EXHIBIT 10.11
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LOAN AND TRUST AGREEMENT
among
MASSACHUSETTS PORT AUTHORITY
and
▇▇▇▇▇ HARBORSIDE ASSOCIATES II LIMITED PARTNERSHIP
and
SHAWMUT BANK, N.A., AS TRUSTEE
Dated as of December 15, 1990
as Amended and Restated as of June 27, 1991
$40,000,000
Massachusetts Port Authority
Special Project Revenue Bonds, Series 1990
(Harborside Hyatt Conference Center and Hotel Project)
INDEX
Page
PART I: PLEDGE AND ASSIGNMENT; DEFINITIONS
Article 1 - Granting Clause of Borrower and Pledge
and Assignment of Issuer
Section 101. Granting Clause of Borrower. . . . . . . . . . . . . . 2
Section 102. Pledge and Assignment of Issuer. . . . . . . . . . . . 2
Section 103. Defeasance of Lien; Termination of
Borrower's Obligations on the Loan . . . . . . . . . . 3
Article 2 - Definitions
PART II: THE BONDS
Article 3 - The Bonds
Section 301. Issuance of Bonds, Dates, Maturities
and Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Section 302. Reserved . . . . . . . . . . . . . . . . . . . . . . . 16
Section 303. Execution; Authentication. . . . . . . . . . . . . . . 16
Section 304. Interest on Bonds. . . . . . . . . . . . . . . . . . . 16
Section 305. Lost Bonds . . . . . . . . . . . . . . . . . . . . . . 17
Section 306. Exchange and Transfer of Bonds; Book
Entry System . . . . . . . . . . . . . . . . . . . . . 17
Section 307. Temporary Bonds. . . . . . . . . . . . . . . . . . . . 19
Article 4 - Redemption of Bonds Before Maturity
Section 401. Redemption of Bonds. . . . . . . . . . . . . . . . . . 20
Section 402. Selection of Bonds to be Redeemed . . . . . . . . . . 23
Section 403. Procedure for Redemption . . . . . . . . . . . . . . . 25
Article 5 - Source and Application of Funds
Section 501. Project Fund . . . . . . . . . . . . . . . . . . . . . 26
Section 502. Bond Fund. . . . . . . . . . . . . . . . . . . . . . . 29
Section 502A. Revenue Fund.. . . . . . . . . . . . . . . . . . . . . 30
Section 503. Debt Service Reserve Fund. . . . . . . . . . . . . . . 32
Section 504. Rebate Fund. . . . . . . . . . . . . . . . . . . . . . 34
Section 505. Construction and Operating Costs
Contingency Fund . . . . . . . . . . . . . . . . . . . 40
Section 505A. Equity Reserve Fund. . . . . . . . . . . . . . . . . . 41
Section 505B. Credit Enhancement Account . . . . . . . . . . . . . . 43
Section 505C. Credit Enhancement Reduction and
Termination. . . . . . . . . . . . . . . . . . . . . . 44
Section 505D. Supplemental Equity Fund . . . . . . . . . . . . . . . 44
Section 506. Investment of Moneys in Funds. . . . . . . . . . . . . 46
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Page
Section 507. Maximum Investments in Nonpurpose
Obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
Section 508. Avoidance of Arbitrage . . . . . . . . . . . . . . . . 48
Section 509. Authorized Application of Funds;
Moneys to be Held in Trust . . . . . . . . . . . . . . 48
Section 510. Nonpresentment of Bonds. . . . . . . . . . . . . . . . 48
Section 511. Bonds Are Not General Obligations. . . . . . . . . . . 48
PART III: THE PROJECT
Article 6 - Completion of the Project
Section 601. Borrower's Obligations to Complete
Project, etc . . . . . . . . . . . . . . . . . . . . 49
Section 602. Completion Certificate . . . . . . . . . . . . . . . . 49
Article 7 - Operation of the Project
Section 701. Compliance with Authorization. . . . . . . . . . . . . 49
Section 702. Insurance Proceeds . . . . . . . . . . . . . . . . . . 49
Section 703. Eminent Domain Proceeds. . . . . . . . . . . . . . . . 50
PART IV: REPRESENTATIONS AND AGREEMENTS
OF ISSUER AND BORROWER
Article 8 - Representations and Agreements of Issuer
Section 801. Due Organization and Authorization
of Bonds . . . . . . . . . . . . . . . . . . . . . . . 51
Section 802. Payment of Bonds; Trustee's Rights
with Respect to the Loan; Cooperation with
Trustee. . . . . . . . . . . . . . . . . . . . . . . . 52
Section 803. Rights of Issuer as Ground Lessor
and Airport Operator; Relationship to
Ground Lease . . . . . . . . . . . . . . . . . . . . . 52
Article 9 - Representations of the Borrower
Section 901. Existence . . . . . . . . . . . . . . . . . . . . . . 53
Section 902. Valid Obligations. . . . . . . . . . . . . . . . . . . 53
Section 903. Legal Proceedings. . . . . . . . . . . . . . . . . . . 54
Section 904. Compliance with Law; Consents, etc.. . . . . . . . . . 54
Section 905. Tax Matters. . . . . . . . . . . . . . . . . . . . . . 54
Article 10 - Certain Agreements of Borrower
Section 1001. Loan Payments, Etc.. . . . . . . . . . . . . . . . . . 54
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Page
Section 1002. Borrower to Maintain Its Legal
Existence. . . . . . . . . . . . . . . . . . . . . . . 59
Section 1003. Indemnification of Issuer and
Trustee. . . . . . . . . . . . . . . . . . . . . . . . 59
Section 1004. Additional Remedies of Bondholders. . . . . . . . . . 61
Section 1005. Financial Reports . . . . . . . . . . . . . . . . . . 61
PART V: EVENTS OF DEFAULT
Article 11 - Default Provisions and Remedies of
Trustee, Bondholders and Issuer
Section 1101. Events of Default; Defaults. . . . . . . . . . . . . . 63
Section 1102. Acceleration . . . . . . . . . . . . . . . . . . . . . 64
Section 1103. Other Remedies; Rights of
Bondholders. . . . . . . . . . . . . . . . . . . . . . 65
Section 1104. Right of Bondholders to Direct
Proceedings. . . . . . . . . . . . . . . . . . . . . . 65
Section 1105. Application of Moneys . . . . . . . . . . . . . . . . 65
Section 1106. Remedies Vested in Trustee. . . . . . . . . . . . . . 66
Section 1107. Rights and Remedies of Bondholders. . . . . . . . . . 66
Section 1108. Waivers of Events of Default. . . . . . . . . . . . . 67
Section 1109. Intervention by Trustee . . . . . . . . . . . . . . . 67
Section 1110. Remedies of Issuer on Event of
Default. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67
PART IV: THE TRUSTEE
Article 12 - The Trustee
Section 1201. Acceptance of Trusts . . . . . . . . . . . . . . . . . 68
Section 1202. Fees and Expenses of Trustee . . . . . . . . . . . . . 69
Section 1203. Successor Trustee. . . . . . . . . . . . . . . . . . . 69
Section 1204. Resignation by Trustee; Removal. . . . . . . . . . . . 69
Section 1205. Appointment of Successor Trustee . . . . . . . . . . . 69
Section 1206. Dealing in Bonds . . . . . . . . . . . . . . . . . . . 70
Section 1207. Trustee as Bond Registrar; List of
Bondholders. . . . . . . . . . . . . . . . . . . . . . 70
Section 1208. Successor Trustee as Custodian of
Funds, Bond Registrar and Paying Agent . . . . . . . . 70
Section 1209. Adoption of Authentication . . . . . . . . . . . . . . 70
Section 1210. Designation and Succession of
Paying Agents. . . . . . . . . . . . . . . . . . . . . 71
Section 1211. Trust Estate May Be Vested in
Co-Trustee . . . . . . . . . . . . . . . . . . . . . . 71
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Page
PART VII: SUPPLEMENTAL AGREEMENT AND
WAIVERS; MISCELLANEOUS
Article 13 - Supplemental Agreements and Waivers
Section 1301. Supplemental Agreements Not
Requiring Consent of Bondholders . . . . . . . . . . . 72
Section 1302. Supplemental Agreements Requiring
Consent of Bondholders . . . . . . . . . . . . . . . . 73
Section 1303. Opinion of Counsel . . . . . . . . . . . . . . . . . . 74
Section 1304. Modification by Unanimous Consent. . . . . . . . . . . 75
Article 14 - Miscellaneous
Section 1401. Consents, etc., of Bondholders . . . . . . . . . . . . 75
Section 1402. Limitation of Rights . . . . . . . . . . . . . . . . . 75
Section 1403. Severability . . . . . . . . . . . . . . . . . . . . . 75
Section 1404. Notices. . . . . . . . . . . . . . . . . . . . . . . . 75
Section 1405. Payments Due on Saturdays, Sundays
and Holidays . . . . . . . . . . . . . . . . . . . . . 76
Section 1406. Extent of Issuer Covenants; No
Personal Liability . . . . . . . . . . . . . . . . . . 76
Section 1407. Bonds Owned by Issuer or Borrower. . . . . . . . . . . 76
Section 1408. Captions; Index. . . . . . . . . . . . . . . . . . . . 76
Section 1409. Instruments of Further Assurance;
Recordings and Filing. . . . . . . . . . . . . . . . . 77
Section 1410. Exculpation of Related Persons of
Borrower . . . . . . . . . . . . . . . . . . . . . . . 77
Section 1411. Counterparts . . . . . . . . . . . . . . . . . . . . . 77
Section 1412. Governing Law; Sealed Instrument . . . . . . . . . . . 77
Section 1413. Agreements to Constitute Covenants . . . . . . . . . . 77
Section 1414. Confirmation of Original Agreement . . . . . . . . . . 77
Exhibit 301 Form of Bonds
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AMENDED AND RESTATED
LOAN AND TRUST AGREEMENT
This AMENDED AND RESTATED LOAN AND TRUST AGREEMENT (as from time to
time in effect, the "Agreement") is entered into as of June 27, 1991 by the
Massachusetts Port Authority (the "Issuer"), a body politic and corporate
and a public instrumentality of The Commonwealth of Massachusetts (the
"Commonwealth") duly created by Chapter 465 of the Acts of 1956 of the
Commonwealth, as heretofore amended and supplemented (as so amended and
supplemented, the "Enabling Act"), ▇▇▇▇▇ Harborside Associates II Limited
partnership, a Massachusetts limited partnership (the "Borrower"), and
Shawmut Bank, N.A., a national banking association, as trustee (with its
successors and, where the context may require, any separate Trustee or Co-
Trustee appointed by the Trustee pursuant to the provisions of this
Agreement, the "Trustee").
Terms defined in this Agreement are used as defined herein. Unless
otherwise indicated, references to Articles or Sections refer to this
Agreement.
RECITALS
Pursuant to a Loan and Trust Agreement dated as of December 15, 1990,
as amended (the "Original Agreement"), among the Issuer, the Borrower and
the Trustee, the Issuer duly issued $40,000,000 principal amount of special
project revenue bonds (the "Bonds", which term includes bonds issued in
replacement or exchange for Bonds and excludes Bonds for which the Trustee
is holding payment under Section 510 hereof). The proceeds of the Bonds
were loaned (the "Loan") by the Issuer to the Borrower to finance the
Project (as defined herein), subject to the provision that such proceeds
were required to be held in escrow until the Remarketing Date established
under Section 405 of the original Agreement. Effective as of the
Remarketing Date, viz. June 27, 1991, the original Agreement is amended and
restated to be this Agreement.
All things necessary to make the Bonds, when authenticated, the
binding, limited obligations of the Issuer and to create a valid lien and
pledge as herein provided have been accomplished; and the execution and
delivery of this Agreement and the issuance of the Bonds have been duly
authorized.
In consideration of the mutual agreements and representations
contained in this Agreement and for other good and valuable consideration,
the receipt of which is hereby acknowledged, the parties hereby agree,
covenant, grant, pledge, assign, represent and warrant as follows (it being
understood and
agreed that the performance of the agreements of the Issuer herein
contained and any obligation it may incur for the payment of money shall
not constitute a general obligation of the Issuer or the Commonwealth or a
debt or a pledge of the faith and credit of the Issuer or the Commonwealth
or any political subdivision or municipality thereof but shall be payable
solely from the revenues and funds provided under this Agreement, the
Credit Enhancement Agreement and the Borrower Security Instruments):
PART I: PLEDGE AND ASSIGNMENT; DEFINITIONS
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Article 1 - Granting Clause of Borrower and Pledge and Assignment of Issuer
In order to secure the due payment of principal of, premium, if any,
and interest on the Bonds and the compliance by the Borrower and the Issuer
with their agreements contained in this Agreement:
Section 101. GRANTING CLAUSE OF BORROWER. For and in consideration of
the Loan made hereunder to the Borrower, the Borrower as debtor does by
these presents freely grant, pledge and assign to the Trustee, its
successors and assigns forever, for the benefit of the Bondholders and
hereby creates in the Trustee, its successors and assigns, as secured party
for the benefit of the Bondholders a security interest under the Uniform
Commercial Code to the maximum extent possible in all right, title and
interest of the Borrower in and to the Pledged Receipts upon the terms and
trusts herein set forth for the benefit, security and protection of all
present and future holders of all Bonds from time to time issued under and
secured by this Agreement.
Section 102. PLEDGE AND ASSIGNMENT OF ISSUER. In order to secure the
due payment of principal of, premium, if any, and interest on the Bonds and
compliance by the Issuer with its agreements contained in this Agreement
the Issuer hereby grants, pledges and assigns to the Trustee for the
benefit of the Bondholders all of its right, title and interest in and to
the Pledged Receipts and all of the Issuer's right, title and interest in
this Agreement, including enforcement rights and remedies but excepting
from such grant, pledge and assignment the right of the Issuer to any
payment or reimbursement pursuant to Section 1001D or Section 1003 and its
rights under the third sentence of Section 1110 and excepting any amounts
on deposit in the Rebate Fund; and provided that the Issuer shall retain an
independent right (but no obligation) to enforce against the Borrower
compliance with the provisions of Section 1004 hereof; and provided that
the pledge hereunder shall not transfer any rights or remedies under the
Ground Lease, the Credit Enhancement
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Agreement or any other statement or instrument other than this Agreement.
Section 103. DEFEASANCE OF LIEN; TERMINATION OF BORROWERS OBLIGATIONS
ON THE LOAN. When (i) the Issuer has paid or has been deemed to have paid,
within the meaning of this Section 103, to the holders of all of the Bonds
the principal and interest and premium, if any, due or to become due
thereon at the times and in the manner stipulated therein and herein and
(ii) all Additional Payments have been paid or provided for to the
satisfaction of the Issuer and the Trustee, the lien of this Agreement on
the Trust Estate shall terminate and the Borrower's obligations with
respect to the Loan shall terminate, except that, notwithstanding
termination of the lien hereof, the obligations of the Borrower to make all
payments required by Section 504 and of any other party hereto to take any
other action under Section 504 shall continue until all such obligations
have been paid in full. Upon the Borrower's written request, the Trustee
shall upon the termination of the lien hereof promptly execute and deliver
to the Borrower and the Issuer an appropriate discharge hereof except that,
subject to the provisions of this Agreement, the Trustee shall continue to
hold in trust amounts held pursuant to Section 510 for the payment of the
principal of, premium, if any, and interest on the Bonds and moneys held
for rebate to the United States of America under Section 148(f) of the
Code.
All the outstanding Bonds shall be deemed to have been paid within
the meaning of this Section 103 if the Trustee shall have paid to the
holders of such Bonds, or pursuant to Section 510 or 1105 shall be holding
in trust for and shall have irrevocably committed to the payment of the
Outstanding Bonds sufficient moneys for the payment of all principal of and
interest and premium, if any, on such Bonds to the date of maturity or
redemption, as the case may be; provided, that if any of such Bonds are
deemed to have been paid prior to the earlier of the redemption or the
maturity thereof, the Trustee shall have received an unqualified opinion of
Bond Counsel that such payment and the holding thereof by the Trustee shall
not in and of itself cause interest on the Bonds to be included in gross
income for federal income tax purposes; and provided, further, that if any
such Bonds are to be redeemed prior to the maturity thereof, notice of such
redemption shall have been duly given or irrevocable provision satisfactory
to the Trustee shall have been duly made for the giving of such notice.
Any moneys held by the Trustee in the manner provided by the
provisions of this Section 103 shall be invested by the Trustee in the
manner provided by Section 506 (but only to the extent that such
investments are available) only in United States Obligations which do not
contain provisions permitting redemption
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at the option of the issuer, the maturities or redemption dates, without
premium, of which shall coincide as nearly as practicable with, but not be
later than, the time or times at which said moneys will be required for the
aforesaid purposes. The making of any such investments or the sale or other
liquidation thereof shall not be subject to the control of the Issuer or
the Borrower, and the Trustee shall have no responsibility for any losses
resulting from such investment. Any income or interest earned by, or
increment to, the investments held under this Section 103, to the extent
determined from time to time by the Trustee to be in excess of the amount
required to be held by it for the purposes of this Section 103, shall be
paid to the Borrower.
After all of the outstanding Bonds shall be deemed to have been paid
and all other amounts required to be paid under this Agreement shall have
been paid, then upon the termination of this Agreement (a) any amounts in
the Equity Reserve Fund shall be paid to the Credit Enhancer and (b) any
amounts in the Project Fund, the Bond Fund, the Revenue Fund, the Debt
Service Reserve Fund, the Supplemental Equity Fund and the Construction and
Operating Costs Contingency Fund, shall be paid to the Credit Enhancer to
the extent necessary to repay any unpaid Obligations as defined in the
Credit Enhancement Agreement, and thereafter the remainder, if any, shall
be paid to the Borrower.
Article 2 - Definitions
The following terms as used in this Agreement, the Bonds and any
certificate or document executed in connection therewith shall have the
following meanings (or are defined elsewhere in this Agreement as indicated
below) unless the context otherwise indicates:
"Account" means any of the Capitalized Interest Account, the Costs of
Remarketing Account or the Construction Account of the Project Fund.
"Additional Payments" means the amounts required to be paid by the
Borrower under Section ▇▇▇▇▇.
"▇▇▇ ▇▇▇▇▇" means ▇. ▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇. ▇▇▇▇, ▇▇ and ▇▇▇▇▇▇
▇▇▇▇▇▇, not individually but as trustees under AEW #158 Trust.
"Annual Scheduled Redemption Obligation" -- See Section 1001B.
"Authorization" means, collectively, the letter dated May 16, 1986
from the Internal Revenue Service to ▇▇▇▇▇▇▇▇
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Development Associates and Section 1317(5) (C) of the Tax Reform Act of
1986.
"Authorized Borrower Representative" means the person or each
alternate designated to act for the Borrower by written certificate
furnished to the Issuer and the Trustee, containing the specimen signature
of such person and signed on behalf of the Borrower by the Chairman or
President of the general partner or the Borrower.
"Bankruptcy" means the filing of a petition in bankruptcy (or the
commencement of a bankruptcy, a general assignment for the benefit of
creditors, a receivership or similar proceeding) by or against the Borrower
or by the Issuer under any applicable bankruptcy, insolvency,
reorganization or similar law now or hereafter in effect which, in the case
of a proceeding brought against the Borrower, is not dismissed within 90
days.
"Basic Agreement" means each of this Agreement, the Bonds, the
Contract of Purchase, the Remarketing Agreement, the Disbursement
Agreement, the Borrower Security Instruments and the Hyatt Subordination
Agreement.
"Beneficial Owner" -- See Section 306.
"Bond Counsel" means Ropes & ▇▇▇▇ or any other attorney at law or a
firm of attorneys reasonably acceptable to the Trustee of nationally
recognized standing in matters pertaining to the validity of and the
tax-exempt nature or interest on bonds issued by states and their political
subdivisions, duly admitted to the practice of law before the highest court
of any state of the United States of America.
"Bond Fund" -- See Section 502.
"Bond Fund Balance" -- See Section 1001B.
"Bondholder" or "holder" means, as of any time, the registered owner
of any Bond as shown in the register kept by the Trustee as bond registrar.
"Bonds" -- See Recitals in this Agreement.
"Bond Year" means any one-year period ending on March 31.
"Borrower" -- See Recitals in this Agreement.
"Borrower Affiliate" shall mean (a) a "substantial user" of the
project or a "related person" to any such "substantial user", within the
meaning of such terms under Section 147(a) of the
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Code, or (b) any other Person purchasing Bonds with funds furnished by a
Borrower Affiliate.
"Borrower Security Instruments" means each of the Leasehold Mortgage,
the Collateral Assignment of Leases, Contracts, Licenses, Permits,
Agreements, Warranties and Approvals dated as of December 15, 1990 by the
Borrower in favor of the Trustee, the Collateral Assignment of Management
Agreement dated as of December 15, 1990 by the Borrower in favor of the
Trustee, the Collateral Assignment of Rents and Leases dated as of December
15, 1990 by the Borrower in favor of the Trustee and such additional or
supplemental mortgages, security agreements, conditional assignments,
subordination agreements, guarantees and similar instruments as the
Borrower or any other Person from time to time may enter into in favor of
the Trustee for the purpose of securing or supporting the obligations of
the Borrower under this Agreement and which shall be identified as
"Borrower Security Instruments" for the purpose of this Agreement by
written agreement of the Borrower and the Trustee, each as from time to
time in effect.
"Business Day" means any day other than a Saturday, Sunday or other
day on which the New York Stock Exchange is closed or on which banks are
authorized or required to be closed in any of the City of Boston,
Massachusetts, or any other municipality in which the principal offices of
the Trustee are located.
"Capitalized Interest Account" means the Capitalized Interest Account
of the Project Fund established under Section 501.
"Cash Flow Available for Debt Service" means for any period all
amounts remitted by Hyatt Corporation to the Borrower in respect of such
period pursuant to Section 4.3 of the Hyatt Management Agreement minus the
amount of Rent accruing during such period; provided, however, that if the
Hyatt Management Agreement expires or is terminated, "Cash Flow Available
for Debt Service" thereafter shall mean for any period an amount equal to
the Project's "Funds Available Before Other Obligations (Income)"
calculated as provided in the statement of "Projected Debt Service
Coverage" set forth at pages 15 and 16 of the Remarketing Official
Statement relating to the Bonds dated June 27, 1991 minus the amount of
incentive management fees, if any, accruing for such period.
"Closing Date" means the date of delivery of the Bonds to the
Underwriter against payment therefor.
"Code" means the Internal Revenue Code of 1986, as from time to time
amended, and any regulations promulgated thereunder, including without
limitation any Treasury Regulations or
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Temporary or Proposed Regulations, as the same shall from time to time be
amended including (until modified, amended or superseded) Treasury
Regulations or Temporary or Proposed Regulations under the Internal Revenue
Code of 1954, as amended.
"Commonwealth" -- See first paragraph of this Agreement.
"Completion Certificate" -- See Section 602.
"Completion Date" shall mean the earlier to occur of (i) the date on
which the acquisition, construction, equipping and furnishing of the
Project are completed substantially in accordance with the Authorization
and the Plans and (ii) the date of abandonment of the Project.
"Construction Account" means the Construction Account of the Project
Fund established under Section 501.
"Construction and Operating Costs Contingency Fund" -- See Section
505.
"Construction Inspector" shall have the meaning provided therefor
under the Disbursement Agreement.
"Contract of Purchase" means the Contract of Purchase dated December
27, 1990 among the Issuer, the Borrower and the Underwriter, including the
Letter of Representation and Indemnification dated December 31, 1990 from
the Borrower to the Issuer and the Underwriter.
"Costs of Collection" means all attorneys' reasonable fees and out-
of-pocket expenses incurred by the Trustee and all costs and expenses
associated with travel on behalf of the Trustee, which costs and expenses
are directly or indirectly related to the Trustee's efforts to collect or
enforce the Bonds, this Agreement or the Borrower Security Instruments, or
any of the Trustee's rights, remedies, powers, privileges, or discretion
against or in respect of the Borrower thereunder (whether or not suit is
instituted in connection with any of the foregoing).
"Costs of Remarketing Account" means the Costs of Remarketing Account
of the Project Fund established under Section 501.
