EXHIBIT 10.41
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INDENTURE OF TRUST
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Between
THE CITY OF SPRINGDALE, ARKANSAS
and
REGIONS BANK
Dated as of October 1, ▇▇▇▇
▇▇▇ ▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇
INDUSTRIAL DEVELOPMENT REFUNDING REVENUE BONDS
(ADVANCED ENVIRONMENTAL RECYCLING TECHNOLOGIES, INC. PROJECT)
SERIES 2003
TABLE OF CONTENTS
(This Table of Contents is not a part of this Indenture of Trust and is only for
convenience of reference.)
Page
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ARTICLE I DEFINITIONS; BOND INDENTURE TO CONSTITUTE CONTRACT............................................. 14
Section 1.1 Definitions................................................................... 14
Section 1.2 Indenture to Constitute Contract.............................................. 30
ARTICLE II AUTHORIZATION, TERMS.......................................................................... 31
Section 2.1 Authorized Amount of Bonds.................................................... 31
Section 2.2 All Bond Equally and Ratably
Secured by Trust Estate Except as Expressly Provided Herein; Limited
Obligation of Bonds and Pledges Securing the Same............................. 31
Section 2.3 Authorization of Bonds........................................................ 33
Section 2.4 Execution of Bonds............................................................ 34
Section 2.5 Registration, Transfer and Exchange of Bonds, Persons
Treated as Owner.............................................................. 35
Section 2.6 Lost, Stolen, Destroyed and Mutilated Bonds................................... 35
Section 2.7 Delivery of Bonds............................................................. 36
Section 2.8 Trustee's Authentication Certificate.......................................... 36
Section 2.9 Cancellation and Destruction of Bonds by the Trustee.......................... 37
Section 2.10 Temporary Bonds............................................................... 37
Section 2.11 Transfer Restrictions......................................................... 37
ARTICLE III REVENUES AND FUNDS........................................................................... 38
Section 3.1 Pledge of Trust Estate........................................................ 38
Section 3.2 Establishment of Funds and Accounts........................................... 38
Section 3.3 Payments into the Bond Principal Fund and
the Bond Interest Fund........................................................ 38
Section 3.4 Use of Monies in the Bond Principal Fund and
the Bond Interest Fund........................................................ 39
Section 3.5 Custody of the Bond Principal Fund and the
Bond Interest Fund............................................................ 39
Section 3.6 Payments Into the Reserve Fund................................................ 39
Section 3.7 Uses of Moneys in the Reserve Fund............................................ 40
Section 3.8 Custody of the Reserve Fund................................................... 40
Section 3.9 Project Fund.................................................................. 40
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Section 3.10 Custody of the Project Fund................................................... 42
Section 3.11 Nonpresentment of Bonds....................................................... 43
Section 3.12 Monies to Be Held in Trust.................................................... 43
Section 3.13 Repayment From the Funds...................................................... 43
Section 3.14 Creation of Additional Accounts and Subaccounts;
Transfers of Monies Among Funds............................................... 43
Section 3.15 Rebate Fund................................................................... 44
Section 3.16 Rebate Deposits............................................................... 44
Section 3.17 Rebate Disbursements.......................................................... 44
Section 3.18 Tax Certificates.............................................................. 45
Section 3.19 Refunding..................................................................... 45
Section 3.20 Cost of Issuance Fund......................................................... 46
Section 3.21 Custody of the Cost of Issuance Fund.......................................... 46
ARTICLE IV COVENANTS OF THE CITY......................................................................... 46
Section 4.1 Performance of Covenants...................................................... 46
Section 4.2 Instruments of Further Assurance.............................................. 46
Section 4.3 Payment of Principal, Premium, If Any, and Interest........................... 46
Section 4.4 Conditions Precedent.......................................................... 47
Section 4.5 Supplemental Indentures; Recordation or Filing of
Security Instruments.......................................................... 47
Section 4.6 Rights Under the Loan Agreement............................................... 47
ARTICLE V REDEMPTION OF SERIES 2003 BONDS PRIOR TO MATURITY.............................................. 48
Section 5.1 Redemption of Bonds Upon Occurrence of Certain Events......................... 48
Section 5.2 Redemption of Bonds Upon a Determination of Taxability........................ 48
Section 5.3 Sinking Fund.................................................................. 48
Section 5.4 Method of Selecting Bonds..................................................... 49
Section 5.5 Notice of Redemption.......................................................... 50
Section 5.6 Bonds Due and Payable on Redemption Date;
Interest Ceases to Accrue..................................................... 51
Section 5.7 Cancellation.................................................................. 51
Section 5.8 Partial Redemption of Bonds................................................... 51
ARTICLE VI INVESTMENTS................................................................................... 52
Section 6.1 Investment of Funds........................................................... 52
Section 6.2 Arbitrage..................................................................... 52
Section 6.3 Allocation and Transfers of Investment Income................................. 53
ARTICLE VII DISCHARGE OF INDENTURE....................................................................... 54
Section 7.1 Discharge of This Indenture................................................... 54
Section 7.2 Liability of City Not Discharged.............................................. 55
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ARTICLE VIII DEFAULTS AND REMEDIES....................................................................... 56
Section 8.1 Events of Default............................................................. 56
Section 8.2 Remedies on Events of Default................................................. 56
Section 8.3 Majority of Bondholders and Holders of Parity Indebtedness May Control
Proceedings................................................................... 58
Section 8.4 Rights and Remedies of Bondholders............................................ 58
Section 8.5 Application of Monies......................................................... 58
Section 8.6 Trustee May Enforce Rights Without Bonds...................................... 61
Section 8.7 Trustee to File Proofs of Claim in Receivership, Etc.......................... 61
Section 8.8 Delay or Omission No Waiver................................................... 61
Section 8.9 No Waiver of one Default to Affect Another.................................... 61
Section 8.10 Discontinuance of Proceedings on Default; Position
of Parties Restored........................................................... 61
Section 8.11 Waivers of Events Of Default.................................................. 61
Section 8.12 Trustee to Notify Parties of Default and Disclose
Information Relating to Default............................................... 61
ARTICLE IX CONCERNING THE TRUSTEE........................................................................ 62
Section 9.1 Duties of the Trustee......................................................... 62
Section 9.2 Fee and Expenses of Trustee................................................... 64
Section 9.3 Resignation or Replacement of Trustee......................................... 65
Section 9.4 Conversion, Consolidation or Merger of Trustee................................ 66
Section 9.5 Trustee to Retain Information................................................. 66
Section 9.6 Guaranty Agreement............................................................ 66
ARTICLE X SUPPLEMENTAL INDENTURES AND AMENDMENTS OF THE LOAN AGREEMENT................................... 68
Section 10.1 Supplemental Indentures....................................................... 68
Section 10.2 Amendments, etc., of the Loan Agreement....................................... 69
ARTICLE XI MISCELLANEOUS................................................................................. 70
Section 11.1 Evidence of Signature of Bondholders and Ownership of Bonds................... 70
Section 11.2 Parties Interested Herein..................................................... 70
Section 11.3 Titles, Headings, Etc......................................................... 70
Section 11.4 Severability.................................................................. 70
Section 11.5 Governing Law................................................................. 71
Section 11.6 Execution in Counterparts..................................................... 71
Section 11.7 Notices....................................................................... 71
Section 11.8 Payments Due on Nonbusiness Days.............................................. 72
Section 11.9 Provision of General Application.............................................. 72
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INDENTURE OF TRUST
This INDENTURE OF TRUST, dated as of October 1, 2003 (as supplemented
and amended, this "Indenture"), is executed by and between the CITY OF
SPRINGDALE, ARKANSAS (the "City"), a body politic and corporate, and REGIONS
BANK, having a corporate trust office in Little Rock, Arkansas, duly organized
and existing under the laws of the State of Alabama, as Trustee (the "Trustee"),
being authorized to accept and execute trusts of the character herein set out
under and by virtue of the laws of the State of Alabama.
WITNESSETH:
WHEREAS, Advanced Environmental Recycling Technologies, Inc., a
corporation duly organized and existing under the laws of the State of Delaware
(the "Company"), requested that the City finance the cost of certain solid waste
disposal facilities located within the City, in accordance with that certain
Mortgage and Loan Agreement, dated as of October 1, 1999 (as amended, the
"Original Loan Agreement"), between the City and the Company; and
WHEREAS, Title 14, Chapter 267 of the Arkansas Code of 1987, Annotated,
and Title 14, Chapter 164, Subchapter 2 of the Arkansas Code of 1987, Annotated
(the "Act"), authorizes the City to finance such costs; and
WHEREAS, in order to finance such costs, the City issued its City of
Springdale, Arkansas Industrial Development Revenue Bonds (Advanced
Environmental Recycling Technologies, Inc. Project) Series 1999A (the "Series
1999 Bonds") pursuant to and secured by an Indenture of Trust, dated as of
October 1, 1999 (as amended, the "Original Indenture"), between the City and
First National Bank of Springdale, as trustee, which trustee has been succeeded
to in interest by the Trustee (as Trustee under the Original Indenture, the
"Original Trustee"); and
WHEREAS, the rights of the City in the Original Loan Agreement were
assigned by the City to the Original Trustee pursuant to an Assignment of
Mortgage, dated as of October 1, 1999; and
WHEREAS, in order to provide funds to refund, redeem and discharge the
Series 1999 Bonds, the City shall issue its City of Springdale, Arkansas
Industrial Development Refunding Revenue Bonds (Advanced Environmental Recycling
Technologies, Inc. Project) Series 2003 (the "Bonds") pursuant to and secured by
this Indenture; and
WHEREAS, the City and the Company shall execute a Mortgage and Loan
Agreement, dated as of the date hereof (the "Loan Agreement"), pursuant to which
the City will loan the proceeds of the Bonds to the Company, and the Company
will obligate itself to repay such loan to the City; and
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WHEREAS, the Bonds shall be secured as provided herein and in the Loan
Agreement; and
WHEREAS, the Bonds and the Trustee's authentication certificate are to
be substantially in the following form, with such necessary or appropriate
variations, omissions and insertions as permitted or required by this Indenture:
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(FORM OF SERIES 2003 BOND)
**Unless this Bond is presented by an authorized representative of The
Depository Trust Company, a New York corporation ("DTC"), to the City or its
agent for registration of transfer, exchange, or payment, and any Bond issued is
registered in the name of Cede & Co. or in such other name as is requested by an
authorized representative of DTC (and any payment is made to Cede & Co. or to
such other entity as is 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.**
Except as provided in the Indenture herein described, upon any transfer of a
Beneficial Ownership Interest (as defined in the Indenture) in the Series 2003
Bond, the purchaser thereof shall be deemed to have certified to the Trustee and
acknowledged, represented and agreed with the Company and the Underwriter (as
such terms are defined in the Indenture described herein) that such purchaser is
acquiring the Series 2003 Bond for its owns account and that it is (i) a
"qualified institutional buyer" within the meaning of Rule 144A promulgated
under the Securities Act of 1933, as amended (the "1933 Act"), or (ii) an
institutional "accredited investor," as defined in Rule 501(a)(1), (2), (3), or
(7) of the 1933 Act.
THE CITY OF SPRINGDALE, ARKANSAS
INDUSTRIAL DEVELOPMENT REFUNDING REVENUE BONDS
(ADVANCED ENVIRONMENTAL RECYCLING TECHNOLOGIES, INC. PROJECT)
SERIES 2003
No. R- $____________________
Original
Interest Rate Maturity Date Issue Date CUSIP
------------- ------------- ---------- -----
7.00% October 1, 2017 October __, 2003 850260 DQ0
REGISTERED OWNER: CEDE & CO.
PRINCIPAL AMOUNT:
THE CITY OF SPRINGDALE, ARKANSAS, a public body politic and corporate,
organized and existing under the laws of the State of Arkansas (the "City"), for
value received, hereby promises to pay, from the sources hereinafter described,
the Principal Amount stated
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above, in lawful money of the United States of America, to the Registered Owner
stated above or the registered assigns, on the Maturity Date stated above
(unless this Bond shall have been called for prior redemption, in which case on
such redemption date), upon the presentation and surrender hereof at the
designated corporate trust office of Regions Bank, as Trustee (the "Trustee"),
in Little Rock, Arkansas, or at the principal office of its successor in trust
under an Indenture of Trust, dated as of October 1, 2003 (the "Indenture"),
between the City and the Trustee, and to pay, from like sources, to the
Registered Owner stated above as of the fifteenth day of the calendar month
prior to an Interest Payment Date (the "Regular Record Date"), by check or draft
mailed by the Trustee on the Interest Payment Date to such Registered Owner at
his address as it last appears on the registration books kept for that purpose
at the office of the Trustee, interest on said sum in like coin or currency from
the Original Issue Date stated above or from the most recent date from which
interest has been paid or duly provided for, at the Interest Rate stated above,
payable semiannually on April 1 and October 1 of each year, commencing April 1,
2004, on the basis of a 360-day year composed of twelve 30-day months, until
payment of the principal hereof has been made or provided for. The Trustee may
make payments of principal at maturity or upon redemption and payment of
interest by wire transfer within the United States to any owner of at least
$1,000,000 in aggregate principal amount of the Bonds requesting the same in
writing addressed to the Trustee as provided in this Indenture. Any interest not
timely paid or duly provided for shall cease to be payable to the Registered
Owner hereof at the close of business on the applicable Regular Record Date and
shall be payable to the Registered Owner hereof at the close of business on a
Special Record Date (as defined in the Indenture) for the payment of any
defaulted interest. Such Special Record Date shall be fixed by the Trustee
whenever monies become available for payment of the defaulted interest, and
notice of such Special Record Date shall be given to the Registered Owner hereof
not less than ten days prior thereto. If the date for making any payment or the
last day for performance of any act or the exercise of any right, as provided in
this Bond, shall not be a "Business Day" as defined in this Indenture, such
payment may be made or act performed or right exercised on the next succeeding
Business Day with the same force and effect as if done on the nominal date
provided in this Bond. Notwithstanding anything herein to the contrary, when
this Bond is registered in the name of a Depository (as defined in this
Indenture) or its nominee, the principal and redemption price of and interest on
this Bond shall be payable in same day or federal funds delivered or transmitted
to the Depository or its nominee.
This Bond is one of a duly authorized series of bonds of the City
designated as "City of Springdale, Arkansas Industrial Development Refunding
Revenue Bonds (Advanced Environmental Recycling Technologies, Inc Project)
Series ▇▇▇▇" (▇▇▇ "▇▇▇▇▇"). The Bonds have been issued under Title 14, Chapter
267 of the Arkansas Code of 1987, Annotated, and Title 14, Chapter 164,
subchapter 2 of the Arkansas Code of 1987, Annotated (together, the "Act"), to
refund and pay the City of Springdale, Arkansas Industrial Development Revenue
Bonds (Advanced Environmental Recycling Technologies, Inc. Project) Series 1999A
(the "Series 1999 Bonds"), originally issued to finance and refinance costs of
acquiring, constructing and equipping certain solid waste recovery and
manufacturing facilities (the "Facilities"); to fund
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a reserve fund with respect to the Series 1999 Bonds; and to fund certain costs
of issuing the Series 1999 Bonds.
This Bond is a limited obligation of the City payable solely from and
secured by (a) a pledge of certain rights of the City under and pursuant to the
Mortgage and Loan Agreement dated as of October 1, 2003 (the "Loan Agreement"),
between the City and Advanced Environmental Recycling Technologies, Inc. (the
"Company"), (b) a pledge of the Funds and Pledged Revenues other than the Rebate
Fund (all as defined in the Indenture), (c) an assignment of the City's mortgage
on the Property (as defined in the Indenture) (including personal property and
equipment) and of the City's security interest in the Pledged Revenues (as
defined in the Indenture) of the Company, and (d) a mortgage interest on
facilities of the Company located in Lowell, Arkansas (the "Lowell Facilities"),
(e) a deed of trust interest on facilities of the Company located in Junction,
Texas (the "Junction Facilities"), and (f) a Patent and Trademark Security
Agreement from the Company for the benefit of the Trustee.
This Bond shall not constitute or become an indebtedness, a debt or a
liability of or a charge against the general credit or taxing power of the State
of Arkansas or any county, city, city and county, town, school district, or
other subdivision of the State of Arkansas or of any other political subdivision
or body corporate and politic within the State of Arkansas other than the City
(but only to the extent of the revenues pledged in this Indenture), and neither
the State of Arkansas, nor any county, city, city and county, town, school
district or other subdivision of the State of Arkansas, except the City to the
extent provided above, shall be liable hereon; nor shall this Bond constitute
the giving, pledging, or loaning of the faith and credit of the State of
Arkansas, or any county, city, city and county, town, school district or other
subdivision of the State of Arkansas or of any other political subdivision or
body corporate and politic within the State of Arkansas, but shall be payable
solely from the funds pledged therefor. The issuance of this Bond shall not,
directly or indirectly or contingently, obligate the State of Arkansas or any
subdivision of the State of Arkansas nor empower the City to levy or collect any
form of taxes or assessments therefor or to create any indebtedness payable out
of taxes or assessments or make any appropriation for the payment of this Bond,
and such appropriation or levy is prohibited. The Bonds and the interest thereon
do not constitute an indebtedness of the City within the meaning of any
constitutional or statutory limitation.
Reference is hereby made to the Indenture and the Loan Agreement for a
description of the revenues pledged, the nature and extent of the security, the
rights, duties and obligations of the City, the Trustee and the Registered
Owners of the Bonds and the terms and conditions upon which the Bonds are, and
are to be, secured, and a statement of the rights, duties, immunities and
obligations of the City and the Trustee.
The Bonds are subject to optional redemption by the City upon the
written direction of the Company Representative as a whole or in part at any
time, at a redemption price equal to the principal amount thereof to be redeemed
and accrued interest to the redemption date, in certain event of damage,
destruction or condemnation to the property of the Company located in
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Springdale, Arkansas. The Bonds are also subject to optional redemption by the
City upon the written direction of the Company Representative, as a whole, but
not in part, at redemption prices equal to 110% of the principal amount thereof
to be redeemed and accrued interest to the redemption date, as a condition
precedent to the acquisition of substantially all of the assets of the Company
or in the event of the merger or consolidation of the Company, as provided in
the Loan Agreement.
The Bonds are also subject to mandatory sinking fund redemption by lot
in such manner as the Trustee may determine pursuant to the Indenture, at a
redemption price equal to 100 percent of the principal amount thereof and
accrued interest to the redemption date.
Upon the occurrence of a Determination of Taxability, as defined in
this Indenture, the Bonds are subject to mandatory redemption in whole at a
redemption price equal to 105% of the Outstanding principal amount thereof, plus
interest accrued to the redemption date, at the earliest practicable date
selected by the Trustee, after consultation with the Company, but in no event
later than 45 days following the Trustee's notification of the Determination of
Taxability. The occurrence of a Determination of Taxability with respect to the
Bonds will not constitute an Event of Default under this Indenture and the sole
remedy of the Holders of the Bonds is the mandatory redemption of the Bonds
pursuant to this paragraph.
In the event less than all Bonds are to be redeemed pursuant to the
optional or special redemption provisions of this Indenture, they shall be
redeemed in such order of maturity as the Company Representative shall determine
(less than all of the Bonds of a single maturity to be selected by lot in such
manner as the Trustee may determine). Except as hereinafter provided, notice of
the call for redemption shall be given by the Trustee by mailing by first class
mail a copy of the redemption notice not more than 45 days nor less than 30 days
prior to the redemption date to the Registered Owners of Bonds to be redeemed in
whole or in part at the address of such Registered Owner last showing on the
registration books. Failure to give such notice or any defect therein shall not
affect the validity of any proceedings for the redemption of such Bonds for
which no such failure or defect occurs. All Bonds called for redemption will
cease to bear interest after the specified redemption date, provided collected
funds for their payment are on deposit at the place of payment at the time of
redemption.
Notwithstanding the foregoing, no additional notice shall be required
with respect to mandatory sinking fund redemption unless requested by the
holders of 100% of the principal amount of the Bonds, and Bonds need not be
presented for mandatory sinking fund redemption payment.
The Bonds are issuable only as fully registered bonds in the minimum
denominations of $100,000 and in any integral multiple of $5,000 in excess
thereof. The Bonds shall initially be registered in the name of Cede & Co., as
nominee for The Depository Trust Company ("DTC"), to be held in a book entry
system and: (i) such Bonds shall be registered in the name of the DTC or its
nominee, as Bondholder, and immobilized in the custody of DTC; (ii) unless
otherwise
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requested by DTC, there shall be a single Bond certificate for each maturity;
and (iii) such Bonds shall not be transferable or exchangeable, except for
transfer to another depository or another nominee of a depository, without
further action by the City. The owners of beneficial interest in the Bonds shall
not have any right to receive Bonds in the form of physical certificates. If any
depository determines not to continue to act as a depository for the Bonds for
use in a book entry system, the City may attempt to have established a
securities depository/book entry system relationship with another qualified
depository under this Indenture. If the City does not or is unable to do so, the
City and the Trustee, after the Trustee has made provision for notification to
the owners of book entry interests by the then depository, shall permit
withdrawal of the Bonds from the depository, and authenticate and deliver Bond
certificates in fully registered form (in authorized denominations of not less
than $100,000 in excess thereof) to the assignees of the depository or its
nominee.
