "Bank Bonds." Bonds
the Purchase Price of which is paid for with funds provided by the Borrower
pursuant to Subsection 308(e) or Paragraph 311(a)(ii) shall be registered in the
name of the Borrower by the Trustee and shall be "Borrower Bonds". Borrower
Bonds shall be held by the Trustee for the account of the Borrower until
transferred pursuant to this Section 312 or canceled pursuant to written
instructions of the Borrower. Bank Bonds and Borrower Bonds shall be registered
as such on the books and records maintained by the Trustee for registration of
Bonds
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(or if the Bonds are held in the Book-Entry Only System, such Bonds shall be
recorded in the books of DTC for the account of the Trustee and shall be deemed
to be Bank Bonds), but the Trustee shall not be required to authenticate or
deliver Bank Bonds or Borrower Bonds, except that it shall authenticate and
deliver Bank Bonds pursuant to written instructions received from the Bank. Any
Borrower Bonds that remain unsold (a) for a period of ninety (90) days (or such
longer period as may be approved (under Massachusetts and federal law) in an
opinion of Bond Counsel reasonably acceptable to the Trustee) or (b) on the
Fixed Rate Conversion Date or (c) upon payment of all other Bonds Outstanding or
provision therefor as provided in this Agreement, shall be automatically deemed
canceled. Upon receipt by the Trustee of notice from the Remarketing Agent that
a purchaser has been found for Bank Bonds or Borrower Bonds held by the Trustee,
the Trustee shall register and deliver such Bonds to such purchaser (at which
time such Bonds shall cease to be Bank Bonds or Borrower Bonds) upon receipt by
the Trustee of the Purchase Price of such Bonds, provided, however, that no Bank
Bond or Borrower Bond shall be so registered and delivered unless the Trustee
has received from the Bank a written notice of the reinstatement of the
principal and interest component of the Credit Facility. The Trustee shall
promptly notify (subsequently confirmed in writing) the Remarketing Agent
whenever (i) it is prohibited from registering and delivering Bonds pursuant to
this Agreement and (ii) if the Trustee has been so prohibited, upon the
restoration of its power hereunder to register and deliver Bonds. Bonds
purchased with moneys drawn under the Credit Facility shall not be subsequently
transferred or assigned by the Bank except as provided in this Section 312.
(b) Remarketing of Bonds in the Weekly Mode Between Notice and
Redemption or Conversion Date. No Bonds in the Weekly Mode scheduled to be
redeemed or converted to the Fixed Rate Mode may be remarketed under Subsection
312(a) after receipt by the Remarketing Agent of notice of redemption or
conversion of such Bonds to the Fixed Rate Mode from the Borrower unless the
Remarketing Agent, on or before the redemption date or Purchase Date, gives
notice to the purchaser that the Bonds will be redeemed or converted, and such
purchaser will be required to surrender its Bonds for payment on the applicable
redemption date or to tender its Bonds for mandatory purchase on the Fixed Rate
Conversion Date, as the case may be.
Section 313. Paying Agent. The Trustee shall act as paying agent,
registrar and transfer agent for the Bonds.
Section 314. Remarketing Agent.
(a) Qualifications and Responsibilities. The Borrower shall appoint,
with the consent of the Issuer and the Bank, a Remarketing Agent when the Bonds
are in the Weekly Mode. The Remarketing Agent shall be authorized by law to
perform all of the duties imposed upon it by this Agreement. In addition, the
Remarketing Agent shall be a member of the National Association of Securities
Dealers, Inc. or a banking corporation, acceptable to the Issuer, the Borrower
and the Bank. The Remarketing Agent, which may act by means of agents, shall
signify its acceptance of the duties and obligations imposed upon it hereunder
by a written agreement with the Borrower under which the Remarketing Agent will
agree, among other things, to:
(i) determine the Weekly or Fixed Rate pursuant to and in accordance
with Paragraph 301(d)(i) or Subsection 301(e) and the forms of Weekly and Fixed
Rate Bonds;
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(ii) give all notices to the Trustee regarding the determination of
interest rates on the Bonds and regarding Tendered Bonds as are required of the
Remarketing Agent in this Agreement;
(iii) hold all moneys received hereunder from the remarketing of
Tendered Bonds for the benefit of the person or entity which shall have
delivered such moneys until the Remarketing Agent shall have transferred such
moneys to the Trustee as provided in this Agreement;
(iv) keep such books and records with respect to its duties as
Remarketing Agent as shall be consistent with prudent industry practice and make
such books and records available for inspection by the parties hereto at all
reasonable times; and
(v) use its best efforts to remarket Bonds in accordance with this
Agreement and any remarketing agreement entered into by the Remarketing Agent
and the Borrower.
The Remarketing Agent may enter into custodial agreements with one or
more banking or similar institutions for the deposit and holding of the Bonds in
order to facilitate the tendering and remarketing of Bonds as provided in this
Agreement, provided, however, that in no event shall the Issuer or the Trustee
be responsible or held liable for any action taken or not taken under any such
custodial agreement and in no way shall any such custodial agreement relieve or
otherwise alter the obligations and responsibilities of the Remarketing Agent
set forth in this Agreement.
(b) Removal or Resignation of Remarketing Agent. The Borrower may remove
the Remarketing Agent at any time upon thirty (30) days' prior written notice to
the Remarketing Agent, the Bank and the parties hereto and appoint a successor
which meets the qualifications set forth in Subsection 314(a) and which is
reputable and experienced in the remarketing of obligations similar to the
Bonds. The Borrower shall appoint a successor with similar qualifications if the
Remarketing Agent resigns or becomes ineligible. The Borrower shall give the
Issuer, the Bank and the Trustee at least fifteen (15) days' written notice
prior to the appointment of a successor Remarketing Agent. The Remarketing Agent
may at any time resign and be discharged of the duties and obligations created
by this Agreement by giving at least thirty (30) days' written notice to the
parties hereto and the Bank. The Trustee shall give written notice to the
Bondowners of any removal or appointment of the Remarketing Agent.
(c) Successors. Any corporation, association, partnership or firm which
succeeds to the business of the Remarketing Agent as a whole or substantially as
a whole, whether by sale, merger, consolidation or otherwise, shall thereby
become vested with all the property, rights and powers of the Remarketing Agent
under this Agreement and shall be subject to all the duties and obligations of
the Remarketing Agent under this Agreement. In the event that the Remarketing
Agent shall resign or be removed, or be dissolved, or if the property or affairs
of the Remarketing Agent shall be taken under the control of any state or
federal court or administrative body because of bankruptcy or insolvency, or for
any other reason, and the Borrower shall not have appointed its successor within
thirty (30) days, the Trustee shall apply, at the expense of the Borrower, to a
court of competent jurisdiction for such appointment.
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Section 315. Investments.
(a) Pending their use under this Agreement, moneys in the Bond Fund,
Construction Fund or Rebate Fund, may be invested by the Trustee in Permitted
Investments (as defined below) designated in writing by the Borrower, maturing
or redeemable at the option of the holder at or before the time when such moneys
are expected to be needed by the Trustee and shall be so invested pursuant to
the specific written direction of the Borrower if no Default known to the
Trustee then exists under this Agreement, provided that the Borrower shall not
request, authorize or permit any investment which would cause any Bonds to be
classified as "arbitrage bonds" as defined in IRC Section 148. Any investments
pursuant to this subsection shall be held by the Trustee as a part of the Bond
Fund, Construction Fund or Rebate Fund and shall be sold or redeemed to the
extent necessary to make payments or transfers or anticipated payments or
transfers from such Funds.
(b) Any interest realized on investments in any Fund and any profit
realized upon the sale or other disposition thereof shall be credited to such
Fund and any loss shall be charged thereto.
(c) (1) The term "Permitted Investments" means
(A) Government Obligations;
(B) Direct obligations and fully guaranteed certificates of
beneficial interest of the Export-Import Bank of the United States; consolidated
debt obligations and letter of credit-backed issues of the Federal Home Loan
Banks; participation certificates and senior debt obligations of the Federal
Home Loan Mortgage Corporation ("FHLMCs"); debentures of the Federal Housing
Administration; mortgage-backed securities (except stripped mortgage securities
which are valued greater than par on the portion of unpaid principal) and senior
debt obligations of the Federal National Mortgage Association ("FNMAs");
participation certificates of the General Services Administration; guaranteed
mortgage-backed securities and guaranteed participation certificates of the
Government National Mortgage Association ("GNMAs"); guaranteed participation
certificates and guaranteed pool certificates of the Small Business
Administration; debt obligations and letter of credit-backed issues of the
Student Loan Marketing Association; local authority bonds of the U.S. Department
of Housing and Urban Development; guaranteed Title XI financings of the U.S.
