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CASTLE ROCK RANCH PUBLIC IMPROVEMENTS AUTHORITY
and
SOUTHTRUST BANK OF ALABAMA, NATIONAL ASSOCIATION,
as Trustee
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INDENTURE OF TRUST
dated as of March 1, 1996
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relating to the issuance of
$66,975,000
CASTLE ROCK RANCH PUBLIC IMPROVEMENTS AUTHORITY
PUBLIC FACILITIES REVENUE BONDS
SERIES 1996
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TABLE OF CONTENTS
PAGE
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ARTICLE I - DEFINITIONS, NOTICES . . . . . . . . . . . . . . . . . . . . . . 12
Section 1.1 DEFINITIONS. . . . . . . . . . . . . . . . . . . . . . . 12
Section 1.2 NOTICE TO AUTHORITY, CREDIT ENHANCEMENT PROVIDER AND
TRUSTEE. . . . . . . . . . . . . . . . . . . . . . . . . 23
Section 1.3 INCORPORATION BY REFERENCE OF TRUST INDENTURE ACT. . . . 23
ARTICLE II - THE BONDS . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
Section 2.1 AUTHORIZATION OF BONDS . . . . . . . . . . . . . . . . . 25
Section 2.2 TERMS OF BONDS . . . . . . . . . . . . . . . . . . . . . 25
Section 2.3 TERMS OF REDEMPTION. . . . . . . . . . . . . . . . . . . 27
Section 2.4 USE OF DEPOSITORY. . . . . . . . . . . . . . . . . . . . 27
ARTICLE III - ISSUE OF SERIES 1996 BONDS . . . . . . . . . . . . . . . . . . 30
Section 3.1 AUTHENTICATION AND DELIVERY OF BONDS . . . . . . . . . . 30
Section 3.2 APPLICATION OF PROCEEDS OF SERIES 1996 BONDS . . . . . . 30
Section 3.3 PROJECT FUND . . . . . . . . . . . . . . . . . . . . . . 30
Section 3.4 CAPITALIZED INTEREST ACCOUNT . . . . . . . . . . . . . . 31
Section 3.5 [Reserved] . . . . . . . . . . . . . . . . . . . . . . . 31
Section 3.6 SUBORDINATE INDEBTEDNESS . . . . . . . . . . . . . . . . 31
ARTICLE IV - REVENUES AND CREDIT ENHANCEMENT . . . . . . . . . . . . . . . . 32
Section 4.1 ESTABLISHMENT OF FUNDS AND ACCOUNTS. . . . . . . . . . . 32
Section 4.2 CREDIT ENHANCEMENT; SOURCE OF PAYMENT. . . . . . . . . . 32
Section 4.3 PLEDGE; REVENUE FUND . . . . . . . . . . . . . . . . . . 34
Section 4.4 ALLOCATION OF REVENUES . . . . . . . . . . . . . . . . . 34
Section 4.5 APPLICATION OF INTEREST FUND . . . . . . . . . . . . . . 36
Section 4.6 APPLICATION OF PRINCIPAL FUND. . . . . . . . . . . . . . 36
Section 4.7 APPLICATION OF REDEMPTION FUND . . . . . . . . . . . . . 38
Section 4.8 INVESTMENT OF MONEYS IN FUNDS AND ACCOUNTS . . . . . . . 39
Section 4.9 ESTABLISHMENT AND APPLICATION OF THE REBATE FUND . . . . 39
ARTICLE V - REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE AUTHORITY . . . 41
Section 5.1 REPRESENTATIONS AND WARRANTIES OF THE AUTHORITY. . . . . 41
Section 5.2 ACQUISITION OF PROPERTY. . . . . . . . . . . . . . . . . 43
Section 5.3 AUTHORITY'S TITLE TO PROJECT; DEED OF TRUST. . . . . . . 44
Section 5.4 INSURANCE. . . . . . . . . . . . . . . . . . . . . . . . 44
Section 5.5 MISCELLANEOUS COVENANTS. . . . . . . . . . . . . . . . . 47
Section 5.6 CONSOLIDATION, MERGER, SALE OR TRANSFER UNDER CERTAIN
CONDITIONS . . . . . . . . . . . . . . . . . . . . . . . 47
Section 5.7 REPORTS. . . . . . . . . . . . . . . . . . . . . . . . . 49
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Section 5.8 TAX COVENANTS. . . . . . . . . . . . . . . . . . . . . . 49
Section 5.9 TRANSFER TO DISTRICT . . . . . . . . . . . . . . . . . . 50
ARTICLE VI - CERTIFICATES AND OPINIONS . . . . . . . . . . . . . . . . . . . 51
Section 6.1 CONTENT OF CERTIFICATES AND OPINIONS . . . . . . . . . . 51
ARTICLE VII - PROVISIONS CONCERNING THE BONDS. . . . . . . . . . . . . . . . 52
Section 7.1 EXECUTION OF BONDS . . . . . . . . . . . . . . . . . . . 52
Section 7.2 TRANSFER OR EXCHANGE OF BONDS. . . . . . . . . . . . . . 52
Section 7.3 BOND REGISTER. . . . . . . . . . . . . . . . . . . . . . 56
Section 7.4 TEMPORARY BONDS. . . . . . . . . . . . . . . . . . . . . 56
Section 7.5 BONDS MUTILATED, LOST, DESTROYED OR STOLEN . . . . . . . 56
ARTICLE VIII - PROVISIONS REGARDING REDEMPTION OF BONDS. . . . . . . . . . . 58
Section 8.1 SELECTION OF BONDS FOR REDEMPTION. . . . . . . . . . . . 58
Section 8.2 NOTICE OF REDEMPTION . . . . . . . . . . . . . . . . . . 58
Section 8.3 EFFECT OF REDEMPTION . . . . . . . . . . . . . . . . . . 59
ARTICLE IX - ADDITIONAL REPRESENTATIONS AND COVENANTS OF THE AUTHORITY . . . 60
Section 9.1 PAYMENT OF PRINCIPAL AND INTEREST. . . . . . . . . . . . 60
Section 9.2 ACCOUNTING RECORDS AND REPORTS . . . . . . . . . . . . . 60
Section 9.3 COMPLIANCE WITH INDENTURE. . . . . . . . . . . . . . . . 60
Section 9.4 AUTHORIZATION FOR BONDS. . . . . . . . . . . . . . . . . 61
Section 9.5 OBSERVANCE OF LAWS AND REGULATIONS, ERISA. . . . . . . . 61
Section 9.6 MAINTENANCE AND REPAIR OF PROJECT. . . . . . . . . . . . 61
Section 9.7 OTHER LIENS. . . . . . . . . . . . . . . . . . . . . . . 61
Section 9.8 COMPLIANCE WITH CONTRACTS. . . . . . . . . . . . . . . . 62
Section 9.9 PROSECUTION AND DEFENSE OF SUITS . . . . . . . . . . . . 62
Section 9.10 EMINENT DOMAIN . . . . . . . . . . . . . . . . . . . . . 62
Section 9.11 FURTHER ASSURANCES . . . . . . . . . . . . . . . . . . . 64
ARTICLE X - EVENTS OF DEFAULT AND REMEDIES . . . . . . . . . . . . . . . . . 65
Section 10.1 EVENTS OF DEFAULT: ACCELERATION: WAIVER OF DEFAULT . . . 65
Section 10.2 POWER OF TRUSTEE TO ENTER AND TAKE POSSESSION OF TRUST
ESTATE . . . . . . . . . . . . . . . . . . . . . . . . . 67
Section 10.3 APPLICATION OF MONEYS. . . . . . . . . . . . . . . . . . 68
Section 10.4 INSTITUTION OF LEGAL PROCEEDINGS BY TRUSTEE. . . . . . . 69
Section 10.5 POWER OF SALE. . . . . . . . . . . . . . . . . . . . . . 69
Section 10.6 ACCELERATION UPON EXERCISE OF POWER OF SALE. . . . . . . 70
Section 10.7 SALE AS ENTIRETY OR IN PARCELS . . . . . . . . . . . . . 70
Section 10.8 ADJOURNMENTS OF SALE . . . . . . . . . . . . . . . . . . 70
Section 10.9 TRANSFER TO BUYER AT SALE. . . . . . . . . . . . . . . . 70
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Section 10.10 SALE A BAR AGAINST AUTHORITY . . . . . . . . . . . . . . 71
Section 10.11 BUYER NOT LIABLE FOR APPLICATION OF PURCHASE MONEY . . . 71
Section 10.12 APPLICATION OF BONDS TO PURCHASE PRICE . . . . . . . . . 71
Section 10.13 PURCHASE BY TRUSTEE. . . . . . . . . . . . . . . . . . . 71
Section 10.14 APPLICATION OF PROCEEDS OF SALE. . . . . . . . . . . . . 71
Section 10.15 EFFECT OF DELAY OR OMISSION TO PURSUE REMEDY . . . . . . 72
Section 10.16 REMEDIES CUMULATIVE. . . . . . . . . . . . . . . . . . . 72
Section 10.17 WAIVER BY AUTHORITY OF BENEFITS OF LAWS FOR PROTECTION
OF DEBTORS . . . . . . . . . . . . . . . . . . . . . . . 72
Section 10.18 COVENANT TO PAY BONDS IN EVENT OF DEFAULT, ETC.. . . . . 72
Section 10.19 RIGHTS OF TRUSTEE IN RECEIVERSHIP PROCEEDINGS, ETC.. . . 73
Section 10.20 RIGHTS OF BONDHOLDERS TO CONTROL PROCEEDINGS BY
TRUSTEE. . . . . . . . . . . . . . . . . . . . . . . . . 74
Section 10.21 LIMITATION ON BONDHOLDERS' RIGHT TO ▇▇▇. . . . . . . . . 74
Section 10.22 ABSOLUTE OBLIGATION OF AUTHORITY . . . . . . . . . . . . 75
Section 10.23 WAIVER OF PERSONAL LIABILITY OF INDIVIDUALS. . . . . . . 75
Section 10.24 CREDIT ENHANCEMENT PROVIDER RIGHTS . . . . . . . . . . . 75
Section 10.25 CREDIT ENHANCEMENT PROVIDER TO BE SUBROGATED TO RIGHTS
OF HOLDERS . . . . . . . . . . . . . . . . . . . . . . . 75
ARTICLE XI - THE TRUSTEE . . . . . . . . . . . . . . . . . . . . . . . . . . 76
Section 11.1 DUTIES, IMMUNITIES AND LIABILITIES OF TRUSTEE;
REPRESENTATIONS AND WARRANTIES OF TRUSTEE. . . . . . . . 76
Section 11.2 RIGHT OF TRUSTEE TO RELY UPON DOCUMENTS, ETC.. . . . . . 78
Section 11.3 TRUSTEE NOT RESPONSIBLE FOR RECITALS; REFUSAL TO
PERFORM. . . . . . . . . . . . . . . . . . . . . . . . . 78
Section 11.4 RIGHT OF TRUSTEE TO ACQUIRE BONDS. . . . . . . . . . . . 79
Section 11.5 MONEYS RECEIVED BY TRUSTEE TO BE HELD IN TRUST . . . . . 79
Section 11.6 COMPENSATION AND INDEMNIFICATION OF TRUSTEE. . . . . . . 79
Section 11.7 QUALIFICATIONS OF TRUSTEE. . . . . . . . . . . . . . . . 80
Section 11.8 RESIGNATION AND REMOVAL OF TRUSTEE AND APPOINTMENT OF
SUCCESSOR TRUSTEE. . . . . . . . . . . . . . . . . . . . 80
Section 11.9 ACCEPTANCE OF TRUST BY SUCCESSOR TRUSTEE . . . . . . . . 81
Section 11.10 MERGER OR CONSOLIDATION OF TRUSTEE . . . . . . . . . . . 82
Section 11.11 RECORDS OF TRUSTEE . . . . . . . . . . . . . . . . . . . 82
Section 11.12 REPORTS BY TRUSTEE TO HOLDERS. . . . . . . . . . . . . . 82
Section 11.13 TRUSTEE DISCLAIMER . . . . . . . . . . . . . . . . . . . 83
Section 11.14 APPOINTMENT OF CO-TRUSTEE. . . . . . . . . . . . . . . . 85
Section 11.15 ELIGIBLE INSTITUTIONS. . . . . . . . . . . . . . . . . . 86
ARTICLE XII - MODIFICATION OF INDENTURE. . . . . . . . . . . . . . . . . . . 87
Section 12.1 MODIFICATION WITHOUT CONSENT OF BONDHOLDERS. . . . . . . 87
Section 12.2 MODIFICATION WITH CONSENT OF BONDHOLDERS . . . . . . . . 87
Section 12.3 EFFECT OF SUPPLEMENTAL INDENTURE . . . . . . . . . . . . 88
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Section 12.4 OPINION OF COUNSEL AS TO SUPPLEMENTAL INDENTURE. . . . . 88
Section 12.5 NOTATION OF MODIFICATION ON BONDS: PREPARATION OF NEW
BONDS. . . . . . . . . . . . . . . . . . . . . . . . . . 89
Section 12.6 AMENDMENTS TO OPERATING AGREEMENT AND INTERGOVERNMENTAL
AGREEMENT. . . . . . . . . . . . . . . . . . . . . . . . 89
ARTICLE XIII - DEFEASANCE. . . . . . . . . . . . . . . . . . . . . . . . . . 90
Section 13.1 DISCHARGE OF THIS INDENTURE. . . . . . . . . . . . . . . 90
Section 13.2 DISCHARGE OF LIABILITY ON BONDS. . . . . . . . . . . . . 91
Section 13.3 PAYMENT OF BONDS AFTER DISCHARGE OF INDENTURE. . . . . . 91
Section 13.4 RIGHTS OF THE DISTRICT . . . . . . . . . . . . . . . . . 92
ARTICLE XIV - MISCELLANEOUS. . . . . . . . . . . . . . . . . . . . . . . . . 94
Section 14.1 SUCCESSORS OF AUTHORITY. . . . . . . . . . . . . . . . . 94
Section 14.2 LIMITATION OF RIGHTS TO PARTIES AND BONDHOLDERS. . . . . 94
Section 14.3 WAIVER OF NOTICE . . . . . . . . . . . . . . . . . . . . 94
Section 14.4 DESTRUCTION OF BONDS . . . . . . . . . . . . . . . . . . 94
Section 14.5 SEVERABILITY OF INVALID PROVISIONS . . . . . . . . . . . 94
Section 14.6 EVIDENCE OF RIGHTS OF BONDHOLDERS. . . . . . . . . . . . 94
Section 14.7 CONTINUING DISCLOSURE. . . . . . . . . . . . . . . . . . 95
Section 14.8 ARTICLE AND SECTION HEADINGS . . . . . . . . . . . . . . 95
Section 14.9 EXECUTION IN SEVERAL COUNTERPARTS. . . . . . . . . . . . 96
Section 14.10 TRUST INDENTURE ACT CONTROLS . . . . . . . . . . . . . . 96
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THIS INDENTURE OF TRUST (the "Indenture"), made and entered into as of the
first day of March 1996, by and between CASTLE ROCK RANCH PUBLIC IMPROVEMENTS
AUTHORITY, a nonprofit corporation organized and existing under and by virtue of
the laws of the State of Colorado, having its principal place of business in the
County of ▇▇▇▇▇▇▇ in said State (the "Authority"), and SOUTHTRUST BANK OF
ALABAMA, NATIONAL ASSOCIATION, as trustee, a national banking association
organized and existing under and by virtue of the laws of the United States of
America, having a corporate trust office in Birmingham, Alabama, and being
qualified to accept and administer the trusts hereby created (the "Trustee");
W I T N E S S E T H:
WHEREAS, the Authority is organized under the nonprofit corporation laws of
the State of Colorado and its articles of incorporation provide that it is not
organized for profit, and no part of the Authority's net earnings, if any, will
ever inure to the benefit of any person; and
WHEREAS, the Authority, in furtherance of the purposes, and as a corporate
instrumentality of, ▇▇▇▇▇▇ Ridge Metropolitan District No. 5, ▇▇▇▇▇▇▇ County,
Colorado (the "District"), is authorized to issue bonds and other obligations
payable from revenues of the Authority; and
WHEREAS, the Authority proposes to acquire, construct, improve and equip on
behalf of the District and in furtherance of the best interests of the District
and its inhabitants and intended for use in the promotion of public health and
public welfare certain public improvements consisting of parks and recreational
facilities, together with all necessary incidental and appurtenant properties,
facilities, equipment and costs (the "Project"), all located or to be located
within or having a substantial connection with the District; and
WHEREAS, the Authority has determined to issue its Public Facilities
Revenue Bonds, Series 1996, in the aggregate principal amount of $66,975,000
(the "Series 1996 Bonds" or the "Bonds") in order to acquire with proceeds
thereof real property upon which certain of the Project facilities will be
constructed or installed, and certain water rights with respect to the Project
(together, the "Property"); and
WHEREAS, the Authority will execute a Registration Rights Agreement (as
herein defined) pursuant to which the Authority will authorize the exchange of
Bonds, as therein described. The Bonds initially issued shall be designated as
"Series A Bonds," and following such exchange, the Bonds exchanged for Series A
Bonds pursuant to the exchange under the Registration Rights Agreement shall be
designated as "Series B Bonds" (and together with the Series A Bonds, the
"Bonds"); and
WHEREAS, the Series 1996 Bonds are issued on behalf of the District, and
pursuant to a Recreational Facilities Agreement, dated as of the date hereof
(the "Recreational Facilities Agreement"), and an Operating Agreement, dated as
of the date hereof (the "Operating Agreement"), each between the Authority and
the District, the District is entitled, not later than
1
upon discharge of the obligations of the Authority, including the Series 1996
Bonds, to acquire unencumbered fee title to the Property without cost; and
WHEREAS, it has been determined that the payment of the principal of and
interest on the Series 1996 Bonds (i) should be credit enhanced by BFC Guaranty
Corp. (the "Credit Enhancement Provider"), pursuant to the Credit Enhancement
(as hereafter defined); and (ii) should be secured by the Deed of Trust,
Security Agreement, Financing Statement and Assignment of Rents and Leases from
the Authority for the benefit of the Trustee and the Credit Enhancement
Provider, dated as of the date hereof (the "Deed of Trust"); and
WHEREAS, the Series 1996 Bonds and the form of Trustee's certificate of
authentication and registration are to be in substantially the following forms
with necessary or appropriate variations, omissions and insertions, as permitted
or required by this Indenture:
2
[Unless and until it is exchanged in whole or in part for Bonds in
definitive form, this Bond may not be transferred except as a whole by the
Depository to a nominee of the Depository or by a nominee of the Depository to
the Depository or another nominee of the Depository or by the Depository or any
such nominee to a successor Depository or a nominee of such successor
Depository. Unless this certificate is presented by an authorized
representative of The Depository Trust Company (55 ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇
▇▇▇▇) ("▇▇▇"), to the issuer or its agent for registration of transfer, exchange
or payment, and any certificate issued is registered in the name of Cede & Co.
or such other name as may be requested by an authorized representative of DTC
(and any payment is made to Cede & Co. or such other entity as may be requested
by an authorized representative of DTC), ANY TRANSFER, PLEDGE OR OTHER USE
HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the
registered owner hereof, Cede & Co., has an interest herein.](1)
THIS BOND (OR ITS PREDECESSOR) WAS ORIGINALLY ISSUED IN A TRANSACTION
EXEMPT FROM REGISTRATION UNDER ▇▇▇▇▇▇▇ ▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
SECURITIES ACT OF 1933 (THE "SECURITIES ACT"), AND THIS BOND MAY NOT
BE OFFERED, SOLD OR OTHERWISE TRANSFERRED IN THE ABSENCE OF SUCH
REGISTRATION OR AN APPLICABLE EXEMPTION THEREFROM. EACH PURCHASER OF
THIS BOND IS HEREBY NOTIFIED THAT THE SELLER MAY BE RELYING ON THE
EXEMPTION FROM THE PROVISIONS OF SECTION 5 OF THE SECURITIES ACT
PROVIDED BY RULE 144A THEREUNDER. THE HOLDER OF THIS BOND AGREES FOR
THE BENEFIT OF THE AUTHORITY THAT (A) THIS BOND MAY BE RESOLD, PLEDGED
OR OTHERWISE TRANSFERRED, ONLY (1) INSIDE THE UNITED STATES TO A
PERSON WHO THE SELLER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL
BUYER (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT) IN A
TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A, OR IN ACCORDANCE
WITH ANOTHER EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE
SECURITIES ACT (AND BASED UPON AN OPINION OF COUNSEL IF THE AUTHORITY
SO REQUESTS), (2) TO THE AUTHORITY, (3) PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT OR, (4) OUTSIDE THE UNITED STATES TO A FOREIGN
PERSON IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 904 UNDER THE
SECURITIES ACT AND, IN EACH CASE, IN ACCORDANCE WITH ANY APPLICABLE
SECURITIES LAWS OF ANY STATE OF THE UNITED STATES OR ANY OTHER
APPLICABLE JURISDICTION, AND (B) THE HOLDER WILL, AND EACH SUBSEQUENT
HOLDER IS REQUIRED TO, NOTIFY ANY PURCHASER FROM IT OF THIS BOND OF
THE RESALE RESTRICTIONS SET FORTH IN (A) ABOVE.
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(1) This paragraph should be included only if the Bond is issued in Book-Entry
form.
3
No. R-_________ $________________
CASTLE ROCK RANCH PUBLIC IMPROVEMENTS AUTHORITY
PUBLIC FACILITIES REVENUE BOND
SERIES 1996
INTEREST RATE MATURITY DATE ISSUE DATE CUSIP
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Registered Owner: Cede & Co., Taxpayer Identification Number: ▇▇-▇▇▇▇▇▇▇
Principal Sum:
Castle Rock Ranch Public Improvements Authority, a nonprofit corporation
organized and existing under and by virtue of the laws of the State of Colorado
(the "Authority"), for value received, hereby promises to pay to the Registered
Owner specified above or registered assigns, on the Maturity Date specified
above, the Principal Sum specified above in lawful money of the United States of
America; and to pay interest thereon in like money from the date hereof to the
first interest payment date, and thereafter from the interest payment date next
preceding the date of authentication of this Bond (unless this Bond is
authenticated on an interest payment date, in which event it shall bear interest
from such date of authentication, or unless this Bond is authenticated during
the period after a Record Date (as hereinafter defined) but before the next
interest payment date, in which event this Bond shall bear interest from that
next interest payment date or when no interest has been paid on this Bond, in
which event this Bond shall bear interest from March 1, 1996) until payment of
such principal sum, at the Interest Rate per annum specified above, computed on
the basis of a 360-day year of twelve 30-day months, payable semiannually on
June 1 and December 1 in each year commencing December 1, 1996. Interest hereon
is payable in lawful money of the United States of America by check mailed by
first class mail on each interest payment date to the registered owner as of the
close of business on the fifteenth day of the calendar month immediately
preceding such interest payment date (whether or not the fifteenth day is a
business day) (the "Record Date"); provided, however, that any owner of
$1,000,000 or more of the principal amount of Bonds (as hereinafter defined)
may, at any time prior to a Record Date, give to SouthTrust Bank of Alabama,
National Association, as trustee (the "Trustee") in Birmingham, Alabama, written
instructions for payment of such interest on each succeeding interest payment
date by wire transfer. Interest shall be deemed paid when an interest check is
mailed, postage prepaid by first class mail to the holder hereof at the address
indicated on the bond register maintained by the Trustee. Any such interest not
so timely paid or provided for shall cease to be payable to the person who is
the registered owner hereof at the close of business on the Record Date and
shall be payable to the person who is the
4
registered owner hereof at the close of business on a special record date
(the "Special Record Date") established for the payment of any such defaulted
interest. Notice of the Special Record Date and the date fixed for the
payment of defaulted interest shall be given by first-class mail to the
registered owner hereof as shown on the registration books on a date selected
by the Trustee. The principal hereof and premium, if any, hereon are payable
when due upon presentation hereof at the corporate trust office of the
Trustee, in Birmingham, Alabama, in lawful money of the United States of
America. The holder of this Bond may also be entitled to receive Additional
Interest (as defined in the Indenture), subject to the terms and conditions
therein described.
This Bond is one of a duly authorized issue of bonds of the Authority
designated as the "Castle Rock Ranch Public Improvements Authority Public
Facilities Revenue Bonds, Series 1996" (the "Bonds"), all issued under and
equally secured by an Indenture of Trust (the "Indenture"), dated as of March 1,
1996, between the Authority and the Trustee. The Bonds are general obligations
of the Authority to the payment of which Revenues (as defined in the Indenture)
of the Authority are pledged, and are secured by a Deed of Trust and certain
Credit Enhancement, as set forth and defined in the Indenture. Amounts derived
under the Credit Enhancement are not available for the payment of, among other
things, Additional Interest. Reference is hereby made to the Indenture and all
indentures supplemental thereto, the provisions of which are incorporated herein
by this reference, for a description of the rights thereunder of the registered
owners of the Bonds, of the nature and extent of the security, of the rights,
duties and immunities of the Trustee and of the rights and obligations of the
Authority thereunder, to all of the provisions of which Indenture the registered
owner of this Bond, by acceptance hereof, assents and agrees.
THIS BOND SHALL NEVER CONSTITUTE THE DEBT OR INDEBTEDNESS OR FISCAL
OBLIGATION OF THE STATE OF COLORADO, ▇▇▇▇▇▇▇ COUNTY, COLORADO OR ▇▇▇▇▇▇ RIDGE
METROPOLITAN DISTRICT NO. 5 (THE "DISTRICT") WITHIN THE MEANING OF ANY PROVISION
OR LIMITATION OF THE COLORADO STATE CONSTITUTION OR STATUTES, AND SHALL NEITHER
CONSTITUTE NOR GIVE RISE TO A PECUNIARY LIABILITY OF THE STATE, COUNTY OR
DISTRICT OR A CHARGE AGAINST THEIR GENERAL CREDIT OR TAXING POWERS.
The Indenture contains provisions permitting the Authority and the Trustee,
with the consent of the Credit Enhancement Provider (so long as the Credit
Enhancement Provider is not in default under the Credit Enhancement) and the
holders of not less than a majority in aggregate principal amount of the Bonds
at the time outstanding, evidenced as in the Indenture provided, to execute
Supplemental Indentures adding any provisions to, or changing in any manner, or
eliminating any of the provisions of, the Indenture; provided, however, that no
such Supplemental Indenture shall (1) extend the fixed maturity of this Bond or
reduce the rate of interest hereon or extend the time of payment of interest, or
reduce the amount of the principal hereof, or reduce any premium payable on the
redemption hereof, without the consent of the holder hereof, or (2) reduce the
aforesaid percentage of holders of Bonds whose consent is required for the
execution of such Supplemental Indentures, or permit the creation of any lien
5
on the Trust Estate prior to or on a parity with the lien of the Indenture or
deprive the holders of the Bonds of the lien created by the Indenture upon
the Trust Estate, without the consent of the Holders of all Bonds then
outstanding who would be adversely affected, and the Credit Enhancement
Provider (as defined in the Indenture).
The Authority shall have the right, under the circumstances prescribed in
the Indenture, to redeem Bonds at the principal amount thereof plus accrued
interest to the date of redemption through the application of proceeds of
insurance and eminent domain proceedings as provided in the Indenture. The
Bonds are also subject to mandatory redemption at the principal amount thereof
plus accrued interest to the date of redemption, from amounts provided by the
Credit Enhancement, as provided in the Indenture.
As provided in the Indenture, notice of redemption shall be given by first-
class mail, not less than thirty nor more than sixty days prior to the
redemption date, to the registered owner of this Bond, but neither failure to
mail such notice nor any defect in the notice so mailed shall affect the
sufficiency of the proceedings for redemption of Bonds as to which notice is
properly given.
If this Bond is called for redemption and payment is duly provided therefor
as specified in the Indenture, interest shall cease to accrue hereon from and
after the date fixed for redemption. In case less than all of the Bonds are to
be redeemed, the Bonds shall be redeemed in part as provided in the Indenture.
If an event of default, as defined in the Indenture, shall occur, the
principal of all Bonds may be declared due and payable upon the conditions, in
the manner and with the effect provided in the Indenture. The Indenture
provides that in certain events such declaration and its consequences may be
rescinded by the holders of at least a majority in aggregate principal amount of
the Bonds then outstanding, subject to the rights of the Credit Enhancement
Provider.
This Bond is transferable by the registered owner hereof, in person or by
his attorney duly authorized in writing, at the principal corporate trust office
of the Trustee, but only in the manner, subject to the limitations and upon
payment of the charges provided in the Indenture, and upon surrender and
cancellation of this Bond. Upon such transfer a new fully registered Bond or
Bonds, of the same series and maturity and of authorized denomination or
denominations, for the same aggregate principal amount will be issued to the
transferee in exchange herefor.
The Authority and the Trustee may treat the registered owner hereof on the
Record Date as the absolute owner hereof for the purpose of receiving payments
of principal and interest on this Bond, and on any other date for all purposes,
and the Authority and the Trustee shall not be affected by any notice to the
contrary.
No recourse shall be had for the payment of the principal of or the
interest on this Bond or for any claim based hereon or otherwise in respect
hereof, or based on or in respect of the
6
Indenture or any indenture supplemental thereto, against any incorporator,
member, director or officer, as such, past, present or future, of the
Authority or of any predecessor or successor corporation, either directly or
through the Authority or otherwise, whether by virtue of any constitution,
statute or rule of law, or by the enforcement of any assessment or penalty,
or otherwise, all such liability being by the acceptance hereof and as part
of the consideration for the issue hereof expressly waived and released, as
provided in the Indenture.