While a depository is the sole holder of the Bonds, delivery or
notation of partial redemption of Bonds shall be effected in accordance with the
provisions of the Letter of Representations, as defined in this Indenture.
In addition to the words and terms defined elsewhere in this Bond, the
following terms shall have the following meanings:
"Beneficial Owner" means, with respect to the Bonds, a person owning a
Beneficial Ownership Interest therein, as evidenced to the satisfaction of the
Trustee.
"Beneficial Ownership Interest" means the beneficial right to receive
payments and notices with respect to the Bonds which are held by a Depository
under a book entry system.
"Book entry form" or "book entry system" means, with respect to the
Bonds, a form or system, as applicable, under which (i) the Beneficial Ownership
Interests may be transferred only through a book entry and (ii) physical Bond
certificates in fully registered form are registered only in the name of a
Depository or its nominee as holder, with the physical Bond certificates
"immobilized" in the custody of the Depository. The book entry system maintained
by and the responsibility of the Depository (and not maintained by or the
responsibility of the City or the Trustee) is the record that identifies, and
records the transfer of the interests of, the owners of beneficial (book entry)
interests in the Bonds.
"Depository" means any securities depository that is a clearing agency
under federal law operating and maintaining, with its participants or otherwise,
a book entry system to record ownership of book entry interests in Bonds, and to
effect transfers of book entry interests in Bonds, and includes and means
initially The Depository Trust Company (a limited purpose trust company), New
York, New York.
"Direct Participant" means a Participant as defined in the Letter of
Representations.
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"Indirect Participant" means a Person utilizing the book entry system
of the Depository by, directly or indirectly, clearing through or maintaining a
custodial relationship with a Direct Participant.
NEITHER THE CITY, THE COMPANY, NOR THE TRUSTEE WILL HAVE ANY
RESPONSIBILITY OR OBLIGATION TO ANY DIRECT PARTICIPANT, INDIRECT PARTICIPANT OR
ANY BENEFICIAL OWNER OR ANY OTHER PERSON NOT SHOWN ON THE REGISTRATION BOOKS OF
THE TRUSTEE AS BEING A HOLDER WITH RESPECT TO: (1) THE BONDS; (2) THE ACCURACY
OF ANY RECORDS MAINTAINED BY DTC OR ANY DIRECT PARTICIPANT OR INDIRECT
PARTICIPANT; (3) THE TIMELY OR ULTIMATE PAYMENT BY DTC OR ANY DIRECT PARTICIPANT
OR INDIRECT PARTICIPANT OF ANY AMOUNT DUE TO ANY BENEFICIAL OWNER IN RESPECT OF
THE PRINCIPAL OR REDEMPTION PRICE OF OR INTEREST ON THE BONDS; (4) THE DELIVERY
BY ANY DIRECT PARTICIPANT OR INDIRECT PARTICIPANT OF ANY NOTICE TO ANY
BENEFICIAL OWNER WHICH IS REQUIRED OR PERMITTED UNDER THE TERMS OF THIS
INDENTURE TO BE GIVEN TO REGISTERED OWNERS; (5) THE SELECTION OF THE BENEFICIAL
OWNERS TO RECEIVE PAYMENT IN THE EVENT OF ANY PARTIAL REDEMPTION OF THE BONDS;
OR (6) ANY CONSENT GIVEN OR OTHER ACTION TAKEN BY DTC AS REGISTERED OWNER.
Except for the 15 days next preceding the mailing of notice of
redemption of the Bonds (and, if this Bond or portion thereof is called, the
period following the giving of such notice), this Bond is fully transferable by
the Registered Owner hereof in person or by his duly authorized attorney on the
registration books kept at the principal office of the Trustee upon surrender of
this Bond, together with a duly executed written instrument of transfer
satisfactory to the Trustee. Upon such transfer, a new fully registered bond or
bonds of authorized denomination or denominations for the same aggregate
principal amount and maturity will be issued to the transferee in exchange
therefor, all upon payment of the charges and subject to the terms and
conditions set forth in this Indenture. The City and the Trustee may deem and
treat the person in whose name this Bond is registered as the absolute owner
hereof, whether or not this Bond shall be overdue, for the purpose of receiving
payment (except as provided above with respect to Regular and Special Record
Dates) and for all other purposes, and neither the City nor the Trustee shall be
affected by any notice to the contrary. Bonds which are reissued upon transfer,
exchange or other replacement shall bear interest from the most recent Interest
Payment Date to which interest has been paid or duly provided for, or if no
interest has been paid, then from the Original Issue Date.
To the extent permitted by, and as provided in the Indenture,
modifications or amendments of the Indenture, or of any indenture supplemental
thereto, and of the rights and obligations of the City and of the owners of the
Bonds may be made with the consent of the City and, in certain instances, with
the consent of the owners of not less than a majority in aggregate principal
amount of the Bonds then Outstanding; provided, however, that no such
modification
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or amendment shall be made which will affect the terms of payment of the
principal of, premium, if any, or interest on any of the Bonds which are
unconditional, unless consented to by all Bondholders. Any such consent by the
owner of this Bond shall be conclusive and binding upon such owner and upon all
future owners of this Bond and of any bond issued upon the transfer or exchange
of this Bond whether or not notation of such consent is made upon this Bond.
The owner of this Bond shall have no right to enforce the provisions of
the Indenture, the provisions of which are incorporated herein by this
reference, or to institute action to enforce the pledge, assignment or covenants
made therein or to take any action with respect to an Event of Default under the
Indenture or to institute, appear in or defend any suit, action or other
proceeding at law or in equity with respect thereto, except as provided in this
Indenture. In case an Event of Default under the Indenture shall occur, the
principal of all the Bonds at any such time Outstanding under the Indenture may
be declared or may become due and payable, upon the conditions and in the manner
and with the effect provided in this Indenture. The Indenture provides that such
declaration may in certain events be rescinded and annulled by the Trustee under
certain circumstances.
Neither the members of the City Council of the City nor any person
executing the Bonds shall be liable personally on the Bonds or be subject to any
personal liability or accountability by reason of the issuance thereof.
It is hereby certified, recited and declared that all conditions, acts
and things required by the Constitution or statutes of the State of Arkansas or
by the Act or the Indenture to exist, to have happened or to have been performed
precedent to or in the issuance of this Bond exist, have happened and have been
performed.
This Bond shall not be entitled to any benefit under this Indenture or
any indenture supplemental thereto, or become valid or obligatory for any
purpose until the Trustee shall have signed the certificate of authentication
hereon.
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IN WITNESS WHEREOF, the CITY OF SPRINGDALE, ARKANSAS has caused this
Bond to be signed in its name and on its behalf by the manual or facsimile
signature of its Mayor, and a facsimile of its corporate seal to be affixed
hereon and attested by the manual or facsimile signature of its City Clerk.
[SEAL]
CITY OF SPRINGDALE, ARKANSAS
By: /s/ ▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇
-------------------
Attest: Mayor
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇
---------------------------
City Clerk
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(FORM OF ASSIGNMENT)
FOR VALUE RECEIVED, _________________ the undersigned, hereby sells. assigns and
transfers unto:
________________________________________________________________________________
PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS OF ASSIGNEE
________________________________________________________________________________
TAX IDENTIFICATION OR SOCIAL SECURITY NO.
the within Bond and all rights thereunder, and hereby irrevocably constitutes
and appoints attorney to transfer the within Bond on the books kept for
registration thereof, with full power of substitution in the premises.
Dated: _______________ ___________________________________________________
NOTICE: The signature to this assignment must
correspond with the name as it appears upon the
face of the within Bond in every particular,
without alteration or enlargement or any change
whatever. Signature must be guaranteed by a member
of a Medallion Signature Program.
(FORM OF TRUSTEE'S CERTIFICATE OF AUTHENTICATION)
This is one of the Bonds described in the within mentioned Indenture of
Trust.
REGIONS BANK
By _________________________________
Authorized Officer
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WHEREAS, all things necessary to make the Bonds, when authenticated by
the Trustee and issued as in this Indenture provided, the valid, binding and
legal obligations of the City and to constitute this Indenture a valid, binding
and legal instrument for the security of the Bonds in accordance with its terms,
have been done and performed;
NOW, THEREFORE, THIS INDENTURE WITNESSETH:
That the City, in consideration of the premises and of the mutual
covenants herein contained and of the purchase and acceptance of the Bonds by
the owners thereof and of the sum of One Dollar to it duly paid by the Trustee
at or before the execution and delivery of these presents, and for other good
and valuable consideration, the receipt of which is hereby acknowledged, in
order to secure the payment of the principal of, premium, if any, and interest
on all Bonds at any time Outstanding under this Indenture according to their
tenor and effect and to secure the performance and observance of all the
covenants and conditions in the Bonds and herein contained, and to declare the
terms and conditions upon and subject to which the Bonds are issued and secured,
has executed and delivered this Indenture and has granted, bargained, sold,
alienated, assigned, pledged, set over and confirmed, and by these presents does
grant, bargain, sell, alienate, assign, pledge, set over and confirm unto
Regions Bank, as Trustee, and to its successors and assigns forever, all and
singular the following described property, franchises and income:
A. The Loan Agreement, including the rights of the City
under and pursuant to the Loan Agreement (other than the rights of the City
under Sections 5.1(f), 8.5 and 10.4 of the Loan Agreement and other than the
rights of the City to perform certain discretionary acts as reserved in the Loan
Agreement) and the rights, title and interests granted, pledged, bargained,
sold, conveyed and mortgaged by the Company therein, including Pledged Revenues
(as herein defined).
B. All Funds (except the Rebate Fund) established under
this Indenture, except for monies deposited with or paid to the Trustee for the
redemption of Bonds, notice of the redemption or tender of which has been duly
given, and all Pledged Revenues payable to the Trustee by or for the account of
the City pursuant to the Loan Agreement and this Indenture, subject only to the
provisions of this Indenture permitting the application thereof for the purposes
and on the terms and conditions set forth in this Indenture.
C. The Principal Guaranty.
D. Any and all other interests in real or personal
property of every name and nature from time to time hereafter by delivery or by
writing of any kind specifically mortgaged, pledged or hypothecated, as and for
additional security hereunder by the City or by anyone in its behalf or with its
written consent in favor of the Trustee, which is hereby authorized to receive
any and all such property at any and all times and to hold and apply the same
subject to the terms hereof.
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TO HAVE AND TO HOLD the same with all privileges and appurtenances
hereby conveyed and assigned, or agreed or intended to be, to the Trustee and
its successors in said trust and assigns forever;
IN TRUST, NEVERTHELESS, upon the terms herein set forth for the equal
and proportionate benefit, security and protection of all owners of the Bonds
issued under and secured by this Indenture without privilege, priority or
distinction as to the lien or otherwise of any of the Bonds over any other of
the Bonds except as specifically provided herein:
PROVIDED, HOWEVER, that if the City, its successors or assigns shall
well and truly pay, or cause to be paid, the principal of the Bonds and the
premium, if any, and the interest due or to become due thereon, at the times and
in the manner mentioned in the Bonds according to the true intent and meaning
thereof, and shall cause the payments to be made into the Bond Principal Fund
and the Bond Interest Fund as hereinafter required or shall provide, as
permitted hereby, for the payment thereof by depositing with the Trustee the
entire amount due or to become due thereon, or certain securities as herein
permitted, and shall well and truly keep, perform and observe all the covenants
and conditions pursuant to the terms of this Indenture to be kept, performed and
observed by it, and shall pay or cause to be paid to the Trustee all sums of
money due or to become due to it in accordance with the terms and provisions
hereof, then upon such final payments, this Indenture and the rights hereby
granted shall cease, terminate and be void; otherwise, this Indenture to be and
remain in full force and effect.
THIS INDENTURE FURTHER WITNESSETH and it is expressly declared that all
Bonds issued and secured hereunder are to be issued, authenticated and
delivered, and all said property, rights, interests and revenues and funds
hereby pledged and assigned are to be dealt with and disposed of under, upon and
subject to the terms, conditions, stipulations, covenants, agreements, trusts,
uses and purposes as hereinafter expressed, and the City has agreed and
covenanted, and does hereby agree and covenant with the Trustee and with the
respective owners from time to time of the Bonds as follows:
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ARTICLE I
DEFINITIONS; BOND INDENTURE TO CONSTITUTE CONTRACT
Section 1.1. Definitions. All words and phrases not otherwise
defined herein shall have the same meanings as assigned to such words and
phrases in Article I of the Loan Agreement and in Article I of this Indenture.
In addition, the following terms, except where the context indicates otherwise,
shall have the respective meanings set forth below:
"Act" means, collectively, Title 14, Chapter 267 of the Arkansas Code
of 1987, Annotated, and Title 14, Chapter 164, Subchapter 2, of the Arkansas
Code of 1987, Annotated.
"Additional Indebtedness" means all Indebtedness of the Company other
than the Loan.
"Approved Purchasers" means (i) Weyerhaeuser Company or any division or
subsidiary or parent thereof, (ii) ▇▇▇▇'▇ Companies, Inc. or any division or
subsidiary or parent thereof, and (iii) any additional purchaser approved by the
holders of a majority in principal amount of the Bonds.
"Assignment" means the Assignment of Mortgage and Loan Agreement, dated
as of October 1, 2003, from the City to the Trustee.
"Audited Financial Statements" means, as to the Company, financial
statements for a Fiscal Year, or for such other period for which an audit has
been performed, prepared in accordance with generally accepted accounting
principles, which have been audited and reported upon by independent certified
public accountants.
"Balloon Long-Term Indebtedness" means Long-Term Indebtedness 20
percent or more of the principal payments of which are due in any 12-month
period, which portion of the principal is not required by the documents pursuant
to which such Indebtedness is issued to be amortized by redemption prior to such
date.
"Beneficial Owner" means, with respect to any Bonds in Book Entry Form,
a Person owning a Beneficial Ownership Interest therein, as evidenced to the
satisfaction of the Trustee.
"Beneficial Ownership Interest" means the beneficial right to receive
payments and notices with respect to the Bonds which are held by a Depository
under a book entry system.
"Board" means the Board of Directors of the Company.
"Bonds" or "Series 2003 Bonds" means the City of Springdale, Arkansas
Industrial Development Refunding Revenue Bonds (Advanced Environmental Recycling
Technologies, Inc. Project) Series 2003.
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"Bond Interest Fund" means the Bond Interest Fund created in this
Indenture.
"Bond Principal Fund" means the Bond Principal Fund created in this
Indenture.
"Bondholder" or "holder" or "owner" of Bonds means the Registered Owner
of any Bond.
"Book Entry Form" or "book entry system" means, with respect to any
Bonds, a form or system, as applicable, under which (i) the Beneficial Ownership
Interests may be transferred only through a book entry and (ii) physical Bond
certificates in fully registered form are registered only in the name of a
Depository or its nominee as Holder, with the physical Bond certificates
"immobilized" in the custody of the Depository. The book entry system maintained
by and the responsibility of the Depository (and not maintained by or the
responsibility of the City or the Trustee) is the record that identifies, and
records the transfer of the interests of, the owners of book entry interests in
such Bonds.
"Business Day" means any day other than a Saturday, a Sunday or any
other day on which the New York Stock Exchange or banks are authorized or
obligated by law or executive order to close in New York, New York, or any city
in which the principal corporate trust office of the Trustee is located.
"City" means the City of Springdale, Arkansas, or any public
corporation succeeding to its rights and obligations under the Loan Agreement.
"City Officer" means the Mayor or other officer of the City, and, when
used with reference to an act or document, also means any other person
authorized by resolution of the City to perform such act or sign such document.
"Code" means the Internal Revenue Code of 1986, as amended, and the
regulations issued from time to time thereunder.
"Commitment Indebtedness" means the obligation of the Company to repay
amounts disbursed pursuant to a commitment from a financial institution to
refinance when due other Indebtedness (including accrued and unpaid interest
thereon) of the Company or to purchase when tendered for purchase by the holder
thereof in accordance with the terms thereof other Indebtedness (including
accrued and unpaid interest thereon) of the Company, which other Indebtedness
was incurred in accordance with the provisions of the Loan Agreement, plus any
fees payable to such financial institution for such commitment and any other
expenses (including collection) thereunder, including, without limitation,
amounts disbursed and fees and expenses payable in connection with any Credit
Facility.
- 15 -
"Company" or "Corporation" means Advanced Environmental Recycling
Technologies, Inc., a Delaware corporation, and its successors and assigns.
"Company Representative" or "Corporation Representative" means the
executive director or chief financial officer of the Company or any other person
designated as such by an instrument in writing delivered to the City and the
Trustee by the chief executive officer of the Company or chief financial
officer.
"Completion Date" means the date of the completion of the acquisition,
construction, improvement and equipping of the Facilities described in Exhibit B
to the Loan Agreement, as evidenced by the certificate of the Company filed with
the Trustee as required by the Loan Agreement.
"Completion Indebtedness" means any Long-Term Indebtedness incurred by
the Company for the purpose of financing the completion of the acquisition,
construction or equipping of the facilities for which Long-Term Indebtedness has
theretofore been incurred in accordance with the provisions of the Loan
Agreement, to the extent necessary to provide a completed and equipped facility
of the type and scope contemplated at the time that such Long-Term Indebtedness
theretofore incurred was originally incurred, and, to the extent the same shall
be applicable, in accordance with the general plans and specifications for such
facility as originally prepared with only such changes as have been made in
conformance with the documents pursuant to which such Long-Term Indebtedness
theretofore incurred was originally incurred.
"Consultant" means a firm or firms designated in a certificate of the
Company Representative which is not, and no member, stockholder, director,
officer, trustee or employee of which is, an officer, director, trustee or
employee of the Company, and which is a professional management consultant of
national repute for having the skill and experience necessary to render the
particular report required by the provision of the Loan Agreement in which such
requirement appears.
"Cost of Issuance Fund" means the Cost of Issuance Fund created
pursuant to this Indenture.
"Cost of the Project" means the sum total of all reasonable or
necessary costs incidental to the financing of the Facilities described in the
Loan Agreement.
"Credit Facility" means a line of credit, letter of credit, standby
bond purchase agreement or similar credit enhancement or liquidity facility
established in connection with the issuance of Indebtedness to provide credit or
liquidity support for such Indebtedness.
"Current Assets" means unrestricted cash of the Company or other assets
of the Company which are expected to be converted into cash or consumed in the
production of income
- 16 -
within the greater of one year and the normal operating cycle of the Company,
all determined in according with generally accepted accounting principles.
"Current Liabilities" means liabilities of the Company expected to be
liquidated in the greater of one year and the normal operating cycle of the
Company, excluding any liability otherwise classified as current which will be
settled from other than Current Assets, all determined in according with
generally accepted accounting principles.
"Current Ratio" means the ratio of Current Assets to Current
Liabilities.
"Debt to Equity Ratio" means the ratio of (i) Indebtedness to (ii)
excess of total assets of the Company over total liabilities.
"Depository" means any securities depository that is a clearing agency
under federal law operating and maintaining, with its participants or otherwise,
a book entry system to record ownership of book entry interests in bonds, and to
effect transfers of book entry interests in bonds in book entry form, and
includes and means initially The Depository Trust Company (a limited purpose
trust company), New York, New York.
"Determination of Taxability" means and shall occur when, (i) the
Trustee receives written notice from the Company or a majority of Bondholders,
supported by an Opinion of Bond Counsel which shall be a nationally recognized
firm with expertise in the area of federal taxation of municipal bonds, that
interest on the Bonds is includable in the gross income of Holders of the Bonds
of any series for federal income tax purposes or (ii) the Internal Revenue
Service shall claim in writing that interest on the Bonds of any series is
includable in the gross income of Holders of such Bonds for federal income tax
purposes.
"Direct Participant" means a Participant as defined in the Letter of
Representations.
"Environmental Law" means (i) the Comprehensive Environmental Response,
Compensation and Liability Act of 1976, 42 U.S.C. Sections 9601 et seq.; (ii)
the Comprehensive Environmental Response, Compensation and Liability Act of
1980, as amended by ▇▇▇▇, 42 U.S.C. Sections 1820 et seq.; (iii) the Hazardous
Materials Transportation Act, 49 U.S.C. Sections 1810 et seq.; (iv) the Toxic
Substances Control Act, 15 U.S.C. Sections 2601 et seq.; (v) the Resource
Conservation and Recovery Act, as amended, 42 U.S.C. Sections 9601 et seq.; (vi)
the Clean Water Act, 33 U.S.C. Sections 1251 et seq.; (vii) the Clean Air Act,
42 U.S.C. Sections 7412 et seq.; and (viii); and any related laws of the State
of Arkansas or ordinances or resolutions of the City, as any such acts, powers
and duties may be amended, modified or supplemented and any regulations
promulgated pursuant to any of the foregoing statutes.
