Exhibit 10.1
Execution Copy
================================================================================
---------------------
TRUST INDENTURE
DATED AS OF SEPTEMBER 1, 2006
--------------------------------
Between
CITY OF OLATHE, KANSAS,
AS ISSUER
AND
UMB BANK, N.A.,
AS TRUSTEE
$3,680,000 $400,000
City of Olathe, Kansas City of Olathe, Kansas
Tax Exempt Industrial Revenue Bonds Tax Exempt Industrial Revenue Bonds
(DCI, Inc. Project) (DCI, Inc. Project)
Series 2006A Series 2006B
$100,000 $820,000
City of Olathe, Kansas City of Olathe, Kansas
Taxable Industrial Revenue Bonds Taxable Subordinate Industrial Revenue Bonds
(DCI, Inc. Project) (DCI, Inc. Project)
Series 2006C Series 2006D
TRUST INDENTURE
Table of Contents
Page
ARTICLE I
DEFINITIONS
SECTION 101. DEFINITIONS OF WORDS AND TERMS..........................3
SECTION 102. RULES OF INTERPRETATION................................11
ARTICLE II
THE BONDS
SECTION 201. TITLE AND AMOUNT OF BONDS..............................12
SECTION 202. LIMITED NATURE OF OBLIGATIONS..........................12
SECTION 203. DENOMINATION, NUMBER AND DATING OF BONDS...............13
SECTION 204. METHOD AND PLACE OF PAYMENT OF BONDS...................13
SECTION 205. EXECUTION AND AUTHENTICATION OF BONDS..................14
SECTION 206. REGISTRATION, TRANSFER AND EXCHANGE OF BONDS...........14
SECTION 207. PERSONS DEEMED OWNERS OF BONDS.........................15
SECTION 208. AUTHORIZATION OF BONDS.................................15
SECTION 209. RESERVED...............................................17
SECTION 210. TEMPORARY BONDS........................................17
SECTION 211. MUTILATED, LOST, STOLEN OR DESTROYED BONDS.............17
SECTION 212. CANCELLATION AND DESTRUCTION OF BONDS UPON PAYMENT.....18
ARTICLE III
REDEMPTION OF BONDS
SECTION 301. REDEMPTION OF BONDS GENERALLY..........................18
SECTION 302. REDEMPTION OF BONDS....................................18
SECTION 303. RESERVED...............................................19
SECTION 304. TRUSTEE'S DUTY TO REDEEM BONDS.........................19
SECTION 305. NOTICE OF REDEMPTION...................................19
ARTICLE IV
FORM OF BONDS
i
ARTICLE V
THE PROJECT FUND
SECTION 501. CREATION OF PROJECT FUND...............................20
SECTION 502. DEPOSITS INTO THE PROJECT FUND.........................20
SECTION 503. DISBURSEMENTS FROM THE PROJECT FUND....................20
SECTION 504. DISPOSITION UPON COMPLETION OF THE PROJECT.............20
SECTION 505. DISPOSITION UPON ACCELERATION..........................21
ARTICLE VI
REVENUES AND FUNDS
SECTION 601. CREATION OF THE PRINCIPAL AND INTEREST PAYMENT ACCOUNT.21
SECTION 602. DEPOSITS INTO THE PRINCIPAL AND INTEREST PAYMENT
ACCOUNT................................................21
SECTION 603. APPLICATION OF MONEYS IN THE PRINCIPAL AND INTEREST
PAYMENT ACCOUNT........................................21
SECTION 604. PAYMENTS DUE ON SATURDAYS, SUNDAYS AND HOLIDAYS........22
SECTION 605. NONPRESENTMENT OF BONDS................................22
ARTICLE VII
SECURITY FOR DEPOSITS AND INVESTMENT OF FUNDS
SECTION 701. MONEYS TO BE HELD IN TRUST.............................23
SECTION 702. INVESTMENT OF MONEYS IN FUNDS..........................23
SECTION 703. MANNER OF INVESTMENT...................................23
SECTION 704. RECORD KEEPING.........................................23
SECTION 705. ARBITRAGE AND GENERAL TAX COVENANT.....................23
ARTICLE VIII
GENERAL COVENANTS AND PROVISIONS
SECTION 801. PAYMENT OF PRINCIPAL OF, PREMIUM, IF ANY, AND INTEREST
ON THE BONDS...........................................24
SECTION 802. AUTHORITY TO EXECUTE INDENTURE AND ISSUE BONDS.........24
SECTION 803. PERFORMANCE OF COVENANTS...............................24
SECTION 804. INSTRUMENTS OF FURTHER ASSURANCE.......................24
SECTION 805. MAINTENANCE, TAXES AND INSURANCE.......................24
SECTION 806. INSPECTION OF PROJECT BOOKS............................25
SECTION 807. ENFORCEMENT OF RIGHTS UNDER THE LEASE..................25
SECTION 808. POSSESSION AND USE OF PROJECT..........................25
ARTICLE IX
REMEDIES OF DEFAULT
SECTION 901. ACCELERATION OF MATURITY IN EVENT OF DEFAULT...........25
SECTION 902. EXERCISE OF REMEDIES BY THE TRUSTEE....................26
SECTION 903. LIMITATION ON EXERCISE OF REMEDIES BY BONDOWNERS.......26
ii
SECTION 904. RIGHT OF BONDOWNERS TO DIRECT PROCEEDINGS..............26
SECTION 905. REMEDIES CUMULATIVE....................................27
SECTION 906. WAIVERS OF EVENTS OF DEFAULT...........................27
SECTION 907. SUBORDINATION OF SERIES 2006D BONDS....................27
ARTICLE X
THE TRUSTEE
SECTION 1001. ACCEPTANCE OF THE TRUSTS...............................28
SECTION 1002. FEES, CHARGES AND EXPENSES OF THE TRUSTEE..............29
SECTION 1003. NOTICE TO BONDOWNERS IF DEFAULT OCCURS.................30
SECTION 1004. INTERVENTION BY THE TRUSTEE............................30
SECTION 1005. SUCCESSOR TRUSTEE UPON MERGER, CONSOLIDATION OR SALE...30
SECTION 1006. RESIGNATION OF TRUSTEE.................................30
SECTION 1007. REMOVAL OF TRUSTEE.....................................30
SECTION 1008. QUALIFICATIONS OF SUCCESSOR TRUSTEE....................30
SECTION 1009. VESTING OF TRUSTS IN SUCCESSOR TRUSTEE.................30
SECTION 1010. RIGHT OF TRUSTEE TO PAY TAXES AND OTHER CHARGES........31
SECTION 1011. TRUST ESTATE MAY BE VESTED IN CO-TRUSTEE...............31
SECTION 1012. ANNUAL ACCOUNTING......................................32
SECTION 1013. RECORDINGS AND FILINGS.................................32
SECTION 1014. PERFORMANCE OF DUTIES UNDER THE LEASE AND GUARANTY
AGREEMENT..............................................32
ARTICLE XI
SUPPLEMENTAL INDENTURES
SECTION 1101. SUPPLEMENTAL INDENTURES NOT REQUIRING CONSENT OF
BONDOWNERS.............................................32
SECTION 1102. SUPPLEMENTAL INDENTURES REQUIRING CONSENT OF
BONDOWNERS.............................................33
SECTION 1103. CORPORATION'S CONSENT TO SUPPLEMENTAL INDENTURES.......33
ARTICLE XII
LEASE AMENDMENTS
SECTION 1201. LEASE AMENDMENTS.......................................33
ARTICLE XIII
SATISFACTION AND DISCHARGE OF INDENTURE
SECTION 1301. SATISFACTION AND DISCHARGE OF THE INDENTURE............33
SECTION 1302. BONDS DEEMED TO BE PAID................................34
ARTICLE XIV
MISCELLANEOUS PROVISIONS
SECTION 1401. CONSENTS AND OTHER INSTRUMENTS BY BONDOWNERS...........35
SECTION 1402. LIMITATION OF RIGHTS UNDER THE INDENTURE...............35
iii
SECTION 1403. NOTICES................................................35
SECTION 1404. SUSPENSION OF NEWSPAPER PUBLICATION OR MAIL SERVICE....36
SECTION 1405. SEVERABILITY...........................................36
SECTION 1406. EXECUTION IN COUNTERPARTS..............................36
SECTION 1407. GOVERNING LAW..........................................36
SECTION 1408. ELECTRONIC TRANSACTION.................................36
Signature and Seals
Schedule I -Property Subject to Lease
Exhibit A - Form of the Series 2006A Bonds
Exhibit B - Form of the Series 2006B Bonds
Exhibit C - Form of the Series 2006C Bonds
Exhibit D - Form of the Series 2006D Bonds
iv
TRUST INDENTURE
THIS TRUST INDENTURE, dated as of the September 1, 2006 (the "Indenture"),
between the CITY OF OLATHE, KANSAS, a municipal corporation duly organized and
existing under the laws of the State of Kansas (the "Issuer"), and UMB BANK,
N.A., a national banking association duly organized and existing and authorized
to accept and execute trusts of the character herein set forth under the laws of
the United States, with its principal corporate trust office located in Kansas
City, Missouri, as Trustee (the "Trustee");
WITNESSETH:
WHEREAS, the Issuer is authorized by K.S.A. 12-1740 to 12-1749d, inclusive,
as amended (the "Act"), to acquire, construct, improve and equip certain
facilities (as defined in the Act) for commercial, industrial and manufacturing
purposes, and to enter into leases and lease-purchase agreements with any
person, firm or corporation for said facilities, and to issue revenue bonds for
the purpose of paying the cost of any such facilities; and
WHEREAS, pursuant to such authorization, the Issuer's Governing Body passed
and approved an Ordinance on August 15, 2006 (the "Ordinance"), authorizing the
Issuer to issue its: (a) Tax Exempt Industrial Revenue Bonds (DCI, Inc.
Project), Series 2006A, in the aggregate principal amount of $3,680,000 (the
"Series 2006A Bonds"); (b) Tax Exempt Industrial Revenue Bonds (DCI, Inc.
Project), Series 2006B, in the aggregate principal amount of $400,000 (the
"Series 2006B Bonds"); (c) Taxable Industrial Revenue Bonds (DCI, Inc. Project),
Series 2006C, in the aggregate principal amount of $100,000 (the "Series 2006C
Bonds"); and (d) Taxable Subordinate Industrial Revenue Bonds (DCI, Inc.
Project), Series 2006D, in the aggregate principal amount of $820,000 (the
"Series 2006D Bonds," and together with the Series 2006A Bonds, the Series 2006B
Bonds and the Series 2006C Bonds, the "Bonds"), for the purpose of acquiring,
constructing and equipping a manufacturing facility (the "Project" as
hereinafter more fully described); and
WHEREAS, pursuant to the Act and the Ordinance, the Issuer is authorized
(i) to execute and deliver this Indenture for the purpose of issuing and
securing the Bonds, as hereinafter provided, and (ii) to enter into a Lease
Agreement of even date herewith (the "Lease"), between the Issuer and the
Corporation, under which the proceeds of the Bonds shall be used to acquire,
construct, improve and equip the Project and pursuant to which Issuer shall
lease the Project to the Corporation, in consideration of rentals which are
intended to be sufficient to provide for the payment of the principal of,
premium, if any, and interest on the Bonds as the same become due; and
WHEREAS, all things necessary to make the Bonds, when authenticated by the
Trustee and issued as provided in this Indenture, the valid and legally binding
limited obligations of the Issuer, and to constitute this Indenture a valid and
legally binding pledge and assignment of the Trust Estate herein made for the
security of the payment of the principal of, premium, if any, and interest on
the Bonds issued hereunder, have been done and performed, and the execution and
delivery of this Indenture and the execution and issuance of the Bonds, subject
to the terms hereof, have in all respects been duly authorized;
NOW, THEREFORE, THIS INDENT WITNESSETH:
GRANTING CLAUSES
That the Issuer, in consideration of the premises, the acceptance by the
Trustee of the trusts hereby created, the purchase and acceptance of the Bonds
by the Owners thereof, and of other good and valuable consideration, the receipt
of which is hereby acknowledged, and in order to secure the payment of the
principal of, premium, if any, and interest on all of the Bonds issued and
Outstanding under this Indenture from time to time according to their tenor and
effect, and to secure the performance and observance by the Issuer of all the
covenants, agreements and conditions herein and in the Bonds contained, does
hereby pledge and assign unto the Trustee and its successors and assigns, the
property described in paragraphs (a), (b) and (c) below (said property being
herein referred to as the "Trust Estate"), to wit:
(a) The real estate situated in ▇▇▇▇▇▇▇ County, Kansas, described in
Schedule I attached hereto and constituting a part of the Project as
referred to in the recitals to this Indenture and as defined herein, with
all buildings, additions and improvements and machinery and equipment now
or hereafter located thereon to the extent and subject to the limitations
provided in the Lease, and with the tenements, hereditaments,
appurtenances, rights, privileges and immunities thereunto belonging or
appertaining;
(b) All right, title and interest of the Issuer in, to and under the
Lease (except the Issuer's right to indemnity thereunder), and all rents,
revenues and receipts derived by the Issuer from the Project including,
without limitation, all Rental Payments derived by the Issuer under and
pursuant to and subject to the provisions of the Lease (except for the
rights of the Issuer to receive moneys for its own account under the Lease
and any payments made by the Corporation to meet the rebate requirements of
Section 148(f) of the Code); provided that the pledge and assignment hereby
made shall not impair or diminish the obligations of the Issuer under the
provisions of the Lease; and
(c) All moneys and securities (except arbitrage rebate) from time to
time held by the Trustee under the terms of this Indenture, including any
amounts realized by the Trustee pursuant to the Guaranty Agreement, and any
and all other real or personal property of every kind and nature from time
to time hereafter, by delivery or by writing of any kind, pledged, assigned
or transferred as and for additional security hereunder by the Issuer or by
anyone in its behalf, or with its written consent, to the Trustee, which is
hereby authorized to receive any and all such property at any and all times
and to hold and apply the same subject to the terms hereof.
TO HAVE AND TO HOLD, all and singular, the Trust Estate with all rights and
privileges hereby pledged and assigned, or agreed or intended so to be, to the
Trustee and its successors in trust and assigns;
IN TRUST NEVERTHELESS, upon the terms and subject to the conditions herein
set forth, for the equal and proportionate benefit, protection and security of
all Owners from time to time of the Bonds issued and Outstanding under this
Indenture, without preference, priority or distinction as to lien or otherwise
of any of the Bonds over any other of the Bonds except as expressly provided in
or permitted by this Indenture;
2
PROVIDED, HOWEVER, that if the Issuer shall well and truly pay, or cause to
be paid, the principal of, premium, if any, and interest on all the Bonds, at
the times and in the manner mentioned in the Bonds according to the true intent
and meaning thereof, or shall provide for the payment thereof (as provided in
Article XIII hereof), and shall pay or cause to be paid to the Trustee all other
sums of money due or to become due to it in accordance with the terms and
provisions hereof, then upon such final payments this Indenture and the rights
hereby granted shall cease, determine and be void; otherwise, this Indenture
shall be and remain in full force and effect.