Maritime Administration; guaranteed transit bonds of the Washington Metropolitan
Area Transit Authority; Resolution Funding Corporation Securities;
(C) Direct obligations of any state or municipality of the
United States of America or any subdivision or agency thereof whose unsecured,
uninsured and unguaranteed general obligation debt is rated, at the time of
purchase, AAA or at least as high as the rating then in effect on the Bonds by
S&P, or any obligation fully and unconditionally guaranteed by any state or
municipality, subdivision or agency whose unsecured, uninsured and unguaranteed
general obligation debt is rated, at the time of purchase, AAA or at least as
high as the rating then in effect on the Bonds by S&P or shares of an investment
company or trust registered under 15 U.S.C. Section 80(a)-1 et. seq. whose
portfolio is limited to the foregoing;
(D) Commercial paper (having original maturities of not more
than 270 days) rated, at the time of purchase, "A-1+" or better by S&P;
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(E) Federal funds, unsecured certificates of deposit, time
deposits or bankers acceptances (in each case having maturities of not more than
365 days) of any domestic bank including a branch office of a foreign bank which
branch office is located in the United States, provided legal opinions are
received to the effect that full and timely payment of such deposit or similar
obligation is enforceable against the principal office or any branch of such
bank, which, at the time of purchase, has a "Short-Term CD" rating of "A-1+" by
S&P;
(F) Deposits of any bank or savings and loan association which
has combined capital, surplus and undivided profits of not less than Thirty
Million Dollars ($30,000,000), provided such deposits are continuously and fully
insured by the Federal Deposit Insurance Corporation; and
(G) Investments in money-market funds rated "AAAm" or "AAAmG" by
S&P including any such fund for which the Trustee or any of its affiliates
provides services.
(2) The Trustee shall acquire and sell all investments hereunder at
the fair market value within the meaning of Treas. Reg. Section 1.148-5(d)(6).
Any investment may be purchased from or through the Trustee or any Bondowner or
any affiliate of either of them.
(d) The Trustee shall be entitled to rely on all written investment
instructions provided by the Borrower hereunder, and shall have no duty to
monitor the compliance thereof with the restrictions set forth herein. The
Trustee shall have no responsibility or liability for any depreciation in the
value of any investment or for any loss, direct or indirect, resulting from any
investment, reinvestment or liquidation made in accordance with the written
instructions of the Borrower. The Trustee shall be without liability to the
Borrower, the Issuer, any Bondowner or any other person in the event that any
investment made in accordance with the written instructions of the Borrower or
in any Permitted Investment shall cause any or all of the Bonds to be or become
arbitrage bonds within the meaning of IRC Section 148 or shall cause any person
to incur any liability or rebates or other monies payable pursuant to the IRC.
Section 316. Reserved.
Section 317. Credit Facilities.
(a) Substitution or Replacement. Upon satisfaction of the requirements
set forth in this Section 317 and subject to the last sentence of Subsection
317(b), the Borrower may (except during the period between the giving of notice
of mandatory tender for purchase on account of the expiration of the Credit
Facility and the Purchase Date) replace a Credit Facility then in effect with a
substitute Credit Facility; provided, however, that (1) the Credit Facility
being replaced shall in no event be terminated or released until the Borrower
has given not less than forty-five (45) days' written notice to the Trustee and
the Remarketing Agent, and the Trustee has received the proceeds of all
outstanding drawings on the Credit Facility being replaced, (2) if the Bonds
supported by the Credit Facility being replaced are in the Weekly Mode, the
Trustee has given not less than thirty (30) days' written notice of the
termination or release of the Credit Facility to owners of such Bonds in the
Weekly Mode and the identity of the provider of the substitute Credit Facility
to owners of such Bonds in the Weekly Mode; and (3) the provider of the
substitute Credit Facility purchases all Outstanding Bank Bonds on the effective
date of the
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substitute Credit Facility. The extension of an existing Credit Facility shall
not constitute a substitute Credit Facility.
Prior to the replacement of any Credit Facility the Borrower shall have
delivered to the Trustee: (i) an opinion of counsel for the issuer of the
substitute Credit Facility to the effect that it constitutes a legal, valid and
binding obligation of the issuer enforceable in accordance with its terms; (ii)
an opinion of Bond Counsel to the effect that the issuance of a substitute
Credit Facility will not adversely affect the exclusion of interest on such
Bonds from gross income for federal income tax purposes; (iii) a certificate of
the Bank that all amounts due under the Reimbursement Agreement or otherwise
owed by the Borrower to the Bank have been paid and that the Borrower has
fulfilled all its obligations arising out of such Agreement; and (iv) if the
Bonds are in the Weekly Mode, written evidence of the rating of the Bonds, if
any, with the substitute Credit Facility and if the Bonds are in the Fixed Rate
Mode, evidence from S&P that the rating of the Bonds with the substitute Credit
Facility will not result in a downgrade or withdrawal of the rating on the Bonds
by S&P, if S&P is then rating the Bonds. Notice of the substitution,
replacement, termination or extension of a Credit Facility shall be sent by the
Trustee to S&P.
(b) Requirements. Each Credit Facility must:
(i) be an irrevocable, unconditional obligation of a financial
institution;
(ii) be on terms no less favorable to the Trustee than the Letter of
Credit and entitle the Trustee to draw upon or demand payment and receive in
immediately available funds an amount equal to the sum of the principal amount
of the Bonds supported by the Credit Facility and (A) forty-five (45) days'
accrued interest at the Maximum Interest Rate on the principal amount of Bonds
then Outstanding in the Weekly Mode, or (B) two hundred ten (210) days' accrued
interest at the Fixed Rate on the principal amount of Bonds then Outstanding in
the Fixed Rate Mode plus any applicable premium; and
(iii) provide for a term which may not expire in less than one year
and which may not expire or be terminated prior to the fifth Business Day after
the mandatory tender for purchase as provided in Paragraph 301(d)(iv).
Section 318. Securities Laws. In any "Offering" of the Bonds by a
"Participating Underwriter" as those terms are defined in Rule 15c2-12 under the
Securities Exchange Act of 1934, as amended, including any remarketing of Bonds
under this Agreement, the Borrower shall at all times comply with applicable
federal and state securities laws, and shall cooperate with the Remarketing
Agent to the extent necessary to permit the Remarketing Agent to comply with,
applicable federal and state securities laws.
ARTICLE IV: THE PROJECT
Section 401. Construction Fund.
(a) A Construction Fund is hereby established to be held by the Trustee.
Moneys in the Construction Fund shall be applied by the Trustee to the payment
or reimbursement of Project Costs. Borrower hereby grants to the Trustee, for
the benefit of the Bondholders and the Bank, a security interest in all deposits
in the Construction Fund.
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(b) The Trustee is hereby authorized and directed to issue its checks or
make wire transfers for each disbursement from the Construction Fund (except any
fees, costs and expenses payable to the Trustee which may be withdrawn by and
credited to the Trustee upon appropriate requisition of the Borrower) upon being
furnished with a written requisition therefor in substantially the form attached
as Exhibit A, approved in writing by the Bank, certified to by a Borrower
Representative and stating: (A) the name and address of the person to whom
payment is to be made, (B) the amount of the payment, (C) that the disbursement
is for a proper expenditure of moneys in the Construction Fund pursuant to this
Agreement, (D) the general classification of the expenditure, (E) that none of
the items for which the requisition is made has been the basis for any prior
disbursement from the Construction Fund (requests for disbursement of retainage
amounts shall not be deemed to be an item for which a prior request has been
made), (F) after giving effect to the payment of the requisition, the use of all
funds disbursed from the Construction Fund complies with the limitations
contained in the Federal Tax Certificate, and (G) as of the date of the request,
there is no Event of Default hereunder, or any event that, with the passage of
time or the giving of notice or both, would ripen into such an Event of Default.
The Borrower and the Bank may enter into one or more separate agreements
(collectively, the "Disbursement Agreement") which will set forth the conditions
under which the Bank will approve requisitions from the Construction Fund.
(c) The Trustee shall maintain adequate records pertaining to the
Construction Fund and all disbursements therefrom and shall, within ninety (90)
days of its receipt of the certificate of completion referred to in Section 403,
file an accounting thereof with the Issuer, the Borrower and the Bank.
(d) Notwithstanding anything herein to the contrary if the principal of
the Bonds shall have become due and payable pursuant to Article VI hereof, the
Trustee shall not issue its checks on or make wire transfers from the
Construction Fund, but, rather shall transfer any moneys in the Construction
Fund to the Bond Fund.
Section 402. Construction of the Project.
(a) The Borrower shall proceed with due diligence to acquire, construct,
reconstruct and equip the Project or cause the Project to be acquired,
constructed, reconstructed and equipped in accordance with the plans and
specifications therefor. Contracts for carrying out the Project and purchases in
connection therewith shall be made by the Borrower in its own name.