"Escrowed Interest" means amounts (but not including any interest
earnings thereon, except as otherwise provided in the Loan Agreement) deposited
in escrow in connection with the issuance of Long-Term Indebtedness and either
held as cash or invested in noncallable
- 17 -
Government Obligations to pay interest on such Long-Term Indebtedness (but shall
not include capitalized or borrowed interest).
"Equipment" means those items of machinery, equipment or other personal
property installed in the Improvements and pledged to the repayment of the Loan
pursuant to the Loan Agreement, and any item of machinery, equipment or other
personal property or fixtures acquired and installed in substitution or
replacement thereof, less such machinery, equipment or other personal property
or fixtures as may be released from such pledge pursuant to the Loan Agreement
or taken by exercise of the power of eminent domain as provided in the Loan
Agreement, as such items may at any time exist.
"Event of Default" or "event of default" means those defaults specified
in this Indenture or the Loan Agreement, as appropriate.
"Facilities" means the solid waste disposal facilities of the Company
financed or refinanced with proceeds of the Series 1999 Bonds, located in the
City of Springdale, Arkansas, as more particularly described in Exhibit B to the
Loan Agreement.
"Fiscal Year" means the fiscal year of the Company.
"Funds" means the Project Fund, the Bond Principal Fund, the Bond
Interest Fund, the Reserve Fund and the Rebate Fund, and any account created
therein, all as established and created by this Indenture.
"Governing Body" means the Board of Directors of the Company.
"Government Obligations" means:
1. (a) Direct obligations (other than an
obligation subject to variation in principal repayment) of the United States of
America;
(b) obligations fully and
unconditionally guaranteed as to timely payment of principal and interest by the
United States of America;
(c) obligations fully and
unconditionally guaranteed as to timely payment of principal and interest by any
agency or instrumentality of the United States of America when such obligations
are backed by the full faith and credit of the United States of America;
(d) evidences of ownership or
proportionate interests in future interest and principal payments on obligations
described above held by a bank or trust company as custodian, under which the
owner of the investment is the real party in interest and has the right to
proceed directly and individually against the obligor and the underlying
government
- 18 -
obligations are not available to any person claiming through the custodian or to
whom the custodian may be obligated, provided, however, that Government
Obligations described in this subsection (d) may only be used in connection with
a defeasance of the Bonds under this Indenture; or
(e) securities of or other interests in
any open-end or closed-end management type investment company or investment
trust registered under the federal "Investment Company Act of 1940," 15 U.S.C.
Section 80(a)-1 et seq., if the portfolio of such investment company or
investment trust is limited to United States of America obligations which are
backed by the full faith and credit of the United States of America and to
repurchase agreements fully collateralized by such obligations and if any such
investment company or investment trust actually takes delivery of such
collateral, either directly or through an authorized custodian.
2. Pre-refunded municipal obligations rated
"AAA" by Standard & Poor's Rating Services and "AAA" by ▇▇▇▇▇'▇ Investors
Service meeting the following requirements:
(a) the municipal obligations are (i)
not subject to redemption prior to maturity or (ii) the bond trustee therefor
has been given irrevocable instructions concerning their call and redemption and
the issuer of the municipal obligations has covenanted not to redeem such
municipal obligations other than as set forth in such instructions;
(b) the municipal obligations are
secured by cash or obligations described in paragraphs (1)(a), (b), (c), (d) or
(e) above, which may be applied only to payment of the principal of, interest
and premium on such municipal obligations;
(c) the principal of and interest on
the obligations described in paragraphs (1)(a), (b), (c), (d) or (e) above (plus
any cash in the escrow) has been verified by the report of independent certified
public accountants to be sufficient to pay in full all principal of, interest
and premium, if any, due and to become due to the municipal obligations
("Verification");
(d) the cash or obligations described
in paragraph (1) above serving as security for the municipal obligations are
held by an escrow agent or trustee in trust for owners of the municipal
obligations;
(e) no substitution of an obligation
described in paragraph (1) above shall be permitted except with another
obligation described in paragraph (1) above and upon delivery of a new
Verification; and
(f) the cash or obligations described
in paragraph (1) above are not available to satisfy any other claims, including
those by or against the bond trustee or escrow agent.
- 19 -
"Guarantor" means ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ as guarantor under the Principal
Guaranty.
"Guaranty" means any obligation of the Company guaranteeing in any
manner, directly or indirectly, any obligation of any Person, which obligation
of such other Person would, if such obligation were the obligation of the
Company, constitute Indebtedness under the Loan Agreement. For the purposes of
the Loan Agreement, so long as no payments are required to be made under such
Guaranty and so long as such Guaranty constitutes a contingent liability under
generally accepted accounting principles, the aggregate principal amount of any
indebtedness in respect of which the Company shall have executed and delivered
its Guaranty shall be deemed to be equal to 20 percent of the principal amount
borrowed under such guaranteed indebtedness Outstanding at the time any
computation is being made, and the aggregate annual principal and interest
payments on any indebtedness in respect of which the Company shall have executed
and delivered its Guaranty shall be deemed to be equal to 20 percent of the
amount which would be payable as principal of and the interest on the
indebtedness for which a Guaranty shall have been issued during the Fiscal Year
for which any computation is being made, provided that if there shall have
occurred a default under the guaranteed obligation of any direct or indirect
payment by the Company on such Guaranty, then, during the period commencing on
the date of such default of payment and ending as the case may be on the day on
which such default is cured or on the day which is two years after such other
Person resumes making all payments on such guaranteed obligation, 100 percent of
such guaranteed indebtedness shall be taken into account.
"Hazardous Material" means: (i) any substances defined as "hazardous
substances," "pollutants," "contaminants," "hazardous materials," "hazardous
wastes," or "hazardous or toxic substances" or related materials as now or
hereafter defined in any Environmental Law, (ii) those substances listed or
otherwise identified as substances of the type referred to in the preceding
subsection (i) in the regulations adopted and issued pursuant to any
Environmental Law, as the same may be amended, modified or supplemented; (iii)
any friable asbestos, airborne asbestos in excess of that generally found in the
atmosphere, respectively, where the facilities of the Company are located, or
any substance or material containing asbestos, excluding any such materials
located on the solid waste disposal or manufacturing facilities of the Company
prior to the date of the Loan Agreement so long as such materials are contained,
maintained, abated, or removed in compliance with all applicable Environmental
Laws; and (iv) any substance the presence of which on the Facilities is
prohibited by any applicable Environmental Law; provided that Hazardous Material
shall not include any such substances used in or resulting from the ordinary
operation of a facility constituting solid waste recycling facilities or for the
cleaning of the Facilities; provided that such substances are stored, handled
and disposed of in compliance with all applicable Environmental Laws and other
applicable laws and regulations.
"Improvements" means the real property improvements located on the Site
and pledged pursuant to the Loan Agreement.
- 20 -
"Income Available for Debt Service" means, as to any Fiscal Year or
other specified period, (i) excess of revenues over expenses of the Company
before depreciation, amortization and interest expense on Long-Term
Indebtedness, as determined from the Audited Financial Statements or as
otherwise herein provided, provided that unrealized gains and losses on
investments will not be recognized in the calculation of Income Available for
Debt Service, plus (ii) capitalized or funded interest available for and
scheduled to be applied to interest obligations accrued during such period;
provided, however, that (1) no determination thereof shall take into account any
gain or loss resulting from either the extinguishment of Indebtedness or the
sale, exchange or other disposition of capital assets not made in the ordinary
course of business, and (2) revenues shall not include earnings from the
investment of Escrowed Interest or earnings constituting Escrowed Interest.
"Indebtedness" means (i) all obligations of the Company for borrowed
money including, but not limited to, the Loan, (ii) all installment sales,
conditional sales and capital lease obligations incurred or assumed by the
Company as purchaser, and (iii) all Guaranties, whether constituting Long-Term
Indebtedness or Short-Term Indebtedness. Indebtedness shall not include any
other obligation incurred by the Company in the ordinary course of business, any
obligation to contribute to self-insurance, pension or other risk management
programs, indemnification obligations incurred with respect to Commitment
Indebtedness, or any fees or expenses payable in connection with the incurrence
of Indebtedness.
"Indenture" means this Indenture of Trust between the City and the
Trustee, including any indentures supplemental thereto made in conformity
therewith, pursuant to which the Bonds are authorized to be issued and secured.
"Independent Architect" means an architect, engineer or firm of
architects and engineers selected by the Company with the approval of a majority
in principal amount of the Bondholders.
"Indirect Participant" means a Person utilizing the book entry system
of the Depository by, directly or indirectly, clearing through or maintaining a
custodial relationship with a Direct Participant.
"Insurance Consultant" means a firm or Person selected by the Company
Representative and approved by a majority of the Bondholders or Beneficial
Owners which is not, and no member, stockholder, director, trustee, officer or
employee of which is, an officer, director, trustee or employee of the Company
and which is qualified to survey risks and to recommend insurance coverage for
solid waste recycling facilities and services and organizations engaged in such
operations and which may provide insurance coverage for the Company.
"Interest Payment Dates" means April 1 and October 1 of each year,
commencing April 1, 2004.
- 21 -
"Junction Deed of Trust" means the Deed of Trust, Assignment of Leases
and Rents, Security Agreement and Financing Statement, dated as of the date
hereof with respect to certain property of the Company located in Junction,
Texas.
"Junction Property" means the real property described in the Junction
Deed of Trust.
"Letter of Representations" means any Letter of Representations from
the City and the Trustee to the Depository which may be entered into in
connection with the issuance of the Bonds in a book entry system, as
supplemented and amended from time to time.
"Lien" means any mortgage, deed of trust or pledge of, security
interest in, or encumbrance on, the assets of the Company or sale of accounts
receivable with recourse of, the Company which secures any Indebtedness.
"Loan" means the loan by the City to the Company of the proceeds from
the sale of the Bonds (exclusive of accrued interest paid by the initial
purchasers of any Bonds) pursuant to the Loan Agreement.
"Loan Agreement" means the Mortgage and Loan Agreement between the City
and the Company, dated as of October 1, 2003, and any amendments and supplements
thereto made in conformity with the requirements thereof and of this Indenture.
"Loan Payments" means those payments required to be paid by the Company
identified as Loan Payments pursuant to the Loan Agreement.
"Long-Term Debt Service Coverage Ratio" means, except as otherwise
provided in the Loan Agreement, for any Fiscal Year or other specified period,
the ratio determined by dividing the Income Available for Debt Service by
Maximum Annual Debt Service. When calculating the Long-Term Debt Service
Coverage Ratio, (i) capitalized interest shall not be counted as income unless
it will be available and applied in the same year as the Maximum Annual Debt
Service will occur, and (ii) payments to be made in respect of principal and
interest on any revolving credit or similar agreement secured solely by a pledge
of accounts receivable and inventory shall not be included in determining
Maximum Annual Debt Service.
"Long-Term Debt Service Requirement" means, for any Fiscal Year or
other specified period, the aggregate of the payments to be made in respect of
principal and interest (whether or not separately stated) on Outstanding
Long-Term Indebtedness of the Company during such period, also taking into
account:
(i) with respect to Balloon Long-Term
Indebtedness, (a) the amount of principal which would be payable in such period
if such principal were amortized from the date of incurrence thereof over a
period of 20 years on a level debt service basis at an interest rate equal to
the rate borne by such Indebtedness on the date calculated, except that if the
- 22 -
date of calculation is within 12 months of the actual maturity of such
Indebtedness, the full amount of principal payable at maturity shall be included
in such calculation, or (b) principal payments or deposits with respect to
Indebtedness secured by an irrevocable letter of credit issued by, or an
irrevocable line of credit with a bank having a combined capital and surplus of
at least $50,000,000, or insured by an insurance policy issued by any insurance
company rated at least "A" by ▇▇▇▇▇▇ ▇. Best Company or its successors in Best's
Insurance Reports or its successor publication, nominally due in the last Fiscal
Year in which such Indebtedness matures may, at the option of the Company
Representative, be treated as if such principal or interest payments or deposits
were due as specified in any loan agreement issued in connection with such
letter of credit, line of credit or insurance policy or pursuant to the
repayment provisions of such letter of credit, line of credit or insurance
policy, and interest on such Indebtedness after such Fiscal Year shall be
assumed to be payable pursuant to the terms of such loan agreement or repayment
provisions;
(ii) with respect to Long-Term
Indebtedness which is Variable Rate Indebtedness, the interest on such
Indebtedness shall be calculated at the rate which is equal to the average of
the actual interest rates which were in effect (weighted according to the length
of the period during which each such interest rate was in effect) for the most
recent 12-month period immediately preceding the date of calculation for which
such information is available (or such shorter period, but not less than six
months, if such information is not available for a 12-month period), except that
with respect to new Variable Rate Indebtedness, and Variable Rate Indebtedness
issued within the last six months, the interest rate for such Indebtedness for
the initial interest rate period shall be such interest rate as determined in
writing delivered to the Trustee by a banking, investment banking or financial
advisory firm, which shall be knowledgeable in matters relating to finance for
solid waste recycling facilities; and
(iii) with respect to any Commitment
Indebtedness providing for payment of other Long-Term Indebtedness, to the
extent that amounts are not then due and owing for advances made by the creditor
with respect thereto, the principal and interest relating to such Commitment
Indebtedness shall not be included in any computations with respect to Income
Available for Debt Service or the Long-Term Debt Service Requirement; provided,
however, that interest shall be excluded from the determination of Long-Term
Debt Service Requirement to the extent that Escrowed Interest is available to
pay such interest (but the amount excluded shall not take into account interest
earnings on such Escrowed Interest unless there shall have been delivered to the
Trustee a report of an independent firm of nationally recognized certified
public accountants verifying that such amount of interest can be timely paid
from such escrow).
"Long-Term Indebtedness" means all Indebtedness having a maturity
longer than one year incurred or assumed by the Company, including:
(i) money borrowed for an original term, or
renewable at the option of the borrower for a period from the date originally
incurred, longer than one year;
- 23 -
(ii) leases which are required to be capitalized
in accordance with generally accepted accounting principles having an original
term, or renewable at the option of the lessee for a period from the date
originally incurred, longer than one year;
(iii) installment sale or conditional sale
contracts incurred or assumed by the Company as purchaser having an original
term in excess of one year;
(iv) Short-Term Indebtedness if a commitment by a
financial lender exists to provide financing to retire such Short-Term
Indebtedness and such commitment provides for the repayment of principal on
terms which would, if such commitment were implemented, constitute Long-Term
Indebtedness; and
(v) the current portion of Long-Term
Indebtedness.
"▇▇▇▇▇▇ Mortgage" means the Mortgage, Assignment of Leases and Rents,
Security Agreement and Financing Statement, dated as of the date hereof, with
respect to certain property of the Company located in Lowell, Arkansas.
"Lowell Property" means the real property described in the ▇▇▇▇▇▇
Mortgage.
"Maximum Annual Debt Service" means the highest Long-Term Debt Service
Requirement for any current or succeeding Fiscal Year or other specified period.
"Monthly Payments" means monthly payments to be made by the Company
pursuant to the Loan Agreement in an amount equal to (a) the sum of (i) the
quotient obtained by dividing the amount of principal and redemption premium, if
any, of the Bonds due and payable on the next succeeding payment date for
principal (whether at their stated maturities, date called for optional
redemption or by mandatory sinking fund redemption) by twelve (12), and (ii) the
quotient obtained by dividing the interest due and payable on the Bonds on the
next succeeding Interest Payment Date by six (6), and (b) any deposits to the
Reserve Fund required pursuant to the Loan Agreement.
"Net Book Value" when used in connection with Property, Plant and
Equipment or other property means the value of such property, net of accumulated
depreciation or amortization, if applicable and as the case may be, as it is
carried on the books of the Company in conformity with generally accepted
accounting principles.
"Net Proceeds" means the gross proceeds of any insurance or
condemnation awards or the gross proceeds received pursuant to any title
insurance policy with respect to any Property, Plant and Equipment pledged to
the payment of the Loan pursuant to the Loan Agreement, the ▇▇▇▇▇▇ Mortgage or
the Junction Deed of Trust, less such fees and expenses incurred in collecting
the same.
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"Nonrecourse Indebtedness" means any Indebtedness incurred to finance
the purchase by the Company of tangible property secured solely by a Lien on
such property, the liability for which is limited to the property subject to
such Lien with no recourse, directly or indirectly, to any other assets of the
Company.
"Notice Beneficial Owners" means those Beneficial Owners who have given
their addresses and facsimile numbers to the Company.
"Officer's Certificate" means a certificate signed by the Company
Representative. Each Officer's Certificate presented pursuant to the Loan
Agreement shall state that it is being delivered pursuant to (and shall identify
the section or subsection of), and shall incorporate by reference and use in all
appropriate instances all terms defined in, the Loan Agreement.
"Operating Expenses" shall mean all expenditures required in the
operation and maintenance of the Improvements including those that result in
both current period expenses as well as current assets or current liabilities
under generally accepted accounting principles, and including, the following
items, without intending to limit the generality of the foregoing:
(a) expenditures for operation
(including all utilities and fees payable under management and/or operating
agreements), maintenance, repair, alterations, insurance and inspection;
(b) salaries and expenditures for
professional, managerial, supervisory, administrative, engineering,
architectural, legal, financial, auditing and consulting services, including the
reasonable annual compensation and expenses of the officers and directors of the
Company allocable to the Improvements and including the fees of and other
amounts payable to the Trustee and the City;
(c) all taxes or contributions or
payments in lieu thereof, assessments and charges, including, without intending
to limit the generality of the foregoing, income, profits, sales, use, property,
franchise, and excise taxes;
(d) obligations under contracts for
supplies, services and pensions and other employee benefits;
(e) purchases of merchandise and other
inventory items; and
(f) rentals payable under leases not
intended by the Company to evidence the acquisition of capital assets, as
determined in accordance with generally accepted accounting principles;
provided, however, that rentals payable under leases which, under generally
accepted accounting principles would be treated as evidencing the acquisition of
a capital asset shall be includable within Operating Expenses, if so designated
by the
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Company,provided, however, the term "Operating Expenses" shall not be construed
to include (i) depreciation, (ii) amortization, and (iii) the annual Long-Term
Debt Service Requirement.
"Opinion of Bond Counsel" means an opinion in writing signed by an
attorney or firm of attorneys acceptable to the Trustee and experienced in the
field of municipal bonds whose opinions are generally accepted by purchasers of
municipal bonds.
"Opinion of Counsel" means an opinion in writing signed by an attorney
or firm of attorneys, acceptable to the Trustee, who may be counsel for the
Company or other counsel acceptable to the Trustee.
"Outstanding" means, as of any particular time, all Bonds which have
been duly authenticated and delivered by the Trustee under this Indenture,
except:
(a) Bonds theretofore canceled by the
Trustee or delivered to the Trustee for cancellation after purchase in the open
market or because of payment at or redemption prior to maturity;
(b) Bonds for the payment or redemption
of which cash funds (or securities to the extent described in this Indenture)
shall have been theretofore deposited with the Trustee (whether upon or prior to
the maturity or redemption date of any such Bonds); provided that, if such Bonds
are to be redeemed prior to the maturity thereof, notice of such redemption
shall have been given or arrangements satisfactory to the Trustee shall have
been made therefor, or waiver of such notice satisfactory in form to the Trustee
shall have been filed with the Trustee; and
(c) Bonds in lieu of which other Bonds
have been authenticated under this Indenture.
Bonds which do not pay interest currently in accordance with their
terms shall be deemed to be Outstanding in an amount equal to their accreted
value at the applicable time.
"Parity Indebtedness" means Indebtedness of the Company secured on a
parity basis with the Bonds, except to the extent provided in Section 8.13 of
the Loan Agreement.
"Patent and Trademark Security Agreement" means the Patent and
Trademark Security Agreement, dated as of the date hereof, from the Company for
the benefit of the Trustee.