THIS INDENTURE FURTHER WITNESSETH, and it is hereby expressly declared,
covenanted and agreed by and between the parties hereto, that all Bonds issued
and secured hereunder are to be issued, authenticated and delivered and that all
the Trust Estate is to be held and applied under, upon and subject to the terms,
conditions, stipulations, covenants, agreements, trusts, uses and purposes as
hereinafter expressed, and the Issuer does hereby agree and covenant with the
Trustee and with the respective Owners from time to time of the Bonds, as
follows:
ARTICLE I
DEFINITIONS
Section 101. Definitions of Words and Terms. In addition to the words and
terms defined elsewhere in this Indenture, the following words and terms as used
in this Indenture shall have the following meanings, unless some other meaning
is plainly intended:
"Act" means K.S.A. 12-1740 to 12-1749d, inclusive, as amended.
"Adjustment Date" has the meaning set forth in Section 208(a)(i) hereof.
"Authorized Corporation Representative" means the Chief Financial Officer
of DCI, or such other officer of the Corporation or DCI at the time designated
to act on behalf of the Corporation as evidenced by written certificate
furnished to the Issuer and the Trustee containing the specimen signature of
such person and signed on behalf of the Corporation by its manager or authorized
officer. Such certificate may designate an alternate or alternates, each of whom
shall be entitled to perform all duties of the Authorized Corporation
Representative.
"Bank Midwest" means Bank Midwest, N.A., a national banking association
organized under the laws of the United States of America.
"Bond" or "Bonds" means, collectively, the Series 2006A Bonds, the Series
2006B Bonds, the Series 2006C Bonds and the Series 2006D Bonds.
"Bond Counsel" means the firm of ▇▇▇▇▇▇▇ & ▇▇▇▇, P.C. or any other attorney
or firm of attorneys whose expertise in matters relating to the issuance of
obligations by states and their political subdivisions is nationally recognized
and acceptable to Trustee and Corporation.
"Bondowner" means the registered owner of any fully registered Bond as
indicated on the bond register maintained by the bond registrar.
3
"Business Day" means a day which is not a Saturday, Sunday or any day
designated as a holiday by the Congress of the United States or by the
Legislature of the State and on which Banks in both the State and the location
of the principal office of the Trustee are not authorized to be closed.
"Change in Law" means any event not included in the definition of the term
"Event of Taxability," the effect of which shall be to render the interest on
the Tax-Exempt Bonds includible for any period in the gross income of the
Bondowners or former Bondowners (other than a Bondowner who is a Substantial
User or a Related Person thereto) for federal income tax purposes, including,
but not limited to, the enactment or adoption (as determined by Bond Counsel) of
any provision or change in the Code, or in the laws of the State or the
regulations of any agency or instrumentality thereof (regardless of the
effective date thereof) subsequent to the date hereof. The term "Change in Law"
shall not include any change of any provision of the Code the effect of which is
to subject interest on the Tax-Exempt Bonds to treatment as a tax preference
item for purposes of computing any alternative minimum tax or other similar tax
imposed on any Bondowner.
"Change of Circumstances" means the occurrence of any of the following
events:
(1) title to, or the temporary use of, all or any material part of the
Project shall be condemned by any authority exercising the power of eminent
domain;
(2) title to substantially all of the Project is found to be deficient
or nonexistent to the extent that the Project is untenantable or the
efficient utilization of the Project by the Corporation is substantially
impaired;
(3) substantially all of the Project is damaged or destroyed by fire
or other casualty; or
(4) as a result of: (i) changes in the Constitution of the State; or
(ii) any legislative or administrative action by the State or any political
subdivision thereof, or by the United States; or (iii) any action
instituted in any court, the Lease shall become void or unenforceable, or
impossible of performance without unreasonable delay, or in any other way
by reason of such changes of circumstances, unreasonable burdens or
excessive liabilities are imposed upon the Issuer or the Corporation.
"Code" means the Internal Revenue Code of 1986, as amended, together with
the regulations promulgated thereunder by the United States Department of the
Treasury.
"Completion Date" means the date of completion of the acquisition,
purchase, construction and installation of the Project pursuant to the Lease.
"Corporation" means DCI Holdings FAE, LLC, a Kansas limited liability
company, and its successors and assigns, and shall mean DCI, Inc. after the date
on which the Lease is assigned to DCI, Inc.
"Costs of Issuance" means any and all expenses of whatever nature incurred
in connection with the issuance and sale of the Bonds, including but not limited
to underwriting fees and expenses, underwriting discount, bond and other
printing expenses, and legal fees and expenses of counsel.
4
"Cumulative Outstanding Principal Amount" means an amount equal to the
aggregate of all amounts paid into the Project Fund in accordance with the
provisions of this Indenture and the applicable Bond Purchase Agreement, as
reflected in the bond registration records maintained by the Trustee or in the
Table of Cumulative Outstanding Principal Amount set forth in the form of Series
2006B Bond or Series 2006D Bonds.
"Default Administration Costs" means the reasonable fees, charges and
expenses of the Trustee incurred in anticipation of an Event of Default, or
after the occurrence of an Event of Default, including, but not limited to,
counsel fees, litigation costs and expenses, the expenses of maintaining and
preserving the Project and the expenses of re-letting or selling the Project.
"Determination of Taxability" shall be deemed to have occurred on the
earliest of the following dates:
(a) The date of the occurrence of any Event of Taxability; or
(b) On that date when Corporation files or is required to file any
statement, supplemental statement or other tax schedule, return or document
in accordance with the Code which discloses, or would disclose had such
been filed, that an Event of Taxability shall have occurred (a
"Supplemental Statement"); or
(c) The effective date of a Change in Law; or
(d) On that date when the Corporation shall be advised in writing by
the Commissioner or any District Director of Internal Revenue that an Event
of Taxability or Change in Law shall have occurred; or
(e) On that date when the Corporation shall receive notice from the
Issuer or the Trustee in writing that the Issuer or Trustee has been
advised by (i) any Bondowner that the Internal Revenue Service has issued a
report concluding the interest on the Tax-Exempt Bonds to be includible in
the gross income of such Bondowner due to the occurrence of an Event of
Taxability or Change in Law; or (ii) the Commissioner or any District
Director of Internal Revenue that the interest on the Tax-Exempt Bonds is
includible in the gross income of any such Bondowner due to the occurrence
of an Event of Taxability or Change in Law; or
(f) On that date when the Corporation or the Trustee shall be advised
in writing by Bond Counsel of a Change in Law.
No Determination of Taxability, however, shall occur so long as the
Corporation, at its expense:
(1) agrees to seek a revenue ruling or other written determination
(hereinafter, referred to as "the Revenue Ruling") on behalf of the
Bondowners from the Internal Revenue Service affirming that the interest on
the Tax-Exempt Bonds is exempt from Federal income taxation and will remain
unaffected by the Event of Taxability or the Change in Law, as the case may
be; and
(2) procures an opinion of Bond Counsel to the effect that (a) there
is a substantial and valid legal basis for the position that the interest
on the Tax-Exempt Bonds has been, is and will remain tax exempt, (b) such
Bond Counsel has no reason to
5
believe that the Internal Revenue Service will decline to consider the
ruling request for procedural or technical reasons, and (c) such Bond
Counsel has no knowledge or reason to believe that the Internal Revenue
Service has indicated a position not to rule favorably on similar questions
or would not rule favorably; and
(3) agrees to reimburse and fully indemnify and hold the Bondowners
harmless from and against any and all liability, damage, loss, cost or
expense (including attorneys' fees) which the Bondowners may incur as the
result of Corporation's attempt to secure the Revenue Ruling, and further
agrees to pay on demand all costs and expenses which the Bondowners may
incur in seeking the Revenue Ruling, and to furnish such surety bond,
letter of credit or other form of security as the Trustee may reasonably
request from time to time to secure the Corporation's obligations under the
Lease, including without limitation any potential increases in interest, or
any premium, whether prospective or retroactive, and any potential taxes,
penalties or related interest.
Provided the Corporation promptly initiates and continues to diligently pursue
the Revenue Ruling, compliance with the foregoing provisions shall suspend the
effective date of the Determination of Taxability. The issuance of a Revenue
Ruling clearly concluding that the interest on the Tax-Exempt Bonds is
excludable from gross income for federal income tax purposes and will remain
unaffected by the purported Event of Taxability or Change in Law, as the case
may be, shall be deemed to annul the Determination of Taxability. Otherwise, the
issuance of any contrary or inconsistent Revenue Ruling, or the failure to
obtain any Revenue Ruling within six months from the date of the delivery of the
notice to the Corporation by the Trustee or the Issuer of the Event of
Taxability or Change in Law, as the case may be, whichever shall occur, shall
constitute a final disposition of the matter (any appeal rights notwithstanding)
and a Determination of Taxability shall be deemed to have then occurred.
"Event of Default" means one of the following events:
(a) Default in the due and punctual payment of any interest on any
Bond;
(b) Default in the due and punctual payment of the principal of or
premium, if any, on any Bond on the stated maturity or accelerated maturity
date thereof, or at the redemption date thereof;
(c) Default in the performance or observance of any other of the
covenants, agreements or conditions on the part of the Issuer in this
Indenture or in the Bonds contained, and the continuance thereof for a
period of 30 days after written notice thereof shall have been given to the
Issuer and the Corporation by the Trustee, or to the Trustee, the Issuer
and the Corporation by the Owners of not less than 25% in aggregate
principal amount of Bonds then Outstanding; provided, however, if any
default shall be such that it cannot be corrected within such 30-day
period, it shall not constitute an Event of Default if corrective action is
instituted by the Issuer or the Corporation within such period and
diligently pursued until such default is corrected; or
(d) An Event of Default as defined in the Lease shall have occurred.
"Event of Taxability" means any action by the Corporation or any other
person including, but not limited to, the use of Tax-Exempt Bond proceeds in
violation of the covenants contained in the Lease which has the effect of
causing the interest on the Tax-Exempt Bonds to become includible for any period
in the gross income for Federal income tax purposes (other than for alternative
minimum tax
6
purposes) of any Owner or former Owner of the Tax-Exempt Bonds (other than an
Owner who is a Substantial User of the Project or a Related Person thereto).
"Government Securities" means direct obligations of, or obligations the
payment of the principal of and interest on which are unconditionally guaranteed
by, the United States of America.
"Guarantors" means, collectively, means those persons and/or entities
(whether one or more) who, or which, execute and deliver the Guaranty Agreement.
"Guaranty Agreement" means the separate Guaranty Agreement dated as of
September 1, 2006 of the Guarantors named therein and in favor of the Trustee
for the benefit of the Bondowners, required pursuant to the provisions of this
Indenture.
"Improvements" means all buildings, structures, facilities, machinery,
equipment and any other property purchased in whole or in part from the proceeds
of the Bonds as may be more specifically described in the Lease and made a part
thereof.
"Indenture" means this Trust Indenture, as from time to time amended and
supplemented by Supplemental Indentures in accordance with the provisions of
Article XI of this Indenture.
"Interest Payment Date" means (i) with respect to the Superior Bonds, means
the first day of each month, commencing October 1, 2006, and (ii) with respect
to the Series 2006D Bonds, means March 1 and September 1, commencing March 1,
2007, and terminating for each series when the principal of, redemption premium
if any, and interest on such series of Bonds have been fully paid.
"Investment Contract" means an agreement to deposit all or any portion of
the proceeds of the sale of the Bonds with a bank, with the deposits to bear
interest at an agreed rate.
"Investment Securities" means any of the following securities, and to the
extent the same are at the time permitted for investment of funds held by the
Trustee pursuant to this Indenture:
(i) Government Securities.
(ii) obligations of the Federal National Mortgage Association, the
Government National Mortgage Association, the Federal Financing Bank, the
Federal Intermediate Credit Corporation, Federal Banks for Cooperatives,
Federal Land Banks, Federal Home Loan Banks, Farmers Home Administration
and Federal Home Loan Mortgage Association;
(iii) direct and general obligations of the State, to the payment of
the principal of and interest on which the full faith and credit of the
State is pledged, provided that at the time of their purchase under this
Indenture such obligations are rated in either of the two highest rating
categories by a nationally recognized bond rating agency;
(iv) deposits in or certificates of deposit issued by any bank or
trust company organized under the laws of any state of the United States of
America or any national banking association (including the Trustee),
provided that such deposits shall be either of a bank, trust company or
national banking association continuously and fully insured by the Federal
Deposit Insurance Corporation, or continuously and fully secured by such
securities as are described above in clauses (i) through (iii), inclusive,
which shall have a market value (exclusive of
7
accrued interest) at all times at least equal to the principal amount of
such deposits and shall be lodged with the Trustee, as custodian, by the
bank, trust company or national banking association accepting such deposit
or issuing such certificate of deposit, and the bank, trust company or
national banking association issuing each such certificate of deposit
required to be so secured shall furnish the Trustee an undertaking
satisfactory to it that the aggregate market value of all such obligations
securing each such certificate of deposit will at all times be an amount
equal to the principal amount of each such certificate of deposit and the
Trustee shall be entitled to rely on each such undertaking;
(v) any Investment Contract or repurchase agreement with any bank or
trust company organized under the laws of any state of the United States of
America or any national banking association (including the Trustee) or
government bond dealer reporting to, trading with, and recognized as a
primary dealer by the Federal Reserve Bank of New York, which agreement is
secured by any one or more of the securities described in clauses (i), (ii)
or (iii) above;
(vi) any investment in shares or units of a money market fund or trust
rated in either of the two highest categories by any nationally recognized
securities rating agency; or
(vii) any other investment approved in writing by Bank Midwest so long
as Bank Midwest is the Owner of any Outstanding Bond, and thereafter
approved in writing by the Owners of 100% of the Outstanding Bonds.
"Issuer" means the City of Olathe, Kansas, a political subdivision existing
under the laws of the State, and its successors and assigns.
"Land" means the real property described in Schedule I attached hereto and
made a part hereof.
"Lease" means the Lease dated as of the date of this Indenture between the
Issuer and the Corporation, as from time to time amended and supplemented in
accordance with the provisions thereof and of Article XII of this Indenture.
"Notice Representative" means:
(a) With respect to the Corporation, its Chief Financial Officer.
