HomeMy WebLinkAbout2011-04-26; City Council; 20515 EXHIBIT 2; SUBSTITUTE CREDIT FACILITY SANTA FE RANCH APTSEXHIBIT 2
DRAFT FINANCING DOCUMENTS
SANTA FE RANCH APARTMENTS
(ON FILE IN CITY CLERK'S OFFICE)
SECOND AMENDED AND RESTATED LOAN AGREEMENT
among
CITY OF CARLSBAD, CALIFORNIA,
as Issuer
and
U.S. BANK NATIONAL ASSOCIATION,
as Trustee
and
SANTA FE RANCH, LLC
as Borrower
Relating to
$15,920,000
CITY OF CARLSBAD, CALIFORNIA
Variable Rate Demand Multifamily Housing Revenue Refunding Bonds
Series A of 1993
(Santa Fe Ranch Apartments f/k/a La Costa Apartments Project)
Dated as of May 1,2011
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SECOND AMENDED AND RESTATED LOAN AGREEMENT
THIS SECOND AMENDED AND RESTATED LOAN AGREEMENT (this "Financing
Agreement") dated as of May 1, 2011, among the CITY OF CARLSBAD, CALIFORNIA a
municipal corporation of the State of California (together with any successor to its rights, duties and
obligations hereunder, "Issuer"), U.S. BANK NATIONAL ASSOCIATION (together with any
successor trustee hereunder, the "Trustee"), a national banking association duly organized and
existing under the laws of the United States of America having a corporate trust office located in Los
Angeles, California, and SANTA FE RANCH, LLC, a limited liability company duly organized and
existing under the laws of the State of Delaware and authorized to do business in the State of
California (together with its successors and assigns permitted hereunder, the "Borrower"), amends
and restates in its entirety that certain Amended and Restated Loan Agreement (the "Amended Loan
Agreement") dated as of May 1, 2002 among the Issuer, the Trustee and the Borrower,
WITNESSETH:
WHEREAS, pursuant to the provisions of Chapter 7 of Part 5 of Division 31 (commencing
with Section 52075) of the Health and Safety Code of the State of California, as amended (the
"Act"), the Issuer may finance the costs of residential developments that will provide decent, safe
and sanitary housing for persons or families of low and moderate income in the State of California
(the "State"); and
WHEREAS, the Act authorizes the Issuer: (a) to make loans to provide financing for
residential developments located within the State, and intended to be occupied to the extent required
by applicable federal tax law by persons or families of low and moderate income, as determined by
the Issuer; (b) to authorize the issuance of revenue bonds by the Issuer for the purpose of obtaining
moneys to make such loans and provide such financing and to pay administrative costs and other
costs incurred in connection with the issuance of such bonds; and (c) to pledge all or any part of the
revenues and receipts to be received by the Issuer from or in connection with such loans, and to
mortgage, pledge or grant security interests in such loans in order to secure the payment of the
principal or redemption price of and interest on such bonds; and
WHEREAS, pursuant to an Indenture of Trust dated as of May 1, 1993 (the "Original
Indenture"), as amended and restated by the Amended and Restated Indenture of Trust dated as
May 1, 2002 (the "Indenture"), both between the Issuer and U.S. Bank, N.A. (successor in interest to
First Trust of California, National Association and also known as "U.S. Bank National Association"),
the Issuer, has heretofore issued $15,920,000 in original principal amount of its Variable Rate
Demand Multifamily Housing Revenue Refunding Bonds Series A of 1993 (Santa Fe Ranch
Apartments f/k/a La Costa Apartments Project) (the "Bonds") the proceeds of which were loaned to
La Costa Partners, a California general partnership (the "Original Owner") pursuant to a Loan
Agreement, dated as of May 1, 1993 (the "Original Loan Agreement"), as amended and restated by
the Amended Loan Agreement and again by this Financing Agreement, for the purpose of
refinancing the construction of a multifamily rental housing development located in the City of
Carlsbad, California, as legally described in Exhibit "B" and known as Santa Fe Ranch Apartments
(the "Project"); and
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WHEREAS, the Bonds were issued for the purpose of refunding the Issuer's $15,920,000
Multifamily Housing Revenue Bonds, Series A of 1985 (La Costa Apartments Project) the proceeds
of which financed the construction of the Project; and
WHEREAS, the Original Owner, the Issuer, the Trustee, and The Northwestern Mutual Life
Insurance Company (the "Prior Owner") entered into an Assignment and Assumption Agreement
(Bond Documents) dated June 23, 1998, whereby the Prior Owner agreed to purchase, acquire and
assume all of the Original Owner's right, title and interest in the Project; and
WHEREAS, the Prior Owner sold, disposed of, assigned, conveyed and transferred all of its
right, title and interest in and to the Project and the Bonds to the Borrower pursuant to a purchase
contract dated February 25, 2002, as amended; and
WHEREAS, the Bonds are currently secured under the Amended and Restated Indenture of
Trust dated as of May 1, 2002 (the "Amended Indenture") by and between the Issuer and the Trustee
by a Credit Enhancement Agreement (the "Credit Enhancement Agreement") dated as of May 1,
2002 between the Trustee and the Federal Home Loan Mortgage Corporation; and
WHEREAS, the Borrower desires to provide on the date of execution and delivery hereof
(the "Credit Facility Substitution Date") for the substitution of the Credit Enhancement Agreement
with a new Credit Facility provided by Wells Fargo Bank, National Association (the "Credit Facility
Provider" or "Bank"); and
WHEREAS, pursuant to Section 5.4 of the Amended Loan Agreement, the Borrower may
provide for the substitution of an Alternate Credit Facility upon the satisfaction of certain conditions;
and
WHEREAS, pursuant to Section 8.4 of the Amended Loan Agreement and Section 8.03 of
the Amended Indenture, the Amended Loan Agreement may be amended in connection with the
delivery of the new Credit Facility; and
WHEREAS, the Issuer, the Trustee, the Borrower, the owner of one hundred percent (100%)
of the Bonds Outstanding as of May , 20 (the "Bondholder") and the Bank are consenting to the
amendment of the Amended Loan Agreement as hereinafter provided; and
WHEREAS, the Issuer, the Borrower, the Trustee and the Bondholder now desire to amend
and restate the Amended Loan Agreement in the manner hereinafter provided to conform to and
accommodate the provision of the new Credit Facility by the Bank; and
WHEREAS, the Borrower's repayment obligations in respect of the Bond Mortgage Loan
will be evidenced by a Second Amended and Restated Promissory Note dated as of May 1, 2011,
(together with all riders and addenda thereto, the "Bond Mortgage Note") in form attached hereto as
Exhibit "A" delivered upon the order of the Issuer pursuant to this Financing Agreement to the
Trustee; and
WHEREAS, the Borrower will cause to be delivered to the Trustee on the Credit Facility
Substitution Date the Credit Facility from the Bank; and
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WHEREAS, to evidence the Borrower's reimbursement obligations to the Bank for draws
made under the Credit Facility, the Borrower will enter into a Reimbursement Agreement with the
Bank dated as of even date herewith (the "Reimbursement Agreement"); and
WHEREAS, pursuant to the Assignment and Assumption Agreement dated as of May 1,
2002 by and among the Prior Owner, the Borrower, the Trustee and the Issuer, the Prior Owner has
assigned its rights and obligations to the Borrower and the Borrower has assumed the indebtedness,
obligation and liabilities of the Prior Owner with respect to the Bonds and the Project; and
WHEREAS, to secure the Borrower's reimbursement obligations under the Reimbursement
Agreement, the Borrower will execute and deliver to the Bank on the Credit Facility Substitution
Date a Deed of Trust with Absolute Assignment of Rents and Leases, Security Agreement and
Fixture Filing (Credit Bank) dated as of even date herewith (the "Reimbursement Mortgage") with
respect to the Project; and
WHEREAS, the Issuer, the Trustee and the Credit Facility Provider have also entered into an
Intercreditor Agreement dated as of even date herewith (the "Intercreditor Agreement") in
connection with the delivery of the Credit Facility; and
WHEREAS, the parties hereto acknowledge the matters set forth in the Recitals to the
Indenture; and
WHEREAS, this Financing Agreement shall be effective as of the date of execution and
delivery by the parties hereto; and
NOW, THEREFORE, for and in consideration of the mutual covenants and representations
hereinafter contained, the parties hereto agree to amend and restate the Amended Loan Agreement as
follows:
ARTICLE I
DEFINITIONS
Section 1.1. Definitions. All words and phrases defined in the Indenture shall have the
same meanings for the purposes of this Financing Agreement. In addition to the words and terms
defined in the Indenture and elsewhere herein, the following words and phrases shall have the
following meanings:
"Amended Indenture" means the Amended and Restated Indenture of Trust dated as of
May 1, 2002, between the Issuer and U.S. Bank, N.A., also known as "U.S. Bank National
Association."