(b) The Borrower may not revise the plans and specifications of the
Project in any material respect without the prior written consent of the Bank
and the Issuer, which consent shall not be unreasonably withheld or delayed but
may be subject to such reasonable conditions as the Bank or the Issuer may deem
appropriate, including without limitation the requirement that the Bank and the
Issuer be furnished with an unqualified opinion of Bond Counsel that
construction of the Project in accordance with the revised plans and
specifications will not adversely affect the tax-exempt status of the interest
payable on the Bonds. The Borrower acknowledges that it is fully familiar with
the physical condition of the Project and is not relying on any representation
of any kind by the Issuer as to the nature or the condition thereof. The Issuer
shall not be liable to the Borrower or to any other person for any latent or
patent defect in the Project.
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Section 403. Certificate of Completion. The Borrower shall proceed with
due diligence to complete the acquisition, construction, reconstruction and
equipping of the Project. Completion of the acquisition, construction,
reconstruction and equipping of the Project shall be evidenced by a certificate
signed by a Borrower Representative delivered to the Trustee and the Bank
stating: (a) the date of such completion, (b) that all labor, services,
materials and supplies used therefor and all costs and expenses in connection
therewith have been paid, (c) that acquiring, constructing, reconstructing and
equipping the Project has been completed in accordance with the plans and
specifications with the exception of ordinary punchlist items and work awaiting
seasonal opportunity and (d) that the Project is ready for occupancy, use and
operation for its intended purposes. Notwithstanding the foregoing, such
certificate may state that: (1) it is given without prejudice to any rights of
the Borrower against third parties which exist at the date of such certificate
or which may subsequently come into being, (2) it is given only for the purposes
of this Section 403, and (3) no person other than the Issuer, the Bank or the
Trustee may benefit therefrom.
All moneys in the Construction Fund (including moneys earned thereon by
investment remaining after the earliest to occur of (i) delivery of the
certificate of completion, or (ii) abandonment of the Project, shall promptly at
the written direction of a Borrower Representative or the Bank be paid into the
Bond Fund and applied as provided in Section 310(a). If at any time there are no
longer any Bonds Outstanding and all amounts owing under this Agreement to the
Issuer and the Trustee have been paid, any remaining moneys in the Construction
Fund shall first be applied to the Bank to pay any obligations owed under the
Reimbursement Agreement, as certified by the Bank, with the remainder, if any,
to the Borrower.
Section 404. Completion by the Borrower.
(a) In the event that the proceeds of the Bonds are not sufficient to
pay in full all costs of acquiring, constructing, reconstructing and equipping
the Project in accordance with the plans and specifications, the Borrower
agrees, for the benefit of the Issuer, the Trustee and the Bank, to pay all such
sums as may be in excess of the proceeds of the Bonds.
(b) No payment pursuant to this Section 404 shall entitle the Borrower
to any diminution or abatement of any amounts payable by the Borrower under this
Agreement.
Section 405. Borrower not to Impair Tax Status; Use of Project.
Notwithstanding any provision herein to the contrary, the Borrower will not use
any of the proceeds of the Bonds (or the income earned through the investment
thereof, if any) or operate the Project in any manner, and will not take or omit
any action or permit any action to be taken or omitted with the result that
interest on any Bonds is included in the gross income of the owners thereof for
federal income tax purposes.
Section 406. Compliance with Law. In the acquisition, construction,
maintenance, improvement and operation of the Project, the Borrower has and will
comply in all material respects with all applicable building, subdivision,
zoning and land use, environmental protection, sanitary and safety and other
laws, rules and regulations and will not permit any nuisance thereat and will to
the extent of its ownership and control, permit no nuisance to be committed
thereat by others while the Borrower is, or is entitled to be, in possession
thereof. It shall not be a breach of this section if the Borrower fails to
comply with such laws, rules and regulations during any period in which the
Borrower shall in good faith be diligently contesting the validity thereof.
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Section 407. Current Expenses. The Borrower shall pay in a timely manner
all costs of maintaining and operating the Project, including without limitation
all taxes, excises and other governmental charges lawfully levied thereon or
with respect to its interests therein or use thereof to the extent of the
Borrower's interests therein. It shall not be a breach of this section if the
Borrower fails to pay any such costs, taxes or charges during any period in
which the Borrower shall in good faith be contesting the validity or amount
thereof and no foreclosure proceedings have been commenced, unless the
procedures applicable to such contest require payment thereof and proceedings
for their refund or abatement.
Section 408. Disposition and Use of Project. The Borrower shall not
sell, lease, transfer or otherwise dispose of the Project (other than the grant
of a mortgage of and security interest in the Project to the Bank) unless it
obtains the consent of the Issuer, which consent shall not be unreasonably
withheld. At the time of any such sale, lease, transfer or disposition, the
Borrower shall deliver to the Issuer and the Trustee an opinion of Bond Counsel
addressed to and reasonably satisfactory to the Trustee and the Issuer that such
sale, lease, transfer or other disposition will not affect the exclusion of the
interest on any Bonds from the gross income of the owners thereof for federal
income tax purposes. To the extent required by Bond Counsel in connection with
rendering a favorable opinion, the Borrower shall deposit proceeds of such sale,
lease, transfer or other disposition into the Bond Fund and apply such proceeds
as provided in Section 310(a). No sale, lease, transfer or other disposition of
the Project shall relieve the Borrower of any of its obligations under this
Agreement.
The Borrower shall not make or permit to be made any material change in
the purposes for which the Project is used without the consent of the Issuer,
which consent shall not be unreasonably withheld. The Borrower at its own
expense may alter, remodel or improve the Project and construct other facilities
at the site of the Project, provided such action shall not result in any
substantial change in the Project or the character of the activities conducted
by the Borrower at the Project site without the consent of the Issuer, which
consent shall not be unreasonably withheld.
ARTICLE V: RESERVED
ARTICLE VI: DEFAULT AND REMEDIES
Section 601. Default by the Borrower.
(a) Events of Default; Default. "Event of Default" in this Agreement
means any one of the events set forth below and "Default" means any Event of
Default without regard to any lapse of time or notice.
(i) Debt Service on Bonds; Required Purchase. Any principal of,
premium, if any, or interest on any Bond shall not be paid when due, whether at
maturity, by acceleration, upon redemption or otherwise or any Purchase Price
for Bonds shall not be paid as provided in Sections 301, 308, 311 or 312.
(ii) Other Obligations. The Borrower shall fail to observe or
perform any of its other covenants or agreements contained herein and such
failure shall continue for a period of
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thirty (30) days after written notice given to the Borrower by the Trustee or
the owners of at least 25% in principal amount of the Bonds Outstanding.
(iii) Bankruptcy. (A) A trustee, receiver, custodian or similar
official or agent shall be appointed for the Borrower or for any substantial
part of its property and such trustee or receiver shall not be discharged within
ninety (90) days, (B) the Borrower shall commence a voluntary case under the
federal bankruptcy laws, or shall make an assignment for the benefit of
creditors, or shall apply for, consent to or acquiesce in the appointment of, or
taking possession by, a trustee, receiver, custodian or similar official or
agent for itself or any substantial part of its property, or (C) the Borrower
shall have an order or decree for relief in an involuntary case under the
federal bankruptcy laws entered against it, or a petition seeking
reorganization, readjustment, arrangement, composition, or other similar relief
as to it under the federal bankruptcy laws or any similar law for the relief of
debtors shall be brought against it and shall be consented to by it or shall
remain undismissed for ninety (90) days.
(iv) Reimbursement Agreement. The Trustee shall have received
written notice from the Bank of the occurrence of an event of default under the
Reimbursement Agreement and a request by the Bank to accelerate the Bonds.
(v) Non-Reinstatement under the Credit Facility. The Trustee shall
receive written notice from the Bank within ten (10) calendar days after a
drawing under the Credit Facility that the Bank has not reinstated the amount
representing the interest component so drawn, and such non-reinstatement causes
the total amount of the obligation of the Bank under the Credit Facility to be
less than the principal amount of the Outstanding Bonds supported by the Credit
Facility, and accrued interest for a period of forty-five (45) days at the
Maximum Interest Rate with respect to the principal amount of such Bonds then
Outstanding in the Weekly Mode or two hundred ten (210) days at the Fixed Rate
if the Bonds are in the Fixed Rate Mode.
Notwithstanding anything in this subsection to the contrary, no action
or failure to act by the Borrower which results in interest on any Bonds
becoming includable in gross income of the owners thereof for federal income tax
purposes shall constitute a Default or Event of Default under this Agreement so
long as the redemption provided by Subsection 310(c) occurs. In such event, no
owner of Bonds shall be entitled to any claim for monetary damages hereunder and
the redemption of the Bonds as provided under Subsection 310(c) shall be the
exclusive recourse of owners of the Bonds.