(b) With respect to the Issuer, its duly elected or appointed City
Clerk.
(c) With respect to the Trustee, any trust officer thereof.
"Original Proceeds" means all proceeds, including accrued interest, derived
from the sale of the Bonds to the Original Purchaser.
"Original Purchaser" means (a) with respect to the Series 2006A Bonds, the
Series 2006B Bonds and the Series 2006C Bonds, Bank Midwest, and (b) with
respect to the Series 2006D Bonds, DCI, Inc., a Kansas corporation.
"Outstanding" means, as of a particular date all Bonds issued,
authenticated and delivered under this Indenture, except:
8
(a) Bonds cancelled by the Trustee or delivered to the Trustee for
cancellation pursuant to this Indenture;
(b) Bonds for the payment or redemption of which moneys or investments
have been deposited in trust with the Trustee in accordance with the
provisions of the Indenture; and
(c) Bonds in exchange for or in lieu of which other Bonds have been
authenticated and delivered pursuant to this Indenture.
"Owner" means the registered owner of any fully registered Bond.
"Paying Agent" means the Trustee.
"Payment Date" means any date on which the principal of or interest on any
Bonds is payable.
"Permitted Encumbrances" means any mortgages, liens or other encumbrances
specifically described in Schedule I hereto; easements and rights of way of
record at the time of conveyance of the Land to the Issuer, and any other title
exceptions not affecting marketability or the usefulness of the Project for
Corporation's purposes as a solid waste disposal facility for shredding and
processing waste paper products.
"Principal and Interest Payment Account" means the account authorized and
established with the Trustee pursuant to this Indenture designated "City of
Olathe, Kansas, Principal and Interest Payment Account for Industrial Revenue
Bonds (DCI, Inc. Project)."
"Principal Payment Date" means (i) with respect to the Superior Bonds,
means the first day of each month, commencing October 1, 2006, and (ii) with
respect to the Series 2006D Bonds, means March 1 and September 1, commencing
March 1, 2007, and terminating for each series when the principal of, and
premium, if any, have been fully paid.
"Project" means and includes the interest of Issuer in the Land and the
Improvements, together with any Project Additions.
"Project Additions" means any alterations or additions made to the Project
to the extent provided in Articles XI and XII of the Lease.
"Project Costs" means those costs incurred in connection with the Project,
including:
(a) all costs and expenses necessary or incident to the acquisition of
the Land and such of the Improvements as are acquired, constructed or in
progress at the date of such acquisition;
(b) fees and expenses of architects, appraisers, surveyors and
engineers for estimates, surveys, soil borings and soil tests and other
preliminary investigations and items necessary to the commencement of
construction, preparation of plans, drawings and specifications and
supervision of construction, as well as for the performance of all other
duties of architects, appraisers, surveyors and engineers in relation to
the construction, furnishing and equipping of the Project or the issuance
of the Bonds;
9
(c) all costs and expenses of constructing, acquiring or installing
the remaining portion of the Project.
(d) payment of interest actually incurred on any interim financing
obtained from a lender unrelated to the Corporation for performance of work
on the Project prior to the issuance of the Bonds;
(e) the cost of the title insurance policies and the cost of any
insurance and performance and payment bonds maintained during the
construction period in accordance with Article VI of the Lease,
respectively; and
(f) Costs of Issuance.
"Project Fund" means the fund authorized and established with the Trustee
pursuant to this Indenture designated the "City of Olathe, Kansas, Project Fund
(DCI, Inc. Project)."
"Record Date" means the Business Day prior to the last day of the month
immediately preceding each Interest Payment Date, or if such date is not a
Business Day, the Business Day immediately preceding such date.
"Related Person" means a related person as defined in Section 147(a) of the
Code.
"Rental Payments" means the aggregate of the Basic Rent and Additional Rent
payments provided for pursuant to Article III of the Lease.
"Securities Depository" means The Depository Trust Company, New York, New
York, or its nominee, and its successors and assigns.
"Series ▇▇▇▇▇ ▇▇▇▇▇" means the City of Olathe, Kansas Tax Exempt Industrial
Revenue Bonds (DCI, Inc. Project), Series 2006A, issued in the aggregate
principal amount of $3,680,000.
"Series 2006B Bonds" means the City of Olathe, Kansas Tax Exempt Industrial
Revenue Bonds (DCI, Inc. Project), Series 2006B, issued in the aggregate
principal amount of $400,000.
"Series 2006C Bonds" means the City of Olathe, Kansas Taxable Industrial
Revenue Bonds (DCI, Inc. Project), Series 2006C, issued in the aggregate
principal amount of $100,000.
"Series 2006D Bonds" means the City of Olathe, Kansas Taxable Subordinate
Industrial Revenue Bonds (DCI, Inc. Project), Series 2006D, issued in the
aggregate principal amount of $820,000.
"State" means the State of Kansas.
"Substantial User" means a substantial user of the Project as defined in
Section 147(a) of the Code.
"Superior Bonds" means, collectively, the Series 2006A Bonds, the Series
2006B Bonds and the Series 2006C Bonds.
10
"Supplemental Indenture" means any indenture supplemental or amendatory to
this Indenture entered into by the Issuer and the Trustee pursuant to Article XI
of this Indenture.
"Tax Compliance Agreement" means the Tax Compliance Agreement dated as of
the date of the Indenture among the Issuer, the Corporation and the Trustee,
containing representations and covenants regarding the preservation of the
tax-exempt status of the interest on the Tax-Exempt Bonds, the investment of
proceeds of the Tax-Exempt Bonds and the calculation and payment of rebate
amounts under Section 148(f) of the Code.
"Tax-Exempt Bonds" means, collectively, the Series 2006A Bonds and the
Series 2006B Bonds.
"Taxable Bonds" means, collectively, the Series 2006C Bonds and the Series
2006D Bonds.
"Term" means, collectively, the Basic Term and any Additional Term of the
Lease.
"Trust Estate" means the Trust Estate described in the Granting Clauses of
this Indenture.
"Trustee" means UMB Bank, N.A., Kansas City, Missouri, in its capacity as
bond registrar and trustee and its successor or successors and any other
corporation or association which at the time may be substituted in its place
pursuant to and at the time serving as Trustee under this Indenture.
Section 102. Rules of Interpretation.
(a) Words of the masculine gender shall be deemed and construed to
include correlative words of the feminine and neuter genders. Unless the
context shall otherwise indicate, the words importing the singular number
shall include the plural and vice versa, and words importing persons shall
include firms, associations and corporations, including public bodies, as
well as natural persons.
(b) Wherever in this Indenture it is provided that either party shall
or will make any payment or perform or refrain from performing any act or
obligation, each such provision shall, even though not so expressed, be
construed as an express covenant to make such payment or to perform, or not
to perform, as the case may be, such act or obligation.
(c) All references in this instrument to designated "Articles,"
"Sections" and other subdivisions are, unless otherwise specified, to the
designated Articles, Sections and subdivisions of this instrument as
originally executed. The words "herein," "hereof," "hereunder" and other
words of similar import refer to this Indenture as a whole and not to any
particular Article, Section or subdivision.
(d) The Table of Contents and the Article and Section headings of this
Indenture shall not be treated as a part of this Indenture or as affecting
the true meaning of the provisions hereof.
11
ARTICLE II
THE BONDS
Section 201. Title and Amount of Bonds. No Bonds may be issued under this
Indenture except in accordance with the provisions of this Article. The Bonds
authorized to be issued under this Indenture shall be designated as follows:
(a) "City of Olathe, Kansas Tax Exempt Industrial Revenue Bonds (DCI,
Inc. Project), Series 2006A" (the "Series 2006A Bonds");
(b) "City of Olathe, Kansas Tax Exempt Industrial Revenue Bonds (DCI,
Inc. Project), Series 2006B" (the "Series 2006B Bonds");
(c) "City of Olathe, Kansas Taxable Industrial Revenue Bonds (DCI,
Inc. Project), Series 2006C" (the "Series 2006C Bonds"); and
(d) "City of Olathe, Kansas Taxable Subordinate Industrial Revenue
Bonds (DCI, Inc. Project), Series 2006D" (the "Series 2006D Bonds").
The total principal amount of all Bonds that may be issued hereunder is
hereby expressly limited to $5,000,000.
Section 202. Limited Nature of Obligations.
(a) The Bonds and the interest thereon shall be limited obligations of
the Issuer payable solely and only from the net earnings and revenues
derived by the Issuer from the Project, including but not limited to the
rents, revenues and receipts under the Lease (including, in certain
circumstances, Bond proceeds and income from the temporary investment
thereof and proceeds from sale of the Project, insurance and condemnation
awards or payments, if any, received pursuant to the Guaranty Agreement),
and are secured by a pledge and assignment of the Trust Estate to the
Trustee in favor of the Bondowners, as provided in this Indenture. The
Bonds and the interest thereon shall not be a debt or general obligation of
Issuer or the State, or any municipal corporation thereof, and neither the
Bonds, the interest thereon, nor any judgment thereon or with respect
thereto, are payable in any manner from tax revenues of any kind or
character. The Bonds shall not constitute an indebtedness or a pledge of
the faith and credit of Issuer, the State or any municipal corporation
thereof, within the meaning of any constitutional or statutory limitation
or restriction.
(b) The full and prompt payment of the principal of, premium, if any,
and interest on the Bonds has been unconditionally guaranteed by the
Guarantors to the Trustee, for the benefit of the Owners of the Bonds,
under the terms of the Guaranty Agreement. The Trustee shall enforce the
Guaranty Agreement for the benefit and protection of the Bondowners so long
as any of the Bonds remain Outstanding. The Trustee shall not permit or
consent to any change, amendment, modification or termination of the
Guaranty Agreement except to the extent provided for therein.
(c) No provision, covenant or agreement contained in this Indenture or
the Bonds, or any obligation herein or herein imposed upon the Issuer, or
the breach thereof, shall constitute or
12
give rise to or impose upon the Issuer a pecuniary liability or a charge
upon its general credit or powers of taxation. In making the agreements,
provisions and covenants set forth in this Indenture, the Issuer has not
obligated itself except with respect to the Project and the application of
the payments, revenues and receipts therefrom as hereinabove provided.
Neither the officers of the Issuer nor any person executing the Bonds shall
be liable personally on the Bonds by reason of the issuance thereof.
Section 203. Denomination, Number and Dating of Bonds.
(a) The Bonds of each series shall be initially issuable in the form
of one fully registered Bond without coupons. The Bonds shall be
substantially in the form set forth in Article IV of this Indenture. The
Bonds of each series of Bonds shall be numbered in such manner as the
Trustee shall determine.
(b) Each series of Bonds shall be dated the date of initial delivery
thereof. If any Bond is at any time thereafter transferred, any Bond
replacing such Bond shall be dated as of the date of authentication
thereof.
Section 204. Method and Place of Payment of Bonds.
(a) The principal of and interest on the Bonds shall be payable in any
coin or currency of the United States of America which on the respective
dates of payment thereof is legal tender for payment of public and private
debts.
(b) Payment of the principal of the Bonds shall be made in accordance
with Section 208 hereof or upon the presentation and surrender of such Bond
at the principal payment office of any Paying Agent named in the Bond;
provided, that so long as the Corporation is the sole Bondowner of any
series of Bonds, the Trustee shall make payments of principal on such
series of Bonds by internal bank transfer or by wire transfer to an account
at a commercial bank or savings institution designated by such Bondowner
and located in the continental United States; provided, further, that upon
any payment by internal bank transfer or by wire transfer of principal on
such series of Bonds, the Trustee shall record the amount of such principal
payment on the registration books for such series of Bonds maintained by
the Trustee on behalf of the Issuer. If the Bonds of such series are
presented to the Trustee together with such payment, the Trustee may enter
the amount of such principal payment on the Table of Cumulative Outstanding
Principal Amount on the Bonds of such series in the manner provided by
Section 402 hereof. Notwithstanding the foregoing, the registration books
maintained by the Trustee shall be the official record of the Cumulative
Outstanding Principal Amount on the Bonds at any time, and the Bondowner is
not required to present the Bonds for action by the Trustee, as bond
registrar, with each payment of principal on the Bonds. Payment of the
interest on the Bonds shall be made by the Trustee on each Interest Payment
Date to the person appearing on the registration books of the Issuer
hereinafter provided for as the registered owner thereof on the Record Date
by check or draft mailed to such registered owner at such owner's address
as it appears on such registration books. In the event that the Corporation
is the sole Bondowner of any series of Bonds, the Trustee is authorized to
make interest payments on such series of Bonds by internal bank transfer or
by wire transfer to an account at a commercial bank or savings institution
designated by such Bondowner and located in the continental United States.
In addition, at the written request of any registered owner of Bonds, the
principal and interest on the Bonds shall be paid by electronic transfer to
such owner upon written notice to the Trustee from such owner containing
the electronic transfer instructions (which shall be in the continental
United States) to which such owner wishes to have such transfer directed
and such written notice is given by such owner to the Trustee not less than
the fifteenth day (whether or not a Business Day) of the calendar month
next preceding such Interest Payment Date. Any such written notice for
electronic transfer shall be signed by such owner and shall include the
name of the bank, its address,
13
its ABA routing number and the name, number and contact name related to
such owner's account at such bank to which the payment is to be credited.
Section 205. Execution and Authentication of Bonds.
(a) The Bonds shall be executed on behalf of the Issuer by the manual
or facsimile signature of the Mayor and attested by the manual or facsimile
signature of the City Clerk, and shall have the corporate seal of the
Issuer affixed thereto or imprinted thereon. In case any officer whose
signature or facsimile thereof appears on any Bonds shall cease to be such
officer before the delivery of such Bonds, such signature or facsimile
thereof shall nevertheless be valid and sufficient for all purposes, the
same as if such person had remained in office until delivery. Any Bond may
be signed by such persons as at the actual time of the execution of such
Bond shall be the proper officers to sign such Bond although on the date of
such Bond such persons may not have been such officers.
(b) The Bonds shall have endorsed thereon a Certificate of
Authentication substantially in the form set forth in Article IV hereof,
which shall be manually executed by the Trustee. No Bond shall be entitled
to any security or benefit under this Indenture or shall be valid or
obligatory for any purpose unless and until such Certificate of
Authentication shall have been duly executed by the Trustee. Such executed
Certificate of Authentication upon any Bond shall be conclusive evidence
that such Bond has been duly authenticated and delivered under this
Indenture. The Certificate of Authentication on any Bond shall be deemed to
have been duly executed if signed by any authorized officer or employee of
the Trustee, but it shall not be necessary that the same officer or
employee sign the Certificate of Authentication on all of the Bonds that
may be issued hereunder at any one time.
Section 206. Registration, Transfer and Exchange of Bonds.