"Permitted Investments" means any of the following which at the time
are legal investments under the laws of the State of Arkansas for moneys held
under this Indenture and then proposed to be invested therein:
(a) Government Obligations;
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(b) negotiable certificates of deposit
issued by, or banker's acceptances drawn on and accepted by, any bank, including
the Trustee, the certificate of deposit or debt obligations of which (or if such
bank, is the principal bank in a bank holding company, debt obligations of the
bank holding company) are rated, at the time such certificates or acceptances
are issued, in one of the two highest Rating Categories;
(c) repurchase agreements with any U.S.
commercial bank, or with any United States Government securities dealer,
provided that such repurchase agreements are fully secured by Government
Obligations, and provided further that (i) such collateral is held by the
Trustee or any agent acting solely for the Trustee during the term of such
repurchase agreement, (ii) such collateral is not subject to liens or claims of
third parties and the Trustee has a perfected first security interest in the
collateral, (iii) such collateral has a market value (determined at least once
every 14 days) at least equal to 102% of the amount invested in the repurchase
agreement, and (iv) the failure to maintain such collateral at the level
required in (iii) above will require the Trustee to liquidate the collateral;
(d) certificates of deposit issued by
any bank, savings institution or trust company, including the Trustee, and time
deposits in any bank, savings institution or trust company, including the
Trustee, as to which principal is fully insured by a federally sponsored deposit
insurance program; and
(e) money market funds which are rated
in the highest Rating Category and are fully collateralized by Government
Obligations.
"Permitted Liens" shall have the meaning assigned to it in Section
8.10(b) of the Loan Agreement.
"Person" means an individual, association, unincorporated organization,
corporation, partnership, joint venture, business trust or a government or an
agency or a political subdivision thereof, or any other entity.
"Pledged Revenues" means the rights to receive all the receipts,
revenues, cash and income of the Company from whatever source derived, whether
in the form of accounts receivable, contract rights, chattel paper, general
intangibles, profits and income, or other rights, and the proceeds of such
rights, whether now owned or held or hereafter coming into existence.
"Pledged Springdale Property" means the Improvements, the Site and the
Equipment, pledged pursuant to the Loan Agreement.
"Principal Guaranty" means the Guaranty Agreement, executed by ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇, dated as of the date hereof.
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"Project" means the acquisition, construction and equipping of the
Company's solid waste disposal facilities located in the City.
"Project Fund" means the Project Fund created pursuant to this
Indenture.
"Property" means collectively the Improvements and the Site.
"Property, Plant and Equipment" means real and personal, tangible and
intangible property owned by the Company which is property, plant and equipment
under generally accepted accounting principles.
"Rating Agency" means ▇▇▇▇▇'▇ Investors Service, Inc. or Standard &
Poor's Ratings Services, a Division of the ▇▇▇▇▇▇-▇▇▇▇ Companies, Inc., and
their respective successors and assigns.
"Rating Category" or "Categories" means the rating category or
categories respectively of each Rating Agency.
"Rebate Analyst" means an attorney or firm of attorneys or accountant
or firm of accountants or other Person hired by the Company to assist the
Company in compliance with the arbitrage rebate requirements of Section 4.6 of
the Loan Agreement.
"Rebate Fund" means the Rebate Fund created in this Indenture.
"Refunding Project" means the refunding of the Series 1999 Bonds.
"Registered Owner" or "Registered Owner" means the Registered Owner of
any Bonds, as shown on the registration books of the Trustee.
"Regular Record Date" means the fifteenth day of the calendar month
prior to a regularly scheduled Interest Payment Date for the Bonds.
"Reserve Fund" means the Reserve Fund created pursuant to this
Indenture.
"Reserve Fund Credit Enhancement" means any letter of credit credited
to the Reserve Fund or any account therein as provided in the Loan Agreement in
lieu of cash or Permitted Investments on deposit in the Reserve Fund.
"Reserve Requirement" means $2,040,000.
"Series ▇▇▇▇ ▇▇▇▇▇" means the City of Springdale, Arkansas Industrial
Development Revenue Bonds (Advanced Environmental Recycling Technologies, Inc.
Project) Series 1999A.
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"Short-Term Indebtedness" means Indebtedness with a term of less than
one year.
"Significant Bondholder" shall mean any one Beneficial Owner of greater
than 50% of the Beneficial Ownership Interest in Bonds then Outstanding, and if
no one Beneficial Owner owns greater than 50% of the Beneficial Ownership
Interest in Bonds then Outstanding, then the provisions relating to the
Significant Bondholder shall not apply
"Site" means the real property described as the Site in the Loan
Agreement, less any such real property released under the provisions of the Loan
Agreement.
"Special Record Date" means a special record date fixed to determine
the names and addresses of Registered Owners for purposes of paying interest on
a special Interest Payment Date for the payment of defaulted interest, all as
further provided in this Indenture.
"Subordinated Debt" means any Indebtedness the payment of which is
specifically subordinated to the payment of principal and interest on the Bonds
and evidenced by a writing which contains provisions substantially as provided
in the Loan Agreement and for which the Company has received an Opinion of
Counsel to the effect that such Indebtedness constitutes Subordinated Debt.
"Tax Certificates" means the certificates of the City or the Company
relating to the tax-exempt status of the Bonds and including any amendments or
supplements thereto.
"Transfer" means any act or occurrence the result of which is to
dispossess any Person of any asset or interest therein, including specifically,
but without limitation, the forgiveness of any debt, but shall not include
leases and operating contracts governed by the Loan Agreement.
"Trust Estate" means the property pledged, assigned and mortgaged to
the Trustee pursuant to the granting clauses of this Indenture.
"Trustee" means Regions Bank, as trustee, and its successors and
assigns.
"Underwriter" means Hutchinson, Shockey, Erley & Co., and its
successors and assigns; provided that any purchaser of a Bond from the
Underwriter shall not be considered as successor or assign thereof.
"Variable Rate Indebtedness" means any portion of Indebtedness the
interest rate on which has not been established at a fixed or constant rate to
maturity.
Section 1.2 Indenture to Constitute Contract. In consideration of
the purchase and acceptance of any or all of the Bonds by those who shall own
the same from time to time, the provisions of this Indenture shall be part of
the contract of the City with the owners of the Bonds, and shall be deemed to be
and shall constitute contracts among the City, the Trustee and the
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owners from time to time of the Bonds. The pledge made in this Indenture and the
provisions, covenants and agreements herein set forth to be performed by or on
behalf of the City shall be for the equal benefit, protection and security of
the owners of any and all of the Bonds except as specifically provided herein.
All of the Bonds, regardless of the time or times of their issuance or maturity,
shall be of equal rank without preference, priority or distinction of any of the
Bonds over any other thereof, except as expressly provided in or pursuant to
this Indenture.
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ARTICLE II
AUTHORIZATION, TERMS,
Section 2.1 Authorized Amount of Bonds. No Bonds may be issued
under this Indenture except in accordance with this Article. The total principal
amount of Bonds that may be issued hereunder is hereby expressly limited to, and
the amount hereby authorized to be issued shall be, $14,400,000.
Section 2.2 All Bonds Equally and Ratably Secured by Trust Estate
Except as Expressly Provided Herein; Limited Obligation of Bonds and Pledges
Securing the Same. All Bonds issued under this Indenture and at any time
Outstanding shall in all respects be equally and ratably secured hereby, without
preference, priority or distinction as to date or dates or the actual time or
times of the issue or maturity of the Bonds, so that all Bonds at any time
issued and Outstanding hereunder shall have the same right, lien and preference
under and by virtue of this Indenture, and shall all be equally and ratably
secured hereby, except as otherwise expressly provided herein. The Bonds shall
be limited obligations of the City payable solely out of the security specified
in this Indenture. The Bonds shall not constitute or become an indebtedness, a
debt or a liability of or a charge against the general credit or taxing power of
the State of Arkansas, the General Assembly of the State of Arkansas, or of any
county, city, city and county, town, school district or other subdivision of the
State of Arkansas, or of any other political subdivision or body corporate and
politic within the State of Arkansas other than the City (but only to the extent
provided in this Indenture) and neither the State of Arkansas, the General
Assembly of the State of Arkansas, nor any county, city, city and county, town,
school district or other subdivision of the State of Arkansas, except the City
to the extent provided above, shall be liable thereon; nor shall the Bonds
constitute the giving, pledging or loaning of the faith and credit of the State
of Arkansas, the General Assembly of the State of Arkansas, or any county, city,
city and county, town, school district or other subdivision of the State of
Arkansas or of any other political subdivision or body corporate and politic
within the State of Arkansas but shall be payable solely from the funds herein
provided therefor. The issuance of the Bonds shall not, directly or indirectly
or contingently, obligate the State of Arkansas or any subdivision of the State
of Arkansas nor empower the City to levy or collect any form of taxes or
assessments therefor or to create any indebtedness payable out of taxes or
assessments or make any appropriation for their payment, and such appropriation
or levy is prohibited. Nothing in the Act shall be construed to authorize the
City to create a debt of the State of Arkansas within the meaning of the
Constitution or statutes of the State of Arkansas or authorize the City to levy
or collect taxes or assessments. Neither the members of the City nor any person
executing the Bonds shall be liable personally on the Bonds or be subject to any
personal liability or accountability by reason of the issuance thereof. The
State of Arkansas shall not in any event be liable for the payment of the
principal of, premium, if any, or interest on the Bonds or for the performance
of any pledge, mortgage, obligation or agreement of any kind whatsoever
undertaken by the City. No breach of any such pledge, mortgage, obligation or
agreement shall
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impose any pecuniary liability upon the State of Arkansas or any charge upon its
general credit or against its taxing power.
Section 2.3 Authorization of Bonds. There is hereby authorized to
be issued hereunder and secured hereby an issue of bonds, designated as the
"City of Springdale, Arkansas Industrial Development Refunding Revenue Bonds
(Advanced Environmental Recycling Technologies, Inc Project) Series 2003." They
shall be issuable only as fully registered bonds in the minimum denomination of
$100,000 plus integral multiples of $5,000 in excess thereof. The Bonds shall be
separately lettered "R" and shall be numbered separately from 1 upward.
The Bonds shall be dated as of their date of original
issuance, and shall bear interest from such date to maturity at the rate of
7.00% per annum, on the basis of a 360-day year composed of twelve 30-day
months, payable semiannually on October 1 and April 1 of each year, with the
first interest payment to be made on April 1, 2004, except that Bonds which are
reissued upon transfer, exchange or other replacement shall bear interest from
the most recent Interest Payment Date to which interest has been paid, or if no
interest has been paid, from the date of the Bonds.
The Bonds shall be originally issued in Book Entry Form, and
shall be registered in the name of Cede & Co., as nominee of The Depository
Trust Company. While the Bonds are held in Book Entry Form, (i) such Bonds shall
be registered in the name of the Depository or its nominee, as Bondholder, and
immobilized in the custody of the Depository; (ii) unless otherwise requested by
the Depository, there shall be a single Bond certificate for each Bond maturity;
and (iii) such Bonds shall not be transferable or exchangeable, except for
transfer to another Depository or another nominee of a Depository, without
further action by the City. While the Bonds are in Book Entry Form, Bonds in the
form of physical certificates shall only be delivered to the Depository.
So long as a book entry system is in effect for the Bonds, the
City and Trustee shall recognize and treat the Depository, or its nominee, as
the Holder of the Bonds for all purposes, including payment of debt service,
giving of notices, and enforcement of remedies. The crediting of payments of
debt service on the Bonds and the transmittal of notices and other
communications by the Depository to the Direct Participant in whose Depository
account the Bonds are recorded and such crediting and transmittal by Direct
Participants to Indirect Participants or Beneficial Owners and by Indirect
Participants to Beneficial Owners are the respective responsibilities of the
Depository and the Direct Participants and the Indirect Participants and are not
the responsibility of the City or the Trustee; provided, however, that the City
and the Trustee understand that neither the Depository nor its nominee shall
provide any consent requested of the Registered Owners of Bonds pursuant to this
Indenture, and that the Depository will mail an omnibus proxy (including a list
identifying the Direct Participants) to the City which assigns the Depository's,
or its nominee's, voting rights to the Direct Participants to whose account at
the Depository the Bonds are credited (as of the record date for mailing of
requests for such consents). Upon receipt of such omnibus proxy, the City shall
promptly
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provide such omnibus proxy (including the list identifying the Direct
Participants attached thereto) to the Trustee, who shall then treat such owners
as Registered Owners of the Bonds for purposes of obtaining any consents
pursuant to the terms of this Indenture.
As long as the Bonds are registered in the name of a
Depository, or its nominee, the Trustee agrees to comply with the terms and
provisions of the Letter of Representations including the provisions of the
Letter of Representations with respect to any delivery of the Bonds to the
Trustee shall supersede the provisions of this Indenture with respect thereto.
If any Depository determines not to continue to act as a
Depository for the Bonds held in a book entry system, the City may attempt to
have established a securities depository/book entry system relationship with
another Depository under this Indenture. If the City does not or is unable to do
so, the City and the Trustee, after the Trustee has made provision for
notification of the Beneficial Owners by appropriate notice to the then
Depository, shall permit withdrawal of the Bonds from the Depository and shall
authenticate and deliver Bonds certificates in fully registered form to the
assignees of the Depository or its nominee or to the Beneficial Owners. A
majority of the Beneficial Owners also may request that the Bonds be withdrawn
from the Depository and that the Trustee authenticate and deliver Bonds
certificates in fully registered form to the Beneficial Owners. Such withdrawal,
authentication and delivery shall be at the cost and expense (including costs of
printing or otherwise preparing and delivering such replacement Bonds) of the
Company. Such replacement Bonds shall be in the denominations specified in the
first paragraph of this Section 2.3.
NEITHER THE CITY, THE COMPANY NOR THE TRUSTEE WILL HAVE ANY
RESPONSIBILITY OR OBLIGATION TO ANY DIRECT PARTICIPANT, INDIRECT PARTICIPANT OR
ANY BENEFICIAL OWNER OR ANY OTHER PERSON NOT SHOWN ON THE REGISTRATION BOOKS OF
THE TRUSTEE AS BEING A HOLDER WITH RESPECT TO: (1) THE SERIES 2003 BONDS; (2)
THE ACCURACY OF ANY RECORDS MAINTAINED BY DTC OR ANY DIRECT PARTICIPANT OR
INDIRECT PARTICIPANT; (3) THE TIMELY OR ULTIMATE PAYMENT BY DTC OR ANY DIRECT
PARTICIPANT OR INDIRECT PARTICIPANT OF ANY AMOUNT DUE TO ANY BENEFICIAL OWNER IN
RESPECT OF THE PRINCIPAL OR REDEMPTION PRICE OF OR INTEREST ON THE BONDS; (4)
THE DELIVERY BY ANY DIRECT PARTICIPANT OR INDIRECT PARTICIPANT OF ANY NOTICE TO
ANY BENEFICIAL OWNER WHICH IS REQUIRED OR PERMITTED UNDER THE TERMS OF THIS
INDENTURE TO BE GIVEN TO REGISTERED OWNERS; (5) THE SELECTION OF THE BENEFICIAL
OWNERS TO RECEIVE PAYMENT IN THE EVENT OF ANY PARTIAL REDEMPTION OF THE BONDS;
OR (6) ANY CONSENT GIVEN OR OTHER ACTION TAKEN BY DTC AS HOLDER.
The Bonds shall mature on October 1, 2017.
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Proceeds of the Bonds shall be applied as provided in the
Indenture and the Loan Agreement.
The principal of and premium, if any, on the Bonds shall be
payable at the principal corporate trust office of the Trustee currently located
in Little Rock, Arkansas, or at the principal office of its successor in trust
upon presentation and surrender of the Bonds. Payment of interest on any Bond
shall be made to the Registered Owner thereof by check or draft mailed on the
Interest Payment Date by the Trustee to the Registered Owner at his address as
it last appears on the registration books kept by the Trustee at the close of
business on the Regular Record Date for such Interest Payment Date, but any such
interest not so timely paid or duly provided for shall cease to be payable to
the Registered Owner thereof at the close of business on the Regular Record Date
and shall be payable to the Registered Owner thereof at the close of business on
a Special Record Date for the payment of any such defaulted interest. Such
Special Record Date shall be fixed by the Trustee whenever monies become
available for payment of the defaulted interest, and notice of such Special
Record Date shall be given to the Registered owners of the Bonds not less than
10 days prior thereto by first-class mail to each such Registered owner as shown
on the Trustee's registration books on the date selected by the Trustee, stating
the date of the Special Record Date and the date fixed for the payment of such
defaulted interest. Notwithstanding the foregoing, at the written request
addressed to the Trustee of any Bondholder of at least $1,000,000 in aggregate
principal amount of the Bonds, payments of principal at maturity or upon
redemption and payments of interest may be paid by wire transfer within the
United States to the bank account number filed no later than the Regular Record
Date with the Trustee for such purpose. All payments on the Bonds shall be made
in lawful money of the United States of America upon collection of immediately
available funds.
The Bonds are subject to prior redemption as herein set forth.
The Bonds shall be substantially in the form and tenor hereinabove recited with
such appropriate variations, omissions and insertions as are permitted or
required by this Indenture.
Notwithstanding anything herein to the contrary, when any Bond
is registered in the name of a Depository or its nominee, the principal and
redemption price of and interest on such Bond shall be payable in same day or
federal funds delivered or transmitted to the Depository or its nominee.
Section 2.4 Execution of Bonds. The Bonds shall be executed in
the name and on behalf of the City, by the manual or facsimile signature of the
Mayor of the City, and its corporate seal or a facsimile thereof shall be
thereunto affixed, imprinted, engraved or otherwise reproduced thereon and
attested by the manual or facsimile signature of the City Clerk. Any Bond may be
signed (manually or by facsimile), sealed or attested on behalf of the City by
any person who, at the date of such act, shall hold the proper office,
notwithstanding that at the date of authentication, issuance or delivery, such
person may have ceased to hold such office.
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Section 2.5 Registration, Transfer and Exchange of Bonds, Persons
Treated as Owner. The City shall cause books for the registration and for the
transfer of the Bonds as provided in this Indenture to be kept by the Trustee
which is hereby appointed the transfer agent of the City for the Bonds.
Notwithstanding such appointment, the Trustee is hereby authorized to make any
arrangements with other institutions that it deems necessary or desirable in
order that such institutions may perform the duties of transfer agent for the
Bonds. Subject to the provisions of Section 2.03 hereof, upon surrender for
transfer of any Bond at the designated corporate trust office of the Trustee,
duly endorsed for transfer or accompanied by an assignment duly executed by the
Registered Owner or his attorney duly authorized in writing, the City shall
execute and the Trustee shall authenticate and deliver in the name of the
transferee or transferees a new fully registered Bond or Bonds for a like
aggregate principal amount of the same maturity.
Bonds may be exchanged at the designated corporate trust
office of the Trustee for a like aggregate principal amount of fully registered
Bonds of the same maturity in authorized denominations, which shall be no less
than $100,000. The City shall execute and the Trustee shall authenticate and
deliver Bonds which the Bondholder making the exchange is entitled to receive,
bearing numbers not contemporaneously Outstanding. The execution by the City of
any fully registered Bond of any denomination shall constitute full and due
authorization of such denomination and the Trustee shall thereby be authorized
to authenticate and deliver such fully registered Bond.
The Trustee shall not be required to transfer or exchange any
Bond during the period from the Regular Record Date next preceding the mailing
of notice of redemption as herein provided. After the giving of such notice of
redemption, the Trustee shall not be required to transfer or exchange any Bond,
which Bond or portion thereof has been called for redemption.
Payment of either principal or interest on any fully
registered Bond shall be made only to or upon the written order of the
Registered Owner thereof or his legal representative, on the Regular Record Date
or the Special Record Date but such registration may be changed as hereinabove
provided. All such payments shall be valid and effectual to satisfy, and
discharge the liability upon such Bond to the extent of the sum or sums paid. As
to any Bond, for all other purposes and on any other date, the Registered Owner
shall be regarded as the absolute owner hereof.
The Trustee shall require the payment by any Bondholder
requesting exchange or transfer of any tax or other governmental charge required
to be paid with respect to such exchange or transfer. The Company shall, under
the Loan Agreement, be liable to pay all expenses and charges of the City and of
the Trustee in connection with such exchange or transfer.
Section 2.6 Lost, Stolen, Destroyed and Mutilated Bonds. Upon
receipt by the City and the Trustee of evidence satisfactory to them of the
ownership of and the loss, theft, destruction or mutilation of any Bond and, in
the case of a lost, stolen or destroyed Bond, of
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indemnity satisfactory to them. and upon surrender and cancellation of the Bond,
if mutilated, (i) the City shall execute, and the Trustee shall authenticate and
deliver, a new Bond of the same maturity, series and denomination in lieu of
such lost, stolen, destroyed or mutilated Bond or (ii) if such lost, stolen,
destroyed or mutilated Bond shall have matured or have been called for
redemption, in lieu of executing and delivering a new Bond as aforesaid, the
City may pay such Bond. Any such new Bond shall bear a number not
contemporaneously Outstanding. The applicant for any such new Bond may be
required to pay all expenses and charges of the City and of the Trustee in
connection with the issuance of such Bond. All Bonds shall be held and owned
upon the express condition that, to the extent permitted by law, the foregoing
conditions are exclusive with respect to the replacement and payment of
mutilated, destroyed, lost or stolen bonds, negotiable instruments or other
securities.