"Amended Loan Agreement" means the Amended and Restated Loan Agreement dated as of
May 1, 2002, among the Issuer, the Trustee and the Borrower.
"Compliance Certificate" means the Certificate of Continuing Program Compliance,
substantially in the form of Exhibit "B" to the Tax Regulatory Agreement, as such form may be
revised by the Issuer from time to time and filed with the Issuer at the times and in the manner set
forth in the Tax Regulatory Agreement.
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"Event of Default" means any event described as an Event of Default in Section 7.1.
"Financing Agreement" means this Second Amended and Restated Loan Agreement as
amended, supplemented or restated from time to time.
"Income Certification" means an Income Certification substantially in the form attached as
Exhibit "C" to the Tax Regulatory Agreement, as such form may be revised by the Issuer from time
to time upon advice of Bond Counsel, filed with the Issuer at the times and in the manner set forth in
the Tax Regulatory Agreement.
"Indenture" means the Second Amended and Restated Indenture of Trust dated as of even
date herewith between the Issuer and the Trustee, as the same may be amended, supplemented or
restated from time to time.
"Wrongful Dishonor" shall have the meaning set forth in the Intercreditor Agreement.
Section 1.2. Interpretation. Words of the masculine gender shall be deemed and
construed to include correlative words of the feminine and neuter genders. Words importing the
singular number shall include the plural number and vice versa unless the context shall otherwise
indicate. Words importing persons include firms, partnerships, joint ventures, associations and
corporations. References to Articles, Sections and other subdivisions of this Financing Agreement
are the Articles, sections and other subdivisions of this Financing Agreement as originally executed.
The terms "herein", "hereunder", "hereby", "hereto", "hereof and any similar terms refer to
this Financing Agreement; the term "heretofore" means before the date of execution of this
Financing Agreement; and the term "hereafter" means after the date of execution of this Financing
Agreement.
(End of Article I)
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ARTICLE II
REPRESENTATIONS, WARRANTIES AND COVENANTS
Section 2.1. Representations, Warranties and Covenants of the Issuer. The Issuer makes
the following representations, warranties and covenants:
(a) The Issuer is a municipal corporation duly organized and validly existing
under the Constitution and laws of the State. The Issuer has full legal right, power and authority to
execute and deliver the Bonds and the Bond Financing Documents to which it is a party and to carry
out its obligations thereunder. By proper action, the Issuer has duly authorized the execution and
delivery of the Bond Financing Documents to which it is a party and the issuance, sale, execution and
delivery of the Bonds. Each of the Bond Financing Documents to which the Issuer is a party has
been duly executed and delivered by the Issuer and is a legal, valid and binding obligation of the
Issuer enforceable against the Issuer in accordance with its terms, subject to bankruptcy, insolvency,
reorganization, moratorium and other similar laws affecting the rights of creditors generally and
general equitable principles.
(b) The Issuer has complied with the provisions of the Act and the laws of the
State which are prerequisites to the consummation of all transactions described or contemplated in
the Bond Financing Documents to which the Issuer is a party, and the execution and delivery of the
Bonds and the Bond Financing Documents, the consummation of the transactions contemplated
thereby and the fulfillment of or compliance with the terms and conditions or provisions of the Bonds
and the Bond Financing Documents do not conflict with or result in the breach of any of the terms,
conditions or provisions of any agreement or instrument or judgment, order or decree to which the
Issuer is now a party or by which it is bound, nor do they constitute a default under any of the
foregoing or result in the creation or imposition of any prohibited lien, charge or encumbrance of any
nature upon any property or assets of the Issuer under the terms of any instrument or agreement.
(c) No authorization or approval or other action by, and no notice to or filing
with, any governmental authority or regulatory body is required for the due execution and delivery
by the Issuer of, and performance by the Issuer of its obligations under, any of the Bond Financing
Documents, which has not been obtained.
(d) There is no action, suit, proceeding, inquiry or investigation pending or
threatened against the Issuer by or before any court, governmental agency or public board or body,
nor, to the Issuer's knowledge, any basis therefor, which (i) affects or questions the existence or the
territorial jurisdiction of the Issuer or the title to office of any member of the governing body of the
Issuer; (ii) affects or seeks to prohibit, restrain or enjoin the execution and delivery of any Bond
Financing Documents or the remarketing of the Bonds on the Credit Facility Substitution Date; (iii)
affects or questions the validity or enforceability of the Bonds or any Bond Financing Document; (iv)
questions the tax-exempt status of the Bonds; or (v) questions the power or authority of the Issuer to
perform its obligations under the Bonds or any Bond Financing Document, or to carry out the
transactions contemplated by the Bonds and the Bond Financing Documents.
(e) No officer or other official of the Issuer has any personal financial interest in
the Project or the Borrower or in the transactions contemplated by this Financing Agreement.
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(f) Upon the discovery by the Issuer of any noncompliance by the Borrower with
this Financing Agreement or the Tax Regulatory Agreement, the Issuer will notify the Trustee and
the Credit Facility Provider of such noncompliance and will, subject to the provisions of Article VII
hereof, promptly institute action, or cause the Trustee to institute action, to correct such
noncompliance, will diligently pursue such action and will attempt to correct such noncompliance
within sixty (60) days after such discovery, subject to the provisions of the Indenture, this Financing
Agreement and the Tax Regulatory Agreement.
Section 2.2. Representations, Warranties and Covenants of the Borrower. The
Borrower makes the following representations, warranties and covenants, all of which, together with
the other representations and agreements of the Borrower contained in this Financing Agreement, are
relied upon by the Issuer and the Trustee and serve as a basis for the undertakings of the Issuer and
the Trustee contained in this Financing Agreement:
(a) The Borrower (i) is a Delaware limited liability company duly organized,
validly existing and in good standing under the laws of the state in which it has been organized and
duly qualified to transact business under the laws of the State, (ii) has the power and authority to own
its properties and assets and to carry on its business as now being conducted and as contemplated by
the Bond Financing Documents to which the Borrower is a party, and (iii) has the power to execute
and perform under the Bond Financing Documents to which the Borrower is a party.
(b) The execution and performance by the Borrower of the Bond Financing
Documents to which the Borrower is a party and other instruments required pursuant to the Bond
Financing Documents to which the Borrower is a party (i) will not violate or, as applicable, have not
violated any provision of any law, rule or regulation or any order of any court or other agency or
government and (ii) will not violate or, as applicable, have not violated any provision of any
indenture, agreement or other instrument to which the Borrower is a party or is otherwise subject, or
result in the creation or imposition of any lien, charge or encumbrance of any nature other than the
liens created by the Bond Mortgage, the Reimbursement Mortgage, the Pledge Agreement, the Tax
Regulatory Agreement and by this Financing Agreement.
(c) The Borrower has good and marketable fee simple title to the Project, free
and clear of any lien or encumbrance (subject to encumbrances created pursuant to or permitted
under the Bond Mortgage Loan Documents).
(d) Unless and until the Project shall be sold and transferred to a new Borrower
as provided in Section 5.7 hereof and Section 11 of the Tax Regulatory Agreement, the Borrower
shall do or cause to be done all things necessary to retain in the Borrower its ownership of the
Project, to perform its obligations under the Bond Financing Documents to which the Borrower is a
party and to maintain the tax-exempt status of the Bonds. The Borrower shall not cause or permit the
Project, or any interest therein, to be sold, assigned or transferred, except as hereinafter provided in
Section 5.7 and Section 11 of the Tax Regulatory Agreement.
(e) There is no action, suit or proceeding at law or in equity or by or before any
governmental instrumentality or other agency now pending or threatened against or affecting the
Borrower or any of its properties (including, without limitation, the Project) or rights, which, if
adversely determined, would (i) impair the right of the Borrower to carry on its business substantially
as now conducted and as contemplated by the Bond Financing Documents, (ii) adversely affect the
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financial condition of the Borrower, (iii) prohibit, restrain or enjoin the issuance, sale or delivery of
the Bonds or the loaning of the proceeds of the Bonds to the Borrower or the execution and delivery
of the Bonds or any of the Bond Financing Documents, (iv) adversely affect the validity or
enforceability of the Bonds or any of the Bond Financing Documents or (v) adversely affect the
exclusion from gross income for federal income tax purposes of interest on the Bonds.