"Co-Trustee" means any Co-Trustee appointed by the Trustee pursuant
to the provisions of Section 1211.
"Credit Enhancement Account" means the account of that name
established under Section 4 of the Credit Enhancement Agreement.
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"Credit Enhancement Agreement" means the Credit Enhancement Agreement
dated as of June 27, 1991 among the Borrower, the Trustee and the Credit
Enhancer, as from time to time in effect.
"Credit Enhancement Fee" means the fee of $150,000 per annum provided
under Section 3.2 of the Credit Enhancement Agreement.
"Credit Enhancement Termination Date" means the first date on which
the principal balance of the Debt Service Reserve Fund (calculated as
provided in Section 506 hereof) shall be equal to or more than the
aggregate principal amount of the Bonds then outstanding.
"Credit Enhancer" means the Massachusetts Port Authority, not as the
Issuer hereunder but as the provider of credit enhancement under the Credit
Enhancement Agreement.
"Debt Service Coverage Ratio" means for any year the ratio calculated
by dividing the Cash Flow Available for Debt Service for such year by the
maximum amount of principal of and interest on the Bonds (initially
$4,420,000) payable during any twelve-month period commencing on March 2
and ending on (and including) March 1 in any year.
"Debt Service Reserve Fund" -- See Section 503.
"Default" means any Event of Default or any event or condition which,
with the passage of time or giving of notice or both, would constitute an
Event of Default.
"Determination of Taxability" -- See Section 401(c).
"Disbursement Agreement" means the Disbursement Agreement dated as of
December 15, 1990 between the Borrower and the Trustee, as amended as of
June 27, 1991 and as from time to time in effect.
"DTC" -- See Section 306.
"Enabling Act" -- See first paragraph of this Agreement.
"Equity Costs Certificate" shall have the meaning provided therefor
in the Credit Enhancement Agreement.
"Equity Reserve Fund" -- See Section 505A.
"Estimated Completion Date" means July 1, 1993.
"Event of Default" -- See Section 1101.
"Excess Earnings" -- See Section 504.
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"Final Computation Date" -- See Section 504.
"Fund" means any of the Project Fund, the Bond Fund, the Revenue
Fund, the Debt Service Reserve Fund, the Rebate Fund, the Construction and
Operating Costs Contingency Fund, the Equity Reserve Fund and the
Supplemental Equity Fund.
"Gross proceeds" -- See Section 504.
"Ground Lease" means the lease dated as of May 1, 1983 between the
Issuer, as ground lessor, and Massachusetts Technology Center Associates,
as ground lessee, as amended and restated by the Ground Lease for Phase C
of the Bird Island Flats Development dated as of September 15, 1990 between
the Issuer, as ground lessor, and the Borrower, as ground lessee, as
affected by the Landlord's Consent and Estoppel Certificate dated as of
December 15, 1990 by the Issuer, as ground lessor, for the benefit of the
Trustee and as amended by the Ground Lease Amendment dated as of June 27,
1991 between the Issuer, as ground lessor, and the Borrower, as ground
lessee, and as from time to time in effect.
"Hyatt Management Agreement" means the Management Agreement (▇▇▇▇▇
Airport) dated as of February 1, 1990 (in the preamble thereof) between the
Borrower and Hyatt Corporation, as amended as of June 27, 1991 and as from
time to time in effect.
"Hyatt Subordination Agreement" means the Subordination, Non-
Disturbance and Attornment Agreement dated as of December 15, 1990 between
Hyatt Corporation and the Trustee, as from time to time in effect.
"Initial Interest Period" means the period commencing on and
including the Closing Date to but excluding the Remarketing Date.
"Initial Purchaser or Purchasers" means the Underwriter and any other
purchaser or purchasers of the Bonds named in the Contract of Purchase.
"Interest Payment Date" means (a) the Remarketing Date and (b) March
1 and September 1 of each year thereafter, commencing March 1, 1992.
"Investment Property" -- See Section 504.
"Issuer" -- See first paragraph of this Agreement.
"Leasehold Mortgage" means the Leasehold Mortgage and Security
Agreement dated as of December 15, 1990 by the Borrower in favor of the
Trustee, as from time to time in effect.
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"Loan" -- See Recitals in this Agreement.
"Majority of the Bondholders" means the holders of more than 50
percent of the aggregate principal amount of outstanding Bonds.
"Moody's" means ▇▇▇▇▇'▇ Investors Service, Inc., a corporation
organized and existing under the laws of the State of Delaware, its
successors and assigns, and, if such corporation shall be dissolved or
liquidated or shall no longer perform the functions of a securities rating
agency, "Moody's" shall be deemed to refer to any other nationally
recognized securities rating agency designated by the Trustee, with the
approval of the Borrower, by notice to the Issuer.
"Nonpurpose Investments" -- See Section 504.
"Notice Address" means:
(a) As to the Borrower: ▇▇▇▇▇ Harborside Associates II
Limited Partnership
c/▇ ▇▇▇▇▇▇▇▇ Development Associates
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: Managing Partner
(b) As to the Issuer: Massachusetts Port Authority
▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: Chief Legal Counsel
(c) As to the Trustee: Shawmut Bank, N.A.
Corporate Trust Department
(31st Floor)
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, AVP
(d) As to the AEW Trust: AEW #158 Trust
c/▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ Waitch, Inc.
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
or such other address or addresses as any such party shall designate
by notice actually received by the addressor.
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"Official Statement" means, collectively, the official Statement
relating to the Bonds dated December 27, 1990 and the Remarketing official
Statement relating to the Bonds dated June 27, 1991.
"Original Agreement" -- See Recitals in this Agreement.
"Outstanding Bonds" or "Bonds outstanding" means the amount of
principal of the Bonds which has not at the time been paid, exclusive of
(a) Bonds in lieu of which others have been authenticated under Section
305, (b) principal of any Bond which has become due (whether by maturity,
call for redemption or otherwise) and for which provision for payment as
required herein has been made, and (c) for purposes of any direction,
consent or waiver under this Agreement or under any other Basic Agreement,
Bonds deemed not to be outstanding pursuant to Section 1407.
"Paying Agent" means the Trustee or any other paying agent appointed
in accordance with Section 1210 hereof.
"Payment Date" means each Interest Payment Date, Principal Payment
Date or any other date on which any principal of, premium, if any, or
interest on any Bond is due and payable for any reason, including without
limitation upon any redemption of Bonds pursuant to Section 401.
"Person" means a corporation, association, partnership, joint
venture, trust, organization, business, individual or government or any
governmental agency or political subdivision thereof.
"Plans" shall have the meaning provided therefor under the Leasehold
Mortgage.
"Pledged Receipts" means the Loan and all payments and other revenues
received or receivable by the Issuer, or the Trustee for the account of the
Issuer, in respect of the Loan, including without limitation moneys,
investments and proceeds in the Project Fund, the Revenue Fund, the Bond
Fund, the Debt Service Reserve Fund, the Construction and Operating Costs
Contingency Fund, the Equity Reserve Fund and the Supplemental Equity Fund,
except for amounts in the Rebate Fund and payments to the Issuer under
subsections (i) and (ii) of Section 1001D or under Section 1003, and
subject to the provisions of Section 510 regarding moneys for the benefit
of the holders of particular Bonds.
"Principal Payment Date" means March 1 of each year in which
principal of the Bonds is due and payable.
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"Project" means the acquisition, construction, equipping and
furnishing of a 270-room conference center and hotel on approximately six
acres of land at Boston-▇▇▇▇▇ International Airport in Boston,
Massachusetts leased by the Borrower, as ground lessee, from the Issuer, as
ground lessor, under the Ground Lease.
"Project Fund" -- See Section 501.
"Qualified Investments" means (i) United States Obligations (ii)
certificates or receipts representing direct ownership of future interest
or principal payments on United States Obligations held by a custodian in
safekeeping on behalf of the holders of such certificates or receipts;
(iii) certificates of deposit or banker's acceptances or interest-bearing
deposits of the Trustee, banks affiliated with the Trustee and banks or
trust companies organized under the laws of the United States of America or
any state thereof, which have capital and surplus of at least $100,000,000
and a rating on their commercial paper of not less than prime-one or A-1 or
their equivalents by Moody's or S&P; (iv) variable rate demand obligations
commercial paper or finance company paper, including that of any affiliate
of the Trustee, in each case rated in the highest short-term category by
Moody's or S&P; (v) bonds, obligations or commercial paper of the District
of Columbia, any territory of the United States of America or any state of
the United States of America or of any political subdivision or other
instrumentality of the foregoing, the interest on which is excluded from
gross income for federal income tax purposes and which are rated in one of
the two highest categories (without regard to pluses or minuses) for such
securities by Moody's or S&P; (vi) shares of any open-end diversified
investment company registered under the Investment Company Act of 1940, as
amended, or any other so-called "money market fund" which, in either case,
maintains a constant net asset value per share in accordance with
regulations of the Securities and Exchange Commission, has aggregate net
assets of not less than $50,000,000 on the date of purchase, and to the
extent practicable and in accordance with its investment guidelines invests
85% of its assets in investments of the types described in clauses (i),
(ii), (iii) and (iv) above or unrated securities of the types described
above if such assets are of comparable quality, provided that the purchase
of any shares in any particular investment company shall be limited to an
aggregate amount owned at any time of not more than $2,000,000; (vii)
shares of any open-end diversified investment company registered under the
Investment Company Act of 1940, as amended, which maintains a constant net
asset value per share in accordance with regulations of the Securities and
Exchange Commission, has aggregate net assets of not less than $50,000,000
on the date of purchase, and either derives at least 35% of its gross
income from interest on or gains from the sale
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of investments of the types described in clause (v) above or unrated
securities of the types described in clause (v) if such assets are of
comparable quality or has at least 85% of the weighted average value of its
assets invested in investments of such types, provided that the purchase of
any shares in any particular investment company shall be limited to an
aggregate amount owned at any time of $2,000,000; (viii) Qualified
Repurchase Agreements with respect to securities described in clause (i) or
(ii) above or clause (xi) below; (ix) in the case of funds in an aggregate
amount of $100,000 or less, an interest-bearing account in a bank or trust
company described in clause (iii) above, the interest on which is payable
at least as often as quarterly and withdrawal from which is unrestricted as
to prior notice; (x) bonds, debentures, notes or other evidences of
indebtedness issued or guaranteed by any agency or instrumentality of the
United States now existing or hereafter created; (xi) bonds, debentures,
notes or other evidences of indebtedness issued by United States
corporations and mortgaged-back securities, which in each case are rated
not less than "Aa" or "AA" or their equivalent by Moody's or S&P; and (xii)
if required to keep the Bonds from becoming "arbitrage bonds" under Section
148 of the Code, obligations not deemed to be "investment property" under
Section 148 of the Code which are rated by either Moody's or S&P in either
of its two highest long term or short term credit rating categories
(without regard to pluses or minuses); provided as to all of the foregoing
(a) that such investment or deposit is not prohibited by federal or state
ranking laws applicable to the Trustee and (b) that such investment or
deposit would not result in an imputed receipt within the meaning of the
Temporary Regulations under Section 148 of the Code.
"Qualified Repurchase Agreement" with respect to any subject
securities means a repurchase agreement collateralized by such subject
securities with any registered broker/dealer or with any commercial bank,
provided that (a) a specific written repurchase agreement governs the
transaction; (b) the subject securities are held, free and clear of any
lien, by the Trustee or an independent third party acting solely as agent
for the Trustee and such third party is (i) a Federal Reserve Bank or (ii)
a bank which is a member of the Federal Deposit Insurance Corporation and
which has combined capital, surplus and undivided profits of not less than
$25,000,000, and the Trustee shall have received written confirmation from
such third party that it holds such subject securities, free and clear of
any lien, as agent for the Trustee; (c) the repurchase agreement has a term
of 30 days or less, or the Trustee will value the subject securities no
less frequently than monthly and will liquidate the collateral securities
if any deficiency in the required collateral percentage is not restored
within five Business Days of such valuation; and (d) the fair market value
of the subject
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securities in relation to the amount of the repurchase obligation,
including principal and interest, is equal to at least 102%.
"Rebate Fund" -- See Section 504.
"Rebate Payment Date" -- See Section 504.
"Record Date" means with respect to each Payment Date the close of
business on the fifteenth day of the month immediately preceding the month
in which such Payment Date occurs.
"Remarketing Agent" means ▇▇▇▇▇▇▇, ▇▇▇▇▇ & Co.
"Remarketing Agreement" means the Remarketing Agreement dated June
27, 1991 among the Borrower, the Issuer and the Remarketing Agent,
including the Letter of Representation and Indemnification dated June 27,
1991 from the Borrower to the Issuer and the Remarketing Agent, each as
from time to time in effect.
"Remarketing Date" means June 27, 1991.
"Rent" means for any period all Base Rent, Contingent Rent,
Additional Contingent Rent and Parking Rent (each as defined in the Ground
Lease) accruing during such period.
"Required Debt Service Reserve Amount" means the least of (a) 10% of
the proceeds of the Bonds, (b) 100% of the maximum annual debt service on
the Outstanding Bonds, and (c) 125% of the average of the annual principal
and interest requirements on the outstanding Bonds.
"Revenue Fund" -- See Section 502A.
"Semiannual Interest Obligation" -- See Section 1001B.
"Shawmut Base Rate" means the per annum rate of interest from time to
time announced by Shawmut Bank, N.A. at its principal office in Boston,
Massachusetts as its Corporate Base Rate.
"S&P" means Standard & Poor's Corporation, a corporation organized
and existing under the laws of the State of New York, its successors and
assigns, and, if such corporation shall be dissolved or liquidated or shall
no longer perform the functions of a securities rating agency, "S&P" shall
be deemed to refer to any other nationally recognized securities rating
agency designated by the Trustee, with the approval of the Borrower, by
notice to the Issuer.
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"Supplemental Equity Fund" -- See Section 505D.
"Taking" -- See Section 703.
"Tax Statement" means, collectively, the Borrower's certificates
containing representations, warranties and covenants as to certain tax
matters dated the Closing Date and the Remarketing Date and signed by the
Borrower.
"Trust Estate" means the Pledged Receipts and other rights assigned
by the Issuer and the Borrower to the Trustee hereunder.
"Trustee" -- See first paragraph of this Agreement.
"Underwriter" means ▇▇▇▇▇▇▇, Sachs & Co.
"Uniform Commercial Code" means Chapter 106 of the Massachusetts
General Laws, as amended.
"United States Obligations" means any bonds or obligations which as
to principal and interest constitute direct obligations of the united
States of America or the timely payment of principal of and interest on
which is guaranteed by the United States of America.
"Yield" -- See Section 504.
Any reference in this Agreement to the Borrower, the Issuer or the
Trustee shall include those which succeed to their functions, duties or
responsibilities pursuant to or by operation of law or who are lawfully
performing their functions. Any reference in this Agreement to any statute
or law or chapter or section thereof shall include all amendments,
supplements or successor provisions thereto.
PART II: THE BONDS
--------------------
Article 3 - The Bonds
Section 301. ISSUANCE OF BONDS, DATES. MATURITIES AND INTEREST. The
Bonds shall be designated "Massachusetts Port Authority Special Project
Revenue Bonds, Series 1990 (Harborside Hyatt Conference Center and Hotel
Project)"; shall be issued in the original aggregate principal amount of
$40,000,000; shall be substantially in the form set forth in Exhibit 301
attached hereto, with such variations, omissions and insertions as are
permitted or required hereby; and shall be dated December 31, 1990 if
authenticated prior to the first Interest Payment Date and otherwise shall
be dated as of the Interest Payment Date next preceding the date of their
authentication, except that if authenticated on an Interest Payment Date
they shall be dated as
-15-
of such date of authentication; provided that if at the time of
authentication interest thereon is in default, they shall be dated as of
the date to which interest has been paid or if no interest has been paid,
they shall be dated as of December 31, 1990. Except to the extent otherwise
provided in Section 306 or made necessary as a result of a partial
redemption, the Bonds shall be issued in fully registered form without
coupons numbered from R-82 upwards in denominations of $100,000 or any
integral multiple thereof thereafter, and shall be registered in such names
as shall be requested by the Bondholders.
The Bonds shall be issued in a single series having a stated maturity
date of March 1, 2026. Interest on each Bond shall accrue from its dated
date, payable on each Interest Payment Date.
Section 302. RESERVED.
Section 303. EXECUTION; AUTHENTICATION. Bonds shall be executed on
behalf of the Issuer by the manual or facsimile official signature of the
Chairman, Vice Chairman or Executive Director of the Issuer. The official
seal (which may be facsimile) of the Issuer shall be impressed or imprinted
on all Bonds. In case any officer whose signature shall appear on the Bonds
shall cease to be such officer before the delivery of such Bonds, such
signature shall nevertheless be valid and sufficient for all purposes as if
he or she had remained in office until delivery and any Bonds may be signed
on behalf of the Issuer by such persons as, at the time of execution of
such Bond, shall be the proper officers of the Issuer, even though at the
date of such Bond or of the delivery of this Agreement such person was not
such officer.
No Bond shall be valid or obligatory until authenticated as provided
in Exhibit 301 by the Trustee. Such authentication shall be conclusive
evidence that such Bond has been authenticated and delivered hereunder. The
certificate of authentication on any Bond shall be deemed to have been
executed by the Trustee if manually signed by an authorized signatory of
the Trustee, but it shall not be necessary that the same individual sign
the certificate of authentication on all of the Bonds issued hereunder.
Section 304. INTEREST ON BONDS. The Bonds shall bear interest from
and including the date thereof until payment of the principal thereof shall
have been made or provided for in accordance with the provisions hereof,
whether at maturity, upon redemption or otherwise. The Bonds will bear
interest during the Initial Interest Period at the fixed rate of 6.5% per
annum to (but excluding) June 20, 1991 and at the fixed rate of 6.25% per
annum from (and including) June 20, 1991 to (but excluding) June
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27, 1991. From and after the Remarketing Date the Bonds will bear interest
at the fixed rate of 10% per annum. Interest on the Bonds in all cases will
be computed during the Initial Interest period on the basis of a 365-day
year and for actual days elapsed and thereafter on the basis of a 360-day
year consisting of twelve 30-day months. Interest will be payable as
provided in Exhibit 301.
Section 305. LOST BONDS. If any of the Bonds are lost, wrongfully
taken, mutilated, destroyed or improperly cancelled, the Issuer shall
authorize the issuance of new Bonds to replace them upon proof satisfactory
to the Issuer and the Trustee and (except in the case of mutilated or
improperly cancelled Bonds which are surrendered to the Trustee) upon
giving to the Issuer, the Trustee and the Borrower an indemnity bond in
such amount as the Issuer, the Trustee and the Borrower may require. Each
new Bond shall in all respects be identical with the mutilated, lost,
stolen, destroyed or improperly cancelled Bond. The Issuer and the Trustee
may impose reasonable charges in connection with the issuance of
replacement Bonds under this Section 305, which shall be for the account of
the Bondholders requesting the issuance of replacement Bonds.
Section 306. EXCHANGE AND TRANSFER OF BONDS; BOOK ENTRY SYSTEM. Upon
surrender of a Bond or Bonds at the corporate trust office of the Trustee,
as bond registrar, together with an assignment duly executed by the
Bondholder or his attorney or legal representative in such form and with
such guaranty of signature as shall be satisfactory to the Trustee, the
Bond or Bonds may be exchanged for fully registered Bonds of the same
maturity, aggregating in amount the then unpaid principal amount of the
Bond or Bonds surrendered, of authorized denominations.
As to any Bond, the Bondholder shall be deemed and regarded as the
absolute owner thereof for all purposes and none of the Issuer, the
Borrower or the Trustee shall be affected by any notice to the contrary.
At the option of the Bondholder, any Bond may be presented at the
corporate trust office of the Trustee for endorsement showing the balance
of principal due thereon and the date to which interest has been paid.
Any Bond may be transferred upon the books kept for the registration
and transfer of Bonds only upon surrender thereof to the Trustee, as bond
registrar, together with an assignment duly executed by the Bondholder or
his attorney or legal representative in such form and with such guaranty of
signature as shall be satisfactory to the Trustee; PROVIDED, that the
Trustee shall not be obliged to make any transfer of a Bond during the
period between a Record Date and the corresponding
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Interest Payment Date. Upon the transfer of any such Bond and on request of
the Trustee, the Issuer shall execute, and the Trustee shall authenticate
and deliver, a new Bond or Bonds, registered in the name of the transferee
or transferees, of the same maturity, aggregating in amount the then unpaid
principal amount of the Bond or Bonds surrendered, of authorized
denominations.
BY ACCEPTANCE OF ANY BOND, THE BONDHOLDER AGREES THAT IT WILL NOT
TRANSFER OR GRANT PARTICIPATIONS IN SUCH BOND IN DENOMINATIONS OF LESS THAN
$100,000.
In all cases in which Bonds shall be issued in exchange for or in
replacement of other Bonds, the Bonds to be issued shall be signed and
sealed on behalf of the Issuer, and authenticated by the Trustee as
provided in Section 303. The obligation of the Issuer and the rights of the
Bondholders with respect to such Bonds shall be the same as with respect to
the Bonds being exchanged or replaced. Such registrations of transfers or
exchanges of Bonds shall be without charge to the Bondholders, except that
any taxes or other governmental charges required to be paid with respect to
the same shall be paid by the Bondholder requesting such registration of
transfer or exchange as a condition precedent to the exercise of such
privilege. Any service charge made by the Trustee for any such
registration, transfer or exchange shall be paid by the Borrower.
Whenever any outstanding Bond shall be delivered to the Trustee for
cancellation pursuant to this Agreement, or for exchange or transfer
pursuant to this Section 306, such Bond shall be promptly cancelled and
destroyed by the Trustee and counterparts of a certificate of destruction
evidencing such destruction shall be retained by the Trustee and, if
requested by the Issuer or the Borrower, shall be furnished by the Trustee
to the Issuer or the Borrower, as the case may be.
The foregoing provisions of this Section 306 to the contrary
notwithstanding, following the Initial Interest Period the Bonds will be
issued on the Remarketing Date as one fully registered bond in the name of
Cede & Co., as nominee of The Depository Trust Company, New York, New York
("DTC"), and deposited in the custody of DTC. The actual purchasers of the
Bonds (the "Beneficial Owners") will not receive physical delivery of the
Bonds. Individual purchases of the Bonds may be made in book-entry form
only in principal amounts of $100,000 or any integral multiple thereof.
Principal and interest payments on the Bonds will be made to DTC or its
nominee as Bondholder.
DTC shall pay interest to the Beneficial Owners of record through its
participants as of the close of business on the Record Date. DTC shall pay
the redemption price of the Bonds called for redemption to the Beneficial
Owners of record through
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its participants as of the close of business 15 days prior to the date
fixed for redemption. The Trustee shall notify DTC, to the extent possible,
of any notice required to be given pursuant to this Agreement not less than
15 days prior to the date upon which such notice is required to be given.
Transfer of ownership interests in the Bonds shall be made by DTC and
its participants, acting as nominees of the Beneficial Owners, in
accordance with rules specified by DTC and its participants. There can be
no assurance that DTC, its participants or other nominees of the Beneficial
Owners will act in accordance with such rules or on a timely basis.
Bond certificates will be issued directly to owners of the Bonds
other than DTC, or its nominee, upon the occurrence of the following events
(subject, however, to operation of the two sentences following clause (c)
below):
(a) DTC determines not to continue to act as securities
depository for the Bonds; or
(b) the Borrower with the consent of the Issuer and the
Trustee has advised DTC of its determination that DTC is incapable of
discharging its duties; or
(c) the Borrower with the consent of the Issuer and the
Trustee has determined that it is in the best interest of the Bondholders
not to continue the book-entry system of transfer or that interests of the
beneficial owners of the Bonds might be adversely affected if the book-
entry system of transfer is continued.
Upon occurrence of the event described in (a) or (b) above the Borrower
shall attempt to locate another qualified securities depository. If the
Borrower fails to locate another qualified securities depository to replace
DTC, the Trustee shall authenticate and deliver Bonds in certificated form.