Section 2.7 Delivery of Bonds. Upon the execution and delivery of
this Indenture, the City shall execute and deliver to the Trustee and the
Trustee shall authenticate the Bonds and deliver them to the initial purchasers
thereof as directed by the City and as hereinafter in this Section provided.
Prior to the delivery by the Trustee of any of the Bonds, all
conditions precedent to the disbursal of proceeds of the Series 1999 Bonds from
the Project Fund, as specified in Section 3.9 hereof, shall have been satisfied
or waived by the holders of 100% of the Bonds, and there shall have been filed
with or delivered to the Trustee the following:
(a) an ordinance duly adopted by the
City, certified by the City Clerk or other City Officer thereof, authorizing the
financing of the Cost of the Project, the execution and delivery of the Loan
Agreement and this Indenture and the issuance of the Bonds;
(b) a duly executed copy of this
Indenture;
(c) a duly executed copy of the Loan
Agreement;
(d) a duly executed copy of the
Assignment;
(e) a duly executed copy of the
Principal Guaranty; and
(f) the written order of the City as to
the delivery of the Bonds signed by a City Officer.
Section 2.8 Trustee's Authentication Certificate. The Trustee's
authentication certificate upon the Bonds shall be substantially in the form and
tenor hereinbefore provided. No Bond shall be secured hereby or entitled to the
benefit hereof, or shall be valid or obligatory for any purpose, unless the
certificate of authentication, substantially in such form, has been duly
executed by the Trustee; and such certificate of the Trustee upon any Bond shall
be conclusive evidence and the only competent evidence that such Bond has been
authenticated and delivered
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hereunder. The Trustee's certificate of authentication shall be deemed to have
been duly executed by it if manually signed by an authorized officer of the
Trustee, but it shall not be necessary that the same person sign the signed
certificate of authentication on all of the Bonds issued hereunder.
Section 2.9 Cancellation and Destruction of Bonds by the Trustee.
Whenever any Outstanding Bonds shall be delivered to the Trustee for the
cancellation thereof pursuant to this Indenture, upon payment of the principal
amount or interest represented thereby, or for replacement pursuant to Section
2.6 hereof such Bonds shall be promptly canceled and destroyed by the Trustee
and counterparts of a certificate of destruction evidencing such destruction
shall be furnished by the Trustee to the City and the Company.
Section 2.10 Temporary Bonds. Pending the preparation of
definitive Bonds, the City may execute and the Trustee shall authenticate and
deliver temporary Bonds. Temporary Bonds shall be issuable as fully registered
Bonds without coupons, of any denomination, and substantially in the form of the
definitive Bonds but with such omissions, insertions and variations as may be
appropriate for temporary Bonds, all as may be determined by the City. Every
temporary Bond shall be executed by the City and be authenticated by the Trustee
upon the same conditions and in substantially the same manner, and with like
effect, as the definitive Bonds. As promptly as practicable the City shall
execute and shall furnish definitive Bonds and thereupon temporary Bonds may be
surrendered in exchange therefor at the principal office of the Trustee and the
Trustee shall authenticate and deliver in exchange for such temporary Bonds a
like aggregate principal amount of definitive Bonds. Until so exchanged the
temporary Bonds shall be entitled to the same benefits under this Indenture as
definitive Bonds.
Section 2.11 Transfer Restrictions. Upon a transfer of a
Beneficial Ownership Interest in a Series 2003 Bond (other than a transfer by
the Underwriter pursuant to the initial sale of the Series 2003 Bonds), each
purchaser of such Beneficial Ownership Interest shall be deemed to have
certified to the Trustee and acknowledged, represented and agreed with the
Company and the Underwriter that such purchaser is acquiring the Series 2003
Bond for its own account, and that it is (i) a "qualified institutional buyer"
within the meaning of Rule 144A promulgated under the Securities Act of 1933, as
amended, or (ii) an institutional "accredited investor," as defined in Rule
501(a)(1), (2), (3), or (7) of the Securities Act of 1933, as amended. The
foregoing transfer restrictions shall not apply if (i) the Trustee has received
a municipal bond insurance policy or other form of credit enhancement securing
payment of principal and interest on the Bonds, provided that the policy
provider or credit enhancer is rated in one of the three highest categories by a
Rating Agency and such insurance policy or credit enhancement has a term not
less than the final maturity of the Series 2003 Bonds (or, if shorter, may be
drawn upon in full upon its expiration), or (ii) a Rating Agency has assigned
the Series 2003 Bonds a rating of at least "Baa3" or "BBB," without any form of
third party credit enhancement. A legend shall be printed on the face of each
Series 2003 Bond indicating the foregoing.
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ARTICLE III
REVENUES AND FUNDS
Section 3.1 Pledge of Trust Estate. Subject only to the rights of
the City to apply amounts under the provisions of this Article III, a pledge of
the Trust Estate to the extent provided herein is hereby made, and the same is
pledged to secure the payment of the principal of, premium, if any, and interest
on the Bonds. The City hereby covenants that it has not, as of the date hereof,
granted and shall not grant any pledge on the Trust Estate which is prior to the
pledge in favor of the Bonds. The pledge hereby made shall be valid and binding
from and after the time of the delivery by the Trustee of the first Bond
authenticated and delivered under this Indenture. The security so pledged and
then or thereafter received by the City shall immediately be subject to the lien
of such pledge and the obligation to perform the contractual provisions hereby
made shall have priority over any or all other obligations and liabilities of
the City, and the lien of such pledge shall be valid and binding as against all
parties having claims of any kind in tort, contract or otherwise against the
City irrespective of whether such parties have notice thereof.
Section 3.2 Establishment of Funds and Accounts. The City hereby
establishes and creates the following Funds for the Bonds and may create
accounts within such funds, all of which shall be special trust funds and
accounts held by the Trustee:
(a) Bond Principal Fund;
(b) Bond Interest Fund;
(c) Reserve Fund;
(d) Project Fund;
(e) Cost of Issuance Fund; and
(f) Rebate Fund.
Section 3.3 Payments Into the Bond Principal Fund and the Bond
Interest Fund. There shall be deposited into the Bond Interest Fund all accrued
interest, if any. In addition, there shall be deposited into the Bond Principal
Fund or the Bond Interest Fund, as appropriate, and as and when received (i) all
required Monthly Payments pursuant to the Loan Agreement, (ii) all moneys
transferred to the Bond Interest Fund and the Bond Principal Fund from the
Project Fund pursuant to this Indenture, (iii) all moneys transferred to the
Bond Interest Fund and the Bond Principal Fund from the Reserve Fund pursuant to
this Indenture, (iv) all other moneys required or permitted to be deposited into
the Bond Principal Fund or Bond Interest Fund pursuant to the Loan Agreement or
this Indenture, including any supplements to the Indenture, and (v) all other
moneys received by the Trustee when accompanied by directions not inconsistent
with the Loan
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Agreement or the Indenture that such moneys are to be paid into the Bond
Principal Fund or Bond Interest Fund. There shall also be retained in the Bond
Principal Fund and Bond Interest Fund, interest and other income received on
investment of moneys in the Bond Principal Fund and Bond Interest Fund to the
extent provided in Section 6.3 hereof.
Section 3.4 Use of Monies in the Bond Principal Fund and the Bond
Interest Fund. Except as provided in this Section and in Sections 3.11, 3.16,
6.3 and 8.5 hereof, monies in the Bond Principal Fund shall be used solely for
the payment of the principal of and premium, if any, on the Bonds, and monies in
the Bond Interest Fund shall be used solely for the payment of the interest on
the Bonds. Whenever the total amount in the Bond Principal Fund and the Bond
Interest Fund is sufficient to redeem all of the Bonds Outstanding and to pay
interest to accrue thereon prior to such redemption, and redemption premium, if
any, the City, subject to the requirements of the Loan Agreement, covenants to
take and cause to be taken the necessary steps to redeem all of the Bonds on the
redemption date for which the required redemption notice has been given.
Section 3.5 Custody of the Bond Principal Fund and the Bond
Interest Fund. The Bond Principal Fund and the Bond Interest Fund shall be in
the custody of the Trustee but in the name of the City, and the City authorizes
and directs the Trustee to withdraw sufficient funds from the Bond Principal
Fund to pay the principal of and premium, if any, on the Bonds as the same
become due and payable, and to withdraw sufficient funds from the Bond Interest
Fund to pay the interest on the Bonds as the same becomes due and payable or to
make transfers to the Rebate Fund pursuant to Section 3.16 hereof.
Section 3.6 Payments Into the Reserve Fund. There shall be
deposited into the Reserve Fund $1,440,000 of proceeds of the Series 1999 Bonds.
There shall also be deposited into the Reserve Fund (i) all
moneys required to be deposited therein pursuant to the Loan Agreement or the
Indenture, and (ii) all other moneys received by the Trustee when accompanied by
directions not inconsistent with the Loan Agreement or this Indenture that such
moneys are to be paid into such account.
Income from investment of the Reserve Fund shall be retained
in the Reserve Fund to the extent described in Section 6.3 hereof. Anything in
this Indenture to the contrary notwithstanding, moneys on deposit in the Reserve
Fund shall be invested so as not to be in violation of the yield restrictions
set forth in the Tax Certificates. Permitted Investments relating to moneys in
the Reserve Fund shall be valued by the Trustee in the manner contemplated in
the Indenture. If any such valuation reveals that the value of such Permitted
Investments is less than the Reserve Requirement with respect to the Bonds then
Outstanding, the Trustee shall immediately notify the Company and the City of
the amount of the difference between the amount derived by such valuation and
the Reserve Requirement, which difference shall be deposited by the Company in
the Reserve Fund by making the deposits required by the Loan Agreement.
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Section 3.7 Use of Moneys in the Reserve Fund. Except as required
with respect to Section 3.16 hereof, moneys in the Reserve Fund shall be used
solely for the payment of the principal of, premium, if any, and interest on the
Bonds in the event moneys in the Bond Principal Fund and Bond Interest Fund are
insufficient to make such payments when due, whether on an Interest Payment
Date, redemption date, sinking fund redemption date, maturity date or otherwise.
(a) Upon the occurrence of an Event of Default hereunder,
any moneys in the Reserve Fund shall be transferred by the Trustee, but only
upon the direction of a Significant Bondholder to the Bond Interest Fund, and
with respect to any moneys in excess of the amount required to be transferred to
the Bond Interest Fund, to the Bond Principal Fund and applied in accordance
with this Indenture, provided, however, that the amounts on deposit in the
Reserve Fund shall be used to pay only the respective series of Bonds for which
the City has determined that a deposit to the Reserve Fund shall be made in
accordance with this Indenture.
(b) Any moneys in the Reserve Fund may be used to pay the
principal of and interest on such Bonds on the final maturity date.
(c) In the event of the redemption of the Bonds in whole,
any moneys in the Reserve Fund shall be transferred to the Bond Principal Fund
and applied to the payment of the principal of and premium, if any, on such
Bonds.
Section 3.8 Custody of the Reserve Fund. The Reserve Fund shall
be in the custody of the Trustee but for the benefit of the Bondholders and the
City hereby authorizes and directs the Trustee to withdraw sufficient funds from
the Reserve Fund to pay the principal of, premium, if any, and interest on the
Bonds and for the purpose described in Section 3.16 hereof, which authorization
and direction the Trustee hereby accepts.
Section 3.9 Project Fund. Following the transfer described in
Section 3.6 hereof, unexpended proceeds of the Series 1999 Bonds in the amount
of $2,100,000 shall be applied to the redemption of the Series 1999 Bonds on
October 16, 2003, and the remainder of the unexpended proceeds of the Series
1999 Bonds shall be deposited in the Project Fund. In addition, there shall be
deposited in the Project Fund any moneys required to be transferred to the
Project Fund pursuant to the investment provisions of this Indenture, and all
other moneys the Company may make available in its discretion to pay the
reasonable or necessary costs incidental to the acquisition, construction,
improvement or equipping of the Facilities and all other necessary and
incidental expenses in connection with the foregoing.
The Trustee shall keep and maintain adequate records
pertaining to the Project Fund, and all payments therefrom, which shall be open
to inspection by the Company, Registered Owners of the Bonds, the Beneficial
Owners or their duly authorized agents during normal business hours of the
Trustee. After the Completion Date, the Trustee shall file a
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statement of income and disbursements with respect to the Project Fund with the
Company. Any moneys then remaining in the Project Fund shall be transferred to
the Bond Principal Fund or Bond Interest Fund and used, at the option and
written direction of the Company, (i) to redeem Bonds on the next succeeding
Interest Payment Date on which the Bonds shall be subject to redemption, or (ii)
to provide for additional solid waste disposal improvements to the Facilities.
At or prior to disbursement of proceeds of the Series 1999
Bonds from the Project Fund hereof, the Company shall deliver the following to
the Trustee:
(a) a detailed estimate of the costs of the
Facilities, indicating the gross costs, including all hard and soft costs,
including, without limitation, all equipment to be acquired, showing that the
moneys in the Project Fund, together with the Company's reasonable estimate of
the investment earnings to be deposited therein, are sufficient to pay all costs
of completing the Facilities, certified by the Company Representative to the
best of his or her knowledge and belief, upon due inquiry, to be correct;
(b) a satisfactory commitment for an ALTA policy
of mortgagee's title insurance with liability not less than the maximum
principal amount of the Outstanding Bonds, showing the Loan Agreement to be a
valid first lien on the Property subject only to Permitted Liens in such form,
containing only such exceptions and containing such endorsements as are
satisfactory to the Trustee. The expense of such policy endorsements shall be
borne by the Company;
(c) the ▇▇▇▇▇▇ Mortgage;
(d) a satisfactory commitment for an ALTA policy
of mortgagee's title insurance with liability not less than the maximum
principal amount of the Outstanding Bonds, showing the ▇▇▇▇▇▇ Mortgage to be a
valid first lien on the ▇▇▇▇▇▇ Property subject only to Permitted Liens in such
form, containing only such exceptions and containing such endorsements as are
satisfactory to the Trustee. The expense of such policy endorsements shall be
borne by the Company;
(e) the Junction Deed of Trust;
(f) a satisfactory commitment for an ALTA policy
of mortgagee's title insurance with liability not less than $2,000,000, showing
the Junction Deed of Trust to be a valid first lien on the Junction Property
subject only to Permitted Liens in such form, containing only such exceptions
and containing such endorsements as are satisfactory to the Trustee. The expense
of such policy endorsements shall be borne by the Company;
(g) a property survey on the Site, the Junction
Property and the ▇▇▇▇▇▇ Property;
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(h) appraisals of the Property, the property
described in the Junction Deed of Trust, and the property described in the
▇▇▇▇▇▇ Mortgage;
(i) certificates satisfactorily evidencing
continuing compliance with the insurance requirement of the Loan Agreement;
(j) Phase One Environmental Surveys of the Site,
the Junction Property , and the ▇▇▇▇▇▇ Property;
(k) the Patent and Trademark Security Agreement;
and
(l) such other certificates of the Trustee or
the Company as may reasonably be required by Bond Counsel to evidence compliance
with the terms of this Indenture.
Delivery of any of the foregoing may be waived by the holders
of 100% of the Bonds.
Upon the occurrence of an Event of Default under the Indenture
and the exercise by the Trustee of the remedies specified in the Loan Agreement
and the Indenture, any moneys in the Project Fund shall be transferred by the
Trustee to the Bond Interest Fund and thereafter, with respect to any moneys in
excess of the amount required to pay interest on the Bonds, to the Reserve Fund,
and, with respect to any moneys in excess of the Reserve Requirement to the Bond
Principal Fund, and applied in accordance with the Indenture.
Section 3.10 Custody of the Project Fund. The Project Fund shall
be in the custody of the Trustee but in the name of the City, and the City
authorizes and directs the Trustee, on the requisition of the Company
Representative, to withdraw sufficient funds from the Project Fund to pay the
Cost of the Project, and without such requisition to make required transfers to
the Rebate Fund pursuant to Section 3.16 hereof, which authorization and
direction the Trustee hereby accepts.
Section 3.11 Nonpresentment of Bonds. In the event any Bonds shall
not be presented for payment when the principal thereof becomes due, either at
maturity, the date fixed for redemption thereof, or otherwise, if collected
funds sufficient for the payment thereof shall have been deposited in the Bond
Principal Fund and the Bond Interest Fund or otherwise made available to the
Trustee for deposit therein, all liability of the City to the owner or owners
thereof for the payment of such Bonds shall forthwith cease, terminate and be
completely discharged, and thereupon it shall be the duty of the Trustee to hold
such fund or funds in a separate trust account for the benefit of the owner or
owners of such Bonds, who shall thereafter be restricted exclusively to such
fund or funds for any claim of whatever nature on his, her or their part under
this Indenture with respect to said Bond or on, or with respect to, said Bond.
The Trustee shall be under no obligation to, and shall not be required to,
invest such funds pending payment of the
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Bonds. If any Bond shall not be presented for payment within the period of five
years following the date when such Bond becomes due, whether by maturity or
otherwise, the Trustee shall return to the Company the funds theretofore held by
it for payment of such Bond, and such Bond shall, subject to the defense of any
applicable statute of limitation, thereafter be an unsecured obligation of the
Company.
Section 3.12 Monies to Be Held in Trust. All monies required to be
deposited with or paid to the Trustee under any provision of this Indenture
shall be held by the Trustee in trust for the purposes specified in this
Indenture and, except for monies deposited with or paid to the Trustee for the
redemption of Bonds for which the notice of redemption has been duly given,
shall, while held by the Trustee, constitute part of the Trust Estate (other
than the Rebate Fund) and be subject to the lien hereof and not subject to
attachment or any other lien by any other creditor in the event of bankruptcy
nor available for general operations of the Company in the event of bankruptcy.
Section 3.13 Repayment From the Funds. Any amounts remaining in
the Funds after payment in full of the Bonds (or making provision for such
payment in accordance with Article VII), the fees and expenses of the Trustee,
and all other amounts required to be paid hereunder and under the Loan Agreement
to the City and all other amounts required to be paid hereunder and under the
Loan Agreement shall, upon the expiration of the term of the Loan Agreement, be
paid as the Company Representative shall direct in writing.
Section 3.14 Creation of Additional Accounts and Subaccounts;
Transfers of Monies Among Funds. The Trustee shall, at the written request of
the Company Representative and the City, establish such additional accounts
within any of the Funds established under this Indenture, and subaccounts within
any of the accounts established under this Indenture, as shall be specified in
such written request, for the purpose of identifying more precisely the sources
of payments into and disbursements from such Funds, accounts and subaccounts;
but the establishment of any such additional accounts or subaccounts shall not
alter or modify any of the requirements of this Indenture with respect to the
deposit or use of the monies in any Fund established hereunder.
Section 3.15 Rebate Fund. There is hereby created and established
with the Trustee for the benefit of the United States of America a Rebate Fund
in the name of the City which shall be expended in accordance with the
provisions hereof, the Tax Certificates. The Company shall be responsible for
making all such deposits to the Rebate Fund as required in the Tax Certificates
and Section 5.1(g) of the Loan Agreement. The Trustee shall invest the Rebate
Fund at the written direction (or by oral instruction promptly confirmed in
writing) of the Company Representative and shall deposit income from said
investments immediately upon receipt thereof in the Rebate Fund. For purposes of
determining rebate calculations that may be required with respect thereto
pursuant to the Tax Certificates, the Company may employ, at its own expense, a
Rebate Analyst. The Tax Certificates may be superseded or amended by a
certificate of the Company, accompanied by an Opinion of Bond Counsel addressed
to, the Company and the Trustee to the effect that the use of said new
certificate will not adversely affect the exclusion of
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interest on the Bonds from gross income of the recipients thereof for purposes
of federal income taxation.
Section 3.16 Rebate Deposits. The Trustee shall make the rebate
deposit described in the Tax Certificates based upon the written instructions of
the Company Representative. If a withdrawal from the Rebate Fund is permitted as
a result of such computation because no rebate payments are required to be made,
the amount withdrawn shall be deposited in the Bond Principal Fund in accordance
with written instructions furnished to the Trustee. Record of the determinations
required by this Section must be retained by the Company Representative and the
Trustee until six years after the final retirement of the Bonds.
If the monies on deposit in the Rebate Fund are insufficient
for the purposes thereof, the Trustee shall transfer monies to the Rebate Fund
from the following Funds in the following order of priority: the Project Fund,
the Reserve Fund, the Bond Principal Fund and the Bond Interest Fund.