(f) To the knowledge of Borrower, after reasonable inquiry of the Prior Owner,
the operation of the Project in the manner contemplated by the Bond Financing Documents to which
the Borrower is a party does not and will not conflict with any zoning, water or air pollution or other
ordinance, order, law or regulation applicable thereto, and the Project is being operated in
compliance with all federal, state and local laws or ordinances (including rules and regulations)
relating to zoning, building, safety and environmental quality.
(g) The Borrower has filed or caused to be filed all federal, state and local tax
returns which are required to be filed or has obtained appropriate extensions therefor, and has paid or
caused to be paid all taxes as shown on said returns or on any assessment received by it, to the extent
that such taxes have become due.
(h) The Borrower is not in default in the performance, observance or fulfillment
of any of the obligations, covenants or conditions contained in any agreement or instrument to which
it is a party which default would materially adversely affect the transactions contemplated by the
Bond Financing Documents or the operations of the Borrower or the enforceability of the Bond
Financing Documents to which the Borrower is a party or the ability of the Borrower to perform all
obligations thereunder.
(i) To the knowledge of the Borrower, after reasonable inquiry of the Prior
Owner, the acquisition, construction, equipping and installation of the Project as well as its use and
operation are in conformance with all applicable requirements set forth in the Act and the Project will
be utilized and maintained in such manner as to conform with all applicable zoning, planning,
building, environmental and other regulations of all governmental authorities having jurisdiction of
the Project, and all necessary permits, licenses, consents and permissions have been obtained as of
the date of execution of this Financing Agreement to the extent that the same are required and
obtainable as of such date.
(j) The remaining average reasonably expected economic life of the facilities of
the Project financed with the net proceeds of the Bonds is not less than 5 years.
(k) If the Borrower is a partnership, all of the partnership interests in the
Borrower are validly issued and are fully registered, if required, with the applicable governmental
authorities and/or agencies, and there are no outstanding options or rights to purchase or acquire
those interests. If the Borrower is a limited liability company, all of the ownership interests in the
Borrower are validly issued and are fully registered, if required, with the applicable governmental
authorities and/or agencies, and there are no outstanding options or rights to purchase or acquire
those interests. Nothing in this Financing Agreement shall prevent the Borrower from issuing
additional partnership interests or ownership interests if such units are issued in accordance with all
applicable securities laws.
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(1) The representations and warranties of the Borrower contained in the Tax
Regulatory Agreement are true and accurate.
(m) The Borrower has not and will not knowingly take or permit, or knowingly
omit to take or cause to be taken, any action within its control that would adversely affect the
exclusion of the interest on the Bonds from gross income for federal income tax purposes.
(n) If the Borrower becomes aware of any situation, event or condition which
would, to the best of its knowledge, result in the interest on the Bonds becoming includable in gross
income for purposes of federal income taxation, the Borrower shall promptly give written notice
thereof to the Issuer, the Trustee and the Credit Facility Provider.
(o) The information, statements or reports furnished in writing to the Issuer by
the Borrower in connection with this Financing Agreement or the consummation of the transactions
contemplated hereby (including, without limitation, any written information furnished by the
Borrower in connection with the preparation of any Remarketing Memorandum for the Bonds and of
any other materials related to the remarketing, delivery or offering of the Bonds from time to time)
does not contain any untrue statement of a material fact or omit to state a material fact necessary to
make the statements contained therein, in light of the circumstances under which they were made, not
misleading; and the representations and warranties of the Borrower and the statements, information
and descriptions contained in the Borrower's closing certificates, as of the Closing Date and the
Credit Facility Substitution Date, were and are true and correct in all material respects, do not contain
any untrue statement of a material fact, and do not omit to state a material fact necessary to make the
certifications, representations, warranties, statements, information and descriptions contained therein,
in light of the circumstances under which they were made, not misleading; and any estimates or the
assumptions contained in any certificate of the Borrower delivered as of the Closing Date and the
Credit Facility Substitution Date were and are reasonable.
(p) To the knowledge of the Borrower, no member, officer or employee of the
Issuer has been or is in any manner interested, directly or indirectly, in that person's own name or in
the name of any other person, in the Bonds, the Tax Regulatory Agreement, the Bond Mortgage, the
Credit Enhancement Agreement, the Borrower or the Project, in any contract for property or
materials to be furnished or used in connection with the Project, or in any aspect of the transactions
contemplated by the Tax Regulatory Agreement, the Bond Mortgage or this Financing Agreement.
(q) The Borrower has made certain representations in Section 9.1 of the
Reimbursement Agreement concerning environmental matters, which the Borrower agrees may be
relied upon by the Issuer, the Trustee and the Credit Facility Provider.
(r) The Borrower intends to hold the Project for its own account and has no
current plans to sell and has not entered into any agreement to sell all or any portion of the Project to
an entity unrelated to the Borrower.
(s) The Project is located wholly within the Issuer's boundaries in San Diego
County, California.
(t) The Borrower shall make no changes to the Project or to the operation thereof
which would affect the qualification of the Project under the Act or impair the exclusion from gross
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income for federal income tax purposes of the interest on the Bonds. The Borrower intends to utilize
the Project as required by the Tax Regulatory Agreement and will timely file the Income
Certification, Certificate of Continuing Program Compliance, attached as Exhibits "B" and "C"
thereto, with the Issuer as required by such Tax Regulatory Agreement.
(u) The information contained in the Remarketing Memorandum, insofar as such
information relates to the Borrower and the Project, was, and the information in the Remarketing
Memorandum delivered on the Credit Facility Substitution Date is, accurate in all material respects
and did not as of the Closing Date and does not as of the Credit Facility Substitution Date contain
any untrue statement of a material fact or omit to state a material fact pertaining to the Borrower and
the Project necessary to make the statements made therein, in light of the circumstances under which
they were made, not misleading.
(v) The Indenture has been submitted to the Borrower for examination, and the
Borrower, by execution of this Financing Agreement, acknowledges and agrees that it has
participated in the drafting of the Indenture and that it is bound by, shall adhere to the provisions of,
and shall have the rights set forth by the applicable terms and conditions of, the Indenture; and
covenants and agrees to perform all obligations required of the Borrower pursuant to the terms of the
Indenture.
(w) It is hereby agreed by the Borrower, that the Issuer shall be entitled to an
annual fee as set forth in Section 18 of the Tax Regulatory Agreement.
(x) To the knowledge of the Borrower, after reasonable inquiry of the Prior
Owner, the Project has been in continuing material compliance with the Tax Regulatory Agreement,
which was executed, delivered and recorded with respect to the Bonds upon their original issuance
and delivery.
(y) To the knowledge of the Borrower, after reasonable inquiry of the Prior
Owner, upon issuance of the Bonds, the Original Owner incurred a substantial binding obligation to
commence acquisition and construction of the Project within the applicable period set forth in
Treasury Regulation 1.103-14(b)(3), pursuant to which the Original Owner expended an amount
equal to at least the lesser of $100,000 or 2-1/2% of the total cost of acquisition and construction of
the Project and proceeded with due diligence to complete the Project.
(z) To the knowledge of the Borrower, after reasonable inquiry of the Prior
Owner, substantially all (at least 90%) of the aggregate amount disbursed from the proceeds of the
Bonds (which amount is equal to the original principal amount of the Bonds plus investment earnings
less principal of the Bonds redeemed pursuant to Revenue Procedure 79-3 (as supplemented), if any,
and less underwriter's discount, letter of credit fees and costs of issuance of the Bonds (the "Original
Net Proceeds")) available to pay or reimburse costs permitted by the Act and the 1954 Code and
incurred by or on behalf of the Issuer or the Borrower with respect to the Project ("Project Costs")
were applied to pay or reimburse Qualified Project Costs (within the meaning of the 1954 Code) and
that not more than an insubstantial portion (not more than 10%) of the Original Net Proceeds was
applied to pay or reimburse Project Costs other than Qualified Project Costs.
(aa) To the knowledge of the Borrower, after reasonable inquiry of the Prior
Owner, any and all contracts to acquire any part of the Project which were entered into prior to sixty
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days before the Issuer took action to permit reimbursement of the Original Owner from the proceeds
of the Bonds (with respect to which payments were made from the proceeds of the Bonds as
Qualified Project Costs) were, on such date, fully executory in nature, and the burdens or benefits of
ownership of any property which was the subject of such contracts had not accrued to or been
imposed upon the Original Owner or any "related person," as such term is defined in the 1954 Code,
prior to such date.