(a) The Trustee shall keep books for the registration and for the
transfer of Bonds as provided in this Indenture.
(b) The Bonds may be transferred only upon the books kept for the
registration and transfer of Bonds upon surrender thereof to the Trustee
duly endorsed for transfer or accompanied by an assignment duly executed by
the registered owner or such owner's attorney or legal representative, in
such form as shall be satisfactory to the Trustee. The Bonds have not been
registered under the Securities Act of 1933, as amended, or any state
securities law, and the Bonds may not be transferred unless (i) the Issuer
consents in writing to such transfer, and (ii) and the Issuer and the
Trustee are furnished a written legal opinion from counsel acceptable to
the Trustee, the City and the Corporation, to the effect that such transfer
is exempt from the registration requirements of the Securities Act of 1933,
as amended, and any applicable state securities law. The Bonds may be
transferred to any successor to the Corporation or any entity owned or
under common ownership with the Corporation, as lessee under the Lease
without the necessity of obtaining the City's consent or such an opinion.
In connection with any such transfer of the Bonds the Trustee shall receive
an executed representation letter signed by the proposed assignee
containing substantially the same representations contained in the
representation letter delivered to the Trustee from each Bondowner upon the
initial issuance of the Bonds. Upon any such transfer, the Issuer shall
execute and the Trustee shall authenticate and deliver in exchange for such
Bonds a new fully registered Bond or Bonds, registered in the name of the
transferee, of any denomination or denominations authorized by this
Indenture, in an aggregate principal amount equal to the
14
outstanding principal amount of such Bonds, of the same series and maturity
and bearing interest at the same rate.
(c) In all cases in which Bonds shall be exchanged or transferred
hereunder, the Issuer shall execute and the Trustee shall authenticate and
deliver at the earliest practicable time Bonds in accordance with the
provisions of this Indenture. All Bonds surrendered in any such exchange or
transfer shall forthwith be cancelled by the Trustee. The Issuer or the
Trustee may make a charge for every such exchange or transfer of Bonds
sufficient to reimburse it for any tax, fee or other governmental charge
required to be paid with respect to such exchange or transfer, and such
charge shall be paid by the Bondowner before any such new Bond shall be
delivered. Neither the Issuer nor the Trustee shall be required to make any
such exchange or transfer of Bonds on or after the Record Date preceding a
Payment Date on the Bonds or, in the case of any proposed redemption of
Bonds, during the 15 days immediately preceding the selection of Bonds for
such redemption or after such Bonds or any portion thereof has been
selected for redemption.
Section 207. Persons Deemed Owners of Bonds. The person in whose name any
Bond shall be registered as shown on the registration books required to be
maintained by the Trustee by this Article shall be deemed and regarded as the
absolute owner thereof for all purposes. Payment of, or on account of the
principal of and premium, if any, and, interest on any such Bond shall be made
only to or upon the order of the Owner thereof or his legal representative. All
such payments shall be valid and effectual to satisfy and discharge the
liability upon such Bond, including the interest thereon, to the extent of the
sum or sums so paid.
Section 208. Authorization of Bonds.
(a) There shall be initially issued and secured pursuant to this
Indenture four series of Bonds in the aggregate principal amount of
$5,000,000 for the purpose of providing funds for paying the Project Costs.
The Bonds shall be dated September 1, 2006, and shall bear interest from
their effective date of registration or the Interest Payment Date to which
interest has been paid and shall pay principal and interest (subject to
prior redemption) as follows:
(i) Series 2006A Bonds. The Series 2006A Bonds shall bear
interest at an initial rate of 5.30% and shall mature on September 1,
2026. Principal and interest shall be payable on the first day of each
month in an amount sufficient to amortize the principal amount
outstanding by the maturity date. The interest rate on the Series
2006A Bonds shall adjust on September 1, 2011, September 1, 2016 and
September 1, 2021 (each, an "Adjustment Date"). The adjusted interest
rate shall be the yield (rounded to two decimal points) on the most
currently issued 5-year United States Treasury notes as of the 5th
Business Day immediately preceding the Adjustment Date, plus a spread
of 1.80%, minus a discount percentage for tax-exempt status. The
discount percentage shall be provided by the Bondowner of the Series
2006A Bonds to the Trustee and will be computed in good faith by such
Bondowner and based on such Bondowner's income tax rate and IRS
regulations in effect at the time of the adjustment. The amortization
schedule shall be adjusted on each Adjustment Date in order to
amortize the then remaining principal amount of Series 2006A Bonds
Outstanding by the maturity date.
(ii) Series 2006B Bonds. The Series 2006B Bonds shall bear
interest at a rate of 6.06% and shall mature on September 1, 2009.
Principal and interest shall be payable on the first day of each month
in an amount sufficient to amortize the principal amount outstanding
by the maturity date.
(iii) Series 2006C Bonds. The Series 2006C Bonds shall bear
interest at a rate of 7.88% and shall mature on September 1, 2009.
Principal and interest shall be
15
payable on the first day of each month in an amount sufficient to
amortize the principal amount outstanding by the maturity date.
(iv) Series 20060 Bonds. The Series 2006D Bonds shall bear
interest at a rate of 8.00% on the Cumulative Outstanding Principal
Amount of the Series 2006D Bonds and shall mature on March 1, 2017.
Interest only shall be payable in arrears on each March 1 and
September 1, commencing on March 1, 2007, and continuing thereafter
until the said Cumulative Outstanding Principal Amount is paid in
full. Principal shall be payable at maturity unless redeemed prior to
the maturity date.
(b) Interest shall be calculated for the Series 2006A Bonds, Series
2006B Bonds and Series 2006C Bonds on the basis of 365/360 day year.
Interest shall be calculated on the basis of a year of 360 days consisting
of twelve months of 30 days each for the Series 2006D Bonds. An
amortization schedule will be provided to the Trustee by the Bondowner for
each series of Superior Bonds on the date of issuance of the Bonds, on each
date principal is prepaid for the applicable series of Superior Bonds and
on each Adjustment Date for the Series 2006A Bonds. The Trustee shall rely
conclusively on the amortization schedules properly provided to it for
payments of principal of and interest on the Superior Bonds, and the
Corporation's sole remedy for an incorrect amortization schedule shall be
against the applicable Bondowner.
(c) The Trustee is hereby designated as the Issuer's Paying Agent for
the payment of the principal of, premium, if any, and interest on the
Bonds.
(d) Upon the original issuance and delivery of the Bonds, the
effective date of registration thereof shall be September 1, 2006.
(e) The Bonds shall be substantially in the form and manner set forth
in Article IV hereof and delivered to the Trustee for authentication, but
prior to or simultaneously with the authentication and delivery of the
Bonds by the Trustee, there shall be filed with the Trustee the following:
(1) An original or certified copy of the Ordinance passed by
Issuer's Governing Body authorizing the issuance of the Bonds and the
execution of this Indenture and the Lease.
(2) An original executed counterpart of this Indenture.
(3) An original executed counterpart of the Lease.
(4) An original executed counterpart of the Guaranty Agreement.
(5) An original executed counterpart of the Tax Compliance
Agreement.
16
(6) An opinion of Bond Counsel to the effect that the Bonds
constitute valid and legally binding obligations of the Issuer and
that the interest on the Tax-Exempt Bonds is excluded from gross
income for Federal income tax purposes and that the interest on the
Bonds is exempt from Kansas income taxation, subject to such
limitations and restrictions as shall be described therein.
(7) Such other certificates, statements, receipts and documents
as the Trustee shall reasonably require for the delivery of the Bonds.
(f) When the documents specified in subsection (e) of this Section
shall have been filed with the Trustee, and when the Bonds shall have been
executed and authenticated as required by this Indenture, the Trustee shall
deliver the Bonds to or upon the order of the Original Purchaser thereof,
but only upon payment to the Trustee of the purchase price of the Bonds.
The proceeds of the sale of the Bonds, including accrued interest and
premium thereon, if any, shall be immediately paid over to the Trustee, and
the Trustee shall deposit and apply such proceeds as provided in Article V
hereof.
Section 209. Reserved.
Section 210. Temporary Bonds.
(a) Until definitive Bonds of any series are available for delivery,
the Issuer may execute, and upon request of the Issuer, the Trustee shall
authenticate and deliver, in lieu of definitive Bonds, but subject to the
same limitations and conditions as definitive Bonds, temporary printed,
engraved, lithographed or typewritten Bonds, in the form of fully
registered Bonds in denominations of $5,000 or any integral multiple
thereof, substantially of the tenor hereinabove set forth and with such
appropriate omissions, insertions and variations as may be required with
respect to such temporary Bonds.
(b) If temporary Bonds shall be issued, the Issuer shall cause the
definitive Bonds to be prepared and to be executed and delivered to the
Trustee, and the Trustee, upon presentation to it at its principal office
of any temporary Bond shall cancel the same and authenticate and deliver in
exchange therefor, without charge to the Owner thereof, a definitive Bond
or Bonds of an equal aggregate principal amount, of the same series and
maturity and bearing interest at the same rate as the temporary Bond
surrendered. Until so exchanged the temporary Bonds shall in all respects
be entitled to the same benefit and security of this Indenture as the
definitive Bonds to be issued and authenticated hereunder.
Section 211. Mutilated, Lost, Stolen or Destroyed Bonds. In the event any
Bond shall become mutilated, or be lost, stolen or destroyed, the Issuer shall
execute and the Trustee shall authenticate and deliver a new Bond of like
series, date and tenor as the Bond mutilated, lost, stolen or destroyed.
Provided that, in the case of any mutilated Bond, such mutilated Bond shall
first be surrendered to the Trustee, and in the case of any lost, stolen or
destroyed Bond, there shall be first furnished to the Issuer and the Trustee
evidence of such loss, theft or destruction satisfactory to the Issuer and the
Trustee, together with indemnity satisfactory to them. In the event any such
Bond shall have matured, instead of issuing a substitute Bond the Issuer may pay
or authorize the payment of the same without surrender thereof. Upon the
issuance of any substitute Bond, the Issuer and the Trustee may require the
payment of an amount sufficient to reimburse the Issuer and the Trustee for any
tax or other
17
governmental charge that may be imposed in relation thereto and any other
reasonable fees and expenses incurred in connection therewith.
Section 212. Cancellation and Destruction of Bonds Upon Payment.
(a) All Bonds which have been paid or redeemed or which the Trustee
has purchased or which have otherwise been surrendered to the Trustee under
this Indenture, either at or before maturity, shall be cancelled by the
Trustee immediately upon the payment, redemption or purchase of such Bonds
and the surrender thereof to the Trustee.
(b) All Bonds cancelled under any of the provisions of this Indenture
shall be delivered by the Trustee to the Issuer, or, upon request of the
Issuer, shall be destroyed by the Trustee. The Trustee shall execute a
certificate in triplicate describing the Bonds so delivered or destroyed,
and shall file executed counterparts of such certificate with the Issuer
and the Corporation.
ARTICLE III
REDEMPTION OF BONDS
Section 301. Redemption of Bonds Generally. The Bonds shall be subject to
redemption prior to maturity in accordance with the terms and provisions of this
Article.
Section 302. Redemption of Bonds. The Bonds shall be subject to redemption
as follows:
(a) Mandatory Redemption Upon a Determination of Taxability. In the
event of a Determination of Taxability with respect to any Tax-Exempt Bond,
all of the Tax-Exempt Bonds then Outstanding shall be called for redemption
and payment on a redemption date established by the Corporation at a
redemption price equal to the par value of the principal amount thereof,
plus accrued interest to the redemption date (which redemption date shall
not be earlier than 45 days or later than 120 days after the date of the
Determination of Taxability).
(b) Extraordinary Optional Redemption. In the event of a Change of
Circumstances, the Bonds shall be subject to redemption and payment prior
to the stated maturity thereof, at the option of the Issuer, upon
instructions from the Corporation, on any date at a redemption price equal
to the par value of the principal amount thereof, plus accrued interest
thereon to the redemption date, without premium, provided all of the Bonds
are so redeemed and paid according to their terms.
(c) Optional Redemption. The Bonds of each series shall be subject to
redemption and payment prior to maturity by the Corporation in whole at any
time or in part from time to time on any Interest Payment Date at the
redemption price of l00%, plus accrued interest thereon to the date fixed
for redemption and payment; provided, that, in the event any series of the
Superior Bonds are called for redemption and payment prior to maturity
(unless with respect to the Series 2006A Bonds, the redemption date is an
Adjustment Date) and the funds used to redeem and pay such series of
Superior Bonds are obtained from a lender other than Bank Midwest, the
redemption price for such series of Superior Bonds shall be 101%, plus
accrued interest thereon to the date fixed for redemption and payment.
18
Section 303. Reserved.
Section 304. Trustee's Duty to Redeem Bonds. The Trustee shall call Bonds
for redemption and payment as herein provided and shall give notice of
redemption as provided in Section 305 hereof upon receipt by the Trustee at
least 10 days prior to the redemption date of a written request of the
Corporation. The written request of the Corporation shall identify the
redemption date and the principal amount and series or portion thereof of Bonds
to be redeemed, and shall also set forth the redemption price. The Trustee may
rely exclusively on this request of the Corporation in establishing the
redemption price.
Section 305. Notice of Redemption. Notice of the call for any redemption
identifying the Bonds or series of Bonds or portions thereof to be redeemed
shall be given by the Trustee, in the name of the Issuer, by mail, facsimile or
e-mail at least 5 days and not more than 30 days prior to the date fixed for
redemption to the Owner of each Bond to be redeemed at the address shown on the
registration books maintained by the Trustee; provided, however, that failure to
give such notice as aforesaid, or any defect therein, shall not affect the
validity of any proceedings for the redemption of the Bonds.
All official notices of redemption shall be dated and shall state:
(a) the redemption date,
(b) if less than all outstanding Bonds are to be redeemed, the
principal amount and series of the Bonds to be redeemed,
(c) that on the redemption date the redemption price will become due
and payable upon each such Bond or portion thereof called for redemption,
and that interest thereon shall cease to accrue from and after said date,
and
(d) if applicable, the place where such Bonds are to be surrendered
for payment of the redemption price, which place of payment shall be the
principal office of the Trustee.
The Trustee is also directed to comply with any mandatory or voluntary
standards then in effect for processing redemptions of municipal securities
established by the Securities and Exchange Commission. Failure to comply with
such standards shall not affect or invalidate the redemption of any Bond to be
redeemed.