(b) Waiver. At any time before an acceleration pursuant to Paragraph
602(a), the Trustee may waive a Default under Paragraph 601(a)(ii) and annul its
consequences by written notice to the Borrower, and in the absence of
inconsistent instructions from Bondowners pursuant to Sections 606 or 901 shall
do so upon written instruction of the owners of at least twenty-five per cent
(25%) in principal amount of such Bonds Outstanding. No waiver under this
section shall affect the right of the Trustee or the Issuer to enforce the
payment of any amounts owing to it. The Trustee shall not waive any Event of
Default under Paragraphs 601(a)(i), 601(a)(iii), 601(a)(iv) or 601(a)(v).
Section 602. Remedies for Events of Default. If an Event of Default
occurs and is continuing:
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(a) Acceleration. If the Event of Default is one described in Paragraph
601(a)(i), (iii), (iv) or (v), the principal of the Bonds that are supported by
a Credit Facility and Bank Bonds and accrued interest thereon shall
automatically become immediately due and payable without any further notice or
action, whereupon interest on the Bonds shall cease to accrue. Notwithstanding
the foregoing, if an Event of Default described in Paragraph 601(a)(i) occurs
due to the failure of the Trustee to receive sufficient funds for the payment of
the Purchase Price of all Bonds supported by a Credit Facility tendered for
purchase on any Purchase Date, the Trustee shall immediately draw under the
Credit Facility an amount equal to such deficiency (except to the extent that
one or more drawings have been made previously in respect of the same
deficiency), plus one day's accrued interest on such Bonds, and only if such
Event of Default is not cured by the close of business on the next Business Day
shall there be such an automatic acceleration of the payment of principal of and
accrued interest on the Bonds. If the Event of Default is one described in
Section 601(a)(ii), the Trustee, upon receipt of a written direction from the
holders of at least twenty-five percent (25%) of the outstanding principal
balance of the Bonds, shall, by written notice to the Borrower, the Issuer and
the Bondholders, declare immediately due and payable the principal amount of the
Outstanding Bonds and the payments to be made by the Borrower therefor and
accrued interest on the foregoing, whereupon the same shall become immediately
due and payable without any further action or notice.
(b) Rights as a Secured Party. The Trustee, and Bank, after payment of
the Bonds, may exercise all of the rights and remedies of a secured party under
the UCC. Notice sent by registered or certified mail, postage prepaid, or
delivered during business hours, to the Borrower at least seven (7) days before
an event under UCC Section 9-504(3) or any successor provision of law shall
constitute reasonable notification of such event.
Section 603. Court Proceedings. The Trustee may enforce the provisions
of this Agreement by appropriate legal proceedings for the specific performance
of any covenant, obligation or agreement contained herein whether or not a
Default or an Event of Default exists, or for the enforcement of any other
appropriate legal or equitable remedy, and may recover damages caused by any
breach by the Borrower of the provisions of this Agreement, including (to the
extent this Agreement may lawfully provide) court costs, reasonable attorney's
fees and expenses and other costs and expenses incurred in enforcing the
obligations of the Borrower hereunder. The Issuer may likewise enforce
obligations owed to it hereunder which it has not assigned to the Trustee. All
rights under this Agreement and the Bonds may be enforced by the Trustee without
the possession of any Bonds or the production thereof at the trial or other
proceedings relative thereto, and any proceeding instituted by the Trustee shall
be brought in its name for the ratable benefit of the Bondowners.
Section 604. Revenues after Default. After the occurrence of an Event of
Default, any funds pledged as security hereunder and any other moneys received
by the Trustee (other than amounts irrevocably set aside to pay particular
Bonds) shall be applied to amounts due under Section 308 (without regard to any
grace periods), which amounts shall be applied in the order specified in Section
307.
Section 605. The Credit Facility; Acceleration. Upon acceleration of the
Bonds prior to expiration of the Credit Facility, the Trustee shall draw
immediately on the Credit Facility in accordance with Section 308(c)(i) in an
amount equal to the aggregate unpaid principal of and interest on the Bonds
(other than Bank Bonds and Borrower Bonds) to the date of acceleration. Upon
receipt of payment with respect to such draw, the Trustee shall immediately pay
therefrom
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to the owners of the Bonds (other than Bank Bonds and Borrower Bonds) the
principal of and accrued interest due on such Bonds. The Trustee shall not
require indemnification for any draw required by this Section 605 except and
unless such draw is prohibited by or violates applicable law or any outstanding
or pending court or governmental order or decree.
Section 606. Rights of Bondowners. If an Event of Default occurs and is
continuing, and if the Bondowners representing not less than 25% in principal
amount of the Bonds Outstanding shall have requested the Trustee in writing to
exercise one or more of the rights and remedies provided hereunder and offered
it indemnity as provided in Subsection 702(e), the Trustee shall be required to
exercise such one or more of the rights and remedies hereunder as the Trustee
shall determine to be in the best interest of the Bondowners and not
inconsistent with any directions given in accordance with Section 901. No
Bondowner shall have any right to institute an action in law or equity or to
pursue any other remedy hereunder with respect to any Bond unless (i) an Event
of Default of which the Trustee has been notified has occurred and Bondowners
representing not less than 25% in principal amount of the Bonds Outstanding
shall have requested the Trustee in writing to exercise its rights and remedies
with respect thereto and shall have offered the Trustee reasonable opportunity
to do so and indemnity as provided in Subsection 702(e), and (ii) the Trustee
shall within a reasonable time thereafter fail to exercise any of such rights or
remedies. No Bondowner shall have any right to institute any action or pursue
any other remedy if and to the extent that the surrender, impairment, waiver, or
loss of the lien of this Agreement would, under applicable law, result.
Notwithstanding the foregoing, each Bondowner shall have a right of action to
enforce payment of the Bonds at and after the due dates thereof at the place,
from the sources and in the manner expressed in the Bonds. For purposes of this
Section 606, so long as the Credit Facility has paid all amounts due on Bonds it
supports, the Bank issuing such Credit Facility shall be treated as owner of
such Bonds.
Section 607. Performance of Borrower's Obligations. If the Borrower
shall fail to observe or perform any of its agreements or obligations hereunder,
the Issuer or the Trustee may perform the same in its own name or in the
Borrower's name and each is hereby irrevocably appointed the Borrower's
attorney-in-fact for such purpose. Unless an Event of Default exists, the Issuer
or the Trustee, as the case may be, shall give at least five (5) days' notice to
the Borrower before taking action under this section, except that in case of
emergency as reasonably determined by the acting party, it may act on lesser
notice or give the notice promptly after rather than before taking the action.
The reasonable cost of any such action performed by the Trustee or the Issuer
shall be paid or reimbursed by the Borrower within thirty (30) days after the
Trustee or the Issuer notifies the Borrower of such cost.
Section 608. Remedies Cumulative; No Waiver. The rights and remedies
under this Agreement shall be cumulative and shall not exclude any other rights
and remedies allowed by law, provided there is no duplication of recovery.
Neither the failure to insist upon a strict performance of any of the
obligations of the Borrower nor the failure to exercise any remedy for any
violation thereof, shall be taken as a waiver for the future of the right to
insist upon strict performance of the obligation or of the right to exercise any
remedy for the violation.
ARTICLE VII: THE TRUSTEE
Section 701. Corporate Organization, Authorization and Capacity. The
Trustee represents and warrants that; (i) it is a national banking association
duly organized and validly existing under the laws of the United States of
America, (ii) it is qualified to serve as Trustee
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under the Act and this Agreement, with the capacity to exercise the powers and
duties of the Trustee hereunder, and (iii) by proper corporate action it has
duly authorized the execution and delivery of this Agreement.
Section 702. Rights and Duties of the Trustee.
(a) Moneys to be Held in Trust. All moneys deposited with the Trustee
under this Agreement (other than amounts received for its own use) shall be held
by the Trustee in trust and applied subject to the provisions of this Agreement,
but need not be segregated from other funds except as required herein or by law.
(b) Accounts. The Trustee shall keep proper accounts of its transactions
hereunder (separate from its other accounts), which shall be open to inspection
at reasonable times by the Issuer, the Bank, the Borrower and the Bondowners and
their representatives duly authorized in writing.
(c) Performance of the Issuer's Obligations. If the Issuer shall fail to
observe or perform any agreement or obligation contained in this Agreement, the
Trustee may take whatever legal proceedings may be required to compel full
performance by the Issuer of its obligations, and in addition, the Trustee,
after having been offered indemnity in the manner set forth in Subsection (c)
hereof, may, but shall not be obligated, to whatever extent it deems appropriate
for the protection of the Bondowners, itself or the Borrower, to perform any
such obligation in the name of the Issuer and on its behalf.