In addition to the rights provided to Holders of Bonds under the Indenture,
Holders of Transfer Restricted Securities (as defined in the Indenture) shall
have all the rights set forth in the Registration Rights Agreement dated as of
the date of the Indenture, between the Authority and the parties named on the
signature pages thereof (the "Registration Rights Agreement").
This Bond shall not be entitled to any benefit under the Indenture, or
become valid or obligatory for any purpose, until the certificate of
authentication hereon endorsed shall have been manually signed by the Trustee.
IN WITNESS WHEREOF, Castle Rock Ranch Public Improvements Authority has
caused this Bond to be executed on its behalf by manual or facsimile signature
of its President, attested by manual or facsimile signature of its Secretary,
all as of the issue date specified above.
CASTLE ROCK RANCH PUBLIC IMPROVEMENTS AUTHORITY
By: --------------------------------------------
President
Attest:
---------------------
Secretary
[Form of Trustee's Certificate of Authentication
to Appear on Bonds]
7
This is one of the Bonds described in the within-mentioned Indenture and
authenticated on the date set forth below.
SOUTHTRUST BANK OF ALABAMA,
NATIONAL ASSOCIATION
as Trustee
Date: By:
--------------------- -----------------------------------
Authorized Signatory
8
[Form of Assignment]
For value received the undersigned do(es) hereby sell, assign and transfer unto
______________________________________________ the within-mentioned Bond and
hereby irrevocably constitute and appoint ______________________________
attorney, to transfer the same on the books of the Trustee with full power of
substitution in the premises.
----------------------------------------
Dated:
-------------------
Note: The signatures to this Assignment must correspond with the name(s) as
written on the face of the within Bond in every particular, without alteration
or enlargement or any change whatsoever.
Signature Guaranteed: Social Security Number, Taxpayer
Identification Number or Other
Identifying Number of Assignee:
-------------------------- ----------------------------------------
NOTICE: Signature must be
guaranteed by a member firm of
the STAMP, SEMP or MSP signature
guaranty medallion program
[End of Form of Bond]
9
and
WHEREAS, all acts and proceedings required by law and by the articles of
incorporation and bylaws of the Authority, including all action requisite on the
part of its directors and officers, necessary to make the Bonds, when executed
by the Authority, authenticated and delivered by the Trustee and duly issued,
the valid, binding and legal obligations of the Authority, and to constitute
this Indenture a valid and binding agreement for the uses and purposes herein
set forth, in accordance with its terms, have been done and taken; and the
execution and delivery of this Indenture have been in all respects duly
authorized;
NOW, THEREFORE, THIS INDENTURE WITNESSETH, that in order to secure the
payment of the principal of and the interest and premium, if any, on all Series
1996 Bonds issued and outstanding under this Indenture, according to their
tenor, and to secure the performance of all obligations of the Authority to the
Credit Enhancement Provider and the performance and observance of all the
covenants and conditions therein and herein set forth, and to declare the terms
and conditions upon and subject to which the Series 1996 Bonds are to be issued
and received, and in consideration of the premises and of the purchase and
acceptance of the Series 1996 Bonds by the registered owners thereof, and for
other valuable considerations, the receipt whereof is hereby acknowledged, the
Authority does hereby grant, bargain, sell, warrant, convey, confirm, assign,
transfer in trust, transfer a security interest in, pledge and set over unto the
Trustee, and to its successors in the trusts hereby created, all and singular
the property of the Authority, real and personal, hereinafter described (said
property being herein sometimes referred to as the "Trust Estate"):
1. All of the Revenues (as defined herein) existing, earned or
received by the Authority, including interest or profits from the
investment of moneys in any fund pursuant to Section 4.7 hereof and any
insurance proceeds received by the Authority as and to the extent provided
in Section 5.4 hereof.
2. All of the real property and improvements thereon and any
personal property acquired by the Authority with proceeds of the Bonds in
connection therewith, as described in the Deed of Trust, subject to the
interests thereon of the Credit Enhancement Provider, as provided in the
Deed of Trust.
3. All payments made under the Credit Enhancement.
4. All right, title and interest of the Authority in the Credit
Enhancement, the Operating Agreement, the Recreational Facilities Agreement
and the Development Agreement (as herein defined) and the Bond Pledge and
Security Agreement (as herein defined).
TO HAVE AND TO HOLD, all and singular, the Trust Estate, including any and
all additional property that by virtue of any provision hereof or of any
indenture supplemental
10
hereto shall hereafter become subject to this Indenture and to the trusts
hereby created, unto the Trustee and its successors in the trusts hereby
created forever;
IN TRUST, NEVERTHELESS, for the equal and proportionate benefit and
security of the Holders (as herein defined) from time to time of the Series 1996
Bonds authenticated and delivered hereunder and issued by the Authority and
outstanding, and for the enforcement of the payment of the Series 1996 Bonds and
of the interest (and any premium) thereon when payable according to their tenor,
purport and effect and to secure the performance of and compliance with the
covenants and conditions of this Indenture, without preference, priority or
distinction as to lien or otherwise of any one Series 1996 Bond over any other
Series 1996 Bond by reason of priority in the issue, sale or negotiation
thereof, or of any other cause, so that each Series 1996 Bond shall have the
same rights, privileges and lien under and by virtue of this Indenture, and so
that the principal of and interest (and any premium) on every Series 1996 Bond
shall, subject to the terms hereof, be equally and proportionately secured
hereby, as if all had been duly issued and sold and negotiated simultaneously
with the execution and delivery of this Indenture; and conditioned, however,
that if the Authority shall well and truly pay or cause to be paid fully and
promptly when due all indebtedness, liabilities, obligations and sums at any
time secured hereby, including interest and attorneys' fees, and shall promptly,
faithfully and strictly keep, perform and observe or cause to be kept, performed
and observed all of its covenants, warranties and agreements contained herein,
then and in such event this Indenture shall be and become void and of no further
force and effect; otherwise the same shall remain in full force and effect.
And it is hereby covenanted that the Series 1996 Bonds shall be issued,
authenticated and delivered, and that the Trust Estate shall be held by the
Trustee, subject to the further covenants, conditions, uses and trusts
hereinafter set forth, and the Authority agrees and covenants with the Trustee
and with the Holders from time to time of the Series 1996 Bonds, as follows:
11
ARTICLE I
DEFINITIONS, NOTICES
Section 1.1 DEFINITIONS. Unless the context otherwise requires, the
terms defined in this Section (and in Article VI hereof) shall, for all purposes
of this Indenture and of any indenture supplemental hereto, have the meanings
herein specified, the following definitions to be equally applicable to both the
singular and plural forms of any of the terms herein defined:
"ACCOUNTANT" shall mean a person or firm engaged in the practice of
accounting who is a nationally recognized certified public accountant acceptable
to the Trustee and who is independent of the entity whose accounts are being
audited.
"ACT OF BANKRUPTCY" shall mean the filing of a petition in bankruptcy (or
other commencement of a bankruptcy or similar proceeding) by or against the
Authority under any applicable bankruptcy, insolvency or similar law as now or
hereafter in effect.
"ADDITIONAL INTEREST" shall mean additional interest payable to each Holder
of Transfer Restricted Securities calculated at the rate of 1% per annum on the
principal amount of such Transfer Restricted Securities during the period (prior
to the registration of the Bonds) that any Nonregistration exists.
"AGGREGATE ANNUAL DEBT SERVICE" shall mean Debt Service on all Indebtedness
for the twelve-month period ending on the last day of November of each year.
"AUTHORITY" shall mean Castle Rock Ranch Public Improvements Authority, a
corporate instrumentality of the District and a nonprofit corporation organized
and existing under and by virtue of the laws of the State of Colorado.
"AUTHORIZED OFFICER" or "RESPONSIBLE OFFICER" shall mean and include the
president of the board of directors, the president, every vice president, every
assistant vice president, the cashier, every assistant cashier, every trust
officer, and every officer and assistant officer of the Trustee, other than
those specifically above mentioned, to whom any corporate trust matter is
referred because of his knowledge of, and familiarity with, a particular
subject.
"AVAILABLE MONEYS" shall mean (a) proceeds of the Bonds received
contemporaneously with the issuance and sale of the Bonds and held by the
Trustee at all times since receipt of such proceeds in a separate and segregated
account in which only Available Monies were at any time held, and the proceeds
from the investment thereof, (b) monies paid by the Authority to the Trustee
which monies shall have been held by the Trustee for at least 126 days prior to
the date such monies are to be applied to the payment of principal or interest
on the Bonds, provided that no Act of Bankruptcy shall have occurred during such
126 day period, (c) monies drawn under any Credit Enhancement or collateral
therefor which are either applied directly to the payment of the principal of or
interest on the Bonds or which, if not so applied, are held in a separate
12
and segregated subaccount under the Indenture until so applied, (d) deposits
with the Trustee as agent and bailee of proceeds of the issuance of refunding
obligations or obligations of the District or the Authority if, in the
written opinion of nationally recognized counsel experienced in bankruptcy
matters and acceptable to the Trustee, the deposit and use of such proceeds
will not constitute a voidable preference under the Bankruptcy Code in the
case of bankruptcy of the Authority or the District, (e) any other money the
application of which will not, in the written opinion of nationally
recognized counsel experienced in bankruptcy matters and acceptable to the
Trustee, constitute a voidable preference under the Bankruptcy Code in the
case of bankruptcy of the Authority or the District, and (f) investment
income derived from the investment of the foregoing types of monies; provided
that such proceeds, monies or income shall not be deemed to be Available
Monies or available for payment of the Bonds if, among other things, an
injunction, restraining order or stay is in effect preventing such proceeds,
monies or income from being applied to make such payment.
"BANKRUPTCY CODE" shall mean the Bankruptcy Reform Act of 1978, as amended.
"BOND COUNSEL" shall mean any attorney at law or firm of attorneys selected
by the Authority, of nationally recognized standing in matters pertaining to the
validity of and federal tax exemption of interest on obligations issued by
states and political subdivisions, and duly admitted to practice law before the
highest court of any state of the United States of America.
"BOND PLEDGE AND SECURITY AGREEMENT" shall mean that certain Bond Pledge
and Security Agreement, dated as of the date hereof, from the Credit Enhancement
Provider for the benefit of the Trustee.
"BONDS" AND "TERM BONDS"
"BONDS" OR "SERIES 1996 BONDS" shall mean the Authority's $66,975,000
aggregate principal amount of Public Facilities Revenue Bonds, Series 1996.
"TERM BONDS" shall mean the Series 1996 Bonds maturing on December 1,
2011 and on December 1, 2017.
"BOOK-ENTRY BONDS" shall mean Bonds that are issued only in book-entry-only
form.
"CAPITALIZED INTEREST ACCOUNT" shall mean the account by such name created
by the provisions of Section 4.1 of this Indenture.
"CERTIFICATE OF THE AUTHORITY" shall mean a certificate signed by the
President of the Authority and by the Secretary of the Authority. If and to the
extent required by the provisions of Section 6.1, each Certificate of the
Authority shall include the statements provided for in Section 6.1 hereof.
13
"CERTIFIED RESOLUTION" shall mean a copy of a resolution of the Authority
certified by the Secretary or an Assistant Secretary of the Authority to have
been duly adopted by the Authority and to be in full force and effect on the
date of such certification.
"CODE" shall mean the Internal Revenue Code of 1986, as amended.
"COLLATERAL" shall mean the Series B REMIC Bonds, the payments on such
Bonds and any Federal Securities substituted therefor.
"COLLATERALIZED CREDIT FUND" shall mean the fund by that name created
pursuant to Section 4.1 of this Indenture.
"COLLATERALIZED CREDIT INTEREST ACCOUNT" shall mean the account by that
name created pursuant to Section 4.1 of this Indenture.
"COLLATERALIZED CREDIT PRINCIPAL ACCOUNT" shall mean the account by that
name created pursuant to Section 4.1 of this Indenture.
"CONTINUING DISCLOSURE AGREEMENT" shall mean the Continuing Disclosure
Agreement by and between the Authority and the other parties named on the
signature pages thereof, dated the date of execution and delivery of the Bonds,
as originally executed and as it may be amended form time to time in accordance
with the terms thereof.
"COSTS OF ISSUANCE" shall mean the costs and expenses incurred by the
Authority or the District to effect the authorization, preparation, issuance,
sale and delivery of the Bonds, including but not limited to any printing costs,
rating agency fees, fees and disbursements of Bond Counsel, fees and
disbursements of the Authority or the District, fees and expenses of the
Authority or the District incurred in connection with issuance of the Bonds, and
initial fees and expenses of the Trustee.
"CREDIT ENHANCEMENT" shall mean that Collateralized Credit Enhancement
Agreement, dated as of the date hereof, from the Credit Enhancement Provider for
the benefit of the Trustee, together with the Collateral (which shall be pledged
and assigned pursuant thereto by the Bond Pledge and Security Agreement).
"CREDIT ENHANCEMENT PROVIDER" shall mean BFC Guaranty Corp., a Delaware
corporation.
"DEBT SERVICE" shall mean, when used with respect to Indebtedness, as of
any date of calculation and with respect to any period the sum of (i) the
interest payable on all such Indebtedness during such period (except to the
extent that such interest is payable from the proceeds of such Indebtedness set
aside for such purpose), and (ii) the principal (or mandatory sinking fund or
redemption fund or installment purchase price or lease rental or similar payment
14
or deposit) payments on such Indebtedness required in such period; computed on
the assumption that no portion of such Indebtedness shall cease to be
outstanding in such period except by reason of the application of such scheduled
payments; PROVIDED, HOWEVER, that for purposes of such computation if
Indebtedness is secured by a Credit Enhancement, principal payments or deposits
with respect to such Indebtedness nominally due in the last Fiscal Year in which
such Indebtedness matures may, at the option of the Authority, be treated as if
they were due as specified in any loan agreement or reimbursement agreement
issued in connection with such Credit Enhancement or pursuant to the repayment
provisions of such Credit Enhancement and interest on such Indebtedness after
such Fiscal Year shall be assumed to be payable pursuant to the terms of such
loan agreement or reimbursement agreement or repayment provisions; and PROVIDED
FURTHER that if interest on Indebtedness is payable pursuant to a variable
interest rate formula, the interest rate on such Indebtedness for any period
when the actual interest rate cannot be yet determined shall be assumed to be
equal to the greater of (a) the current interest rate calculated pursuant to the
provisions of such agreement, or (b) if available, the weekly average interest
rate on such Indebtedness during the preceding thirty-six (36) months preceding
the date of calculation or if such Indebtedness has not been outstanding for
such 36-month period, such weekly average interest rate on comparable debt (as
determined by the Authority), as set forth in a certificate filed with the
Trustee and the Authority; and provided further that if interest with respect to
such Indebtedness has been capitalized such capitalized interest shall not be
taken into account in making any calculation.
"DEED OF TRUST" shall mean that certain Deed of Trust, Security Agreement,
Financing Statement and Assignment of Rents and Leases, dated as of the date
hereof, from the Authority for the benefit of the Trustee and the Credit
Enhancement Provider.
"DEFINITIVE BONDS" shall mean Bonds that are in the form of Bonds included
herein that do not include the information called for by footnote 1.
"DEPOSITORY" means, with respect to the Book-Entry Bonds, the Person
specified in Section 2.4 hereof as the Depository with respect to the Bonds,
until a successor shall have been appointed and become such Depository pursuant
to the applicable provision of this Indenture, and, thereafter, "Depository"
shall mean or include such successor.
"DESIGNATED OFFICE OF THE TRUSTEE" shall mean the corporate trust office of
the Trustee in Birmingham, Alabama, which, on the date of the execution of this
Indenture, is located at ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇, ▇.▇. ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇ ▇▇▇▇▇, Attn: Corporate Trust Department.
"DEVELOPER" shall mean ▇▇▇▇▇▇▇ County Development Corporation, a Colorado
corporation, and its successors and assigns.
"DEVELOPMENT AGREEMENT" shall mean that certain Development Agreement,
dated as of the date hereof, between the Authority and the Developer and other
owners of property in the
15
District or a Related District, and any similar agreement with any owner of
property in the District or a Related District.
"DISTRICT" shall mean the ▇▇▇▇▇▇ Ridge Metropolitan District No. 5 as the
same is organized and existing under and by virtue of the laws of the State of
Colorado now in effect and as hereafter amended.
"EFFECTIVE DATE" shall mean the effective date of the Registration
Statement.
"ELIGIBLE ACCOUNTS" shall mean a segregated trust account or accounts
maintained with the corporate trust department of an Eligible Institution.
"ELIGIBLE INSTITUTION" shall mean a federal depository institution or
state-chartered depository institution subject to regulations regarding
fiduciary funds on deposit similar to Title 12 of the Federal Code of
Regulations Section 9.10(b) which, in either case, has corporate trust powers,
acting in its fiduciary capacity.
"EVENT OF DEFAULT" shall have the meaning specified in Section 10.1 hereof.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended.
"EXCHANGE OFFER" means the offer that may be made by the Authority pursuant
to the Registration Rights Agreement to exchange Series A Bonds for Series B
Bonds.
"EXTRA PAYMENTS" shall mean payments with respect to premium, if any, on
the Bonds, interest on the Bonds in excess of the pre-default rate thereon,
Additional Interest and amounts due solely as a result of acceleration of the
Bonds.
"FEDERAL SECURITIES" shall mean securities of the type described in
paragraphs (a), (b) and (c)(v) of the definition of Investment Securities.
"FINANCIAL NEWSPAPER OR JOURNAL" shall mean THE WALL STREET JOURNAL and THE
BOND BUYER, and any other newspaper or journal publishing financial news and
selected by the Trustee, whose decision shall be final and conclusive, printed
in the English language, circulated in Denver, Colorado and New York, New York
and customarily published on each business day.
"HOLDER" or "BONDHOLDER" or "OWNER" shall mean the person in whose name
such Bond shall be registered.
"INDEBTEDNESS" shall mean any indebtedness or obligation of the Authority
which, in accordance with generally accepted accounting principles, is
classified as a liability on a balance sheet.
16
"INDENTURE" shall mean this Indenture of Trust, as originally executed or
as it may from time to time be supplemented, modified or amended by any
Supplemental Indenture entered into pursuant to the provisions hereof.
"INFORMATION SERVICES" shall mean Financial Information, Inc.'s "Daily
Called Bond Service," 30 ▇▇▇▇▇▇▇▇▇▇ Street, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇, Attention: Editor; ▇▇▇▇▇ Information Services' "Called Bond Service," ▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇; Moody's "Municipal and
Government," ▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention:
Municipal News Reports; and Standard and Poor's "Called Bond Record," ▇▇
▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇; or to such other addresses and/or
such other services providing information with respect to called bonds as the
Authority may designate to the Trustee in writing.
"INTEREST FUND" shall mean the fund by such name created by the provisions
of Section 4.1 of this Indenture.
"INTEREST PAYMENT DATE" shall mean June 1 and December 1 of each year,
commencing with respect to the Series 1996 Bonds, on December 1, 1996.
"INVESTMENT SECURITIES" shall mean, and includes, any of the following
investments, to the extent permitted or authorized by applicable law at the time
purchased by the Trustee, bearing interest or issued at a discount to the extent
permitted by applicable law:
(a) direct obligations of, or obligations the principal of and
interest on which are unconditionally guaranteed by, the United States of
America (including obligations issued or held in book-entry form on the books of
the Department of the Treasury of the United States of America);
(b) bonds, debentures, notes or other evidence of indebtedness issued
or guaranteed by any of the following federal agencies and provided such
obligations are backed by the full faith and credit of the United States of
America (stripped securities are only permitted if they have been stripped by
the agency itself):
(i) U.S. Export-Import Bank (direct obligations or fully
guaranteed certificates of beneficial ownership);
(ii) Farmers Home Administration (certificates of beneficial
ownership);
(iii) Federal Financing Bank;
(iv) General Services Administration participation certificates;
17
(v) Government National Mortgage Association ("GNMA")
guaranteed mortgage-backed bonds and pass through certificate
obligations;
(vi) U.S. Maritime Administration guaranteed Title XI financing
obligations; or
(vii) U.S. Department of Housing and Urban Development (HUD)
project notes, local authority bonds, new communities debentures (U.S.
guaranteed) and U.S. public housing notes and bonds -- U.S. government
guaranteed public housing notes and bonds;
(c) bonds, debentures, notes or other evidence of indebtedness issued
or guaranteed by any of the following non-full faith and credit U.S. government
agencies (stripped securities are only permitted if they have been stripped by
the agency itself):
(i) Federal Home Loan Bank System senior debt obligations;
(ii) FHLMC senior debt obligations and participation
certificates;
(iii) FNMA mortgage-backed securities and senior debt
obligations;
(iv) Student Loan Marketing Association senior debt obligations;
or
(v) Resolution Funding Corporation obligations; or
(d) money market mutual funds rated AAAm or AAAm-G by Standard &
Poor's Ratings Services, whose investments are limited to securities of the
types listed in (a) through (c) above.
"LEASE" shall mean that certain U.S. Government Lease for Real Property,
dated August 12, 1994, as supplemented by a Supplemental Lease Agreement No. 1,
dated January 3, 1996, and Supplemental Lease Agreement No. 2, dated March 25,
1996, between the General Services Administration of the United States of
America and Parcel 49C Limited Partnership, a District of Columbia limited
partnership, as the same may be further supplemented or amended.
"MANDATORY SINKING FUND ACCOUNT PAYMENT DATES" shall mean December 1 of
each of the years specified in Section 4.4 for the payment of Mandatory Sinking
Fund Account Payments.
"MANDATORY SINKING FUND ACCOUNT PAYMENTS" shall mean the aggregate amounts
required by this Indenture or any Supplemental Indenture or indentures to be
deposited in Sinking Fund Accounts for the payment of Term Bonds.
18
"MASTER TRUST AGREEMENT" shall mean the Trust Indenture, dated as of the
date hereof, between BFC Finance Corp. and the Master Trustee.
"MASTER TRUSTEE" shall mean SouthTrust Bank of Alabama, National
Association, a national banking association with its principal corporate trust
office located in Birmingham, Alabama, or any successor assignee of payments
under the Lease.
"MAXIMUM AGGREGATE ANNUAL DEBT SERVICE" shall mean Debt Service on all
Indebtedness for the twelve month period ending on the last day of November of
the year in which such Debt Service is the largest.
"NET INCOME AVAILABLE FOR DEBT SERVICE" shall mean, with respect to any
period, the excess of revenues over operating expenses (before extraordinary
items) of the Authority, determined in accordance with generally accepted
accounting principles, to which shall be added interest, amortization and
depreciation expense and other non-cash charges, each item determined in
accordance with generally accepted accounting principles, and excluding (a) any
profits or losses on the sale or disposition, not in the ordinary course of
business, of investments or fixed or capital assets or resulting from the early
extinguishment of debt, (b) gifts, grants, bequests, donations and
contributions, to the extent specifically restricted by the donor to a
particular purpose inconsistent with their use for the payment of debt service,
(c) the net proceeds of insurance (other than business interruption insurance)
and condemnation awards, and (d) amounts deposited to the designated fund (as
that term is used in the audited financial statements of the Authority) or a
comparable fund or account specified by the Authority.
"NON-RECOURSE INDEBTEDNESS" shall mean any indebtedness secured by a lien,
which is not a general obligation of the Authority and liability for which is
effectively limited to the property subject to such lien with no recourse to, or
lien upon, directly or indirectly, the Revenues or any other property of the
Authority.
"NONREGISTRATION" shall have the meaning provided in Section 2.2(e) of this
Indenture.
"OPERATING AGREEMENT" shall have the meaning set forth in the recitals
hereto.
"OPINION OF COUNSEL" shall mean a written opinion of counsel (who may be
counsel for the Authority) appointed by the Authority. If and to the extent
required by the provisions of Section 6.1, each Opinion of Counsel shall include
the statements provided for in Section 6.1.
"OPTIONAL REDEMPTION ACCOUNT" shall mean the special account by that name
created pursuant to Section 4.6 hereof.
"OUTSTANDING" shall (subject to the provisions of Section 14.6 (c)) mean
all Bonds theretofore authenticated and delivered by the Trustee under this
Indenture except:
19
(a) Bonds theretofore cancelled by the Trustee or surrendered to the
Trustee for cancellation;
(b) Bonds for the payment or redemption of which Available Moneys in
the necessary amount shall have theretofore been deposited with the Trustee
(whether upon or prior to the maturity or the redemption date of such Bonds);
provided that, if such Bonds are to be redeemed prior to the maturity thereof,
notice of such redemption shall have been given as provided in Article VIII
provided or provision satisfactory to the Trustee shall have been made for the
giving of such notice; and
(c) Bonds in lieu of, or in substitution for, which other Bonds shall
have been authenticated and delivered by the Trustee pursuant to the terms of
Section 7.5.
"PERSON" shall mean an individual, a corporation, a limited liability
company, a partnership, a trust, an unincorporated organization or a government
or any agent or political subdivision thereof.
"PRINCIPAL FUND" shall mean the fund by such name created by the provisions
of this Indenture.
"PROJECT" shall have the meaning set forth in the recitals hereto.
"PROJECT FUND" shall mean the fund by such name created by the provisions
of this Indenture.
"PROPERTY" shall have the meaning set forth in the recitals hereto.
"PUBLIC BODY" shall mean the District.
"RATING AGENCY" shall mean, on any given date, any nationally recognized
rating agency which then has outstanding a credit rating on any of the Bonds (or
other obligations to which reference is made herein).
"REBATE FUND" shall mean the fund by that name established pursuant to
Section 4.1 hereof.
"REBATE INSTRUCTIONS" shall mean the instructions delivered to the Trustee
by the Authority pursuant to the Tax Certificate.
"REBATE REQUIREMENTS" shall have the meaning set forth in the Tax
Certificate.
"RECORD DATE" shall have the meaning set forth in Section 2.2 hereof.
20
"RECREATIONAL FACILITIES AGREEMENT" shall have the meaning set forth in the
recitals hereto.
"REDEMPTION FUND" shall mean the fund by such name created by the
provisions of this Indenture.
"REGISTRATION RIGHTS AGREEMENT" means the Registration Rights Agreement,
dated as of the date of this Indenture, by and between the Authority, the Credit
Enhancement Provider and the Underwriter, as such agreement may be amended,
modified or supplemented from time to time.
"REGISTRATION STATEMENT" means the Registration Statement required to be
filed with respect to the Bonds and the Credit Enhancement pursuant to the
Registration Rights Agreement.
"REIMBURSEMENT AGREEMENT" shall mean the Reimbursement Agreement, dated as
of the date hereof, between the Authority and the Credit Enhancement Provider,
as the same may be supplemented or amended from time to time.
"RELATED DISTRICT" or "RELATED DISTRICTS" shall mean any one or more of the
▇▇▇▇▇▇ Ridge Metropolitan Districts Nos. 1-4.
"REVENUE FUND" shall mean the fund by such name created by the provisions
of this Indenture.
"REVENUE INTEREST ACCOUNT" shall mean the account by that name created
pursuant to Section 4.1 of this Indenture.
"REVENUE PRINCIPAL ACCOUNT" shall mean the account by that name created
pursuant to Section 4.1 of this Indenture.
"REVENUES" shall mean all proceeds, charges, income, rents, receipts,
profits, benefits and existing fund balances of the Authority, exclusive of (i)
payments for Operation and Maintenance Expenses paid by the District pursuant to
the Operating Agreement, (ii) any gifts, grants, bequests, donations and
contributions to the extent specifically restricted by the donor to a particular
purpose inconsistent with their use for Bond payments, and (iii) any payments
received by the Authority pursuant to the Development Agreement.
"SEC" means the Securities and Exchange Commission.
"SECURITIES ACT" means the Securities Act of 1933, as amended.
"SECURITIES DEPOSITORIES" shall mean: The Depository Trust Company, ▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Fax (▇▇▇) ▇▇▇-▇▇▇▇ or 4190; Midwest
Securities Trust
21
Company, Capital Structures-Call Notification, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Fax (▇▇▇) ▇▇▇-▇▇▇▇; Philadelphia Depository Trust
Company, Reorganization Division, ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: Bond Department, Fax (▇▇▇) ▇▇▇-▇▇▇▇; or to
such other addresses and/or such other securities depositories as the
Authority may designate to the Trustee in writing.
"SERIES A BONDS" shall have the meaning provided in the recitals hereto.
"SERIES B BONDS" shall have the meaning provided in the recitals hereto.
"SERIES B REMIC BONDS" shall mean that certain series of obligations
designated "BFC Finance Corp. REMIC Lease-Backed Bonds, Series 1996, Federal
Lease-Backed Class B."
"SERIES 1996 BONDS" shall have the meaning provided in the recitals hereto.
"SINKING FUND ACCOUNTS" shall mean any Sinking Fund Accounts established
hereby in the Principal Fund (established pursuant to Section 4.1 hereof) for
the payment of Term Bonds.
"SPECIAL RECORD DATE" shall have the meaning specified in Section 2.2
hereof.
"SPECIAL REDEMPTION ACCOUNT" shall mean the special account by that name
created pursuant to Section 4.7 hereof.