In the event the Borrower makes the determination noted in (b) or (c) above
(as to which the Borrower undertakes no obligation to make any
investigation to determine the occurrence of any events that would permit
the Borrower to make any such determination), and has made provisions to
notify the beneficial owners of the Bonds by mailing an appropriate notice
to DTC, the Borrower shall cause the Trustee to authenticate and deliver
Bonds in certificated form pursuant to Exhibit 301 of this Agreement to any
DTC participants making such a request. Principal of and interest on the
Bonds shall be payable as otherwise provided in this Article 3. The Bonds
will be transferable in accordance with this Section 306.
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Section 307. TEMPORARY BONDS. Pending the preparation of definitive
Bonds, the Issuer may execute, and upon its request in writing, the Trustee
shall authenticate and deliver one or more printed, lithographed
or-typewritten temporary Bonds (including temporary Bonds printed by offset
or photocopying). Temporary Bonds shall be issuable as registered Bonds
without coupons, of any authorized denomination, and substantially in the
form of definitive Bonds but with such omissions, insertions and variations
as may be appropriate for temporary Bonds, all as may be determined by the
Issuer. Temporary Bonds may contain such reference to any provisions of
this Agreement as may be appropriate. Every temporary Bond shall be
executed by the Issuer and be authenticated by the Trustee upon the same
conditions and in substantially the same manner, and with like effect, as
the definitive Bonds. As promptly as practicable the Issuer shall execute
and shall furnish definitive registered Bonds without coupons and thereupon
temporary Bonds may be surrendered in exchange therefor without charge at
the corporate trust office of the Trustee, and the Trustee shall
authenticate and deliver in exchange for such temporary Bonds a like
aggregate principal amount of definitive Bonds of authorized denominations.
Until so exchanged the temporary Bonds shall be entitled to the same
benefits under this Agreement as definitive Bonds.
Article 4 - Redemption of Bonds Before Maturity
Section 401. REDEMPTION OF BONDS. The Bonds shall be subject to
redemption prior to maturity as follows:
(a) OPTIONAL REDEMPTION. The Bonds shall be subject to redemption
prior to stated maturity on and after March 1, 2001 by the Issuer, at the
written direction of the Borrower upon not less than 35 days' notice to the
Trustee in whole on any date or in part on any Payment Date (but in the
case of a partial redemption prior to the Credit Enhancement Termination
Date only so long as the amount on deposit in the Equity Reserve Fund shall
equal or exceed the aggregate amount to be paid thereto under Section 3.2
of the Credit Enhancement Agreement without regard to any deferral or
limitation permitted thereunder) in the amount of $100,000 or any integral
multiple thereof, at the following redemption price (expressed as a
percentage of the principal amount of the Bonds, or portion thereof, to be
redeemed), plus accrued interest to the redemption date:
Redemption Period Redemption
(both dates inclusive) Price
---------------------- ----------
March 1, 2001 through February 28, 2002 102%
March 1, 2002 through February 28, 2003 101%
March 1, 2003 and thereafter 100%
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(b) EXTRAORDINARY OPTIONAL REDEMPTION. The Bonds may be redeemed in
whole but not in part by the Issuer at any time, at the written direction
of the Borrower upon not less than 35 days' notice to the Trustee, at a
redemption price equal to 100% of the principal amount thereof plus accrued
interest thereon to the redemption date, without premium, under any of the
following conditions:
(i) The Project shall have been damaged or destroyed to such
extent that, in the reasonable judgment of the Borrower (A) the Project
cannot be reasonably restored within a period of six months from the date
of such damage or destruction, or (B) the Borrower is thereby prevented
from carrying on its normal operation of the Project for a period of six
months from the date of such damage or destruction; or
(ii) Title to, or the temporary use of all or a substantial
part of the Project shall have been taken or condemned by a competent
authority, which taking or condemnation results or is likely to result in
the Borrower being thereby prevented or likely to be prevented from
carrying on its normal operation of the Project for a period of six months;
or
(iii) As a result of changes in the Constitution of the United
States of America or of the Commonwealth or of legislative or
administrative action (whether state or federal) or by final decree or
judgment of any court or administrative body (whether state or federal),
the Bonds or this Agreement become void or unenforceable or impossible of
performance in accordance with the intent and purpose of the parties as
expressed therein or herein.
(c) MANDATORY REDEMPTION. The Bonds shall be subject to mandatory
redemption as provided in this Section 401(c):
(i) The Bonds shall be redeemed in part on any date from
moneys remaining in the Project Fund upon the completion of the Project, to
the extent required under Section 501C, at a redemption price equal to 100%
of the principal amount redeemed plus accrued interest thereon to the
redemption date, without premium.
(ii) The Bonds shall be redeemed in part on any date from
proceeds of casualty insurance or Takings deposited with the Bond Fund for
such purpose pursuant to SectiOns 502(e) and 702 or 703 at a redemption
price equal to 100% of the principal amount redeemed plus accrued interest
thereon to the redemption date, without premium.
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(iii) The Bonds shall be redeemed in part on March 1 in each
year, commencing March 1, 2001, at a redemption price equal to 100% of the
principal amount redeemed plus accrued interest thereon to the redemption
date, without premium, in the principal amount set forth below next to such
date:
DATE AMOUNT
---- ------
March 1, 2001 $ 400,000
March 1, 2002 400,000
March 1, 2003 400,000
March 1, 2004 500,000
March 1, 2005 500,000
March 1, 2006 600,000
March 1, 2007 600,000
March 1, 2008 700,000
March 1, 2009 800,000
March 1, 2010 900,000
March 1, 2011 1,000,000
March 1, 2012 1,000,000
March 1, 2013 1,100,000
March 1, 2014 1,300,000
March 1, 2015 1,400,000
March 1, 2016 1,500,000
March 1, 2017 1,700,000
March 1, 2018 1,900,000
March 1, 2019 2,000,000
March 1, 2020 2,200,000
March 1, 2021 2,500,000
March 1, 2022 2,700,000
March 1, 2023 3,000,000
March 1, 2024 3,300,000
March 1, 2025 3,600,000
leaving the principal amount of $4,000,000 due and payable on the
stated maturity date of March 1, 2026.
The requirements of clause (iii) of this Section 401(c) are
subject, however, to the provision that any partial redemption of Bonds
under Section 401(a) or under clause (i) or (ii) of this Section 401(c)
shall reduce the mandatory scheduled redemption requirements of clause
(iii) of this Section 401(c) as provided in this paragraph. In the event of
a partial redemption of Bonds under Section 401(a) or under clause (i) or
(ii) of this Section 401(c), the Trustee shall allocate the principal
amount redeemed among the scheduled redemptions provided in clause (iii) of
this Section 401(c) in a manner which, as nearly as practicable, will
maintain the average life to maturity of the Bonds. Such allocations shall
be made only in units of $100,000. Each such allocation by the Trustee
shall, in
-22-
the absence of manifest error, be conclusive and binding upon the
Issuer, the Borrower, the Trustee and the Bondholders. The Trustee promptly
shall give notice of each such allocation by written statement setting
forth the revised schedule of mandatory redemptions under clause (iii) of
this Section 401(c) by mail to the Issuer, the Borrower and each
Bondholder.
(iv) In the event of the occurrence of a Determination of
Taxability, the Bonds shall be redeemed in whole on a date selected by the
Borrower not later than 180 days following such occurrence at a redemption
price equal to 102% of the outstanding principal amount thereof plus
accrued interest thereon to the redemption date. In the event of such
redemption, all funds held under this Agreement other than amounts on
deposit in the Rebate Fund and funds necessary to pay Additional Payments
shall be available to pay principal of and premium and interest on the
Bonds. As used herein, a "Determination of Taxability" shall be deemed to
occur if a final decree or judgment of any federal court or a final action
of the Internal Revenue Service determines that interest paid or payable on
any Bond is or was includable in the gross income of a Bondholder for
federal income tax purposes under the Code (other than a holder who is a
substantial user or related person within the meaning of Section 147(a) of
the Code) due to any action taken or omitted to be taken by the Borrower or
the Issuer. No such decree, judgment or action will be considered final for
this purpose, however, unless the Borrower or the Issuer has been given
notice, and, if it is so desired and is legally allowed, has been afforded
the opportunity to contest the same, either directly or in the name of any
Bondholder, and until conclusion of any appellate review, if sought. If the
Trustee receives written notice from any Bondholder stating that such
Bondholder has been notified in writing by the Internal Revenue Service
that it proposes to include the interest on such Bond in the gross income
of such holder for the reasons described herein or any other proceeding has
been instituted against such holder which may lead to a final decree,
judgment or action as described herein, then the Trustee shall promptly
give notice thereof to the Borrower, the Issuer and each Bondholder. Such
holder will afford the Borrower the opportunity to contest such claim or
proceeding, either directly or in the name of such holder, until conclusion
of any appellate review, if sought. The Trustee shall thereafter coordinate
any similar requests or notices it may have received from other Bondholders
and shall keep them informed of the progress of any administrative
proceedings or litigation.
-23-
Section 402. SELECTION OF BONDS TO BE REDEEMED. A redemption of Bonds
shall be a redemption of the whole or of any part of the Bonds, provided,
that there shall be no partial redemption of less than $100,000. If less
than all the Bonds shall be called for redemption under any provision of
this Agreement permitting such partial redemption the particular Bonds to
be redeemed shall be selected by the Trustee, in such manner as the Trustee
in its discretion may deem fair and appropriate; provided, however (a) that
the portion of any Bond to be redeemed under any provision of this
Agreement shall be in the principal amount of $100,000 or any multiple
thereof, (b) that, in selecting Bonds for redemption, the Trustee shall
treat each Bond as representing that number of Bonds which is obtained by
dividing the principal amount of such Bond by $100,000 and (c) that, to the
extent practicable, the Trustee will not select any Bond for partial
redemption if the amount of such Bond remaining outstanding would be
reduced by such partial redemption to less than $100,000. If there shall be
called for redemption less than all of a Bond, the Issuer shall execute and
deliver and the Trustee shall authenticate, upon surrender of such Bond,
and at the expense of the Borrower and without charge to the owner thereof,
a replacement Bond in the principal amount of the unredeemed balance of the
Bond so surrendered.
At its option, to be exercised on or before the 60th day next
preceding any mandatory scheduled redemption date pursuant to Section
401(c) (iii), the Borrower may deliver to the Trustee for cancellation
Bonds in any aggregate principal amount which have been purchased by the
Borrower in the open market. Each Bond 50 delivered shall be credited by
the Trustee at 100% of the principal amount thereof against the mandatory
scheduled redemption requirement provided in Section 401(c) (iii) on such
mandatory redemption date and against the monthly Loan payments required to
be made with respect to such mandatory scheduled redemption requirement
under Section 1001B; and any excess of such amount shall be credited
against future mandatory scheduled redemption requirements and against the
corresponding portions of the monthly Loan payments in chronological order.
The Borrower, will, on or before the 60th day preceding each mandatory
scheduled redemption date, furnish the Trustee with a certificate, signed
by an Authorized Borrower Representative, stating the extent to which the
provisions of the first sentence of this paragraph are to be availed of
with respect to such mandatory redemption requirements for such mandatory
redemption date; unless such certificate is so timely furnished to the
Trustee, the mandatory redemption requirements provided for such date in
Section 401(c) (iii) and the corresponding portions of the monthly Loan
payments shall not be reduced under the provisions of this paragraph.
-24-
Section 403. PROCEDURE FOR REDEMPTION.
(a) In the event any of the Bonds are called for redemption, the
Trustee shall give notice, in the name of the Issuer, of the redemption of
such Bonds, which notice shall (i) specify the Bonds to be redeemed, the
redemption date, the redemption price, and the place or places where
amounts due upon such redemption will be payable (which shall be the
corporate trust office of the Trustee) and, if less than all of the Bonds
are to be redeemed, the numbers of the Bonds, and the portions of the
Bonds, so to be redeemed, (ii) state any condition to such redemption, and
(iii) state that on the redemption date, and upon the satisfaction of any
such condition, the Bonds to be redeemed shall cease to-bear interest.
CUSIP number identification shall accompany all redemption notices. Such
notice may set forth any additional information relating to such
redemption. Such notice shall be given by registered or certified mail at
least 30 days (or, in the case of acceleration of the Bonds pursuant to
Section 1102, seven days) but not more than 60 days prior to the date fixed
for redemption to each Registered Owner of Bonds to be redeemed at its
address shown on the registration books kept by the TrUstee provided,
however, that failure to give such notice to any Bondholder or any defect
in such notice shall not affect the validity of the proceedings for the
redemption of any of the other Bonds.
Except at any time during which all of the Bonds are registered in
the name of Cede & Co., notice of such redemption also shall be sent by
registered mail, overnight delivery service or other similar means, postage
prepaid, to the municipal registered securities depositories named below
which are known to the Trustee to be holding Bonds and to at least two of
the national information services named below that disseminate securities
redemption notices, when possible, at least five days prior to the mailing
of notices required by the first paragraph above, but in any event at least
30 days (or, in the case of acceleration of the Bonds pursuant to Section
1102, seven days) and not more than 60 days prior to the redemption date;
provided that neither failure to receive such notice nor any defect in
any-notice so mailed shall affect the sufficiency of the proceedings for
the redemption of such Bonds.
Securities depositories include The Depository Trust Company, ▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Fax- (▇▇▇) ▇▇▇-▇▇▇▇ or 4190;
Midwest Securities Trust Company, Capital structures-Call Notification, ▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Fax-(312) ▇▇▇-▇▇▇▇; Pacific
Securities Depository Trust Company, Pacific and Company, ▇.▇. ▇▇▇ ▇▇▇▇,
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Fax-(415) ▇▇▇-▇▇▇▇; Philadelphia
Depository Trust Company, Reorganization Division, ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇,
-▇▇-
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: Bond Department, Fax-(215)
▇▇▇-▇▇▇▇ or, in accordance with the then current guidelines of the
Securities and Exchange Commission, to such other addresses and/or such
other securities depositories or any such other depositories as the Issuer
may designate in writing to the Trustee.
Information services include Financial Information, Inc. "Daily
Called Bond Service", 30 ▇▇▇▇▇▇▇▇▇▇ Street, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇, Attention: Editor; ▇▇▇▇▇ Information Services, "Called Bond
Service", ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇;
▇▇▇▇▇'▇ Investors Service "Municipal and Government", ▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇
▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: Municipal News Reports;
Standard and Poor's Corporation "Called Bond Record", ▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇
▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇; or, in accordance with then current guideline of the
Securities and Exchange Commission, to such other addresses and/or such
other services providing information with respect to called bonds, or any
other such services as the Issuer may designate in writing to the Trustee.
(b) Any Bonds and portions of Bonds which have been duly selected
for redemption and which are paid in accordance with Section 510 shall
cease to bear interest on the specified redemption date.
Article 5 - Source and Application of Funds
Section 501. PROJECT FUND. A Project Fund is hereby established by
the Issuer with the Trustee. Within the Project Fund there are hereby
established three separate accounts, viz., the Capitalized Interest
Account, the Costs of Remarketing Account and the Construction Account.
A. SOURCE AND DISBURSEMENTS. Not later than one day following the
Remarketing Date, the funds on deposit in the Escrow Account established
under the Original Agreement shall be applied as follows: (1) $38,333.33
(on the Remarketing Date) to pay interest on the Bonds to the existing
holders thereof, (2) $4,000,000 to be deposited into the Debt Service
Reserve, (3) $36,000,000 to be deposited into the Project Fund and (4) the
remainder to be deposited into the Rebate Fund. The $36,000,000 deposited
into the Project fund shall be allocated as follows: $8,044,444 to be
deposited in the Capitalized Interest Account, $800,000 to be deposited in
the Costs of Remarketing Account and the remainder to be deposited in the
Construction Account.
(a) DISBURSEMENTS FROM CAPITALIZED INTEREST ACCOUNT. Not
later than 12:00 noon, Eastern time, on the Business Day next preceding
each March 1 and September 1, commencing March 1, 1992 and ending on the
March 1 or September 1 next
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preceding the Estimated Completion Date, the Trustee shall withdraw
from the Capitalized Interest Account and deposit into the Bond Fund an
amount which, together with any funds then on deposit in- the Bond Fund,
shall be sufficient to pay all interest due on the Bonds on such March 1 or
September 1. Payment of such amount in full under this Section 501A shall
satisfy the obligation of the Borrower to make such payment under Section
1001A. Prior to the Completion Date, all investment earnings on the
Capitalized Interest Account shall be transferred when realized to the
Construction Account. In addition, in the event that the Borrower shall
give the Trustee written notice that the Borrower expects the acquisition,
construction, equipping and furnishing of the Project to be completed by a
date prior to the Estimated Completion Date, which notice shall specify the
new expected Completion Date and shall be accompanied by a certificate of
the Construction Inspector that it is reasonable to expect the Project to
be completed by such date, then the Trustee shall calculate the amount
required to be retained in the Capitalized Interest Account in order to
provide for the payment of interest on the Bonds through the new expected
Completion Date (taking into account earnings on investments of such
amount, to the extent that such investments actually have been made) and
shall transfer to the Construction Account an amount equal to the positive
difference, if any, between the amount then on deposit in the Capitalized
Interest Account and the amount required to be retained as provided above.
(b) DISBURSEMENTS FROM COSTS OF REMARKETING ACCOUNT. Not
later than one day following the Remarketing Date, the Trustee shall
transfer from the Costs of Remarketing Account to the Construction and
Operating Costs Contingency Fund the sum of up to $500,496.70, representing
reimbursement and recontribution to the Project of costs of issuance and
remarketing identified in the Equity Costs Certificate, and shall
distribute the remainder of the funds in the Costs of Remarketing Account
as instructed by the Borrower.
(c) DISBURSEMENTS FROM CONSTRUCTION ACCOUNT. Not later than
one day following the Remarketing Date, there shall be transferred from the
Construction Account to the Construction and Operating Costs Contingency
Fund the sum of up to $2,199,466.99, representing reimbursement and
recontribution to the Project of eligible project costs identified in the
Equity Costs Certificate. Disbursements from the Construction Account of
the Project Fund shall be applied for the payment or reimbursement of the
following costs:
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(i) Costs incurred directly or indirectly for or in
connection with the acquisition, construction, equipping or furnishing of
the Project, including preliminary planning and studies, architectural,
legal, engineering and supervisory services, other labor and services,
materials, acquisition and installation.
(ii) Any other incidental and necessary costs and expenses
relating to the acquisition, construction, equipping or furnishing of the
Project, including without limitation interest on the Bonds, if any,
accruing after the Estimated Completion Date and prior to the Completion
Date and not paid from the Capitalized Interest Account, but not including
"issuance costs" within the meaning of Section 147(g) (1) of the Code.
Such disbursements from the Construction Account shall be made only
as provided in and subject to the terms of the Disbursement Agreement.
Except as provided in the first sentence of this subsection (c), no funds
shall be disbursed from the Construction Account to pay or reimburse any
costs listed in the Equity Costs Certificate.
In addition, in the event that the Completion Date shall not have
occurred on or before the Estimated Completion Date, then on each date
thereafter occurring on or before the Completion Date on which a Loan
payment is due and payable under Section 1001A or 1001B, the Trustee
without need for requisition shall transfer from the Construction Account
to the Bond Fund such amount, if any, as shall be necessary to meet the
Loan payment required to be made on such date. Payment of any Loan payment
in full on any such date under this Section 501A shall satisfy the
obligation of the Borrower to make such payment under Section 1001B.
B. TRANSFER OF CAPITALIZED INTEREST ACCOUNT ON COMPLETION. On the
earlier of the Estimated Completion Date and the Completion Date, the
Trustee shall withdraw from the Capitalized Interest Account and deposit
into the Bond Fund an amount equal to the amount of interest on the Bonds
accrued through such date and unpaid, less any amount then on deposit in
the Bond Fund. Any amount remaining in the Capitalized Interest Account
shall be transferred to the Construction Account, and the Capitalized
Interest Account thereupon shall be closed.
C. TRANSFER OF CONSTRUCTION ACCOUNT ON COMPLETION. Except as
otherwise provided in the next-to-last sentence of this Section 501C, all
moneys in the Construction Account (including moneys earned thereon by
investment and amounts transferred from the Capitalized Interest Account
pursuant to Section 501B) remaining after the Completion Date shall
promptly at the written
-28-
direction of an Authorized Borrower Representative be (i) paid into the
Bond Fund and applied promptly to redeem principal of the Bonds in
accordance with Section 401(c) (i) so as, to the extent possible, to
exhaust such amount, or (ii) paid into the Bond Fund and applied to pay
interest on the Bonds, or (iii) such combination of the foregoing as is
provided in such direction; provided that (a) before any funds are applied
pursuant to clause (ii) or (iii) of this Section 501C the Trustee shall
have received an opinion of Bond Counsel or a ruling of the Internal
Revenue Service that such payment will not adversely affect the exclusion
from gross income for federal income tax purposes of the interest paid on
the Bonds and (b) the Trustee shall give notice of any redemption of Bonds
pursuant to clause (i) or (iii) of this Section 501C to the Bondholders at
least 30 days prior to the redemption date and otherwise in accordance with
Section 403. However, amounts certified to the Trustee by the Authorized
Borrower Representative shall be retained in the Construction Account for
payment of costs referred to in Section 501A not yet due and payable. Any
such retained funds remaining after full payment of all such costs shall be
likewise applied as aforesaid.
D. BORROWER REQUIRED TO PAY COSTS IF PROJECT FUND INSUFFICIENT. If
the moneys in the Project Fund are not sufficient to pay in full the costs
to be paid therefrom, the Borrower agrees to complete the acquisition,
construction, equipping and furnishing of the Project and to pay all costs
therefor in excess of the moneys available in the Project Fund. The Issuer
makes no warranty, express or implied, that moneys paid into the Project
Fund or otherwise available to complete the Project will be sufficient to
pay all costs therefor.
Section 502. BOND FUND. A Bond Fund is hereby established by the
Issuer with the Trustee, and the Trustee is hereby appointed paying agent
for the Bonds. Moneys shall be deposited in the Bond Fund from time to time
and shall be applied solely as follows:
(a) [RESERVED]
(b) Upon completion of the Project or upon the occurrence of
other events specified in Section 501C, funds shall be transferred from the
Construction Account of the Project Fund to the Bond Fund and applied in
accordance with Section 501C.
(c) Loan payments by the Borrower pursuant to Sections 1001A
and 1001B, amounts transferred from the Reserve Fund pursuant to Section
502A, amounts transferred from the Capitalized Interest Account or
Construction Account of the Project Fund pursuant to Section 501A, amounts
transferred from the Debt Service Reserve Fund pursuant to
-29-
Sections 503 (a), (b) and (c) , amounts transferred from the
Construction and Operating Costs Contingency Fund pursuant to Sections
505(a) and (b), amounts transferred from the Equity Reserve Fund pursuant
to Sections 505A(a) and (b), amounts transferred from the Supplemental
Equity Fund pursuant to Sections 505D(a), (b) and (d) and amounts
transferred from the Credit Enhancement Account pursuant to Sections
505B(b) and (c) shall be deposited into the Bond Fund and shall be applied
to pay principal of and interest on the Bonds as and when the same become
due.
(d) Sums for the redemption of Bonds as described in Section
401 shall be deposited into the Bond Fund. Such funds shall be applied to
make such redemptions.
(e) Proceeds from insurance or condemnation awards shall be
deposited in the Bond Fund to the extent provided in Section 702 or 703.
The Trustee shall apply the monies so deposited in the Bond Fund to redeem
the principal of the Bonds as provided in Section 403, without premium,
immediately upon the earliest practicable redemption date selected by the
Trustee for the redemption without further authorization from the Borrower
or the Issuer so as, to the extent possible, to exhaust such amount. Any
balance remaining after such application shall be applied to pay interest
on the Bonds.