(d) Responsibility. The Trustee shall be entitled to the advice of
counsel of its selection (who may be the Trustee's counsel, Bond Counsel,
counsel for the Issuer, the Borrower or any Bondowner) and shall be wholly
protected as to any action taken or omitted to be taken in good faith in
reliance on such advice. The Trustee may rely conclusively on any notice,
certificate or other document furnished to it hereunder and reasonably believed
by it to be genuine. The Trustee shall not be liable for any action taken by it
in good faith and reasonably believed by it to be within the discretion or
powers conferred upon it, in good faith omitted to be taken by it and reasonably
believed to be beyond the discretion or powers conferred upon it, taken by it
pursuant to any direction or instruction by which it is governed hereunder, or
omitted to be taken by it by reason of the lack of direction or instruction
required hereby for such action; nor shall it be responsible for the
consequences of any error of judgment reasonably made by it. Whenever, in the
administration of this Agreement, the Trustee shall deem it desirable that a
matter be proved or established prior to taking, suffering, or omitting any
action hereunder (other than the giving of notice of a drawing under a Credit
Facility), the Trustee (unless other evidence be herein specifically prescribed)
may, in the absence of bad faith on its part, rely upon a certificate of an
officer of the Issuer or a Borrower Representative. The duties of the Trustee
are those expressly set forth in this Agreement, and no additional duties shall
be implied. When any payment, consent or other action by it is called for
hereby, it may defer such action pending receipt of such evidence, if any, as it
may require in support thereof. The Trustee shall in no event be liable for the
application or misapplication of funds, or for other acts or defaults, by any
person, firm, or corporation, except its own directors, officers, and employees.
No recourse shall be had by the Borrower, the Issuer or any Bondowner for any
claim based on this Agreement or any Bond against any director, officer,
employee, or agent of the Trustee alleging personal liability on the part of
such person, unless such claim is based upon the bad faith, gross negligence,
fraud or deceit of such person. The Trustee has no responsibility for the
validity or
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sufficiency of this Agreement or the Bonds or any security therefor or any
offering or disclosure document related thereto. The Trustee shall not be bound
to make any investigation into the facts or matters stated in any resolution,
certificate, statement, instrument, opinion, report, notice, request, direction,
consent, order, bond debenture or other paper or document, but the Trustee, in
its discretion, may make such further inquiry or investigation into such facts
or matters as it may see fit, and, if the Trustee shall determine to make such
further inquiry or investigation, it shall be entitled, upon reasonable notice
and during regular business hours, and subject further to the Borrower's safety
and confidentiality requirements, to examine the books, records and premises of
the Issuer or the Borrower personally or by agent or attorney.
The Trustee may execute any of the trusts or powers hereunder or perform
any duties hereunder either directly or by or through agents or attorneys, and
the Trustee shall not be responsible for any misconduct or negligence on the
part of any agent or attorney appointed with due care by it hereunder.
(e) Limitations on Actions. The Trustee shall not be required to monitor
the financial condition of the Borrower or the physical condition of the Project
and, unless otherwise expressly provided, shall not have any responsibility with
respect to notices, certificates or other documents filed with it hereunder,
except to make them available for inspection by the Bondowners. The Trustee
shall not be deemed to have knowledge of and shall not be required to take
notice of any Default or Event of Default, except for a Default or Event of
Default described in Paragraph 601(a)(i) relating to the payment of principal
of, premium, if any, Purchase Price and interest on the Bonds, unless the
Trustee shall be specifically notified in writing by the Borrower, the Issuer or
Bondowners representing not less than 25% in principal amount of the Bonds
Outstanding, or in the case of a Default or Event of Default described in
Paragraph 601(a)(iv) or (v), the Trustee shall be notified in writing by the
Bank. Except as aforesaid, the Trustee shall not be deemed to have knowledge of
any matter or circumstance, the occurrence of which would require it to take
action hereunder, unless an officer of the Trustee responsible for the
administration of this Agreement actually knows. The Trustee shall not be
required to take any remedial action (other than the giving of notice) unless
indemnity reasonably satisfactory to it is furnished for any expense or
liability to be incurred therein, including fees and expenses of its attorneys,
other than liability for failure to meet the standards set forth in this
section. The Trustee shall be entitled to reimbursement from the Borrower for
its expenses reasonably incurred or advances reasonably made, which
reimbursement shall be due and payable immediately after notifying the Borrower
of such expenses or advances, in the exercise of its rights or the performance
of its obligations hereunder, whether or not it acts without previously
obtaining indemnity. In no event, however, shall the Trustee be required to take
any remedial action which may subject it to potential liability under any
federal, state or local environmental law or regulation.
A permissive right or power to act shall not be construed as a
requirement to act. Upon receipt of written notice, direction, instruction, and
indemnity as provided above and, after making such investigation, if any, as it
deems appropriate to verify the occurrence of any Default of which it is
notified by the Bondowners or the Bank, the Trustee shall pursue such remedies
hereunder (not contrary to such direction) as it deems appropriate for the
protection of the Bondowners (including the Bank as provided in Section 901);
and in its actions under this provision, the Trustee shall be required to act
for the protection of the Bondowners with the same prudence as would be expected
of a prudent person in the conduct of such person's affairs.
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(f) Financial Obligations. Nothing contained in this Agreement shall in
any way obligate the Trustee to pay any debt or meet any financial obligations
to any person in relation to the Project except from moneys received under the
provisions of this Agreement (including from the exercise of its rights and
remedies hereunder) other than moneys received for its own purposes.
(g) Ownership of Bonds. The Trustee or any affiliate of the Trustee may
be or become the owner of Bonds with the same rights as if it were not Trustee.
(h) No Surety Bond. The Trustee shall not be required to furnish any
bond or surety.
(i) Requests by the Borrower. Upon any request by the Borrower to the
Trustee to take any action under this Agreement (including but not limited to
any proposed amendment pursuant to Section 1101) the Trustee shall be entitled
to receive from the Borrower prior to taking such action, and to rely
conclusively upon, a certificate of a Borrower Representative and an opinion of
counsel reasonably satisfactory to the Trustee (who may be counsel to the
Borrower), and, if applicable in the reasonable judgment of the Trustee, a
certificate of an accountant satisfactory to the Borrower (who may be an
employee of the Borrower), each to the effect that in the signer's opinion all
conditions precedent applicable to such action under this Agreement, if any,
have been satisfied (and, in the case of the certificate of the Borrower
Representative, including but not limited to the absence of any Default or Event
of Default) and such action is permitted by this Agreement.
(j) Securities Disclosures. Without limitation of any other provision of
this Article, the Trustee is authorized to make such securities disclosures as
may be required or appropriate under applicable securities laws and regulations,
including the Rule, pursuant to notices of the Borrower regarding reportable
events. The Trustee is entitled to rely conclusively on notice from the Borrower
and an opinion of counsel expert in federal securities laws acceptable to the
Trustee in making or not making any securities law disclosure. The Trustee shall
have no liability to the Borrower or any Bondowner for any disclosure or
nondisclosure made or not made in good faith in reliance on such notice from the
Borrower and opinion of counsel expert in federal securities law.
Section 703. Fees and Expenses of the Trustee. The Borrower shall pay to
the Trustee such compensation as shall be agreed in writing between the Trustee
and the Borrower for its services and prepay or reimburse the Trustee for its
reasonable expenses and disbursements, including attorney's fees and expenses,
hereunder. The Borrower shall indemnify and save the Trustee and its directors,
officers, employees and agents harmless against any and all (a) claims as set
forth in Section 1002, (b) costs, counsel fees and expenses, expenses or
liabilities reasonably incurred in connection with such claims, and (c) expenses
and liabilities which it may incur in the acceptance or exercise of its duties
hereunder and which are not due to the bad faith, gross negligence, fraud or
deceit of any director, officer, employee or agent of the Trustee. Any fees,
expenses, reimbursements, or other charges which the Trustee may be entitled to
receive from the Borrower hereunder shall be due and payable thirty (30) days
after a request for payment has been made by the Trustee, and if not otherwise
paid, shall accrue interest from the date the request for payment is made at the
"base rate" of the Trustee and shall be a first lien upon any funds or other
property then or thereafter held hereunder by the Trustee (other than funds held
by the Trustee under Section 204, Section 304(c) or Section 305); provided,
however, that the lien of the Trustee shall be subordinate to the lien for the
benefit of the Bondowners
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upon the moneys drawn under the Credit Facility, the proceeds of any remarketing
of the Bonds and other Eligible Funds, if any, which are the basis of the
determination made by the Trustee of the amount to be drawn under the Credit
Facility, including, without limitation, such funds held by the Trustee under
Section 204 and Subsection 304(c). If any such moneys are so applied, the
Borrower shall be immediately obligated to restore the moneys so applied. The
Trustee shall not require indemnification for any payment when due of principal,
premium or interest on any Bond to be made by the Trustee to any Bondowner,
prior to the time such payment is made by the Trustee, except and unless such
payment is prohibited by or violates applicable law or any outstanding or
pending court or governmental order or decree.