"SUPPLEMENTAL INDENTURE" shall mean any indenture hereafter duly
authorized and entered into between the Authority and the Trustee in accordance
with the provisions of this Indenture.
"TAX CERTIFICATE" shall mean the certificate, dated the date of delivery of
the Bonds, executed by the Authority relating to the use of proceeds of the
Bonds and the exclusion from federal income taxation of interest on the Bonds.
"TIA" shall mean the Trust Indenture Act of 1939 (15 U.S.C. Sections 77aaa-
77bbbb) as in effect on the date on which this Indenture is qualified under the
TIA.
"TRANSFER RESTRICTED SECURITIES" shall mean the securities that bear or are
required to bear the legend set forth in Section 7.2(g) hereof.
"TRUSTEE" shall mean SouthTrust Bank of Alabama, National Association, a
national banking association organized and existing under and by virtue of the
laws of the United States of America having a principal corporate trust office
in Birmingham, Alabama, or its successor as Trustee hereunder.
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"TRUST ESTATE" shall mean all of the property described in the granting
clauses of this Indenture or of any Supplemental Indenture.
"UNDERWRITER" shall mean ▇▇▇▇▇▇ Brothers Inc.
"WRITTEN CONSENT OF THE AUTHORITY", "WRITTEN ORDER OF THE AUTHORITY",
"WRITTEN REQUEST OF THE AUTHORITY", OR "WRITTEN REQUISITION OF THE AUTHORITY"
shall mean, respectively, a written consent, order, request or requisition
signed by or on behalf of the Authority by its President or by any person
(whether or not an officer of the Authority) who is specifically authorized by
resolution of the District to sign or execute such a document on its behalf.
Section 1.2 NOTICE TO AUTHORITY, CREDIT ENHANCEMENT PROVIDER AND
TRUSTEE. Any notice to or demand upon the Trustee may be served or presented in
writing, and such demand may be made, at the Designated Office of the Trustee.
Any notice to or demand upon the Authority may be served or presented in
writing, and such demand may be made, at Stanford Place III, Suite 902, ▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, or to the Authority at such
other address as may be filed in writing by the Authority with the Trustee. Any
notice to the Credit Enhancement Provider shall be given in writing, postage
prepaid addressed to BFC Guaranty Corp., ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇,
▇▇▇▇▇▇▇▇▇▇, ▇.▇. ▇▇▇▇▇, Attention ▇▇▇▇▇ ▇▇▇▇▇▇, or by telecopy to (202) 639-
0512, Attention President. Any notice or demand shall be deemed to have been
sufficiently given or served for all purposes by being deposited, postage
prepaid, in a post office letter box, or otherwise delivered by a method of
overnight verifiable delivery, addressed as specified above. Any notice or
communication shall also be so mailed to any Person described in TIA Section
313(c), to the extent required by the TIA. Failure to mail a notice or
communication to a Holder or any defect in it shall not affect its sufficiency
with respect to other Holders. Holders may communicate pursuant to TIA Section
312(b) with other Holders with respect to their rights under this Indenture or
the Bonds. The Authority and the Trustee and anyone else shall have the
protection of TIA Section 312(c).
Section 1.3 INCORPORATION BY REFERENCE OF TRUST INDENTURE ACT
Whenever this Indenture refers to a provision of the TIA, the provision is
incorporated by reference in and made a part of this Indenture.
The following TIA terms used in this Indenture have the following meanings:
"INDENTURE SECURITIES" means the Bonds;
"INDENTURE SECURITY HOLDER" means a Holder of a Bond;
"INDENTURE TO BE QUALIFIED" means this Indenture;
"INDENTURE TRUSTEE" OR "INSTITUTIONAL TRUSTEE" means the Trustee;
23
"OBLIGOR" on the Bonds means the Authority and any successor obligor upon
the Bonds.
All other terms used in this Indenture that are defined by the TIA, defined
by TIA reference to another statute or defined by SEC rule under the TIA have
the meanings so assigned to them.
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ARTICLE II
THE BONDS
Section 2.1 AUTHORIZATION OF BONDS. Bonds may be issued hereunder in
order to obtain funds to carry out the purposes of the Authority. The Bonds are
designated generally as the "Castle Rock Ranch Public Improvements Authority
Public Facilities Revenue Bonds." This Indenture constitutes a continuing
agreement with the Trustee and Holders of all of the Bonds at any time
outstanding to secure the full and final payment of the principal of and
premium, if any, and interest on all Bonds which may from time to time be
executed and delivered hereunder.
Section 2.2 TERMS OF BONDS.
(a) The Bonds issued hereunder are designated as the "Castle Rock
Ranch Public Improvements Authority Public Facilities Revenue Bonds, Series
1996." The aggregate principal amount of Series 1996 Bonds which may be issued
and outstanding under this Indenture shall not exceed Sixty-Six Million Nine
Hundred Seventy-Five Thousand dollars ($66,975,000).
(b) Interest on the Series 1996 Bonds shall be payable semiannually
on June 1 and December 1 in each year, commencing December 1, 1996. Subject to
Section 2.2(e) hereof, the Series 1996 Bonds shall mature on December 1 of each
year and bear interest at a rate of interest per annum, computed on the basis of
a 360-day year of twelve 30-day months in accordance with the following
schedule:
Maturity (December 1) Amount Rate
--------------------- ------- ----
1999 $1,980,000 5.750%
2000 2,095,000 5.750%
2001 2,215,000 5.750%
2002 2,340,000 5.750%
2003 2,475,000 5.900%
2004 2,620,000 6.000%
2005 2,780,000 6.100%
2006 2,950,000 5.700%
2007 3,115,000 6.300%
2008 3,310,000 6.400%
2009 3,525,000 6.500%
2011 7,750,000 6.375%
2017 29,820,000 6.250%
The Series 1996 Bonds will be issued as fully registered Bonds, initially as
Book-Entry Bonds, in denominations of one hundred thousand dollars ($100,000) or
any multiple of $5,000 in excess thereof, so long as no Bond shall have
principal maturing in more than one year.
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(c) Interest on the Series 1996 Bonds is payable in lawful money of
the United States of America by check mailed by first class mail on each
Interest Payment Date to the registered owner as of the close of business on the
15th day of the calendar month immediately preceding such Interest Payment Date
(whether or not a business day) (the "Record Date"); provided, however, that any
owner of $1,000,000 or more of the principal amount of the Bonds may, at any
time prior to a Record Date, give to the Trustee written instructions for
payment of such interest on each succeeding Interest Payment Date by wire
transfer. Interest on any Bond shall be deemed paid when an interest check is
mailed, postage prepaid by first class mail to the Holder thereof, at the
address indicated on the bond register maintained by the Trustee. Any such
interest not so timely paid or duly provided for shall cease to be payable to
the person who is the Owner thereof on the Record Date and shall be payable to
the person who is the Owner thereof at the close of business on a special record
date (the "Special Record Date") established for the payment of the defaulted
interest. Such Special Record Date shall be fixed by the Trustee whenever
moneys become available for payment of the defaulted interest, and notice of the
Special Record Date shall be given to the registered owners of the Series 1996
Bonds not less than ten (10) days prior to the Special Record Date by first-
class mail to each such Owner as shown on the registration books kept by the
Trustee on a date selected by the Trustee. Such notice shall state the date of
the Special Record Date and the date fixed for the payment of such defaulted
interest. The principal on the Series 1996 Bonds and premium, if any, thereon
are payable when due upon presentation thereof at the principal corporate trust
office of the Trustee in lawful money of the United States of America.
(d) The Series 1996 Bonds shall be dated as of March 1, 1996, and
shall bear interest from the date thereof to the first Interest Payment Date,
and thereafter from the Interest Payment Date next preceding the date of
authentication thereof unless such date of authentication is an Interest Payment
Date, in which event they shall bear interest from such date of authentication,
or unless a Series 1996 Bond is authenticated during the period after a Record
Date but before the next Interest Payment Date, in which event the Series 1996
Bonds shall bear interest from that next Interest Payment Date or, if no
interest has been paid, in which event the Series 1996 Bonds shall bear interest
from March 1, 1996; provided, however, that if, at the time of authentication of
any fully registered Series 1996 Bond, interest is in default thereon, such
fully registered Series 1996 Bond shall bear interest from the Interest Payment
Date to which interest has previously been paid or made available for payment on
the outstanding Series 1996 Bonds.
(e) In addition to interest payable pursuant to Section 2.2(b), the
Bonds will bear Additional Interest as provided in this Section 2.2(e). If (i)
the Registration Statement is not filed with the SEC on or prior to 270 days
after the date of issue of the Bonds, or (ii) the Registration Statement has not
been declared effective by the SEC within 360 days after the date of issue of
the Bonds, or (iii) the Exchange Offer has not been consummated within 30
business days after the Effective Date (each such event referred to in clauses
(i) through (iii), a "Nonregistration"), the Authority will pay additional
interest to each Holder of Transfer Restricted Securities calculated at the rate
of 1% per annum on the principal amount of such Transfer Restricted Securities
during the period (prior to the registration of the Bonds) that any
26
Nonregistration exists (such interest being "Additional Interest"). Following
registration of the Bonds, the accrual of Additional Interest will cease.
Nonregistration is not an Event of Default and will not result in a redemption
or acceleration of the Bonds. The Credit Enhancement does not provide for the
payment of Additional Interest. The Authority shall notify the Trustee of a
Nonregistration and of any termination thereof, and shall notify the Trustee of
the registration of the Bonds. The Trustee shall be entitled to rely
conclusively on such notices. Notwithstanding any provision of this Indenture
to the contrary (i) Additional Interest shall be paid solely from Revenues, to
the extent available in the Revenue Interest Account, (ii) no Additional
Interest shall be paid while any installment of interest (other than Additional
Interest) on or principal of the Bonds shall remain due and payable or any
amount is due to the Credit Enhancement Provider under the Reimbursement
Agreement, (iii) no acceleration of the Bonds shall occur as the result of
nonpayment of Additional Interest, and (iv) neither an event of nonpayment of
Additional Interest nor a Nonregistration shall constitute or give rise to an
Event of Default hereunder.
Section 2.3 TERMS OF REDEMPTION.
(a) MANDATORY SINKING FUND REDEMPTION. The Series 1996 Bonds shall
be subject to mandatory sinking fund redemption as provided in Section 4.6
hereof.
(b) EXTRAORDINARY MANDATORY REDEMPTION. The Bonds are subject to
extraordinary mandatory redemption in whole from proceeds of prepayment or
liquidation or redemption (other than mandatory sinking fund redemption) of
Collateral consisting of Series B REMIC Bonds in accordance with the terms
thereof.
(c) REDEMPTION PROCEDURE. Bonds shall be redeemed in accordance with
the procedures set forth in Article VIII hereof.
Section 2.4 USE OF DEPOSITORY. Except as may be provided by
Supplemental Indenture and notwithstanding any provision of the Indenture to the
contrary:
(a) The Bonds shall initially be evidenced by one Bond for each year
in which the Bonds mature in denominations equal to the aggregate principal
amount of the Bonds maturing in that year. Such Bonds shall be registered in
the name of "Cede & Co." as nominee for The Depository Trust Company, the
Depository for the Bonds. Registered ownership of the Bonds, or any portions
thereof, may not thereafter be transferred except:
(i) To any successor of The Depository Trust Company or its
nominee, or to any substitute Depository designated pursuant to clause (ii)
of this subsection (a) ("Substitute Depository"); provided that any
successor of The Depository Trust Company or substitute depository shall be
qualified under any applicable laws to provide the service proposed to be
provided by it;
27
(ii) To any substitute Depository not objected to by the Trustee,
upon (1) the resignation of The Depository Trust Company or its successor
(or any substitute depository or its successor) from its functions as
Depository, or (2) a determination by the Authority that The Depository
Trust Company or its successor (or any Substitute Depository or its
successor) is no longer able to carry out its functions as Depository;
provided that any such Substitute Depository shall be qualified under any
applicable laws to provide the services proposed to be provided by it; or
(iii) To any person as provided below, upon (1) the
resignation of The Depository Trust Company or its successor (or Substitute
Depository or its successor) from its functions as Depository; provided
that no Substitute Depository which is not objected to by the Trustee can
be obtained, or (2) a determination by the Authority that it is in the best
interests of the Authority to remove The Depository Trust Company or its
successor (or any Substitute Depository or its successor) from its function
as Depository.
(b) In the case of any transfer pursuant to clause (i) or clause (ii)
of subsection 2.4(a) hereof, upon receipt of all Outstanding Bonds by the
Trustee, together with a Certificate of the Authority to the Trustee, a single
new Bond for each maturity shall be executed and delivered, registered in the
name of such successor or such Substitute Depository, or their nominees, as the
case may be, all as specified in such Certificate of the Authority. In the case
of any transfer pursuant to clause (iii) of subsection 2.4(a) hereof, upon
receipt of all Outstanding Bonds by the Trustee together with a Certificate of
the Authority to the Trustee, new Bonds shall be executed and delivered in such
denominations and registered in the names of such persons as are requested in
such Certificate of the Authority; provided the Trustee shall not be required to
deliver such new Bonds within a period less than 60 days from the date of
receipt of such Certificate of the Authority.
(c) In the case of partial redemption, cancellation or an advance
refunding of any Bonds maturing in a particular year, The Depository Trust
Company shall make an appropriate notation on such Bonds indicating the date and
amounts of such reduction in principal, in form acceptable to the Trustee.
(d) The Authority and the Trustee shall be entitled to treat the
person in whose name any Bond is registered as the Owner thereof for all
purposes of the Indenture and any applicable laws, notwithstanding any notice to
the contrary received by the Trustee or the Authority; and the Authority and the
Trustee shall have no responsibility for transmitting payments to, communicating
with, notifying, or otherwise dealing with any beneficial owners of the Bonds.
Neither the Authority nor the Trustee will have any responsibility or
obligations, legal or otherwise, to the beneficial owners or to any other party
including The Depository Trust Company or its successor (or Substitute
Depository or its successor), except for the Owner of any Bond.
28
(e) So long as all outstanding Bonds are registered in the name of
"Cede & Co." or its registered assign, the Authority and the Trustee shall
cooperate with "Cede & Co.", as sole registered Owner, and its registered
assigns in effecting payment of the principal, redemption premium, if any, and
interest on the Bonds by arranging for payment in such manner that funds for
such payments are properly identified and are made immediately available on the
date they are due.
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ARTICLE III
ISSUE OF SERIES 1996 BONDS
Section 3.1 AUTHENTICATION AND DELIVERY OF BONDS. The Trustee,
forthwith upon the execution and delivery of this Indenture, upon the execution
and delivery to it by the Authority of the Series 1996 Bonds, as hereinabove
provided, and without any further action on the part of the Authority, shall
authenticate Series 1996 Bonds in an aggregate principal amount of not exceeding
Sixty-Six Million Nine Hundred Seventy-Five Thousand dollars ($66,975,000.00),
and shall deliver them to or upon the Written Order of the Authority.
Section 3.2 APPLICATION OF PROCEEDS OF SERIES 1996 BONDS. The proceeds
received by the Authority (net of the underwriter's discount of $1,272,062.50)
from the sale of the Series 1996 Bonds shall be deposited in the following funds
and accounts:
(a) accrued interest on the Series 1996 Bonds from their dated date
to the date of delivery, shall be deposited in the Capitalized Interest Account
of the Interest Fund;
(b) $7,729,585.70 shall be deposited in the Capitalized Interest
Account;
(c) $511,866.00 shall be deposited in the Costs of Issuance Account;
(d) $4,018,500.00 shall be paid to the Credit Enhancement Provider as
its fee for the Credit Enhancement; and
(e) the remainder of the proceeds from the sale of the Series 1996
Bonds ($54,550,000.00) shall be deposited in the Project Fund.
Section 3.3 PROJECT FUND; COSTS OF ISSUANCE ACCOUNT. The Authority
shall establish, maintain and hold a separate fund to be known as the "Project
Fund." The proceeds of the Bonds deposited in the Project Fund shall be applied
for the purpose of providing funds for the acquisition of the Property and of
expenses incident to the Project, including architectural and engineering fees
and expenses, tests and inspection, surveys, land acquisition, the fees and
expenses of the Trustee, Costs of Issuance and all other expenses in connection
with the preparation, issuance and delivery of the Bonds, legal fees and
expenses of counsel, and similar expenses.
Before any expenditure is made from the Project Fund, the Authority shall
determine that the entire sum of the expenditures then to be made and of all
other expenditures previously made from the Project Fund have been used to
finance the acquisition of the Property and expenses incident thereto, all of
which property other than land is of a character subject to the allowance for
depreciation under Section 167 of the Code.
30
When acquisition of the Property shall have been completed, the Authority
shall transfer any remaining balance in the Project Fund to the Trustee for
deposit into the Redemption Holding Account as provided in Section 4.7 hereof.
Within the Project Fund, there shall be created the "Costs of Issuance
Account" from which account costs of issuance of the Series 1996 Bonds shall be
paid. Any moneys remaining in the Costs of Issuance Account on September 29,
1996 shall be transferred by the Authority to the Project Fund.
Section 3.4 CAPITALIZED INTEREST ACCOUNT. Moneys in the Capitalized
Interest Account shall be applied by the Trustee in the amounts necessary to
pay interest becoming due and payable on the next ensuing Interest Payment Date
of the Series 1996 Bonds then Outstanding (other than Additional Interest and
any other interest constituting Extra Payments), until such amount is exhausted.
Section 3.5 [Reserved]
Section 3.6 SUBORDINATE INDEBTEDNESS. So long as any of the Bonds
remain Outstanding, the Authority will not issue any additional bonds or
obligations payable from Revenues or having a lien upon the Trust Estate having
priority over, or on a parity with, the Bonds.
The Authority may incur any Indebtedness secured by a lien or encumbrance
which is expressly stated to be junior and subordinate to the lien and
encumbrance upon the Revenues created hereunder and to the Deed of Trust except
as hereinafter provided. No such subordinate indebtedness shall be secured by
the Credit Enhancement or the Collateral. No such subordinate indebtedness
shall be issued without the consent of the Credit Enhancement Provider.
Subordinate indebtedness will have no rights of acceleration or foreclosure.
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ARTICLE IV
REVENUES AND CREDIT ENHANCEMENT
Section 4.1 ESTABLISHMENT OF FUNDS AND ACCOUNTS. The following funds
and accounts shall be established by the Trustee pursuant to the provisions of
this Indenture:
(a) Project Fund; and within the Project Fund, the Costs of Issuance
Account
(b) Revenue Fund
(c) Collateralized Credit Fund
(d) Interest Fund, and within the Interest Fund, the following accounts:
(i) Capitalized Interest Account
(ii) Collateralized Credit Interest Account
(iii) Revenue Interest Account
(e) Principal Fund, and within the Principal Fund, the following accounts:
(i) Collateralized Credit Principal Account
(ii) Revenue Principal Account
(iii) The Sinking Fund Accounts provided for in Section 4.6
(f) Redemption Fund, and within the Redemption Fund, the following
accounts:
(i) Special Redemption Account
(ii) Redemption Holding Account
(g) Rebate Fund
Section 4.2 CREDIT ENHANCEMENT; SOURCE OF PAYMENT.
(a) So long as the Credit Enhancement is in effect and no Event of Default
exists thereunder, all payments of principal and interest on the Series 1996
Bonds (except for interest for the period prior to March 1, 1998, Additional
Interest, other Extra Payments and amounts payable on redemption pursuant to
Section 9.10(c) hereof) shall be made from the proceeds of draws on the Credit
Enhancement which shall be deposited directly in the Collateralized Credit Fund.
Pursuant to the Bond Pledge and Security Agreement, all payments in regard to
the Collateral are to be made directly to the Trustee, and shall be deposited in
the Collateralized Credit Fund. To the extent that the amount in the
Collateralized Credit Fund is insufficient on any Interest Payment Date to pay
interest (other than interest for the period prior to March 1, 1998, Additional
Interest, any other interest constituting Extra Payments and interest due as a
32
result of redemption pursuant to Section 9.10(c)) and principal due and payable
on the Series 1996 Bonds on such Interest Payment Date (other than amounts
payable on redemption pursuant to Section 9.10(c) hereof), the Trustee shall
demand that the Credit Enhancement Provider immediately deposit the amount of
such deficiency in the Collateralized Credit Fund.
(b) Monies on deposit in the Collateralized Credit Account shall be
applied as follows:
(i) When due, the amount necessary to pay fees and expenses of the
Trustee in an amount not to exceed the amounts on the dates specified in
Schedule I hereto, shall be transferred to the Trustee.
(ii) On each Interest Payment Date, the amount required to pay
interest due and payable on the Series 1996 Bonds on such Interest Payment
Date (other than interest for the period prior to March 1, 1998, Additional
Interest and any other interest which is an Extra Payment and interest due
as a result of redemption pursuant to Section 2.3(b) or 9.10(c) hereof)
shall be transferred to the Collateralized Credit Interest Account where it
shall be held separate and apart from any other amounts in the Interest
Fund.
(iii) On each Interest Payment Date, the amount, if any, required
to pay principal on the Series 1996 Bonds due and payable on such Interest
Payment Date (other than as a result of redemption pursuant to Section
2.3(b) or Section 9.10(c) hereof) shall be transferred to the
Collateralized Credit Principal Account, where it shall be held separate
and apart from any other amounts in the Principal Fund.
(iv) On each Interest Payment Date, any amounts received by the
Trustee as proceeds of prepayment or liquidation or redemption of the
Series B REMIC Bonds held as Collateral shall be transferred by the Trustee
to the Special Redemption Account and used to redeem Series 1996 Bonds
pursuant to Sections 2.3(b) and 4.7 hereof.
(v) On each Interest Payment Date, any remaining amount in the
Collateralized Credit Fund on such Interest Payment Date shall be paid by
the Trustee to the Credit Enhancement Provider, unless the Credit
Enhancement Provider is in default with respect to its obligations under
the Credit Enhancement Agreement, in which event such amount shall remain
in the Collateralized Credit Fund until such default has been cured or
otherwise waived by the Trustee.
(vi) The Trustee shall have the obligation to hold and maintain the
Credit Enhancement for the benefit of the owners of Series 1996 Bonds in
accordance with its terms. If at any time during the term of the Credit
Enhancement any successor Trustee shall be appointed and qualified under
this Indenture, the resigning Trustee shall request that the provider of
such Credit Enhancement transfer or cause the transfer of the Credit
Enhancement and the Collateral to the successor Trustee. If the resigning
Trustee fails to make this request, the successor Trustee shall do so
before accepting appointment.
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Section 4.3 PLEDGE; REVENUE FUND.
(a) Subject only to the provisions of this Indenture permitting the
application thereof for the purposes and on the terms and conditions set forth
herein and therein, the Authority does hereby pledge, in order to secure the
payment of the principal of, premium, if any, and interest on the Bonds in
accordance with their terms and the provisions of this Indenture, all of the
Revenues and any other amounts (including proceeds of the sale of Bonds) held in
any fund or account established pursuant to this Indenture other than the Rebate
Fund. Said pledge shall constitute a lien on and security interest in such
assets for the payment of the Bonds in accordance with their terms.
(b) The Authority agrees that, so long as any of the Bonds remain
Outstanding, all of the Revenues of the Authority shall be deposited as soon as
practicable upon receipt in a fund hereby created and designated as the "Revenue
Fund" which the Authority shall establish and maintain hereunder in an account
to be held by the Trustee. Subject only to the provisions of this Indenture
permitting the application thereof for the purposes and on the terms and
conditions set forth herein, the Authority hereby pledges and, to the extent
permitted by law, grants a security interest to the Trustee in the Revenue Fund
to secure the payment of the principal of, premium, if any, and interest on the
Bonds.
Section 4.4 ALLOCATION OF REVENUES.
On or before each Interest Payment Date, the Trustee shall transfer from
the Revenue Fund and deposit into the following respective accounts or transfer
the respective amount directly, as hereinafter provided, the following amounts,
in the following order of priority, the requirements of each such account
(including the making up of any deficiencies in any such account resulting from
lack of moneys sufficient to make any earlier required deposit) at the time of
deposit to be satisfied before any transfer is made to any account subsequent in
priority:
(i) Available Moneys to the Revenue Interest Account, in an amount
equal to the aggregate amount of interest becoming due and payable on the
next such Interest Payment Date on all Bonds then Outstanding (other than
Additional Interest or other interest constituting Excess Payments or
interest payable as a result of redemption pursuant to Section 2.3(b) or
9.10(c) hereof) less any amounts to be transferred to the Interest Fund
from the Capitalized Interest Account as capitalized interest and less any
amounts transferred to the Collateralized Credit Interest Account for the
payment of such interest;
(ii) Available Moneys to the Revenue Principal Account, in an amount
equal to the aggregate amount of principal, if any, becoming due and
payable on the Outstanding Bonds (including any mandatory sinking fund
payments required to be paid into the respective Sinking Fund Accounts for
Outstanding Bonds but excluding principal due as a result of redemption
pursuant to Section 2.3(b) or 9.10(c) hereof) on the next
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ensuing Interest Payment Date, less any transfers from the Collateralized
Credit Principal Account for the payment of such principal;
(iii) To the extent that the amounts described in (i) and (ii)
above are not transferred to the Revenue Interest Account or the Revenue
Principal Account solely because the funds in the Revenue Fund are not
Available Moneys, such funds shall be retained in the Revenue Account until
(A) they are Available Moneys and are used to make the transfers provided
for in (i) and (ii) or (B) such transfers are made from another source of
Available Moneys. In addition, if no Mandatory Sinking Fund Account
Payment is due on such Interest Payment Date, an amount equal to half of
the Mandatory Sinking Fund Payment due on the next Interest Payment Date
shall be retained in the Revenue Fund.
(iv) Any remaining amount in the Revenue Fund shall be transferred to
the Rebate Fund to the extent required by the Rebate Instructions, to be
applied by the Trustee in accordance therewith.
(v) Any remaining amount in the Revenue Fund shall be transferred to
the Credit Enhancement Provider to the extent of an amount equal to amounts
drawn under the Credit Enhancement and applied to the payment of principal
of or interest on the Bonds, and any other amounts due by the Authority to
the Credit Enhancement Provider under the Reimbursement Agreement, together
with interest thereon as determined pursuant to the Reimbursement
Agreement, to the extent a request for the same has been submitted to the
Trustee by the Credit Enhancement Provider or otherwise provided pursuant
to the Credit Enhancement, and to the extent not previously reimbursed to
the Credit Enhancement Provider by the Trustee from Revenues, unless a
default by the Credit Enhancement Provider has occurred and is continuing
under the Credit Enhancement, in which event such amount shall remain in
the Revenue Fund until such default has been cured or otherwise waived by
the Trustee, at which time such amount shall be paid to the Credit
Enhancement Provider; provided that until there is an amount in the Revenue
Fund sufficient to pay any accrued but unpaid Additional Interest and any
Additional Interest first becoming due on the next Interest Payment Date,
any Revenue received pursuant to the Development Agreement shall be
transferred to the Revenue Interest Account to pay Additional Interest.
(vi) Any remaining amount in the Revenue Fund shall be transferred to
the Revenue Interest Account to the extent necessary for the payment of
Additional Interest or any other interest constituting Extra Payments, to
be applied to pay such interest in the order in which it accrued.
(vii) Any remaining amount in the Revenue Fund shall be applied to
the extent necessary to pay any other Extra Payments in the order in which
such Extra Payments become due and payable.
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(viii) Any remaining amount in the Revenue Fund shall be applied by
the Trustee to the extent necessary to pay any Trustee and other fees and
expenses then due and payable under this Indenture in the order that such
amounts become due and payable.
(ix) Any moneys remaining in the Revenue Fund after the foregoing
transfers may be used by the Authority for any lawful purpose.
Section 4.5 APPLICATION OF INTEREST FUND.
All Available Moneys on deposit in the Interest Fund shall be used and
withdrawn by the Trustee without the necessity of depositing any amounts in any
account of the Interest Fund solely for the purpose of paying the interest on
the Bonds as it shall become due and payable; provided that Additional Interest,
any other interest constituting Extra Payments, and any interest due as a result
of redemption pursuant to Section 2.3(b) and 9.10(c) hereof shall be paid from
the sources and in the priorities provided in Section 4.2, 4.3, 4.6 and 9.10(c)
hereof.
Section 4.6 APPLICATION OF PRINCIPAL FUND.
(a) All Available Moneys on deposit in the Principal Fund shall be
used and withdrawn by the Trustee solely for the purposes of paying the
principal of the Bonds when due and payable, except that all amounts in the
Sinking Fund Accounts shall be used and withdrawn by the Trustee solely to
purchase or redeem or pay at maturity the respective Term Bonds, as provided
herein, and that principal due as a result of redemption pursuant to Section
2.3(b) and 9.10(c) hereof shall be paid solely from the Redemption Fund.