ARTICLE IV
FORM OF BONDS
The Series 2006A Bonds, and the Trustee's Certificate of Authentication to
be endorsed thereon, shall be substantially in the form set forth in EXHIBIT A
hereto. The Series 2006B Bonds, and the Trustee's Certificate of Authentication
to be endorsed thereon, shall be substantially in the form set forth in EXHIBIT
B hereto. The Series 2006C Bonds, and the Trustee's Certificate of
Authentication to be endorsed thereon, shall be substantially in the form set
forth in EXHIBIT C hereto. The Series 2006D Bonds, and the Trustee's Certificate
of Authentication to be endorsed thereon, shall be substantially in the form set
forth in EXHIBIT D hereto. The Bonds may have endorsed thereon such legends or
text as
19
may be necessary or appropriate to conform to any applicable rules and
regulations of any governmental authority or any custom, usage or requirement of
law with respect thereto.
ARTICLE V
THE PROJECT FUND
Section 501. Creation of Project Fund. There is hereby created and ordered
to be established in the custody of the Trustee a special trust fund in the name
of the Issuer to be designated the "City of Olathe, Kansas, Project Fund (DCI,
Inc. Project)."
Section 502. Deposits into the Project Fund. The following funds shall be
paid over to and deposited by the Trustee into the Project Fund, as and when
received:
(a) The proceeds from the sale of the Bonds.
(b) The earnings accrued on the investment of moneys in the Project
Fund and required to be deposited into the Project Fund pursuant to Section
702 hereof.
(c) The Net Proceeds of casualty insurance, condemnation awards or
title insurance required to be deposited into the Project Fund pursuant to
the Lease.
(d) Except as otherwise provided herein or in the Lease, any other
money received by or to be paid to the Trustee from any other source for
the purchase or construction of the Project, when accompanied by directions
by the Corporation that such moneys are to be deposited into the Project
Fund.
Section 503. Disbursements from the Project Fund.
(a) The moneys in the Project Fund shall be disbursed by the Trustee
for the payment of Project Costs in accordance with the provisions of
Article V of the Lease provided that funds expended for Costs of Issuance
shall not exceed 2% of the aggregate principal amount of the Tax-Exempt
Bonds. If the Issuer so requests, a copy of each requisition certificate
submitted to the Trustee for payment under this Section shall be promptly
provided by the Trustee to the Issuer.
(b) The Trustee shall keep and maintain adequate records pertaining to
the Project Fund and all disbursements therefrom, and after the Project has
been completed and a certificate of payment of all costs filed as provided
in Section 504 hereof, upon request by the Issuer or the Corporation, the
Trustee shall file a statement of receipts and disbursements with respect
thereto.
Section 504. Disposition Upon Completion of the Project. The completion of
the Project and payment of all costs and expenses incident thereto shall be
evidenced by the filing with the Trustee by the Corporation of the Certificate
of Completion required by Section 5.5 of the Lease. As soon thereafter as
practicable, but in no event later than the Completion Date, any balance
remaining in the Project Fund shall without further authorization be deposited
in the Principal and Interest Payment Account and applied by the Trustee solely
to the payment of principal of the Bonds through the payment
20
or redemption thereof on any Redemption Date specified in Section 302(c) hereof
or as otherwise permissible in the opinion of Bond Counsel.
Section 505. Disposition Upon Acceleration. If the principal of the Bonds
shall have become due and payable pursuant to Section 901 of this Indenture,
upon the date of payment by the Trustee of any moneys due as hereinafter
provided in Article IX, any balance remaining in the Project Fund shall, without
further authorization, be deposited in the Principal and Interest Payment
Account by the Trustee.
ARTICLE VI
REVENUES AND FUNDS
Section 601. Creation of the Principal and Interest Payment Account. There
is hereby created and ordered established in the custody of the Trustee a
special trust fund in the name of the Issuer to be designated the "City of
Olathe, Kansas, Principal and Interest Payment Account for Industrial Revenue
Bonds (DCI, Inc. Project)" (herein called the "Principal and Interest Payment
Account").
Section 602. Deposits into the Principal and Interest Payment Account. The
Trustee shall deposit into the Principal and Interest Payment Account, as and
when received, the following:
(a) All Rental Payments payable by the Corporation to the Issuer
specified in Section 3.1 of the Lease.
(b) Any amount in the Project Fund to be transferred to the Principal
and Interest Payment Account pursuant to Section 504 hereof upon completion
of the Project and any amount remaining in the Project Fund to be
transferred to the Principal and Interest Payment Account pursuant to
Section 505 hereof upon acceleration of the maturity of the Bonds.
(c) All interest and other income derived from investments of
Principal and Interest Payment Account moneys as provided in Section 702
hereof.
(d) All other moneys received by the Trustee under and pursuant to any
of the provisions of the Lease when accompanied by directions from the
person depositing such moneys that such moneys are to be paid into the
Principal and Interest Payment Account.
(e) Any amounts received by the Trustee from any Guarantor under the
Guaranty Agreement.
Section 603. Application of Moneys in the Principal and Interest Payment
Account.
(a) Except as provided in subsection (d) of this Section or in the Tax
Compliance Agreement, moneys in the Principal and Interest Payment Account
shall be expended solely for the payment of the principal of, premium, if
any, and interest on the Bonds as the same mature and become due or upon
the redemption thereof prior to maturity.
(b) The Issuer hereby authorizes and directs the Trustee to withdraw
sufficient funds from the Principal and Interest Payment Account to pay the
principal of, premium, if any, and
21
interest on the Bonds as the same become due and payable and to make said
funds so withdrawn available for the purpose of paying said principal,
premium, if any, and interest.
(c) The Trustee, upon written direction of the Issuer and the
Corporation, shall use any moneys in the Principal and Interest Payment
Account to redeem all or part of one or more series of the Bonds
Outstanding, and to pay interest to accrue thereon prior to such
redemption, in accordance with and to the extent permitted by Article III
hereof so long as the Corporation is not in default with respect to any
payments under the Lease and to the extent said moneys are in excess of the
amount required for payment of Bonds theretofore matured or called for
redemption and past due interest in all cases when such Bonds have not been
presented for payment.
(d) Any amount remaining in the Principal and Interest Payment Account
after the principal of, premium, if any, and interest on the Bonds shall
have been paid in full or provision made therefor in accordance with
Article XIII hereof, shall be paid to the Corporation by the Trustee.
(e) On any date principal or interest are due on both the Superior
Bonds and the Series 2006D Bonds, the Trustee shall first pay principal or
interest on the Superior Bonds out of amounts on deposit in the Principal
and Interest Payment Account and thereafter, the Trustee shall pay
principal or interest on the Series 2006D Bonds.
Section 604. Payments Due on Saturdays, Sundays and Holidays. In any case
where the date of maturity of principal of, premium, if any, or interest on the
Bonds or the date fixed for redemption of any Bonds shall not be a Business Day,
then payment of principal, premium, if any, or interest need not be made on such
date but may be made on the next succeeding Business Day with the same force and
effect as if made on the date of maturity or the date fixed for redemption, and
no interest shall accrue for the period after such date.
Section 605. Nonpresentment of Bonds. In the event that any Bond shall not
be presented for payment when the principal thereof becomes due, either at
maturity or otherwise, or at the date fixed for redemption thereof, or the
Trustee is unable to locate the Owner for the payment of accrued interest or an
accrued interest check remains uncashed, if funds sufficient to pay such Bond
and accrued interest shall have been made available to the Trustee, all
liability of the Issuer to the Owner thereof for the payment of such Bond and
accrued interest, shall forthwith cease, determine and be completely discharged,
and thereupon it shall be the duty of the Trustee to hold such fund or funds,
without liability for interest thereon, for the benefit of the Owner of such
Bond, who shall thereafter be restricted exclusively to such fund or funds for
any claim of whatever nature on his part under this Indenture or on, or with
respect to, said Bond and accrued interest. If any Bond shall not be presented
for payment within four years following the date when such Bond becomes due,
whether by maturity or otherwise, or the accrued interest cannot be paid as set
out above, the Trustee upon the request of the Corporation shall repay to the
Corporation the funds theretofore held by it for payment of such Bond and
accrued interest, and such Bond and accrued interest shall, subject to the
defense of any applicable statute of limitation, thereafter be an unsecured
obligation of the Corporation, and the Owner thereof shall be entitled to look
only to the Corporation for payment, and then only to the extent of the amount
so repaid, and the Corporation shall not be liable for any interest thereon and
shall not be regarded as a trustee of such money.
22
ARTICLE VII
SECURITY FOR DEPOSITS AND INVESTMENT OF FUNDS
Section 701. Moneys to be Held in Trust. All moneys deposited with or paid
to the Trustee for the account of any Fund or Account under any provision of
this Indenture shall be held by the Trustee or Paying Agent in trust and shall
be applied only in accordance with the provisions of this Indenture and the
Lease and, until used or applied as so provided, shall constitute part of the
Trust Estate and be subject to the lien hereof. The Trustee shall not be under
any liability for interest on any moneys received hereunder except interest
earned on investments made pursuant to Section 702 of this Indenture and such
other interest as may be agreed upon.
Section 702. Investment of Moneys in Funds. Moneys held in the Project Fund
and the Principal and Interest Payment Account shall be separately invested and
reinvested by the Trustee upon the written direction of the Corporation in
Investment Securities which mature or are subject to redemption by the owner
prior to the date such funds will be needed; provided, however, that such moneys
shall not be invested in such manner as will violate the provisions of Sections
703, 704 and 705 hereof. If the Corporation fails to provide written directions
concerning investment of moneys held in such funds, the Trustee may invest in
such Investment Securities specified in subparagraph (vi) of the definition of
Investment Securities. The Trustee is specifically authorized to implement its
automated cash investment system to invest cash and to charge its normal cash
management fees, which may be deducted from earned income on investments. Any
such Investment Securities shall be held by or under the control of the Trustee
and shall be deemed at all times a part of the Fund or Account in which such
moneys are originally held, and except as otherwise specifically provided in
this Indenture, the interest accruing thereon and any profit realized from such
Investment Securities shall be credited to and accumulated in such Fund or
Account, and any loss resulting from such Investment Securities shall be charged
to such Fund or Account. The Trustee shall sell and reduce to cash a sufficient
amount of such Investment Securities whenever the cash balance in any Fund or
Account is insufficient for the purposes of such Fund or Account. In determining
the balance in any Fund or Account, investments in such Fund or Account shall be
valued at the lower of their original cost or their fair market value as of the
most recent Payment Date. The Trustee may make any and all investments permitted
by the provisions of this Section through its own bond department or short-term
investment department. The Trustee shall make no investments which would violate
the provisions of Section 148 of the Code.
Section 703. Manner of Investment. All investments made pursuant to this
Article shall be made in accordance with the Tax Compliance Agreement.
Section 704. Record Keeping. The Trustee shall maintain records designed to
show compliance with the provisions of this Article and with the provisions of
Article VI for at least six years after the payment of all of the Outstanding
Bonds.
Section 705. Arbitrage and General Tax Covenant. The Issuer covenants and
agrees that it will cause the proceeds of the Bonds to be applied as soon as
practicable and with all reasonable dispatch for the purposes for which the
Bonds are issued, and the Issuer covenants and agrees that no part of the
proceeds of the Bonds shall be invested in any securities or obligations nor
used at any time, directly or indirectly, in a manner which would cause any of
the Bonds to be or become "arbitrage bonds" within the meaning of Section 148 of
the Code or would violate the provisions of the Code and the regulations of the
Treasury Department thereunder proposed or in effect at the time of such use and
applicable to obligations issued on the date of issuance of the Bonds.
23
ARTICLE VIII
GENERAL COVENANTS AND PROVISIONS
Section 801. Payment of Principal of, Premium, if any, and Interest on the
Bonds. The Issuer covenants and agrees that it will, but solely from the rents,
revenues and receipts derived from the Project as described herein, promptly pay
or cause to be paid the principal of, premium, if any, and interest on the Bonds
as the same become due and payable at the place, on the dates and in the manner
provided herein and in the Bonds according to the true intent and meaning
thereof, and to this end the Issuer covenants and agrees that it will use
reasonable efforts to cause the Project to be continuously leased as a revenue
and income producing undertaking, and that, should there be a default under the
Lease with the result that the right of possession of the Project is returned to
the Issuer, the Issuer shall fully cooperate with the Trustee and with the
Bondowners to protect the rights and security of the Bondowners and shall
diligently proceed in good faith and use reasonable efforts to secure another
tenant for the Project to the end that at all times sufficient rents, revenues
and receipts will be derived by Issuer from the Project to provide for payment
of the principal of, premium, if any, and interest on the Bonds as the same
become due and payable. If the Issuer is unable to procure a new tenant who will
enter into such a lease, the Issuer may take such good faith reasonable action
as shall be in the best interests of the Bondowners which may include the sale
of the Project, and if the Project is sold, after deducting all costs of the
sale, any moneys derived from such sale shall be used for the purpose of paying
the principal of and interest and redemption premium, if any, on the Bonds.
Nothing herein shall be construed as requiring the Issuer to operate the Project
as a business other than as lessor or to use any funds or revenues from any
source other than funds and revenues derived from the Project.
Section 802. Authority to Execute Indenture and Issue Bonds. The Issuer
covenants that it is duly authorized under the Constitution and laws of the
State of Kansas to execute this Indenture, to issue the Bonds and to pledge and
assign the Trust Estate in the manner and to the extent herein set forth; that
all action on its part for the execution and delivery of this Indenture and the
issuance of the Bonds has been duly and effectively taken; and that the Bonds in
the hands of the Owners thereof are and will be valid and enforceable limited
obligations of the Issuer according to the import thereof.
Section 803. Performance of Covenants. The Issuer covenants that it will
faithfully perform at all times any and all covenants, undertakings,
stipulations and provisions contained in this Indenture, in the Bonds and in all
proceedings of its governing body pertaining thereto.
Section 804. Instruments of Further Assurance. The Issuer covenants that it
will do, execute, acknowledge and deliver, or cause to be done, executed,
acknowledged and delivered, such Supplemental Indentures and such further acts,
instruments, financing statements and other documents as the Trustee may
reasonably require for the better pledging and assigning unto the Trustee the
property and revenues herein described to secure the payment of the principal
of, premium, if any, and interest on the Bonds. The Issuer covenants and agrees
that, except as herein and in the Lease provided, it will not sell, convey,
mortgage, encumber or otherwise dispose of any part of the Project or the rents,
revenues and receipts derived therefrom or from the Lease, or of its rights
under the Lease.
Section 805. Maintenance, Taxes and Insurance. The Issuer represents that
pursuant to the provisions of Articles VI, VII and X of the Lease, the
Corporation has agreed to cause the Project to be maintained and kept in good
condition, repair and working order, to pay, as the same respectively
24
become due, all taxes, assessments and other governmental charges at any time
lawfully levied or assessed upon or against the Project or any part thereof, and
to keep the Project constantly insured to the extent provided for therein, all
at the sole expense of Corporation.