When the Trustee incurs expenses or renders services in connection with
an Event of Default or Default specified in Section 601(a)(iii), the expenses
(including the reasonable charges and expenses of its counsel) and the
compensation for the services are intended to constitute expenses of
administration under any applicable federal or state bankruptcy, insolvency or
other similar law.
The provisions of this Section shall survive the termination of this
Agreement.
Section 704. Resignation or Removal of Trustee. The Trustee may resign
on not less than sixty (60) days' notice given in writing to the Issuer, the
Bondowners, the Bank and the Borrower, but such resignation shall not take
effect until a successor has been appointed and has assumed the Trustee's duties
hereunder. The Trustee will promptly certify to the other parties that it has
mailed such notice to all Bondowners and such certificate shall be conclusive
evidence that such notice was given in the manner required hereby. The Trustee
may be removed by written notice to the parties from the Bondowners representing
a majority in principal amount of the Bonds Outstanding, but no such removal
shall take effect until a successor has been appointed and assumed the Trustee's
duties hereunder. A petition in a court of competent jurisdiction for removal of
the Trustee and the appointment of a successor may be filed by the Bondowners
representing not less than 25% in principal amount of the Bonds Outstanding.
Section 705. Successor Trustee. Any corporation or association which
succeeds to the corporate trust business of the Trustee as a whole, or
substantially as a whole, whether by sale, merger, consolidation or otherwise,
shall become vested with all the property, rights and powers of the Trustee
hereunder, without any further act or conveyance.
In case the Trustee resigns or is removed or becomes incapable of
acting, or becomes bankrupt or insolvent, or if a receiver, liquidator or
conservator of the Trustee or of its property is appointed, or if a public
officer takes charge or control of the Trustee, or of its property or affairs, a
successor shall be appointed (but only with the consent of the Bank, if any
Bonds shall then be entitled to the benefits of a Credit Facility, which consent
shall not be unreasonably withheld or delayed) by written notice from the
Borrower to the Issuer. The Borrower shall notify the Bondowners of the
appointment in writing within twenty (20) days from the appointment. The
Borrower will promptly certify to the successor Trustee that it has mailed such
notice to all Bondowners and such certificate will be conclusive evidence that
such notice was given in the manner required hereby. If no appointment of a
successor is made within twenty (20) days after the giving of written notice of
resignation or removal in accordance with Section 704 or after the occurrence of
any other event requiring or authorizing such appointment, the outgoing Trustee
or any Bondowner may apply, at the expense of the Borrower, to any court of
competent jurisdiction for the appointment of such a successor, and such court
may thereupon,
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after such notice, if any, as such court may deem proper, appoint such
successor. Any successor Trustee appointed under this section shall be a trust
company or a bank having the powers of a trust company that meets the
requirements of the Act and shall have a capital and surplus of not less than
Fifty Million Dollars ($50,000,000). Any such successor Trustee shall notify the
Issuer, the Bank and the Borrower of its acceptance of the appointment and, upon
giving such notice, shall become Trustee, vested with all the property, rights
and powers of the Trustee hereunder, without any further act or conveyance. Such
successor Trustee shall execute, deliver, record and file such instruments as
are required to confirm or perfect its succession hereunder and any predecessor
Trustee shall from time to time execute, deliver, record and file such
instruments as the incumbent Trustee may reasonably require to confirm or
perfect any succession hereunder.
Section 706. Conflicting Interests.
(a) If the Trustee has or shall acquire any "conflicting interest" as
such term is defined in the Trust Indenture Act of 1939, as amended, then,
within 90 days after ascertaining that it has such conflicting interest, and if
the Event of Default to which such conflicting interest relates has not been
cured or duly waived or otherwise eliminated before the end of such 90-day
period, such Trustee shall either eliminate such conflicting interest or shall
provide written notice to Borrower of such conflict and the Borrower shall take
prompt steps to have a successor Trustee appointed as provided by Section 705 of
this Loan Agreement. In the event that such Trustee shall fail to cause
appointment of a successor, such Borrower shall, within 10 days after the
expiration of such 90-day period, transmit notice of such failure to the
Bondowners; and any Bondowner may, on his own behalf and on behalf of all others
similarly situated, petition any court of competent jurisdiction for the removal
of the Trustee, and the appointment of a successor, if the Borrower fails, after
written request thereof by such Bondowner to cause appointment of a successor.
(b) The Trustee may accept, hold and draw upon letters of credit issued
by itself or by any of its corporate affiliates to provide security and a source
of payment for the Bonds. Further, the Trustee covenants that it shall at all
times maintain adequate controls to manage any potential conflicting interest.
Notwithstanding any other provision herein to the contrary, while the Bank is
the same entity as the Trustee or an affiliate of the entity acting as Trustee
hereunder and the Bank has not failed to honor a properly presented drawing on
the Letter of Credit, the Trustee shall have no discretion with respect to the
acceleration of the Bonds and shall do so only upon written direction of the
Bank or the Bondowners with the consent of the Bank. If the Bank is then an
affiliate of or the same entity as the Trustee, and if the Bank fails at any
time to honor a properly presented drawing on the Letter of Credit, the Trustee
shall immediately tender its resignation, and Borrower shall take prompt steps
for the appointment of a successor trustee in accordance with the provisions of
Section 705 of this Loan Agreement.
ARTICLE VIII: THE ISSUER
Section 801. Corporate Organization, Authorization and Power. The Issuer
represents and warrants as follows:
(i) It is a body politic and corporate and a public instrumentality of
the Commonwealth, established under Chapter 23G, with the power under and
pursuant to the Act,
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to execute and deliver this Agreement and to perform its obligations hereunder,
and to issue and sell the Bonds pursuant to this Agreement; and
(ii) It has taken all necessary action and has complied with all
provisions of the Constitution of the Commonwealth and the Act required to make
this Agreement and the Bonds the valid obligations of the Issuer which they
purport to be; and, when executed and delivered by the parties hereto, this
Agreement will constitute a valid and binding agreement of the Issuer
enforceable in accordance with its terms, except as enforceability may be
subject to the exercise of judicial discretion in accordance with general
equitable principles and to applicable bankruptcy, insolvency, reorganization,
moratorium and other laws for the relief of debtors heretofore or hereafter
enacted to the extent that the same may be constitutionally applied; and
(iii) When delivered to and paid for by the initial purchasers in
accordance with the terms of this Agreement and the Bond Purchase Agreement with
respect to the Bonds, the Bonds will constitute valid and binding special
obligations of the Issuer enforceable in accordance with their terms, except as
enforceability may be subject to the exercise of judicial discretion in
accordance with general equitable principles and to applicable bankruptcy,
insolvency, reorganization, moratorium and other laws for the relief of debtors
heretofore or hereafter enacted to the extent that the same may be
constitutionally applied, and will be entitled to the benefits of this
Agreement; and
(iv) The Issuer makes no other representations or warranties, either
express or implied, of any nature or kind, including, without limitation, a
representation or warranty that interest on the Bonds is or will continue to be
exempt from federal or state income taxation.
Section 802. Covenant as to Payment; Faith and Credit of Commonwealth
Not Pledged. The Issuer covenants that it will promptly pay or cause to be paid
the principal of, interest, premium, if any, and other charges, if any, on the
Bonds at the place, on the dates and in the manner provided herein and in the
Bonds, provided, however, that the Bonds do not now and shall never constitute a
general obligation of the Issuer or a debt or pledge of the faith and credit of
the Commonwealth, and all covenants and undertakings by the Issuer hereunder and
under the Bonds to make payments are special obligations of the Issuer payable
solely from the revenues and funds pledged hereunder.
Section 803. Rights and Duties of the Issuer.
(a) Remedies of the Issuer. Notwithstanding any contrary provision in
this Agreement, the Issuer shall have the right to take any action not
prohibited by law or make any decision not prohibited by law with respect to
proceedings for indemnity against the liability of the Issuer and its officers,
directors, employees and agents and for collection or reimbursement of moneys
due to it under this Agreement for its own account. The Issuer may enforce its
rights under this Agreement which have not been assigned to the Trustee by legal
proceedings for the specific performance of any obligation contained herein or
for the enforcement of any other legal or equitable remedy, and may recover
damages caused by any breach by the Borrower of its obligations to the Issuer
under this Agreement, including any amounts required to be paid by the Borrower
pursuant to Subsection 308(b), court costs, reasonable attorney's fees and other
costs and expenses incurred in enforcing such obligations.