(b) The Trustee shall establish and maintain within the Principal
Fund a separate account for the Term Bonds of each maturity, designated as the
"Sinking Fund Account," inserting therein the maturity (if more than one such
account is established) designation of such Bonds. On or before each Interest
Payment Date, the Trustee shall transfer Available Moneys deposited in the
Principal Fund pursuant to Sections 4.2 and 4.4 for the purpose of making a
Mandatory Sinking Fund Account Payment (if such deposit is required in such
month) from the Principal Fund to the applicable Sinking Fund Account. With
respect to each Sinking Fund Account, on each Mandatory Sinking Fund Account
Payment Date established for such Sinking Fund Account, the Trustee shall apply
the Mandatory Sinking Fund Account Payment required on that date to the
redemption (or payment at maturity, as the case may be) of Term Bonds of the
series and maturity for which such Sinking Fund Account was established, upon
the notice and in the manner provided in Article VIII; provided that, at any
time prior to giving such notice of such redemption, the Trustee upon the
Written Order of the Authority shall apply moneys in such Sinking Fund Account
to the purchase by the Authority of Term Bonds of such series and maturity at
public or private sale, as and when and at such prices (including brokerage and
other charges, but excluding accrued interest, which is payable from the
Interest Fund) as shall be directed by the Authority, except that the Authority
shall not direct the Trustee to apply moneys in the Sinking Fund Account to such
purchase if the purchase price (excluding accrued interest) exceeds the
Redemption Price that would be payable for such Bonds upon redemption by
application of such Mandatory Sinking Fund Account Payment. If, during the
twelve-month period immediately preceding said Mandatory Sinking Fund Account
Payment
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Date, the Trustee upon Written Order of the Authority has purchased Term Bonds
of such series and maturity with moneys in such Sinking Fund Account, or,
during said period and prior to giving said notice of redemption, the Authority
has deposited Term Bonds of such series and maturity with the Trustee, or Term
Bonds of such series and maturity were at any time purchased or redeemed by the
Trustee from the Redemption Fund and allocable to said Mandatory Sinking Fund
Account Payment, such Bonds so purchased or deposited or redeemed shall be
applied, to the extent of the full principal amount thereof, to reduce said
Mandatory Sinking Fund Account Payment. All Bonds purchased or deposited
pursuant to this subsection shall be cancelled and destroyed. Any amounts
remaining in a Sinking Fund Account when all of the Term Bonds for which such
account was established are no longer outstanding shall be withdrawn by the
Trustee and transferred to the Revenue Fund. Subject to a different allocation
provided in a Supplemental Indenture for a series of Bonds issued pursuant to
such Supplemental Indenture, all Term Bonds purchased from a Sinking Fund
Account or deposited by the Authority with the Trustee shall be allocated first
to the next succeeding Mandatory Sinking Fund Account Payment for such series
and maturity of Bonds, then to such Mandatory Sinking Fund Account Payments for
such series and maturity as may be specified by the Authority (or, if the
Authority fails to so specify, pro rata to the remaining Mandatory Sinking Fund
Account Payments required for such series and maturity of Bonds in proportion to
the amount of such Mandatory Sinking Fund Account Payments).
(c) Subject to the provisions of paragraph (b) above, the Trustee
shall establish and maintain within the Principal Fund a separate account for
the Series 1996 Term Bonds maturing on December 1, 2011, designated as the
"(2011 Maturity) Sinking Fund Account". The Mandatory Sinking Fund Account
Payment Dates and the Mandatory Sinking Fund Account Payments for such account
shall be as follows:
Mandatory Sinking Fund Account Mandatory Sinking
Payment Date (December 1) Fund Account Payment
------------------------------ ---------------------
2010 $3,755,000
2011* 3,995,000
* Final Maturity
(d) Subject to the provisions of paragraph (b) above, the Trustee
shall establish and maintain within the Principal Fund a separate account for
the Series 1996 Term Bonds maturing on December 1, 2017, designated as the
"(2017 Maturity) Sinking Fund Account". The Mandatory Sinking Fund Account
Payment Dates and the Mandatory Sinking Fund Account Payments for such account
shall be as follows:
Mandatory Sinking Fund Account Mandatory Sinking
Payment Date (December 1) Fund Account Payment
------------------------------ --------------------
2012 $4,250,000
2013 4,515,000
2014 4,795,000
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2015 5,095,000
2016 5,415,000
2017* 5,750,000
* Final Maturity
Section 4.7 APPLICATION OF REDEMPTION FUND. The Trustee shall establish
and maintain the Redemption Fund which the Trustee shall hold in trust, and
shall establish therein a separate Redemption Holding Account and a separate
Special Redemption Account. The Authority shall deposit in the Special
Redemption Account amounts required for redemption of the Bonds pursuant to
Section 2.3(b) hereof. All amounts deposited in the Special Redemption Account
shall be used and withdrawn by the Trustee solely for the purpose of redeeming
Bonds, in the manner and upon the terms and conditions specified in Section
2.3(b) and Article VIII hereof, at the next succeeding date of redemption for
which notice has been given and at the redemption prices then applicable to any
redemptions of the Bonds otherwise permitted hereunder; provided that, at any
time prior to giving such notice of redemption, the Trustee shall, upon Written
Order of the Authority, apply such amounts to the purchase of Bonds by the
Authority at public or private sale, as and when and at such prices (including
brokerage and other charges, but excluding accrued interest, which is payable
from the Interest Fund) as shall be directed by the Authority, except that the
Authority shall not direct such purchase if the purchase price (exclusive of
accrued interest) exceeds the principal amount of such Bonds. All Term Bonds
purchased or redeemed from the Redemption Fund shall be allocated first to the
next succeeding Mandatory Sinking Fund Account Payment for such maturity of
Bonds, then to such Mandatory Sinking Fund Account Payments for such maturity as
may be specified by the Authority (or if the Authority fails to so specify, pro
rata to the remaining Mandatory Sinking Fund Account Payments required for such
series and maturity of Bonds in proportion to the amount of such Mandatory
Sinking Fund Account Payments).
The moneys deposited in the Redemption Holding Account pursuant to Section
3.3 or Section 9.10 hereof shall be used and applied to the call and redemption
of Bonds in authorized denominations to the maximum degree permissible, and at
the earliest possible dates at which such Bonds can be redeemed without payment
of premium pursuant to this Indenture, or the payment of obligations of the
Authority to the Credit Enhancement Provider under the Reimbursement Agreement,
unless, in either case, in the opinion of Bond Counsel a different application
of such moneys would not cause interest on the Bonds to become includable in
gross income for federal income tax purposes or is necessary to assure that
interest on the Bonds is not includable in gross income for federal income tax
purposes. Notwithstanding Section 4.8, the moneys in the Redemption Holding
Account shall be invested by the Trustee, pursuant to a Written Request of the
Authority at a yield no higher than the yield on the Outstanding Bonds (unless
in the opinion of Bond Counsel investment at a higher yield would not cause
interest on the Bonds to become includable in gross income for federal income
tax purposes), and all such investment income shall be deposited in the
Redemption Holding Account and expended or reinvested as provided above.
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Section 4.8 INVESTMENT OF MONEYS IN FUNDS AND ACCOUNTS. (a) Subject to
the provisions of Section 4.9 hereof, all moneys in any of the funds and
accounts established pursuant to this Indenture and held by the Trustee shall be
invested by the Trustee as directed by the Authority in writing solely in
Investment Securities. Investment Securities may be purchased at such prices
determined by the Authority. The Authority shall direct such investment so that
all Investment Securities shall be acquired subject to the limitations set forth
in Section 5.8, the limitations as to maturities hereinafter in this Section set
forth and such additional limitations or requirements consistent with the
foregoing as may be established by Written Request of the Authority. Absent the
direction of the Authority in the manner set forth above, the Trustee shall
invest only in Federal Securities. The foregoing provision of this Section
4.8(a) are subject to the limitation that all investments held in any fund or
account hereunder shall mature at such times (without reinvestment thereof or of
investment income thereon) so as to assure the amounts necessary for the
intended purpose of such fund or account.
(b) All interest, profits and other income received from the
investment of moneys in any other fund or account established pursuant to this
Indenture shall be credited to the fund or account for the credit of which such
investment was acquired, provided that all interest, profits and other revenues
from the investment of the Project Fund shall be deposited to the Revenue Fund
and used solely for the purposes set forth in Section 4.4(i) through (iv) and
shall be applied to such purposes prior to any other revenues.
(c) The Trustee may act as principal or agent in the making or
disposing of any investment and may impose its customary charges therefor. The
Trustee may sell at the best price obtainable, or present for redemption, any
Investment Securities so purchased whenever it shall be necessary to provide
moneys to meet any required payment, transfer, withdrawal or disbursement from
the fund or account to which such Investment Security is credited, and the
Trustee shall not be liable or responsible for any loss resulting from any
investment made in accordance with this Section.
Section 4.9 ESTABLISHMENT AND APPLICATION OF THE REBATE FUND. (a) The
Trustee shall establish and maintain a fund separate from any other fund
established and maintained hereunder designated as the Rebate Fund. The Trustee
shall maintain in such Rebate Fund such accounts as the Authority determines
shall be necessary to comply with the terms and conditions of the Tax
Certificate as directed by the Authority. Subject to the transfer provisions
provided in paragraph (e) below, all money at any time deposited in the Rebate
Fund shall be held by the Trustee in trust, to the extent required to satisfy
the Rebate Requirement (as defined in the Tax Certificate), for payment to the
federal government of the United States of America and neither the Authority nor
the Holder of any Bonds shall have any rights in or claim to such money. All
amounts deposited into or on deposit in the Rebate Fund shall be governed by the
provisions of this Section, Section 5.8 of this Indenture and the Tax
Certificate (which is incorporated herein by reference). The Trustee shall be
deemed conclusively to have complied with such provisions if it follows the
written directions of the Authority including supplying all necessary
information in the manner provided in the Tax Certificate and shall not be
required to take any action thereunder in the absence of written directions by
the Authority.
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(b) Upon the Authority's written direction, an amount shall be
deposited to the Rebate Fund by the Trustee from deposits by the Authority from
the Revenue Fund if and to the extent required, so that the balance of the
Rebate Fund after such deposit shall equal the Rebate Requirement. Computations
of the Rebate Requirement shall be furnished by or on behalf of the Authority in
accordance with the Tax Certificate.
(c) The Trustee shall have no obligation to rebate any amounts
required to be rebated pursuant to this Section, other than from moneys held in
the Rebate Fund or from other moneys provided to it by the Authority.
(d) At the written direction of the Authority, the Trustee shall
invest all amounts held in the Rebate Fund in Investment Securities as directed
by the Authority, subject to the restrictions set forth in the Tax Certificate.
Money shall not be transferred from the Rebate Fund except as provided in
paragraph (e) below.
(e) Upon receipt of and in accordance with the Authority's written
directions, the Trustee shall remit part or all of the balances in the Rebate
Fund to the United States. Subject to Section 5.8, if the Authority so directs,
the Trustee will deposit moneys into or transfer moneys out of the Rebate Fund
from or into such accounts or funds in accordance with the Authority's written
direction. Any moneys remaining in the Rebate Fund after redemption and payment
of all of the Bonds and payment and satisfaction of any Rebate Requirement, or
provision having been made therefor satisfactory to the Trustee, shall be
withdrawn and remitted to the Authority.
(f) Notwithstanding any other provision of this Indenture, including
in particular Article XIII hereof, but subject to subparagraph (g) below, the
obligation to remit the Rebate Requirements to the United States and to comply
with all other requirements of this Section, Section 5.8 of the Indenture and
the Tax Certificate shall survive the defeasance or payment in full of the
Bonds.
(g) Notwithstanding any provision of this Indenture to the contrary,
including, without limitation, those in Sections 4.9 and 5.8 hereof, the Trustee
shall not be liable or responsible for any calculation or determination which
may be required in connection with or for the purpose of complying with Section
148 of the Code or any applicable Treasury regulations, including, without
limitation, the calculation of amounts required to be paid to the United States
under the provisions of such Section 148 of the Code and the applicable Treasury
regulations, the maximum amount which may be invested in "nonpurpose
obligations" as defined in the Code and the fair market value of any investments
made hereunder, and the sole obligation of the Trustee with respect to
investments of funds hereunder shall be to invest the moneys received by the
Trustee in Investment Securities pursuant to the instructions of the Authority.
The Trustee shall have no responsibility for determining whether or not the
investments made pursuant to the direction of the Authority comply with this
Indenture or with the Tax Certificate or any other document or agreement or any
requirement of law.
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ARTICLE V
REPRESENTATIONS, WARRANTIES AND
COVENANTS OF THE AUTHORITY
Section 5.1 REPRESENTATIONS AND WARRANTIES OF THE AUTHORITY. So long
as any of the Bonds remain Outstanding, the Authority makes the following
representations and warranties to the Bondholders and the Trustee:
(a) The Authority is a corporate instrumentality of the District
within the meaning of Section 3.041(a) of Revenue Procedure 82-26 and Revenue
Ruling 57-128 and within the meaning of Section ▇▇-▇▇-▇▇▇, Colorado Revised
Statutes, as amended, and a nonprofit corporation duly incorporated and in good
standing under the laws of the State of Colorado, has full legal right, power
and authority to enter into this Indenture and to carry out and consummate all
transactions contemplated by this Indenture, and by proper corporate action has
duly authorized the execution and delivery of this Indenture.
(b) The activities and purposes of the Authority are those permitted
under the nonprofit corporation law of the State of Colorado and the property to
be provided by the Bonds is located within the geographic boundaries of the
District or has a substantial connection with the District.
(c) The Authority is located in the State of Colorado and its
articles of incorporation provide that the Authority is not organized for
profit.
(d) The articles of incorporation of the Authority also provide that
corporate income will not inure to any private person and the Authority hereby
represents and warrants that corporate income will not inure to any private
person.
(e) The Bonds of the Authority shall be issued pursuant to Revenue
Procedure 82-26 and will be issued solely on behalf of the District.
(f) All of the original proceeds and investment proceeds of the Bonds
will be used to provide tangible real or personal property or any costs of
issuance of the Bonds in accordance with Revenue Procedure 82-26. For purposes
of this paragraph, proceeds will be considered to provide tangible real and
personal property only if the proceeds are (i) used to finance costs that a
taxpayer must charge to the property's capital account, may elect to charge to
property's capital account instead of deducting, or may elect to deduct instead
of charging to the property's capital account, and (ii) used to fund a
reasonably required reserve fund. The foregoing does not apply to a de minimis
amount, less than $5,000, that is included in the bond issue solely for the
purpose of rounding the dollar amount of the issue. For purposes of this
section, "original proceeds" are amounts (after payment of all expenses of
issuing the Bonds) received at any time as a result of the sale of the Bonds.
For purposes of this section, investment proceeds are amounts (net of
administrative costs) that result from the investment of
41
any proceeds of the Bonds, but investment proceeds do not include amounts
earned after the date that (1) the construction, reconstruction or
acquisition of the Project facilities is completed, or (2) all of the
proceeds (less amounts used to fund a reasonably required reserve fund) have
been spent on the construction, reconstruction or acquisition of the Project
facilities, whichever occurs later.
(g) The Authority hereby represents and warrants that, at the date of
the execution and delivery of this Indenture, a reasonable estimate of the fair
market value of the property financed by the Series 1996 Bonds on the latest
maturity date of such Series of Bonds will be equal to at least 20% of the
original cost of the property financed by such Series of Bonds.
(h) The Authority hereby represents and warrants that, at the date of
the execution and delivery of this Indenture, a reasonable estimate of the
remaining useful life of the property financed by such Series of Bonds on the
latest maturity date of Bonds will be the longer of one year or 20% of the
original estimated useful life of the property financed by such Series of Bonds.
(i) The officers of the Authority executing this Indenture are, at
the date of execution and delivery of this Indenture, duly and properly in
office and fully authorized to execute the same.
(j) This Indenture has been duly authorized, executed and delivered
by the Authority, and constitutes the legal, valid, and binding agreement of the
Authority, enforceable against the Authority in accordance with its terms,
except as enforcement may be limited by bankruptcy, insolvency or other similar
laws affecting the enforcement of creditors' rights generally and by the
application of equitable principles if equitable remedies are sought.
(k) The execution and delivery of this Indenture, the consummation of
the transactions herein contemplated and the fulfillment or compliance with the
terms and conditions hereof, will not conflict with or constitute a violation or
breach of or default (with due notice or the passage of time or both) under the
articles of incorporation of the Authority, its bylaws or any indenture,
mortgage, deed of trust, agreement, lease, contract or other agreement or
instrument to which the Authority is a party or by which it or its properties
are otherwise subject or bound, or, to the knowledge of the Authority, at the
date of the execution and delivery of this Indenture, any applicable law or
administrative rule or regulation, or any applicable court or administrative
decree or order, or result in the creation or imposition of any prohibitive
lien, charge or encumbrance of any nature whatsoever upon any of the property or
assets of the Authority, which conflict, violation, breach, default, lien,
charge or encumbrance might have consequences that would materially and
adversely affect the consummation of the transactions contemplated by this
Indenture or the financial condition, assets, properties, or operations of the
Authority.
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(l) At the date of the execution and delivery of this Indenture, no
consent or approval of any trustee or holder of any indebtedness of the
Authority, and no consent, permission, authorization, order or license of, or
filing or registration with, any governmental authority is necessary in
connection with the execution and delivery of this Indenture or the consummation
of any transaction herein contemplated, except as have been obtained or made and
as are in full force and effect.
(m) At the date of the execution and delivery of this Indenture,
there is no action, suit, proceeding, inquiry or investigation, before or by any
court or federal, state, municipal or other governmental authority, pending, or
to the knowledge of the Authority after reasonable investigation, threatened
against or affecting the Authority or the assets, properties or operations of
the Authority which, if determined adversely to the Authority, or its interest,
could have a material adverse effect upon the consummation of the transactions
contemplated by or the validity of this Indenture, or upon the financial
condition, assets, properties or operations of the Authority, and the Authority
is not in default with respect to any order or decree of any court or any order,
regulation or demand of any federal, state, municipal or other governmental
authority, which default might have consequences that would materially and
adversely affect the consummation of the transactions contemplated by this
Indenture or the financial condition, assets, properties or operations of the
Authority or its properties. All of the tax returns (federal, state and local)
required to be filed by or on behalf of the Authority have been filed, and all
taxes shown thereon to be due, including interest and penalties, except such, if
any, as are being actively contested by the Authority in good faith, have been
paid or adequate reserves have been made for the payment thereof, which
reserves, if any, are reflected in the financial statements of the Authority.
(n) No information, exhibit or report furnished to the underwriter or
Trustee by the Authority in connection with the negotiation of this Indenture
contains any untrue statement of a material fact or omits to state a material
fact required to be stated therein or necessary to make the statements therein,
in light of the circumstances under which they were made, not misleading.
(o) The Authority has good right, full power and lawful authority to
grant, bargain, sell, warrant, convey, confirm, assign, transfer in trust,
transfer a security interest in, pledge and set over the Trust Estate in the
manner and form herein provided, and the Authority will forever warrant and
defend the title to the same to the Trustee against all claims of all persons
whomsoever. The Trustee has a valid exclusive first lien in the Trust Estate,
subject to no other prior lien.
Section 5.2 ACQUISITION OF PROPERTY. The Authority will forthwith
acquire and construct the Property and construct the Project thereon in
conformity with law and all requirements of all governmental authorities having
jurisdiction thereover.
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Section 5.3 AUTHORITY'S TITLE TO PROJECT; DEED OF TRUST. The Authority
will not alter, modify or cancel, or agree or consent to alter, modify or
cancel, the Deed of Trust except in accordance with the terms thereof.
Without allowance for any days of grace which may or might exist or be
allowed by law or granted pursuant to any terms or conditions of the Deed of
Trust, the Authority will in all respects promptly and faithfully keep, perform
and comply with all the terms, provisions, covenants, conditions and agreements
of the Deed of Trust to be kept, performed and complied with by it. The
Authority will not do or permit anything to be done, or omit or refrain from
doing anything, in the case where any such act done or permitted to be done, or
any such omission of or refraining from action, would or might be a ground for
declaring a forfeiture of its fee simple interest in real property comprising
any part of the Project. The Authority will promptly deposit with the Trustee
(to be held by the Trustee until the title and rights of the Trustee under this
Indenture shall be released or reconveyed) any and all documentary evidence
received by it showing compliance with the provisions of the Deed of Trust to be
performed by the Authority. The Authority, immediately upon its receiving or
giving any notice, communication or other document in any way relating to or
affecting the Deed of Trust, which may or can in any manner affect the estate of
the Authority in or under the Deed of Trust, or any portion of the Trust Estate,
will deliver the same, or a copy thereof, to the Trustee. If the Authority
fails to take action required by this paragraph the Trustee may (but shall be
under no obligation to) take such action and charge the Authority for all costs
incurred in connection therewith.
The Authority will pay or cause to be paid all taxes, assessments and other
charges, if any, that may be levied, assessed or charged upon the Project, the
Trust Estate, or any part thereof, promptly as and when the same shall become
due and payable; and the Authority will, from time to time keep the Trustee
advised of such payments, and furnish to the Trustee a certificate on or before
March 1 of each year to the effect that the requirements of this Section have
been complied with. The Authority will not suffer any part of the Trust Estate
hereby conveyed and transferred in trust, or any part thereof, to be sold for
any taxes, assessments or other charges whatsoever, or to be forfeited therefor;
nor do or permit to be done in, upon or about said Trust Estate, or any part
thereof, anything that might in any way weaken, diminish or impair the security
intended to be given by this Indenture.
Section 5.4 INSURANCE.
(a) The Authority shall, unless otherwise consented to by the Credit
Enhancement Provider, maintain or cause to be maintained, at all times while any
of the Bonds are outstanding, fire, lightning, and extended coverage insurance,
including vandalism and malicious mischief insurance, sprinkler system leakage
insurance and boiler explosion insurance, either as a part of comprehensive
insurance carried by the Authority or as a part of insurance carried by any
contractor under a construction contract, if any, on structures constituting any
part of the Project, in an amount equal to one hundred percent of the
replacement cost of such structures (except that such earthquake insurance may
be subject to a deductible clause of not to exceed
44
ten percent of such replacement cost for any one loss and except that such
other insurance may be subject to deductible clauses for any one loss of not
to exceed the lesser of the Maximum Aggregate Annual Debt Service and the
amount available for that purpose) or, in the alternative, in an amount and
in a form sufficient, in the event of total or partial loss, to enable the
Authority either to retire all Bonds then outstanding or to restore such
structures to the condition existing before such loss. Said extended
coverage endorsement shall, as nearly as practicable, cover loss or damage by
explosion, windstorm, riot, aircraft, vehicle damage, smoke and such other
hazards as are normally covered by such endorsement. The Trustee shall be
named as an additional payee of such policies.
In the event of any damage to or destruction of any part of the Project,
caused by the perils covered by such insurance, the Authority, except as
hereinafter provided, shall cause the proceeds of such insurance to be utilized
for the repair, reconstruction or replacement of the damaged or destroyed
portion of the Project, and the Trustee shall hold proceeds separate and apart
from all other funds in a special fund it is authorized to establish, to the end
that such proceeds shall be applied to the repair, reconstruction or replacement
of the Project to at least the same good order, repair and condition as it was
in prior to the damage or destruction, insofar as the same may be accomplished
by the use of such proceeds. The Trustee shall permit withdrawals of said
proceeds from time to time upon receiving the written request of the Authority,
stating that the Authority has expended moneys or incurred liabilities in an
amount equal to the amount herein requested to be paid over to it for the
purpose of repair, reconstruction or replacement, and specifying the items for
which such moneys were expended, or such liabilities were incurred. Any balance
of said proceeds not required for such repair, reconstruction or replacement
shall be treated by the Trustee as Revenues and applied in the manner provided
by Section 4.4, subject to the provisions of Section 5.4 hereof.
(b) (i) Except as provided in subparagraph (ii) of this paragraph
(b) and unless otherwise consented to by the Credit Enhancement Provider,
the Authority shall maintain or cause to be maintained, at all times while
any of the Bonds are outstanding, public liability insurance, with limits
of not less than one million dollars ($1,000,000) for one person and three
million dollars ($3,000,000) for more than one person involved in one
accident, to protect the Authority and its members, directors, officers,
agents and employees and the Trustee from all direct or contingent loss or
liability for damages for bodily injury or death occasioned by reason of
the Authority's operations, including any use or occupancy of the Project.
The Authority shall also maintain or cause to be maintained, so long as any
of the Bonds are outstanding, insurance against liability for property
damage resulting from any casualty attributable to the Authority's
operations, in an amount not less than two hundred thousand dollars
($200,000) for each accident. Such public liability insurance and such
property damage insurance may be subject to a deductible clause of not to
exceed fifty thousand dollars ($50,000) for any one accident. Such public
liability insurance and such property damage insurance may, however, be in
the form of a single limit policy in the amount of [three million dollars
($3,000,000)] covering all such risks.
45
(ii) The Authority shall have the right, exercisable from time to
time, subject to the approval of the Credit Enhancement Provider, to
provide other kinds of insurance or methods or plans of protection against
risk or loss which shall be in substitution, or partial substitution, for
any of the kinds of insurance required to be maintained by the Authority
hereunder, providing such other kinds of insurance, plans or methods shall
afford reasonable protection to the Authority, its members, directors,
officers, agents and employees and the Trustee and Bondholder in light of
all circumstances giving consideration to cost, availability and plans or
methods of protection adopted by Colorado corporations similar to the
Authority. Before another method or plan may be provided by the Authority,
there shall be filed with the Trustee a certificate of an actuary, or other
qualified person, stating that, in the opinion of the signer, the
substitute method or plan of protection is in accordance with the
requirements of this Section and, when effective, would afford adequate
protection to the Authority, its members, directors, officers, agents and
employees and the Trustee against loss and damage from hazards and risks
covered thereby. There shall also be filed with the Trustee a Certificate
of this Authority setting forth the details of such substitute method or
plan.
(c) The Authority shall maintain or cause to be maintained, at all
times while any of the Bonds are outstanding and unless otherwise consented to
by the Credit Enhancement Provider, business interruption or use and occupancy
insurance on each structure constituting any part of the Project, in an amount
not less than the amount of interest accruing on the Bonds during the current
fiscal year, for a period of at least one year; in either case insuring against
loss of use caused by the perils covered by the insurance required by Section
5.4(a), except that such insurance may be subject to a deductible clause of not
to exceed the aggregate total rental payable during the first thirty days of any
loss except that such insurance need be maintained as to the peril of earthquake
only following completion of construction of each structure and only if such
insurance is available at reasonable cost on the open market from reputable
insurance companies. Any such insurance policy shall contain a loss payable
clause making any loss thereunder payable to the Trustee, as its interest may
appear. Any proceeds of such insurance shall be treated as Revenues and applied
as provided in Section 4.4, subject to the provisions of Section 5.4 hereof.
(d) The Authority may purchase, on all or any of the Bonds of any
series, insurance assuring the Bondholders that the principal of and interest on
the insured Bonds will be paid when due and payable. The purchase of any such
insurance shall not constitute a preference or priority of the insured Bonds
over any Bonds not so insured, and all Bonds Outstanding, irrespective of the
providing of such insurance on some of the Bonds, shall be equally and
proportionately secured hereby.
(e) The Authority shall deliver to the Trustee (i) on the date of
delivery of any new insurance policy or any insurance policy renewal, a copy of
such new or renewed policy, and (ii) during the month of March in each year a
schedule, in such detail as the Trustee in its discretion may request, setting
forth the insurance policies then in force pursuant to this Section,
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the names of the insurers which have issued the policies, the amounts thereof
and the property and risks covered thereby. Each such insurance policy shall
require that the Trustee shall be given thirty days' notice of any intended
cancellation thereof or reduction of the coverage provided thereby. Delivery
to the Trustee of the schedule of insurance policies under the provisions of
this Section shall not confer responsibility upon the Trustee as to the
sufficiency of coverage or amounts of said policies. If so requested in
writing by the Trustee, the Authority shall also deliver to the Trustee
duplicate originals or certified copies of each insurance policy described in
such schedule.
(f) In the event subordinate indebtedness of the Authority is issued
or incurred as provided in Section 3.6 hereof, the Authority shall be authorized
to insure such additions and improvements to the Project as are financed with
proceeds of such subordinate indebtedness. Proceeds of insurance with respect
to loss or damage to such additions and improvements shall be applied first to
the repair or replacement of such additions and improvements and shall
thereafter be applied to the payment or redemption of such subordinate
indebtedness. Proceeds of any business interruption insurance procured with
respect to such additions and improvements may be applied by the Authority to
the payment of such subordinate indebtedness or the payment of operating
expenses with respect to such additions and improvements.
Section 5.5 MISCELLANEOUS COVENANTS. Unless it receives the consent of
the Credit Enhancement Provider, the Authority covenants that, so long as any of
the Bonds remain outstanding:
(a) The Authority will not issue any obligations payable from
Revenues or having a lien on the Trust Estate having priority over, or on a
parity with, the Series 1996 Bonds;
(b) Except as provided in Section 3.6 hereof, the Authority will not
assume or guarantee, or otherwise obligate itself for or become liable for the
payment of, or contingently agree to purchase, any debt of any person other than
the Authority; and
(c) The Authority covenants and agrees that, unless otherwise
consented to by the Credit Enhancement Provider, it shall fix, charge and
collect, or cause to be fixed, charged and collected, subject to applicable
requirements or restrictions imposed by law, such rent rates, fees, or charges
for use of the Project which, together with all other anticipated receipts and
revenues of the Authority and any other funds available therefor, will be
budgeted for the next Fiscal Year to be sufficient to produce Net Income
Available for Debt Service equal to at least one and thirty-hundredths (1.30)
times Aggregate Annual Debt Service for all Bonds then outstanding for the next
Fiscal Year.