(bb) Money on deposit in any fund or account in connection with the Bonds,
whether or not such money was derived from other sources, has not been used by or under the
direction of the Borrower, in a manner which would cause the Bonds to be "arbitrage bonds" within
the meaning of Section 103(c) of the 1954 Code.
(cc) All material terms and conditions to the making of the loan of the proceeds of
the Bonds have been satisfied.
Section 2.3. Representations and Warranties of the Trustee. The Trustee makes the
following representations and warranties:
(a) The Trustee is a national banking association duly organized and existing
under and pursuant to the laws of the United States of America. The Trustee has duly authorized the
execution and delivery of the Bond Financing Documents to which it is a party.
(b) The Trustee has complied with the provisions of law which are prerequisite to
the consummation of, and has all necessary power (including trust powers) and authority to
consummate, all transactions described in and contemplated by the Bond Financing Documents.
Section 2.4. Arbitrage and Rebate Fund Calculations. The Borrower shall (a) take or
cause to be taken all actions necessary or appropriate in order to fully and timely comply with
Section 4.12 of the Indenture and (b) designate and retain at the Borrower's expense, a Rebate
Analyst reasonably acceptable to the Issuer for the purpose of making any and all calculations
required under Section 4.12 of the Indenture. Such calculations, if required, shall be made in the
manner and at such times as specified in Section 4.12 of the Indenture. The Borrower shall cause the
Rebate Analyst to provide such calculations to the Trustee and the Issuer at such times and with such
directions as are necessary to comply fully with the arbitrage and rebate requirements set forth in the
Indenture and to comply fully with Section 148 of the 1986 Code, including the timely payment of
any arbitrage rebate owed.
Section 2.5. Tax Covenants. The Borrower hereby covenants and agrees not to use the
proceeds of the Bonds, any moneys transferred from the Original Indenture, the earnings thereon and
any other moneys on deposit in any fund or account maintained in respect of the Bonds (whether
such moneys were derived from the proceeds of the sale of the Bonds or from other sources) in a
manner which would cause the Bonds to be "arbitrage bonds" within the meaning of Section 148 of
the 1986 Code. The Borrower shall comply with the provisions of the Tax Regulatory Agreement
applicable to the Borrower.
Section 2.6. Enforcement of Bond Financing Documents. The Issuer and the Trustee
may enforce and take all reasonable steps, actions and proceedings necessary for the enforcement of
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all terms, covenants and conditions of the Bond Financing Documents as and to the extent set forth
therein.
(End of Article II)
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ARTICLE III
THE BOND MORTGAGE LOAN
Section 3.1. Conditions to Effectiveness of Amendments. This Financing Agreement
shall amend and restate the Amended Loan Agreement and the Indenture shall amend and restate the
Amended Indenture once the following conditions have been met:
(a) The Borrower shall have executed and delivered to the Trustee the Bond
Mortgage Note in the form attached hereto as Exhibit A and any amendments to the Bond Mortgage;
(b) The amendment to the Tax Regulatory Agreement to take effect on the Credit
Facility Substitution Date shall have been executed and delivered by the parties thereto and shall
have been appropriately filed for recording in the Office of the County Recorder for the County of
San Diego (as defined below), and the Trustee shall have received evidence satisfactory to it of such
filing;
(c) The Credit Facility and all other Bond Financing Documents not listed above
shall have been executed and delivered by all parties thereto and delivered to the Trustee;
(d) The Borrower shall have delivered to the Trustee and the Issuer a certificate
confirming, as of the Credit Facility Substitution Date, the matters set forth in Section 2.2 and an
opinion of its counsel or other counsel satisfactory to the Trustee and the Issuer; and
(e) The consent of the Bondholder to the effectiveness of this Financing
Agreement and the Indenture shall have been received.
Section 3.2. Bond Mortgage Loan Terms; Servicing.
(a) The Bond Mortgage Loan shall (i) be evidenced by the Bond Mortgage Note
payable to the Trustee as assignee of the Issuer; (ii) be in the principal amount of $15,920,000; (iii)
bear interest as provided in the Bond Mortgage Note; and (iv) be subject to optional and mandatory
prepayment at the times, in the manner and on the terms, and have such other terms and provisions,
as provided herein and in the Bond Mortgage Note.
(b) The exercise of rights by the Issuer and the Trustee as its assignee with
respect to the Bond Mortgage Loan shall be subject to the terms of the Intercreditor Agreement.
Section 3.3. Initial Deposits. On the Credit Facility Substitution Date, $ shall
be deposited to the Cost of Issuance Fund by the Borrower. To the extent that amounts in the Cost of
Issuance Fund are insufficient to pay all costs of effecting the delivery of the Credit Facility on the
Credit Facility Substitution Date, the Borrower shall cause the payment of such additional costs of
effecting the delivery of the Credit Facility to be made on its behalf as such amounts become due.
Section 3.4. Assignment to Trustee. The parties hereto acknowledge, and the Borrower
consents to, the assignment by the Issuer to the Trustee pursuant to the Indenture of all of the Issuer's
right, title and interest in the Bond Mortgage Note, this Financing Agreement (excluding the
Reserved Rights), the Bond Mortgage Loan and the Revenues as security for the payment of the
Purchase Price of, principal of, premium, if any, and interest on the Bonds.
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Section 3.5. Investment of Funds. Except as otherwise provided in the Indenture, any
moneys held as a part of any Fund or Account established under the Indenture shall be invested or
reinvested by the Trustee in Qualified Investments in accordance with Section 4.08 of the Indenture.
Section 3.6. Damage; Destruction and Eminent Domain. If the Project or any portion
thereof is destroyed or damaged in whole or in part by fire or other casualty, or title to, or the
temporary use of, the Project or any portion thereof shall have been taken by the exercise of the
power of eminent domain, and the Issuer, the Borrower or the Trustee receives Net Proceeds from
insurance or any condemnation award in connection therewith, such Net Proceeds shall be utilized as
provided in the Bond Mortgage Loan Documents and the Indenture.
Section 3.7. Compliance with Usury Laws. Notwithstanding any other provision of this
Financing Agreement, it is agreed and understood that in no event shall this Financing Agreement,
the Bond Mortgage Note or other instrument of indebtedness, be construed as requiring the Borrower
or any other person to pay interest and other costs or considerations that constitute interest under any
applicable law which are contracted for, charged or received pursuant to this Financing Agreement in
an amount in excess of the maximum amount of interest allowed under any applicable law.
In the event of any acceleration of the payment of the principal amount of the Bond Mortgage
Note or other evidence of indebtedness, that portion of any interest payment in excess of the
maximum legal rate of interest, if any, provided for in this Financing Agreement or related
documents shall be canceled automatically as of the date of such acceleration, or, if theretofore paid,
credited to the principal amount.
The provisions of this Section prevail over any other provision of this Financing Agreement.
(End of Article III)
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ARTICLE IV
LOAN PAYMENTS
Section 4.1. Payments Under the Bond Mortgage Note; Independent Obligation of
Borrower. The Borrower agrees to repay the Bond Mortgage Loan at the time and in the amounts
necessary to enable the Trustee, on behalf of the Issuer, to pay all amounts payable with respect to
the Bonds, when due, whether at maturity or upon redemption (with premium, if applicable),
acceleration, tender, purchase or otherwise. The obligation of the Borrower to make the payments
set forth in this Article IV shall be an independent and separate obligation of the Borrower from its
obligation to make payments under the Bond Mortgage Note, provided that in all events payments
made by the Borrower under and pursuant to the Bond Mortgage Note shall be credited against the
Borrower's obligations hereunder. If for any reason the Bond Mortgage Note or any provision
thereof shall be held invalid or unenforceable against the Borrower by any court of competent
jurisdiction, the Bond Mortgage Note or such provision thereof shall be deemed to be the obligation
of the Borrower pursuant to this Financing Agreement to the full extent permitted by law and such
holding shall not invalidate or render unenforceable any of the provisions of this Article IV and shall
not serve to discharge any of the Borrower's payment obligations hereunder.
The obligations of the Borrower to repay the Bond Mortgage Loan, to perform all of its
obligations under the Bond Mortgage Loan Documents, to provide indemnification pursuant to
Section 6.1, to pay costs, expenses and charges pursuant to Section 4.2 and to make any and all other
payments required by this Financing Agreement in accordance with the terms hereof, the Indenture
or any other documents contemplated by this Financing Agreement or by the Bond Mortgage Loan
Documents shall be absolute and unconditional and shall not be subject to diminution by set-off,
recoupment, counterclaim, abatement or otherwise.