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(b) Limitations on Actions. Without limiting the generality of
Subsection 803(c), the Issuer shall not be required to monitor the financial
condition of the Borrower and shall not have any responsibility or other
obligation with respect to reports, notices, certificates or other documents
filed with it hereunder.
(c) Responsibility. The Issuer shall be entitled to the advice of
counsel (who may be counsel for any party) and shall not be liable for any
action taken or omitted to be taken in good faith in reliance on such advice.
The Issuer may rely conclusively on any communication or other document
furnished to it under this Agreement and reasonably believed by it to be
genuine. The Issuer shall not be liable for any action (i) taken by it in good
faith and reasonably believed by it to be within the discretion or powers
conferred upon it, or (ii) in good faith omitted to be taken by it because
reasonably believed to be beyond the discretion or powers conferred upon it,
(iii) taken by it pursuant to any direction or instruction by which it is
governed under this Agreement or (iv) omitted to be taken by it by reason of the
lack of direction or instruction required for such action, nor shall it be
responsible for the consequences of any error of judgment reasonably made by it.
It shall in no event be liable for the application or misapplication of funds,
or for other acts or defaults by any person except its own directors, officers
and employees. When any consent or other action by the Issuer is called for by
this Agreement, the Issuer may defer such action pending such investigation or
inquiry or receipt of such evidence, if any, as it may require in support
thereof. It shall not be required to take any remedial action (other than the
giving of notice) unless reasonable indemnity is provided for any expense of
liability to be incurred thereby. It shall be entitled to reimbursement for
expenses reasonably incurred or advances reasonably made, with interest at the
Bank Rate, as announced from time to time (or, if none, the nearest equivalent)
in the exercise of its rights or the performance of its obligations hereunder,
to the extent that it acts without previously obtaining indemnity. No permissive
right or power to act shall be construed as a requirement to act; and no delay
in the exercise of any such right or power shall affect the subsequent exercise
of that right or power. The Issuer shall not be required to take notice of any
breach or default by the Borrower under this Agreement except when given notice
thereof by the Trustee. No recourse shall be had by the Borrower, the Trustee or
any Bondowner for any claim based on this Agreement, the Bonds or any agreement
securing the same against any director, officer, agent or employee of the Issuer
alleging personal liability on the part of such person unless such claim is
based upon the willful dishonesty of or intentional violation of law by such
person. No covenant, stipulation, obligation or agreement of the Issuer
contained in this Agreement shall be deemed to be a covenant, stipulation,
obligation or agreement of any present or future director, officer, employee or
agent of the Issuer in his or her individual capacity, and no person executing a
Bond shall be liable personally thereon or be subject to any personal liability
or accountability by reason of the issuance thereof.
(d) Financial Obligations. Nothing contained in this Agreement is
intended to impose any pecuniary liability on the Issuer nor shall it in any way
obligate the Issuer to pay any debt or meet any financial obligations to any
person at any time in relation to the Project except from moneys received under
the provisions of this Agreement; provided, however, that nothing contained in
this Agreement shall in any way obligate the Issuer to pay such debts or meet
such financial obligations from moneys received from the Issuer's own account
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ARTICLE IX: THE BONDOWNERS
Section 901. Action by Bondowners. Subject to Subsections 601(b), 602(a)
and Section 1101 (as to the waivers and consents granted thereby), Bondowners
representing a majority in principal amount of the Bonds Outstanding shall have
the right at any time, by written notice to the Trustee and upon offering it
indemnity as provided in Subsection 702(e), to direct the Trustee (i) in the
granting of any consents, waivers or similar actions pertaining to the Bonds,
(ii) in the time, method and place of conducting all proceedings, (iii) in the
exercise of any rights or remedies available to the Trustee hereunder, or (iv)
in the exercise of any other right or power conferred upon the Trustee for the
protection of the Bondowners, provided that such direction shall be in
accordance with the provisions of law and this Agreement, and the Trustee may
take any other action determined proper by the Trustee which is not inconsistent
with such direction.
Any request, authorization, direction, notice, consent, waiver or other
action provided by this Agreement to be given or taken by Bondowners may be
contained in and evidenced by one or more writings of substantially the same
tenor signed by the Bondowners of the requisite percentage of principal amount
of Bonds Outstanding or their attorneys duly appointed in writing. Proof of the
execution of any such instrument, or of any instrument appointing any such
attorney, shall be sufficient for any purpose of this Agreement (except as
otherwise herein expressly provided) if made in the following manner, but the
Issuer or the Trustee may nevertheless in its discretion require further or
other proof in cases where it deems the same desirable.
The fact and date of the execution by any Bondowner or his or her
attorney of such instrument may be proved by the certificate, which need not be
acknowledged or verified, of an officer of a bank or trust company satisfactory
to the Issuer or to the Trustee or of any notary public or other officer
authorized to take acknowledgments of the deeds to be recorded in the state in
which he purports to act, that the person signing such request or other
instrument acknowledged to him or her the execution thereof, or by an affidavit
of a witness of such execution, duly sworn to before such notary public or other
officer. The authority of the person or persons executing any such instrument on
behalf of a corporate Bondowner may be established without further proof if such
instrument is signed by a person purporting to be the president or a vice
president of such corporation with a corporate seal affixed and attested by a
person purporting to be its clerk or secretary or an assistant clerk or
assistant secretary.
The ownership of Bonds and the amount, numbers and other identification,
and date of holding the same shall be proved by the registry books for the Bonds
maintained by the Paying Agent.
Any request, consent or vote of the owner of any Bond shall bind all
future owners of such Bond. Bonds owned or held by or for the account of the
Issuer, the Borrower, or any related person to the Borrower within the meaning
of Section 147(a) of the IRC shall not be deemed Outstanding Bonds for the
purpose of any consent or other action by Bondowners, except that for such
purposes Bank Bonds shall be treated as Outstanding and shall be deemed to be
owned by the Bank. So long as no Default exists under Paragraph 601(a)(i) with
respect to any Bonds supported by a Credit Facility, the Bank and not the
Bondowner shall be treated as the owner of all Bonds entitled to the benefits of
such Credit Facility for the purpose of any consent or other action by
Bondowners.
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ARTICLE X: THE BORROWER
Section 1001. Existence and Good Standing; Merger; Consolidation.
Borrower will maintain its corporate existence, and good standing under the laws
of the State of Delaware and will maintain itself as a foreign corporation duly
qualified to do business and in good standing, in The Commonwealth and in each
jurisdiction in which the failure to so qualify would have a material adverse
effect upon its business or properties. The Borrower shall not merge or
consolidate with or sell all or substantially all of its respective assets to
another entity, except (i) that the Borrower may transfer all or a portion of
the Project pursuant to Section 408 and (ii) subject to compliance with any
applicable restrictions in the Reimbursement Agreement, the Borrower may so
merge or consolidate with or sell all or substantially all of its respective
assets to another entity if (A) the surviving or transferee entity is qualified
to do business and is in good standing in the Commonwealth, (B) the surviving or
transferee entity has assumed in writing all of the obligations of the Borrower
hereunder, and (C) upon such assumption there will not be a Default hereunder.
Section 1002. Indemnification by the Borrower. The Borrower, regardless
of any agreement to maintain insurance, shall indemnify and save harmless the
Issuer and the Trustee and their respective directors, officers, employees and
agents from and against (a) any and all claims by or on behalf of any person
arising out of (1) any condition of the Project, or (2) the construction,
reconstruction, improvement, use, occupancy, conduct or management of the
Project or any work or anything whatsoever done or omitted to be done in or
about the Project, or (3) any accident, injury or damage whatsoever to any
person occurring in or about the Project, or (4) any breach or default by the
Borrower of or in any of their obligations hereunder or (5) any act or omission
of the Borrower or the Bank or any of its agents, contractors, servants,
employees or licensees, (6) the audit of the Issuer by the Internal Revenue
Service in connection with the issuance of the Bonds, or (7) the offering,
issuance, sale or any resale of the Bonds, but only to the extent permitted by
law, and (b) any and all costs, counsel fees, expenses or liabilities reasonably
incurred in connection with any such claim or any action or proceeding brought
thereon. In case any action or proceeding is brought against the Issuer or the
Trustee or any such director, officer, employee or agent by reason of any such
claim, the Borrower upon notice from the affected party shall resist or defend
such action or proceeding. Subject to the foregoing, the Issuer and the Trustee
shall cooperate and join with the Borrower, at the expense of the Borrower, as
may be required in connection with any action or defense by the Borrower.
ARTICLE XI: MISCELLANEOUS
Section 1101. Amendments.