Section 3.17 Rebate Disbursements. Not later than 60 days after
the last day of the fifth Bond Year, as defined in the Tax Certificates, and
every five years thereafter, the Trustee shall pay to the United States 90
percent of the amount, at the written direction of the Rebate Analyst, on
deposit in the Rebate Fund as of such payment date. No later than 60 days after
the final retirement of the Bonds, the Trustee shall pay to the United States
100 percent of the balance remaining in the Rebate Fund (or such lesser amount
as shall be due and owing to the United States). Nothing herein shall relieve
the Company of its obligation to pay the rebate amount in accordance with
Section 5.1(g) of the Loan Agreement. Each payment required to be paid to the
United States pursuant to this Section shall be filed with the Internal Revenue
Service Center, ▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇. Each payment shall be
accompanied by a copy of the Internal Revenue Form 8038 originally filed with
respect to the Bonds, Internal Revenue Form 8038-T and, if necessary, a
statement summarizing the determination of the amount to be paid to the United
States.
Section 3.18 Tax Certificates. The use and investment of monies in
any of the Funds shall be subject to the provisions of the Tax Certificates, and
the City and the Trustee, in the performance of their duties thereunder, agree
to comply with the same. Trustee shall have no responsibility for rebate
calculations and shall have no liability for actions taken at the direction of
the Company or Rebate Analyst
Section 3.19 Refunding. Proceeds of the Bonds will be applied to
the redemption of the Series 1999 Bonds on October 16, 2003.
Section 3.20 Cost of Issuance Fund. The Company shall deposit to
the Cost of Issuance Fund an amount sufficient to pay all costs incurred in
connection with the authorization, issuance and sale of the Bonds, to the extent
the same are approved by the Company. The Trustee shall transfer amounts from
the Cost of Issuance Fund as directed by the Company. The Trustee shall
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keep and maintain adequate records pertaining to the Cost of Issuance Fund, and
all payments therefrom, which shall be open to inspection by the Company,
Registered Owners of the Bonds, the Beneficial Owners or their duly authorized
agents during normal business hours of the Trustee.
Section 3.21 Custody of the Cost of Issuance Fund. The Cost of
Issuance Fund shall be in the custody of the Trustee but in the name of the
City, and the City authorizes and directs the Trustee, on the requisition of the
Company Representative, to withdraw sufficient funds from the Cost of Issuance
Fund to pay the costs incurred in connection with the authorization, issuance
and sale of the Bonds, which authorization and direction the Trustee hereby
accepts.
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ARTICLE IV
COVENANTS OF THE CITY
Section 4.1 Performance of Covenants. The City covenants that it
will faithfully perform at all times any and all covenants, undertakings,
stipulations and provisions contained in this Indenture, in any and every Bond
and in all proceedings of the City pertaining thereto. The City covenants,
represents, warrants and agrees that it is duly authorized under the laws of the
State of Arkansas, including particularly and without limitation, the Act, to
issue the Bonds and to execute this Indenture, to pledge the property described
herein and pledged hereby and to pledge the Trust Estate in the manner and to
the extent herein set forth, that all actions on its part required for the
issuance of the Bonds and the execution and delivery of this Indenture have been
duly and effectively taken or will be duly taken as provided herein, and that
this Indenture is a valid and enforceable instrument of the City and that the
Bonds in the hands of the owners thereof are and will be valid and enforceable
obligations of the City according to the terms thereof.
Section 4.2 Instruments of Further Assurance. The City covenants
that it will do, execute, acknowledge and deliver or cause to be done, executed,
acknowledged and delivered, such indentures supplemental hereto and such further
acts, instruments and transfers as the Trustee may reasonably require for the
better assuring, transferring, pledging and hypothecating unto the Trustee all
and singular the Trust Estate to the payment of the principal of, premium, if
any, and interest on the Bonds.
Promptly after any filing, registration or recording (other
than the filing of the Loan Agreement, this Indenture and any financing
statements in connection with the issuance of the Bonds) or any re-filing,
re-registration or re-recording of this Indenture or the Loan Agreement or any
filing, registration, recording, re-filing, re-registration or re-recording of
any supplement to either of said instruments, any financing statement or
instrument of similar character relating to any of said instruments or any
instrument of further assurance which is required pursuant to the preceding
paragraph, the City will cause the Company Representative to deliver to the
Trustee an opinion of independent counsel to the effect that such filing,
registration, recording, re-filing, re-registration or re-recording has been
duly accomplished and setting forth the particulars thereof.
Section 4.3 Payment of Principal, Premium, If Any, and Interest.
The City will promptly pay or cause to be paid the principal of, premium, if
any, and interest on all Bonds issued hereunder according to the terms hereof.
The principal, premium, if any, and interest payments are payable solely from
the Trust Estate, which is hereby specifically pledged to the payment thereof in
the manner and to the extent herein specified. Nothing in the Bonds or in this
Indenture shall be considered or construed as pledging any funds or assets of
the City other than those pledged hereby or creating any liability of the City's
members, employees or other agents.
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Section 4.4 Conditions Precedent. Upon the date of issuance of
any of the Bonds, the City hereby covenants that all conditions, acts and things
required of the City by the Constitution or statutes of the State of Arkansas or
by the Act or by this Indenture to exist, to have happened or to have been
performed precedent to or in the issuance of the Bonds shall exist, have
happened and have been performed.
Section 4.5 Supplemental Indentures; Recordation or Filing of
Security Instruments. As set forth in Section 12.9 of the Loan Agreement, the
City shall cause the Trustee to cause such continuation statements under the
Arkansas Uniform Commercial Code at all times to be recorded, registered and
filed by the Trustee and to be kept, recorded, registered and filed in such
manner and in such places as may be required by law in order fully to preserve
and protect the security of the Bondholders and all rights of the Trustee
hereunder.
Section 4.6 Rights Under the Loan Agreement. The City will
observe all of the obligations, terms and conditions required on its part to be
observed or performed under the Loan Agreement. The City agrees that wherever in
the Loan Agreement it is stated that the City will notify the Trustee, whenever
the Loan Agreement gives the Trustee some right or privilege, or in any way
attempts to confer upon the Trustee the ability for the Trustee to protect the
security for payment of the Bonds, that such part of the Loan Agreement shall be
as though it were set out in this Indenture in full.
The City agrees that the Trustee as assignee of the Loan
Agreement, to the extent provided herein, may enforce, in its name or in the
name of the City, all rights of the City (other than the rights of the City
under Sections 5.1(f), 8.5 and 10.4 of the Loan Agreement and other than the
rights of the City to perform certain discretionary acts reserved in the Loan
Agreement) and all obligations of the Company under and pursuant to the Loan
Agreement for and on behalf of the Bondholders, whether or not the City is in
default hereunder.
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ARTICLE V
REDEMPTION OF SERIES 2003 BONDS PRIOR TO MATURITY
Section 5.1 Redemption of Bonds Upon Occurrence of Certain
Events.
(a) The Bonds are redeemable by the City upon the direction of the
Company Representative in whole or in part at any time at a redemption price
equal to the principal amount of each Bond redeemed, and accrued interest
thereon to the redemption date, upon the occurrence of events described in
Section 7.1 of the Loan Agreement.
(b) The Bonds are also redeemable by the City upon the direction
of the Company Representative in whole but not in part at any time at a
redemption price equal to 110% of the principal amount thereof, and accrued
interest thereon to the redemption date, as a condition precedent to the
acquisition by any Person of substantially all of the assets of the Company or
as a condition precedent of the merger or consolidation of the Company, as
provided in Section 8.14 of the Loan Agreement.
Section 5.2 Redemption of Bonds Upon a Determination of
Taxability. Upon the occurrence of a Determination of Taxability, the Bonds are
subject to mandatory redemption in whole at a redemption price equal to 105% of
the Outstanding principal amount thereof, plus interest accrued to redemption
date, at the earliest practicable date selected by the Trustee, after
consultation with the Company, but in no event later than 45 days following
receipt by the Trustee of notice of the Determination of Taxability. The
occurrence of a Determination of Taxability with respect to the Bonds will not
constitute an Event of Default under this Indenture and the sole remedy of the
Holders will be mandatory redemption of the Bonds in accordance with this
Section 5.2. Within five Business Days after receipt by the Trustee of written
notice of a Determination of Taxability, the Trustee shall give written notice
thereof to the Holders of all Bonds then Outstanding and shall also give written
notice to the Company and the City.
Section 5.3 Sinking Fund. The Bonds are subject to mandatory
sinking fund redemption at a redemption price equal to 100 percent of the
principal amount thereof and accrued interest to the redemption date. As and for
a sinking fund for the redemption of such Bonds, there shall be deposited
pursuant to Section 5.1(a) of the Loan Agreement in the Bond Principal Fund and
Bond Interest Fund a sum which is sufficient to redeem (after credit as provided
below) the following principal amounts of such Bonds and accrued interest to the
redemption date:
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October 1 Principal October 1 Principal
of the Year Amount of the Year Amount
----------- ------ ----------- ------
2004 $ 700,000 2011 1,200,000
2005 800,000 2012 1,200,000
2006 800,000 2013 1,300,000
2007 900,000 2014 1,400,000
2008 900,000 2015 1,500,000
2009 1,000,000 2016 1,500,000
2010 1,100,000 2017 100,000
Not more than 45 days nor less than 30 days prior to a sinking
fund payment date for the Bonds, the Trustee shall proceed to select for
redemption (by lot in such manner as the Trustee may determine) from all Bonds
Outstanding which are subject to sinking fund redemption on such date a
principal amount of such Bonds equal to the aggregate principal amount of Bonds
redeemable with the required sinking fund payment, and shall call such Bonds for
redemption from the particular sinking fund on the next October 1, and give
notice of such call.
At the option of the Company Representative (so long as no
Event of Default has occurred and is continuing) to be exercised by delivery of
a written certificate to the Trustee and the City not less than 45 days next
preceding any sinking fund redemption date, it may (i) deliver to the Trustee
for cancellation Bonds which are subject to sinking fund redemption on such date
in an aggregate principal amount designated by the Company Representative, or
(ii) specify a principal amount of such Bonds which prior to said date have been
redeemed (otherwise than through the operation of such sinking fund) and
canceled by the Trustee and not theretofore applied as a credit against any
sinking fund redemption obligation for such Bonds. Each Bond so delivered or
previously redeemed shall be credited by the Trustee at 100% of the principal
amount thereof against the obligation of the Company on such sinking fund
redemption date, and any excess shall be so credited against future sinking fund
redemption obligations for Bonds proportionately to all remaining sinking fund
payments. In the event the Company Representative shall avail itself of the
provisions of clause (i) of the first sentence of this paragraph the certificate
required by the first sentence of this paragraph shall be accompanied by the
Bonds to be canceled.
Notwithstanding any provision of this Indenture to the
contrary, in the event all Bonds are held by a single holder, no additional
notice shall be required with respect to mandatory sinking fund redemption
unless requested by the holders of 100% of the principal amount of the Bonds,
and Bonds need not be presented for mandatory sinking fund redemption payment.
Section 5.4 Method of Selecting Bonds. Except in the case of
mandatory sinking fund redemption pursuant to Section 5.3 hereof, in the event
that less than all of the Outstanding
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Bonds shall be redeemed, the Bonds redeemed shall be redeemed in such order of
maturity as the Company Representative shall determine in accordance with
written directions furnished to the Trustee (less than all of the Bonds of a
single maturity to be selected by lot in such manner as the Trustee may
determine).
Section 5.5 Notice of Redemption. Bonds shall be called for
redemption by the Trustee as herein provided but only if funds have been
deposited with the Trustee on or before the date fixed for redemption sufficient
to pay the applicable redemption price of the Bonds to be redeemed. Except as
otherwise herein provided, the Company shall provide to the Trustee, at least 45
days prior to the redemption date, a Certificate of the Company Representative
specifying the principal amount of the Bonds to be called for redemption, the
applicable redemption price or prices and the provision or provisions of this
Indenture pursuant to which such Bonds are to be called for redemption, provided
that such certificate shall not be required with respect to a sinking fund
redemption pursuant to Section 5.3 hereof and Bonds shall be called for
redemption by the Trustee pursuant to such Section without the necessity of any
action by the City or the Company. In the case of any redemption or tender other
than as provided in Section 5.3 hereof, the Trustee shall cause notice of such
redemption to be given by mailing not more than 45 days nor less than 30 days
prior to the redemption date by first class mail a copy of the redemption notice
to the Registered Owner of any Bonds designated for redemption in whole or in
part, at their address as the same shall last appear upon the registration
books; provided, however, that failure to give such notice or any defect
therein, shall not affect the validity of any proceedings for the redemption of
such Bonds for which no such failure or defect occurs.
Notice of any redemption hereunder with respect to Bonds held
under a book entry system shall be given by the Registrar only to the
Depository, or its nominee, as the Holder of such Bonds. Selection of book entry
interests in the Bonds called for redemption, and notice of call to the owners
of those interests called, is the responsibility of the Depository, the Direct
Participant and the Individual Participant and any failure of the Depository to
advise any Direct Participant and any failure of a Direct Participant or any
Indirect Participant to notify the Beneficial Owner of any such notice and its
contents or effect will not affect the validity of such notice of any
proceedings for the redemption of such Bonds.
Each notice of redemption shall specify the name of the Bonds,
the date the Bonds were originally issued, the date fixed for redemption, the
date of mailing of the notice, the redemption price, the place or places of
payment (including contact person and phone number) the CUSIP numbers of Bonds
being redeemed, the rate of interest borne by each Bond being redeemed or
tendered, the maturity date of each Bond being redeemed or tendered, that
payment will be made upon presentation and surrender of the Bonds to be
redeemed, that interest accrued to the date fixed for redemption will be paid as
specified in said notice, any conditions to the redemption (including, but not
limited to, deposit of the applicable redemption price) and that on and after
said date interest thereon will cease to accrue. If less than all the
Outstanding Bonds are to be redeemed, the notice of redemption shall specify the
Bonds to be redeemed, and the numbers of the Bonds or portions thereof to be
redeemed.
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Section 5.6 Bonds Due and Payable on Redemption Date; Interest
Ceases to Accrue. On or before any redemption pursuant to this Article V,
collected funds sufficient to redeem all the Bonds called for redemption at the
appropriate redemption price, including accrued interest to the date fixed for
redemption, shall be deposited with the Trustee. On the redemption date, the
principal amount of each Bond to be redeemed, together with the accrued interest
thereon to such date, and redemption premium, if any, shall become due and
payable; from and after such date, notice of redemption having been given, and
deposit having been made in accordance with the provisions of this Article V,
then, notwithstanding that any Bonds called for redemption shall not have been
surrendered, no further interest shall accrue on any of such Bonds. From and
after such date of redemption (such notice having been given and such deposit
having been made), the Bonds to be redeemed shall not be deemed to be
Outstanding hereunder, and the City shall be under no further liability in
respect thereof.
Section 5.7 Cancellation. All Bonds which have been redeemed
shall be canceled by the Trustee and destroyed as provided in Section 2.9
hereof.
Section 5.8 Partial Redemption of Bonds. Upon surrender of any
Bond for redemption in part only, the City shall execute, and the Trustee shall
authenticate and deliver to the owner thereof, the cost of which shall be paid
by the Company, a new Bond or Bonds of the same maturity and of authorized
denominations, in an aggregate principal amount equal to the unredeemed portion
of the Bond surrendered; provided that the Trustee shall select Bonds for
redemption so as to assure that after such redemption no Registered Owner or
Owner of Beneficial Interests shall retain Bonds in authorized denominations of
not less than $100,000; and provided further that, if less than all of an
Outstanding Bond of one maturity in a book entry system is to be called for
redemption, the Trustee shall give notice to the Depository or the nominee of
the Depository that is the Holder of such Bond, and the selection of the
Beneficial Interests in that Bond to be redeemed shall be at the sole discretion
of the Depository and its participants. In the case of a partial redemption of
Bonds by lot, each unit of face value of principal thereof equal to $5,000 (each
such $5,000 unit is hereinafter referred to as a "Unit") shall be treated as
though it were a separate Bond in the amount of such Unit. If it is determined
that one or more, but not all, of the Units represented by a Bond are to be
called for redemption, then upon notice of redemption of a Unit or Units of
Bonds, the holder of that Bond shall surrender the Bond to the Trustee (a) for
payment of the redemption price of the Unit or Units of Bonds called for
redemption (including without limitation. the interest accrued to the date fixed
for redemption and any premium), and (b) for issuance, without charge to the
holder thereof, of a new Bond or Bonds of $100,000 or amounts in excess thereof
in such integrals as are permitted hereunder, aggregating a principal amount
equal to the unmatured and unredeemed portion of, and bearing interest at the
same rate and maturing on the same date as, the Bond surrendered.
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ARTICLE VI
INVESTMENTS
Section 6.1 Investment of Funds. Subject to the Section 3.18
hereof, any monies held as part of the Funds shall, on instructions signed by a
Corporation Representative, be invested by the Trustee in Permitted Investments
(i) with respect to the Project Fund and the Reserve Fund maturing in the
amounts and at the times necessary to provide funds to make the payments to
which such monies are applicable as estimated in a certificate of a Corporation
Representative from time to time filed with the Trustee and (ii) with respect to
the Bond Principal Fund, the Bond Interest Fund and the Rebate Fund maturing in
the amounts and at the times necessary to provide funds to make the payments to
which such monies are applicable as determined by the Trustee. To the extent
practicable, all such Permitted Investments purchased shall mature or be
redeemable on a date or dates prior to the time when the monies so invested will
be required for expenditure. Permitted Investments in the Reserve Fund shall
have a maturity of not more than one year. The Trustee shall sell and reduce to
cash a sufficient portion of such investments whenever the cash balance in a
Fund is insufficient for the purposes of such Fund. The Trustee may make any and
all investments permitted by the provisions of this Section through its trust or
bond department.
Investments in any of the Funds hereof shall be valued by the
Trustee not less often than annually, at the market value thereof, exclusive of
interest. Deficiencies in the amount on deposit in the Reserve Fund resulting
from a decline in market value shall be restored by the Company beginning not
later than three months after the valuation date by making the deposits required
by Section 5.1(e)(iii) of the Loan Agreement.
As to any investment agreement, the Trustee shall give notice
to any provider of an investment agreement in accordance with the terms of the
investment agreement so as to receive funds thereunder when needed with no
penalty or premium paid.
Section 6.2 Arbitrage. In reliance upon the covenant of the
Company in Section 4.6 of the Loan Agreement, the City hereby covenants for the
benefit of each owner of the Bonds that no use will be made of the proceeds of
the Bonds or of any monies in the Funds and that no other action shall be taken
which will cause the Bonds or any obligations subsequently issued by the City to
be "arbitrage bonds" within the meaning of Section 148 of the Code and the
regulations prescribed thereunder.
Unless otherwise required by Section 148 of the Code, the City
Clerk or any other officer of the City having responsibility with respect to the
issuance of the Bonds shall, on or prior to the date of issuance of the Bonds,
if applicable, either alone or in conjunction with any other officer, employee,
consultant or agent of the City, deliver to the Trustee the certification
required by the regulations promulgated under Section 148 of the Code to
evidence that such
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Bonds will not be "arbitrage bonds" within the meaning of Section 148 of the
Code and the regulations thereunder. Such certificates may rely upon the
certificates of the Company delivered to the City pursuant to Section 4.6 of the
Loan Agreement.
Section 6.3 Allocation and Transfers of Investment Income. Any
investments shall be held by or under the control of the Trustee and shall be
deemed at all times a part of the Fund from which the investment was made. Any
loss resulting from such investments shall be charged to such Fund. Any interest
or other gain from any Fund from any investment or reinvestment shall be
allocated and transferred subject to the Tax Certificates, as follows:
(a) any interest or other gain realized as a result of
any investments or reinvestments of moneys in the Project Fund shall be retained
in or transferred to the Project Fund;
(b) any interest or other gain realized as a result of
any investments or reinvestments of moneys in the Bond Principal Fund and the
Bond Interest Fund shall be retained in the respective Fund;
(c) any interest or other gain realized as a result of
any investments or reinvestments of moneys in the Reserve Fund shall be
transferred to the Project Fund during the construction of the Improvements and
thereafter shall be credited to the Reserve Fund if the amount therein is less
than the Reserve Requirement. If the amount in the Reserve Fund is equal to or
greater than the Reserve Requirement, such interest or other gain realized shall
be paid into the Project Fund, and after the Completion Date, to the Bond
Interest Fund;
(d) any interest or other gain realized as a result of
any investments or reinvestments of moneys in the Cost of Issuance Fund shall be
paid to the Company;
(e) any interest or other gain realized as a result of
any investment or reinvestment of moneys in the Rebate Fund shall be retained in
the Rebate Fund; and
(f) notwithstanding the foregoing, any interest or other
gain realized as a result of any investments or reinvestments of moneys in Funds
pursuant to the Indenture shall first be deposited in the Rebate Fund to the
extent amounts required to be deposited therein pursuant to the Indenture have
not been so deposited.