Section 5.6 CONSOLIDATION, MERGER, SALE OR TRANSFER UNDER CERTAIN
CONDITIONS. The Authority covenants and agrees that, unless otherwise consented
to by the Credit Enhancement Provider, it shall not dissolve, sell, lease or
otherwise dispose of all or substantially all of its assets, or consolidate with
or merge into another Person or permit one or more other Persons
47
to consolidate with or merge into it; provided, that the Authority may, with
the consent of the Credit Enhancement Provider and without violating the
covenants contained in this Section, consolidate with or merge into, sell, or
lease all or substantially all of its assets to another Person, or permit one
or more other Persons to consolidate with or merge into it, if:
(a) The Trustee shall have received an opinion of Counsel that such
actions are permitted by law;
(b) The surviving, resulting or transferee Person, as the case may
be:
(i) assumes in writing, if such Person is not the
Authority, all of the obligations of the Authority under this
Indenture and agrees to fulfill and comply with the terms, covenants
and conditions hereof; and
(ii) is not, after such transaction, otherwise in default
under any provision of this Indenture; and
(c) The Trustee shall have received an opinion of Bond Counsel to the
effect that such merger, consolidation, sale, lease or other transfer will not
cause the interest on the Bonds to be included in gross income for federal
income tax purposes under Section 103 of the Code.
If a merger, consolidation, sale, lease or other transfer is effected, as
provided in this Section, the provisions of this Section shall continue in full
force and effect, and no further merger, consolidation, sale or transfer shall
be effected except in accordance with the provisions of this Section.
Upon compliance with the foregoing provisions of this Section 5.6, (i) the
Authority and such Person shall be considered to be one entity for purposes of
this Indenture, (ii) all computations hereunder shall be made on a combined
basis for the Authority and such Person, and (iii) no provision hereof shall
apply to transactions between the Authority and such Person. No such sale,
transfer, consolidation or merger shall relieve the Authority of its obligations
hereunder.
A Person may also agree to become a co-obligor and jointly and severally
liable with the Authority (without the necessity of merger, consolidation or
transfer of assets) under this Indenture if the foregoing provisions are
satisfied. In such event, references in this Indenture to Indebtedness of the
Authority shall be considered to refer to the combined Indebtedness of the
Authority and such Person and references to the financial condition or results
of operation of the Authority shall be considered to refer to the Authority and
such Person, and the Authority and such Person shall be considered to be the
Authority for all purposes of this Indenture.
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Section 5.7 REPORTS.
(a) At any time after the Authority files the Registration Statement
with respect to the Exchange Offer, the Authority shall file a copy of all
information required to be filed with the SEC for public availability (unless
the SEC will not accept such a filing) and shall promptly make such information
available to all securities analysts and prospective investors upon request.
(b) For so long as any Transfer Restricted Securities remain
outstanding, the Authority and the Credit Enhancement Provider shall furnish to
all Holders and to securities analysts and prospective investors, upon their
request, the information required to be delivered pursuant to Rule 144A(d)(4)
under the Securities Act.
Section 5.8 TAX COVENANTS.
(a) The Authority covenants that it will not take any action, or fail
to take any action, if any such action or failure to take action would adversely
affect the exclusion from gross income of the interest on the Bonds under
Section 103 of the Code. The Authority will not directly or indirectly use or
permit the use of any proceeds of the Bonds or any other funds of the Authority,
or take or omit to take any action that would cause the Bonds to be "arbitrage
bonds" within the meaning of Section 148(a) of the Code to the extent applicable
to the Bonds. To that end, the Authority will comply with all requirements of
Section 148 of the Code to the extent applicable to the Bonds. In the event
that at any time the Authority is of the opinion that for purposes of this
Section 5.8 it is necessary to restrict or limit the yield on the investment of
any moneys held by the Trustee under this Indenture, the Authority shall so
instruct the Trustee in writing, and the Trustee shall take action in accordance
with such instructions.
(b) Without limiting the generality of the foregoing, the Authority
agrees that there shall be paid from time to time all amounts required to be
rebated to the United States pursuant to Section 148(f) of the Code and any
temporary, proposed or final Treasury Regulations as may be applicable to the
Bonds from time to time. This covenant shall survive payment in full or
defeasance of the Bonds. The Authority specifically covenants to pay or cause
to be paid to the United States at the times and in the amounts determined under
Section 4.8 hereof the Rebate Requirements, as described in the Tax Certificate.
The Trustee agrees to comply with all instructions of the Authority.
(c) The Authority shall at all times do and perform all acts and
things permitted by law and this Indenture which are necessary or desirable in
order to assure that interest paid on the Bonds (or any of them) will be
excluded from gross income for federal income tax purposes and shall take no
action that would result in such interest not being excluded from gross income
for federal income tax purposes.
(d) Any other obligation issued by the Authority either to make
improvements to the Project or to refund the Bonds will be discharged no later
than the latest maturity date of
49
the original obligations, regardless of whether the original obligations are
callable at an earlier date.
(e) The Authority will not use or permit the use of the Project by
any person in such manner or to such extent as would result in loss of the
exclusion from gross income of interest on any of the Bonds under Section 103 of
the Code.
(f) Notwithstanding any provision of this Section 5.8 or Section 4.8
or Article XII hereof, if the Authority shall provide the Trustee an opinion of
Bond Counsel to the effect that any action required under this Section 5.8 or
Section 4.8 or Article XII hereof is no longer required, or to the effect that
some further action is required, to maintain the exclusion from gross income of
the interest on the Bonds pursuant to Section 103 of the Code, the Authority and
the Trustee may rely conclusively on such opinion in complying with the
provisions hereof, and the covenants hereunder shall be deemed to be modified to
that extent.
(g) The Authority will execute no management contract, lease or
similar agreement with respect to the Project unless, in the opinion of Bond
Counsel, such agreement shall not adversely affect the exclusion from gross
income of interest on the Bonds for federal income tax purposes.
Section 5.9 TRANSFER TO DISTRICT. Notwithstanding the foregoing, the
Authority is expressly authorized to transfer to the District, at any time and
without consideration other than the execution by the District of the Operating
Agreement, any Project facility not pledged to the payment of the Bonds pursuant
to the Deed of Trust, including any property released from the Deed of Trust in
accordance with the terms thereof.
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ARTICLE VI
CERTIFICATES AND OPINIONS
Section 6.1 CONTENT OF CERTIFICATES AND OPINIONS. Every certificate or
opinion with respect to compliance with a condition or covenant provided for in
this Indenture (other than a certificate provided pursuant to TIA Section
314(a)(4)) shall comply with the provisions of TIA Section 314(e) and shall
include (a) a statement that the person or persons making or giving such
certificate or opinion have read such covenant and condition and the definitions
herein relating thereto; (b) a brief statement as to the nature and scope of the
examination or investigation upon which the statements or opinions contained in
such certificate or opinion are based; (c) a statement that, in the opinion of
the signers, they have made or caused to be made such examination or
investigation as is necessary to enable them to express an informed opinion as
to whether or not such covenant or condition has been complied with; and (d) a
statement as to whether, in the opinion of the signers, such condition or
covenant has been complied with.
Any such certificate or opinion made or given by an officer of the
Authority may be based, insofar as it relates to legal matters, upon a
certificate or opinion of or representation by counsel, unless such officer
knows that the certificate or opinion or representations with respect to the
matters upon which his certificate or opinion may be based as aforesaid are
erroneous, or in the exercise of reasonable care should have known that the same
were erroneous. Any such certificate or opinion made or given by counsel may be
based, insofar as it relates to factual matters upon a certificate or opinion
of, or representation by, an Authority Representative stating the information
with respect to factual matters which is in the possession of the Authority,
unless such counsel knows that the certificate or opinion or representations
with respect to the matters upon which his opinion may be based as aforesaid are
erroneous, or in the exercise of reasonable care should have known that the same
were erroneous.
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ARTICLE VII
PROVISIONS CONCERNING THE BONDS
Section 7.1 EXECUTION OF BONDS. The Bonds shall be executed on behalf of
the Authority in its corporate name with the manual or facsimile signature of
its President or any Vice President attested by the manual or facsimile
signature of its Secretary or any Assistant Secretary. The Bonds shall then be
delivered to the Trustee for authentication by it. In case any of the officers
who shall have signed or attested any of the Bonds shall cease to be such
officer or officers of the Authority before the Bonds so signed or attested
shall have been authenticated or delivered by the Trustee or issued by the
Authority, such Bonds may nevertheless be authenticated, delivered and issued
and, upon such authentication, delivery and issue, shall be as binding upon the
Authority as though those who signed and attested the same had continued to be
such officers of the Authority and also any Bond may be signed and attested on
behalf of the Authority by such persons as at the actual date of the execution
of such Bond shall be the proper officers of the Authority although at the
nominal date of such Bonds any such person shall not have been such officer of
the Authority.
Only such of the Bonds as shall bear thereon a certificate of
authentication in the form hereinabove recited, manually executed by the
Trustee, shall be valid or obligatory for any purpose or entitled to the
benefits of this Indenture, and such certificate of the Trustee shall be
conclusive evidence that the Bonds so authenticated have been duly authenticated
and delivered hereunder and are entitled to the benefits of this Indenture.
Section 7.2 TRANSFER OR EXCHANGE OF BONDS.
(a) TRANSFER AND EXCHANGE OF DEFINITIVE BONDS. When Definitive Bonds
are presented by a Holder to the Trustee with a request: (x) to register the
transfer of the Definitive Bonds; or (y) to exchange such Definitive Bonds for
an equal principal amount of Definitive Bonds of other authorized denominations,
the Trustee shall register the transfer or make the exchange as requested if its
requirements for such transactions are met; PROVIDED, HOWEVER, that the
Definitive Bonds presented or surrendered for register of transfer or exchange:
(i) shall be duly endorsed or accompanied by a written instruction of transfer
in form satisfactory to the Trustee duly executed by such Holder or by his
attorney, duly authorized in writing; and (ii) in the case of a Definitive Bond
that is a Transfer Restricted Security, such request shall be accompanied by the
following additional information and documents, as applicable: (A) if such
Transfer Restricted Security is being delivered to the Trustee by a Holder for
registration in the name of such Holder, without transfer, a certification to
that effect from such Holder (in substantially the form of Exhibit A hereto); or
(B) if such Transfer Restricted Security is being transferred to a "qualified
institutional buyer" (as defined in Rule 144A under the Securities Act) in
accordance with Rule 144A under the Securities Act or pursuant to an exemption
from registration in accordance with Rule 144 or Rule 904 under the Securities
Act or pursuant to an effective registration statement under the Securities Act,
a certification to that effect from such Holder (in substantially the form of
Exhibit A hereto); or (C) if such Transfer Restricted
52
Security is being transferred in reliance on another exemption from the
registration requirements of the Securities Act, a certification to that
effect from such Holder (in substantially the form of Exhibit A hereto) and
an Opinion of Counsel from such Holder or the transferee reasonably
acceptable to the Authority and to the Trustee to the effect that such
transfer is in compliance with the Securities Act.
(b) TRANSFER OF A DEFINITIVE BOND FOR A BENEFICIAL INTEREST IN A
BOOK-ENTRY BOND. A Definitive Bond may not be exchanged for a beneficial
interest in a Book-Entry Bond unless all Outstanding Bonds are to be, at the
option of the Authority, Book-Entry Bonds.
(c) TRANSFER AND EXCHANGE OF BOOK-ENTRY BONDS. The transfer and
exchange of Book-Entry Bonds or beneficial interests therein shall be effected
through the Depository, in accordance with this Indenture and the procedures of
the Depository therefore which shall include restrictions on transfer comparable
to those set forth herein to the extent required by the Securities Act.
(d) TRANSFER OF A BENEFICIAL INTEREST IN A BOOK-ENTRY BOND FOR A
DEFINITIVE BOND. No Beneficial Interest in a Book-Entry Bond may be transferred
for a Definitive Bond unless the Authority shall determine that Bonds will no
longer be issued in book-entry only form.
(e) RESTRICTIONS ON TRANSFER AND EXCHANGE OF BOOK-ENTRY BONDS.
Notwithstanding any other provision of this Indenture (other than the provisions
set forth in subsection (f) of this Section 7.2), a Book-Entry Bond may not be
transferred as a whole except by the Depository to a nominee of the Depository
or by a nominee of the Depository to the Depository or another nominee of the
Depository or by the Depository or any such nominee to a successor Depository or
a nominee of such successor Depository.
(f) AUTHENTICATION OF DEFINITIVE BONDS IN ABSENCE OF DEPOSITORY. If
at any time: (i) the Depository for the Bonds notifies the Authority that the
Depository is unwilling or unable to continue as Depository for the Book-Entry
Bonds and a successor Depository for the Book-Entry Bonds is not appointed by
the Authority within 90 days after delivery of such notice; or (ii) the
Authority, at its sole discretion, notifies the Trustee in writing that it
elects to cause the issuance of Definitive Bonds under this Indenture, then the
Authority shall execute, and the Trustee shall, upon receipt of an
authentication order in accordance with Section 7.1 hereof, authenticate and
deliver, Definitive Bonds in an aggregate principal amount equal to the
principal amount of the Book-Entry Bonds in exchange for such Book-Entry Bonds.
(g) LEGENDS.
(i) Except as permitted by the following paragraphs (ii) and
(iii), each Bond certificate evidencing Book-Entry Bonds and Definitive
Bonds (and all Bonds issued in exchange therefor or substitution thereof)
shall bear legends in substantially the following form:
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THIS BOND (OR ITS PREDECESSOR) WAS ORIGINALLY ISSUED IN A
TRANSACTION EXEMPT FROM REGISTRATION UNDER ▇▇▇▇▇▇▇ ▇ ▇▇ ▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇ SECURITIES ACT OF 1933 (THE "SECURITIES ACT"), AND
THIS BOND MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED IN
THE ABSENCE OF SUCH REGISTRATION OR AN APPLICABLE EXEMPTION
THEREFROM. EACH PURCHASER OF THIS BOND IS HEREBY NOTIFIED THAT
THE SELLER MAY BE RELYING ON THE EXEMPTION FROM THE PROVISIONS OF
SECTION 5 OF THE SECURITIES ACT PROVIDED BY RULE 144A THEREUNDER.
THE HOLDER OF THIS BOND AGREES FOR THE BENEFIT OF THE AUTHORITY
THAT (A) THIS BOND MAY BE RESOLD, PLEDGED OR OTHERWISE
TRANSFERRED, ONLY (1) INSIDE THE UNITED STATES TO A PERSON WHO
THE SELLER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER
(AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT) IN A
TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A, OR IN
ACCORDANCE WITH ANOTHER EXEMPTION FROM THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT (AND BASED UPON AN OPINION OF
COUNSEL IF THE AUTHORITY SO REQUESTS), (2) TO THE AUTHORITY, (3)
PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT OR, (4) OUTSIDE
THE UNITED STATES TO A FOREIGN PERSON IN A TRANSACTION MEETING
THE REQUIREMENTS OF RULE 904 UNDER THE SECURITIES ACT AND, IN
EACH CASE, IN ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF
ANY STATE OF THE UNITED STATES OR ANY OTHER APPLICABLE
JURISDICTION, AND (B) THE HOLDER WILL, AND EACH SUBSEQUENT HOLDER
IS REQUIRED TO, NOTIFY ANY PURCHASER FROM IT OF THIS BOND OF THE
RESALE RESTRICTIONS SET FORTH IN (A) ABOVE.
(ii) Upon any sale or transfer of a Transfer Restricted Security
(including any Transfer Restricted Security represented by a Book-Entry
Bond) pursuant to Rule 144 under the Securities Act or pursuant to an
effective registration statement under the Securities Act: (A) in the case
of any Transfer Restricted Security that is a Definitive Bond, the Trustee
shall permit the Holder thereof to exchange such Transfer Restricted
Security for a Definitive Bond that does not bear the legend set forth in
(i) above and rescind any restriction on the transfer of such Transfer
Restricted Security; and (B) in the case of any Transfer Restricted
Security represented by a Book-Entry Bond, such Transfer Restricted
Security shall not be required to bear the legend set forth in (i) above,
PROVIDED, HOWEVER, that with respect to any request for an exchange of a
Transfer Restricted Security that is represented by a Book-Entry Bond for a
Definitive Bond that does not bear the first legend set forth in (i) above,
which request is made in
54
reliance upon Rule 144, the Holder thereof shall certify in writing to
the Trustee that such request is being made pursuant to Rule 144 (such
certification to be substantially in the form of Exhibit A hereto).
(iii) Notwithstanding the foregoing, upon consummation of
the Exchange Offer, the Authority shall issue and, upon receipt of an
authentication order in accordance with Section 7.1 hereof, the Trustee
shall authenticate Series B Bonds in exchange for Series A Bonds accepted
for exchange in the Exchange Offer, which Series B Bonds shall not bear the
legend set forth in (i) above, and no restriction shall apply to the
transfer of such Series B Bonds. Series A Bonds which are not exchanged
shall continue to be subject to such restriction.
(h) CANCELLATION AND/OR ADJUSTMENT OF BOOK-ENTRY BONDS. At such time
as all beneficial interests in Book-Entry Bonds have been exchanged for
Definitive Bonds, redeemed, repurchased or cancelled, all Book-Entry Bonds shall
be returned to or retained and cancelled by the Trustee. At any time prior to
such cancellation, if any beneficial interest in a Book-Entry Bond is exchanged
for Definitive Bonds, redeemed, repurchased or cancelled, the principal amount
of Bonds represented by such Book-Entry Bond shall be reduced accordingly and an
endorsement shall be made on such Book-Entry Bond, by the Trustee or at the
direction of the Trustee, to reflect such reduction.
(i) GENERAL PROVISIONS RELATING TO TRANSFERS AND EXCHANGES.
(i) To permit registrations of transfers and exchanges, the
Authority shall execute and the Trustee shall authenticate Definitive Bonds
and Book-Entry Bonds.
(ii) No service charge shall be made to a Holder for any
registration of transfer or exchange, but the Authority and the Trustee may
require payment of a sum sufficient to cover any transfer tax or similar
governmental charge payable in connection therewith (other than any such
transfer taxes or similar governmental charge payable upon exchange or
transfer).
(iii) The Trustee shall not be required to register the
transfer of or exchange any Bond selected for redemption in whole or in
part, except the unredeemed portion of any Bond being redeemed in part.
(iv) All Definitive Bonds and Book-Entry Bonds issued upon any
registration of transfer or exchange of Definitive Bonds or Book-Entry
Bonds shall be the valid obligations of the Authority, evidencing the same
debt, and entitled to the same benefits under this Indenture, as the
Definitive Bonds or Book-Entry Bonds surrendered upon such registration of
transfer or exchange.
(v) The Authority shall not be required: (A) to issue, to
register the transfer of or to exchange Bonds during a period beginning at
the opening of business
55
15 days before the day of any selection of Bonds for redemption and
ending at the close of business on the day of selection; or (B) to
register the transfer of or to exchange any Bond so selected for
redemption in whole or in part, except the unredeemed portion of any Bond
being redeemed in part; or (C) to register the transfer of or to exchange a
Bond between a Record Date and the next succeeding Interest Payment Date.
Section 7.3 BOND REGISTER. The Trustee will keep or cause to be kept,
at the Designated Office of the Trustee, sufficient books for the registration
and transfer of the Bonds, which shall at all times during business hours be
open to inspection by the Authority and shall otherwise comply with TIA Section
312(a); and, upon presentation for such purpose, the Trustee shall, under such
reasonable regulations as it may prescribe, register or transfer or cause to be
registered or transferred, on said books, Bonds as hereinabove provided. If the
Trustee is at any time not the registrar for the Bonds, the Authority shall
furnish to the Trustee at least seven Business Days before each Interest Payment
Date and at such other times as the Trustee may request in writing, a list in
such form and as of such date as the Trustee may reasonably require of the names
and addresses of the Holders of Bonds and the Authority shall otherwise comply
with TIA Section 312(a).
Section 7.4 TEMPORARY BONDS. The Bonds may be initially issued in
temporary form exchangeable for Definitive Bonds when ready for delivery. The
temporary Bonds may be printed, lithographed or typewritten, shall be of such
denominations as may be determined by the Authority and may contain such
reference to any of the provisions of this Indenture as may be appropriate.
Every temporary Bond shall be executed by the Authority and be authenticated by
the Trustee upon the same conditions and in substantially the same manner as the
Definitive Bonds. If the Authority issues temporary Bonds it will execute and
furnish Definitive Bonds without delay upon the request of the purchaser of said
Bonds, and thereupon the temporary Bonds shall be surrendered, for cancellation,
in exchange therefor at the Designated Office of the Trustee, and the Trustee
shall authenticate and deliver in exchange for such temporary Bonds an equal
aggregate principal amount of definitive fully registered Bonds of authorized
denominations, of the same series and maturity or maturities. Until so
exchanged, the temporary Bonds shall be entitled to the same benefits under this
Indenture as Definitive Bonds authenticated and delivered hereunder.
Section 7.5 BONDS MUTILATED, LOST, DESTROYED OR STOLEN. If any Bond
shall become mutilated, the Authority, at the expense of the owner of said Bond,
shall execute, and the Trustee shall thereupon authenticate and deliver, a new
Bond of like tenor in exchange and substitution for the Bond so mutilated, but
only upon surrender to the Trustee of the Bond so mutilated. Every mutilated
Bond so surrendered to the Trustee shall be cancelled by it and delivered to, or
upon the order of, the Authority, or, at the option of the Trustee, the Trustee
shall deliver a certificate with respect to the destruction to the Authority.
If any Bond shall be lost, destroyed or stolen, evidence of such loss,
destruction or theft may be submitted to the Authority and the Trustee and, if
such evidence be satisfactory to both and indemnity satisfactory to them shall
be given, the Authority, at the expense of the owner, shall execute, and the
Trustee shall thereupon authenticate and deliver, a new Bond of like tenor in
lieu of and in substitution
56
for the Bond so lost, destroyed or stolen. The Authority may require payment
of a sum not exceeding the actual cost of preparing each new Bond issued
under this Section and of the expenses which may be incurred by the Authority
and the Trustee in the premises. Any Bond issued under the provisions of
this Section in lieu of any Bond alleged to be lost, destroyed or stolen
shall constitute an original additional contractual obligation on the part of
the Authority whether or not the Bond so alleged to be lost, destroyed or
stolen be at any time enforceable by anyone, and shall be equally and
proportionately entitled to the benefits of this Indenture with all other
Bonds secured by this Indenture.
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ARTICLE VIII
PROVISIONS REGARDING REDEMPTION OF BONDS
Section 8.1 SELECTION OF BONDS FOR REDEMPTION. Whenever less than all
of the Bonds of any one maturity of any series are called for redemption and
such Bonds are redeemable by lot, the Trustee shall select the Bonds of such
maturity to be redeemed, from the outstanding Bonds of such maturity, by lot in
any manner which the Trustee determines. In the event funds are not sufficient
to redeem all Bonds subject to redemption on any date fixed for redemption of
Bonds, the Trustee shall redeem Bonds subject to redemption on a pro rata basis,
determined based upon the principal amount of Bonds subject to redemption.
Section 8.2 NOTICE OF REDEMPTION. Notice of redemption shall be given
by the Trustee in the manner described in this Section 8.2. Each notice of
redemption shall state the redemption date and the place or places of
redemption, shall designate the serial numbers of the Bonds to be redeemed by
giving the CUSIP numbers and the individual numbers of each Bond or by stating
that all Bonds between two stated numbers, both inclusive, have been called for
redemption, and shall require that such Bonds be then surrendered and shall also
state that the interest on the Bonds in such notice designated for redemption
shall cease to accrue from and after such redemption date and that on said date
there will become due and payable on each of said Bonds the principal amount
thereof to be redeemed, interest accrued thereon to the redemption date and the
premium thereon, if any (such premium to be specified).
Notice of redemption shall be given by first-class mail (i) to the
respective registered owners of any Bonds designated for redemption at their
addresses appearing on the Bond registration books, and (ii) to one or more of
the Information Services at least thirty days but not more than sixty days prior
to the redemption date, which notice shall, in addition to setting forth the
above information, set forth, in the case of each registered Bond called only in
part, the portion of the principal thereof which is to be redeemed; provided
that neither failure to mail or any defect in any notice so mailed shall affect
the sufficiency of the proceedings for the redemption of Bonds for which proper
notice has been given pursuant to clause (i). Notice of redemption shall also
be given by telecopy, certified, registered, or overnight mail to the Securities
Depositories. Each such notice shall also state that on said date there will
become due and payable on each of said Bonds the redemption price thereof or of
said specified portion of the principal thereof in the case of a Bond to be
redeemed in part only, together with interest accrued thereon to the redemption
date, and that from and after such redemption date interest thereon shall cease
to accrue, and shall require that such Bonds be then surrendered. Neither the
Authority nor the Trustee shall have any responsibility for any defect in the
CUSIP number that appears on any Bond or in any redemption notice with respect
thereto, and any such redemption notice may contain a statement to the effect
that CUSIP numbers have been assigned by an independent service for convenience
of reference and that neither the Authority nor the Trustee shall be liable for
any inaccuracy in such numbers.
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Notice of redemption of Bonds shall be given by the Trustee, at the expense
of the Authority, for and on behalf of the Authority.
Section 8.3 EFFECT OF REDEMPTION. Notice of redemption having been duly
given as aforesaid, and moneys for payment of the principal amount of the Bonds
to be redeemed, the redemption premium, if any, thereon, and interest due and
unpaid to the redemption date thereon being held by the Trustee, the Bonds so
called for redemption shall, on the redemption date designated in such notice,
become due and payable at the redemption price specified in such notice,
interest on the Bonds so called for redemption shall cease to accrue, said Bonds
shall cease to be entitled to any lien, benefit or security under this
Indenture, and the Holders of said Bonds shall have no rights in respect thereof
except to receive payment of the principal amount thereof, redemption premium,
if any, thereon, and accrued interest thereon to said redemption date.
All unpaid interest installments for interest which shall have become due
and payable on or prior to such date of redemption on registered Bonds so called
for redemption shall be paid to the registered owner thereof as provided in
Section 4.7.
All Bonds redeemed pursuant to the provisions of this Article shall be
cancelled upon surrender thereof and delivered to the Authority, subject to
Section 14.4 hereof, or, at the option of the Trustee, the Trustee shall deliver
a certificate with respect to the destruction to the Authority.
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ARTICLE IX
ADDITIONAL REPRESENTATIONS AND COVENANTS OF THE AUTHORITY
Section 9.1 PAYMENT OF PRINCIPAL AND INTEREST. The Authority will
punctually pay the principal and the interest (and premium, if any) to become
due in respect to every Bond issued hereunder at the times and places and in the
manner provided herein and in the Bonds according to the true intent and meaning
thereof. When and as paid in full, all Bonds shall be delivered to the Trustee,
shall forthwith be destroyed and a certificate of destruction shall be delivered
to the Authority.
Section 9.2 ACCOUNTING RECORDS AND REPORTS. The Authority shall keep
(or cause to be kept) proper books of record and account in which complete and
correct entries shall be made of all transactions relating to the receipts,
disbursements, allocation and application of the Revenues, and such books shall
be available for inspection by the Trustee and by any Holder of Bonds, or his
agent or representative, at reasonable hours and under reasonable conditions.
Not more than 120 days after the close of each fiscal year of the Authority
(which fiscal year currently ends December 31), the Authority shall furnish, to
the Trustee, and to any Bondholder who may so request, a complete financial
statement covering receipts, disbursements, allocation and application of
Revenues for such fiscal year, and including a balance sheet, and the related
statements of revenue and expense, changes in fund balances and changes in
financial position for such fiscal year, setting forth in each case in
comparative form the figures for the previous fiscal year, all certified as to
fairness of presentation, generally accepted accounting principles and
consistency by independent public accountants of nationally recognized standing.
The Authority shall also deliver to the Trustee, without cost, promptly
upon the occurrence of any Event of Default, a certificate of the chief
financial officer of the Authority setting forth the details thereof and the
action which the Authority is taking or proposes to take with respect thereto;
and from time to time such additional information regarding the financial
position, results of operations, business or prospects of the Authority as the
Trustee may reasonably request.
In no event shall receipt by the Trustee of financial and other reports
from the Authority as provided in this Indenture, review of which could lead to
the conclusion that an Event of Default exists hereunder, impose upon the
Trustee the obligation to review and examine the same, it being understood that
all such information shall be received by the Trustee as repository for said
information and document with no obligation on the part of the Trustee to review
the same.
Section 9.3 COMPLIANCE WITH INDENTURE. The Authority will not issue, or
permit to be issued, any Bonds in any manner other than in accordance with the
provisions of this Indenture, and will not suffer or permit any default to occur
under this Indenture, but will faithfully observe and perform all the covenants,
conditions and requirements hereof.
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Section 9.4 AUTHORIZATION FOR BONDS. The Authority hereby represents
and warrants that it is duly authorized under the laws of the State of Colorado,
and any other applicable provisions of law, to create and issue the Bonds and to
execute this Indenture; all corporate action on its part required for the lawful
creation and issue of the Bonds and the execution of this Indenture has been
duly and effectively taken; and the Bonds, upon the issue thereof, will be valid
obligations of the Authority enforceable in accordance with their terms.