Section 806. Inspection of Project Books. The Issuer covenants and agrees
that all books and documents in its possession relating to the Project and the
rents, revenues and receipts derived from the Project shall at all times be open
to inspection by such accountants or other agencies as the Trustee may from time
to time designate.
Section 807. Enforcement of Rights Under the Lease. The Issuer covenants
and agrees that it shall enforce all of its rights and all of the obligations of
the Corporation (at the expense of the Corporation) under the Lease to the
extent necessary to preserve the Project in good order and repair, and to
protect the rights of the Trustee and the Bondowners hereunder with respect to
the pledge and assignment of the rents, revenues and receipts coming due under
the Lease. The Issuer agrees that the Trustee as assignee of the Lease in its
name or in the name of the Issuer may enforce all rights of the Issuer and all
obligations of the Corporation under and pursuant to the Lease for and on behalf
of the Bondowners, whether or not the Issuer is in default hereunder.
Section 808. Possession and Use of Project. So long as not otherwise
provided in this Indenture, the Corporation shall be suffered and permitted to
possess, use and enjoy the Project and appurtenances so as to carry out its
obligations under the Lease.
ARTICLE IX
REMEDIES OF DEFAULT
Section 901. Acceleration of Maturity in Event of Default.
(a) If an Event of Default shall have occurred and be continuing with
respect to any series of Bonds, the Trustee may, and upon the written
request of the Owners of not less than 25% in aggregate principal amount of
Bonds of such series then Outstanding shall, by notice in writing delivered
to the Issuer and the Corporation, declare the principal of all Bonds of
such series then Outstanding and the interest accrued thereon immediately
due and payable, and such principal and interest shall thereupon become and
be immediately due and payable.
(b) If, at any time after such declaration, but before the Bonds shall
have matured by their terms, all overdue installments of principal and
interest on the applicable series of Bonds, together with the reasonable
and proper expenses of the Trustee, and all other sums then payable by the
Issuer under this Indenture shall either be paid or provision satisfactory
to the Trustee shall be made for such payment, then and in every such case
the Trustee shall, but only with the approval of the Owners of not less
than 51% in aggregate principal amount of the Bonds of such series
Outstanding, rescind such declaration and annul such default in its
entirety.
(c) In case of any rescission, then and in every such case the Issuer,
the Trustee and the Bondowners shall be restored to their former position
and rights hereunder respectively, but no such rescission shall extend to
any subsequent or other default or Event of Default or impair any right
consequent thereon.
25
(d) If principal of the Series 2006D Bonds is accelerated pursuant to
this Section, the principal of all other series of Bonds shall also
simultaneously be accelerated pursuant to this Section.
Section 902. Exercise of Remedies by the Trustee.
(a) If an Event of Default shall have occurred and be continuing with
respect to a series of Bonds, the Trustee may and, upon the written request
of the Registered Owners of not less than 25% in aggregate principal amount
of Bonds of such series then Outstanding if indemnified as provided in
Section 1001(j), the Trustee shall, pursue and exercise any available
remedy at law or in equity by suit, action, mandamus or other proceeding or
exercise such one or more of the rights and powers conferred by this
Article as the Trustee, being advised by counsel, shall deem most expedient
in the interests of the Bondowners to enforce the payment of the principal
of, premium, if any, and interest on the Bonds of such series then
Outstanding, and to enforce and compel the performance of the duties and
obligations of the Issuer as herein set forth.
(b) All rights of action under this Indenture or under any of the
Bonds may be enforced by the Trustee without the possession of any of the
Bonds or the production thereof in any trial or other proceedings relating
thereto, and any such suit or proceeding instituted by the Trustee shall be
brought in its name as Trustee without necessity of joining as plaintiffs
or defendants any Bondowners, and any recovery of judgment shall, be for
the equal benefit of all the Owners of the Outstanding Bonds.
Section 903. Limitation on Exercise of Remedies by Bondowners. No Owner of
any Bond of a series shall have any right to institute any suit, action or
proceeding in equity or at law for the enforcement of this Indenture or for the
execution of any trust hereunder or for the appointment of a receiver or any
other remedy hereunder, unless (i) a default with respect to such series has
occurred of which the Trustee has knowledge, (ii) such default shall have become
an Event of Default, (iii) the Owners of 25% in aggregate principal amount of
Bonds of such series then Outstanding shall have made written request to the
Trustee, shall have offered it indemnification as provided in Section 1001(j)
and reasonable opportunity either to proceed to exercise the powers hereinbefore
granted or to institute such action, suit or proceeding in its own name, and
(iv) the Trustee shall thereafter fail or refuse to exercise the powers granted
in this section to institute such action, suit or proceeding in its own name;
and such knowledge, indemnification and request are hereby declared in every
case, at the option of the Trustee, to be conditions precedent to the execution
of the powers and trusts of this Indenture, and to any action or cause of action
for the enforcement of this Indenture, or for the appointment of a receiver or
for any other remedy hereunder, it being understood and intended that no one or
more Bondowners shall have any right in any manner whatsoever to affect, disturb
or prejudice this Indenture by its, his or their action or to enforce any right
hereunder except in the manner herein provided, and that all proceedings at law
or in equity shall be instituted, had and maintained in the manner herein
provided and for the equal benefit of the Owners of all Bonds then Outstanding.
Nothing in this Indenture contained shall, however, affect or impair the right
of any Bondowner to payment of the principal of and interest on any Bond at and
after the maturity thereof or the obligation of the Issuer to pay the principal
of, premium, if any, and interest on each of the Bonds issued hereunder to the
respective Owners thereof at the time, place, from the source and in the manner
herein and in the Bonds expressed.
Section 904. Right of Bondowners to Direct Proceedings. Anything in this
Indenture to the contrary notwithstanding, the Owners of at least 51 % in
aggregate principal amount of Bonds of a series
26
then Outstanding shall have the right, at any time, by an instrument or
instruments in writing executed and delivered to the Trustee, to direct the
time, method and place of conducting all proceedings to be taken in connection
with the enforcement of the terms and conditions of this Indenture, or for the
appointment of a receiver or any other proceedings hereunder; provided that such
direction shall not be otherwise than in accordance with the provisions of law
and of this Indenture.
Section 905. Remedies Cumulative. No remedy by the terms of this Indenture
conferred upon or reserved to the Trustee or to the Bondowners is intended to be
exclusive of any other remedy, but each and every such remedy shall be
cumulative and shall be in addition to any other remedy given to the Trustee or
to the Bondowners hereunder or now or hereafter existing at law or in equity or
by statute. No delay or omission to exercise any right, power or remedy accruing
upon any Event of Default shall impair any such right, power or remedy or shall
be construed to be a waiver of any such Event of Default or acquiescence
therein; and every such right, power or remedy may be exercised from time to
time and as often as may be deemed expedient. No waiver of any Event of Default
hereunder, whether by the Trustee or by the Bondowners, shall extend to or shall
affect any subsequent Event of Default or shall impair any rights or remedies
consequent thereon.
Section 906. Waivers of Events of Default. The Trustee may in its
discretion waive any Event of Default hereunder and its consequences and rescind
any declaration of maturity of principal of and interest on Bonds of a series,
and shall do so upon the written request of the Owners of at least 50% in
aggregate principal amount of all the Bonds of a series then Outstanding. In
case of any such waiver or rescission, or in case any proceedings taken by the
Trustee under this Indenture on account of any such default shall have been
discontinued or abandoned for any reason, or shall have been determined
adversely, then and in every such case the Issuer, the Trustee and the
Bondowners shall be restored to their former positions, rights and obligations
hereunder, respectively, but no such waiver or rescission shall extend to any
subsequent or other default, or impair any right consequent thereon, and all
rights, remedies and powers of the Trustee shall continue as if no such
proceedings had been taken.
Section 907. Subordination of Series 2006D Bonds.
(a) The payment of the principal of, premium, if any, and interest on
the Series 2006D Bonds is subordinate to the Superior Bonds.
(b) At any time the Trustee has amounts on deposit in the Principal
and Interest Payment Account or any other fund held under this Indenture or
otherwise, the Trustee shall first make all payments due to the Owners of
the Superior Bonds. Thereafter, the Trustee shall make all payments due to
the Owners of the Series 2006D Bonds.
(c) If at any time the Trustee receives direction from the Owners of
any series of Superior Bond and the Owner of the Series 2006D Bond, the
Trustee shall follow the direction of the Owners of the applicable series
of Superior Bonds.
ARTICLE X
THE TRUSTEE
27
Section 1001. Acceptance of the Trusts. The Trustee hereby accepts the
trusts imposed upon it by this Indenture, but only upon and subject to the
following express terms and conditions, and no implied covenants or obligations
shall be read into this Indenture against the Trustee:
(a) Prior to an Event of Default and after the curing of all Events of
Default which may have occurred, the Trustee's duties and responsibilities
shall include only those expressly set forth in this Trust Indenture. If
any Event of Default has occurred and is continuing, subject to Section
1001(j) below, the Trustee shall exercise such of the rights and powers
vested in it by this Indenture, and shall use the same degree of care and
skill in their exercise as a prudent person would exercise or use under the
circumstances in the conduct of its own affairs.
Upon the occurrence of an Event of Default, the Trustee shall be and
is hereby authorized to bring appropriate action for judgment or such other
relief as may be appropriate and such action may be in the name of the
Trustee or in the name of the Issuer and Trustee jointly; but in such case,
the Issuer shall have no obligation for any fees and expenses of such
action except out of any funds which might come into the hands of the
Issuer by reason of the ownership of the Project and this Trust Indenture
and the Lease. In addition, the Trustee may file such proof of claim and
such other documents as may be necessary and advisable in order to have the
claims of the Trustee and the Bondowners relative to the Bonds or the
obligations relating thereto allowed in any judicial proceeding.
(b) The Trustee may execute any of the trusts or powers hereunder or
perform any duties hereunder either directly or through agents, attorneys
or receivers. The Trustee shall be entitled to rely upon the opinion or
advice of counsel, who may be counsel to the Trustee, Issuer or the
Corporation, concerning all matters of trust hereof and the duties
hereunder, and may in all cases pay such reasonable compensation to all
such agents, attorneys and receivers as may reasonably be employed in
connection with the trusts hereof. The Trustee shall not be responsible for
any loss or damage resulting from any action or nonaction by it taken or
omitted to be taken in good faith in reliance upon such opinion or advice
of counsel.
(c) The Trustee, in its individual or any other capacity, may become
the owner or pledgee of Bonds with the same rights which it would have if
it were not Trustee.
(d) The Trustee may rely and shall be protected in acting or
refraining from acting upon any ordinance, certificate, statement,
instrument, opinion, report, notice, request, direction, consent, order,
affidavit, letter, telegram or other paper or document provided for under
this Indenture believed by it to be genuine and correct and to have been
signed, presented or sent by the proper person or persons. Any action taken
by the Trustee pursuant to this Indenture upon the request or authority or
consent of any person who, at the time of making such request or giving
such authority or consent is the Owner of any Bond, shall be conclusive and
binding upon all future Owners of the same Bond and upon Bonds issued in
exchange therefor or upon transfer or in substitution thereof.
(e) As to the existence or nonexistence of any fact or as to the
sufficiency or validity of any instrument, paper or proceeding, or whenever
in the administration of this Indenture the Trustee shall deem it desirable
that a matter be proved or established prior to taking, suffering or
omitting any action hereunder, the Trustee shall be entitled to rely upon a
certificate signed by the Authorized Issuer Representative as sufficient
evidence of the facts therein contained, the Trustee shall also be at
liberty to accept a similar certificate to the effect that any particular
28
dealing, transaction or action is necessary or expedient, but may at its
discretion secure such other evidence deemed necessary or advisable, but
shall in no case be bound to secure the same.
(f) The permissive right of the Trustee to do things enumerated in
this Indenture shall not be construed as a duty, and the Trustee shall not
be answerable for other than its negligence or willful misconduct.
(g) At any and all reasonable times the Trustee and its duly
authorized agents, attorneys, experts, engineers, accountants and
representatives shall have the right to inspect any and all of the Project
and all books, papers and records of the Issuer and Corporation pertaining
to the Project and the Bonds, and to make such notes and copies as may be
desired.
(h) The Trustee shall not be required to give any bond or surety with
respect to the execution of its trusts and powers hereunder or otherwise
with respect to the Project.
(i) The Trustee shall have the right, but shall not be required, to
demand, with respect to the authentication of any Bonds, the withdrawal of
any cash, the release of any property, or any action whatsoever within the
purpose of this Indenture, any showings, certificates, opinions, appraisals
or other information, or corporate action or evidence thereof, in addition
to that by the terms hereof required, as a condition of such action by the
Trustee deemed desirable for the purpose of establishing the right of the
Issuer to the authentication of any Bonds, the withdrawal of any cash, or
the taking of any other action by the Trustee.
(j) Before taking any action under this Indenture, other than the
making of payments to Bondowners of principal of and interest on the Bonds
or accelerating the maturity of Bonds pursuant to Section 901 hereof, the
Trustee may require that satisfactory indemnity be furnished to it for the
reimbursement of all costs and expenses to which it may be put and to
protect it against all liability which it may incur in or by reason of such
action, including, without limitation, environmental contamination and the
cleanup thereof, except liability which is adjudicated to have resulted
from its negligence or willful misconduct by reason of any action so taken.
(k) The Trustee shall not be required to take notice or be deemed to
have notice of any default hereunder except any Event of Default described
in subparagraphs (a) and (b) of the definition of an Event of Default,
unless the Trustee is specifically notified in writing of such default by
the Issuer, the Corporation or by the Owners of at least 25% in aggregate
principal amount of all Bonds then Outstanding.
Section 1002. Fees, Charges and Expenses of the Trustee. The Trustee shall
be entitled to payment of or reimbursement for reasonable fees for its ordinary
services rendered hereunder and all advances, agent and counsel fees and other
ordinary expenses reasonably and necessarily made or incurred by the Trustee in
connection with such ordinary services and, in the event that it should become
necessary that the Trustee perform extraordinary services, it shall be entitled
to reasonable compensation therefor and to reimbursement for reasonable and
necessary extraordinary expenses in connection therewith; provided that if such
extraordinary services or extraordinary expenses are occasioned by the neglect
or misconduct of the Trustee it shall not be entitled to compensation or
reimbursement therefor. The Trustee shall be entitled to payment and
reimbursement for the reasonable fees and charges of the Trustee as Paying Agent
for the Bonds. The Trustee agrees that the Issuer shall have no liability for
any
29
fees, charges and expenses of the Trustee, and the Trustee agrees to look only
to the Corporation for the payment of all fees, charges and expenses of the
Trustee and any Paying Agents as provided in the Lease. Upon the occurrence of
an Event of Default and during its continuance, the Trustee shall have a lien
with right of payment prior to payment of principal of, redemption premium, if
any, or interest on any Bond, upon all moneys in its possession under any
provisions hereof for the foregoing advances, fees, costs and expenses incurred
and for Default Administration Costs.