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ARTICLE VII
DISCHARGE OF INDENTURE
Section 7.1 Discharge of This Indenture. If, when the Bonds
secured hereby shall be paid in accordance with their terms (or payment of the
Bonds has been provided for in the manner set forth in the following paragraph),
together with all other sums payable hereunder, then this Indenture and the
Trust Estate and all rights granted hereunder shall thereupon cease, terminate
and become void and be discharged and satisfied. Also, if all Outstanding Bonds
secured hereby shall have been purchased by the Company and delivered to the
Trustee for cancellation, and all other sums payable hereunder have been paid,
or provision shall have been made for the payment of the same, then this
Indenture and the Trust Estate and all rights granted hereunder shall thereupon
cease, terminate and become void and be discharged and satisfied. In such
events, upon the request of the City, the Trustee shall assign and transfer to
the City all property then held by the Trustee hereunder and shall execute such
documents as may be reasonably required by the City (including undertakings by
the Company to continue to comply with its covenants contained in Sections 4.6,
5.1(f), 5.1(g), 8.5 and 10.4 of the Loan Agreement until all Bonds are actually
paid) and shall turn over any surplus in any Fund the Company Representative
shall direct in writing, other than the Rebate Fund.
Payment of any Outstanding Bonds 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 Bonds
are to be redeemed on any date prior to their maturity, the Company
Representative shall have given to the Trustee in form satisfactory to it
irrevocable instructions to give on a date in accordance with the provisions of
Section 5.5 hereof notice of redemption of such Bonds on said redemption date,
such notice to be given in accordance with the provisions of Section 5.5 hereof,
(ii) there shall have been deposited with the Trustee Government Obligations
described in Section 1(a) of the definition of such term as set forth herein
which shall not contain provisions permitting the redemption thereof at the
option of the issuer before the date the principal thereof will be required, the
principal of and the interest on which when due, and without any reinvestment
thereof, will provide monies which, together with any other available monies, if
any, deposited with or held by the Trustee at the same time, shall be sufficient
to pay when due the principal of and premium, if any, and interest due and to
become due on said Bonds on and prior to the redemption date or maturity date
thereof, as the case may be (and if on the date of such deposit, the Bonds are
not actually paid in full, then there shall be provided to the Trustee and the
City (a) report of an independent firm of nationally recognized certified public
accountants verifying the sufficiency of the escrow established to pay the Bonds
in full and (b) an opinion of nationally recognized bond counsel to the effect
that the Bonds are no longer Outstanding under this Indenture), and (iii) in the
event said Bonds are not by their terms subject to redemption within the next 45
days, the Company Representative shall have given the Trustee in form
satisfactory to it irrevocable instructions to give, as soon as practicable in
the same manner as the notice of redemption is given pursuant to
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Section 5.5 hereof, a notice to the owners of such Bonds that the deposit
required by (ii) above has been made with the Trustee and that payment of said
Bonds has been provided for in accordance with this Section and stating such
maturity or redemption date upon which monies are to be available for the
payment of the principal of and premium, if any, and interest on said Bonds. At
such time as payment of any Bonds has been provided for as aforesaid, such Bonds
shall no longer be secured by or entitled to the benefits of this Indenture.
except for the purpose of any payment from such monies or securities deposited
with the Trustee. The Company will use its best efforts to obtain from the
Rating Agencies the assignment of a rating to the Bonds that have been defeased
pursuant to this Section 7.1.
The release of the obligations of the City 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 7.2 Liability of City Not Discharged. Upon compliance
with the provisions of Section 7.1 hereof with respect to all Bonds then
Outstanding, this Indenture may be discharged in accordance with the provisions
of this Article VII, but the liability of the City in respect of such Bonds
shall continue provided that the owners thereof shall thereafter be entitled to
payment only out of the monies or securities deposited with the Trustee as
provided in Section 7.1 hereof.
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ARTICLE VIII
DEFAULTS AND REMEDIES
Section 8.1 Events of Default. Each of the following is hereby
defined as and shall be deemed an "Event of Default":
(a) default in the payment of the principal of or
premium, if any, on any Bond when the same shall become due and payable, whether
at the stated maturity thereof, on a sinking fund payment date, or upon
proceedings for redemption;
(b) default in the payment of any installment of interest
on any Bond when the same shall become due and payable;
(c) default shall be made in the observance or
performance of any covenant, contract or other provision in the Bonds or this
Indenture (other than as referred to in (a) or (b) of this Section) and such
default shall continue for a period of 30 days after written notice to the City
and the Trustee from the owners of at least 25 percent in aggregate principal
amount of the Bonds then Outstanding or to the City from the Trustee specifying
such default and requiring the same to be remedied; provided, with respect to
any such failure covered by this subsection (c), no Event of Default shall be
deemed to have occurred so long as a course of action adequate to remedy such
failure shall have been commenced within such 30-day period and shall thereafter
be diligently prosecuted to completion and the failure shall be remedied
thereby; provided further, however, that failure to correct such default within
90 days after receipt of such notice shall constitute an Event of Default; and
(d) the occurrence of an "event of default" under Section
10.1 of the Loan Agreement.
Section 8.2 Remedies on Events of Default. Upon the occurrence of
an Event of Default, the Trustee shall have the following rights and remedies:
(a) Acceleration. The Trustee may, and upon the written
request of the owners of not less than 25 percent aggregate principal amount of
the sum of the Bonds then Outstanding shall, by notice in writing given to the
City and the Company, declare the principal amount of all Bonds then Outstanding
and the interest accrued thereon to be immediately due and payable and said
principal and interest shall thereupon become immediately due and payable. Upon
any declaration of acceleration hereunder, the City and the Trustee shall
immediately declare all Loan Payments under the Loan Agreement to be immediately
due and payable as provided in Section 10.2 of the Loan Agreement.
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(b) Legal Proceedings. The Trustee may, by mandamus or
other suit, action or proceeding at law or in equity, enforce the rights of the
Bondholders and require the City, the Company or any or both of them to carry
out the Loan Agreement with or for the benefit of the Bondholders and to perform
its or their duties under the Act, the Loan Agreement and this Indenture. The
Trustee may also, by action or suit in equity, enjoin any acts or things which
may be unlawful or in violation of the rights of the Bondholders.
(c) Receivership. The Trustee shall be entitled as a
matter of right without notice or demand (such notice being expressly waived
hereby), ex parte, to the appointment of a receiver or receivers of the Trust
Estate, and of the rents, revenues, income, products and profits thereof,
pending such proceedings, but, notwithstanding the appointment of any receiver,
trustee or other custodian, the Trustee shall be entitled to the possession and
control of any cash, securities or other instruments at the time held by, or
payable or deliverable under the provisions of this Indenture to, the Trustee.
(d) Suit for Judgment on the Bonds. The Trustee shall be
entitled to ▇▇▇ for and recover judgment, either before or after or during the
pendency of any proceedings for the enforcement of the lien of this Indenture,
for the enforcement of any of its rights, or the rights of the Bondholders
hereunder, but any such judgment against the City shall be enforceable only
against the Trust Estate. No recovery of any judgment by the Trustee shall in
any manner or to any extent affect the lien of this Indenture or any rights,
powers or remedies of the Trustee hereunder, or any lien, rights, powers or
remedies of the owners of the Bonds, but such lien, rights, powers and remedies
of the Trustee, the Bondholders shall continue unimpaired as before.
(e) Remedies Under Agreement. The Trustee, as assignee of
the City, may exercise the remedies provided under the Loan Agreement upon an
Event of Default.
In the event written notice is given by the Bondholders to the
Trustee under Section 8.1(c) hereof and upon due receipt of such notice by the
Trustee, the Trustee shall immediately give notice with respect to such default
to the Company.
No right or remedy is intended to be exclusive of any other
right or remedy, but each and every such right or remedy shall be cumulative
with respect to the Trustee and the Bondholders, and in addition to any other
right or remedy given hereunder or now or hereafter existing at law or in equity
or by statute.
If any Event of Default shall have occurred and if instructed
and directed in writing by the owners of not less than the sum of a majority in
aggregate principal amount of Bonds then Outstanding and indemnified as provided
in Section 9.1 hereof, the Trustee shall exercise such one or more of the rights
and powers conferred by this Section as the Trustee, being advised by counsel,
shall deem most expedient in the interests of the Bondholders or as may be set
forth in such directions.
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Section 8.3 Majority of Bondholders and Holders of Parity
Indebtedness May Control Proceedings. Anything in this Indenture to the contrary
notwithstanding and subject to prior notice to the City, the owners of the sum
of a majority in aggregate principal amount of the Bonds and Parity Indebtedness
then Outstanding shall have the right, at any time, to the extent permitted by
law, by an instrument or instruments in writing executed and delivered to the
Trustee, to direct the time, method and place of conducting all proceedings to
be taken in connection with the enforcement of the terms and conditions of this
Indenture, or for the appointment of a receiver, or any other proceedings
hereunder; provided that such direction shall not be otherwise than in
accordance with the provisions hereof. The Trustee shall not be required to act
on any direction given to it pursuant to this Section unless indemnified as
provided in Section 9.1 hereof.
Section 8.4 Rights and Remedies of Bondholders. No owner of any
Bond or Parity Indebtedness shall have any right to institute any suit, action
or proceeding in equity or at law for the enforcement of this Indenture or for
the execution of any trust hereof or for the appointment of a receiver or any
other remedy hereunder, unless a default has occurred of which the Trustee has
been notified as provided in Section 9.1 hereof, or of which by said Section it
is deemed to have notice, nor unless such default shall have become an Event of
Default and the owners of the sum of not less than a majority in aggregate
principal amount of Bonds then Outstanding shall have made written request to
the Trustee and shall have offered ten (10) days either to proceed to exercise
the powers hereinbefore granted or to institute such action, suit or proceeding
in its own name, nor unless they have also offered to the Trustee indemnity as
provided in Section 9.1 hereof nor unless the Trustee shall thereafter fail or
refuse to exercise the powers hereinbefore granted, or to institute such action,
suit or proceeding in its own name; and such notification, request and offer of
indemnity are hereby declared in every case at the option of the Trustee to be
conditions precedent to the execution of the powers and trusts of this
Indenture, and to any action or cause of action for the enforcement of this
Indenture, or for the appointment of a receiver or for any other remedy
hereunder; it being understood and intended that no one or more owners of the
Bonds shall have the right in any manner whatsoever to affect, disturb or
prejudice the lien of this Indenture by his, her or their action or to enforce
any right hereunder except in the manner herein provided and that all
proceedings at law or in equity shall be instituted, had and maintained in the
manner herein provided and for the equal benefit of the owners of all Bonds then
Outstanding. Nothing in this Indenture contained shall, however, affect or
impair the right of any owner of Bonds to enforce the payment, by the
institution of any suit, action or proceeding in equity or at law, of the
principal of, premium, if any, or interest on any Bond at and after the maturity
thereof, or the obligation of the City to pay the principal of, premium, if any,
and interest on each of the Bonds to the respective owners of the Bonds at the
time and place, from the source and in the manner herein and in the Bonds
expressed.
Section 8.5 Application of Monies. All monies received by the
Trustee pursuant to any reasonable right given or action taken under the
provisions of this Article shall, after payment of the fees of the Trustee,
costs and expenses of the proceedings resulting in the collection of such monies
and the expenses, liabilities and advances incurred or made by the
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Trustee, first, to the extent of any deficiency of required amounts in the
Rebate Fund be deposited in the Rebate Fund, and thereafter shall be held in
trust and all monies so deposited in the Bond Principal Fund and the Bond
Interest Fund and all monies held or deposited in the Bond Principal Fund and
the Bond Interest Fund during the continuance of an Event of Default shall be
applied as follows:
(a) Unless the principal of all the Bonds and Parity
Indebtedness shall have become or shall have been declared due and payable, all
such monies shall be applied:
FIRST--to the payment to the persons entitled thereto
of all installments of interest then due on the Bonds and Parity Indebtedness in
the order of the maturity of the installments of such interest and, if the
amount available shall not be sufficient to pay in full any particular
installment, then to the payment ratably, according to the amounts due on such
installment, to the persons entitled thereto, without any discrimination or
privilege; and
SECOND--to the payment to the persons entitled
thereto of the unpaid principal of and premium, if any, on any of the Bonds and
Parity Indebtedness which shall have become due (other than Bonds called for
redemption for the payment of which moneys are held pursuant to the provisions
of the Indenture), in the order of their due dates, with interest on the unpaid
principal of and premium, if any, on such Bonds from the respective dates upon
which they became due, at a rate which shall be the highest rate of interest
borne by any such Bond and Parity Indebtedness during the 365 days prior to the
date on which such Bonds and Parity Indebtedness became due or the maximum rate
permitted by law if less than such rate aforesaid and, if the amount available
shall not be sufficient to pay in full such Bonds due on any particular date,
together with such interest, then to the payment ratably, according to the
amount of principal due on such date, to the persons entitled thereto, without
any discrimination or privilege.
(b) If the principal of all the Bonds and Parity
Indebtedness shall have become due or shall have been declared due and payable,
all such moneys shall be applied to the payment of the principal and interest
then due and unpaid upon all of the Bonds, together with interest on overdue
installments of principal at a rate which shall be the highest rate of interest
borne by any Outstanding Bond during the 365 days prior to the date on which
Bonds become due or the maximum rate permitted by law if less than such rate
aforesaid, without preference or priority of principal over interest or of
interest over principal, or of any installment of interest over any other
installment of interest, or of any such Bond over any other such Bond, ratably,
according to the amounts due respectively for principal and interest, to the
persons entitled thereto without any discrimination or privilege.
(c) If the principal of all the Bonds and Parity
Indebtedness shall have been declared due and payable, and if such declaration
shall thereafter have been rescinded and annulled under the provisions of this
Article then, subject to the provisions of paragraph (b) of this Section in the
event that the principal of all the Bonds and Parity Indebtedness shall later
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become due or be declared due and payable, the monies shall be applied in
accordance with the provisions of paragraph (a) of this Section.
Whenever monies are to be applied pursuant to the provisions
of this Section, such monies shall be applied at such times, and from time to
time, as the Trustee shall determine, having due regard to the amount of such
monies available for application and the likelihood of additional monies
becoming available for such application in the future. Whenever the Trustee
shall apply such funds, it shall fix the date (which shall be an Interest
Payment Date unless it shall deem another date more suitable) upon which such
application is to be made, and upon such date interest on the amounts of
principal to be paid on such dates shall cease to accrue. The Trustee shall give
such notice as it may deem appropriate of the deposit of any such monies and of
the fixing of any such date, and shall not be required to make payment to the
owner of any Bond and Parity Indebtedness until such Bond and Parity
Indebtedness shall be presented to the Trustee for appropriate endorsement or
for cancellation if fully paid.
Whenever all of the Bonds and Parity Indebtedness and interest
thereon have been paid under the provisions of this Section and all expenses and
fees of the Trustee and all other amounts to be paid to the City hereunder or
under the Loan Agreement have been paid, any balance remaining in the Funds
shall be paid as provided in Section 3.13 hereof.
Section 8.6 Trustee May Enforce Rights Without Bonds. All rights
of action and claims under this Indenture or any of the Bonds Outstanding
hereunder may be enforced by the Trustee without the possession of any of the
Bonds or the production thereof in any trial or proceedings relative thereto;
and any suit or proceeding instituted by the Trustee shall be brought in its
name as Trustee, without the necessity of joining as plaintiffs or defendants
any owners of the Bonds, and any recovery of judgment shall be for the ratable
benefit of the owners of the Bonds subject to the provisions of this Indenture.
Section 8.7 Trustee to File Proofs of Claim in Receivership, Etc
In the case of any receivership, insolvency, bankruptcy, reorganization,
arrangement, adjustment, composition or other judicial proceedings affecting the
Trust Estate or the Company, the City or the Trustee shall, to the extent
permitted by law, be entitled to file such proofs of claims and other documents
as may be necessary or advisable in order to have claims of the Trustee and of
the Bondholders allowed in such proceedings for the entire amount due and
payable by the City under this Indenture, or by the Company, as the case may be,
at the date of the institution of such proceedings and for any additional
amounts which may become due and payable by it after such date, without
prejudice, however, to the right of any Bondholder s to file a claim in his own
behalf.
Section 8.8 Delay or Omission No Waiver. No delay or omission of
the Trustee, any Bondholder or any holder to exercise any right or power
accruing upon any default shall exhaust or impair any such right or power or
shall be construed to be a waiver of any such default, or
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acquiescence therein; and every power and remedy given by this Indenture may be
exercised from time to time and as often as may be deemed expedient.
Section 8.9 No Waiver of One Default to Affect Another. No waiver
of any default hereunder, whether by the Trustee, the Bondholders, shall extend
to or affect any subsequent or any other then existing default or shall impair
any rights or remedies consequent thereon.
Section 8.10 Discontinuance of Proceedings on Default; Position of
Parties Restored. In case the Trustee shall have proceeded to enforce any rights
under this Indenture and such proceedings shall have been discontinued or
abandoned for any reason, or shall have been determined adversely to the
Trustee, then and in every such case the City and the Trustee shall be restored
to their former positions and rights hereunder with respect to the Trust Estate,
and all rights, remedies and powers of the Trustee shall continue as if no such
proceedings had been taken.
Section 8.11 Waivers of Events Of Default. Subject to prior
written notice to and prior written consent of the City, the Trustee may in its
discretion waive any Event of Default hereunder and its consequences and rescind
any declaration of maturity of principal of and interest on the Bonds, and shall
do so upon the written request of the owners of the sum of a majority in
aggregate principal amount of all the Bonds then Outstanding in respect of which
default exists; provided, however, that there shall not be waived (i) any Event
of Default in the payment of the principal of or premium on any Outstanding
Bonds at the date of maturity or redemption thereof, or any default in the
payment when due of the interest on any such Bonds, unless prior to such waiver
or rescission, all arrears of interest or all arrears of payments of principal
and premium, if any (with interest upon such principal and premium, if any, at a
rate which shall be 1 percent per annum above the highest rate of interest borne
by any Bond during the 365 days prior to the date on which such principal and
premium, if any, were due or the maximum rate permitted by law if less than such
rate aforesaid) and all expenses of the Trustee, and all amounts to be paid to
the City hereunder and under the Loan Agreement, in connection with such default
shall have been paid or provided for or (ii) any default in the payment of
amounts set forth in Section 5.1(d) of the Loan Agreement. In case of any such
waiver or rescission, or in case any proceedings taken by the Trustee on account
of any such default shall have been discontinued or abandoned or determined
adversely to the Trustee, then and in every such case the City, the Trustee, the
Bondholders shall be restored to their former positions and rights hereunder,
respectively, but no such waiver or rescission shall extend to or affect any
subsequent or other default, or impair any rights or remedies consequent
thereon.
Section 8.12 Trustee to Notify Parties of Default and Disclose
Information Relating to Default. The Trustee shall immediately notify in writing
the City and the Company of any default hereunder of which it has actual
knowledge or the occurrence of any Event of Default. The Trustee shall notify as
within five (5) Business Days in writing all Bondholders and Notice Beneficial
Owners of the occurrence of any Event of Default and shall make available to
such Bondholders information reasonably requested of the Trustee concerning the
Event of Default, the Bonds, the Company, and such other information relevant to
the Event of Default, subject to the provisions of Section 9.01 hereof.
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ARTICLE IX
CONCERNING THE TRUSTEE
Section 9.1 Duties of the Trustee. The Trustee hereby accepts the
trusts imposed upon it by this Indenture and agrees to perform said trusts, but
only upon and subject to the following express terms and conditions, and no
implied covenants or obligations shall be read into this Indenture against the
Trustee:
(a) The Trustee, prior to the occurrence of an Event of
Default and after the curing of all Events of Default which may have occurred,
undertakes to perform such duties and only such duties as are specifically set
forth in this Indenture. In case an Event of Default has occurred (which has not
been cured or waived), the Trustee shall exercise such of the rights and powers
vested in it by this Indenture, and use the same degree of care and skill in
their exercise, as a prudent man would exercise or use under the circumstances
in the conduct of the affairs of others.
(b) The Trustee may execute any of the trusts hereof or
powers hereunder and perform any of its duties by or through attorneys, agents,
receivers or employees but shall be answerable for the conduct of the same in
accordance with the standard specified above, only if the Trustee has not
exercised reasonable care in the selection thereof and shall be entitled to act
upon an opinion of independent counsel concerning all matters of the trust
hereof and its duties hereunder, and may in all cases pay such reasonable
compensation to all such attorneys, agents, receivers and employees as may
reasonably be employed in connection with the trusts hereof. The Trustee may act
upon an opinion of independent counsel and shall not be responsible for any loss
or damage resulting from any action or nonaction taken by or omitted to be taken
in good faith in reliance upon such opinion of independent counsel.