Section 9.5 OBSERVANCE OF LAWS AND REGULATIONS, ERISA. The Authority
will well and truly keep, observe and perform all valid and lawful obligations
and regulations now or hereafter imposed on it by contract, or prescribed by any
law of the United States of America, or of the State of Colorado, or by any
officer, board or commission having jurisdiction or control, as a condition of
the continued enjoyment of any and every right, privilege or franchise now owned
or hereafter acquired by the Authority, including its right to exist and carry
on business as a corporation, to the end that such contracts, rights and
franchises shall be maintained and preserved, and shall not become abandoned,
forfeited or in any manner impaired.
The Authority will comply with the minimum funding requirements of ERISA
with respect to any retirement plan of the Authority that is subject to ERISA.
Section 9.6 MAINTENANCE AND REPAIR OF PROJECT. The Authority shall
construct and maintain or cause to be maintained in good condition and keep in
good repair the Project and all buildings, facilities and equipment now or
hereafter constituting any part of the Trust Estate, shall maintain the Project
as a fully equipped and operational facility, and shall not commit or allow any
waste with respect to any of the Trust Estate.
Section 9.7 OTHER LIENS. The Authority shall keep the Trust Estate and
all parts thereof free from judgments, mechanics, and materialmen's liens
(except those arising from the construction of the Project) and free from all
liens, claims, demands and encumbrances of whatsoever prior nature or character,
to the end that the priority of the lien of this Indenture may at all times be
maintained and preserved, and free from any claim or liability which, in the
judgment of the Trustee (and its determination thereof shall be final), might
embarrass or hamper the Authority in conducting its business or operating the
Trust Estate, and the Trustee at its option (after first giving the Authority
ten days, written notice to comply therewith and failure of the Authority to so
comply within said ten-day period) may (but shall not be obligated to) defend
against any and all actions or proceedings in which the validity of this
Indenture or its priority is or might be questioned, or pay or compromise any
claim or demand asserted in any such actions or proceedings; provided, however,
that, in defending against such actions or proceedings or in paying or
compromising such claims or demands, the Trustee shall not in any event be
deemed to have waived or released the Authority from liability for or on account
of any of its covenants and warranties contained herein, or from its liability
hereunder to defend the validity or priority of this Indenture and the lien
hereof and to perform such covenants and warranties.
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So long as any Bonds are outstanding, the Authority will not create or
suffer to be created any mortgage, pledge, lien or charge upon all or any part
of the Trust Estate, the Project or the Revenues, on a senior or parity lien to
the lien of this Indenture, except the Deed of Trust and encumbrances permitted
thereby, and as expressly permitted by Section 3.6.
The Authority may incur Non-Recourse Indebtedness without any limitation
hereunder.
Section 9.8 COMPLIANCE WITH CONTRACTS. The Authority shall comply with
the terms, covenants and provisions, express or implied, of all contracts for
the use of the Trust Estate by the Authority, and all other contracts and
agreements affecting or involving the Trust Estate or the business of the
Authority.
Section 9.9 PROSECUTION AND DEFENSE OF SUITS. The Authority shall
promptly, upon request of the Trustee or any Bondholder, from time to time take
such action as may be necessary or proper to remedy or cure any defect in or
cloud upon the title to the Trust Estate or any part thereof, whether now
existing or hereafter developing, shall prosecute all such suits, actions and
other proceedings as may be appropriate for such purpose and shall indemnify and
save the Trustee and every Bondholder harmless from all loss, cost, damage and
expense, including attorneys' fees, which they or any of them may incur by
reason of any such defect, cloud, suit, action or proceeding.
The Authority shall defend against every suit, action or proceeding at any
time brought against the Trustee or any Bondholder upon any claim arising out of
the receipt, application or disbursement of any of the Revenues or involving the
rights of the Trustee or any Bondholder under this Indenture; provided, that the
Trustee or any Bondholder at its or his election may appear in and defend any
such suit, action or proceeding. The Authority shall indemnify and hold
harmless the Trustee and the Bondholders against any and all liability claimed
or asserted by any person, arising out of such receipt, application or
disbursement, and shall indemnify and hold harmless the Bondholders against any
attorneys' fees or other expenses which any of them may incur in connection with
any litigation to which any of them may become a party by reason of his
ownership of Bonds. The Authority shall promptly reimburse any Bondholder in the
full amount of any attorneys' fees or other expenses which he may incur in
litigation or otherwise in order to enforce his rights under this Indenture or
the Bonds, provided that such litigation shall be concluded favorably to such
Bondholder's contentions therein. Notwithstanding any contrary provision hereof
this covenant shall remain in full force and effect, even though all
indebtedness and obligations secured hereby may have been fully paid and
satisfied and this Indenture may have been released and discharged, until the
Authority shall have been dissolved.
Section 9.10 EMINENT DOMAIN. If all or any part of the Trust Estate
shall be taken by eminent domain proceedings (or sold to a government
threatening to exercise the power of eminent domain), the proceeds therefrom
shall be deposited with the Trustee in a special fund in trust which it is
authorized to establish and shall be applied and disbursed by the Trustee as
follows:
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(a) (i) If the Trustee is furnished with the report specified in
Section 9.10(a)(iii) to the effect that such eminent domain proceedings
have not materially affected the operation of the Project or the ability of
the Authority to meet any of its obligations hereunder, and if such report
states that such proceeds are not needed for repair or rehabilitation of
the Project, the Trustee shall treat such proceeds as Revenues and shall
apply such proceeds as provided in Section 4.4, subject to Section 9.10(e)
hereof.
(ii) If the Trustee is furnished with the report specified in
Section 9.10(a)(iii) to the effect that such eminent domain proceedings
have not materially affected the operation of the Project or the ability of
the Authority to meet any of its obligations hereunder, and if such report
states that such proceeds are needed for repair or rehabilitation of the
Project, the Trustee shall pay to the Authority, or to its order, from said
proceeds such amounts as the Authority may expend for such repair or
rehabilitation, upon the filing with the Trustee of such Written
Requisitions of the Authority, certificates of architects or engineers.
(iii) In making any such application (including the application
mentioned in the following subsection (b)), the Trustee shall be provided,
at the expense of the Authority, the report of an independent engineer or
other independent professional consultant. Any such application by the
Trustee shall be final.
(b) If less than all of the Project shall have been taken in such
eminent domain proceedings, and if the Trustee is furnished a report of an
independent engineer concluding that such eminent domain proceedings have
materially affected the operation of the Project or the ability of the Authority
to meet any of its obligations hereunder, the Trustee shall deposit the proceeds
to the Redemption Holding Account as provided in Section 4.6 hereof, subject to
Section 9.10(e) hereof.
(c) (i) If all of the Project shall have been taken in such eminent
domain proceedings and if proceeds from such taking allocable to the
Project (after applying Section 9.10(e) hereof), together with any other
moneys then available to the Trustee for the purpose, are sufficient to
provide for the payment of the entire amount of principal then due or to
become due upon the Bonds, together with the interest thereon, so as to
enable the Authority to retire all of the Bonds then outstanding by
redemption or by payment at maturity, the Trustee shall deposit the
proceeds in the Redemption Holding Account and shall apply such proceeds
to the payment of such interest and to such retirement.
(ii) If all of the Project shall have been taken in such eminent
domain proceedings and if such proceeds (after applying Section 9.10(e)
hereof), together with any other moneys then available to the Trustee for
the purpose, are insufficient to provide moneys for the purposes specified
in paragraph (i) of this subsection (c), the Trustee shall deposit the
proceeds in the Redemption Holding Account.
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(d) After all of the Bonds have been retired and the entire amount of
principal due or to become due upon the Bonds, together with the interest
thereon, have been paid in full, the Trustee shall pay the remainder of such
proceeds to the District and the Authority in accordance with their respective
interests as directed by the Authority subject to Section 9.10(e) hereof.
(e) In the event the Authority shall issue or incur subordinate
indebtedness as provided in Section 3.6 hereof for the acquisition, construction
or completion of improvements or additions to the Project and all or less than
all of the Project shall be taken in such eminent domain proceedings, the
Authority shall be entitled to allocate proceeds of such eminent domain between
the Property and such additions and improvements financed with such subordinate
indebtedness on the basis of relative fair market values and apply the proceeds
in accordance with such allocation.
Section 9.11 FURTHER ASSURANCES. Whenever and so often as requested so
to do by the Trustee or any Bondholder, the Authority will promptly execute and
deliver or cause to be executed and delivered all such other and further
instruments, documents or assurances, and promptly do or cause to be done all
such other and further things, as may be necessary or reasonably required in
order to further and more fully vest in the Trustee and the Bondholders all
rights, interest, powers, benefits, privileges and advantages conferred or
intended to be conferred upon them by this Indenture.
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ARTICLE X
EVENTS OF DEFAULT AND REMEDIES
Section 10.1 EVENTS OF DEFAULT: ACCELERATION: WAIVER OF DEFAULT. Any one
or more of the following events shall constitute an Event of Default hereunder:
(a) Default shall be made in the due or punctual payment (other than
Extra Payments prior to the maturity of the Bonds) of the principal of, or
premium (if any) on, any Bond when and as the same shall become due and payable,
whether at maturity as therein expressed, by proceedings for redemption, by
declaration or otherwise;
(b) Default shall be made in the due and punctual payment (other than
Extra Payments prior to the maturity of the Bonds) of any installment of
interest on any Bond, when and as such interest installment shall become due and
payable;
(c) There shall occur a breach of any material representation of the
Authority herein, or default shall be made by the Authority in the performance
or observance of any other of the covenants, agreements or conditions on its
part in this Indenture or in the Bonds contained, and such default shall have
continued for a period of forty-five (45) days after written notice thereof,
specifying such default and requiring the same to be remedied, shall have been
given to the Authority and the Credit Enhancement Provider by the Trustee, or to
the Authority and the Trustee by the Credit Enhancement Provider;
(d) The Authority shall (1) admit in writing its inability to pay its
debts generally as they become due, (2) file a petition in bankruptcy or to take
advantage of any insolvency act, (3) make an assignment for the benefit of its
creditors, (4) consent to the appointment of a receiver of itself or of the
whole or any substantial part of its property, or (5) on a petition in
bankruptcy filed against the Authority, be adjudicated a bankrupt;
(e) The Authority shall file a petition or answer seeking
reorganization or arrangement under the federal bankruptcy laws or any other
applicable law of the United States of America or any State thereof;
(f) A court of competent jurisdiction shall enter an order, judgment
or decree appointing, without the consent of the Authority, a receiver of the
Authority, or of the whole or any substantial part of its property, or approving
a petition filed against the Authority seeking reorganization of the Authority
under the federal bankruptcy laws or any other applicable law of the United
States of America or any State thereof, and such order, judgment or decree shall
not be vacated or set aside and stayed within sixty (60) days from the date of
the entry thereof; or
(g) Under the provisions of any other law for the relief or aid of
debtors, any court of competent jurisdiction shall assume custody or control of
the Authority or of the whole
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or any substantial part of its property, and such custody or control shall
not be terminated or stayed within sixty (60) days from the date of
assumption of such custody or control; or
(h) There is a breach of a covenant or a material representation by
the Credit Enhancement Provider under the Credit Enhancement.
In each and every such case during the continuance of an Event of Default,
unless the principal of all the Bonds shall have already become due and payable,
the Trustee, by notice in writing to the Authority may, and upon written request
of the Credit Enhancement Provider or the Holders of not less than twenty-five
per cent (25%) in aggregate principal amount of the Bonds at the time
outstanding, shall, declare the principal of all the Bonds then outstanding, and
the interest accrued thereon, to be due and payable immediately, and upon any
such declaration the same shall become and shall be immediately due and payable,
subject to the further provisions of this Section 10.1, but the Bonds will be
accelerated and become due and payable only if Available Moneys sufficient to
pay such Bonds shall be deposited with the Trustee on or before the date
specified for such acceleration.
This provision, however, is subject to the condition that if, at any time
after the principal of the Bonds shall have been so declared due and payable,
and before any judgment or decree for the payment of the moneys due shall have
been obtained or entered as hereinafter provided, the Authority shall deposit
with the Trustee Available Moneys sufficient to pay all principal on the Bonds
matured prior to such declaration and all matured installments of interest (if
any) upon all the Bonds, with interest on such overdue installments of principal
at the rate or rates of interest required hereunder and the reasonable fees and
expenses (including, without limitation, those of its counsel) of the Trustee,
and any and all other defaults known to the Trustee (other than in the payment
of principal of and interest on the Bonds due and payable solely by reason of
such declaration) shall have been made good or cured to the satisfaction of the
Trustee or provision deemed by the Trustee to be adequate shall have been made
therefor, then, and in every such case, the Trustee, with the consent of the
Credit Enhancement Provider and, if the Credit Enhancement Provider has failed
to provide payments specified in Section 4.2 hereof, the Holders of at least a
majority in aggregate principal amount of the Bonds then outstanding, by written
notice to the Authority and the Holders of the Bonds, may rescind and annul such
declaration and its consequences and waive such default; but no such rescission
and annulment shall extend to or shall affect any subsequent default, or shall
impair or exhaust any right or power consequent thereon, provided that no such
recision shall require consent of the Credit Enhancement Provider if such
rescission occurs following the occurrence and continuance of an event of
default by the Credit Enhancement Provider under the Credit Enhancement.
The foregoing is subject to the limitation that (i) no Event of Default or
acceleration shall occur without the consent of the Credit Enhancement Provider
while the Credit Enhancement Provider has continued to provide funds sufficient
to pay principal of and interest on the Bonds pursuant to Section 4.2 hereof
(except for Extra Payments or amounts payable on redemption following occurrence
described in Section 9.10(c) hereof) and is otherwise not in breach of a
covenant or a material representation by the Credit Enhancement Provider under
the Credit
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Enhancement, and (ii) neither the consent of the Credit Enhancement Provider
nor the deposit of Available Moneys shall be required for acceleration if the
Credit Enhancement Provider is continuing to fail to provide such amounts or
is otherwise in breach of a covenant or a material representation by the
Credit Enhancement Provider under the Credit Enhancement.
Anything to the contrary set forth in this Indenture notwithstanding, if an
Event of Default shall occur hereunder, the District shall have an exclusive
option to purchase all properties, equipment or other assets financed by the
Bonds and any and all additions to that property, equipment or assets for an
amount equal to the unpaid principal amount of all Bonds then outstanding and
accrued interest thereon to the date of the Event of Default. The District
shall have (a) not less than ninety (90) days from the date it is notified by
the Authority of the Event of Default in which to exercise this option, and (b)
not less than ninety (90) days from the date the District exercises the option
to purchase such property, equipment and assets. Upon an Event of Default the
Authority shall immediately notify the Trustee and the District of such an Event
of Default and rights to purchase hereunder by telex, telecopy or telephone
(confirmed in writing). If the District exercises such an option to purchase,
the purchase price paid by the District shall be immediately applied by the
Trustee in accordance with Section 10.3 hereof. The Authority shall remain
liable to the Holders of the Bonds for any interest accruing thereon following
an Event of Default and not paid from such purchase price, if any, paid by the
District to the Trustee in accordance with this Section 10.1.
The Trustee shall not be required to take notice, or be deemed to have
notice, of any default or Event of Default under this Indenture, other than an
Event of Default under Sections 10.1(a) and (b), unless specifically notified in
writing of such default or Event of Default by the Credit Enhancement Provider
or by the Holders of not less than twenty-five percent (25%) in aggregate of the
Bonds at the time outstanding.
Notwithstanding the foregoing, no Event of Default shall occur hereunder as
a result of any nonpayment of amounts specified in Section 4.9 hereof, if, in
the opinion of Bond Counsel, such failure shall not cause interest on the Bonds
to become subject to inclusion in gross income for federal income tax purposes.
Section 10.2 POWER OF TRUSTEE TO ENTER AND TAKE POSSESSION OF TRUST
ESTATE. If one or more of the Events of Default shall happen and be continuing,
then and in each and every case the Trustee, either personally or by its agents
or attorneys, may, in its discretion, and upon the written request of the Credit
Enhancement Provider or the Holders of not less than a majority in principal
amount of the Bonds then outstanding, and upon being indemnified to its
satisfaction, forthwith shall, enter into and upon and take and hold possession
of the Trust Estate, and may exclude the Authority and its agents and servants
and all other persons or corporations wholly therefrom and may use, manage and
control the Trust Estate and conduct the business of the Authority with respect
thereto in such manner as in its discretion it shall deem to be to the best
advantage of the Credit Enhancement Provider and the Holders of the Bonds.
In aid of the exercise of the power of entry conferred upon the Trustee
under the foregoing provisions of this Section, the Trustee in its discretion
and without notice or demand
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upon the Authority, such notice and demand being hereby expressly waived,
shall be entitled to the appointment of a receiver by any court of competent
jurisdiction, and such receiver so appointed shall be entitled to exercise
all the powers hereby conferred upon the Trustee under the provisions of this
Article in the management and operation of the Trust Estate.
Section 10.3 APPLICATION OF MONEYS. Upon every such entry the Trustee
from time to time, and at the expense of the Trust Estate, may maintain and
restore and insure and keep insured the Trust Estate and make all necessary
repairs, renewals, replacements, alterations, additions, betterments and
improvements, as it may deem judicious. The Trustee in case of such entry shall
have the right to manage the Trust Estate and to carry on the business of the
Authority with respect thereto and to exercise all the rights and powers of the
Authority either in the name of the Authority or otherwise, as the Trustee shall
deem best, and shall be entitled to collect, take and receive all earnings,
income, rents, issues and profits of the Trust Estate.
All moneys received by the Trustee pursuant to any right given or action
taken under the provisions of this Article shall, after deducting the costs and
expenses of collecting or securing the same, and after deducting the expenses of
operating the Trust Estate and of conducting the business thereof, and of all
repairs, maintenance, renewals, replacements, alterations, additions,
betterments and improvements, and all payments or reserves that may be made or
set up, in the Trustee's discretion, for taxes, assessments, insurance and prior
or other proper charges upon or in connection with the operation of the Trust
Estate or any part thereof, as well as just and reasonable compensation for its
own services and for the services of counsel, agents and employees by it
properly engaged and employed, and after making reimbursement to itself for
advances made pursuant to the provisions of this Indenture with interest on all
such advances at the prime (or equivalent) rate most recently quoted by the
Trustee plus two percent (2%) per annum or, if less, the maximum rate allowed by
any applicable usury law, the Trustee shall apply moneys received by it pursuant
to this Section as follows:
FIRST: In case the principal of none of the Bonds shall have
become due and remain unpaid, to the payment of interest in default in the
order of the accrual thereof, such payments to be made ratably to the
persons entitled thereto without discrimination or preference.
SECOND: In case the principal of any of the Bonds shall have become
due by acceleration or otherwise and remain unpaid, first to the payment of
interest in default in the order of the accrual thereof, then to the
payment of the principal of all Bonds then due and unpaid, with interest on
the overdue principal at the rate or rates of interest borne by the
respective Bonds; in each instance such payment to be made ratably to the
persons entitled thereto without discrimination or preference.
Upon the payment in full of all amounts due for such principal or interest,
or payable for other purposes, and if the Authority shall not then be in default
hereunder, the Trust Estate (except any money required to be held by the Trustee
under any other Section of this Indenture) shall be returned to the Credit
Enhancement Provider in satisfaction of obligations of the Authority to the
Credit Enhancement Provider under the Reimbursement Agreement and the Deed of
Trust, including interest thereon as provided in the Reimbursement Agreement,
and
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upon certification to the Trustee by the Credit Enhancement Provider that all
such obligations (including such interest) have been paid in full, any
balance remaining shall be paid to the Authority, its successors or assigns,
or to whosoever may be lawfully entitled thereto.
Section 10.4 INSTITUTION OF LEGAL PROCEEDINGS BY TRUSTEE. If one or more
of the Events of Default shall happen and be continuing, the Trustee in its
discretion may, and upon the written request of the Credit Enhancement Provider
or the Holders of not less than a majority in principal amount of the Bonds then
outstanding, and upon being indemnified to its reasonable satisfaction therefor,
shall, proceed to protect or enforce its rights or the rights of Credit
Enhancement Provider and the Holders of Bonds under this Indenture by a suit in
equity or action at law, either for the specific performance of any covenant or
agreement contained herein, or in aid of the execution of any power herein
granted, or for the foreclosure of this Indenture, or for the enforcement of any
other appropriate legal or equitable remedy as the Trustee shall deem most
effectual in support of any of its rights or duties hereunder; and upon
instituting such proceeding, or in order to take possession of the Trust Estate
as hereinabove provided, the Trustee shall be entitled as of right to the
appointment of a receiver of the Trust Estate, without notice or demand to or
upon the Authority, which notice and demand are hereby expressly waived.
Section 10.5 POWER OF SALE. If one or more of the Events of Default
shall happen and be continuing, the Trustee, without entry, personally or by
attorney, in its discretion may, and upon the written request of the Credit
Enhancement Provider or the Holders of not less than a majority in principal
amount of the Bonds then outstanding, and upon being indemnified to its
reasonable satisfaction therefore, shall, take any and all action permitted to
be taken by it pursuant to the Credit Enhancement and Deed of Trust, and except
as otherwise provided in the Deed of Trust with respect to the Project, proceed
to sell to the highest and best bidder all and singular the Trust Estate (except
any money then held by the Trustee under any provision of this Indenture) and
all rights, title, interest, claim and demand therein and thereto of the
Authority. Except as otherwise provided in the Deed of Trust and in respect to
the Project, such sale shall be made at public auction and at such place or
places in the county in which the Trust Estate or a portion thereof is located,
and at such time or times and upon such notice as the Trustee may be advised by
counsel to be consistent with the laws, if any, applicable thereto, and upon
such terms as the Trustee may fix. In connection with any such sale, the
Trustee, in its sole discretion, may authorize an appraisal of the Trust Estate
to be made by such person or persons as the Trustee may select. Further, the
Trustee may reject any and all bids submitted at such sale if, in the opinion of
the Trustee, such bids do not represent a fair price for the Trust Estate, and
may postpone any sale until such time as the Trustee shall determine. Any
person, including the Authority, the Trustee, the Credit Enhancement Provider
and any Holder of Bonds, may purchase at any such sale and the Trustee may make
a credit bid at any such sale on behalf of the Holders of the Bonds then
outstanding in any amount up to but not exceeding the total indebtedness then
owed under the Indenture. Notice of any sale pursuant to any provision of this
Indenture shall state the time and place when and where the same is to be made,
shall contain a brief general description of the property to be sold, shall
briefly state the terms of the sale and shall be given by publication or posting
or both to the extent and in the manner required by law.
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Section 10.6 ACCELERATION UPON EXERCISE OF POWER OF SALE. In the event
of any sale of the Trust Estate made under the power of sale hereby granted and
conferred, or under or by virtue of judicial proceedings, or of any judgment or
decree of foreclosure and sale, the principal of all Bonds, if not previously
due, immediately shall become and be due and payable, anything in said Bonds or
in this Indenture to the contrary notwithstanding.
Section 10.7 SALE AS ENTIRETY OR IN PARCELS. Should any such sale be
made pursuant to judicial proceedings, such sale shall be made either as an
entirety or in such parcels as may be directed by the court, or should such sale
be made by the Trustee under the power of sale hereby granted, such sale shall
be made either as an entirety or in such parcels as the Trustee in its sole
discretion may determine.
The Public Body shall have a first right and option, in the event of any
proposed sale pursuant to judicial proceedings or by the Trustee under the power
of sale herein granted, to purchase the Trust Estate at the price sufficient to
retire and pay all indebtedness of the Authority then outstanding and secured by
this Indenture.
The Authority, for itself and all persons and corporations hereafter
claiming through or under it, or who may at any time hereafter become holders of
liens junior to the lien of this Indenture, hereby expressly waives and releases
all right to have the properties and rights comprised in the Trust Estate
marshaled upon any foreclosure or other enforcement hereof, and the Trustee or
any court in which the foreclosure of this Indenture or administration of the
trusts hereby created is sought shall have the right as aforesaid to sell the
entire property of every description comprised in or subject to the trusts
created by this Indenture as a whole in a single parcel as an entirety or in
such parcels.
Section 10.8 ADJOURNMENTS OF SALE. The Trustee from time to time may
adjourn any such sale to be made by it by announcement at the time and place
appointed for such sale or for such adjourned sale or sales, and without further
notice or publication it may make such sale at the time to which the same shall
be so adjourned, but in the event of such adjournment or adjournments, sale
shall be made within six months from the date of sale fixed in the
advertisement, unless notice of sale on some later date shall be given again in
the manner provided in Section 10.5.
Section 10.9 TRANSFER TO BUYER AT SALE. Except as otherwise provided in
the Deed of Trust, upon completion of any such sale or sales, the Trustee shall
execute and deliver to the accepted buyer or buyers a good and sufficient deed
or assignment of the property or properties sold, or shall execute and deliver,
in conjunction with the deed or assignment of the court officer conducting such
sale, a proper release of such properties. The Trustee is hereby irrevocably
appointed the true and lawful attorney of the Authority, in its name and stead
to make all necessary deeds and assignments of such properties thus sold; and
for that purpose the Trustee may execute all necessary instruments of
conveyance, assignment and transfer, and may substitute one or more persons or
corporations with like power, and the Authority hereby ratifies and confirms all
that its said attorney or attorneys, or such substitute one or more persons or
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corporations with like power, shall lawfully do by virtue hereof. Nevertheless,
the Authority, if so requested by the Trustee, shall execute and deliver to the
buyer or buyers such deeds, assignments, transfers and releases as may be
designated in such request.
In the event of a sale of said Trust Estate, or any part thereof, and the
execution of a deed or assignment thereof under these trusts, the recital
therein of default, publication of notice of sale, demand that such sale be
made, postponement of sale, terms of sale, sale, purchase, payment of purchase
money and any other fact affecting the regularity or validity of such sale shall
be effectual and conclusive proof of the facts recited therein as against the
Authority, its successors and assigns, and all other persons.
Section 10.10 SALE A BAR AGAINST AUTHORITY. Any such sale shall divest
all right, title, interest, claim and demand whatsoever, either at law or in
equity, of the Authority, its successors and assigns of, in and to the property
and premises sold, and shall be a perpetual bar, both at law and in equity,
against the Authority, its successors and assigns, and against any and all
persons claiming or who may claim the property sold or any part thereof, from,
through or under the Authority, its successors or assigns.
Section 10.11 BUYER NOT LIABLE FOR APPLICATION OF PURCHASE MONEY. The
receipt of the Trustee or of the court officer conducting such sale shall be a
sufficient discharge for the purchase money of any buyer of the property or any
part thereof, sold as aforesaid, and no buyer or representatives, grantees or
assigns of any buyer, after paying such purchase money and receiving such
receipt, shall be bound to see to the application of such purchase money upon or
for any trust or purpose of this Indenture, or in any manner whatsoever be
answerable for any loss, misapplication or non-application of such purchase
money or any part thereof or be bound to inquire as to the authorization,
necessity, expediency or regularity of any such sale.
Section 10.12 APPLICATION OF BONDS TO PURCHASE PRICE. In case of any such
sale, for the purpose of making settlement or payment for the property
purchased, the buyer shall be entitled to turn in or apply toward the payment of
the purchase price any Bonds and to be credited therefor, to the extent of the
value of or amount which would be payable upon such Bonds upon a distribution
among the Holders of Bonds of the net proceeds of such sale, after making the
deductions allowable under the terms hereof for the costs and expenses of the
sale and otherwise; but such Bonds so applied in payment by the buyer shall be
deemed to be paid only to the extent so applied.
Section 10.13 PURCHASE BY TRUSTEE. At any such sale the Trustee or any
Holder of Bonds may bid for and purchase such property and may make payment on
account thereof as aforesaid, and upon compliance with the terms of sale may
hold, retain and dispose of such property without further accountability
therefor.
Section 10.14 APPLICATION OF PROCEEDS OF SALE. The purchase money,
proceeds and avails of any such sale, together with any sums which may then be
held by the Trustee or be payable
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to and received by it under any of the provisions of this Indenture as part
of the Trust Estate or of the proceeds thereof, shall be applied as provided
in Section 10.3 hereof.
Section 10.15 EFFECT OF DELAY OR OMISSION TO PURSUE REMEDY. No delay or
omission of the Trustee, the Credit Enhancement Provider or of any Holder of
Bonds to exercise any right or power arising from any Event of Default shall
impair any such Event of Default or acquiescence therein; and every power and
remedy given by this Article to the Trustee, the Credit Enhancement Provider or
to the Holders of Bonds may be exercised from time to time, and as often as
shall be deemed expedient. In case the Trustee shall have proceeded to enforce
any right under this Indenture by entry, foreclosure or otherwise, and such
proceedings shall have been discontinued or abandoned because of waiver or for
any other reasons, or shall have been determined adversely to the Trustee, then
and in every such case the Authority, the Trustee, the Credit Enhancement
Provider, and the Holders of the Bonds, severally and respectively, shall be
restored to their former positions and rights hereunder in respect to the Trust
Estate; and all remedies, rights and powers of the Authority, the Trustee, the
Credit Enhancement Provider and the Holders of the Bonds shall continue as
though no such proceedings had been taken.
Section 10.16 REMEDIES CUMULATIVE. No remedy herein conferred upon or
reserved to the Trustee, the Credit Enhancement Provider or to any Holder of the
Bonds is intended to be exclusive of any other remedy, but each and every such
remedy shall be cumulative and shall be in addition to every other remedy given
hereunder.