(f) Sums received upon exercise of remedies by the Trustee or
the Issuer after an Event of Default (except sums received by the Issuer
pursuant to rights not assigned by the Issuer to the Trustee hereunder),
amounts transferred from the Revenue Fund as provided in the last sentence
of Section 502A, amounts transferred from the Debt Service Reserve Fund
pursuant to Section 503(d), amounts transferred from the Construction and
Operating Costs Contingency Fund pursuant to Section 505(c), amounts
transferred from the Equity Reserve Fund pursuant to Section 505A(c),
amounts transferred from the Supplemental Equity Fund pursuant to Section
505D(c) and amounts transferred from the Credit Enhancement Account
pursuant to Section 505B(d) shall be deposited in the Bond Fund. Such
monies shall be applied in accordance with the provisions of Section 1105.
Section 502A. REVENUE FUND. A Revenue Fund is hereby established by
the Issuer with the Trustee. All amounts remitted by Hyatt Corporation to
the Borrower pursuant to Section 4.3 of the Hyatt Management Agreement
shall be paid directly to the Trustee and deposited into the Revenue Fund.
The Borrower shall instruct Hyatt Corporation to make such payments
directly to the Trustee. In the event that the Hyatt Management Agreement
shall
-30-
be terminated prior to the termination of this Agreement, the Borrower not
less frequently than monthly shall pay to the Trustee for deposit into the
Revenue Fund an amount equal to the sum of (i) the Funds Available Before
Other Obligations (Income) for such month calculated as provided in the
statement of "Projected Debt Service Coverage" set forth at pages 15 and 16
of the Remarketing Official Statement relating to the Bonds dated June 27,
1991 plus (ii) the amount of Rent accruing for such month. The Trustee
shall apply amounts in the Revenue Fund, not less often than monthly, as
follows:
(a) To pay Rent to the Issuer as lessor under the Ground
Lease, in such amounts as the Borrower from time to time shall notify the
Trustee in writing.
(b) To pay Loan payments required under Sections 1001A and
1001B.
(c) To pay Additional Payments required under Section 1001D.
(d) On or before the Credit Enhancement Termination Date, to
pay to the Trustee for deposit into the Equity Reserve Fund, or after the
Maximum Amount of Credit shall have been reduced to $500,000 to pay to the
Credit Enhancer directly,. the Credit Enhancement Fee under Section 3.2 of
the Credit Enhancement Agreement.
(e) To replenish the Debt Service Reserve Fund as provided in
Section 1001E.
(f) On or before the Credit Enhancement Termination Date, to
pay any amounts owing under Section 3.1 of the Credit Enhancement
Agreement.
(g) On or before the Credit Enhancement Termination Date, to
replenish the Equity Reserve Fund as provided in Section 1001F.
(h) On and after the Credit Enhancement Termination Date, to
pay any amounts due and payable but unpaid under Section 13(b) of the
Credit Enhancement Agreement.
(i) On or prior to the Credit Enhancement Termination Date,
in the event that the requirements for reducing the Maximum Amount of
Credit to $500,000 under Section 2.5(b) of the Credit Enhancement Agreement
shall have been met except for the condition that $500,000 shall be on
deposit in the Supplemental Equity Fund or in the event that the amount on
deposit therein subsequently shall have been reduced to less than $500,000
for any reason, to the
-31-
supplemental Equity Fund to the extent necessary to increase the
amount on deposit therein to $500,000.
To the extent that as of-the close of business on the first Business Day in
March and September in any year, commencing on the first such date
following the Completion Date, there shall remain monies in the Revenue
Fund after satisfaction of all payments listed above through such date and
no Default shall exist hereunder (or, prior to the Credit Enhancement
Termination Date, under the Credit Enhancement Agreement) , then such
monies (excluding any portion thereof properly allocable to the accrued
portion of a future payment listed above) shall be distributed to the
Borrower. Payment by the Trustee under this Section 502A of an obligation
of the Borrower referred to above shall satisfy such obligation in the same
manner as if made by the Borrower directly. However, failure of the Trustee
to make any such payment shall not excuse the failure of the Borrower to
meet the obligation in question. Upon any acceleration under Section 1102,
the Trustee forthwith shall transfer all amounts in the Revenue Fund to the
Bond Fund to be applied as provided in Section 1105.
Section 503. DEBT SERVICE RESERVE FUND. A Debt Service Reserve Fund
is hereby established with the Trustee for the benefit of the Bondholders.
On the Remarketing Date an amount equal to the Required Debt Service
Reserve Amount shall be deposited in the Debt Service Reserve Fund; The
Trustee shall apply amounts held in the Debt Service Reserve Fund as
follows:
(a) The Trustee shall determine the value of the investments
and funds on deposit in the Debt Service Reserve Fund as of each March 31,
June 30, September 30 and December 31, commencing December 31, 1991, and on
such other dates as the Borrower shall request upon reasonable written
notice. Not later than 21 days following each such valuation, the Trustee
shall report to the Borrower the difference, if any, between (i) the value
of the investments and funds on deposit in the Debt Service Reserve Fund as
of such valuation date and (ii) the Required Debt Service Reserve Amount.
If such difference is positive, then on or before the applicable 21st day,
the Trustee shall withdraw an amount equal to such difference from the Debt
Service Reserve Fund and deposit the same, if the deposit is made on or
prior to the earlier of the Estimated Completion Date and the Completion
Date, into the Construction Account of the Project Fund or, if the deposit
is made after such date, into the Bond Fund. If such difference is
negative, the Borrower will replenish the Debt Service Reserve Fund as
provided in Section, 1001E.
-32-
(b) In the event that as of the close of business on the
Business Day next preceding a Payment Date moneys held in the Bond Fund are
insufficient to pay the principal of and premium, if any, and interest on
the Bonds due and payable on such Payment Date, then immediately following
the opening of business on such Payment Date the Trustee shall transfer
from the Debt Service Reserve Fund to the Bond Fund an amount equal to the
lesser of (i) the amount of such insufficiency and (ii) the amount then on
deposit in the Debt Service Reserve Fund; provided that no such transfer
shall be made unless all of the Revenue Fund, the Construction and
Operating Costs Contingency Fund, the Equity Reserve Fund and the
Supplemental Equity Fund shall have been exhausted; and provided, further,
that no such transfer shall be made on or prior to the Completion Date
unless-the Project Fund shall have been exhausted.
(c) In the event that any Loan Payment required to be made
under Section 1001B shall not be made on the date due (whether directly by
the Borrower or pursuant to Section 501A or 502A), then on the next
succeeding Business Day the Trustee shall transfer from the Debt Service
Reserve Fund to the Bond Fund an amount equal to the lesser of (i) the
amount of such insufficiency and (ii) the amount then on deposit in the
Debt Service Reserve Fund; provided that no such transfer shall be made
unless all of the Revenue Fund; the Construction and Operating Costs
Contingency Fund, the Equity Reserve Fund and the Supplemental Equity Fund
shall have been exhausted; and provided, further, that no such transfer
shall be made on or prior to the Completion Date unless the Project Fund
shall have been exhausted.
(d) Upon any acceleration under Section 1102, the Trustee
forthwith shall transfer all amounts in the Debt Service Reserve Fund to
the Bond Fund to be applied as provided in Section 1105.
(e) In the event that the Borrower shall be unable to pay
from any other source amounts required to be deposited into the Rebate Fund
or paid to the United States of America under Section 504, then upon
written requisition therefor from the Borrower the Trustee shall transfer
from the Debt Service Reserve Fund to the Rebate Fund the amount required
to be deposited into the Rebate Fund or paid to the United States of
America under Section 504; provided, that no such transfer shall be made
unless no Default shall have occurred and be continuing (other than a
Default under Section 504) and unless the Trustee shall have been furnished
an opinion of Bond Counsel or a ruling of the Internal Revenue Service that
such application of funds in
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the Debt Service Reserve Fund would not adversely affect the
exclusion from gross income for federal tax purposes of the interest paid
on the Bonds.
(f) Upon receipt of written advice of Bond Counsel from time
to time stating that the principal amount of the Debt Service Reserve Fund
must be reduced in order to assure that the interest income on the Bonds
will not become subject to federal income taxation, stating that Bond
Counsel does not consider that any other means of protecting the tax-exempt
status of such interest income (such as restricting yield on amounts in the
Debt Service Reserve Fund, investing the same only in tax-exempt
obligations or other methods) is available and specifying the amount of the
reduction required, the Trustee promptly shall transfer to the Bond Fund
the amount so specified.
Section 504. REBATE FUND. The Borrower covenants that it shall take
all action necessary to comply with Section 148 of the Code, including the
payment when due of all amounts payable to the United States of America
thereunder, and shall refrain from taking any action contrary to Section
148 of the Code. For this purpose, a Rebate Fund has been established
pursuant to this Section 504, but to the extent any of the provisions of
this Section 504 are inconsistent with Section 148 of the Code, the
Borrower shall not be required to comply with such provisions but shall be
required to comply with Section 148 of the Code.
(a) ESTABLISHMENT. A Rebate Fund is hereby established with the
Trustee. Such Fund shall be for the sole benefit of the United States of
America and shall not be subject to the lien of this Agreement or to the
claim of any other Person, including without limitation the Bondholders and
the Issuer, and monies in such Fund shall not be commingled with moneys in
any other Fund or Account established under this Agreement. The Rebate Fund
is established for the purpose of compliance with Section 148(f) of the
Code. The Borrower and the Issuer agree that the requirements of this
Section 504 are subject to, and shall be interpreted in accordance with,
Section 148(f) of the Code.
(b) TRANSFERS TO REBATE FUND. Promptly following the close of each
Bond Year and also upon the final maturity date of the Bonds (the "Final
Computation Date"), the Trustee shall upon the direction of the Borrower as
prescribed in subsections (c) and (d) hereof:
(i) transfer to the Rebate Fund first, from the Project Fund,
and second, to the extent amounts in the project Fund are insufficient,
from the Bond Fund, and third, to the extent amounts in the Bond Fund are
insufficient, from (in order) the Construction and
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Operating Costs Contingency Fund, the Supplemental Equity Fund and
the Equity Reserve Fund, an amount (to the extent available) equal to the
Excess Earnings as determined by the Borrower under subsection (c) hereof
(less any amount already transferred to the Rebate Fund on account of such
period from the Escrow Account of the Project Fund pursuant to Section 405)
; and
(ii) pay to the United States of America, if then required by,
and otherwise in accordance with, the provisions of subsection (d) hereof,
such amounts from the Rebate Fund as the Borrower shall determine, or cause
to be determined, to be due. Any amounts due in excess of amounts in the
Rebate Fund shall be paid by the Borrower.
(c) CALCULATION OF EXCESS EARNINGS.
(i) Promptly upon the close of each month, and also promptly
after the Final Computation Date, or at such other times as may be
specified by the Borrower, the Trustee shall provide the Borrower with a
statement of earnings (for the period since the date of the immediately
preceding statement of earnings) on all Funds or accounts with respect to
the Bonds held in trust under this Agreement. The statement shall include
the purchase and sales prices of all Investment Property, the dates of each
investment transaction, information as to whether such transactions were
made at a discount or premium, and such other information known to the
Trustee as the Borrower shall reasonably require. Within 45 days after the
close of each Bond Year or after such Final Computation Date, as the case
may be, the Borrower shall thereupon determine or cause to be determined
the amount of Excess Earnings on all Gross Proceeds of the Bonds, whether
or not held hereunder invested in Investment Property as such terms are
used in Section 148 of the Code.
In general, "Excess Earnings" for any period of time means the
sum of (1) the excess of --
(A) the aggregate amount earned during such period of time on
all "Nonpurpose Investments" (including gains on the disposition of such
investments) in which "Gross Proceeds" of the issue are invested (other
than amounts attributable to an excess described in this subsection (c) (i)
(l)), over
(B) the amount that would have been earned during such period
of time if the "Yield" on such Nonpurpose Investments (other than amounts
attributable to an excess
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described in this subsection (c) (i) (1)) had been equal to the Yield
on the issue, plus
(2) any income during such period of time attributable to the excess
described in subsection (c) (i) (1) above, less (3) any amounts previously
rebated to the United States of America.
(ii) Except as may otherwise be provided by law, Excess
Earnings shall not include any earnings on obligations the interest on
which is excludable from federal gross income under Section 103 of the
Code. Further, Excess Earnings shall not include earnings on the Bond Fund
in any year in which (a) the Bond Fund constitutes a "bona fide debt
service fund" and (b) gross earnings on such fund are less than $100,000. A
"bona fide debt service fund" refers to any fund, or aggregation of funds
(except amounts funded or derived from original proceeds of the Bonds),
whether or not held by the Trustee, to be used primarily for the purpose of
achieving a proper matching of revenues and debt service on the Bonds
within each Bond Year, which funds are depleted to pay such debt service at
least once a year, except for a reasonable carryover (not to exceed the
greater of one year's earnings on such funds or one-twelfth of annual debt
service).
(iii)
(A) No later than 45 days after the close of each Bond Year
and after the Final Computation Date the Authorized Borrower Representative
shall provide a certificate to the Trustee that this subsection (c) has
been fully complied with and shall provide in support of such certification
a certificate of an independent certified public accountant or other
professional with experience in compliance with Section 148 of the Code as
to the accuracy of the Borrower's computations or such other evidence of
compliance as may be approved by the Trustee in advance or a certificate of
such accountant or other professional or an opinion of Bond Counsel that
there were no Excess Earnings required to be deposited into the Rebate
Fund.
(B) 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 of America under subsection (d) below if the Bonds had been
paid in full, upon presentation by the Authorized Borrower Representative
of a certificate to that effect in a form satisfactory to the Trustee such
excess shall promptly be paid into the
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Project Fund or, if the Completion Certificate has been delivered, to
the Borrower.
(iv) The terms "Nonpurpose Investments", "Gross proceeds",
"Investment Property" and "Yield" shall have the meanings prescribed by
Section 148 of the Code and shall be applied in the manner prescribed in
such section.
(d) PAYMENT OF REBATE.
(i) On a date no later than 60 days after the close of last
day of the fifth Bond Year and each succeeding fifth Bond Year or at such
other times as the Borrower may specify with the concurrence of Bond
Counsel, or such other time as may be provided by law, the Trustee, at the
written direction of the Authorized Borrower Representative, shall pay to
the United States from amounts on deposit in the Rebate Fund at least the
amount required to be paid pursuant to the provisions of Section 148(f) of
the Code as calculated by or on behalf of the Borrower, provided that any
amount due in excess of amounts in the Rebate Fund shall be paid by the
Borrower. Within 60 days after the Final Computation Date, the Trustee, at
the written direction of the Authorized Borrower Representative, shall pay
to the United States of America from amounts on deposit in the Rebate Fund
100% of the entire amount then payable pursuant to this Section 148(f) of
the Code as calculated by or on behalf of the Borrower, provided that any
amount due in excess of amounts in the Rebate Fund shall be paid by the
Borrower. Unless otherwise provided by law, each payment shall be made to
the Internal Revenue Service Center, ▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ or
any other address specified by the Internal Revenue Service, accompanied by
a copy of the applicable Form 8038-T and any additional materials that may
be required by law or regulation. Any officer of the Issuer is authorized
to execute a Form 8038-T for this purpose, but the preparation, accuracy
and completeness thereof are the sole responsibility of the Borrower.
(ii) No earlier than 60 days, or later than 35 days, before
each date on which a payment could become due under subsection (d) (i)
above (a "Rebate Payment Date"), the Trustee shall notify the Borrower at
its Notice Address by registered or certified mail, postage prepaid, or by
telegram, of its obligation to comply with the requirements of this
subsection (d).
(iii) Not later than 15 days prior to each Rebate Payment Date,
the Borrower shall deliver to the Trustee (A) a copy of the Form 8038-T
filed with respect to the Bonds,
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(B) a certificate of the Authorized Borrower Representative
summarizing the determination of the amount then required to be paid
pursuant to the subsection (d) (i) above and including the CUSIP number, if
any, for the Bond with the latest maturity for which there is a CUSIP
number, (C) a certificate of an independent certified public accountant as
to the accuracy of such determination or such other evidence of compliance
as may be approved by the Trustee in advance, and (D) if the amount then
held in the Rebate Fund is less than the amount so determined, an amount in
cash in funds available on such 15th day equal to the difference. Upon
receipt of such materials, the Trustee shall make the payment provided for
in subsection (d) (i) above. In the event that the Trustee shall not have
received all of such materials on or within five days following the date
specified in the first sentence of this subsection (d) (iii), it shall pay
over to the United States within the period prescribed in subsection (d)
(i) above all of the funds then held in the Rebate Fund and, if so provided
by the Borrower, the Form 8038-T.
(iv) In the event the Trustee fails to receive the materials
described in subsection (d) (iii) above, the Trustee will notify the
Borrower within five days at its Notice Address by registered or certified
mail, postage prepaid, or by telegram, of the following requirement: The
Borrower must provide to the Trustee within 90 days from the date of such
notice an unqualified opinion of Bond Counsel stating that no further
action by the Borrower or the Trustee 15 necessary for full compliance with
Section 148(f) of the Code or that the failure to comply was an "innocent
failure" as defined in the Code, such failure has been corrected and such
failure has not resulted and will not result in interest on the Bonds
becoming includable for federal tax purposes in the gross income of the
Bondholders. A copy of the notice and opinion referred to in the first
sentence of this subsection (d) (iv) shall also be sent by the Trustee
promptly by registered or certified mail, postage prepaid, or by telegram,
to each Bondholder at its address as it appears on the Bond registration
books.
(v) By agreeing to give the notices referred to in this
subsection (d) of this Section 504 and to make the payments referred to in
this Section 504, the Trustee assumes no responsibility whatsoever for
compliance by the Borrower with the requirements of Section 148(f) of the
Code. The Borrower and the Issuer each expressly agrees that
(notwithstanding any other provision of this Agreement) any failure of the
Trustee to give any such notice, for any reason whatsoever, shall not cause
the
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Trustee to be responsible for any failure of the Borrower to comply
with the requirements of said Section 148(f). The Trustee shall not be
responsible for making the calculations required to be made pursuant to
this Section 504, nor shall it have any responsibility to review the
correctness or accuracy of the calculations or for determining whether the
investment directions given by the Borrower comply with Section 148(f) of
the Code.
(e) CONCLUSIVE COMPLIANCE BY TRUSTEE. The Trustee shall be deemed
conclusively to have complied with the provisions of this Section if it
makes payments in accordance with the certifications and directions of the
Borrower provided in accordance with this Section 504. The Trustee shall
not be required to take any actions in connection with certifications from
the Borrower or in the absence of such certifications, except as required
by subsection (h) of this Section 504.
(f) RECORDS. The Borrower and Trustee, on behalf of the Issuer, and
the Issuer, shall keep such records as will enable them to fulfill their
respective responsibilities under this Section 504 and Section 148(f) of
the Code. For purposes of the computation required under this Section 504,
the Trustee shall make available to the Borrower and the Issuer during
normal business hours all information in the Trustee's control which is
necessary to such computations.
(g) THE ISSUER. The Issuer shall not take any action, or knowingly
omit to take any action within its control, which, if taken or omitted,
respectively, would violate its non-arbitrage certificate delivered upon
the initial issuance of the Bonds or any amendment thereof or supplement
thereto.
(h) ADDITIONAL DOCUMENTATION. Notwithstanding anything in this
Section 504 to the contrary, and in furtherance of the purposes of the last
sentence of Section 504(a), the Trustee, at the written direction of the
Borrower, will provide to the United States of America at such times and at
such places as the Borrower may direct such additional materials as the
Borrower may instruct the Trustee to deliver to the United States of
America; PROVIDED, HOWEVER, that the Trustee need take no action under this
subsection (h) unless the Borrower shall have delivered to the Trustee such
materials and the address or addresses to which such materials are to be
sent by the Trustee no later than 15 days prior to the date on which
delivery of such materials is to be received by the United States of
America.
(i) SECTION 504 SURVIVES DEFEASANCE OF AGREEMENT. This Section 504
as amended from time to time, shall survive the defeasance of this
Agreement with respect to the Bonds, and only upon (i) the retirement of
the Bonds or provision for the same
-▇▇-
▇▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇ ▇▇▇, (▇▇) the payment of all amounts due under Section
148 of the Code with respect to such Bonds, and (iii) presentation of a
certificate from the Borrower in a form satisfactory to the Trustee that
the provisions of Section 148 of the Code have been satisfied shall any
amounts remaining in the Rebate Fund be paid to the Borrower.
Section 505. CONSTRUCTION AND OPERATING COSTS CONTINGENCY FUND. There
is hereby established with the Trustee a Construction and operating Costs
Contingency Fund to be funded with moneys of the Borrower other than
proceeds of the issuance of the Bonds and to be held by the Trustee as part
of the Trust Estate. On the Remarketing Date, the Borrower shall deposit
with the Trustee for deposit into the Construction and Operating Costs
Contingency Fund the sum of $3,500,036.31 and not later than the day
following the Remarketing Date, as provided in Sections 501A(b) and (c),
the Trustee shall transfer from the Costs of Remarketing Account and the
Construction Account of the Project Fund for deposit into the Construction
and Operating Costs Contingency Fund the total sum of $2,699,963.69. In
addition, the Trustee is authorized and directed to accept from the
Borrower and deposit into the Construction and Operating Costs Contingency
Fund such additional amounts as the Borrower from time to time may transfer
to the Trustee for such purpose. The Trustee shall apply moneys held in the
Construction and operating Costs Contingency Fund as follows:
(a) In the event that any Loan payment required to be made
under Section 1001B shall not be made on the date due (whether directly by
the Borrower or pursuant to Section 501A or 502A), then on the next
succeeding Business Day the Trustee shall transfer from the Construction
and Operating Costs Contingency Fund to the Bond Fund an amount equal to
the lesser of (i) the amount of such insufficiency and (ii) the amount then
on deposit in the Construction and Operating Costs Contingency Fund;
provided that no such transfer shall be made unless the Revenue Fund shall
have been exhausted; and provided, further, that no such transfer shall be
made on or prior to the Completion Date unless the Project Fund shall have
been exhausted.
(b) In the event that as of 1:00 p.m. Eastern time on the
Business Day next preceding a Payment Date moneys held in the Bond Fund are
insufficient to pay the principal of and premium, if any, and interest on
the Bonds due and payable on such Payment Date, the Trustee shall transfer
from the Construction and Operating Costs Contingency Fund to the Bond Fund
an amount equal to the lesser of (i) the amount of such insufficiency and
(ii) the amount then on deposit in the Construction and Operating Costs
Contingency Fund; provided that no such transfer shall be made unless
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the Revenue Fund shall have been exhausted; and provided, further,
that no such transfer shall be made on or prior to the Completion Date
unless the Project Fund shall have been exhausted.
(c) Upon any acceleration under Section 1102, the Trustee
forthwith shall transfer all amounts in the Construction and Operating
Costs Contingency Fund to the Bond Fund to be applied as provided in
Section 1105.
(d) So long as no Default shall have occurred and be
continuing, the Trustee shall disburse funds in the Construction and
Operating Costs Contingency Fund to the Borrower for the purpose of paying
issuance costs in excess of those paid from the Costs of Remarketing
Account, for the purpose of paying costs of the acquisition, construction,
equipping and furnishing of the Project incurred prior to the Completion
Date or for the purpose of paying operating costs of the Project, all as
provided in and subject to the terms of the Disbursement Agreement;
provided, that no amount shall be disbursed from the construction and
Operating Costs Contingency Fund for any such purpose if the sum of (i) the
amount remaining in such Fund plus (ii) the aggregate amount theretofore
transferred from such Fund as provided in subsections (a) and (b) above
shall be less than $1,500,000 after giving effect to such disbursement,
except as otherwise agreed in writing by the Credit Enhancer in its sole
discretion.
The Borrower shall ensure that all amounts held in the Construction
and Operating Costs Contingency Fund shall be invested to produce a Yield
not higher than the Yield on the Bonds unless the Trustee is provided with
an opinion of Bond Counsel or a ruling of the Internal Revenue Service that
investment of such amounts without such restriction will not adversely
affect the exclusion from gross income for federal income tax purposes of
the interest paid on the Bonds. The Trustee shall furnish to the Issuer and
the Borrower a report as of March 31, June 30, September 30 and December 31
of each year detailing the receipts, disbursements and ending balance in
the Construction and Operating Costs Contingency Fund for the six-month
period ending on such date, such report to be delivered not later than 30
days following each such date.