Section 4.2. Payment of Certain Fees and Expenses.
(a) In addition to payments of principal, premium, if any, and interest on the
Bond Mortgage Note, the Borrower shall pay or cause to be paid the Issuer Fee and the fees and
expenses of the Trustee, the fees and expenses of the Remarketing Agent pursuant to the
Remarketing Agreement, and the annual rating maintenance fees of the Rating Agency, any
Extraordinary Trustee's Fees and Expenses (subject to Section 7.06 of the Indenture), the Rebate
Analyst Fee and any extraordinary expenses of the Issuer not covered by the Issuer's Fee. The
Borrower agrees to reimburse the Issuer for advances reasonably made, with interest at the Maximum
Rate, to cover expenses, in the enforcement of its rights or remedies against the Borrower under this
Financing Agreement, the Indenture, the Tax Regulatory Agreement or other Bond Financing
Documents to the extent that it acts without previously obtaining indemnity.
(b) All amounts due under (a) above shall be payable from moneys on deposit in
the Administration Expense Account of the Administration Fund available for such purpose as
provided in Section 4.06 of the Indenture or from other moneys of the Borrower, to the extent that
moneys in the Administration Expense Account of the Administration Fund available for such
purpose are insufficient for such purposes.
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Section 4.3. Payments to Rebate Fund. The Borrower shall pay when due to the Trustee
at its Principal Office any amount required to be deposited in the Rebate Fund in accordance with
Section 4.12 of the Indenture.
Section 4.4. Option to Prepay Bond Mortgage Loan. The Borrower shall have the option
to prepay the Bond Mortgage Loan in full or in part prior to the payment and discharge of all the
Outstanding Bonds only in accordance with the provisions of the Bond Mortgage Note. The Bonds
are subject to redemption in accordance with the terms and conditions set forth in the Indenture. In
connection with any prepayment, whether optional or mandatory, in addition to all other payments
required under the Bond Mortgage Note, the Borrower shall pay, or cause to be paid to the Trustee,
an amount sufficient to pay the redemption price of the Bonds to be redeemed, including principal,
interest and premium (if any), and further including any interest to accrue with respect to the Bond
Mortgage Loan and such Bonds between the prepayment date and the redemption date, together with
a sum sufficient to pay all fees, costs and expenses in connection with such redemption and, in the
case of redemption in whole, to pay all other amounts payable hereunder, under the Indenture and the
Reimbursement Agreement. The Borrower shall provide notice of the prepayment to the Trustee, the
Credit Facility Provider and the Issuer in writing forty-five (45) days, or such shorter time as is
possible in the case of involuntary prepayments, prior to the date on which the Borrower will make
the prepayment. Each such notice shall state, to the extent such information is available (i) the
amount to be prepaid, (ii) the date on which the prepayment will be made by the Borrower, and (iii)
the cause for the prepayment, if any.
Section 4.5. Borrower's Obligations Upon Redemption or Tender. In the event of any
redemption, the Borrower will timely pay, or cause to be paid, to the Trustee an amount equal to the
principal amount of such Bonds or portions thereof called for redemption, together with interest
accrued to the redemption date and premium, if any. The Borrower will timely pay all fees, costs and
expenses associated with any redemption of Bonds. In the event that on any optional tender date or
mandatory tender date under and as provided in Section 10.01, 2.02, 2.13 or 3.06 of the Indenture,
Bonds are tendered and not remarketed by the Remarketing Agent, and remarketing proceeds are not
available for the purpose of paying the purchase price of such Bonds, the Borrower will cause to be
paid, under and subject to the terms of the Credit Facility and the Reimbursement Agreement to the
Trustee by the applicable times provided in the Indenture an amount equal to the principal amount of
such Bonds tendered and not remarketed, together with interest accrued to the mandatory tender date
or optional tender date, as the case may be. The Borrower acknowledges that Purchased Bonds will
be purchased by the Trustee for and on behalf of, and registered in the name of, the Borrower and
will be pledged to the Credit Facility Provider pursuant to the [Pledge Agreement].
Section 4.6. Mortgage Taxes. The Borrower shall pay any and all taxes, assessments,
charges, filing, registration and recording fees, excises and levies imposed upon the Issuer by reason
of its interest in, or measured by amounts payable under, the Bond Mortgage Note, this Financing
Agreement, the Bond Mortgage or any other Bond Financing Document, and shall pay all stamp
taxes and other taxes required to be paid on the Bond Mortgage Note, this Financing Agreement, the
Bond Mortgage or the other Bond Financing Documents. If the Borrower fails to make such
payment within five (5) days after notice thereof from the Issuer, the Issuer may (but shall not be
obligated to), subject to the provisions of the Intercreditor Agreement, pay the amount due, and the
Borrower shall reimburse the Issuer on demand for all such advances. The Issuer may direct the
Trustee to advance such amount due from amounts on deposit in any Fund or Account (other than the
Rebate Fund) under the Indenture that is not part of the Trust Estate; provided, however, no payment
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by the Issuer of any amounts due under this Section shall be deemed to extinguish the Borrower's
obligation with respect hereto and such amounts shall remain due and owing by the Borrower until
paid by the Borrower. Upon request, the Borrower shall furnish to the Issuer, the Trustee and the
Credit Facility Provider proof of the payment of any such tax, assessment or other governmental or
similar charge or fee, or any other charge which is payable by the Borrower as set forth above.
(End of Article IV)
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ARTICLE V
SPECIAL COVENANTS OF BORROWER
Section 5.1. Performance of Obligations. The Borrower shall keep and faithfully perform
all of its covenants and undertakings contained herein and in the Bond Financing Documents to
which the Borrower is a party, including, without limitation, its obligations to make all payments set
forth herein and therein in the amounts, at the times and in the manner set forth herein and therein.
Except with respect to the obligations of the Borrower set forth in Sections 4.2, 5.8 and 6.1,
but otherwise notwithstanding any other provisions of this Financing Agreement, the obligations of
the Borrower under this Financing Agreement with respect to the Bond Mortgage Loan are non-
recourse liabilities of the Borrower. However, nothing in this Section shall limit the right of the
Issuer or the Trustee to proceed against the Borrower to recover any fees owing to any of them or any
actual out-of-pocket expenses (including but not limited to actual out-of-pocket attorneys' fees
incurred by any of them) incurred by any of them in connection with the enforcement of any rights
under this Financing Agreement or other Bond Financing Documents. Nothing in this Section shall
limit any right that the Trustee or the Issuer, subject to the terms of the Intercreditor Agreement, may
have to enforce the Bond Mortgage Note, the Bond Mortgage, or any other Bond Mortgage Loan
Documents in accordance with their terms.
Section 5.2. Compliance With Applicable Laws. All work performed in connection with
the Project shall be performed in strict compliance with all applicable federal, state, county and
municipal laws, ordinances, rules and regulations now in force or that may be enacted hereafter.
Section 5.3. Indenture Provisions. The execution of this Financing Agreement shall
constitute conclusive evidence of approval of the Indenture by the Borrower. Whenever the
Indenture by its terms imposes a duty or obligation upon the Borrower, such duty or obligation shall
be binding upon the Borrower to the same extent as if the Borrower were an express party to the
Indenture, and the Borrower shall carry out and perform all of its obligations under the Indenture as
fully as if the Borrower were a party to the Indenture.
Section 5.4. Credit Facility. Without the consent of Bondholders, the Borrower may, on
any date during a Variable Period, on any Reset Adjustment Date, or any Variable Rate Adjustment
Date and on the Conversion Date (but no later than ten (10) days prior to the expiration date of the
Credit Facility unless an irrevocable commitment to extend or replace the existing Credit Facility has
been delivered to the Trustee satisfying the requirements of the Indenture, if applicable), and,
following the beginning of a Reset Period or the Fixed Rate Period, on any Interest Payment Date
occurring after the Bonds may first be optionally redeemed at a price of not greater than par plus
accrued interest to the redemption date and subject to the terms of the existing Credit Facility and
Reimbursement Agreement, arrange for the delivery to the Trustee of an Alternate Credit Facility in
substitution for the Credit Facility then in effect (referred to in this Section 5.4 as "credit support")
and, if applicable, for payment of the Purchase Price of Bonds delivered or deemed delivered in
accordance with Article X of the Indenture (referred to in this Section 5.4 as "liquidity support").