Section 10.17 WAIVER BY AUTHORITY OF BENEFITS OF LAWS FOR PROTECTION OF
DEBTORS. The Authority will not, at any time claim, take or insist upon any
benefit or advantage from any law now or hereafter in force providing for the
valuation or appraisement of the trust property, or any part thereof, prior to
any sale thereof to be made pursuant to any provision herein contained, or
pursuant to the decree, judgment or order of any court of competent
jurisdiction; nor, after any such sale, will it claim or exercise any right,
under any statute now or hereafter enacted, to redeem the property so sold, or
any part thereof; and the Authority hereby expressly waives all benefit and
advantage of any such law and covenants that it will not invoke or utilize any
such law in order to hinder, delay or impede the execution of any power herein
granted and delegated to the Trustee, but will suffer and permit the execution
of every such power as though no such law had been enacted.
Section 10.18 COVENANT TO PAY BONDS IN EVENT OF DEFAULT, ETC. The
Authority covenants that, upon the happening of any Event of Default, the
Authority will pay to the Trustee, upon demand, for the benefit of the Holders
of the Bonds, the whole amount then due and payable thereon (by declaration or
otherwise) for interest or for principal, or both, as the case may be, and all
other sums which may be due hereunder or secured hereby (with interest on
overdue principal at the rate or rates of interest borne by the respective
Bonds), including reasonable compensation to the Trustee, its agents, attorneys
and counsel, and any expenses or liabilities incurred by the Trustee hereunder.
In case the Authority shall fail to pay the same forthwith upon such demand, the
Trustee, in its own name and as trustee of an express trust, shall be
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entitled to institute proceedings or file a claim in any proceedings at law
or in equity or in bankruptcy in any court of competent jurisdiction to
recover judgment for the whole amount due and unpaid, together with costs and
reasonable attorneys' fees. The Trustee shall be entitled to file a claim
and to recover judgment as aforesaid, either before or after or during the
pendency of any trustee's sale proceedings or any proceedings for the
enforcement of the lien of this Indenture upon the Trust Estate, and the
right of the Trustee to file such a claim or to recover such judgment shall
not be affected by any entry or sale, or by the exercise of any other right,
power or remedy for the enforcement of the provisions of this Indenture or
for the foreclosure of the lien hereof; and, in case of a sale of the Trust
Estate, or any portion thereof, and of the application of the proceeds of
sale to the payment of said indebtedness, the Trustee, in its own name and as
trustee of an express trust, shall be entitled to enforce payment of and to
receive all amounts then remaining due and unpaid upon the Bonds then
outstanding, for the benefit of the Holders thereof, and shall be entitled to
recover judgment for any portion of said indebtedness remaining unpaid, with
interest. No recovery of any judgment upon property subject to the lien of
this Indenture or upon any other property shall in any manner or to any
extent affect or impair the lien of this Indenture upon the Trust Estate or
any part thereof or any rights, powers or remedies of the Credit Enhancement
Provider or the Holders of the Bonds, but such lien rights, powers and
remedies shall continue unaffected and unimpaired as before. Any moneys
collected by the Trustee upon any such judgment shall be applied by it in
accordance with the provisions of Section 10.14 so far as the same may be
applicable.
Notwithstanding the foregoing provisions of this Section, the powers hereby
granted to the Trustee are strictly subject to the limitation that if by the
commencement of any action at law to recover judgment for any amount due and
unpaid hereunder or upon the Bonds or by the exercise of any other remedy prior
to or concurrently with trustee's sale proceedings or proceedings to enforce the
lien of this Indenture upon the Trust Estate, the security hereby provided for
would, despite the foregoing provisions of this Section, be surrendered,
impaired, waived or lost, the Trustee shall have no power to commence such
action at law or to exercise such power or remedy; but in case any statute now
in force providing in terms or effect that the commencement of an action to
recover a debt secured by mortgage shall be deemed a waiver of the security
thereof, or prohibiting the exercise of any other remedy prior to or
concurrently with trustee's sale proceedings or proceedings to enforce the lien
of a mortgage upon the premises mortgaged, or any statute which now impairs or
suspends the virtue of the foregoing provisions of this Section and of which the
Authority might take advantage, despite the said provisions, shall hereafter be
repealed or cease to be in force, such statute shall not be deemed to have
become or to be a part of the contract contained in this Indenture.
Section 10.19 RIGHTS OF TRUSTEE IN RECEIVERSHIP PROCEEDINGS, ETC. In the
event of any receivership, insolvency, reorganization or bankruptcy proceedings
affecting the Authority or the Trust Estate, the Trustee, without prejudice to
or waiver of the lien and security of this Indenture or of any right conferred
hereby, shall be entitled, without being the Holder of any Bonds, to file and
prove a claim for the entire amount then due and payable by the Authority under
this Indenture without regard to or deduction for the value of the Trust Estate
or the security of this Indenture or for any amount which may thereafter be
collected, received or
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realized by the Trustee from the Trust Estate or any part thereof, and the
Trustee is hereby appointed the agent and attorney of the Holders of all
Bonds outstanding hereunder for such purpose.
Section 10.20 RIGHTS OF BONDHOLDERS TO CONTROL PROCEEDINGS BY TRUSTEE.
The Holders of a majority in aggregate principal amount of the Bonds at the time
outstanding shall have the right to direct the time, method and place of
conducting any proceeding for any remedy available to the Trustee, or exercising
any trust or power conferred on the Trustee, under this Indenture. In the event
that the Trustee, upon the happening of an Event of Default, shall have taken
some action, by judicial proceedings or otherwise, pursuant to its duties
hereunder, whether upon its own discretion or upon the request of the Credit
Enhancement Provider and the Holders of the above-specified principal amount of
Bonds then outstanding, it shall have full power, in the exercise of its
discretion for the best interests of the Credit Enhancement Provider or the
Holders of the Bonds, with respect to the continuance, discontinuance,
withdrawal, compromise, settlement or other disposal of such action; provided,
however, that the Trustee shall not, unless there no longer continues an event
of default hereunder, discontinue, withdraw, compromise, settle or otherwise
dispose of any litigation pending at law or in equity, if at the time there has
been filed with it a written request signed by the Credit Enhancement Provider
or the Holders of at least a majority in aggregate principal amount of the Bonds
at the time outstanding opposing such discontinuance, withdrawal, compromise,
settlement or other disposal of such litigation.
Section 10.21 LIMITATION ON BONDHOLDERS' RIGHT TO ▇▇▇. No Holder of any
Bond issued hereunder shall have the right to institute any suit, action or
proceeding at law or in equity, for the execution of any trust or power of this
Indenture or for any other remedy under or upon this Indenture, unless (a) such
Holder shall have previously given to the Trustee and the Credit Enhancement
Provider written notice of the occurrence of an Event of Default hereunder; (b)
the Holders of at least twenty-five per cent (25%) in aggregate principal amount
of the Bonds then outstanding shall have made written request to the Trustee to
exercise the powers hereinbefore granted or to institute such action, suit or
proceeding in its own name; (c) such Holder or said Holders shall have tendered
to the Trustee reasonable indemnity against the costs, expenses and liabilities
to be incurred in compliance with such request; and (d) the Trustee shall have
refused or omitted to comply with such request for a period of thirty (30) days
after such written request shall have been received by, and said tender of
indemnity shall have been made to, the Trustee.
Such notification, request, tender of indemnity and refusal or omission are
hereby declared, in every case, to be conditions precedent to the exercise by
any Holder of Bonds of any remedy hereunder; it being understood and intended
that no one or more Holders of Bonds shall have any right in any manner whatever
by his or their action to enforce any right under this Indenture, except in the
manner herein provided, and that all proceedings at law or in equity to enforce
any provision of this Indenture shall be instituted, had and maintained in the
manner herein provided and for the equal benefit of all Holders of the
Outstanding Bonds.
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Section 10.22 ABSOLUTE OBLIGATION OF AUTHORITY. Nothing in Section 10.21
or in any other provision of this Indenture or in the Bonds shall affect or
impair the obligation of the Authority, which is absolute and unconditional, to
pay the principal of, premium, if any, and interest on the Bonds to the
respective Holders of the Bonds at their respective dates of maturity or upon
call for redemption as herein provided and at the place in such Bonds expressed.
Section 10.23 WAIVER OF PERSONAL LIABILITY OF INDIVIDUALS. No recourse
shall be had for the payment of the principal of or interest on the Bonds or for
any claim based thereon or otherwise in respect thereof or based on or in
respect of this Indenture or any indenture supplemental hereto, against any
incorporator, member, director or officer, as such, past, present or future, of
the Authority or of any predecessor or successor corporation, either directly or
through the Authority or otherwise, whether by virtue of any constitution,
statute or rule of law, or by the enforcement of any assessment or penalty, or
otherwise; it being expressly understood that the Bonds and all obligations of
the Authority under this Indenture are solely corporate obligations and that all
such personal liability of such incorporators, members, directors and officers
is hereby expressly waived and released as a condition of, and as a
consideration for, the execution of this Indenture and the issue of the Bonds.
Section 10.24 CREDIT ENHANCEMENT PROVIDER RIGHTS. The Credit Enhancement
Provider shall have no right to direct, request, waive or consent to the
exercise of any remedies under this Article X during any period that the Credit
Enhancement Provider has continued to fail to perform in any material respect
any covenant, or has breached any material representation or warranty, within
the Credit Enhancement. The Trustee shall notify the Bondholders and Standard &
Poor's Ratings Services of any such failure to perform by the Credit Enhancement
Provider.
Section 10.25 CREDIT ENHANCEMENT PROVIDER TO BE SUBROGATED TO RIGHTS OF
HOLDERS. The Credit Enhancement Provider shall, to the extent amounts are due
and payable to the Credit Enhancement Provider pursuant to the Reimbursement
Agreement, become subrogated to the rights of Holders, and to evidence such
subrogation, the Trustee shall note the Credit Enhancement Provider's rights as
subrogee on the registration books maintained by the Trustee. The foregoing is
subject to the limitations that the Credit Enhancement Provider shall be
entitled to exercise its rights as a subrogee only when no Bonds are
outstanding.
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ARTICLE XI
THE TRUSTEE
Section 11.1 DUTIES, IMMUNITIES AND LIABILITIES OF TRUSTEE;
REPRESENTATIONS AND WARRANTIES OF TRUSTEE. The Trustee shall, prior to an Event
of Default, and after the curing of all Events of Default which may have
occurred, perform such duties and only such duties as are specifically set forth
in this Indenture. The Trustee shall after an Event of Default and prior to the
curing of such Event of Default use the same degree of care and skill in the
exercise and use of the rights and remedies available to the Trustee, as a
prudent person would exercise or use under the circumstances in the conduct of
the affairs of others.
(a) No provision of this Indenture shall be construed to relieve the
Trustee from liability for its own grossly negligent action or its own
grossly negligent failure to act, except that:
(i) prior to an Event of Default hereunder and after the curing
of all Events of Default which may have occurred:
(A) the duties and obligations of the Trustee shall be
determined solely by the express provisions of this Indenture and
the Deed of Trust, the Trustee shall not be liable except for the
performance of such duties and obligations as are specifically
set forth in this Indenture and the Deed of Trust, and no implied
covenants or obligations shall be read into this Indenture
against the Trustee; and
(B) in the absence of bad faith on the part of the Trustee,
the Trustee may conclusively rely, as to the truth of the
statements and correctness of the opinions expressed therein,
upon any certificate or opinion furnished to the Trustee
conforming to the requirements of this Indenture; but in the case
of any such certificate or opinion which by any provision hereof
is specifically required to be furnished to the Trustee, the
Trustee shall be under a duty to examine the same to determine
whether or not it conforms to the requirements of this Indenture
(including without limitation the requirements of Section 6.1
hereof); and
(ii) at all times, regardless of whether or not any Event of
Default shall exist:
(A) the Trustee shall not be liable for any error of
judgment made in good faith by a responsible officer or officers
of the Trustee unless it shall be proved that the Trustee was
grossly negligent in ascertaining the pertinent facts; and
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(B) the Trustee shall not be liable with respect to any
action taken or omitted to be taken by it in good faith in
accordance with the direction of the Holders of not less than a
majority (or other percentage provided for herein) in aggregate
principal amount of the Bonds at the time outstanding relating to
the time, method and place of conducting any proceeding for any
remedy available to the Trustee, or exercising any trust or power
conferred upon the Trustee under this Indenture.
None of the provisions contained in this Indenture shall require the
Trustee to expend or risk its own funds or otherwise incur individual financial
liability in the performance of any of its duties or in the exercise of any of
its rights or power.
(b) In connection with the acceptance of its duties hereunder, the
Trustee makes the following representations and warranties:
(i) DUE ORGANIZATION, VALID EXISTENCE. The Trustee is duly
organized and validly existing as a national banking association
with corporate trust powers.
(ii) POWER AND AUTHORITY. The Trustee has full power and
authority to carry on its business as now being conducted and to
enter into this Indenture and accept the trusts imposed upon it
hereby.
(iii) EXECUTION AND DELIVERY. This Indenture has been duly
executed and delivered by the Trustee.
(iv) ENFORCEABILITY. This Indenture constitutes the valid,
legal, binding and enforceable obligation of the Trustee (subject
to bankruptcy, insolvency or creditor rights laws generally, and
principles of equity generally) without offset, defense, or
counterclaim.
(v) NO CONFLICT. The execution, delivery and performance
of this Indenture by the Trustee will not cause or constitute
(with due notice or lapse of time or both) a default under or
conflict with the Trustee's organizational documents or other
agreements by which the Trustee is bound or otherwise materially
or adversely affect performance of the Trustee's duties.
(vi) NO VIOLATION OF LAWS. The execution, delivery and
performance of this Indenture by the Trustee will not violate any
law, regulation, order or decree of any governmental authority.
(vii) CONSENTS OBTAINED. All consents, approvals,
authorizations, orders or filings of or with any court or
governmental
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agency or body, if any, required for the execution, delivery
and performance of this Indenture by the Trustee have been
obtained or made.
(viii) NO LITIGATION. There is no pending action, suit
or proceeding, arbitration or governmental investigation against
the Trustee an adverse outcome of which would materially affect
the Trustee's performance under this Indenture.
Section 11.2 RIGHT OF TRUSTEE TO RELY UPON DOCUMENTS, ETC. Except as
otherwise provided in Section 11.1:
(a) the Trustee may rely and shall be protected in acting upon any
resolution, certificate, statement, instrument, opinion, report, notice,
request, consent, order, bond, or other paper or document reasonably believed by
it to be genuine and to have been signed or presented by the proper party or
parties;
(b) any notice, request, direction, election, order or demand of the
Authority mentioned herein shall be sufficiently evidenced by an instrument
signed in the name of the Authority by its President and by its Secretary or an
Assistant Secretary or its Treasurer (unless other evidence in respect thereof
be herein specifically prescribed); and any resolution of the District may be
evidenced to the Trustee by a Certified Resolution;
(c) the Trustee may consult with counsel (who may be counsel for the
Authority) and the opinion of such counsel shall be full and complete
authorization and protection in respect of any action taken or suffered by it
hereunder in good faith and in accordance with the opinion of such counsel; and
(d) whenever in the administration of the trusts of this Indenture
the Trustee shall deem it necessary or desirable that a matter be proved or
established prior to taking or suffering any action hereunder, such matter
(unless other evidence in respect thereof be herein specifically prescribed)
may, in the absence of gross negligence or bad faith on the part of the Trustee,
be deemed to be conclusively proved and established by a Certificate of the
Authority; and such Certificate of the Authority shall, in the absence of
negligence or bad faith on the part of the Trustee, be full warrant to the
Trustee for any action taken or suffered by it under the provisions of this
Indenture upon the faith thereof.
Section 11.3 TRUSTEE NOT RESPONSIBLE FOR RECITALS; REFUSAL TO PERFORM.
(a) The recitals contained herein and in the Bonds shall be taken as
the statements of the Authority, and the Trustee assumes no responsibility for
the correctness of the same. The Trustee shall not be accountable for the use
or application by the Authority of any of the Bonds authenticated or delivered
hereunder or of the proceeds of such Bonds.
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(b) The Trustee may refuse to perform any duty or exercise any right
or power unless and until it receives indemnity reasonably satisfactory to it
against any loss, liability or expense but the Trustee may not require indemnity
as a condition to declaring the principal of, premium, if any, and interest on
the Bonds to be due immediately under Section 10.01. The permissive right of
the Trustee to do things enumerated under this Indenture shall not be construed
as a duty of the Trustee.
Section 11.4 RIGHT OF TRUSTEE TO ACQUIRE BONDS. Subject to the
limitations of any applicable law, the Trustee and its officers and directors
may acquire and hold, or become the pledgee of, Bonds and otherwise deal with
the Authority in the manner and to the same extent and with like effect as
though it were not Trustee hereunder.
Section 11.5 MONEYS RECEIVED BY TRUSTEE TO BE HELD IN TRUST. Subject to
the provisions of Section 13.3, all moneys received by the Trustee shall, until
used or applied as herein provided, be held in trust for the purposes for which
they were received, and shall be segregated from other funds to the extent
required by law or by this Indenture. The Trustee shall be under no liability
for interest on any moneys received by it hereunder except such as it may agree
with the Authority to pay thereon. All accounts held or maintained under this
Indenture shall be Eligible Accounts.
Each Eligible Account shall be a separate and identifiable account from all
other funds held by the Trustee. All Eligible Accounts must be established and
maintained in the name of the Trustee, bearing a designation clearly indicating
that the funds deposited therein are held for the benefit of the Holders. The
Trustee shall possess all right, title and interest in all funds on deposit from
time in each account and in all proceeds thereof. Each account herein created
shall be under the sole dominion and control of the Trustee for the benefit of
the Holders, and shall contain only funds held for their benefit. The Trustee
shall have no right of set-off or banker's lien against, and no right to
otherwise deduct from any funds held in the account for any amount owed it by
the Authority, any Holder, or the Credit Enhancement Provider.
Section 11.6 COMPENSATION AND INDEMNIFICATION OF TRUSTEE. The Authority
covenants to pay to the Trustee from time to time, and the Trustee shall be
entitled to, reasonable compensation for all services rendered by it in the
execution of the trusts hereby created and in the exercise and performance of
any of the powers and duties hereunder of the Trustee, which compensation shall
not be limited by any provision of law in regard to the compensation of a
trustee of an express trust, and the Authority will pay or reimburse the Trustee
upon its request for all expenses, disbursements and advances incurred or made
by the Trustee in accordance with any of the provisions of this Indenture
(including the reasonable compensation and the expenses and disbursements of its
counsel and of all persons not regularly in its employ) except any such expense,
disbursement or advance as may arise from its gross negligence or bad faith. If
any property, other than cash, shall at any time be held by the Trustee subject
to this Indenture, or any Supplemental Indenture, as security for the Bonds, the
Trustee, if and to the extent authorized by a receivership, bankruptcy or other
court of competent jurisdiction or by the instrument subjecting such property to
the provisions of this Indenture as such security for
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the Bonds, shall be entitled, but shall have no duty or obligation, to make
advances for the purpose of preserving such property or of discharging tax
liens or other prior liens or encumbrances thereon. The Authority also
covenants to indemnify the Trustee for, and to hold it harmless against, any
loss, liability, expense or advance incurred or made without gross negligence
or bad faith on the part of the Trustee, arising out of or in connection with
the acceptance or administration of this trust, including the costs and
expense of defending itself against any claim of liability in the premises.
The obligations of the Authority under this Section to compensate the Trustee
for services and to pay or reimburse the Trustee for expenses, disbursements,
liabilities and advances shall constitute additional indebtedness hereunder
and shall survive the discharge of this Indenture or the resignation or
removal of the Trustee. Such additional indebtedness shall have priority over
the Bonds in respect of all property and funds held or collected by the
Trustee as such, except funds held in trust by the Trustee for the benefit of
the Holders of particular Bonds. The Trustee shall comply with the provisions
of TIA Section 313(b)(2) to the extent applicable. The Trustee shall not be
entitled to any payment of fees, expenses, charges or compensation from
payments under the Credit Enhancement. All costs, expenses, fees and other
charges of the Trustee and compensation due to the Trustee not paid when due
shall bear interest at the base rate most recently quoted by the Trustee plus
two percent (2%) per annum or, if less, the maximum rate allowed by any
applicable usury law.
Section 11.7 QUALIFICATIONS OF TRUSTEE. There shall at all times be a
trustee hereunder which shall,be a corporation or national banking association
organized and doing business under the laws of the United States of America or
the State of Colorado, authorized under such laws to exercise corporate trust
powers, having a combined capital, exclusive of borrowed capital, and a surplus
of at least seventy-five million dollars ($75,000,000), and subject to
supervision or examination by federal or state authority. If such corporation
publishes reports of condition at least annually, pursuant to law or to the
requirements of any supervising or examining authority above referred to, then
for the purposes of this Section the combined capital and surplus of such
corporation shall be deemed to be its combined capital and surplus as set forth
in its most recent report of condition so published. In case at any time the
Trustee shall cease to be eligible in accordance with the provisions of this
Section, the Trustee shall resign immediately in the manner and with the effect
specified in Section 11.8. This Indenture shall always have a Trustee who
satisfies the requirements of TIA Section 310(a)(1), (2) and (5). The Trustee
is subject to TIA Section 310(b).
The Trustee is subject to TIA Section 311(a), excluding any creditor
relationship listed in TIA Section 311(b). A Trustee who has resigned or been
removed shall be subject to TIA Section 311(a) to the extent indicated therein.
Section 11.8 RESIGNATION AND REMOVAL OF TRUSTEE AND APPOINTMENT OF
SUCCESSOR TRUSTEE.
(a) The Trustee may at any time resign by giving written notice to
the Authority, the Credit Enhancement Provider and the Bondholders of such
resignation by mail. Upon receiving such notice of resignation, the Authority
shall promptly appoint a successor
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trustee by an instrument in writing executed by order of the governing board
of the Authority. If no successor trustee shall have been so appointed and
have accepted appointment within thirty days after the publication of such
notice of resignation, the resigning trustee may petition any court of
competent jurisdiction for the appointment of a successor trustee, or any
Bondholder who has been a bona fide Holder of a Bond for at least six months
(or so long as such Bonds have been outstanding if less than six months) may,
on behalf of himself and others similarly situated, petition any such court
for the appointment of a successor trustee. Such court may thereupon, after
such notice, if any, as it may deem proper and prescribe, appoint a successor
trustee.
(b) In case at any time any of the following shall occur:
(i) the Trustee shall cease to be eligible in accordance with
the provisions of Section 11.7 and shall fail to resign after Written
Request therefor by the Authority or by any Bondholder who has been a bona
fide Holder of a Bond for at least six months (or so long as such Bonds
have been outstanding if less than six months), or
(ii) the Trustee shall become incapable of acting, or shall be
adjudged a bankrupt or insolvent, or a receiver of the Trustee or of its
property shall be appointed, or any public officer shall take charge or
control of the Trustee or of its property or affairs for the purpose of
rehabilitation, conservation or liquidation,
then, in any such case, the Authority may remove the Trustee and appoint a
successor trustee by an instrument in writing executed by order of the District,
or any such Bondholder may, on behalf of himself and all others similarly
situated, petition any court of competent jurisdiction for the removal of the
Trustee and appointment of a successor trustee. Such court may thereupon, after
such notice, if any, as it may deem proper and prescribe, remove the Trustee and
appoint a successor trustee.
(c) The Credit Enhancement Provider or the Holders of sixty percent
(60%) or more in aggregate principal amount of the Bonds at the time outstanding
may at any time remove the Trustee and appoint a successor trustee by an
instrument or concurrent instruments in writing signed by the Credit Enhancement
Provider or such Bondholders.
(d) Any resignation or removal of the Trustee and appointment of a
successor trustee pursuant to any of the provisions of this Section shall only
become effective upon acceptance of appointment by the successor trustee as
provided in Section 11.9.
Section 11.9 ACCEPTANCE OF TRUST BY SUCCESSOR TRUSTEE. Any successor
trustee appointed as provided in Section 11.8 shall execute, acknowledge and
deliver to the Authority and to its predecessor trustee an instrument accepting
such appointment hereunder, and thereupon the resignation or removal of the
predecessor trustee shall become effective and such successor trustee, without
any further act, deed or conveyance, shall become vested with all the rights,
powers, trusts, duties and obligations of its predecessor in the trusts
hereunder, with like
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effect as if originally named as Trustee herein; but, nevertheless, on the
Written Request of the Authority or the request of the successor trustee, the
trustee ceasing to act shall execute and deliver an instrument transferring to
such successor trustee, upon the trusts herein expressed, all the rights,
powers and trusts of the trustee so ceasing to act. Upon request of any such
successor trustee, the Authority shall execute any and all instruments in
writing necessary or desirable for more fully and certainly vesting in and
confirming to such successor trustee all such rights, powers, and duties. Any
trustee ceasing to act shall, nevertheless, retain a lien upon all property or
funds held or collected by such trustee to secure the amounts due it as
compensation, reimbursement, expense and indemnity afforded to it by Section
11.6. Each trustee being replaced shall transfer all monies and securities it
holds to the successor trustee.
No successor trustee shall accept appointment as provided in this Section
unless at the time of such acceptance such successor trustee shall be eligible
under the provision of Section 11.7.
Upon acceptance of appointment by a successor trustee as provided in this
Section, the Authority shall publish notice of the succession of such trustee to
the trusts hereunder at least once in a Financial Newspaper or Journal. If the
Authority fails to publish such notice within ten days after acceptance of
appointment by the successor trustee, the successor trustee shall cause such
notice to be published at the expense of the Authority.
Section 11.10 MERGER OR CONSOLIDATION OF TRUSTEE. Any corporation into
which the Trustee may be merged or with which it may be consolidated, or any
corporation resulting from any merger or consolidation to which the Trustee
shall be a party, or any corporation succeeding to the business of the Trustee,
shall be the successor of the Trustee hereunder without the execution or filing
of any paper or any further act on the part of any of the parties hereto,
provided that such successor trustee shall be eligible under the provisions of
Section 11.7.
Section 11.11 RECORDS OF TRUSTEE. The Trustee shall retain all financial
statements furnished to it by the Authority pursuant to Section 9.2, so long as
any of the Bonds shall be outstanding.
Section 11.12 REPORTS BY TRUSTEE TO HOLDERS. Within 60 days after each
February 15 beginning with the February 15 following the date of this Indenture,
and for so long as Bonds remain outstanding, the Trustee shall mail to the
Holders of the Bonds a brief report dated as of such reporting date that
complies with TIA Section 313(a) (but if no event described in TIA Section
313(a) has occurred within the twelve months preceding the reporting date, no
report need be transmitted). The Trustee also shall comply with TIA Section
313(b)(2). The Trustee shall also transmit by mail all reports as required by
TIA Section 313(c).
A copy of each report at the time of its mailing to the Holders of Bonds
shall be mailed to the Authority and filed with the SEC and each stock exchange
on which the Bonds are listed in accordance with TIA Section 313(d). The
Authority shall promptly notify the Trustee when the Bonds are listed on any
stock exchange.
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Section 11.13 TRUSTEE DISCLAIMER.
(a) The acceptance by the Trustee of its duties as Trustee under this
Indenture is subject to the following terms and conditions, which all parties to
this Indenture hereby agrees shall govern and control with respect to the
rights, duties and liabilities of Trustee.
(b) The Trustee is not a party to and is not bound by any agreement
between any one or more of the parties hereto, except this Indenture, unless
otherwise expressly stated herein.
(c) The duties of the Trustee hereunder are only such as are herein
specifically provided, being purely ministerial in nature, and it shall have no
responsibility in respect of any of the Trust Estate other than faithfully to
follow the instructions herein contained.
(d) The Trustee acts hereunder as a depository. All deposits are
warranted by the depositor to be valid deposits. The Trustee is not responsible
for or liable in any manner whatsoever for the sufficiency, correctness,
genuineness and validity of any security, document, or other item, which is a
part of the Trust Estate or for any claim or action by any person, firm,
corporation or trustee concerning the right or power of any depositor to make
any transfer or the validity of the transfer of any part of the Trust Estate to
the Trustee.
(e) The Trustee shall be protected in acting upon any written notice,
request, waiver, consent, receipt or other paper or document which the Trustee
in good faith believes to be genuine.
(f) The Trustee shall not be liable for any error of judgment, or for
any act done or step taken or omitted by it in good faith, or for any mistake of
fact or law, or for anything which it may do or refrain from doing in connection
herewith, except its own gross negligence, bad faith or willful misconduct.
(g) The Trustee is authorized to and may consult with, and obtain
advice from, legal counsel in the event any dispute, conflict or question arises
as to the construction of any of the provisions hereof or its duties hereunder.
The Trustee shall be reimbursed from the Trust Estate held by it for all costs
so incurred and shall incur no liability and shall be fully protected for acting
in good faith in accordance with the opinion and instructions of such counsel.
(h) The Trustee may, but shall not be required to, defend itself in
any legal proceedings which may be instituted against it or it may, but shall
not be required to, institute legal proceedings in respect of the Trust Estate,
or any part thereof. The Trustee shall be indemnified and held harmless against
the cost and expense of any such defenses or action, including, without
limitation, legal fees incurred in any said action.