Section 505A. EQUITY RESERVE FUND. There is hereby established with
the Trustee an Equity Reserve Fund to be held by the Trustee as part of the
Trust Estate. On the Remarketing Date, the Borrower shall pay to the
Trustee for deposit into the Equity Reserve Fund the sum of $300,000.
Thereafter, the Borrower shall pay to the Trustee for deposit into the
Equity Reserve Fund the amounts provided in Section 3.2 of the Credit
-41-
Enhancement Agreement and in Section 1001F hereof. In addition, the Trustee
is authorized and directed to accept from the Borrower and deposit into the
Equity Reserve Fund such additional amounts as the Borrower from time to
time may transfer to the Trustee for such purpose. The Trustee shall apply
moneys held in the Equity Reserve Fund as follows:
(a) In the event that any Loan payment required to be made
under Section 1001B shall not be made on the date due (whether directly by
the Borrower or pursuant to Section 501A or 502A), then on the next
succeeding Business Day the Trustee shall transfer from the Equity Reserve
Fund an amount equal to the lesser of (i) the amount of such insufficiency
and (ii) the amount then on deposit in the Equity Reserve Fund; provided
that no such transfer shall be made unless the Revenue Fund, the
Construction and operating Costs Contingency Fund and the Supplemental
Equity Fund shall have been exhausted; and provided, further, that no such
transfer shall be made on or prior to the Completion Date unless the
Project Fund shall have been exhausted.
(b) In the event that as of 1:00 p.m. Eastern time on the
Business Day next preceding a Payment Date moneys held in the Bond Fund are
insufficient to pay the principal of and premium, if any, and interest on
the Bonds due and payable on such Payment Date, the Trustee shall transfer
from the Equity Reserve Fund to the Bond Fund an amount equal to the lesser
of (i) the amount of such insufficiency and (ii) the amount then on deposit
in the Equity Reserve Fund; provided that no such transfer shall be made
unless the Revenue Fund, the Construction and Operating Costs Contingency
Fund and the Supplemental Equity Fund shall have been exhausted; and
provided, further, that no such transfer shall be made on or prior to the
Completion Date unless the Project Fund shall have been exhausted.
(c) Upon any acceleration under Section 1102, the Trustee
forthwith shall transfer all amounts in the Equity Reserve Fund to be
applied as provided in Section 1105.
The Borrower shall ensure that all amounts held in the Equity Reserve
Fund shall be invested to produce a Yield not higher than the Yield on the
Bonds unless the Trustee is provided with an opinion of Bond Counsel or a
ruling of the Internal Revenue Service that investment of such amounts
without such restriction will not adversely affect the exclusion from gross
income for federal income tax purposes of the interest paid on the Bonds.
The Trustee shall furnish to the Issuer and the Borrower a report as of
March 31, June 30, September 30 and December 31 of each year detailing the
receipts, disbursements
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and ending balance in the Equity Reserve Fund for the six-month period
ending on such date, such report to be delivered not later than 21 days
following each such date.
Section 505B. CREDIT ENHANCEMENT ACCOUNT. Under Section 4 of the
Credit Enhancement Agreement, the Credit Enhancer has established a Credit
Enhancement Account with the Trustee to fund advances committed to be made
to pay debt service on the Bonds as provided in Section 2 of the Credit
Enhancement Agreement. The Credit Enhancement Account shall be administered
as provided in the Credit Enhancement Agreement. The Trustee shall apply
amounts held in the Credit Enhancement Account as follows:
(a) Investment earnings on the Credit Enhancement Account and
amounts equivalent to reductions in the Credit Enhancement Account shall be
paid to the Credit Enhancer as provided in Section 4 of the Credit
Enhancement Agreement free of any lien hereunder or thereunder.
(b) In the event that any Loan payment required to be made
under Section 1001B shall not be made on the date due (whether directly by
the Borrower or pursuant to section 501A or 502A), then on the next
succeeding Business Day the Trustee shall transfer from the Credit
Enhancement Account to the Bond Fund an amount equal to the least of (i)
the amount of such insufficiency, (ii) the Maximum Amount of Credit (as
defined in the Credit Enhancement Agreement) then in effect, and (iii) the
amount then on deposit in the Credit Enhancement Account; provided that no
such transfer shall be made unless all of the Revenue Fund, the
Construction and Operating Costs Contingency Fund, the Supplemental Equity
Fund, the Equity Reserve Fund and the Debt Service Reserve Fund shall have
been exhausted; and provided, further, that no such transfer shall be made
on or prior to the Completion Date unless the Project Fund shall have been
exhausted.
(c) In the event that as of 1:00 p.m. Eastern time on the
Business Day next preceding a Payment Date moneys held in the Bond Fund are
insufficient to pay the principal of - and premium, if any, and interest on
the Bonds due and payable on such Payment Date, the Trustee shall transfer
from the Credit Enhancement Account to the Bond Fund an amount equal to the
least of (i) the amount of such insufficiency, (ii) the Maximum Amount of
Credit (as defined in the Credit Enhancement Agreement) then in effect, and
(iii) the amount then on deposit in the Credit Enhancement Account;
provided that no such transfer shall be made unless all of the Revenue
Fund, the Construction and Operating Costs Contingency Fund, the
Supplemental Equity Fund, the Equity Reserve Fund and the Debt Service
-43-
Reserve Fund shall have been exhausted; and provided, further, that
no such transfer shall be made on or prior to the Completion Date unless
the Project Fund shall have been exhausted.
(d) Upon any acceleration under Section 1102, the Trustee
forthwith shall transfer all amounts in the Credit Enhancement Account to
be applied as provided in Section 1105.
Each transfer for the Credit Enhancement Account pursuant to
subsection (b), (c) or (d) above shall constitute an advance to the
Borrower within the meaning of Sections 2 and 3 of the Credit Enhancement
Agreement.
Section 505C. CREDIT ENHANCEMENT REDUCTION AND TERMINATION.
(a) In the event that the Maximum Amount of Credit shall be
reduced to $500,000 as provided in Section 2.5(b) of the Credit Enhancement
Agreement, then on such date the lien of this Agreement upon the funds and
investments deposited to the account of the Construction and Operating
Costs Contingency Fund and the Equity Reserve Fund shall be terminated,
whereupon (i) all funds and investments in the Equity Reserve Fund shall be
transferred to the Credit Enhancer and (ii) the funds and investments in
the Construction and Operating Costs Contingency Fund shall be applied
first to the payment of all obligations of the Borrower owing to the Credit
Enhancer and the Trustee under the Credit Enhancement Agreement and the
remainder, if any, shall be paid to the Borrower.
(b) In addition, upon the occurrence of the Credit
Enhancement Termination Date, the lien of this Agreement and of the Credit
Enhancement Agreement upon the funds and investments deposited to the
account of the Construction and Operating Costs Contingency Fund and the
Equity Reserve Fund (if not previously terminated) and to the account of
the Supplemental Equity Fund and the Credit Enhancement Account shall be
terminated. Thereupon, (a) all funds and investments in the Credit
Enhancement Account shall be transferred to the Credit Enhancer, (b) all
funds and investments in the Equity Reserve Fund, if any, shall be applied
as provided in Section 3.2 of the Credit Enhancement Agreement and (c) the
funds and investments in the Construction and Operating Costs Contingency
Fund, if any, and in the Supplemental Equity Fund shall be applied first to
the payment of all obligations of the Borrower owing to the Credit Enhancer
and the Trustee under the
-44-
Credit Enhancement Agreement and the remainder, if any, shall be paid
to the Borrower.
Section 505D. SUPPLEMENTAL EQUITY FUND. There is hereby established
with the Trustee a Supplemental Equity Fund to be held by the Trustee as
part of the Trust Estate. The Borrower shall pay to the Trustee for deposit
into the Supplemental Equity Fund the amounts provided in Section 6.5 of
the Credit Enhancement Agreement, and funds may be deposited therein as
provided in Section 502A(i) hereof. In addition, the Trustee is authorized
and directed to accept from the Borrower and deposit into the Supplemental
Equity Fund such additional amounts as the Borrower from time to time may
transfer to the Trustee for such purpose. The Trustee shall apply moneys
held in the Supplemental Equity Fund as follows:
(a) In the event that any Loan payment required to be made
under Section 1001B shall not be made on the date due (whether directly by
the Borrower or pursuant to Section 501A or 502A), then on the next
succeeding Business Day the Trustee shall transfer from the Supplemental
Equity Fund an amount equal to the lesser of (i) the amount of such
insufficiency and (ii) the amount then on deposit in the Supplemental
Equity Fund; provided that no such transfer shall be made unless the
Revenue Fund and the Construction and operating Costs Contingency Fund
shall have been exhausted; and provided, further, that no such transfer
shall be made on or prior to the Completion Date unless the Project Fund
shall been exhausted.
(b) In the event that as of 1:00 p.m. Eastern time on the
Business Day next preceding a Payment Date moneys held in the Bond Fund are
insufficient to pay the principal of and premium, if any, and interest on
the Bonds due and payable on such Payment Date, the Trustee shall transfer
from the Supplemental Equity Fund to the Bond Fund an amount equal to the
lesser of (i) the amount of such insufficiency and (ii) the amount then on
deposit in the Supplemental Equity Fund; provided that no such transfer
shall be made unless the Revenue Fund and the Construction and Operating
Costs Contingency Fund shall have been exhausted; and provided, further,
that no such transfer shall be made on or prior to the Completion Date
unless the Project Fund shall have been exhausted.
(c) Upon any acceleration under Section 1102, the Trustee
forthwith shall transfer all amounts in the Supplemental Equity Fund to be
applied as provided in Section 1105.
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(d) Commencing with the first such date following the
reduction of the Maximum Amount of Credit to $500,000 pursuant to Section
2.5(b) of the Credit Enhancement Agreement, the Trustee shall determine the
value of the investments and funds on deposit in the Supplemental Equity
Fund as of each March 31, June 30, September 30 and December 31. Not later
than 21 days following each such valuation, the Trustee shall report to the
Borrower the difference, if any, between (i) the value of the investments
and funds on deposit in the Supplemental Equity Fund as of such valuation
date and (ii) $500,000. If such difference is positive, then on or before
the applicable 21st day, the Trustee shall withdraw an amount equal to such
difference from the Supplemental Equity Fund and deposit the same into the
Bond Fund. If such difference is negative, the Borrower will replenish the
Supplemental Equity Fund not later than 180 days after the date of
withdrawal.
(e) Prior to the date on which the requirements for reducing
the Maximum Amount of Credit to $500,000 under Section 2.5(b) of the Credit
Enhancement Agreement shall have been met (excluding the condition that
$500,000 shall be on deposit in the Supplemental Equity Fund), funds on
deposit in the Supplemental Equity Fund may be used at the direction of the
Borrower to pay operating costs of the Project or Rent.
The Borrower shall ensure that all amounts held in the Supplemental
Equity Fund shall be invested to produce a Yield not higher than the Yield
on the Bonds unless the Trustee is provided with an opinion of Bond Counsel
or a ruling of the Internal Revenue Service that investment of such amounts
without such restriction will not adversely affect the exclusion from gross
income for federal income tax purposes of the interest paid on the Bonds.
The Trustee shall furnish to the Issuer and the Borrower a report as of
June 30 and December 31 of each year detailing the receipts, disbursements
and ending balance in the Supplemental Equity Fund for the six-month period
ending on such date, such report to be delivered not later than 21 days
following each such date.
Section 506. INVESTMENT OF MONEYS IN FUNDS. The Trustee shall
invest moneys in the Project Fund, the Bond Fund, the Revenue Fund, the
Debt Service Reserve Fund, the Construction and Operating Costs Contingency
Fund, the Equity Reserve Fund, the Supplemental Equity Fund and the Rebate
Fund in any Qualified Investments and shall sell or liquidate any such
investment, in each case upon the written direction of an Authorized
Borrower Representative, subject in each case to the restrictions on
investments set forth in this Section 506 and in other provisions
of this Agreement. The Trustee shall have no responsibility for any losses
resulting from such investment or liquidations, nor shall the Trustee be
responsible if any payment is prohibited under Section 148 of the Code,
provided that the Trustee shall have complied with any investment
instructions delivered to it by Bond Counsel. Moneys in the Bond Fund and
the Debt Service reserve Fund shall be invested by the Trustee only in
United States Obligations and investments described in clause (ix) or (x)
of the definition of Qualified Investments and in Qualified Repurchase
Agreements with respect to United States Obligations or, in the case of the
Debt Service Reserve Fund, with respect to investments described in clause
(x) or (xi) of such definition, the maturities or redemption dates of all
of which shall coincide as nearly as practicable with, but not be later
than, the time or times at which said moneys will be required for the
purposes of this Agreement; and the investments in the Debt Service Reserve
Fund at no time shall have a weighted average life to maturity of more than
five years. Any investments pursuant to this Section 506 may be purchased
from the Trustee. The Trustee is authorized to sell or otherwise converted
into cash investments credited to any Fund or Account created under this
Agreement at the times and in the amounts necessary to meet payments when
due from such Fund or Account and shall include all proceeds from such
investments. No order of the Borrower shall restrict such authorization,
and the Trustee shall not be liable for any loss occurring from any such
sale or conversion to cash. Each Fund and Account shall include all
investments made from moneys credited to such Fund or Account and shall
include all proceeds from such investments. For purposes of this Agreement
(other than Section 507), such investments in the Debt Service Reserve Fund
shall be valued at amortized cost, and such investments in any other Fund
shall be valued at market value.
Section 507. MAXIMUM INVESTMENTS IN NONPURPOSE OBLIGATIONS. The
Borrower agrees, except as otherwise provided in Section 148(d) (3) of the
Code,
(i) at no time during any Bond Year shall the aggregate
amount of Gross Proceeds (within the meaning of Section 148(f) of the Code)
of the Bonds invested in Nonpurpose Investments (excluding, in accordance
with Section 148(d) (3) of the Code, Gross Proceeds invested during certain
temporary periods) with a Yield higher than the Yield on the Bonds exceed
150% of the debt service on the Bonds for such Bond Year, and
(ii) such aggregate amount of Gross Proceeds so invested
shall be promptly and appropriately reduced as the amount of outstanding
Bonds is reduced.
The requirements of this Section 507 are subject to and shall be
interpreted in accordance with Section 148(d) (3) of the Code.
Section 508. AVOIDANCE OF ARBITRAGE. Each of the Issuer and the
Borrower agrees to restrict the use of Bond proceeds in such manner and to
such extent as necessary to assure that the Bonds will not constitute
arbitrage bonds under Section 148 of the Code. Any officer of the Issuer
(including its Chairman, Vice Chairman, Executive Director and Secretary-
Treasurer) having responsibility with respect to the issuance of the Bonds
is authorized and directed, alone or in conjunction with any other officer,
employee or consultant of the Issuer or the Borrower, to give inappropriate
certificate on behalf of the Issuer, for inclusion in the transcript of
proceedings for the Bonds, setting for the facts, estimates and
circumstances and reasonable expectations pertaining to Section 148 of the
Code.
Section 509. AUTHORIZED APPLICATION OF FUNDS; MONEYS TO BE HELD
IN TRUST. The Trustee is authorized to apply each Fund as provided in this
Agreement. All moneys deposited with the Trustee hereunder shall be held
by the Trustee in trust but need not be segregated from other funds except
as required by law or by this Agreement.
Section 510. NONPRESENTMENT OF BONDS. From and after any
Payment Date, if moneys sufficient to pay principal of, premium, if any,
and interest on any Bond then due have been deposited with the Trustee and
irrevocably committed thereto, all liability of the Issuer and the Borrower
for the payment of such amount shall forthwith cease in accordance with
Section 103. The Trustee shall hold such funds, without liability for
interest thereon, for the benefit of the registered owner of such Bond, who
shall thereafter be restricted exclusively to such funds for any claim with
respect to such amount. Unless otherwise required by law, any such funds
which remain unclaimed for three years after such due date shall be paid to
the Borrower without any interest thereon against written receipt therefor
executed on behalf of the Borrower, and neither the Issuer nor the Trustee
shall have any further responsibility with respect to such moneys.
Section 511. BONDS ARE NOT GENERAL OBLIGATIONS. The Bonds do
not now and shall never constitute a general obligation or debt or pledge
of the faith and credit of the Issuer, nor a debt or pledge of the faith
and credit of the Commonwealth or any political subdivision or municipality
thereof, and each covenant and undertaking by the Issuer herein, in the
Bonds and in any other Basic Agreement to make payments is not a general
obligation of the Issuer or a debt or a pledge of the faith and credit of
the Commonwealth or any political subdivision or municipality thereof. The
principal of and premium, if any, and
interest on the Bonds is a limited obligation payable solely from the
revenues, Funds and Accounts specifically pledged hereunder and the Credit
Enhancement Account pledged under the Credit Enhancement Agreement.
Nothing herein shall be construed as requiring the Issuer to use any funds
or revenues from any source other than as described herein.
PART III: THE PROJECT
Article 6 - Completion of the Project
Section 601. BORROWER'S OBLIGATIONS TO COMPLETE PROJECT ETC.
The Borrower shall use its best efforts to cause the Project to be
completed as promptly as feasible and shall at its expense do or cause to
be done all things necessary or proper for such completion in material
compliance with applicable law and regulations. The Borrower shall make no
material changes in the Project as described in the Authorization.
Section 602. COMPLETION CERTIFICATE. Promptly following the
completion of the acquisition, construction, equipping and furnishing of
the Project the Borrower shall evidence such completion by furnishing to
the Trustee a Completion Certificate signed by the Authorized Borrower
Representative (i) stating that the Project has been completed
substantially in accordance with the Authorization and the Plans and all
costs then due and payable in connection therewith have been paid, and that
completion has been accomplished in such a manner as to conform with all
applicable zoning, planning, building, environmental and other regulations
of all governmental authorities having jurisdiction, as the same may be
amended by variance, except for such noncompliances which, singly or in the
aggregate, could not have a material adverse effect on the Project or its
operations, (ii) specifying the Completion Date, and (iii) stating that it
is given without prejudice to any rights against third parties which then
exist or may subsequentially come into being.
Article 7 - Operation of the Project
Section 701. COMPLIANCE WITH AUTHORIZATION. The Project is and
at all times while the Bonds are outstanding will be acquired, constructed,
equipped, furnished and operated substantially as described in the
Authorization, and the average maturity of the Bonds will not exceed 120%
of the average economic life of the Project.
Section 702. INSURANCE PROCEEDS. In the event of any casualty
causing damage to the Project there shall be no abatement or reduction in
the payments required to be made by the Borrower under this Agreement or
any other Basic Agreement.
In the event of such a casualty, the Trustee agrees to act as
"Insurance Trustee" (as defined in Section 9.2 of the Ground Lease) and to
hold in a separate account and disburse insurance proceeds and other funds
provided for the repair, restoration or replacement of the damaged property
as provided in Section 9.2 of the Ground Lease and Paragraph 7 of the
Leasehold Mortgage, and the Borrower shall repair, restore or replace the
damaged property. Any insurance proceeds remaining after payment of all
costs of such repair, restoration or replacement shall, so long as no
Default under this Agreement, the Leasehold Mortgage or any other Basic
Agreement shall have occurred and be continuing, be paid to the Borrower,
subject,however, to any contrary requirements of the Leasehold Mortgage,
the Ground Lease or any instrument securing the obligations of the Borrower
under the Credit Enhancement Agreement. In the event that any portion the
insurance proceeds remaining after such repair, restoration or replacement
is required under Paragraph 7B(i) of the Leasehold Mortgage to be applied
to redeem Bonds, then such portion shall be deposited into the Bond Fund
and applied to redeem Bonds as provided in Sections 401(c) (ii) and 502(e).
Notwithstanding the foregoing, if on account of any casualty causing
damage to the Project the Ground Lease shall be terminated as provided
therein and as referred to in Paragraph 7B(ii) of the Leasehold Mortgage,
then the Borrower shall not be obligated to repair, restore or replace the
Project and all proceeds of insurance (after payment of any costs of
collection) shall be applied as follows: first, to the costs of removing
any remaining improvements and grading the leased premises in accordance
with Section 9.2 of the Ground Lease; second, any portion of the insurance
proceeds remaining shall be deposited into the Bond Fund and applied to
redeem Bonds as provided in Sections 401(c) (ii) and 502(e); and third the
balance of the insurance proceeds, if any, shall be applied in the
priorities specified in Paragraphs 7B(ii) (c) through (e) of the Leasehold
Mortgage.
Section 703. EMINENT DOMAIN PROCEEDS. Should the Project, or
any part thereof or interest therein, be taken or damaged by reason of any
public improvement or condemnation proceeding, or in any other similar
manner (a "Taking"), there shall be no abatement or reduction in the
payments required to be made by the Borrower under this Agreement or any
other Basic Agreement.
In the event of any such Taking, to the extent the Borrower is
required to repair, restore or replace the Project in accordance with the
Ground Lease and the Leasehold Mortgage, the proceeds of the Taking and any
additional funds provided shall be held in a separate account by the
Trustee and disbursed in the manner provided in Paragraphs 7B(i) and 13(b)
of the Leasehold Mortgage, and the Borrower shall repair, restore or
replace the
Project. Any balance of the proceeds of such Taking remaining after
payment of all costs of such repair, restoration or replacement that are
distributable to the Issuer as ground lessor under Section 10.2 of the
Ground Lease shall be paid to the Issuer in its capacity as ground lessor.
the portion of such balance distributable to the Borrower under Section
10.2 of the Ground Lease shall be (i) paid to the Borrower if so provided
under Paragraph 13(b) of the Leasehold Mortgage and if no Default has
occurred and is continuing or (ii) otherwise, deposited into the Bond Fund
and applied to redeem Bonds as provided in Sections 401(c) (ii) and 502(e).
Notwithstanding the foregoing, if on account of any Taking the Ground
Lease shall be terminated as provided therein and as referred to in
Paragraph 13(a) or (c) of the Leasehold Mortgage, then the Borrower shall
not be obligated to restore the Project and the proceeds of the Taking
shall be applied as follows: first, to the costs of removing any
improvements and grading the leased premises to the extent provided in
Section 10.2 of the Ground Lease; second, any portion of such proceeds
remaining shall be deposited in the Bond Fund and applied to redeem Bonds
as provided in Sections 401(c) (i) and 502(e); and third, the balance of
the Taking proceeds, if any, shall be applied in the priorities specified
in Paragraphs 13(a) (ii) through (iv) of the Leasehold Mortgage.
PART IV: REPRESENTATIONS AND AGREEMENTS
OF ISSUER AND BORROWER
Article 8 - Representations and Agreements of Issuer
Section 801. DUE ORGANIZATION AND AUTHORIZATION OF BONDS. The
Issuer represents and warrants as follows:
(a) It is a body politic and corporate and a public
instrumentality of the Commonwealth validly existing under the Enabling
Act, with the power under and pursuant to the Enabling Act, to execute and
deliver the Remarketing Agreement and this Agreement, to perform its
obligations under each thereof and to issue and sell the Bonds pursuant
thereto.
(b) It has taken all necessary action and has complied
with all provisions of the Enabling Act, required to make this Agreement,
the Remarketing Agreement and the Bonds the valid obligations of the Issuer
which they purport to be; and, when executed and delivered by the parties
thereto, this Agreement and the Remarketing Agreement will constitute valid
and binding agreements of the Issuer and be enforceable in accordance with
their respective 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.
(c) When delivered to and paid for by the purchasers
thereof in accordance with the terms of the Remarketing Agreement and this
Agreement, the Bonds will constitute valid and binding LIMITED obligation
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.
(d) The Issuer makes no representation or warranty that
interest on the Bonds is or will continue to be excludable from gross
income for federal or state income tax purposes.
Section 802. PAYMENT OF BONDS; TRUSTEE'S RIGHTS WITH RESPECT TO
THE LOAN; COOPERATION WITH TRUSTEE. The Issuer agrees that it will
promptly pay or cause to be paid the principal of, premium, if any, and
interest on all Bonds as herein provided. The Issuer agrees that the
Trustee may enforce all rights of the Issuer (except those rights not
assigned under this Agreement) and all obligations of the Borrower with
respect to the Loan for and on behalf of the Bondholders, whether or not
the Issuer is in default hereunder. The Issuer agrees that, except as
provided herein, it will not mortgage, encumber or alienate any part of the
Pledged Receipts. All agreements of the Issuer in this Section 802 and
elsewhere in this agreement and in the Remarketing Agreement and the Bonds
are subject to the limitation described in Section 511.