Section 1003. Notice to Bondowners if Default Occurs. If an Event of
Default occurs of which the Trustee is required to take notice, the Trustee
shall give written notice thereof to the Owners of all Bonds then Outstanding,
as shown by the bond registration books required to be maintained by the Trustee
and kept at the principal office of the Trustee.
Section 1004. Intervention by the Trustee. In any judicial proceeding to
which the Issuer is a party and which, in the opinion of the Trustee and its
counsel, has a substantial bearing on the interests of the Bondowners, the
Trustee may intervene on behalf of the Bondowners and shall do so if requested
in writing by the Owners of at least 25% of the aggregate principal amount of
any series of Bonds then Outstanding.
Section 1005. Successor Trustee Upon Merger, Consolidation or Sale. Any
corporation or association into which the Trustee may be merged or converted or
with or into which it may be consolidated, or to which it may sell or transfer
its corporate trust business and assets as a whole or substantially as a whole,
or any corporation or association resulting from any merger, conversion, sale,
consolidation or transfer to which it is a party, shall be and become successor
Trustee hereunder without the execution or filing of any instrument or any
further act on the part of any of the parties hereto.
Section 1006. Resignation of Trustee. The Trustee may resign by an
instrument in writing delivered by registered or certified mail to the Issuer
and the Corporation to take effect not sooner than 90 days after its delivery,
whereupon the Issuer, with the consent of the Corporation, shall immediately, in
writing, designate a successor Trustee; provided, however, that the Trustee's
resignation shall not become effective unless and until a successor Trustee is
approved and qualified.
Section 1007. Removal of Trustee. The Trustee may be removed at any time by
an instrument or concurrent instruments in writing delivered to the Trustee,
executed by the Issuer and the Corporation or at the written direction of the
Owners of at least a majority in aggregate principal amount of the Outstanding
Bonds.
Section 1008. Qualifications of Successor Trustee. Every Successor Trustee
appointed pursuant to the provisions of this Article shall be a trust company or
bank in good standing and qualified to accept such trust having a reported
capital and surplus of not less than $10,000,000.
Section 1009. Vesting of Trusts in Successor Trustee. Every successor
Trustee appointed hereunder shall execute, acknowledge and deliver to its
predecessor and also to the Issuer and the Corporation an instrument in writing
accepting such appointment hereunder, and thereupon such successor shall,
without any further act, deed or conveyance, become fully vested with all the
trusts, powers, rights, obligations, duties, remedies, immunities and privileges
of its predecessor; but such predecessor shall, nevertheless, on the written
request of the Issuer, execute and deliver an instrument transferring to such
successor Trustee all the trusts, powers, rights, obligations, duties, remedies,
immunities and privileges of such predecessor hereunder; and every predecessor
Trustee shall deliver all securities and moneys held by it as Trustee hereunder
to its successor. Should any instrument in writing
30
from the Issuer be required by any successor Trustee for more fully and
certainly vesting in such successor the trusts, powers, rights, obligations,
duties, remedies, immunities and privileges hereby vested in the predecessor,
any and all such instruments in writing shall, on request, be executed,
acknowledged and delivered by the Issuer.
Section 1010. Right of Trustee to Pay Taxes and Other Charges. In case any
tax, assessment or governmental or other charge upon, or insurance premium with
respect to, any part of the Project is not paid as required herein or in the
Lease or in case in the amount required to be rebated to the United States
pursuant to provisions of Section 148(f) of the Code is not paid when due, the
Trustee may pay such tax, assessment or governmental charge or insurance premium
or rebated amount, without prejudice, however, to any rights of the Trustee or
the Bondowners hereunder arising in consequence of such failure; and any amount
at any time so paid under this Section, with interest thereon from the date of
payment at a rate per annum equal to the Trustee's published prime rate in
effect at the time plus 2%, shall become an additional obligation secured by
this Indenture, and the same shall be given a preference in payment over any
payment of principal of, premium, if any, or interest on the Bonds, and shall be
paid out of the proceeds of rents, revenues and receipts collected from the
Project, if not otherwise caused to be paid; but the Trustee shall be under no
obligation to make any such payment unless it shall have been requested to do so
by the Owners of at least 25% of the aggregate principal amount of any series of
Bonds then Outstanding and shall have been provided adequate funds for the
purpose of such payment.
Section 1011. Trust Estate May Be Vested in Co-Trustee.
(a) It is the purpose of this Indenture that there shall be no
violation of any law of any jurisdiction (including particularly the State)
denying or restricting the right of banking corporations or associations to
transact business as trustee in such jurisdiction. It is recognized that in
case of litigation under this Indenture or the Lease, and in particular in
case of the enforcement of either on default, or in case the Trustee deems
that by reason of any present or future law of any jurisdiction it may not
exercise any of the powers, rights or remedies herein granted to the
Trustee, or take any other action which may be desirable or necessary in
connection therewith, it may be necessary or desirable that the Trustee
appoint an additional individual or institution as a co-trustee or separate
trustee, and the Trustee is hereby authorized to appoint such co-trustee or
separate trustee.
(b) In the event that the Trustee appoints an additional individual or
institution as a co-trustee or separate trustee, each and every remedy,
power, right, claim, demand, cause of action, immunity, title, interest and
lien expressed or intended by this Indenture to be exercised by the Trustee
with respect thereto shall be exercisable by such co-trustee or separate
trustee but only to the extent necessary to enable such co-trustee or
separate trustee to exercise such powers, rights and remedies, and every
covenant and obligation necessary to the exercise thereof by such
co-trustee or separate trustee shall run to and be enforceable by either of
them.
(c) Should any deed, conveyance or instrument in writing from the
Issuer be required by the co-trustee or separate trustee so appointed by
the Trustee for more fully and certainly vesting in and confirming to him
or it such properties, rights, powers, trusts, duties and obligations, then
any and all such deeds, conveyances and instruments in writing shall, on
request, be executed, acknowledged and delivered by the Issuer.
(d) In case any co-trustee or separate trustee shall die, become
incapable of acting, resign or be removed, all the properties, rights,
powers, trusts, duties and obligations of such
31
co-trustee or separate trustee, so far as permitted by law, shall vest in
and be exercised by the Trustee until the appointment of a successor to
such co-trustee or separate trustee.
Section 1012. Annual Accounting. The Trustee shall render an annual
accounting to the Issuer, the Corporation and to any Bondowner requesting the
same in writing and remitting the Trustee's reasonable charges for preparing
such copies, showing in reasonable detail all financial transactions relating to
the Trust Estate during the accounting period all calculations related to the
determination of arbitrage rebate and the balance in any Funds or Accounts
created by this Indenture as of the beginning and close of such accounting
period.
Section 1013. Recordings and Filings. The Original Purchaser shall cause
this Indenture and all Supplemental Indentures, the Lease and all amendments to
the Lease or appropriate memoranda thereof and all appropriate financing and
other security instruments to be recorded and filed in such manner and in such
places as may be required by law in order to fully preserve and protect the
security of the Bondowners and the rights of the Trustee hereunder. The Trustee
shall file necessary continuation statements for any filed UCC-1 financing
statement and amendments thereto for which it receives a file stamped
counterpart or a copy of which is contained in the transcript of proceedings
relating to the Bonds.
Section 1014. Performance of Duties under the Lease and Guaranty Agreement.
The Trustee hereby accepts and agrees to perform all duties and obligations
assigned to it under the Lease and the Guaranty Agreement.
ARTICLE XI
SUPPLEMENTAL INDENTURES
Section 1101. Supplemental Indentures Not Requiring Consent of Bondowners.
The Issuer and the Trustee may from time to time, without the consent of or
notice to any of the Bondowners, enter into such Supplemental Indenture or
Supplemental Indentures as shall not be inconsistent with the terms and
provisions hereof, for any one or more of the following purposes:
(a) To cure any ambiguity or formal defect or omission in this
Indenture or to make any other change not prejudicial to the Bondowners;
(b) To grant to or confer upon the Trustee for the benefit of the
Bondowners any additional rights, remedies, powers or authority that may
lawfully be granted to or conferred upon the Bondowners or the Trustee or
either of them;
(c) To more precisely identify the Project or to substitute or add
additional property thereto;
(d) To subject to this Indenture additional revenues, properties or
collateral; and
(e) To conform the provisions of this Indenture to the provisions of
the Code as the same now exists or may be hereafter amended.
32
Section 1102. Supplemental Indentures Requiring Consent of Bondowners.
(a) Exclusive of Supplemental Indentures described in Section 1101
hereof and subject to the terms and provisions contained in this Section,
and not otherwise, the Owners of not less than a majority in aggregate
principal amount of the Bonds of each series of the Bonds affected by such
amendment then Outstanding shall have the right, from time to time,
anything contained in this Indenture to the contrary notwithstanding, to
consent to and approve the execution by the Issuer and the Trustee of such
other Supplemental Indenture or Supplemental Indentures as shall be deemed
necessary and desirable by the Issuer for the purpose of modifying,
amending, adding to or rescinding, in any particular, any of the terms or
provisions contained in this Indenture or in any Supplemental Indenture;
provided, however, that nothing in this Section contained shall permit or
be construed as permitting (1) an extension of the maturity of the
principal of or the interest on any Bond issued hereunder, or (2) a
reduction in the principal amount of any Bond or the rate of interest
thereon, or (3) a privilege or priority of any Bond or Bonds over any other
Bond or Bonds, or (4) a reduction in the aggregate principal amount of
Bonds the Owners of which are required for consent to any such Supplemental
Indenture.
(b) Any provision of this Indenture or the Bonds may be amended with
the written consent of the Owners of 100% in aggregate principal amount of
each series of Bonds then Outstanding.
Section 1103. Corporation's Consent to Supplemental Indentures. Anything
herein to the contrary notwithstanding, a Supplemental Indenture under this
Article which affects any rights of the Corporation shall not become effective
unless and until the Corporation shall have consented in writing to the
execution and delivery of such Supplemental Indenture In this regard, the
Trustee shall cause notice of the proposed execution and delivery of any such
Supplemental Indenture together with a copy of the proposed Supplemental
Indenture to be mailed to the Corporation at least 15 days prior to the proposed
date of execution and delivery of any such Supplemental Indenture.
ARTICLE XII
LEASE AMENDMENTS
Section 1201. Lease Amendments. The Lease may be amended to the extent and
upon the terms and conditions provided therein.
ARTICLE XIII
SATISFACTION AND DISCHARGE OF INDENTURE
Section 1301. Satisfaction and Discharge of the Indenture.
(a) When the principal of, premium, if any, and interest on all the
Bonds shall have been paid in accordance with their terms or provision has
been made for such payment, as provided in Section 1302 hereof, and
provision shall also have been made for paying all other sums payable
hereunder, including the fees and expenses of the Trustee and the Paying
Agents to the date of retirement of the Bonds and the payment of arbitrage
rebate to the United States as
33
required by this Indenture, then the right, title and interest of the
Trustee under this Indenture shall thereupon cease, determine and be void,
and thereupon the Trustee shall cancel, discharge and release this
Indenture and shall execute, acknowledge and deliver to the Issuer such
instruments of satisfaction and discharge or release as shall be requisite
to evidence such release and the satisfaction and discharge of this
Indenture, and shall assign and deliver to the Issuer any property at the
time subject to this Indenture which may then be in its possession, except
amounts in the Principal and Interest Payment Account required to be paid
to the Corporation under Section 603(d) hereof and except funds or
securities in which such funds are invested and held by the Trustee for the
payment of the principal of, premium, if any, and interest on the Bonds or
of arbitrage rebate by the United States.
(b) The Issuer is hereby authorized to accept a certificate by the
Trustee that the principal of, premium, if any, and interest due and
payable upon all of the Bonds then Outstanding and all amounts required to
be paid to the United States have been paid or such payment provided for in
accordance with Section 1302 hereof as evidence of satisfaction of this
Indenture, and upon receipt thereof shall cancel and erase the inscription
of this Indenture from its records.
Section 1302. Bonds Deemed to be Paid.
(a) Bonds shall be deemed to be paid within the meaning of this
Indenture when payment of the principal of and the applicable premium, if
any, on such Bonds, plus interest thereon to the due date thereof (whether
such due date be by reason of maturity or upon redemption as provided in
this Indenture, or otherwise), either (i) shall have been made or caused to
be made in accordance with the terms thereof, or (ii) shall have been
provided for by depositing with the Trustee, in trust and irrevocably set
aside exclusively for such payment (1) moneys sufficient to make such
payment or (2) non-callable Government Securities maturing as to principal
and interest in such amount and at such times as will insure the
availability of sufficient moneys to make such payment. At such time as a
Bond shall be deemed to be paid hereunder, as aforesaid, it shall no longer
be secured by or entitled to the benefits of this Indenture, except for the
purposes of any such payment from such moneys or Government Securities.
(b) Notwithstanding the foregoing, in the case of the redemption of
Bonds which by their terms may be redeemed prior to the stated maturities
thereof, no deposit under clause (ii) of the immediately preceding
paragraph shall be deemed a payment of such Bonds as aforesaid until proper
notice of such redemption shall have been given in accordance with Article
III of this Indenture or irrevocable instructions shall have been given to
the Trustee to give such notice.
(c) Notwithstanding any provision of any other Section of this
Indenture which may be contrary to the provisions of this Section, all
moneys or Government Securities set aside and held in trust pursuant to the
provisions of this Section for the payment of Bonds (including premium
thereon, if any) and interest thereon shall be applied to and used solely
for the payment of the particular Bonds (including premium thereon, if any)
and interest thereon with respect to which such moneys and Government
Securities have been so set aside in trust.
34
ARTICLE XIV
MISCELLANEOUS PROVISIONS
Section 1401. Consents and Other Instruments by Bondowners.
(a) Any consent, request, direction, approval, objection or other
instrument required by this Indenture to be signed and executed by the
Bondowners may be in any number of concurrent writings of similar tenor and
may be signed or executed by such Bondowners in person or by agent
appointed in writing. Proof of the execution of any such instrument or of
the writing appointing any such agent and of the ownership of Bonds, if
made in the following manner, shall be sufficient for any of the purposes
of this Indenture, and shall be conclusive in favor of the Trustee with
regard to any action taken, suffered or omitted under any such instrument,
namely:
(1) The fact and date of the execution by any person of any such
instrument may be proved by the certificate of any officer in any
jurisdiction who by law has power to take acknowledgments within such
jurisdiction that the person signing such instrument acknowledged
before him the execution thereof, or by affidavit of any witness to
such execution.