(i) The Trustee shall make payment to or for, or deliver documents
to, any party only if in its judgment such payment or delivery may be made under
the terms of this
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Indenture without its incurring any liability. If conflicting demands not
expressly provided for in this Indenture are made or notices served upon the
Trustee with respect to its actions or omission under this Indenture, the
parties hereto agree that the Trustee shall have the absolute right to elect
to do either or both of the following: (i) withhold and stop all future
actions or omissions on its part under this Agreement, or (ii) file a suit in
interpleader or for instructions or for a declaratory judgment for other
relief and obtain an order from the proper court requiring the parties to
litigate in such court their conflicting claims and demands. In the event any
such action is taken, the Trustee shall be fully released and discharged from
all obligations to perform any duties or obligations imposed upon it by this
Indenture unless and until otherwise ordered by the court; and the parties
jointly and severally agree that the Trust Estate may be used to pay all
costs, expenses, and reasonable attorney's fees expended or incurred by the
Trustee in connection therewith and promise to pay all such amounts and agree
that the costs in fact incurred shall be fixed by the Trustee and a judgment
thereof shall be rendered by the court in such suit.
(j) In the event that a sale of any or all of the Trust Estate is
necessary or required under the terms of this Indenture, the Trustee agrees to
use its best efforts to effect such a sale at a reasonable price. The parties
hereto agree that the acceptance by the Trustee of an offer or offers to
purchase any or all of the Trust Estate shall be binding and conclusive upon the
parties hereto. The Trustee shall not be liable for the exercise of its
judgment in accepting or rejecting any sale or sales consideration. The Trustee
shall not be liable for any failure to receive any offer or offers from the
public, or from the parties hereto, to purchase all or such part of the Trust
Estate as may be offered for sale by the Trustee provided that the Trustee shall
have made reasonable efforts to obtain such an offer or offers. All expenses
and obligations incurred in connection with any sale of any or all of the Trust
Estate shall be charged against the proceeds and the surplus, if any, shall be
delivered to the distributees under this Indenture.
(k) The parties hereto grant to the Trustee a security interest in
and to all of the Trust Estate and all proceeds, including the right of setoff,
to secure it against any and all costs, expenses and fees arising hereunder.
All fees of the Trustee will be borne by the Authority.
(l) All notices, requests, demands or other communications authorized
or required to be given by any party pursuant to this Indenture shall be given
in writing to all parties, and shall be deemed to have been sufficiently given
on the date mailed by certified mail, return receipt requested, or delivered:
If to the Trustee at:
SouthTrust Bank of Alabama, National Association
Corporate Trust Department
▇.▇. ▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
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If to the Authority at:
Stanford Place III, Suite 902
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: C. ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇
(m) A copy of any notice to Bondholders (other than notice with
respect to mandatory sinking fund redemption) shall also be given, in like
manner, to Standard & Poor's Ratings Services, so long as it is providing a
rating on the Bonds, as follows:
Standard and Poor's Ratings Services
▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attn: Public Finance Group
Section 11.14 APPOINTMENT OF CO-TRUSTEE. It is the purpose of this
Indenture that there shall be no violation of any law of any jurisdiction
(including particularly the law of the State of Colorado) 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 exercise of
rights under this Indenture or in case of litigation under this Indenture and in
particular in case of the enforcement thereof upon an Event of Default, or in
the 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 hold title to the Trust Estate as herein granted, or
take any action which may be desirable or necessary in connection therewith, it
may be necessary that the Trustee appoint an additional individual or
institution as a separate or co-trustee. The following provisions of this
Section are adapted to those ends.
In the event that the Trustee appoints an additional individual or
institution as a separate or co-trustee, each and every remedy, power, right,
claim, demand, cause of action, immunity, estate, title, interest and lien
expressed or intended by this Indenture to be exercised by or vested in or
conveyed to the Trustee with respect thereto shall be exercisable by and vest in
such separate or co-trustee but only to the extent necessary to enable such
separate or co-trustee to exercise such powers, rights and remedies and every
covenant and obligation necessary to the exercise thereof by such separate or
co-trustee shall run to and be enforceable by either of them; provided, however,
that no co-trustee shall be liable by reason of any act or omission of any other
such co-trustee.
Should any instrument in writing from the Authority be required by the
separate or co-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, any and all such instruments in writing shall, on
request, be executed, acknowledged and delivered by the Authority. In case any
separate or co-trustee or a successor to either shall die, become incapable of
acting, resign or be removed, all the estates, properties, rights, powers,
trusts, duties and obligations of such
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separate or co-trustee, so far as permitted by law, shall vest in and be
exercised by the Trustee until the appointment of a new co-trustee or
successor to such separate or co-trustee.
Section 11.15 ELIGIBLE INSTITUTIONS. The Trustee hereby represents that
it is an Eligible Institution. Every successor trustee or co-trustee which
shall hold any account under this Indenture shall be an Eligible Institution.
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ARTICLE XII
MODIFICATION OF INDENTURE
Section 12.1 MODIFICATION WITHOUT CONSENT OF BONDHOLDERS. The Authority,
when authorized by resolution of the District, and the Trustee, from time to
time and at any time, but with the consent of the Credit Enhancement Provider
(so long as the Credit Enhancement Provider is not in default under the Credit
Enhancement), subject to the conditions and restrictions in this Indenture
contained, may enter into an indenture or indentures supplemental hereto, which
indenture or indentures thereafter shall form a part hereof, for any one or more
or all of the following purposes:
(a) to add to the covenants and agreements of the Authority in this
Indenture contained, other covenants and agreements thereafter to be observed,
or to surrender any right or power herein reserved to or conferred upon the
Authority, provided, that no such covenant, agreement or surrender shall
adversely affect the interests of the Holders of the Bonds;
(b) to evidence the succession of another corporation to the
Authority, or successive successions, and the assumption by a successor
corporation of the covenants and obligations of the Authority in the Bonds and
in this Indenture contained;
(c) to make such provisions for the purpose of curing any ambiguity,
or of curing, correcting or supplementing any defective provision contained in
this Indenture, or in regard to other matters or questions arising under this
Indenture, as the Authority may deem necessary or desirable and not inconsistent
with this Indenture and which shall not materially adversely affect the
interests of the Holders of the Bonds; or
(d) to modify, amend or supplement this Indenture or any indenture
supplemental hereto in such manner as to permit the qualification hereof and
thereof under the TIA or any similar federal statute hereafter in effect, and,
if they so determine, to add to this Indenture or any indenture supplemental
hereto such other terms, conditions and provisions as may be permitted by the
TIA or similar federal statute, and which shall not materially adversely affect
the interests of the Holders of the Bonds.
Any Supplemental Indenture authorized by the provisions of this Section may
be executed by the Authority and the Trustee without the consent of the Holders
of any of the Bonds at the time outstanding, notwithstanding any of the
provisions of Section 12.2, but the Trustee shall not be obligated to enter into
any such Supplemental Indenture which affects the Trustee's own rights, duties
or immunities under this Indenture or otherwise.
Section 12.2 MODIFICATION WITH CONSENT OF BONDHOLDERS. With the consent
(evidenced as provided in Section 14.6) of the Credit Enhancement Provider (so
long as the Credit Enhancement Provider is not in default under the Credit
Enhancement) and the Holders of not less than sixty per cent (60%) in aggregate
principal amount of the Bonds at the time
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Outstanding, the Authority, when authorized by a resolution of the District,
and the Trustee may from time to time and at any time enter into an indenture
or indentures supplemental hereto for the purpose of adding any provisions to
or changing in any manner or eliminating any of the provisions of this
Indenture or of any Supplemental Indenture; provided, however, that no such
Supplemental Indenture shall (1) extend the fixed maturities of the Bonds or
reduce the rate of interest thereon or extend the time of payment of
interest, or reduce the amount of the principal thereof, or reduce any
premium payable on the redemption thereof, without the consent of the Holder
of each Bond so affected, or (2) reduce the aforesaid percentage of Holders
of Bonds whose consent is required for the execution of any such Supplemental
Indenture, or permit the creation of any lien on the Trust Estate prior to or
on a parity with the lien of this Indenture (except as expressly permitted by
Section 3.6) or deprive the Holders of the Bonds of the lien created by this
Indenture upon the Trust Estate, without the consent of the Holders of all of
the Bonds then Outstanding and the Credit Enhancement Provider. Upon receipt
by the Trustee of a Certified Resolution authorizing the execution of any
such Supplemental Indenture, and upon the filing with the Trustee of evidence
of the consent of the Credit Enhancement Provider and Bondholders, as
aforesaid, the Trustee shall join with the Authority in the execution of such
Supplemental Indenture unless such Supplemental Indenture affects the Trustee's
own rights, duties or immunities under this Indenture or otherwise, in which
case the Trustee may in its discretion, but shall not be obligated to, enter
into such Supplemental Indenture.
It shall not be necessary for the consent of the Bondholders under this
Section to approve the particular form of any proposed Supplemental Indenture,
but it shall be sufficient if such consent shall approve the substance thereof.
Promptly after the execution by the Authority and the Trustee of any
Supplemental Indenture pursuant to the provisions of this Section, the Authority
shall publish a notice, setting forth in general terms the substance of such
Supplemental Indenture, at least once in a Financial Newspaper or Journal. Any
failure of the Authority to give such notice, or any defect therein, shall not,
however, in any way impair or affect the validity of any such Supplemental
Indenture.
Section 12.3 EFFECT OF SUPPLEMENTAL INDENTURE. Upon the execution of any
Supplemental Indenture pursuant to the provisions of this Article this Indenture
shall be and be deemed to be modified and amended in accordance therewith and
respective rights, duties and obligations under this Indenture of the Authority,
the Trustee and all Holders of outstanding Bonds shall thereafter be determined,
exercised and enforced hereunder subject in all respects to such modification
and amendment, and all the terms and conditions of any such Supplemental
Indenture shall be and be deemed to be part of the terms and conditions of this
Indenture for any and all purposes. Every amendment or supplement to this
Indenture or the Bonds shall be set forth in an amended or supplemented
Indenture that complies with the TIA as then in effect.
Section 12.4 OPINION OF COUNSEL AS TO SUPPLEMENTAL INDENTURE. Subject to
the provision of Section 11.1, the Trustee may receive an Opinion of Counsel as
conclusive evidence that any Supplemental Indenture executed pursuant to the
provision of this Article complies with the requirements of this Article.
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Section 12.5 NOTATION OF MODIFICATION ON BONDS: PREPARATION OF NEW BONDS.
Bonds authenticated and delivered after the execution of any Supplemental
Indenture pursuant to the provisions of this Article may bear a notation, in
form approved by the Trustee, as to any matter provided for in such Supplemental
Indenture, and if such Supplemental Indenture shall so provide, new Bonds, so
modified as to conform, in the opinion of the Trustee and the District, to any
modification of this Indenture contained in any such Supplemental Indenture, may
be prepared by the Authority, authenticated by the Trustee and delivered without
cost to the Holders of the Bonds then Outstanding, upon surrender for
cancellation of such Bonds, in equal aggregate principal amounts.
Section 12.6 AMENDMENTS TO OPERATING AGREEMENT AND INTERGOVERNMENTAL
AGREEMENT. The Operating Agreement and the Intergovernmental Agreement may be
amended only with the consent of the Trustee and the Credit Enhancement Provider
(so long as the Credit Enhancement Provider is not in default under the Credit
Enhancement). The Trustee shall consent to such amendments on the same basis as
it consents to amendments to this Indenture.
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ARTICLE XIII
DEFEASANCE
Section 13.1 DISCHARGE OF THIS INDENTURE. When all Bonds secured hereby
shall be paid in accordance with their terms (or payment of such Bonds has been
provided for in the manner set forth in the following paragraph) together with
all other sums payable hereunder, including, inter alia, amounts due and payable
to the Trustee, then this Indenture and the Trust Estate and all rights granted
hereunder (except for any provisions which may continue to apply as described in
the next paragraph) shall thereupon cease, terminate and become void and be
discharged and satisfied. In such event the Trustee shall assign and transfer
to the Authority (or to the Credit Enhancement Provider if amounts are then due
under the Reimbursement Agreement or the Deed of Trust) all property then held
by the Trustee hereunder and shall execute such documents as may be reasonably
required by the Authority (or by the Credit Enhancement Provider if amounts are
then due under the Reimbursement Agreement or the Deed of Trust) or shall turn
over to the Authority (or to the Credit Enhancement Provider if amounts are then
due under the Reimbursement Agreement or the Deed of Trust) any surplus in any
fund, except the Rebate Fund.
Payment of any outstanding Bond prior to the maturity or redemption date
thereof shall be deemed to have been provided for within the meaning and with
the effect expressed in this Section if (i) in case said Bond is to be redeemed
on any date prior to its maturity, the Authority shall have given to the Trustee
in form satisfactory to it irrevocable instructions to give on a date in
accordance with the provisions of notice of redemption of such Bond on said
redemption date, (ii) there shall have been deposited with the Trustee either
Available Moneys in an amount which shall be sufficient or noncallable Federal
Securities the principal of and the interest on which when due, and without any
reinvestment thereof, will provide moneys which, together with the Available
Moneys, if any, deposited with or held by the Trustee at the same time and
available therefor, shall be sufficient, as verified by an Accountant's report,
to pay when due the principal of, premium, if any, and interest due and to
become due on said Bond on and prior to the redemption date or maturity date
thereof, as the case may be, (iii) the Trustee shall have a valid first priority
security interest in such Federal Securities and all proceeds thereof and
distributions thereon and such Federal Securities shall be in the name of the
Trustee for the benefit of the Holders, (iv) the Trustee shall have received an
opinion of counsel to the effect that (1) the Federal Securities have been duly
and validly assigned and delivered to the Trustee for the benefit of the
Holders, and (2) the security interest of the Trustee for the benefit of the
Holders is a first priority security interest perfected to the extent perfection
is permissible under the laws of the state where the collateral is located, (v)
the Trustee will receive an opinion of bond counsel to the effect that
defeasance in accordance with the provisions of this Article XIII shall not
adversely affect the exclusion from gross income of interest on the Bonds for
federal income tax purposes, (vi) the Trustee shall have received written
confirmation from the Rating Agency that the defeasance will not result in a
down grade, withdrawal or qualification of the ratings then assigned to the
Bonds, and (vii) in the event said Bond is not by its terms subject to
redemption within the next 35 days, the Authority shall have given the Trustee
in form
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satisfactory to it irrevocable instructions to give, as soon as practicable
in the same manner as the notice of redemption is given pursuant hereto, a
notice to the Registered Owner of such Bond that the deposit required by (ii)
above has been made with the Trustee and that payment of said Bond has been
provided for in accordance with this Section and stating such maturity or
redemption date upon which moneys are to be available for the payment of the
principal of and interest on said Bond. Neither such securities nor moneys
deposited with the Trustee pursuant to this Section or principal or interest
payments on any such securities shall be withdrawn or used for any purpose
other than the payment of the principal of, premium, if any, and interest on
the Bonds, but shall be held in trust for such payment; provided any cash
received from such principal or interest payments on such securities
deposited with the Trustee, if not then needed for such purpose, shall, to
the extent practicable, be reinvested in noncallable Federal Securities
maturing at times and in amounts sufficient to pay when due the principal of
and interest to become due on such Bonds on or prior to such redemption date
or maturity date thereof, as the case may be. At such time as payment of a
Bond has been provided for as aforesaid, such Bond shall no longer be secured
by or entitled to the benefits of this Indenture, except for the purpose of
any payment from such moneys or securities deposited with the Trustee and
except for the provisions of this Indenture set forth in the second paragraph
of this Section 13.1.
The release of the obligations of the Authority under this Section shall be
without prejudice to the right of the Trustee to be paid reasonable compensation
for all services rendered by it hereunder and all its reasonable expenses,
charges and other disbursements incurred on or about the administration of the
trust hereby created and the performance of its powers and duties hereunder.
Section 13.2 DISCHARGE OF LIABILITY ON BONDS. Upon the deposit with the
Trustee, in trust, at or before maturity, of money or Federal Securities in the
necessary amount to pay or redeem outstanding Bonds (whether upon or prior to
their maturity or the redemption date of such Bonds), provided that if such
Bonds are to be redeemed prior to the maturity thereof, notice of such
redemption shall have been given as in Article VIII provided or provision
satisfactory to the Trustee shall have been made for the giving of such notice,
all liability of the Authority in respect of such Bonds shall cease, determine
and be completely discharged and the Holders thereof shall thereafter be
entitled only to payment out of the money or Federal Securities deposited with
the Trustee as aforesaid for their payment, subject, however, to the provisions
of Section 13.3.
Section 13.3 PAYMENT OF BONDS AFTER DISCHARGE OF INDENTURE.
Notwithstanding any provisions of this Indenture, any moneys deposited with the
Trustee in trust for the payment of the principal of, or interest or premium on,
any Bonds and remaining unclaimed for two years after the principal of or
interest on all the outstanding Bonds has become due and payable (whether at
maturity or upon call for redemption or by declaration as provided in this
Indenture) shall then be repaid to the Authority, and the Holders of such Bonds
shall thereafter be entitled to look only to the Authority for payment thereof,
and all liability of the Trustee with respect to such moneys shall thereupon
cease; provided, however, that before the repayment of such moneys to the
Authority as aforesaid, the Trustee or Paying Agent, as the case may be, shall
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(at the cost of the Authority) first publish at least once in a Financial
Newspaper or Journal, a notice, in such form as may be deemed appropriate by the
Trustee in respect of the Bonds so payable and not presented and in respect of
the provisions relating to the repayment to the Authority of the moneys held for
the payment thereof. In the event of the repayment of any such moneys to the
Authority as aforesaid, the Holders of the Bonds in respect of which such moneys
were deposited shall thereafter be deemed to be unsecured creditors of the
Authority for amounts equivalent to the respective amounts deposited for the
payment of such Bonds and so repaid to the Authority (without interest thereon).
Section 13.4 RIGHTS OF THE DISTRICT.
(a) The Authority covenants and agrees that all activities of the
Authority shall be undertaken for the benefit of the District. Upon termination
of this Indenture and discharge of the obligations of the Authority, the
District shall be entitled to acquire title to the Property without cost.
(b) The District is hereby granted the right to obtain, at any time,
unencumbered fee title and exclusive possession of the Property, and any
additions to the Property by (1) placing into escrow an amount that will be
sufficient to defease such obligations in accordance with the requirements of
Section 13.1 hereof, and the other requirements of Section 13.1 have been
satisfied, (2) paying reasonable costs incident to the defeasance, (3) paying
any amount then due by the Authority to the Credit Enhancement Provider pursuant
to the Reimbursement Agreement and the Deed of Trust, and (4) paying or
defeasing any obligation issued or incurred pursuant to Section 3.6 hereof. The
District, at any time before its defeases such obligations, shall not agree or
otherwise be obligated to convey any interest in the Project to any person
(including the United States of America or its agencies or instrumentalities)
for any period extending beyond or beginning after the District defeases such
obligations. In addition, the District shall not agree or otherwise be
obligated to convey a fee interest in the Project to any person who was a user
thereof (or a related person) before the defeasance within 90 days after the
District defeases such obligations.
(c) The Authority shall immediately cancel all encumbrances on the
Project, including all leases and management agreements. Any lease, management
contract, or similar encumbrance on the Project will be considered immediately
cancelled if the lessee, management company, or other user vacates the Project
within a reasonable time, generally not to exceed 90 days, after the date the
District exercises its rights under paragraph (b) above.
(d) In addition to the foregoing, if the Authority defaults in its
payments under obligations described in Section 13.4(b) above, the District is
hereby granted an exclusive option to purchase the Project for the amount of the
outstanding indebtedness and accrued interest to the date of default. The
Trustee shall provide notice to the District of any Event of Default within 30
days of the occurrence thereof. The District shall have (a) 90 days from the
date it is notified by the Trustee of the default in which to exercise the
option (which shall be exercised
92
by giving written notice of such exercise to the Trustee and the Authority),
and (b) 90 days from the date it exercises the option to purchase the Property.
(e) Unencumbered fee title to the Project and any additions thereto
and exclusive possession and use thereof will vest in the District without
demand or further action on its part when all obligations described in Section
13.4(b) above (including the Bonds) are discharged. For purposes of this
paragraph (e), such obligations will be discharged when (i) cash is available at
the place of payment on the date that the obligations are due (whether at
maturity or upon call for redemption) and (ii) interest ceases to accrue on the
obligations. All leases, management contracts and similar encumbrances on the
Project shall terminate upon discharge of said obligations. Encumbrances that
do not significantly interfere with the enjoyment of such property, such as most
easements granted to utility companies, are not considered encumbrances for this
Section 13.4.
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ARTICLE XIV
MISCELLANEOUS
Section 14.1 SUCCESSORS OF AUTHORITY. All the covenants, stipulations,
promises and agreements in this Indenture contained, by or on behalf of the
Authority, shall bind and inure to the benefit of its successors and assigns,
whether so expressed or not.
Section 14.2 LIMITATION OF RIGHTS TO PARTIES AND BONDHOLDERS. Nothing in
this Indenture or in the Bonds expressed or implied is intended or shall be
construed to give to any person other than the Authority, the Trustee, the
Credit Enhancement Provider and the Holders of the Bonds issued hereunder, any
legal or equitable right, remedy or claim under or in respect of this Indenture
or any covenant, condition or provision therein or herein contained; and all
such covenants, conditions and provisions are and shall be held to be for the
sole and exclusive benefit of the Authority, the Trustee, the Credit Enhancement
Provider and the Holders of the Bonds issued hereunder.
Section 14.3 WAIVER OF NOTICE. Whenever in this Indenture the giving of
notice by mail or otherwise is required, the giving of such notice may be waived
in writing by the person entitled to receive such notice and in any such case
the giving or receipt of such notice shall not be a condition precedent to the
validity of any action taken in reliance upon such waiver.
Section 14.4 DESTRUCTION OF BONDS. Whenever in this Indenture provision
is made for the cancellation by the Trustee and the delivery to the Authority of
any Bonds, the Trustee may, in lieu of such cancellation and delivery, destroy
such Bonds and deliver a certificate of the destruction to the Authority.
Section 14.5 SEVERABILITY OF INVALID PROVISIONS. In case any one or more
of the provisions contained in this Indenture or in the Bonds shall for any
reason be held to be invalid, illegal or unenforceable in any respect, such
invalidity, illegality or unenforceability shall not affect any other provision
of this Indenture, but this Indenture shall be construed as if such invalid or
illegal or unenforceable provision had never been contained herein.
Section 14.6 EVIDENCE OF RIGHTS OF BONDHOLDERS. (a) Any request,
consent or other instrument required by this Indenture to be signed and executed
by Bondholders may be in any number of concurrent writings of substantially
similar tenor and may be signed or executed by such Bondholders in person or by
agent or agents duly appointed in writing. Proof of the execution of any such
request, consent or other instrument or of a writing appointing any such agent,
shall be sufficient for any purpose of this Indenture and shall be conclusive in
favor of the Trustee and of the Authority if made in the manner provided in this
Section.
(b) The fact and date of the execution by any person of any such
request, consent or other instrument or writing may be proved by the affidavit
of a witness of such execution or by the certificate of a notary public or other
officer of any jurisdiction, authorized
94
by the laws thereof to take acknowledgments of deeds, certifying that the
person signing such request, consent or other instrument acknowledged to him
the execution thereof.
The ownership of Bonds shall be proved by the register of such Bonds. Any
request, consent or vote of the Holder of any Bond shall bind every future
Holder of the same Bond and the Holder of every Bond issued in exchange therefor
or in lieu thereof, in respect of anything done or suffered to be done by the
Trustee or the Authority in pursuance of such request, consent or vote.
(c) In determining whether the Holders of the requisite aggregate
principal amount of Bonds have concurred in any demand, request, direction,
consent or waiver under this Indenture, Bonds which are owned by the Authority,
or by any other obligor on the Bonds, or by any person directly or indirectly
controlling or controlled by, or under direct or indirect common control with,
the Authority or any other obligor on the Bonds, shall be disregarded and deemed
not to be outstanding for the purpose of any such determination, provided, that,
for the purpose of determining whether the Trustee shall be protected in relying
on any such demand, request, direction, consent or waiver, only Bonds which the
Trustee knows to be so owned shall be disregarded. Bonds so owned which have
been pledged in good faith may be regarded as outstanding for the purposes of
this subsection (c) if the pledgee shall establish to the satisfaction of the
Trustee the pledgee's right to vote such Bonds and that the pledgee is not a
person directly or indirectly controlling or controlled by or under direct or
indirect common control with the Authority or any other obligor on the Bonds.
In case of a dispute as to such right, any decision by the Trustee taken upon
the advice of counsel shall be full protection to the Trustee.
(d) In lieu of obtaining any demand, request, direction, consent or
waiver in writing, the Trustee may call and hold a meeting of Bondholders upon
such notice and in accordance with such rules and regulations as the Trustee
considers fair and reasonable for the purpose of obtaining any such action.
Section 14.7 CONTINUING DISCLOSURE. The Authority shall undertake,
pursuant to the Continuing Disclosure Agreement, to provide certain financial
information and operating data and notices of material events as described in
the Continuing Disclosure Agreement. Any failure by the Authority to comply
with the provisions of the Continuing Disclosing Agreement shall not be deemed
an Event of Default hereunder, and the sole remedy under the Continuing
Disclosure Agreement in the event of any such failure by the Authority to comply
with the provisions of the Continuing Disclosure Agreement shall be an action to
compel performance.
Section 14.8 ARTICLE AND SECTION HEADINGS. The headings or titles of the
several Articles and Sections hereof, and any table of contents appended to
copies hereof, shall be solely for convenience of reference and shall not affect
the meaning, construction or effect of this Indenture.
All references herein to "Articles", "Section" and other subdivisions are
to the corresponding Articles, Sections or subdivisions of this Indenture; and
the words "herein",
95
"hereof", "hereunder" and other words of similar import refer to this
Indenture as a whole and not to any particular Article, Section of
subdivision hereof.
Section 14.9 EXECUTION IN SEVERAL COUNTERPARTS. This Indenture may be
executed in any number of counterparts and each of such counterparts shall for
all purposes be deemed to be an original; and all such counterparts, or as many
of them as the Authority and the Trustee shall preserve undestroyed, shall
together constitute but one and the same instrument.
Section 14.10 TRUST INDENTURE ACT CONTROLS. If any provision of this
Indenture limits, qualifies or conflicts with the duties imposed by TIA Section
318(c), the duties imposed by TIA Section 318(c) shall control.
[Balance of Page Intentionally Left Blank]
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IN WITNESS WHEREOF, the Castle Rock Ranch Public Improvements Authority has
caused this Indenture to be signed in its corporate name by its President and
attested by its Secretary and SouthTrust Bank of Alabama, National Association,
in token of its acceptance of the trusts created hereunder, has caused this
Indenture to be signed and attested in its corporate name by its authorized
officer, all as of the day and year first above written.
CASTLE ROCK RANCH PUBLIC
IMPROVEMENTS AUTHORITY
(SEAL)
Attest: By: /s/ C. (Illegible)
------------------------------------
President
(Illegible)
--------------------------
Secretary
SOUTHTRUST BANK OF ALABAMA,
NATIONAL ASSOCIATION
By: (Illegible)
----------------------------------
Authorized Officer
[Signature page to Indenture of Trust]
EXHIBIT A
CERTIFICATE TO BE DELIVERED UPON EXCHANGE OR REGISTRATION OF TRANSFER OF BONDS
Re: Castle Rock Ranch Public Improvements Authority,
Public Facilities Revenue Bonds
This Certificate relates to $____________ principal amount of Bonds held in
* _________ book-entry or *_____________ definitive form by _______________ (the
"Transferor").
The Transferor*:
/ / has requested the Trustee by written order to deliver in exchange for
its beneficial interest in the Book-Entry Bond held by the Depository a Bond or
Bonds in definitive, registered form of authorized denominations in an aggregate
principal amount equal to its beneficial interest in such Book-Entry Bond (or
the portion thereof indicated above); or
/ / has requested the Trustee by written order to exchange or register the
transfer of a Bond or Bonds.
In connection with such request and in respect of each such Bond, the
Transferor does hereby certify that Transferor is familiar with the Indenture
relating to the above captioned Bonds and as provided in such Indenture, the
transfer of this Bond does not require registration under the Securities Act (as
defined below) because:*
/ / Such Bond is being acquired for the Transferor's own account, without
transfer (in satisfaction of Section _________ or Section ____________ of the
Indenture).
/ / Such Bond is being transferred to a "qualified institutional buyer"
(as defined in Rule 144A under the Securities Act of 1933, as amended (the
"Securities Act")) in reliance on Rule 144A (in satisfaction of Section
___________, Section ___________ or Section __________ of the Indenture) or
pursuant to an exemption from registration in accordance with Rule 904 under the
Securities Act (in satisfaction of Section __________ or Section _________ of
the Indenture.)
----------------------
*Check applicable box.
A-1
/ / Such Bond is being transferred in accordance with Rule 144 under the
Securities Act, or pursuant to an effective registration statement under the
Securities Act (in satisfaction of Section ________ or Section ______ of the
Indenture).
/ / Such Bond is being transferred in reliance on and in compliance with
an exemption from the registration requirements of the Securities Act, other
than Rule 144A, 144 or Rule 904 under the Securities Act. An Opinion of Counsel
to the effect that such transfer does not require registration under the
Securities Act accompanies this Certificate (in satisfaction of Section ________
or Section ________ of the Indenture).
[INSERT NAME OF TRANSFEROR]
By:
----------------------------------
Date:
--------------------
----------------------
*Check applicable box.
A-2
SCHEDULE I
Fees of the Trustee payable pursuant to this Schedule I shall be $5,000 per
year payable in equal monthly installments commencing March 1, 1998.
A-3