Section 803. RIGHTS OF ISSUER AS GROUND LESSOR AND AIRPORT
OPERATION; RELATIONSHIP TO GROUND LEASE. It is understood and agreed that
the Issuer's execution and delivery of this Agreement and issuance of the
Bonds and the terms and provisions of this Agreement, the Official
Statement and any preliminary version thereof and each other Basic
Agreement are without prejudice to and shall not derogate in any way from
any of the rights of the Issuer as ground lessor under the Ground Lease, as
operator of Boston-▇▇▇▇▇ International Airport or as Credit Enhancer under
the Credit Enhancement Agreement. Notwithstanding any provision thereof to
the contrary, the Issuer by executing this Agreement, the Official
Statement or any preliminary version thereof or any
other Basic Agreement is under no obligation, express or implied, to
exercise or to refrain from exercising any right, remedy or responsibility
it may have now or hereafter under the Ground Lease, as operator of Boston-
▇▇▇▇▇ International Airport or as Credit Enhancer under he Credit
Enhancement Agreement, regardless of the effect of such exercise or non-
exercise upon the rights and interests of the Trustee and the Bondholders
under the Basic Agreements.
It is further understood and agreed that the provisions of this
Agreement and each other Basic Agreement are not intended in any manner to
modify any of the rights and obligations of the parties under the Ground
Lease, except that solely for the purpose of the Tax Statement and the
Disbursement Agreement the date by which the Borrower must complete the
acquisition, construction, equipping and furnishing of the Project shall be
the day preceding the third anniversary of the Closing Date rather than the
date for completion provided in Section 2.6 of the Ground Lease. In all
other respects in the event of any conflict between any provision of this
Agreement or any other Basic Agreement, on the other hand, and any
provision of the Ground Lease, on the other hand, the provision of the
Ground Lease shall be controlling.
Article 9 - Representations of the Borrower
The Borrower hereby represents and warrants to the Issuer and the
Trustee and, as to ▇▇▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇, as follows:
Section 901. EXISTENCE. It is a limited partnership validly
existing under the laws of the Commonwealth and has full power and
authority to execute, deliver and perform its obligations under this
Agreement, the Remarketing Agreement and all other Basic Agreements to
which it is a party.
Section 902. VALID OBLIGATIONS. It has taken all necessary
action and has complied with all provisions of federal, state and local
law, required to make this Agreement, the Contract of Purchase, the
Disbursement Agreement, the Remarketing Agreement and the Borrower Security
Instruments the valid obligations of the Borrower which they purport to be;
and, when executed and delivered by the general partner of the Borrower,
this Agreement, the Contract of Purchase, the Disbursement Agreement, the
Remarketing Agreement and the Borrower Security Instruments will constitute
valid and binding agreements of the Borrower and be enforceable in
accordance with their respective 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.
Section 903. LEGAL PROCEEDINGS. There is no action, suit,
proceeding or investigation at law or in equity before or by any court or
public board or body pending or, to the knowledge of the Borrower,
threatened against it, wherein an unfavorable decision, ruling or finding
would in any material respect adversely affect the business, assets or
condition (financial or otherwise) of the Borrower or the transactions
contemplated by the Basic Agreements to which the Borrower is a party, or
which in any way would adversely affect the validity of any of the Basic
Agreements to which the Borrower is a party.
Section 904. COMPLIANCE WITH LAW; CONSENTS, ETC. The Borrower
is not in violation in any material respect of any term or provision of any
mortgage, lease, agreement or other instrument which is material to its
business or assets, or of any judgement, decree, governmental order,
statute, rule or regulation by which it is bound or to which it or any of
its assets is subject. The execution and delivery by the Borrower of the
Basic Agreements to which it is a party will not violate or constitute a
default of any term or provision of any mortgage, lease, agreement or other
instrument, or of any judgment, decree, governmental order, statute, rule
or regulation by which the Borrower is bound or to which any of its assets
is subject. No approval by, authorization of, or filing with any federal,
state or municipal or other governmental commission, board or other
governmental authority is necessary in connection with the execution and
delivery by the Borrower of any of the Basic Agreements, except for
necessary approvals under the Code and the Enabling Act, each of which has
been, or by the time of delivery of the Bonds will have been, obtained.
Section 905. TAX MATTERS. The Borrower will comply fully with
its representations, warranties and covenants set forth and contained in
the Tax Statement.
Article 10 - Certain Agreements of Borrower
The Borrower agrees as follows:
Section 1001. LOAN PAYMENTS, ETC.
A. LOAN PAYMENTS BEFORE BOND PAYMENT DATES. The Borrower agrees to
pay by 12:00 noon, Eastern time, on the Business Day next preceding each
Payment Date, as a Loan payment to the Trustee for deposit into the Bond
Fund a sum in immediately available funds equal to all payments of
principal of and premium, if any, and interest on the Bonds due on such
Payment Date less amounts in immediately available funds already on
deposit in the Bond Fund and available for such purpose. In any event the
Loan payments payable under this Section 1001A shall be sufficient to pay
the total principal of and premium, if any, and interest on the Bonds as
and when due. If at any time when said payments on the Bonds are due the
balance in the Bond Fund available for such purpose is insufficient to make
such payments, the Borrower will forthwith pay to the Trustee any such
deficiency. Subject to such obligation, 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 obligations then
due and payable from the Bond Fund plus, if applicable, any additional
amounts then required to be maintained in the Bond Fund.
B. MONTHLY LOAN PAYMENTS. In addition to the payments required by
Section 1001A, the Borrower shall pay to the Trustee for deposit into the
Bond Fund on each date specified below, commencing on the first date
specified below that is not less than 30 days following Estimated
Completion Date (or, if the Borrower shall have given notice of an
anticipated completion Date earlier than the Estimated Completion Date as
provided in Section 501A(a), on the first date specified below that is not
less than 30 days following such new anticipated Completion Date, the
amount specified below next to such date:
DATE AMOUNT
April 1 in each year The amount, if any, by which the sum of (a)
one-sixth of the amount due and payable on the next succeeding Interest
Payment Date in respect of interest on the Bonds (which amount is
hereinafter referred to as the "Semiannual Interest Obligation") plus (b)
one-twelfth of the amount, if any, due and payable on the next succeeding
September 1 in respect of the mandatory scheduled redemption requirements
imposed by Section 401(c) (iii) with respect to the Bonds (which amount is
hereinafter referred to as the "Annual Scheduled Redemption Obligation")
exceeds the amount then on deposit in the Bond Fund and available for the
next succeeding payments of principal of and interest on the Bonds (the
"Bond Fund Balance")
May 1 in each year The amount, if any, by which the
sum of (a) one-third of the Semiannual
Interest Obligation plus (b) one-sixth of the Annual Scheduled Redemption
Obligation exceeds the Bond Fund Balance
June 1 in each year The amount, if any, by which the sum of (a)
one-half of the Semiannual Interest Obligation plus (b) one-quarter of the
Annual Scheduled Redemption Obligation exceeds the Bond Fund Balance
July 1 in each year The amount, if any, by which the sum of (a)
two-thirds of the Semiannual Interest Obligation plus (b) one-third of the
Annual Scheduled Redemption Obligation exceeds the Bond Fund Balance
August 1 in each year The amount, if any, by which the sum of (a)
five-sixth of the Semiannual Interest Obligation plus (b) five-twelfths of
the Annual Scheduled Redemption Obligation exceeds the Bond Fund Balance
September 1 in each year The amount, if any, by which one-half of the
Annual Scheduled Redemption Obligation exceeds the Bond Fund Balance (after
giving effect to any payment in respect of interest on the Bonds made on
such date)
October 1 in each year The amount, if any, by which the sum of (a)
one-sixth of the Semiannual Interest Obligation plus (b) seven-twelfths of
the Annual Scheduled Redemption Obligation exceeds the Bond Fund Balance
November 1 in each year The amount, if any, by which the sum of (a)
one-third of the Semiannual Interest Obligation plus (b) two-thirds of the
Annual Scheduled Redemption Obligation exceeds the Bond Fund Balance
December 1 in each year The amount, if any, by which the
sum of (a) one-half of the Semiannual
Interest Obligation plus (b) three-quarters of the Annual Scheduled
Redemption Obligation exceeds the Bond Fund Balance
January 1 in each year The amount, if any, by which the sum of (a)
two-thirds of the Semiannual Interest Obligation plus (b) five-sixths of
the Annual Scheduled Redemption Obligation exceeds the Bond Fund Balance
February 1 in each year The amount, if any, by which the sum of (a)
five-sixths of the Semiannual Interest Obligation plus (b) eleven-twelfths
of the Annual Scheduled Redemption Obligation exceeds the Bond Fund Balance
Such payments shall be held in the Bond Fund and shall be applied to the
payment of the Bonds.
C. [Reserved].
D. ADDITIONAL PAYMENTS. The Borrower agrees to pay within 30 days
after written demand therefor (by the Issuer or the Trustee, as the case
may be) Additional Payments as follows:
(i) To the Trustee, its reasonable fees and expenses as
trustee, bond registrar and paying agent, including the reasonable fees and
expenses of its attorneys and agents, and any other amounts due to the
Trustee under this Agreement.
(ii) To the Issuer, as reimbursement for all reasonable costs
and expenses paid or incurred by the Issuer, including reasonable fees and
disbursements of counsel, and for all other liabilities incurred by the
Issuer, in satisfaction of any obligations of the Borrower not performed by
the Borrower as required hereunder or under another Basic Agreement.
(iii) To the Issuer, as reimbursement for or prepayment of all
costs, expenses and liabilities paid or incurred or to be paid or incurred
by the Issuer or any of its members, directors, officers, employees or
agents, including reasonable fees and disbursements of counsel, at the
request of the Borrower or as required by this Agreement, the Enabling Act,
the Contract of Purchase or the Remarketing Agreement, other than any
rebate payments
due to the United States of America under Section 148(f) of the Code
on account of moneys and investments held by the Issuer for its own
account.
Any Additional Payment not paid within 30 days after written demand
therefore shall bear interest from such 30th day until the payment date at
the Shawmut Base Rate.
E. DEBT SERVICE RESERVE FUND. If the amount of moneys and
investments in the Debt Service Reserve Fund (measured as provided in
Section 506 hereof) shall be less than the Required Debt Service Reserve
Amount for any reason (including without limitation because of any transfer
authorized under Section 503(b), (c) or (e) hereof), then:
(a) Prior to the reduction of the Maximum Amount of Credit to
$500,000 pursuant to Section 2.5 of the Credit Enhancement Agreement, to
the extent that Cash Flow Available for Debt Service shall be available
therefore, the Borrower shall pay to the Trustee for deposit in the Debt
Service Reserve Fund an amount equal to the lesser of (i) the amount
available for such purpose and (ii) the amount, if any, by which the
Required Debt Service Reserve Amount exceeds the amount then on deposit in
the Debt Service Reserve Fund; and the Trustee shall deposit the same in
the Debt Service Reserve Fund.
(b) If the Maximum Amount of Credit shall have been reduced to
$500,000 pursuant to Section 2.5 of the Credit Enhancement Agreement, then
on the first day of each calendar month, commencing with the second
calendar month following the month in which the amount on deposit in the
Debt Service Reserve Fund shall have become less that the Required Debt
Service Reserve Amount, the Borrower shall pay to the Trustee for deposit
into the Debt Service Reserve Fund an amount equal to the lesser of (i) one
twenty-fourth of the amount so transferred from the Debt Service Reserve
Fund and (ii) the amount, if any, by which the Required Debt Service
Reserve Amount exceeds the amount then on deposit in the Debt Service
Reserve Fund; and the Trustee shall deposit the same in the Debt Service
Reserve Fund.
F. EQUITY RESERVE FUND. In the event that any moneys shall have
been withdrawn from the Equity Reserve Fund pursuant to Section 505A(a),
(b) or (c) hereof and the Credit Enhancement Termination Date shall not
have occurred, then to the extent that Cash Flow Available for Debt Service
shall be available therefore, the Borrower shall pay to the Trustee for
deposit in the Equity Reserve Fund an amount equal to the lesser of (i) the
amount available for such purpose and (ii) an amount equal to the
aggregate amount theretofore withdrawn from the Equity Reserve Fund less
the aggregate amount theretofore repaid under this Section 1001F.
G. OBLIGATIONS UNCONDITIONAL. The Borrower's obligations to make
the payments required by this Agreement shall be absolute and unconditional
and shall not be subject to any right of recoupment or set-off. Until this
Agreement has terminated and ceased to have effect, the Borrower will not
(i) suspend or discontinue any payments required by this Agreement or (ii)
fail to fulfill its other agreements herein for any cause, including
without limitation failure fully to acquire and install the Project, or
damage to the Project, any failure of consideration or commercial
frustration of purpose, any change in federal or state or other laws or
administrative rulings or actions or any failure of the Issuer to fulfill
any agreement, duty, liability or obligation related to this Agreement.
Section 1002. BORROWER TO MAINTAIN ITS LEGAL EXISTENCE. The
Borrower will maintain its legal existence as a Massachusetts limited
partnership and will engage in no substantial business other than the
development, ownership and/or operation of the Project.
Section 1003. INDEMNIFICATION OF ISSUER AND TRUSTEE.
Notwithstanding its insurance agreements in any Basic Agreement or the
Remarketing Agreement, to the extent not prohibited by applicable law, the
Borrower shall indemnify and save harmless the Issuer (in its capacities as
issuer of the Bonds, issuer of the Official Statement and any preliminary
version thereof and party to this Agreement, the Contract of Purchase and
any other Basic Agreement) and the Trustee and their respective members,
directors, officers, employees and agents against and from any and all
liability and expenses arising from their participation in the transactions
contemplated hereby, including without limitation (a) any and all claims by
or on behalf of any Person arising out of (i) any condition of the Project,
or (ii) acquisition, installation, construction, reconstruction,
improvement, equipping, furnishing, use, occupancy, conduct of any work or
anything whatsoever done or omitted to be done in or about the Project, or
(iii) any accident, injury or damage whatsoever to any person occurring in
or about the Project, or (iv) any breach or default by the Borrower of any
of its obligations under the Basic Agreements or the Remarketing Agreement,
or (b) any act or omission of the Borrower or any of its agents,
contractors, servants, employees, or licensees, or (vi) the offering,
issuance, sale, remarketing or resale of the Bonds, or (vii) any action,
suit, claim or proceedings instituted or threatened in connection with the
transactions contemplated by this Agreement, (b) any and all losses, costs,
reasonable counsel fees, expenses or liabilities incurred in connection
with any
such claim or any action or proceeding brought thereon and (c) any Costs of
Collection; provided, however, that the Borrower shall not be required to
indemnify any Person otherwise to be indemnified under this Section 1003
for any liabilities or expenses incurred by such Person to the extent
caused by or resulting from the willful misconduct or gross negligence of
such Person (limited, in the case of the Issuer and its members, directors,
officers, employees and agents to willful misconduct or gross negligence
committed in the capacities of the Issuer referred to above). In case any
action or proceedings is brought against the Issuer or the Trustee or any
such member, director, officer, employee or agent by reason of 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 taken or defended
by the Borrower.
The Issuer and the Trustee and their respective members, directors,
officers, employees and agents shall be entitled to the advice of counsel
(who may also by counsel for the Borrower or any Bondholder) and shall be
wholly protected as to action taken or omitted to be taken in good faith in
reliance on such advice. They may rely conclusively on any communication
or other document furnished to them under the Basic Agreements or the
Remarketing Agreement and reasonably believed by them to be genuine. They
shall not be liable for any action (i) taken by them in good faith and
reasonably believed by them to be within the discretion or powers conferred
upon them, or (ii) in good faith not taken by them because reasonably
believed to be beyond the discretion or powers conferred upon them, or
(iii) taken by them pursuant to any direction or instruction by which they
are governed by the Basic Agreements or the Remarketing Agreement, or (iv)
omitted to be taken by them by reason of the lack of any direction or
instruction required hereby or by any of the other Basic Agreements or the
Remarketing Agreement for such action; nor shall they be responsible for
the consequences of any error or judgment reasonably made by them. The
Issuer and the Trustee shall in no event be liable for the application or
misapplication of funds, or for other acts or defaults, by an Person,
except their own members, directors, officers and employees and, as to the
Trustee, others specified in Section 1201(b). When any consent or other
action by them is called for by the Basic Agreements or the Remarketing
Agreement, they may defer such action pending receipt of such certificates,
opinions, documents or other supporting evidence as they may reasonably
required. They shall not be required to take any remedial action (other
than the giving of notice) unless indemnity reasonably satisfactory to them
is furnished for any expense or liability to be incurred thereby. They
shall be entitled to reimbursement for expenses reasonably incurred or
advances reasonably made, with
interest at the Shawmut Base Rate, in the exercise of their rights or the
performance of their obligations hereunder, to the extent that they act
without previously obtaining indemnity. No permissive right or power to
act which they may have shall be construed as a requirement to act; and no
delay in the exercise of a 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 any Basic Agreement
or the Remarketing Agreement, except when given notice thereof by the
Trustee, nor shall it be required to monitor the financial condition of the
Borrower or the physical condition of the Project. No recourse shall be
had by the Borrower, the Trustee or any Bondholder for any claim based on
any Basic Agreement or the Remarketing Agreement against any member,
director, officer, employee or agent 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.
Section 1004. ADDITIONAL REMEDIES OF BONDHOLDERS. In the event
that and so long as the total of the sums on deposit in the Debt Service
Reserve Fund and the Credit Enhancement Account shall be less than
$8,000,000 (minus the aggregate amount of any reduction in the Maximum
Amount of Credit effected under Section 2.5 of the Credit Enhancement
Agreement), then at the direction of a Majority of the Bondholders the
Trustee shall, if satisfactory indemnity shall have been provided to it,
succeed to and exercise, as a Majority of the Bondholders shall direct, any
or all of the rights of the Borrower as owner under the Hyatt Management
Agreement or as ground lessee under the Ground Lease, including, but not
limited to, all such rights as the Borrower may have under such agreements
to direct the manager, to discharge the manager, to appoint a new manager,
to make improvements to the Project, to sublease the Project and, subject
to the Leasehold Mortgage and the leasehold mortgage securing the Credit
Enhancer, to sell the interest of the Borrower in the Project. The Trustee
shall have the benefit of, but shall subject to, the terms and condition of
the Hyatt Management Agreement or the Ground Lease, as the case may be,
limiting the exercise of any such rights, but shall not be deemed to have
assumed any affirmative obligations thereunder.
Section 1005. FINANCIAL REPORTS. The Borrower shall provide to
the Trustee and each Beneficial Owner which holds an ownership interest of
not less than $1,000,000 principal amount of Bonds and which shall have
requested the same in writing complying with the terms of subsection (d)
hereof, the following financial reports:
(a) As soon as available and in any event not later than 60
days following the end of each of the first three
fiscal quarters of each fiscal year of the Borrower, commencing with
the quarter ending September 30, 1991, a balance sheet of the Borrower as
of the last day in such fiscal quarter together with the statements of
income and cash flows of the Borrower for such quarter, prepared in
accordance with generally accepted accounting principles except for normal
year-end adjustments.
(b) As soon as available and in any event not later than 120
days following the end of the end of each fiscal year of the Borrower,
commencing with the year ending December 31, 1991, a balance sheet of the
Borrower as of the last day of such fiscal year together with the
statements of income and cash flow of the Borrower for such year
accompanied by the unqualified report of an independent certified public
accountant to the effect that such financial statements present fairly in
all material respects the financial condition and results of operations of
the Borrower in accordance with generally accepted accounting principles
consistently applied.
(c) Together with each financial report delivered under
subsection (b) above, (i) a certificate of the chief executive officer or
chief financial officer of the general partner of the Borrower to the
effect that no Default or Event of Default exists under this Agreement or
under the Credit Enhancement Agreement or, if such is not the case,
specifying the Default or Event of Default, the nature thereof and any
steps being taken by the Borrower to remedy the same and (ii), if the Debt
Service Coverage Ratio of the Borrower shall have equalled or exceeded 140%
for such year, a statement to such effect accompanied by calculations
thereof in detail reasonably satisfactory to the Trustee.
(d) Such other financial and statistical information
concerning the operation of the Project as such Beneficial Owner may
reasonably request. In addition, at the request of such Beneficial Owner,
the Borrower will make reasonably available an executive officer of its
general partner to discuss the condition and operation of the Project.
(e) Each request of a Beneficial Owner for financial reports
under this Section 1005 shall be in writing addressed to the Borrower with
a copy to the Trustee and shall state that such Beneficial Owner
acknowledges (and the Trustee hereby acknowledges) that such reports will
contain confidential information of the Borrower and agrees (and the
Trustee hereby agrees) not to disclose such information prior to the time
that it shall become public in another manner; provided, however, that this
agreement
shall be subject to the obligation, if any, of the Trustee or such
Beneficial Owner under law or pursuant to subpoena or other process to make
information available to governmental agencies and examiners or to others;
and provided, further, that such Beneficial Owner may disclose such
information (i) confidentially to its financial advisers, managers,
accountants and attorneys, (ii) to prospective purchasers of at least
$1,000,000 of ownership interest in the Bonds which are financial
institutions and which shall have delivered in writing to the Trustee and
the Borrower a written acknowledgment and agreement in the form set forth
in this subsection (e) and (iii) to others with the prior written consent
of the Borrower.
PART V: EVENTS OF DEFAULT
Article 11 - Default Provisions and Remedies of Trustee, Bondholders
and Issuer.
Section 1101. EVENTS OF DEFAULT; DEFAULTS. The occurrence of any
of the following events shall constitute an "Event of Default" hereunder:
(a) Failure to pay interest on any Bond when due and payable.
(b) Failure to pay any principal of or premium on any Bond
when due and payable, whether at stated maturity or pursuant to any
redemption or purchase requirement under Section 401.
(c) Failure by the Borrower to make any payment under Section
1001A or 1001B when due and payable; provided that no Event of Default
under this subsection (c) shall occur if such nonpayment is covered by a
transfer of funds from the Project Fund under Section 501A or 501B, from
the Construction and Operating Costs Contingency Fund under Section 505(a)
or (b), from the Equity Reserve Fund under Section 505A, from the Debt
Service Reserve Fund under Section 503 or from the Credit Enhancement
Account under Section 505B.
(d) On or after the reduction of the Maximum Amount of Credit
to $500,000 pursuant to Section 2.5 of the Credit Enhancement Agreement,
failure by the Borrower to make any payment under Section 1001E(b) when due
and payable.
(e) Failure by the Borrower or the Issuer on or after the
Credit Enhancement Termination Date to observe or perform any other
covenant, condition or agreement on its part to be observed or performed in
this Agreement or the
Bonds, for a period of 30 days after written notice of such failure
shall have been given to the borrower and the Issuer by the Trustee;
provided, however, that if such observance or performance requires work to
be done, actions to be taken or conditions to be remedied which by its or
their nature cannot reasonably be done, taken or remedied, as the case may
be, within such 30-day period, no Event of Default under this subsection
(e) shall be deemed to have occurred or to exist if and so long as the
Issuer or the Borrower, as the case may be, shall have commenced such work,
actions or remediation within such 30-day period and provided written
notice thereof to the Trustee and shall diligently and continuously
prosecute the same to completion.
(f) On or after the Credit Enhancement Termination Date, the
inaccuracy in any material respect when made of any representation or
warranty made in writing by the Borrower or on its behalf by an Authorized
Borrower Representation in or under any of the Basic Agreements in
connection with the transactions contemplated hereby.
(g) The occurrence or continuation of any Event of Default
under Section 14 of the Leasehold Mortgage on or after the Credit
Enhancement Termination Date.
(h) The occurrence of a Bankruptcy.