The foregoing notwithstanding, with the prior written consent of the Credit Facility Provider, a
Substitution Date may be selected by the Borrower to occur on a date other than the aforementioned
dates, subject to the notice requirements of Section 2.13 of the Indenture. In addition, without the
consent of the Borrower (and without the consent of the Bondholders), the Credit Facility Provider
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may provide any other form of "credit support" or "liquidity support" (or combination thereof) issued
by the Credit Facility Provider in substitution for the Credit Facility if (A) the conditions of Section
8.05 of the Indenture are satisfied or (B)(i) the Rating Agency confirms in writing that such
substitution will not result in a withdrawal, qualification or reduction of the then current rating of the
Bonds, (ii) the Credit Facility Provider delivers to the Issuer and the Trustee an Opinion of Counsel
satisfying the requirements of paragraph (c) of this Section 5.4 and (iii) such substitute "credit
support" or "liquidity support"(or combination thereof) does not increase the amounts required to be
paid by, or other obligations of, the Borrower. Any Alternate Credit Facility shall satisfy the
following conditions, as applicable:
(a) An Alternate Credit Facility may be issued to provide only credit support or
only liquidity support so long as a separate Credit Facility provides, at all times while such Alternate
Credit Facility is in effect, complementary credit support or liquidity support, as the case may be, so
that at all times while any of the Bonds bear interest at the Variable Rate or the Reset Rate such
Bonds shall be entitled to credit support and to the liquidity support required by such mode. During
the Fixed Rate Period, the Bonds shall be entitled to credit support only. Notwithstanding the
foregoing, prior to the commencement of the Fixed Rate Period, the Issuer may, in its sole discretion,
waive the requirement that a Credit Facility be provided during such Fixed Rate Period.
(b) The Alternate Credit Facility shall (i) be in an amount equal to the aggregate
principal amount of the Bonds Outstanding from time to time plus the Interest Requirement or
otherwise provide coverage satisfactory to the Rating Agency; (ii) provide for payment in
immediately available funds to the Trustee upon receipt of the Trustee's request for such payment
with respect to any Interest Payment Date, purchase date (if applicable) or extraordinary mandatory
redemption date pursuant to the Indenture; (iii) if the Alternate Credit Facility is provided to secure
Bonds during a Reset Period, provide an expiration date no earlier than the earliest of (1) the day
following the Reset Adjustment Date immediately succeeding the Reset Period; (2) ten (10) days
after the Trustee receives notice from the Credit Facility Provider of an Event of Default hereunder
or a default under and as defined in the Reimbursement Agreement and a direction to redeem all
Outstanding Bonds; (3) the date on which all Bonds are paid in full and the Indenture is discharged in
accordance with its terms; and (4) the date on which the Bonds become secured by an Alternate
Credit Facility in accordance with the terms of the Indenture; (iv) unless waived by the Issuer in its
sole discretion, result in the Bonds receiving a long-term rating or short-term rating, or both, as
applicable for the mode then in effect, for the long-term rating in one of the two highest rating
categories of the Rating Agency without regard to pluses or minuses, and for the short-term rating in
the highest rating category of the Rating Agency without regard to pluses or minuses, and (v) have a
stated expiration or termination date not sooner than one year following its effective date.
(c) In connection with the delivery of an Alternate Credit Facility, the Trustee
must receive (i) an Opinion of Counsel to the Credit Facility Provider issuing the Alternate Credit
Facility, in form and substance satisfactory to the Issuer and the Trustee, relating to the due
authorization and issuance of the Alternate Credit Facility, its enforceability, that the statements
made relating to the Alternate Credit Facility and Reimbursement Agreement contained in any
disclosure document related to the Bonds are true and correct, that the Alternate Credit Facility is not
required to be registered under the Securities Act of 1933, as amended (unless waived by the Issuer
with the consent of the Remarketing Agent) and if applicable, that payments made by the Credit
Facility Provider pursuant to the Alternate Credit Facility will not be voidable under Section 547 of
the Bankruptcy Code and would not be prevented by the automatic stay provisions of Section 362(a)
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of the Bankruptcy Code, in the context of a case or proceeding by or against the Borrower, a general
partner of the Borrower or by the Issuer under the Bankruptcy Code; (ii) an Opinion of Bond Counsel
to the effect that the substitution of such Alternate Credit Facility will not adversely affect the
exclusion from gross income, for federal income tax purposes, of the interest payable on the Bonds;
(iii) the delivery of a continuing disclosure agreement if required by Rule 15c2-12 of the Securities
Exchange Commission or other applicable laws or regulations then in effect; and (iv) a rating letter
from the Rating Agency establishing a rating on the Bonds permitted by subsection 5.4(b) above.
Section 5.5. Borrower To Maintain Its Existence; Certification of No Default.
(a) The Borrower agrees to maintain its existence and maintain its current legal
status with authority to own and operate the Project. The Borrower agrees that during the term of
this Financing Agreement it will not dispose of all or substantially all of its assets nor consolidate
with nor merge into any entity unless (i) it shall have first filed with the Trustee an opinion of Bond
Counsel to the effect that such disposal of assets, consolidation or merger will not cause the interest
on the Bonds to become includable in gross income for federal income tax purposes; (ii) the acquirer
of the assets or the entity with which it shall consolidate or into which it shall merge shall be an
individual or a corporation, partnership or other legal entity organized and existing under the laws of
the United States of America or one of the states of the United States of America and shall be
qualified and admitted to do business in the State; (iii) such acquiring or remaining entity shall
assume in writing all of the obligations of the Borrower under the Bond Financing Documents; and
(iv) such disposal of assets, consolidation or merger shall be approved by the Issuer in accordance
with Section 11 of the Tax Regulatory Agreement.
(b) In addition to performing all other similar requirements under the Bond
Financing Documents to which the Borrower is a party, the Borrower shall, within sixty (60) days
after the end of each calendar year, render to the Trustee and the Issuer a certificate executed by an
Authorized Officer of the Borrower to the effect that the Borrower is not, as of the date of such
certificate, in default of any of its covenants, agreements, representations or warranties under any of
the Bond Financing Documents to which the Borrower is a party and that, to the best of the
Borrower's knowledge after due inquiry, there has occurred no Event of Default (as such term is
defined in each respective Bond Financing Document) under any of the other Bond Financing
Documents.
Section 5.6. Borrower to Remain Qualified in State and Appoint Agent. The Borrower
will remain duly qualified to transact business in the State and will maintain an agent in the State on
whom service of process may be made in connection with any actions against the Borrower.
Section 5.7. Sale or Other Transfer of Project. The Borrower may convey and transfer
the Project only upon strict compliance with the provisions of the Bond Mortgage Loan Documents
and upon receipt of the prior written consent of the Issuer and the Credit Facility Provider.
Section 5.8. Arbitrage and Rebate Collections; Tax-Exempt Status of the Bonds.
(a) The Borrower covenants for the benefit of the Issuer, the Bondholders and the
Trustee that the proceeds of the Bonds, the earnings thereon and any other moneys on deposit in any
fund or account maintained in respect thereof (whether such moneys were derived from the proceeds
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of the sale thereof or from other sources) will not be used in a manner which would cause the Bonds
to be "arbitrage bonds" within the meaning of Section 148 of the 1986 Code.
(b) The Borrower, for the benefit of the Issuer and each Bondholder, represents
that it has not taken, or permitted to be taken on its behalf, and agrees that it will not take, or permit
to be taken on its behalf, any action which would adversely affect the exclusion from gross income
for federal income tax purposes of the interest paid on the Bonds, and that, upon written request by
the Issuer or the Trustee, it will make and take, or require to be made and taken, such acts and filings
as may from time to time be required under the 1986 Code to maintain such exclusion.
Section 5.9. Right to Perform Borrower's Obligations. In the event the Borrower fails to
perform any of its obligations under this Financing Agreement, the Issuer and/or the Trustee, after
giving requisite notice, if any, may, but shall be under no obligation to, perform such obligation and
pay all costs related thereto, and all such costs so advanced by the Issuer or the Trustee shall become
an additional obligation of the Borrower hereunder, payable on demand with interest thereon at the
default rate of interest payable under the Bond Mortgage Loan Documents.
Section 5.10. Notice of Certain Events. The Borrower shall promptly advise the Issuer and
a Responsible Officer of the Trustee in writing of the occurrence of any Event of Default hereunder
or any event which, with the passage of time or service of notice or both, would constitute an Event
of Default hereunder, specifying the nature and period of existence of such event and the actions
being taken or proposed to be taken with respect thereto.