(2) The fact of ownership of Bonds and the amount or amounts,
number and other identification of such Bonds, and the date of holding
the same shall be proved by the registration books of the Issuer
maintained by the Trustee.
(b) In determining whether the Owners of the requisite principal
amount of Bonds Outstanding have given any request, demand, authorization,
direction, notice, consent or waiver under this Indenture, Bonds owned by
the Corporation or any affiliate of the Corporation shall be disregarded
and deemed not to be Outstanding under this Indenture, except that, in
determining whether the Trustee shall be protected in relying upon any such
request, demand, authorization, direction, notice, consent or waiver, only
Bonds which the Trustee knows to be so owned shall be so disregarded. For
purposes of this paragraph, the word "affiliate" means any person directly
or indirectly controlling or controlled by or under direct or indirect
common control with the Corporation; and for the purposes of this
definition, "control" means the power to direct the management and policies
of such person, directly or indirectly, whether through the ownership of
voting securities, by contract or otherwise. Notwithstanding the foregoing,
Bonds so owned which have been pledged in good faith shall not be
disregarded as aforesaid if the pledgee establishes to the satisfaction of
the Trustee the pledgee's right so to act with respect to such Bonds and
that the pledgee is not the Corporation or any affiliate of the
Corporation.
Section 1402. Limitation of Rights Under the Indenture. With the exception
of rights herein expressly conferred, nothing expressed or mentioned in or to be
inferred from this Indenture or the Bonds is intended or shall be construed to
give any person other than the parties hereto, and the Bondowners, any right,
remedy or claim under or with respect to this Indenture, and all of the
covenants, conditions and provisions hereof being intended to be and being for
the sole and exclusive benefit of the parties hereto, the Corporation and the
Bondowners as herein provided.
Section 1403. Notices. Any notice, request, complaint, demand or other
communication required or desired to be given or filed under this Indenture
shall be in writing and shall be deemed duly
35
given or filed if the same shall be duly mailed by registered or certified mail,
postage prepaid, to the Notice Representative.
All notices given by certified or registered mail as aforesaid shall be
deemed duly given as of the date they are so mailed, provided that any notice to
the Trustee shall only be effective upon actual receipt. A duplicate copy of
each notice, certificate or other communication given hereunder by either the
Issuer or the Corporation to the other shall also be given to the Trustee. The
Issuer, the Trustee and the Corporation may from time to time designate, by
notice given hereunder to the others of such parties, such other address to
which subsequent notices, certificates or other communications shall be sent.
Section 1404. Suspension of Newspaper Publication or Mail Service. If,
because of the temporary or permanent suspension of the publication or general
circulation of any newspaper or suspension of regular mail service or for any
other reason, it is impossible or impractical to publish or mail any notice in
the manner herein provided, then such publication in lieu thereof or other form
of notice as shall be made with the approval of the Trustee shall constitute a
sufficient notice.
Section 1405. Severability. If any provision of this Indenture shall be
held or deemed to be invalid, inoperative or unenforceable as applied in any
particular case in any jurisdiction or jurisdictions or in all jurisdictions, or
in all cases because it conflicts with any other provision or provisions hereof
or any constitution or statute or rule of public policy, or for any other
reason, such circumstances shall not have the effect of rendering the provision
in question inoperative or unenforceable in any other case or circumstance, or
of rendering any other provision or provisions herein contained invalid,
inoperative or unenforceable to any extent whatever.
Section 1406. Execution in Counterparts. This Indenture may be
simultaneously executed in several counterparts, each of which shall be an
original and all of which shall constitute but one and the same instrument.
Section 1407. Governing Law. This Indenture shall be governed exclusively
by and construed in accordance with the applicable laws of the State.
Section 1408. Electronic Transaction. The parties agree that the
transaction described herein may be conducted and related documents may be
stored by electronic means. Copies, telecopies, facsimiles, electronic files and
other reproductions of original executed documents shall be deemed to be
authentic and valid counterparts of such original documents for all purposes,
including the filing of any claim, action or suit in the appropriate court of
law.
[Remainder of page intentionally blank.]
36
IN WITNESS WHEREOF, Issuer has caused this Indenture to be signed in its
name and behalf by the Mayor and its corporate seal to be hereunto affixed and
attested by its City Clerk, and to evidence its acceptance of the trusts hereby
created, Trustee has caused this Indenture to be signed in its name and behalf
and its official seal to be hereunto affixed and attested by its duly authorized
officers, all as of the date first above written.
CITY OF OLATHE, KANSAS
By:
------------------------------------
Mayor
[SEAL]
ATTEST:
By:
-------------------------------
City Clerk
S-1
UMB BANK, N.A.
as Trustee
By:
-------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: V.P.
[SEAL]
ATTEST:
--------------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Asst. Secretary
S-2
SCHEDULE I
PROPERTY SUBJECT TO LEASE
(a) The following described real estate located in ▇▇▇▇▇▇▇ County,
Kansas, to wit:
▇▇▇ ▇▇, ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ PLAT, a subdivision in
the City of Olathe, ▇▇▇▇▇▇▇ County, Kansas
said real property constituting the "Land" as referred to in said Lease.
(b) All buildings, improvements, machinery and equipment now or
hereafter constructed, located or installed on the Land pursuant to said
Lease and paid for in whole or in part with Bond proceeds, constituting the
"Improvements" as referred to in said Lease and said Indenture.
SI-1
EXHIBIT A
FORM OF THE BOND
This Bond has not been registered under the Securities Act of 1933, as amended,
or any state securities laws, and this Bond may not be transferred unless (i)
the Issuer consents in writing to such transfer, and (ii) the Issuer and the
Trustee are furnished a written legal opinion from counsel acceptable to the
Issuer, the Trustee and the Corporation, to the effect that such transfer is
exempt from the registration requirements of the Securities Act of 1933, as
amended, and any applicable state securities laws. This Bond may be transferred
to any successor of the Corporation or any entity owned by or under common
ownership with the Corporation without the necessity of obtaining the Issuer's
consent or such an opinion.
UNITED STATES OF AMERICA
STATE OF KANSAS
COUNTY OF ▇▇▇▇▇▇▇
CITY OF OLATHE, KANSAS
[TAX EXEMPT] [TAXABLE] INDUSTRIAL REVENUE BOND
(DCI, INC. PROJECT)
SERIES 2006[___]
Interest Rate Maturity Date Dated Date
------------- ------------- ----------
September 1, 2006
REGISTERED OWNER: [BANK MIDWEST, N.A.] [DCI, INC.]
PRINCIPAL AMOUNT: [_____________ DOLLARS]
THE CITY OF OLATHE, KANSAS, a municipal corporation organized and existing
under the laws of the State of Kansas (the "Issuer"), for value received,
promises to pay, but solely from the sources hereinafter referred to, to the
Registered Owner specified above, or registered assigns, the Principal Amount
specified above on the Maturity Date specified above or as otherwise provided in
the hereafter defined Indenture, except as the provisions hereinafter set forth
with respect to redemption prior to maturity may become applicable hereto, and
in like manner to pay interest on the portion of said Principal Amount from time
to time Outstanding at the interest rate per annum determined as described
herein and in the Indenture from the Dated Date specified above or from the most
recent Interest Payment Date to which interest has been paid or duly provided
for, payable on each Interest Payment Date as described in the Indenture until
said Principal Amount is paid.
Method of Payment. The principal of and interest on this Bond shall be
payable in any coin or currency of the United States of America which on the
respective dates of payment thereof is legal tender for the payment of public
and private debts. The principal of and
B-1
redemption premium, if any, and interest on this Bond shall be payable in the
manner set forth in the Indenture.
Authorization. This Bond is one of a duly authorized series of bonds of the
Issuer designated "[Tax Exempt] [Taxable] [Subordinate] [Industrial Revenue
Bonds] (DCI, Inc. Project), Series 2006[_]", issued in the maximum aggregate
principal amount of $__________ (herein called the "Bonds"), issued for the
purpose of providing funds to pay a portion of the cost of acquiring,
purchasing, constructing, installing and equipping a commercial project,
consisting of a manufacturing facility (the "Project"), to be leased to DCI
Holdings FAE, LLC, a Kansas limited liability company (the "Corporation"), under
the terms of a Lease Agreement dated as of September 1, 2006 (said Lease
Agreement, as amended and supplemented from time to time in accordance with the
provisions thereof, being herein called the "Lease"), between the Issuer and the
Corporation, all pursuant to the authority of and in full compliance with the
provisions, restrictions and limitations and Constitution and statutes of the
State of Kansas, including particularly K.S.A. 12-1740 to 12-1749d, inclusive,
as amended, and pursuant to proceedings duly had by the governing body of the
Issuer.
Payment of Principal and Interest. Principal and interest on the Bonds
shall be paid in the amounts and at the times specified in Section 208(a) of the
Indenture.
Security. The Bonds are issued under, secured and entitled to the
protection given by the Indenture pursuant to which the rights of the Issuer
under the Lease Agreement are pledged and assigned by the Issuer to the Trustee
as security for the Bonds. Reference is hereby made to the Indenture for a
description of the property pledged and assigned thereunder, and the provisions,
among others, with respect to the nature and extent of the security for the
Bonds, and the rights, duties and obligations of the Issuer, the Trustee and the
owners of the Bonds, and a description of the terms upon which the Bonds are
issued and secured, upon which provision for payment of the Bonds or portions
thereof and defeasance of the lien of the Indenture with respect thereto may be
made and upon which the Indenture may be deemed satisfied and discharged prior
to payment of the Bonds.
Limited Obligations. The Bonds and the interest thereon are limited
obligations of the Issuer payable exclusively out of the Trust Estate under the
Indenture, including but not limited to the rents, revenues and receipts under
the Lease, and are secured by a pledge of the Project as described in the Lease
and a pledge and assignment of the Trust Estate, including all rentals and other
amounts to be received by the Issuer under and pursuant to the Lease, all as
provided in the Indenture. The Bonds and the interest thereon do not constitute
a debt or general obligation of the Issuer, the State of Kansas or any municipal
corporation thereof, and are not payable in any manner by taxation. The Bonds
shall not constitute an indebtedness within the meaning of any constitutional or
statutory debt limitation or restriction. Pursuant to the provisions of the
Lease, rental payments are to be made by the Corporation directly to the Trustee
for the account of the Issuer and deposited in a special trust account created
by the Issuer and designated "City of Olathe, Kansas, Principal and Interest
Payment Account for Industrial Revenue Bonds (DCI, Inc. Project)." The full and
prompt payment of the principal of, redemption premium, if any, and interest on
the Bonds is unconditionally jointly and severally guaranteed for the benefit of
the Bondowners, under the terms of a separate Guaranty Agreement dated as of
September 1, 2006 by the guarantors named therein.
B-2
Redemption. The Bonds are subject to optional and mandatory redemption
prior to their stated maturity as provided in the Indenture.
[Subordination. The payment of the principal of, premium, if any, and
interest on this Bond is subordinate to the Superior Bonds (as defined in the
Indenture). The rights of the Registered Holder of this Bond are limited to the
rights of the holders of the Superior Bonds as described in the Indenture. The
rights to security and payment of this Bond are subordinate to the rights to
security and payment of the Superior Bonds as described in the Indenture.]
Limitation on Rights; Acceleration; Modifications. The Owner of this Bond
shall have no right to enforce the Indenture or to institute action to enforce
the covenants therein, or to take any action with respect to any event of
default under the Indenture, or to institute, appear in or defend any suit or
other proceeding with respect thereto, except as provided in the Indenture. In
certain events, on the conditions, in the manner and with the effect set forth
in the Indenture, the principal of all the Bonds issued under the Indenture and
then Outstanding may become or may be declared due and payable before the stated
maturity thereof, together with interest accrued thereon. Modifications or
alterations of the Bonds or the Indenture may be made only to the extent and in
the circumstances permitted by the Indenture.
Authentication. This Bond shall not be valid or become obligatory for any
purpose or be entitled to any security or benefit under the Indenture until the
Certificate of Authentication hereon shall have been executed by the Trustee.
IT IS HEREBY CERTIFIED AND DECLARED that all acts, conditions and things
required to exist, happen and be performed precedent to and in the execution and
delivery of the Indenture and the issuance of this Bond do exist, have happened
and have been performed in due time, form and manner as required by law.
IN WITNESS WHEREOF, THE CITY OF OLATHE, KANSAS has caused this Bond to be
executed in its name by the manual or facsimile signature of the Mayor and
attested by the manual or facsimile signature of the City Clerk and its official
seal to be affixed hereto or imprinted hereon, and has caused this Bond to be
dated as of September _____, 2006.
CITY OF OLATHE, KANSAS
By: __________________________________
Mayor
[SEAL]
ATTEST:
By: _________________________
City Clerk
B-3
======================================================================================================================
TABLE OF CUMULATIVE OUTSTANDING PRINCIPAL AMOUNT
Principal Amount Cumulative
Principal Amount Paid Pursuant to Outstanding Notation
Deposited Into Redemption Principal Made
Date Construction Fund Provisions Amount By
---- ----------------- ---------- ------ --
B-4
======================================================================================================================
(FORM OF ASSIGNMENT)
(NOTE RESTRICTIONS ON TRANSFERS)
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers unto
----------------------------------------------------------------------------------------------------------------------
Print or Typewrite Name, Address and Social Security or
other Taxpayer Identification Number of Transferee
the within Bond and all rights thereunder, and hereby irrevocably constitutes
and appoints __________________________ attorney to transfer the within Bond on
the books kept by the Trustee for the registration and transfer of Bonds, with
full power of substitution in the premises.
Dated: _____________________ ________________________________________________________________
NOTICE: The signature to this assignment must correspond with
the name as it appears upon the face of the within Bond in
every particular.
Signature Guaranteed By:
[Seal of Bank] ________________________________________________________________
(Name of Eligible Guarantor Institution as defined by SEC Rule
17 Ad-1 5
(17CFR 240.17 Ad-15))
By: ______________________________________
Title: ____________________________________
======================================================================================================================
B-5
(FORM OF TRUSTEE'S CERTIFICATE OF AUTHENTICATION
================================================================================
CERTIFICATE OF AUTHENTICATION
This Bond is the Tax Exempt Industrial Revenue Bond (DCI, Inc.
Project), Series 2006A, described in the Trust Indenture. The effective date of
registration of this Bond is set forth below.
UMB BANK, N.A.
Date: _________________________ By: ___________________________________
Name: _________________________________
Title: ________________________________
================================================================================