(c) The Trustee shall not be responsible for any recital
herein or in the Bonds (except in respect to the certificate of authentication
of the Trustee endorsed on the Bonds), or for insuring the Property or
collecting any insurance monies or for the validity of the execution by the City
of this Indenture or of any supplements hereto or instruments of further
assurance, or for the sufficiency of the security for the Bonds issued hereunder
or intended to be secured hereby, or for the value of or title to the assets of
the Company and the Trustee shall not be bound to ascertain or inquire as to the
performance or observance of any covenants, conditions or agreements on the part
of the City, except as hereinafter set forth; but the Trustee may require of the
City or the Company full information and advice as to the performance of the
covenants, conditions and agreements as to the condition of the assets of the
Company contained herein or in the Loan Agreement. The Trustee shall not be
accountable for the use or application by the City or the Company of any of the
Bonds or the proceeds thereof or the use or application of any money paid over
by the Trustee in accordance with the provisions of this Indenture. The Trustee
shall have no obligation to perform any of the duties of the City under the Loan
Agreement; and
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the Trustee shall not be responsible or liable for any loss suffered in
connection with any investment of funds made by it in accordance with Section
6.1 hereof.
(d) The Trustee shall not be accountable for the use of
any Bonds authenticated or delivered hereunder. The Trustee may not hold Bonds
for its own account.
(e) The Trustee shall be protected in acting upon any
notice, request, consent, certificate, order, affidavit, letter, telegram or
other paper or document believed to be genuine and correct and to have been
signed or sent by the proper person or persons. Any action taken by the Trustee
pursuant to this Indenture upon the request or authority or consent of any
person who at the time of making such request or giving such authority or
consent is the owner of any Bonds shall be conclusive and binding upon all
future owners of the same Bond and upon Bonds issued in place thereof.
(f) As to the existence or nonexistence of any fact or as
to the sufficiency or validity of any instrument, paper or proceeding, the
Trustee shall be entitled to rely upon a certificate signed on behalf of the
City by a City Officer or such other person as may be designated for such
purpose by the City as sufficient evidence of the facts therein contained, and
prior to the occurrence of a default of which the Trustee has been notified as
provided in subsection (h) of this Section, or of which by said subsection it is
deemed to have notice, shall also be at liberty to accept a similar certificate
to the effect that any particular dealing, transaction or action is necessary or
expedient, but may at its discretion secure such further evidence deemed
necessary or advisable, but shall in no case be bound to secure the same.
(g) The permissive rights of the Trustee to do things
enumerated in this Indenture shall not be construed as a duty and the Trustee
shall not be answerable for other than its negligence or willful default,
subject to Section 9.1(a) hereof.
(h) The Trustee shall not be required to take notice or
be deemed to have notice of any default hereunder except failure by the City to
cause to be made any of the payments to the Trustee required to be made by
Article III hereof unless the Trustee shall be specifically notified in writing
of such default by the City or by the owners of at least 25 percent in aggregate
principal amount of Bonds then Outstanding, and all notices or other instruments
required by this Indenture to be delivered to the Trustee must, in order to be
effective, be delivered at the principal corporate trust office of the Trustee;
in the absence of such notice so delivered, the Trustee may conclusively assume
that there is no default except as aforesaid.
(i) All monies received by the Trustee shall, until used
or applied or invested as herein provided, be held in trust in the manner and
for the purposes for which they were received but need not be segregated from
other funds except to the extent required by this Indenture or law. The Trustee
shall not be under any liability for interest on any monies received hereunder
except such as may be agreed upon.
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(j) At any and all reasonable times, the Trustee, and its
duly authorized agents, attorneys, experts, engineers, accountants and
representatives, shall have the right, but shall not be required, to inspect any
and all of the Trust Estate, including all books, papers and records of the City
pertaining to the Project and the Bonds.
(k) The Trustee shall not be required to give any note or
surety in respect of the execution of the said trusts and powers or otherwise in
respect of the premises.
(l) Notwithstanding anything in this Indenture contained,
the Trustee shall have the right, but shall not be required, to demand, in
respect of the authentication of any Bonds, the withdrawal of any cash, the
release of any property, or any action whatsoever within the purview of this
Indenture, any showings, certificates, opinions, appraisals or other
information, or corporate action or evidence thereof, in addition to that by the
terms hereof required, as a condition of such action by the Trustee deemed
desirable for the purpose of establishing the right of the City to the
authentication of any Bonds, the withdrawal of any cash, the release of any
property or the taking of any other action by the Trustee.
(m) Before taking any action under Section 8.2, 8.3 or
8.4 hereof, the Trustee may require that reasonable indemnity be furnished to it
by the owners of the Bonds and for the reimbursement of all expenses which it
may incur and to protect it against all liability, except liability which may
result from its negligence or willful default, by reason of any action so taken.
(n) The Trustee may deposit the property held in the
Funds with a court of general jurisdiction in the city in which the Trustee is
located, or the City may file an action to interplead the Trust Estate and the
Company, the City and any other appropriate parties to such action in the event
of the Trustee's resignation hereunder and the failure of a successor trustee to
succeed to the duties of the Trustee hereunder within 90 days of the giving of
notice of the Trustee's resignation. Upon the deposit of such property and the
filing of a complaint in interpleader, the Trustee shall be relieved of all
liabilities and duties under the Loan Agreement and this Indenture. The City and
the Company shall thereupon submit themselves to the jurisdiction of the
District Court.
(o) In the event there occurs a conflict of interest
arising as the result of the Trustee's acting as Trustee or in fiduciary
capacity with respect to other Indebtedness of the Company, the Trustee shall
appoint a Co-Trustee with respect to the Bonds.
Section 9.2 Fee and Expenses of Trustee. The Trustee shall be
entitled to payment and reimbursement for its reasonable fees for its services
rendered hereunder as and when the same become due and all expenses reasonably
and necessarily made or incurred by the Trustee in connection with such services
as and when the same become due as provided in Section 5.1 of the Loan
Agreement. The Trustee shall not be entitled to payment of any expenses it
incurs related to such resignation upon its resignation as Trustee hereunder
unless such resignation is made in relation to the exercise by the Trustee of
its rights of interpleader hereunder.
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Notwithstanding any provision in this Indenture or the Loan
Agreement to the contrary, any reference or covenant set forth in this Indenture
or the Loan Agreement for the payment or remuneration of (i) the reasonable
fees, compensation, charges or remuneration of the Trustee, or the like, shall
be deemed to reference and include Trustee's fees and extraordinary Trustee's
fees including reasonable default fees of Trustee upon the occurrence of an
Event of Default incurred as a result of the administration of the duties of the
Trustee hereunder, and (ii) reasonable expenses, costs, out-of-pocket costs, or
other reimbursable charges, or the like, shall be deemed to reference and
include reasonable attorney's fees, fees and expenses of independent contractors
or agents incurred in the course of the administration of the duties of the
Trustee hereunder, and other customary and reimbursable expenditures.
Section 9.3 Resignation or Replacement of Trustee. The Trustee
may resign by giving to the City, the Beneficial Owners and the Bondholders 90
days' notice of such resignation, provided, however that no such resignation
shall become effective until a successor has been appointed and has accepted the
duties of Trustee. The present or any future Trustee may be removed at any time
by the Bondholders by an instrument in writing, executed by the City and the
Company, so long as the Company is not in default or by the owners of a majority
in aggregate principal amount of the Bonds then Outstanding; provided, however,
that no such removal shall become effective until a successor has been appointed
and has accepted the duties of Trustee hereunder.
In case the Trustee shall at any time resign or be removed or
otherwise become incapable of acting, subject to the prior written approval of
the City, a successor may be appointed by the owners of a majority in aggregate
principal amount of the Bonds Outstanding by an instrument or concurrent
instruments signed by such Bondholders, or their attorneys-in-fact duly
appointed; provided that the City may appoint a successor until a new successor
shall be appointed by the Bondholders as herein authorized. The City upon making
such appointment shall forthwith give notice thereof to the Bondholders and to
the Company, which notice may be given concurrently with the notice of
resignation given by any resigning Trustee. Any successor so appointed by the
City shall immediately and without further act be superseded by a successor
appointed in the manner above provided by the owners of a majority in aggregate
principal amount of the Bonds Outstanding.
Every successor shall always be a bank or trust company (or a
subsidiary thereof) in good standing, qualified to act hereunder, and having a
combined capital, surplus and undivided profits of not less than $25,000,000. An
successor appointed hereunder shall execute, acknowledge and deliver to the City
an instrument accepting such appointment hereunder, and thereupon such successor
shall, without any further act, deed or conveyance, become vested with all the
estates, properties, rights, powers and trusts of its predecessor in the trust
hereunder with like effect as if originally named as Trustee herein; but the
Trustee retiring shall, nevertheless, on the written demand of its successor,
execute and deliver an instrument conveying and transferring to such successor,
upon the trusts herein expressed, all the estates, properties, rights,
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powers and trusts of the predecessor, who shall duly assign, transfer and
deliver to the successor all properties and monies held by it under this
Indenture. Should any instrument in writing from the City be reasonably required
by any successor for such vesting and confirming, the City shall execute,
acknowledge and deliver the said deeds, conveyances and instruments on the
request of such successor.
The notices herein provided for, to be given to the
Bondholders, shall be given by mailing a copy of such notices by first class
mail to the Bondholders at their addresses as the same shall last appear upon
the registration books. The notice herein provided for to be given to the City,
the Company and the retiring Trustee, shall be given in accordance with Section
11.07 hereof.
The instruments evidencing the resignation or removal of the
Trustee and the appointment of a successor hereunder, together with all other
instruments provided for in this Section, shall be filed and/or recorded by the
successor Trustee in each recording office where this Indenture shall have been
filed and/or recorded.
Section 9.4 Conversion, Consolidation or Merger of Trustee. Any
bank or trust company into which the Trustee or its successor may be converted
or merged, or with which it may be consolidated, or to which it may sell or
transfer its trust business as a whole shall be the successor of the Trustee
under this Indenture with the same rights, powers, duties and obligations and
subject to the same restrictions, limitations and liabilities as its
predecessor, all without the execution or filing of any papers or any further
act on the part of any of the parties hereto, anything herein to the contrary
notwithstanding. In case any of the Bonds to be issued hereunder shall have been
authenticated, but not delivered, any successor Trustee may adopt the
certificate of any predecessor Trustee, and deliver the same as authenticated;
and, in case any of such Bonds shall not have been authenticated, any successor
Trustee may authenticate such Bonds in the name of such successor Trustee.
Section 9.5 Trustee to Retain Information. So long as any of the
Bonds shall be Outstanding, the Trustee shall retain all certificates, financial
statements and other written information furnished to it by or on behalf of the
Company, the City or any other Person under this Indenture, the Loan Agreement
and any other agreement or instrument pertaining to the Bonds and shall make
such documentation available for review after reasonable notice during regular
business hours at the principal corporate trust office of the Trustee to any
Bondholder and to any Beneficial Owner. The Trustee shall permit such reviewers
to take copies of all or any part of such documentation, subject to their
payment of such reasonable copying and handling charges as the Trustee may
impose.
In addition, the Trustee shall be required to report to
Bondholders and Beneficial Owners who have provided their addresses to the
Trustee any withdrawals from the Reserve Fund.
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Section 9.6 Guaranty Agreement. The City hereby authorizes and
directs the Trustee to draw on the Principal Guaranty pursuant to its terms, in
the amounts and at the times necessary to pay principal of and interest on the
bonds pursuant to this Section 9.6. The Trustee shall draw upon the Principal
Guaranty in accordance with the terms thereof as herein provided.
(a) On or before 11:00 a.m., local time at the designated
office of the Trustee on the second Business Day prior to any Interest Payment
Date (or the maturity date or any date set for redemption on Bonds which is not
an Interest payment Date), the Trustee shall determine the amount necessary to
make all required payments of principal and interest on the Bonds on the next
succeeding Interest Payment Date, maturity date, other redemption date, after
giving effect to any permitted transfers from the Reserve Fund, and shall
present a demand to the guarantor in such amount, after giving credit to the
amounts on deposit therefore in the Bond Principal Fund or Bond Interest Fund,
subject to the terms of the Principal Guaranty, so as to permit the timely
transfer of funds from the Guarantor to the Trustee for payment of the principal
of and interest on the Bonds when due, whether at maturity or upon prior
redemption.
(b) The Trustee shall promptly notify the Company and
each Notice Beneficial Owner by oral or telephonic communication confirmed in
writing if the Guarantor has not transferred funds in accordance with the
Principal Guaranty upon the presentment of any such demand.
(c) In calculating the amount to be drawn on the
Principal Guaranty for the payment of principal of and interest on the Bonds,
whether on an Interest Payment Date, at maturity or upon redemption or
acceleration, the Trustee shall take into account the receipt of funds from the
Company under the Loan Agreement.
(d) Upon satisfaction of the conditions for the release
of the Principal Guaranty in accordance with the terms thereof, the Trustee
shall execute such releases or similar documents as may be reasonably requested
by the Company or the Guarantor.
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ARTICLE X
SUPPLEMENTAL INDENTURES
AND AMENDMENTS OF THE LOAN AGREEMENT
Section 10.1 Supplemental Indentures. The owners of not less than
a majority in aggregate principal amount of the Bonds then Outstanding shall
have the right, from time to time, to consent to and approve the execution by
the City and the Trustee of such indenture or indentures supplemental hereto as
shall be deemed necessary or desirable by the City for the purpose of modifying,
altering, amending, adding to or rescinding, in any particular, any of the terms
or provisions contained in this Indenture; provided, however, that without the
consent of the owners of all the Bonds at the time Outstanding, nothing herein
contained shall permit, or be construed as permitting:
(a) an extension of the maturity of, or a reduction of
the principal amount of, or a reduction of the rate of, or extension of the time
of payment of interest on, or a reduction of a premium payable upon any
redemption of, any Bond;
(b) the deprivation of the owner of any Bond then
Outstanding of the lien created by this Indenture (other than as permitted
hereby when such Bond was initially issued);
(c) a privilege or priority of any Bond or Bonds over any
other Bond or Bonds except as specifically permitted by this Indenture; or
(d) a reduction in the aggregate principal amount of the
Bonds required for consent to such supplemental indenture.
If at any time the City shall request the Trustee to enter
into such supplemental indenture for any of the purposes of this Section, the
Trustee shall, upon being reasonably indemnified by the Company with respect to
expenses, cause notice of the proposed execution of such supplemental indenture
to be given to the City and the Company in accordance with Section 11.7 hereof
and to the Notice Beneficial Owners and the Bondholders by mailing a copy of
such notice by first class mail to their addresses as the same shall last appear
upon the registration books. Such notice shall briefly set forth the nature of
the proposed supplemental indenture and shall state that copies thereof are on
file at the designated corporate trust office of the Trustee for inspection by
all Bondholders and Beneficial Owners. If, within 60 days following the giving
of such notice, the owners of the requisite principal amount of the Bonds
Outstanding at the time of the execution of any such supplemental indenture
shall have consented to and approved the execution thereof as herein provided,
no owner of any Bond shall have any right to object to any of the terms and
provisions contained therein, or the operation thereof, or in any manner to
question the propriety of the execution thereof, or to enjoin or
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restrain the Trustee or the City from executing the same or from taking any
action pursuant to the provisions thereof.
Section 10.2 Execution of Supplemental Indentures. The Trustee is
authorized to join with the City in the execution of any such supplemental
indenture and to make further agreements and stipulations which may be contained
therein, but the Trustee shall not be obligated to enter into any such
supplemental indenture which affects its rights, duties or immunities under this
Indenture. Any supplemental indenture executed in accordance with the provisions
of this Article shall thereafter form a part of this Indenture and all the terms
and conditions contained in any such supplemental indenture as to any provision
authorized to be contained therein shall be deemed to be part of this Indenture
for any and all purposes. In case of the execution and delivery of any
supplemental indenture, express reference may be made thereto in the text of the
Bonds issued thereafter.
Section 10.3 Amendments, Etc., of the Loan Agreement. Neither the
City nor the Trustee shall consent to any other amendment, change or
modification of the Loan Agreement without the giving of notice and the written
approval or consent of the owners of not less than a majority in aggregate
principal amount of the Bonds at the time Outstanding. Such notice and consent
shall be given and procured as provided in Section 10.2 hereof.
If at any time the City or the Company shall request the consent of the
Trustee to any such proposed amendment, change or modification of the Loan
Agreement, the Trustee shall, upon being reasonably indemnified by the Company
with respect to expenses, cause notice of such proposed amendment, change or
modification to be given in the same manner as provided in Section 10.2 hereof.
Such notice shall briefly set forth the nature of such proposed amendment,
change or modification and shall state that copies of the instrument embodying
the same are on file at the principal office of the Trustee for inspection by
all Bondholders.
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ARTICLE XI
MISCELLANEOUS
Section 11.1 Evidence of Signature of Bondholders and Ownership of
Bonds. Any request, consent or other instrument which this Indenture may require
or permit to be signed and executed by the Bondholders may be in one or more
instruments and executed by such Bondholders in person or by their attorneys
appointed in writing. Proof of the execution of any such instrument, or of an
instrument appointing such attorney, or the ownership of Bonds shall be
sufficient (except as otherwise herein expressly provided) if made in the
following manner, but the Trustee may, nevertheless, in its discretion require
further or other proof in cases where it deems the same desirable:
(a) the fact and date of the execution by any Bondholder
or his attorney of such instrument may be proved by the certificate of any
officer authorized to take acknowledgments in the jurisdiction in which he
purports to act that the person signing such request or other instrument
acknowledged to him the execution thereof, or by an affidavit of a witness of
such execution, duly sworn to before a notary public; and
(b) the Ownership of any Bonds and the amount and numbers
of such Bonds and the date of holding the same shall be proved by the
registration books of the City kept by the Trustee.
Any request or consent of the owner of any Bond shall
bind all future owners of such Bond in respect of anything done or suffered to
be done by the City or the Trustee in accordance therewith.
Section 11.2 Parties Interested Herein. With the exception of
rights herein expressly conferred on the Company, nothing in this Indenture
expressed or implied is intended or shall be construed to confer upon, or to
give to, any person other than the City, the Trustee and the owners of the
Bonds, any right, remedy or claim under or by reason of this Indenture or any
covenant, condition or stipulation hereof, and all the covenants, stipulations,
promises and agreements in this Indenture contained by and on behalf of the City
shall be for the sole and exclusive benefit of the City, the Trustee, and the
owners of the Bonds.
Section 11.3 Titles, Headings, Etc The titles and headings of the
articles, sections and subsections of this Indenture have been inserted for the
convenience of reference only and shall in no way modify or restrict any of the
terms or provisions hereof.
Section 11.4 Severability. In the event any provision of this
Indenture shall be held invalid or unenforceable by any court of competent
jurisdiction, such holding shall not invalidate or render unenforceable any
other provision hereof.
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Section 11.5 Governing Law. This Indenture shall be governed by
and construed in accordance with the laws of the State of Arkansas.
Section 11.6 Execution in Counterparts. This Indenture may be
executed in several counterparts, each of which shall be an original and all of
which shall constitute but one and the same instrument.
Section 11.7 Notices. All notices, certificates, directions or
other communications hereunder shall be sufficiently given and shall be deemed
given when mailed by certified mail, return receipt requested, postage prepaid,
or by first-class mail, if this Indenture so provides, addressed as follows:
City: City of Springdale
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: Mayor
Trustee: Regions Bank
Corporate Trust, 7th Floor
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Company: Advanced Environmental Recycling Technologies, Inc.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Underwriter: Hutchinson, Shockey, Erley & Co.
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇ ▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
A duplicate copy of each notice, certificate or other communication given
hereunder by or to the City or the Trustee shall also be given to the Company,
the Underwriter and each Notice Beneficial Owner. Alternatively, all notices,
certificates or other communications hereunder may be given by telegram or by
telecopy (if confirmed promptly telephonically and in writing by the sender of
such notice and if receipt of such notice by telecopy is confirmed in writing by
the intended recipient). The City, the Company, the Underwriter and the Trustee
may, by notice
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given hereunder, designate any further or different addresses to which
subsequent notices, certificates or other communications shall be sent.
Section 11.8 Payments Due on Nonbusiness Days. If the date for
making any payment or the last day for performance of any act or the exercise of
any right, as provided in this Indenture, shall not be a Business Day, such
payment may be made or act performed or right exercised on the next succeeding
Business Day with the same force and effect as if done on the nominal date
provided in this Indenture.
Section 11.9 Provision of General Application. Any consent or
approval of the City or Trustee required pursuant to this Indenture shall be in
writing and shall not be unreasonably withheld. Any direction given to the
Trustee shall be in writing.
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IN WITNESS WHEREOF, the City and the Trustee have caused this Indenture
to be executed in their respective corporate names and attested by their duly
authorized Officers and the Trustee has caused its corporate seal to be hereto
affixed, all as of the date first above written.
CITY OF SPRINGDALE, ARKANSAS
By: /s/ ▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇
-------------------
Title: Mayor
Attest:
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇
-------------------------------
City Clerk
[SEAL]
REGIONS BANK,
as Trustee
By: /s/ ▇▇▇▇ ▇▇▇▇▇
---------------
Title: Authorized Officer
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