Section 5.11. Survival of Covenants. The provisions of Sections 4.2 and 6.1 of this
Financing Agreement shall survive the expiration or termination of this Financing Agreement.
Section 5.12. Operating Statements. The Borrower agrees to prepare and submit to the
Issuer, annually within one hundred twenty (120) days after the close of the Borrower's fiscal year, a
Project operating statement and balance sheet. The Borrower further agrees to prepare and submit to
the Issuer quarterly, within thirty (30) days after the close of each fiscal quarter (a) a statement
showing, separately, the percentage of occupied and unoccupied units in the Project, (b) an unaudited
Project operating statement certified by the Borrower as being true, correct and complete and (c) a
current rent roll for the most recent date available which has been certified by the Borrower as being
true, correct and complete in all material respects. In addition, the Borrower will comply with the
reporting requirements set forth in the Tax Regulatory Agreement and as required by the Bond
Financing Documents. Nothing contained in this Section 5.12 is intended to modify or limit any
provisions of the Bond Financing Documents.
Section 5.13. Access to Project and Records; Reports.
(a) Access to Project. Subject to reasonable notice, the Issuer, the Credit Facility
Provider and the Trustee, and the respective duly authorized agents of each, shall have the right (but
not any duty or obligation) at all reasonable times and during normal business hours to enter the
Project and any other location containing the records relating to the Borrower, the Project, the Bond
Mortgage Loan and the Indenture and to inspect and audit any and all of the Borrower's records or
accounts pertaining to the Borrower, the Project, the Bond Mortgage Loan, and the Borrower's
compliance with the terms and conditions of the Bond Mortgage Loan, and the Reimbursement
Agreement and shall have the right to require the Borrower, at the Borrower's sole expense, to
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furnish such documents to the Issuer, the Trustee and the Credit Facility Provider as the Issuer, the
Trustee or the Credit Facility Provider, as the case may be, from time to time, deems reasonably
necessary in order to determine that the provisions of the Bond Mortgage Loan, the Indenture, the
Bond Financing Documents and the Reimbursement Agreement have been complied with and to
make copies of any records that the Credit Facility Provider, the Trustee or the Issuer or their
respective duly authorized agents, may reasonably require. The Borrower shall make available to the
Issuer, the Trustee and the Credit Facility Provider such information concerning the Project, the
Bond Mortgage Loan, the Indenture, the Bond Financing Documents and the Reimbursement
Agreement as any of them may reasonably request.
(b) Certificates and Reports. The Borrower shall file such certificates and other
reports with the Issuer, the Trustee and the Credit Facility Provider, as are required by the Tax
Regulatory Agreement.
(c) Reporting. The Borrower agrees to provide to the Issuer all information
necessary to enable the Issuer to complete and file all forms and reports required by the laws of the
State and the Code in connection with the Project and the Bonds.
(d) Financial Statements. The Borrower agrees to provide at its expense to the
Issuer annual financial statements of the Project certified by an Authorized Officer of the Borrower.
(e) Annual Review of Management. The Borrower hereby authorizes the Issuer
to conduct a review annually of the management and operation of the Project, which the Issuer shall
be under no obligation to perform but may elect to perform in its sole discretion. In the event that the
Issuer conducts such a review, the Issuer may, if it chooses, document its findings from such review
and if it does document the findings shall provide a copy of its findings to the Borrower, the Credit
Facility Provider and the Trustee, and the Borrower shall have thirty (30) days after receipt of such
findings to respond to the Issuer with respect thereto. If the Issuer shall find that any aspect of the
management or operation of the Project may cause interest on the Bonds to be subject to federal
income taxation or may constitute a violation of the Act, the Issuer shall so notify the Borrower, the
Credit Facility Provider and the Trustee, and require remedy from the Borrower of such condition.
The Credit Facility Provider and the Issuer may require the Borrower to remove the management
agent for the Project.
(End of Article V)
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ARTICLE VI
INDEMNIFICATION
Section 6.1. Indemnification. The Borrower releases the Issuer, the Trustee, and their
respective officers, directors, agents, officials, employees (and as to the Issuer, members of its City
Council), and any person who controls the Issuer or the Trustee (only in its capacity as Trustee and
not for the benefit of Bondholders) within the meaning of the Securities Act of 1933, as amended
(collectively, "Indemnified Parties" and, individually, each an "Indemnified Party") and covenants
and agrees, with respect to acts or omissions occurring on or after the Closing Date, to indemnify,
hold harmless and defend each Indemnified Party from and against, any and all losses, claims,
damages, demands, liabilities and expenses (including but not limited to attorneys' fees and
expenses, whether or not suit is brought and whether incurred in settlement negotiations,
investigations of claims, at trial, on appeal or otherwise), litigation and court costs, taxes, amounts
paid in settlement, amounts paid to discharge judgments, causes of action, suits, claims, demands and
judgments of any nature, joint or several, by or on behalf of any person directly or indirectly resulting
from, arising out of or related to:
(i) the transactions provided for in the Indenture or the Bond Financing
Documents or otherwise in connection with the Project, the Bonds, the Bond
Mortgage Loan, or the execution and delivery or amendment of any other document
entered into in connection with the transactions provided for in the Indenture or the
Bond Financing Documents;
(ii) the approval of the financing for the Project or the making of the
Bond Mortgage Loan;
(iii) the issuance, sale or remarketing of the Bonds or any certifications or
representations made by any person other than the party seeking indemnification;
(iv) any and all claims arising in connection with the interpretation,
performance, enforcement, breach, default or amendment of the Indenture or the
Bond Financing Documents or any other documents relating to the Project or the
Bonds or in connection with any federal or state tax audit or investigation, any
securities investigation or enforcement action or any questions or other matters
arising under such documents;
(v) the carrying out by the Borrower of any of the transactions provided
for in the Indenture or the Bond Financing Documents;
(vi) the Trustee's acceptance or administration of the trusts created by the
Indenture or the exercise of its powers or duties under the Indenture or under this
Financing Agreement, the Tax Regulatory Agreement or any other agreements to
which it is a party or otherwise in connection with the transactions provided for in the
Bond Financing Documents;
(vii) any and all claims arising in connection with the issuance, offering,
sale or delivery or remarketing or resale on the secondary market of the Bonds or any
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certifications or representations made by any person other than the Indemnified Party
seeking indemnification, including, without limitation, any statement or information
made by the Borrower with respect to the Borrower or the Project in any offering
document or materials regarding the Bonds, the Project or the Borrower or any
certificate executed by the Borrower which, at the time made, is misleading, untrue or
incorrect in any material respect and any untrue statement or alleged untrue statement
of a material fact relating to the Borrower or the Project contained in any offering
material relating to the sale or remarketing of the Bonds, as from time to time
amended or supplemented, or arising out of or based upon the omission or alleged
omission to state in such offering material a material fact relating to the Borrower or
the Project required to be stated in such offering material or necessary in order to
make the statements in such offering material not misleading, or failure to properly
register or otherwise qualify the sale of the Bonds or failure to comply with any
licensing or other law or regulation which would affect the manner in which or to
whom the Bonds could be sold and the carrying out by the Borrower of any of the
transactions contemplated by the Indenture or the Bond Financing Documents;
(viii) the Borrower's failure to comply with any requirement of this
Financing Agreement, the Bond Mortgage Note, the Bond Mortgage or the Tax
Regulatory Agreement;
(ix) any act or omission of the Borrower or any of its agents, servants,
employees or licensees in connection with the Bond Mortgage Loan, or the Project,
including violation of any law, ordinance, court order or regulation affecting the
Project or any part of it or the ownership, occupancy or use of it;
(x) any damage or injury, actual or claimed, of whatsoever kind, cause or
character, to property (including loss of use of property) or persons, occurring or
allegedly occurring in, on or about the Project or arising out of any action or inaction
of the Borrower, whether or not related to the Project, or resulting from or in any way
connected with specified events, including the construction or management of the
Project, the issuance of the Bonds or otherwise in connection with transactions
contemplated or otherwise in connection with the Project, the Bonds or the execution
or amendment of any document relating to the Project or the Bonds;
(xi) any violation of any environmental law, rule or regulation with
respect to, or the release of any toxic substance from, the Project;
(xii) taxes, charges, assessments, fees, excises and levies imposed upon the
Issuer by reason of its interest in, or measured by amounts payable under, or the
payment of which is a condition to the enforceability of, the Bond Mortgage Note,
this Financing Agreement, the Bond Mortgage or any other Bond Financing
Document, and any and all stamp taxes and other taxes required to be paid heron or
thereon; and
(xiii) any and all claims arising in connection with the operation of the
Project, or the conditions, environmental or otherwise, occupancy, use, possession,
conduct or management of work done in or about, or from the planning, design,
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acquisition, construction or equipping of, the Project or any part of it, including, but
not limited to, the ADA (as evidenced by an architect's certificate to such effect).