(i) Prior to the reduction of the Maximum Amount of Credit to
$500,000 pursuant to Section 2.5 of the Credit Enhancement Agreement, the
sum of the balance of moneys and investments (valued at the lesser of cost
and market value) in the Debt Service Reserve Fund and the Credit
Enhancement Account shall be less than $4,000,000.
The Borrower agrees to notify the Issuer and the Trustee promptly in
writing of the occurrence of any known Event of Default.
Within five days after knowledge of an Event of Default under
subsection (a), (b), (c), (d), (h) or (i) above, the Trustee shall give
written notice, by registered or certified mail, to the Issuer, the
Borrower, all of the Bondholders and the AEW Trust, and upon notice as
provided in Section 1201(d) shall give similar notice of any other Event of
Default.
Section 1102. ACCELERATION. Upon the occurrence of any Event of
Default the Trustee may, and shall upon the written request of a Majority
of the Bondholders declare all Bonds then outstanding to be due and payable
immediately, and, upon such declaration, all principal and interest accrued
thereon shall become immediately due and payable, and there shall be an
automatic corresponding acceleration of the Borrower's indebtedness on the
Loan; provided, however, that if there shall have occurred any Event of
Default under subsection (h) of Section 1101, the principal of and premium,
if any, on all Bonds then outstanding and the interest accrued thereon and
all the Borrower's indebtedness on the Loan automatically shall become
immediately due and payable without any action by the Trustee. Interest
shall accrue on the Bonds and the Loan to the date of payment (even if
after the date of acceleration).
Section 1103. OTHER REMEDIES; RIGHTS OF BONDHOLDERS. Upon the
continuance of an Event of Default, if so requested by Majority of the
Bondholders, and if satisfactory indemnity has been furnished to it, the
Trustee shall exercise such of the rights and powers conferred by this
Agreement, the Leasehold Mortgage or any other Basic Agreement as the
Trustee, being advised by counsel, shall deem most effective to enforce and
protect the interests of the Bondholders.
No remedy under this Agreement is intended to be exclusive, and to
the extent permitted by law each remedy shall be cumulative and in addition
to any other remedy hereunder or now or hereafter existing.
No delay or omission to exercise any right or power shall impair such
right or power or constitute a waiver of any default of Event of default or
acquiescence therein; and each such right and power may be exercised as
often as deemed expedient.
No waiver by the Trustee or the Bondholders of any Default or Event
of Default shall extend to any subsequent Default or Event of Default.
Section 1104. RIGHT OF BONDHOLDERS TO DIRECT PROCEEDINGS.
Anything in this Agreement to the contrary notwithstanding, a Majority of
the Bondholders shall have the right at any time, by an instrument or
instruments in writing executed and delivered to the Trustee, to direct the
method and place of conducting all proceedings to be taken in connection
with the enforcement of the terms and conditions of this Agreement, the
Leasehold Mortgage or any other Basic Agreement or for the appointment of a
receiver or any other proceedings hereunder or thereunder; provided that
such direction shall be in accordance with applicable law and this
Agreement and, if applicable, the Leasehold Mortgage or such other Basic
Agreement, and provided that the Trustee shall be indemnified to its
satisfaction.
Section 1105. APPLICATION OF MONEYS. Upon the occurrence and
continuance of an Event of Default, there shall be deposited in the Bond
Fund all moneys and proceeds held or received by the trustee or any
receiver pursuant to this Agreement or any related document or the exercise
of any rights granted hereby or thereby,
except amounts in the Rebate Fund, which shall be held and applied in
accordance with Section 504, and all moneys in the Bond Fund (except funds
for which provision has been made under Section 510) shall be applied after
first paying all Costs of Collection incurred by the Trustee or any
receiver (i) to the payment of any amounts due as Additional Payments under
section 1001D or amounts due under Section 1003, (ii) then to the payment
of interest, including interest on overdue principal, and, to the extent
not prohibited by applicable law, interest on overdue interest, then due on
the Bonds without regard to when such interest became due, (iii) then to
the payment of principal and premium, if any, then due on the Bonds,
without regard to when such principal or premium, if , any became due and
(iv) then to the payment of all obligations of the Borrower owing to the
Credit Enhancer and the Trustee under the Credit Enhancement Agreement; or
in such other order as may be determined by the Trustee with the written
consent of all of the Bondholders and, if the Issuer is affected thereby,
the written consent of the Issuer. Payments shall be made ratably,
according to the amounts due respectively for interest and principal and
premium, if any, among Bondholders entitled to receive the payment being
made.
Section 1106. REMEDIES VESTED IN TRUSTEE. All rights of action
(including the right to file proofs of claim) under this Agreement or under
any of the Bonds may be enforced by the Trustee without the possession of
any of the Bonds or their production in any proceeding; and any such
proceeding instituted by the Trustee shall be brought in its name, as
Trustee, without the necessity of joining as plaintiffs or defendants any
holders of the Bonds; and any recovery of the judgement shall be for the
benefit of the holders of the Bonds, subject, however, to the provisions of
this Agreement.
Section 1107. RIGHTS AND REMEDIES OF BONDHOLDERS. No Bondholder
shall have any right to institute any proceeding for the enforcement of
this Agreement or any right or remedy granted hereby unless (i) an Event of
Default is continuing, (ii) the Trustee is deemed to have notice or
knowledge thereof or has been notified as provided in ▇▇▇▇▇▇▇ ▇▇▇▇ (▇),
(▇▇▇) a Majority of the Bondholders shall have made written request to the
Trustee and shall have afforded the Trustee reasonable opportunity to
exercise its powers or to institute such proceeding in its own name, and
have offered to the Trustee indemnity satisfactory to it, and (iv) the
Trustee shall have failed or refused to exercise its power or to institute
such proceeding. Such notice, request and offer of indemnity shall at the
option of the Trustee be conditions precedent to the execution of the
powers and trusts of this Agreement, and to any action for the enforcement
of this Agreement or of any right or remedy granted hereby; it being
understood and intended that the holders of the Bonds shall have no right
to affect or prejudice the lien of this Agreement by
their action or to enforce any right hereunder except in the manner herein
provided and that proceedings shall be instituted and maintained in the
manner herein provided and for the benefit of the holders of all Bonds then
outstanding. Notwithstanding the foregoing, each Bondholder shall have a
right of action to enforce the payment of the principal of and premium, if
any, and interest on any Bond held by it at and after the maturity thereof,
from the sources and in the manner expressed in such Bond.
Section 1108. WAIVERS OF EVENTS OF DEFAULT. The Trustee shall
waive (in advance or otherwise) any Event of Default and its consequences
and rescind any declaration of maturity of principal upon the written
request of a Majority of the Bondholders and, with respect to any right of
the Issuer of the Trustee to payment or reimbursement pursuant to Section
1001D or 1003, the written consent of the Issuer or the Trustee (as the
case may be), but no such waiver (except as specifically provided therein)
or rescission shall extend to any subsequent or other Event of Default.
Section 1109. INTERVENTION BY TRUSTEE. In any judicial
proceeding which the Trustee believes has a substantial bearing on the
interests of the Bondholders, the Trustee may intervene on behalf of the
Bondholders.
Section 1110. REMEDIES OF ISSUER ON EVENT OF DEFAULT. Upon the
occurrence and continuance of an Event of default, the Issuer (i) shall, if
requested by the Trustee, confirm in writing any acceleration Loan
indebtedness, (ii) may, upon the request of the Trustee, take such action
in law or equity as may appear desirable to collect any past due or
accelerated Loan indebtedness or other payments hereunder or to enforce
compliance with any obligation or agreement of the Borrower in this
Agreement and (iii) shall have access to and may examine and make copies of
the books, accounts and other data and tax returns of the Borrower.
However, the Issuer shall not be required to take any action which in its
opinion might cause it to expend time or money or otherwise incur any
liability unless satisfactory indemnity has been furnished to it.
Notwithstanding any contrary provision in this Agreement or any other basic
Agreement, the issuer may enforce its rights under Section 1001D, 1003 or
1004 by any lawful available remedy; and nothing in this Agreement or any
other Basic Agreement shall restrict the exercise of rights by the Issuer
as ground lessor under the Ground Lease, as operator of Boston-▇▇▇▇▇
International Airport or as Credit Enhancer.
PART IV: THE TRUSTEE
Article 12 - The Trustee
Section 1201. ACCEPTANCE OF TRUSTS. The Trustee accepts the
trusts imposed upon it by this Agreement and agrees to perform such trusts,
but only upon the terms and conditions contained herein and in Section
1003.
(a) The Trustee, prior to the occurrence of an event of
Default and after the curing of all Events of Default which may have
occurred, undertakes to perform such duties and only such duties as are
specifically set forth in this Agreement and the other Basic Agreements to
which it is a party, and no implied agreements or obligations shall be read
into this Agreement or any other Basic Agreement against the Trustee. In
case an Event of Default has occurred and is continuing, the Trustee shall
exercise such of the rights and powers vested in it by this Agreement and
the other Basic Agreements, and use the same degree of care and skill in
its exercise, as a prudent person would exercise or use under the
circumstances in the conduct of his or her own affairs.
(b) The Trustee, may execute any of its trusts or powers and
perform any of its duties through attorneys, agents, receivers or employees
but shall be answerable for their conduct in accordance with the above
standard, except that as to attorneys, agents and receivers the Trustee
shall be answerable only as to the selection of same in accordance with
said standards. The Trustee shall be entitled to advice of counsel
concerning all matters of trust duties hereunder, and may pay reasonable
compensation to all such attorneys, agents, receivers, employees and
counsel as may reasonably be employed.
(c) Any action taken by the Trustee pursuant to this
Agreement upon the request or authority or consent of any person who at the
time of making such request or giving such authority or consent is the
holder of any Bond shall be conclusive and binding upon all future holders
of such Bond.
(d) The Trustee shall not be required to take notice or be
deemed to have notice or knowledge of any Default hereunder, except
Defaults described in Section 1101 (a), (b), (c), (d) or (i), unless the
Trustee shall be notified in writing of such Default by the Borrower or the
Issuer or by the holders of at lease 25% in aggregate principal amount of
Bonds then outstanding. Until such notice is received,
the Trustee may conclusively assume there is no such Default.
(e) The Trustee shall not be required to give any bond or
surety.
Section 1202. FEES AND EXPENSES OF TRUSTEE. The Borrower shall
pay the Trustee its normal and customary fees for its services rendered
hereunder during any period that no Event of default has occurred or is
continuing. The Borrower shall also reimburse the Trustee for all
advances, counsel fees and other out-of-pocket expenses reasonably made or
incurred by the Trustee in connection with its services hereunder and for
such reasonable fees as it may charge after an Event of Default has
occurred and is continuing.
Section 1203. SUCCESSOR TRUSTEE. Any corporation or association
into which the Trustee may be converted or merged, or with which it may be
consolidated, or to which it may sell or transfer all or substantially all
its trust business and assets, and any corporation or association resulting
from any such conversion, sale, merger, consolidation or transfer, IPSO
FACTO, shall be and become successor Trustee hereunder and vested with all
the trusts, power, discretion, immunities, privileges and all other matters
as was its predecessor, without the execution or filing of any instrument
or any further act on the part of the parties hereto, anything herein to
the contract notwithstanding; provided, however, that any such successor
Trustee shall be a trust company or bank in good standing having trust
powers and (unless otherwise permitted by the Enabling Act) authorized to
act as Trustee in Commonwealth.
Section 1204. RESIGNATION BY TRUSTEE; REMOVAL. The Trustee may
at any time resign from the trusts hereby created by giving 30 days'
written notice to the Issuer, to the Borrower and to each Bondholder, but
such resignation shall not take effect until the appointment of a successor
Trustee, acceptance by the successor Trustee of such trusts and recordation
of the assignment to such successor Trustee of the rights of the mortgagee,
secured party and assignee under the Borrower Security Instruments. The
Trustee may be removed at any time by an instrument or concurrent
instruments in writing delivered to the Trustee and to the Issuer and
signed by a Majority of Bondholders.
Section 1205. APPOINTMENT OF SUCCESSOR TRUSTEE. If the Trustee
hereunder shall resign or be removed, or be dissolved, or otherwise become
incapable of acting hereunder, or in case it shall be taken under the
control of any public officer or officers, or of a receiver appointed by a
court, a successor shall be appointed by the Borrower. If the Borrower
does not
appoint a successor Trustee within 30 days of the Trustee providing notice
of its resignation, the Trustee may petition a court of competent
jurisdiction to appoint a successor Trustee. At any time within one year
after any such vacancy shall have occurred and provided a court has not
appointed a successor Trustee as provided above, a Majority of the
Bondholders may appoint a successor Trustee by an instrument or concurrent
instruments in writing signed by or on behalf of such holders, which
appointment shall supersede any Trustee theretofore appointed by the
Borrower. Each successor Trustee shall be a trust company or bank in good
standing having trust powers and having a reported capital, surplus and
undivided profits of not less than $100,000,000. Any such successor
Trustee shall become Trustee upon giving notice to the Borrower, the Issuer
and the Bondholders, if any, of its acceptance of the appointment, vested
with all the property, rights and powers of the Trustee hereunder, without
any further act of conveyance. Any predecessor Trustee shall execute,
deliver and record and file such instruments as the Trustee may reasonably
require to confirm or perfect any such succession.
Section 1206. DEALING IN BONDS. The Trustee and any of its
directors, officers, employees or agents may become the owners of any or
all of the Bonds secured hereby.
Section 1207. TRUSTEE AS BOND REGISTRAR; LIST OF BONDHOLDERS.
The Trustee is hereby designated as bond registrar for the Bonds and, as
such, will keep on file a list of names and addresses of the holders of all
Bonds; provided, however, that the Trustee shall be under no responsibility
with regard to the accuracy of the address of any Bondholder. At
reasonable times under reasonable regulations established by the Trustee,
such list may be inspected and copied by the Borrower or by owners (or a
designated representative thereof) of Bonds then outstanding, such
ownership and the authority of any such designated representative to be
evidenced to the satisfaction of the Trustee.
Section 1208. SUCCESSOR TRUSTEE AS CUSTODIAN OF FUNDS, BOND
REGISTRAR AND PAYING AGENT. In the event of a change in the office of
Trustee, the predecessor Trustee which has resigned or been removed shall
cease to be custodian of any funds it may hold pursuant to this Agreement,
and cease to be the bond registrar and paying agent for any of the Bonds,
and the successor trustee shall become such custodian, bond registrar and
paying agent.
Section 1209. ADOPTION OF AUTHENTICATION. In case any Bonds
shall have been authenticated but not delivered, any successor Trustee may
adopt the certificate of authentication of the predecessor Trustee and
deliver the Bonds as so authenticated.
Section 1210. DESIGNATION AND SUCCESSION OF PAYING AGENTS. After
15 days' written notice to the Borrower and subject to the Borrower's
approval (which shall not unreasonably be withheld or delayed), the Trustee
may designate any other banks or trust companies as paying agent. Any bank
or trust company with or into which any paying agent other than the Trustee
may be merged or consolidated, or to which the assets and business of such
paying agent may be sold, shall be deemed the successor to such paying
agent for the purposes of this Agreement. If the position of such paying
agent shall become vacant for any reason, the Trustee shall, within 30 days
thereafter, appoint a bank or trust company located in the same state as
such paying agent to fill such vacancy, subject to the Borrower's approval
(which shall not unreasonably be withheld or delayed). The paying agents
shall enjoy the same protective provisions in the performance of their
duties hereunder as are specified in Section 1201 with respect to the
Trustee, insofar as such provisions may be applicable.
Section 1211. TRUST ESTATE MAY BE VESTED IN CO-TRUSTEE. It is
the purpose hereof that there shall be no violation of any law of any
jurisdiction denying or restricting the right of banking corporations or
associations to transact business as trustee in such jurisdiction. It is
recognized that in case of litigation hereunder, and in particular in case
of the occurrence of an Event of Default, it may be necessary that the
Trustee appoint an additional institution as a separate Trustee or Co-
Trustee. The following provisions of this Section 1211 are adapted to
these ends.
Upon the incapacity or lack of authority of the Trustee, by reason of
any present or future law of any jurisdiction, to exercise any of the
rights, powers and trusts herein granted to the Trustee, each and every
remedy, power, right, claim, demand, cause of action, immunity, estate,
title, interest and lien expressed herein or intended to be exercised by or
vested in or conveyed to the Trustee with respect thereto shall be
exercisable by and vest in a separate Trustee or Co-Trustee appointed by
the Trustee but only to the extent necessary to enable the separate Trustee
or Co-Trustee to exercise such rights, powers and trusts, and every
agreement and obligation necessary to the exercise thereof by such separate
Trustee or Co-Trustee shall run to and be enforceable by either of them.
Should any deed, conveyance or instrument in writing from the Issuer
be required by the separate Trustee or Co-Trustee so appointed by the
Trustee in order to more fully and certainly vest in and confirm to him or
it such properties, rights, powers, trusts, duties and obligations, any and
all such deeds, conveyances and instruments shall, on request, be executed,
acknowledged and delivered by the Issuer. In case any separate
Trustee or Co-Trustee, or a successor to either, shall die, became
incapable of acting, resign or be removed, all the estates, properties,
rights, powers, trusts, duties and obligations of such separate Trustee or
Co-Trustee, so far as permitted by law, shall vest in and be exercised by
the Trustee until the appointment of a new Trustee or successor to such
separate Trustee or Co-Trustee. Any separate Trustee or Co-Trustee
appointed pursuant to this Section 1211 shall be a trust company or bank in
good standing having trust powers and having a reported capital, surplus
and individual profits of not less than $50,000,000.
Section 1212. TRUSTEE TO RETAIN INFORMATION. So long as any of
the Bonds shall be outstanding, the Trustee shall retain all certificates,
financial statements and other written information furnished to it by or on
behalf of the Borrower or any other Person under this Agreement and the
other Basic Agreements and shall make such documentation available for
review after reasonable notice during regular business hours at the
principal corporate trust office of the Trustee to any Bondholder and, so
long as the Bonds are held by the DTC or its nominee, to any beneficial
owner of Bonds presenting evidence of such ownership reasonably
satisfactory to the Trustee. The Trustee shall permit such reviewers to
take copies of all or any part of such documentation, subject to their
payment of such reasonable copying and handling charges as the Trustee may
impose.
Section 1213. QUARTERLY FUND REPORTS. Within 30 days following
the end of each calendar quarter, commencing September 30, 1991, the
Trustee shall furnish to Issuer, the Borrower and each Beneficial Owner of
not less than $1,000,000 principal amount of the Bonds which shall have
requested the same in writing a report setting forth the balance in each
Fund and Account and in the Credit Enhancement Account as of the last day
of such fiscal quarter.
PART VII: SUPPLEMENTAL AGREEMENT AND
WAIVERS; MISCELLANEOUS
Article 13 - Supplemental Agreements and Waivers
Section 1301. SUPPLEMENTAL AGREEMENTS NOT REQUIRING CONSENT OF
BONDHOLDERS. The parties to this Agreement or any other Basic Agreement
may without the consent of, or notice to, any of the Bondholders enter into
agreements supplemental to this Agreement or such other Basic Agreement and
financing statements or other instruments evidencing the existence of a
lien as shall not, in their opinion, be inconsistent with the terms and
provisions hereof or thereof for any one or more of the following purposes:
(a) To cure any ambiguity, inconsistency of formal defect or
omission in this Agreement or such other Basic Agreement;
(b) To grant to or confer upon the Trustee for the benefit of
the Bondholders any additional rights, remedies, powers, or authority that
may lawfully be granted to or conferred upon the Bondholders or the
Trustee;
(c) To subject to the lien and pledge of this Agreement or
such other Basic Agreement additional revenues or collateral;
(d) To evidence any succession to the Issuer and the
assumption by such successor of the agreements of the Issuer contained in
this Agreement and the Bonds;
(e) To the extent required by law, to permit registration of
the Bonds under the federal Securities Act of 1933, as amended, the federal
Trust Indenture Act of 1939, as amended (the "Trust Indenture Act"), or any
applicable state securities law, and to permit qualification of this
Agreement under the Trust Indenture Act;
(f) To revise the provisions of Section 504 hereof or any
other provision of this Agreement or any related document or certificate
relating to rebate or arbitrage profits to the United States, provided the
Trustee shall have received an opinion of Bond Counsel that such revision
does not adversely affect the exclusion from gross income of interest on
the Bonds for federal income tax purposes; and
(g) To effect any other change herein or therein which, in
the judgement of the Trustee, is not to the prejudice of the holders of the
Bonds.
Section 1302. SUPPLEMENTAL AGREEMENTS REQUIRING CONSENT OF
BONDHOLDERS. In addition to supplemental agreements permitted by Section
1301, a Majority of the Bondholders shall have the right, from time to
time, to consent to and approve the execution to the parties to this
Agreement or any other Basic Agreement or other agreement or agreements
supplemental hereto or thereto for the purpose of modifying, altering,
amending, adding to or rescinding, in any particular, any of the terms or
provisions contained in this Agreement or such other Basic Agreement or in
any supplemental agreement; provided, however, that nothing in this Section
1302 shall permit (i) an extension of the stated maturity of the principal
of or the interest on any Bond without the consent of the holder of such
Bond; (ii) a reduction in the principal amount of any Bond, the rate of
interest thereon or the premium, if applicable, to be paid upon the
redemption thereof
prior to maturity without the consent of the holder of such Bond; (iii) an
extension of the date for making any scheduled mandatory redemption under
Section 401(c) (iii) without the consent of all of the Bondholders; (iv)
the establishment of a privilege or priority of any Bond or Bonds over any
other Bond or Bonds without the consent of all the Bondholders; (v) a
reduction in the percentage of the aggregate principal amount of Bonds the
holders of which are required to consent to any such supplemental agreement
without the consent of the holders of all the Bonds at the time outstanding
which would be affected by the action to be taken; (vi) a release of
collateral granted under this Agreement or such other Basic Agreement
without the consent of all of the Bondholders, except as expressly provided
herein or therein; or (vii) a modification of the rights, duties or
immunities of the Issuer or the Trustee without the written consent of the
affected party; and provided, further, that no consent of Bondholders shall
be required as to any amendment of or waiver under any shall be required as
to any amendment of or waiver under any provision of the Credit Enhancement
Agreement for which consent of the Trustee is not required as provided in
Section 16 thereof.
If at an time the Issuer or the Borrower shall request the Trustee to
enter into any supplemental agreement pursuant to this Section 1302, the
Trustee shall, upon being satisfactorily indemnified with respect to
expenses, cause notice of the proposed execution to be made in the manner
required for redemption of principal of Bonds pursuant to Section 403;
provided, however, that failure to give such notice, or any defect therein,
shall not affect the validity of the proceedings.
Such notice shall briefly set forth the nature of the proposed
supplemental agreement and shall state that copies thereof are on file at
the corporate trust office of the Trustee for inspection by all
Bondholders. Except as otherwise provided in this Section 1302, if, within
60 days or such longer period (not to exceed two years) as shall be
prescribed by the Issuer following the final mailing of such notice, not
less than a Majority of the Bondholders at the time of the execution of any
such supplemental agreement shall have consented to and approved the
execution thereof, no holder of any Bond shall have any right to object to
any of the terms and provisions contained therein, or the operation
thereof, or in any manner to question the propriety of the execution
thereof, or to enjoin or restrain the Trustee, the Issuer or the Borrower
from executing the same or from taking any action pursuant to the
provisions thereof. Upon the execution of any such supplemental agreement
as in this Section permitted and provided, this Agreement or the applicable
Basic Agreement shall be and be deemed to be modified and amended in
accordance therewith.
Section 1303. OPINION OF COUNSEL. The Trustee shall be entitled
to receive, and shall be fully protected in relying
upon, the opinion of any counsel approved by it, who may be counsel for the
Issuer, as conclusive evidence that a proposed supplemental agreement
complies with the provisions of this Agreement, and that it is proper for
the Trustee, under the provisions of this Article, to join in the execution
of such supplemental agreement.
Section 1304. MODIFICATION BY UNANIMOUS CONSENT. Notwithstanding
anything contained elsewhere in this Agreement, the rights and obligations
of the Borrower, the Issuer, the Trustee and the holders of the Bonds, and
the terms and provisions of the Bonds and this Agreement, any other Basic
Agreement or any supplemental agreement may be modified or altered in any
respect with consent of the Borrower, the Issuer, the Trustee and the
holders of all of the Bonds then outstanding.