(a) Without Bondowners' Consent. The parties may from time to time,
without the consent of any Bondowner, amend this Agreement in order to (i) cure
any ambiguity, defect or omission in the Agreement that does not materially
adversely affect the interests of the Bondowners, (ii) grant additional rights
or security to the Trustee for the benefit of the Bondowners, (iii) add
additional Events of Default as shall not be inconsistent with the provisions of
this Agreement and which shall not materially adversely affect the interests of
the Bondowners, (iv) qualify this Agreement under the Trust Indenture Act of
1939, as amended, or corresponding provisions of federal laws from time to time
in effect, (v) amend or modify the provisions of Section 305 in this Agreement,
so long as the Trustee is provided with an opinion of Bond Counsel to the effect
that (a) such amendment or modification does not adversely affect
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the exclusion of interest on the Bonds from gross income for federal income tax
purposes or (b) such amendment or modification is required to preserve the
exclusion of interest on the Bonds from gross income for federal income tax
purposes, (vi) modify or delete any provision in the Agreement if, in the
opinion of Bond Counsel, such modification or deletion is necessary in order to
comply with regulations under or official interpretations of the Code, (vii)
effective upon the Fixed Rate Conversion Date, make any amendment affecting only
the Bonds being converted, or (viii) make such other provisions in regard to
matters or questions arising under this Agreement as shall not be inconsistent
with the provisions of this Agreement and which shall not materially adversely
affect the interests of the Bondowners.
(b) With Bondowners' Consent. Except as set forth in Subsection 1101(a),
the parties may from time to time amend this Agreement only with the consent of
the registered owners of more than 50% in aggregate principal amount of the
Bonds Outstanding; provided, that no amendment shall be made which adversely
affects the rights of some but less than all the Bonds Outstanding without the
consent of the owners of more than 50% in aggregate principal amount of the
Bonds so affected; and provided further, that no amendment of this Agreement
shall be effective to (i) change the principal, premium or interest on any
Bonds, (ii) change the interest payment dates, maturity dates or purchase or
redemption provisions of any Bonds, (iii) reduce the percentage of Bondowners
whose consent is required for the amendment of this Agreement or (iv) modify the
lien upon or pledge of the payments and other revenues assigned and pledged
hereunder (including any Credit Facility), without the consent, in each case, of
the owner of each Bond which would be affected by the action proposed to be
taken.
When the Trustee determines that the requisite number of consents have
been obtained for an amendment which requires Bondowner consent, it shall,
within ninety (90) days, file a certificate to that effect in its records and
mail notice to the Bondowners. No action or proceeding to invalidate the
amendment shall be instituted or maintained unless it is commenced within sixty
(60) days after such mailing. The Trustee will promptly certify to the Issuer
that it has mailed such notice to all Bondowners and such certificate will be
conclusive evidence that such notice was given in the manner required hereby. A
consent to an amendment may be revoked by written notice given by the Bondowner
and received by the Trustee prior to the Trustee's certification that the
requisite consents have been obtained.
(c) General. Any amendment of this Agreement shall be accompanied by an
opinion of Bond Counsel reasonably satisfactory to the Issuer and the Trustee to
the effect that the amendment is permitted by this Agreement and that such
amendment will not adversely affect the exclusion from gross income for federal
income tax purposes of interest on the Bonds. So long as the Bank has not failed
to honor a sight draft properly submitted to it in accordance with the
provisions of the Credit Facility, no amendment to this Agreement shall be made
without the consent of the Bank. So long as no Event of Default described in
Paragraph 601(a)(i) exists with respect to any Bonds supported by a Credit
Facility, the Bank and not the Bondowners shall be deemed to be the owner of all
Bonds entitled to the benefits of such Credit Facility for the purpose of any
amendment, consent or other action by Bondowners except amendments referred to
in clauses (i) through (iv) of the first paragraph of Subsection (b).
Written notice of any amendment of this Agreement or the Credit Facility
any extension or substitution of the Credit Facility, or any material change to
the Reimbursement Agreement or any remarketing agreement entered into by the
Remarketing Agent and the Borrower shall be
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sent by the Borrower to S&P in advance of such events. The Trustee shall give
S&P, if S&P is then rating the Bonds, written notice of any acceleration or
redemption of the Bonds.
Section 1102. Notices. Unless otherwise expressly provided, all notices
to the Issuer, the Trustee, the Remarketing Agent and the Borrower shall be in
writing and shall be deemed sufficiently given if sent by registered or
certified mail, postage prepaid, or delivered during a Business Day as follows:
(a) to the Issuer at 75 Federal Street, Boston, Massachusetts 02110, attention
of President; (b) to the Trustee at 11,000 Broken Land Parkway, Columbia, MD
21044, attention of Corporate Trust, Trustee Administration; (c) to the Borrower
at 34 Tozer Road, Beverly, MA 01915; and (d) to the Remarketing Agent at
9303-095, 608 Second Avenue South, 9th Floor, Minneapolis, MN 55479-0146, or, as
to all of the foregoing, to such other address as the addressee shall have
indicated by prior written notice to the one giving notice. All notices to a
Bondowner shall be in writing and shall be deemed sufficiently given if sent by
first class mail, postage prepaid, to the Bondowner at the address shown on the
registration books for the Bonds maintained by the Trustee. A Bondowner may
direct the Trustee to change its address as shown on the registration books by
written notice to the Trustee. All notices to Bondowners shall identify the
Bonds by name, CUSIP number, date of original issuance, maturity date, and such
other descriptive information as may be needed to identify accurately the Bonds.
All notices sent to Bondowners by the Borrower or the Trustee shall
simultaneously be sent by registered or certified mail, postage prepaid, to all
registered securities depositories that are registered owners of the Bonds,
provided that the failure to give such notice shall not affect the validity of
any notice given to the Bondowners.
Notice hereunder may be waived prospectively or retrospectively by the
person entitled to the notice, but no waiver shall affect any notice requirement
as to other persons.
Section 1103. Time. All references to times of day in this Agreement are
references to Boston, Massachusetts time.
Section 1104. Agreement Not for the Benefit of Other Parties. Except as
expressly provided herein, this Agreement is not intended for the benefit of and
shall not be construed to create rights in parties other than the Borrower, the
Issuer, the Trustee, the Remarketing Agent, the Bank and the Bondowners.
Section 1105. Severability. In the event that any provision of this
Agreement shall be held to be invalid in any circumstance, such invalidity shall
not affect any other provisions or circumstances.
Section 1106. Counterparts. This Agreement may be executed and delivered
in any number of counterparts, each of which shall be deemed to be an original,
but such counterparts together shall constitute one and the same instrument.
Section 1107. Captions. The captions and table of contents of this
Agreement are for convenience only and shall not affect the construction hereof.
Section 1108. Governing Law. This instrument shall be governed by the
laws of The Commonwealth.
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IN WITNESS WHEREOF, the parties have caused this Agreement to be duly
executed under seal all as of the date first above written.
MASSACHUSETTS DEVELOPMENT FINANCE AGENCY
By:_________________________________________
Authorized Signatory
FREQUENCY & TIME SYSTEMS, INC.
By:_________________________________________
Authorized Signatory
WELLS FARGO BANK MINNESOTA, NATIONAL
ASSOCIATION, as Trustee
By:_________________________________________
Authorized Signatory
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EXHIBIT A
FORM OF REQUISITION FOR PAYMENT
FROM CONSTRUCTION FUND
TO: Wells Fargo Bank Minnesota, National Association, as
Trustee under the Loan and Trust
Agreement dated as of May 1, 2001
(the "Loan Agreement") among the
Massachusetts Development Finance
Agency, Frequency & Time Systems, and
said Trustee.
Requisition No. _____
Dated: ______________
This requisition is made pursuant to Section 401 of the Loan Agreement.
Terms used in this requisition shall have the meanings specified for them in the
Loan Agreement.
The Trustee is hereby authorized and directed to make payment from the
Construction Fund as follows:
Amount:
Name and address of payee:
Description of use of proceeds (attach copies of invoices or statements, where
available, from a payee for issuance costs; if unavailable, provide other
evidence satisfactory to the Trustee):
1. The undersigned Borrower Representative hereby certifies to you in
connection with the payment requested by this requisition that the obligations
set forth on the requisition were incurred in connection with the Project, and
the obligations have not been the basis for a prior requisition that has been
paid.
2. The undersigned Borrower Representative has reviewed the provisions
of the Federal Tax Certificate, and the payment of this requisition will not
result in any proceeds of the Bonds being expended in violation of the
provisions of said Federal Tax Certificate. Without in any way limiting the
generality of the foregoing, the payment of this requisition when added to all
previous requisitions, will not result in more than an amount equal to 2% of the
proceeds of the Bonds being used for issuance costs within the meaning of
Section 147(g) of the Code.
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3. No Event of Default has occurred or will occur by the payment of this
requisition, nor has any event occurred which, with the passage of time or the
giving of notice or both, would ripen into such an Event of Default.
_____________________________
Borrower Representative
Consented to:
Wells Fargo Bank, N.A.
________________________________
Authorized Officer
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