Article 14 - Miscellaneous
Section 1401. CONSENTS, ETC., OF BONDHOLDERS. Any consent,
request, direction, approval, objection or other instrument required by
this Agreement to be executed by the Bondholders may be in any number of
concurrent writings of similar tenor and may be executed by such
Bondholders in person or by agent appointed in writing.
Section 1402. LIMITATION OF RIGHTS. With the exception of rights
herein expressly conferred, nothing expressed or implied in or inferred
from this Agreement or the Bonds shall give to any Person other than the
parties hereto and the holders of the Bonds any right or remedy with
respect to this Agreement. This Agreement and all of the covenants,
conditions and provisions hereof are for the sole and exclusive benefit of
the parties hereto and the holders of the Bonds as herein provided.
Section 1403. 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 provision or circumstance.
Section 1404. NOTICES. All notices, certificates or other
communications hereunder shall be sufficiently given and, except (i) as
provided in Section 504 regarding certificates or other materials to be
provided to the Borrower or the Issuer or notices to be given by the
Trustee, and (ii) as provided in Section 1201(d), shall be deemed to be
delivered if in writing or in the form of a telex addressed to the
appropriate Notice Address and if either (a) actually delivered at said
address (evidenced in the case of a telex by receipt of the correct answer
back) or (b) in the case of a letter, three Business Days shall have
elapsed after the same shall have been deposited in the United States
mails, first-class postage prepaid and registered or certified. A copy of
each notice, certificate or other communication given by any party hereto
shall also be given to each other party hereto in the manner provided for
in this Section 1404.
Section 1405. PAYMENTS DUE ON SATURDAYS, SUNDAYS AND HOLIDAYS.
In any case where a Payment Date is not a Business Day, then payment of
interest or principal and any premium due on such day need not be made by
the Trustee on such date but may be made on the next succeeding Business
day with the same force and effect as if made on the Payment Date.
Section 1406. EXTENT OF ISSUER COVENANTS; NO PERSONAL LIABILITY.
No covenant, stipulation, obligation or agreement of the Issuer contained
in this Agreement or any other Basic Agreement shall be deemed to be a
covenant, stipulation, obligation or agreement of any present or future
member, director, officer, employee or agent of the Issuer in his or her
individual capacity; and no such person (including any such person
executing the Bonds) shall be liable personally on the Bonds or be subject
to any personal liability by reason of their issuance.
Section 1407. BONDS OWNED BY ISSUER OR BORROWER. In determining
whether holders of the requisite aggregate principal amount of the Bonds
have concurred in any direction, consent or waiver under this Agreement or
any other Basic Agreement, Bonds which are owned by the Issuer, the
Borrower or any Borrower Affiliate (unless one or more of such Persons own
all of the Bonds which are then outstanding, determined without regard to
this Section 1407) shall be disregarded and deemed not to be outstanding
for the purpose of any such determination, except that, for the purpose of
determining whether the Trustee shall be protected in relying on any such
direction, consent or waiver, only Bonds which the Trustee knows are so
owned shall be so disregarded. Bonds so owned which have been pledged in
good faith may be regarded as outstanding if the pledgee establishes to the
satisfaction of the Trustee the pledgee's right so to act with respect to
such Bonds and that the pledgee is not the Issuer, the Borrower or any
Borrower Affiliate (unless one or more of such Persons own all of the Bonds
which are then outstanding, determined without regard to this Section
1407). In case of a dispute as to such right, any decision by the Trustee
taken in good faith upon the advice of counsel shall be full protection to
the Trustee in accordance with its standards of performance hereunder.
Section 1408. CAPTIONS; INDEX. The captions, headings and index
in this Agreement are for convenience only and in no way define or describe
the scope or content of any provision of this Agreement.
Section 1409. INSTRUMENTS OF FURTHER ASSURANCE RECORDINGS AND
FILING. The Borrower will do, execute, acknowledge and deliver and cause
to be performed such supplemental indentures and such further acts,
instruments and transfers as the Trustee may reasonably require for the
better assuring, transferring, pledging, assigning and conferring unto the
Trustee the property and rights herein described and the income and revenue
pledged hereby.
The Borrower will cause this Agreement and any necessary financing
statements, and other instruments (and supplements and amendments to any of
the foregoing) to be recorded and filed as may be required by law in order
to preserve fully and protect the security of the holders of the Bonds and
the rights of the Trustee hereunder.
The Borrower shall cause to be filed any continuation statements or
instruments of a similar character serving a similar purpose which, in its
opinion, are required by law in order to preserve and protect the security
of the Bondholders and shall notify the Trustee of such filings.
Section 1410. EXCULPATION OF RELATED PERSONS OF BORROWER. No
partner of the Borrower, other than LHA-II, Inc. as sole general partner of
the Borrower, and no officer, employee or agent of the Borrower and no
stockholder, director, officer, employee or agent of any partner of the
Borrower, including for this purpose any stockholder, director, officer,
employee or agent of LHA-II, Inc., is personally liable for the Borrower's
obligations hereunder or under any other Basic Agreement.
Section 1411. COUNTERPARTS. This Agreement may be executed in
several counterparts, each of which shall be an original and all of which
shall constitute but one and the same Agreement.
Section 1412. GOVERNING LAW; SEALED INSTRUMENT. The validity and
interpretation of this Agreement and the Bonds shall be governed by the
laws of the Commonwealth. It is intended that this Agreement shall have
the effect of a sealed instrument.
Section 1413. AGREEMENTS TO CONSTITUTE COVENANTS. Words of
agreement and promises shall also constitute covenants.
section 1414. CONFIRMATION OF ORIGINAL AGREEMENT. Except as
expressly amended and restated hereby, the Original Agreement is confirmed
in full force and effect.
IN WITNESS WHEREOF, each of the Borrower, the Issuer and the Trustee
has caused this Agreement to be executed and delivered as a sealed
instrument in its name and behalf by its authorized officer, all as of the
date appearing on page 1.
(SEAL) MASSACHUSETTS PORT AUTHORITY
By /s/ ▇▇▇▇▇▇ ▇. ▇'▇▇▇▇▇
------------------------------------
Secretary-Treasurer
▇▇▇▇▇ HARBORSIDE ASSOCIATED II
LIMITED PARTNERSHIP
By LHA-II, Inc., its General Partner
By /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
___________________________________
Its President
SHAWMUT BANK, N.A., AS TRUSTEE
By /s/ ▇▇▇ ▇▇▇▇▇▇▇▇
___________________________________
Authorized Officer
EXHIBIT 301
No. R-82
CUSIP: ▇▇▇▇▇▇▇▇▇ $40,000,000
UNITED STATES OF AMERICA
THE COMMONWEALTH OF MASSACHUSETTS
MASSACHUSETTS PORT AUTHORITY
SPECIAL PROJECT REVENUE BOND, SERIES 1990
(HARBORSIDE HYATT CONFERENCE CENTER AND HOTEL PROJECT)
REGISTERED OWNER: CEDE & CO.
PRINCIPAL AMOUNT: FORTY MILLION DOLLARS
MATURITY DATE: March 1, 2026
INTEREST RATE: 10%
BOND DATE: June 27, 1991
__________________________________________________________________________
THIS BOND DOES NOT CONSTITUTE A GENERAL DEBT OR LIABILITY, OR A PLEDGE OF
THE FAITH AND CREDIT, OF THE MASSACHUSETTS PORT AUTHORITY OR OF THE
COMMONWEALTH OF MASSACHUSETTS OR ANY POLITICAL SUBDIVISION OR MUNICIPALITY
THEREOF. THE PRINCIPAL OF AND PREMIUM, IF ANY, AND INTEREST ON THIS BOND
ARE PAYABLE SOLELY FROM THE REVENUES OF THE PROJECT REFERRED TO HEREIN AND
THE FUNDS AND ACCOUNTS SPECIFICALLY PLEDGED UNDER THE LOAN AND TRUST
AGREEMENT REFERRED TO HEREIN, FROM ADVANCES FROM THE CREDIT ENHANCEMENT
ACCOUNT PLEDGED UNDER THE CREDIT ENHANCEMENT AGREEMENT REFERRED TO HEREIN,
AND FROM THE SECURITY PLEDGED BY ▇▇▇▇▇ HARBORSIDE ASSOCIATES II LIMITED
PARTNERSHIP UNDER THE BORROWER SECURITY INSTRUMENTS REFERRED TO HEREIN.
__________________________________________________________________________
1. PAYMENT PROVISIONS. The Massachusetts Port Authority (the
"Issuer"), a body politic and corporate and a public instrumentality of The
Commonwealth of Massachusetts (the "Commonwealth") duly created by Chapter
465 of the Acts of 1956 of the Commonwealth, as heretofore amended and
supplemented (as so amended and supplemented, the "Enabling Act"), for
value received, promises to pay to the Registered Owner of this Bond, or
registered assigns or legal representatives (but only from the limited
sources and in the manner herein described), the Principal Amount in the
Maturity Date unless redeemed prior thereto as hereinafter provided, and to
pay interest on the unpaid Principal Amount of this Bond outstanding from
time to
time from the Bond Date at the Interest Rate set forth above, payable
semiannually on March 1 and September 1 of each year (each an "Interest
Payment Date"), commencing March 1, 1992.
The final payment of principal, premium, if any, and interest with
respect to this Bond shall be payable in immediately available funds at the
corporate trust office of the Trustee (hereinafter defined) upon surrender
of this Bond, and other payments shall be payable by check or draft mailed
by the Trustee to the Registered Owner at its address appearing on the bond
register kept by the Trustee as of the close of business on the Record
Date, which when used herein shall mean the fifteenth day of the month
immediately preceding the month in which an Interest Payment Date occurs;
provided, however, that if the holder of this Bond or group of which such
holder is a part holds Bonds aggregating $1,000,000 or more in outstanding
principal amount and gives written notice thereof to the Trustee
accompanied by sufficient wire transfer instructions, then payments of
principal, premium, if any, and interest with respect to this Bond (other
than the final payment referred to above) shall be payable by wire transfer
of immediately available funds. As used herein, "Business Day" means any
day other than a Saturday, Sunday or other day on which the New York Stock
Exchange is closed or on which banks are authorized or required to be
closed in the City of Boston, Massachusetts or any other municipality in
which the principal offices of the Trustee are located.
Principal and premium, if any, and interest are payable in lawful
money of the United States of America.
2. INTEREST. This bond shall bear interest from and including the
date hereof until payment of the principal hereof shall have been made or
provided for in accordance with the provisions hereof and of the Loan and
trust Agreement (hereinafter defined) whether at maturity, upon redemption
or otherwise. This Bond will bear interest at the Interest Rate computed
on the basis of a 360-day year, consisting of twelve 30-day months.
3. DESCRIPTION OF BOND ISSUE. This Bond is one of an issue of
$40,000,000 Massachusetts Port Authority Special Project Revenue Bond,
Series 1990 (Harborside Hyatt Conference Center and Hotel Project) (the
"Bonds") issued under a Loan and Trust Agreement dated as of December 15,
1990, as amended and restated as of June 27, 1991 (as in effect from time
to time, the "Loan and Trust Agreement") among the Issuer, ▇▇▇▇▇ Harborside
Associates II Limited Partnership, a Massachusetts limited partnership
(with its successors, the "Borrower"), and Shawmut Bank, N.A., a national
banking association, as trustee (with its successors and, where the context
so requires, any separate Trustee or Co-Trustee appointed by the Trustee
pursuant to the provisions of the Loan and Trust Agreement, the "Trustee").
The
proceeds of the Bonds will be loaned (the "Loan") by the Issuer to the
Borrower under the Loan and Trust Agreement to finance the Project (as
defined in the Loan and Trust Agreement). The Bonds are issued pursuant to
and in full compliance with the laws of the Commonwealth, including the
Enabling Act, and the issuance of the Bonds and the execution and delivery
of the Loan Trust Agreement have been duly authorized by the Issuer.
The Bonds are to be equally and ratably secured and entitled to the
protection given by the Loan and Trust Agreement and the Borrower Security
Instruments and certain other Basic Agreements (each as defined in the Loan
and Trust Agreement) entered into by the Borrower in favor of the Trustee.
In addition, the Massachusetts Port Authority, as credit enhancer and not
as issuer of the Bonds, has agreed to advance certain funds to pay debt
service on the Bonds from a Credit Enhancement Account established under a
Credit Enhancement Agreement date as of June 27, 1991 among the
Massachusetts Port Authority, as credit enhancer, the Borrower and the
Trustee. Reference is hereby made to such documents for a description of
the nature and the extent of the security for the Bonds, the rights, duties
and obligation and immunities of the Issuer, the Trustee and the Registered
Owners and the terms upon which the Bonds are or may be issued and secured.
4. EXCHANGE AND TRANSFER; BOOK-ENTRY SYSTEM. Upon surrender of
this Bond at the corporate trust office of the Trustee, as bond registrar,
together with an assignment duly executed by the Registered Owner or his
attorney or legal representative in such form and with such guaranty of
signature as shall be satisfactory to the Trustee, this Bond may be
exchanged for fully registered Bonds aggregating in amount the then unpaid
principal amount of the Bond so surrendered, in denominations of not less
than $100,000 or any integral multiple thereof.
This Bond may be transferred upon the books kept for the registration
and transfer of Bonds upon its surrender to the Trustee, as bond registrar,
together with and assignment duly executed by the Registered Owner or his
attorney or legal representative in such form and with such guaranty of
signature as shall be satisfactory to the Trustee.
BY ACCEPTANCE OF THIS BOND, THE BONDHOLDER AGREES THAT IT WILL NOT
TRANSFER OR GRANT PARTICIPATIONS IN SUCH BOND IN DENOMINATIONS OF LESS THAN
$100,000.
The foregoing provisions of this Section 4 to the contrary
notwithstanding, the Bonds will be issued initially as fully registered
bonds in the name of Cede & Co., as nominee of The Depository Trust
Company, New York, New York ("DTC"), as Registered Owner of the Bonds, and
deposited in the custody of DTC. One fully registered Bond will be
registered to Cede & Co.
Beneficial owners of the Bonds will not receive physical delivery of the
Bonds. Individual purchases of the Bonds may be made in book-entry form
only in principal amounts of $100,000 or any integral multiple thereof.
Principal and interest payments on the Bonds will be made to DTC or its
nominee as registered owner of such Bonds.
DTC shall pay interest to the beneficial owners of record of the
Bonds through its participants as of the close of business on the Record
Date. DTC shall pay the redemption price of the Bonds called for
redemption to the beneficial owners of record of the Bonds through its
participants as of the close of business 15 days prior to the date fixed
for redemption.
Transfer of ownership interests in the Bonds shall be made by DTC and
its participants, acting as nominees of the beneficial owners of the Bonds,
in accordance with rules specified by DTC and its participants. There can
be no assurance that DTC, its participants or other nominees of the
beneficial owners of the Bonds will act in accordance with such rules or on
a timely basis.
Bond certificates will be issued directly to owners of the Bonds
other than DTC, or its nominee, upon the occurrence of certain events
specified in Section 306 of the Loan and Trust Agreement.
5. REDEMPTION OF BONDS. The Bonds are subject to redemption prior
to stated maturity as follows:
(a) OPTIONAL REDEMPTION. Bonds shall be subject to redemption on
and after March 1, 2001 by the Issuer, at the written direction of the
Borrower, in whole on any date or in part on any Interest Payment Date, in
the amount of $100,000 or any integral multiple thereof, at the following
redemption price (expressed as a percentage of the principal amount of the
Bonds, or portion thereof, to be redeemed), plus accrued interest to the
redemption date:
REDEMPTION PERIOD REDEMPTION
(BOTH DATES INCLUSIVE) PRICE
March 1, 2001 through February 28, 2002 102%
March 1, 2002 through February 28, 2003 101
March 1, 2003 and thereafter 100
(b) EXTRAORDINARY OPTIONAL REDEMPTION. The Bonds may be redeemed
in whole but not in part by the Issuer at any time, at the written
direction of the Borrower, at a redemption price equal to 100% of the
principal amount thereof plus accrued interest thereon to the redemption
date, without premium, upon the occurrence of any extraordinary event or
condition described in Section 401(b) of the Loan and Trust Agreement.
(c) MANDATORY REDEMPTION. The Bonds shall be subject to mandatory
redemption in whole or in part (as specified below) at a redemption price
equal to 100% of the principal amount thereof plus accrued interest to the
redemption date, without premium, as follows:
(i) Mandatory redemption in part on any date from moneys
remaining in the Project Fund established under the Loan and Trust
Agreement upon the completion of the Project, as and to the extent provided
under Section 501C of the Loan and Trust Agreement.
(ii) Mandatory redemption in part on any date from proceeds of
casualty insurance and eminent domain awards, to the extent provided under
Section 702 or 703 of the Loan and Trust Agreement.
(iii) Mandatory scheduled redemptions in part on March 1 in
each year, commencing March 1, 2001, in the amounts provided in Section
401(c) (iii) of the Loan and Trust Agreement, as the same may be adjusted
from time to time on account of an optional or mandatory partial redemption
of Bonds as provided in the last paragraph of Section 401(c) of the Loan
and Trust Agreement.
(d) SELECTION OF BONDS TO BE REDEEMED; PROCEDURE OF REDEMPTION. A
redemption of Bonds shall be a redemption of the whole or of any part of
the Bonds, provided, that there shall be no partial redemption of less than
$100,000 in principal amount of Bonds. If less than all the Bonds shall be
called for redemption under any provision of the Loan and Trust Agreement
permitting such partial redemption of the particular Bonds to be redeemed
shall be selected by the Trustee, in such manner as the Trustee in its
discretion may deem fair and appropriate; PROVIDED, HOWEVER, (x) that the
portion of any Bond to be redeemed under any provision of the Loan and
Trust Agreement shall be in the principal amount of $100,000 or any
multiple thereof, (y) that, in selecting Bonds for redemption, the Trustee
shall treat each in selecting Bonds for redemption, the Trustee shall treat
each Bond as representing that number of Bonds which is obtained by
dividing the principal amount of such Bond by $100,000 and (z) that, to the
extent practicable, the Trustee will not select any Bond for partial
redemption if the amount of such Bond remaining outstanding would be
reduced by such partial redemption to less than $100,000. If there shall
be called for redemption less than all of a Bond, the Issuer shall execute
and deliver and the Trustee shall authenticate, upon surrender of such
Bond, and at the expense of the Borrower and without charge to the owner
thereof, for the unredeemed balance of the Bond so surrendered, Bonds of
like maturity.
At its option, to be exercised on or before the 60th day next
preceding any mandatory scheduled redemption date referred to in subsection
(c) (iii) above, the Borrower may deliver to the Trustee for cancellation
Bonds in any aggregate principal amount which have been purchased by the
Borrower in the open market. Each Bond so delivered shall be credited by
the Trustee at 100% of the principal amount thereof against the mandatory
scheduled redemption requirement referred to in said subsection (c) (iii)
on such mandatory scheduled redemption date and against the monthly Loan
payments required to be made with respect to such mandatory scheduled
redemption requirement under Section 1001B of the Loan and Trust agreement,
and any excess of such amount shall be credited against future mandatory
scheduled redemption requirements and against the corresponding portions of
the monthly Loan payments in chronological order.
In the event any of the Bonds are called for redemption, the Trustee
shall give notice, in the name of the Issuer, of the redemption of such
Bonds, which notice shall (i) specify the Bonds to be redeemed, the
redemption date, the redemption price, and the place or places where
amounts due upon such redemption will be payable and, if less than all of
the Bonds are to be redeemed, the numbers of the Bonds, and the portions of
the Bonds, so to be redeemed, (ii) state any condition to such redemption,
and (iii) state that on the redemption date, and upon the satisfaction of
any such condition, the Bonds to be redeemed shall cease to bear interest.
CUSIP number identification shall accompany all redemption notices. Such
notice may set forth any additional information relating to such
redemption. Such notice shall be given by registered or certified mail at
least 30 days (or, in the case of acceleration of the Bonds pursuant to
Section 1102 of the Loan and Trust Agreement, seven days) but not more than
60 days prior to the date fixed for redemption to each Registered Owner of
Bonds to be redeemed at its address shown on the registration books kept by
the Trustee; PROVIDED, HOWEVER, that failure to give such notice to any
Registered Owner or any defect in such notice shall not affect the validity
of the proceedings for the redemption of any of the other Bonds. Except at
any time during which all of the Bonds are registered in the name of Cede &
Co., notice of such redemption also shall be sent by registered mail,
overnight delivery service or other similar means, postage prepaid, to
certain municipal registered Securities Depositories which are known to the
Trustee to be holding Bonds and to at least two of the national Information
Services that disseminate securities redemption notices, when possible, at
least five days prior to the mailing of notices required by the first
paragraph above, but in any event at least 30 days (or, in the case of
acceleration of the Bonds pursuant to Section 1102 of the Loan and Trust
Agreement, seven days) but not more than 60 days prior to the redemption
date; PROVIDED that neither failure to receive such notify nor any defect
in any
notice so mailed shall affect the sufficiency of the proceedings for the
redemption of such Bonds.
Any Bonds and portions of Bonds which have been duly selected for
redemption and which are paid in accordance with Section 510 of the Loan
and Trust Agreement shall cease to bear interest on the specified
redemption date.
6. ACCELERATION. In certain events as provided in the Loan and
Trust Agreement, the principal of all the Bonds then outstanding under the
Loan and Trust Agreement may become or be declared due and payable before
their stated maturity, together with interest accrued thereon.
7. ADDITIONAL PROVISIONS. The Registered Owner shall have no
right to enforce the provisions of the Loan and Trust Agreement or to
institute or appear in proceedings with respect to the Loan and Trust
Agreement or its enforcement except as provided in the Loan and Trust
Agreement. Modifications or alterations of the Loan and Trust Agreement,
or of any supplements thereto, may be made only as provided to the Loan and
Trust Agreement.
Reference is hereby made to the Loan and Trust Agreement, the
Borrower Security Instruments and the other Basic Agreements, each of which
is on file and may be inspected during regular business hours at the
corporate trust office of the Trustee, for a description of the security
for the Bonds and for the provisions thereof with respect to the rights,
limitations of rights, duties, obligations and immunities of the Issuer,
the Borrower, the Trustee and the Registered Owner hereof. All capitalized
terms used herein and not herein defined are used with the meanings
specified for such terms in the Loan and Trust Agreement.
This Bond shall not constitute the personal obligation, either
jointly or severally, of any member, director, officer, employee or agent
of the Issuer.
This Bond shall not be valid or entitled to any security or benefit
under the Loan and Trust Agreement until the certificate of authentication
hereon shall have been signed by the Trustee.
IN WITNESS WHEREOF, Massachusetts Port Authority has caused this Bond
to be duly executed in its name, and its corporate seal to be hereunto
manually impressed or imprinted by facsimile and attested, by the manual or
facsimile signature of its Chairman, Vice Chairman or Executive Director.
ASSIGNMENT
FOR VALUE RECEIVED, , the undersigned hereby
sells, assigns, and transfers unto
(please print or typewrite name and address including zip code of
transferee)
______________________________________________________________________
(please insert Social Security or other identifying number of assignee)
______________________________________________________________________
the within Bond and all rights thereunder and hereby irrevocably
constitutes and appoints
______________________________________________________________________
attorney to transfer the within Bond on the books kept for registration
thereof, with full power of substitution in the premises.
Dated:__________________
______________________________________________
NOTICE: The signature to this assignment must correspond with the name
as it appears upon the face of the within Bond in every particular, without
alteration or enlargement or any change whatever.
Signature Guarantee:
_____________________________________
Bank, Trust Company or Brokerage Firm
By____________________________________
Authorized Signature
(Seal or Facsimile) MASSACHUSETTS PORT AUTHORITY
By_____________________________
Executive Director
CERTIFICATE OF AUTHENTICATION
This Bond is one of the Bonds described in the aforementioned
Loan and Trust Agreement.
SHAWMUT BANK, N.A., as Trustee
By_____________________________
Authorized Signature