This indemnification shall extend to and include, without limitation, all reasonable costs,
counsel fees, expenses or liabilities incurred in connection with any such claim, or proceeding
brought with respect to such claim; except
(A) in the case of the indemnification of the Trustee or any of its
Indemnified Parties, to the extent such damages are determined by a court of
competent jurisdiction by final and nonappealable judgment to have resulted from the
negligence or willful misconduct of such Indemnified Party; and
(B) in the case of the indemnification of the Issuer, or any of its
Indemnified Parties, to the extent such damages are determined by a court of
competent jurisdiction by final and nonappealable judgment to have resulted from the
illegal or unlawful action of such Indemnified Party.
In the event that any action or proceeding is brought against any Indemnified Party with
respect to which indemnity may be sought under this Financing Agreement, the Borrower, upon
written notice from the Indemnified Party (which notice shall be given within an appropriate time
period so as not to impair the ability of the Borrower to perform its obligations pursuant to this
Section), shall assume the investigation and defense of the action or proceeding, including the
employment of counsel selected by the Borrower, subject to the approval of the Indemnified Party in
such party's reasonable discretion, and shall assume the payment of all expenses related to the action
or proceeding, with full power to litigate, compromise or settle the same in its sole discretion,
provided that the Issuer and the Trustee, as appropriate, shall have the right to review and approve or
disapprove any such compromise or settlement (which approval shall not be unreasonably withheld).
If any claim is made hereunder and the Borrower does not undertake the defense thereof, the
Indemnified Parties shall be entitled to control such litigation and settlement and shall be entitled to
indemnity with respect thereto pursuant to the terms of this Section. Each Indemnified Party shall
have the right to employ separate counsel in any such action or proceeding and participate in the
investigation and defense of the action or proceeding, provided, however, that unless (a) the
Indemnified Party reasonably determines that a conflict of interest exists between the interests of the
Indemnified Party and the interests of the Borrower or (b) such separate counsel is employed by
court order or with the approval of the Borrower, which approval shall not be unreasonably withheld,
conditioned or delayed, the Borrower shall not be required to pay the fees and expenses of such
separate counsel.
Notwithstanding any transfer of the Project to another owner, the Borrower shall remain
obligated to indemnify each Indemnified Party pursuant to this Section 6.1 for all matters arising
prior to the date of such transfer, and, as a condition to the release of the transferor on and after the
transfer date, the transferee must assume the obligations of the Borrower under the Indenture and the
other Bond Financing Documents on and after such transfer date and indemnify each Indemnified
Party pursuant to this Section 6.1 for all matters arising on and after the date of such transfer. The
Indemnified Party's rights under this Section 6.1 shall survive the termination of this Financing
Agreement and the payment or defeasance of the Bonds.
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The obligations of the Borrower under this Section 6.1 are independent of any other
contractual obligation of the Borrower to provide indemnity to the Indemnified Parties, and the
obligations of the Borrower to provide indemnity hereunder shall not be interpreted, construed or
limited in light of any other separate indemnification obligation of the Borrower. An Indemnified
Party shall be entitled simultaneously to seek indemnity under this Section 6.1 and any other
provision under which it is entitled to indemnity.
Section 6.2. Limitation With Respect to the Credit Facility Provider. Notwithstanding
anything in this Financing Agreement to the contrary, in the event that the Credit Facility Provider
shall become the owner of the Project as a result of a foreclosure or a deed in lieu of foreclosure or
comparable conversion of the Bond Mortgage Loan, the Credit Facility Provider shall not be liable
for any breach of or default of any prior owner of the Project under this Financing Agreement and
shall only be responsible for defaults and obligations incurred or occurring during the period that the
Credit Facility Provider is the owner of the Project. Accordingly, during any period that the Credit
Facility Provider owns the Project and that this Article VI is applicable to the Credit Facility
Provider, the Credit Facility Provider's obligations under this Article VI shall be limited to acts and
omissions of the Credit Facility Provider occurring during the period of the Credit Facility Provider's
ownership of the Project.
(End of Article VI)
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ARTICLE VII
EVENTS OF DEFAULT AND REMEDIES
Section 7.1. Events of Default, The following shall be "Events of Default" under this
Financing Agreement and the terms "Event of Default" or "default" shall mean, whenever they are
used in this Financing Agreement, one or all of the following events:
(a) Failure by the Borrower to pay any amounts due under this Financing
Agreement, the Bond Mortgage Note or the Bond Mortgage at the times and in the amounts required
by this Financing Agreement, the Tax Regulatory Agreement, the Bond Mortgage Note or the Bond
Mortgage;
(b) The Borrower's failure to observe and perform any of its other covenants,
conditions or agreements contained herein, other than as referred to in clause (a) above, for a period
of thirty (30) days after written notice specifying such failure and requesting that it be remedied is
given by the Issuer or the Trustee to the Borrower; provided, however, that if the failure shall be such
that it can be corrected but not within such period, the Issuer and the Trustee will not unreasonably
withhold their consent to an extension of such time if corrective action is instituted by the Borrower
within such period and diligently pursued until the failure is corrected; or
(c) The occurrence of a default under the Reimbursement Agreement shall at the
discretion of the Credit Facility Provider constitute an Event of Default under this Financing
Agreement. The occurrence of a default under this Financing Agreement shall in the discretion of
the Credit Facility Provider constitute a default under the Bond Mortgage Loan Documents and the
Reimbursement Agreement.
Nothing contained in this Section 7.1 is intended to amend or modify any of the provisions of
the Bond Mortgage Loan Documents or the Reimbursement Agreement or to bind the Credit Facility
Provider to any notice and cure periods other than as expressly set forth in the Reimbursement
Agreement.
Section 7.2. Remedies on Default. Subject to Section 7.6, whenever any Event of Default
under Section 7.1 of this Financing Agreement shall have happened and be existing, any one or more
of the following remedial steps may be taken; provided that in no event shall the Issuer be obligated
to take any step which in its opinion will or might cause it to expend time or money or otherwise
incur liability unless and until a satisfactory indemnity bond has been furnished to it:
(a) The Issuer shall cooperate with the Trustee as the Trustee acts pursuant to
Section 6.02 of the Indenture.
(b) In the event any of the Bonds shall at the time be Outstanding and not paid
and discharged in accordance with the provisions of the Indenture, the Issuer or the Trustee may have
access to and inspect, examine and make copies of the books and records and any and all accounts,
data and income tax and other tax returns of the Borrower.
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(c) The Issuer may, without being required to give any notice (other than to the
Trustee), except as provided herein, pursue all remedies of a creditor under the laws of the State, as
supplemented and amended, or any other applicable laws.
(d) The Issuer or the Trustee may take whatever action at law or in equity may
appear necessary or desirable to collect the payments due under this Financing Agreement then due
and thereafter to become due, or to enforce performance and observance of any obligation,
agreement or covenant of the Borrower under this Financing Agreement.
(e) At the written request of the Issuer, declare all amounts due under this
Financing Agreement and the Bond Mortgage Loan to be immediately due and payable; provided,
however, that, in the case of an Event of Default described in (b) of Section 7.1 hereof, the amounts
due under this Financing Agreement and the Bond Mortgage Loan shall not be accelerated where (i)
the Trustee has received an opinion of Bond Counsel that the failure to accelerate the Bond Mortgage
Loan under such circumstances will not adversely affect the exclusion from gross income for federal
income tax purposes of interest on the Bonds, and (ii) the Credit Facility Provider has directed the
Trustee not to so declare such amounts due.
Any amounts collected pursuant to Article IV and any other amounts which would be
applicable to payment of principal of and interest and any premium on the Bonds collected pursuant
to action taken under this Section shall be applied in accordance with the provisions of the Indenture.
The provisions of this Section are subject to the further limitation that if, after any Event of
Default all amounts which would then be payable hereunder by the Borrower if such Event of
Default had not occurred and was not continuing shall have been paid by or on behalf of the
Borrower, and the Borrower shall have also performed all other obligations in respect of which it is
then in default hereunder, and shall have paid the reasonable charges and expenses of the Issuer and
the Trustee, , including reasonable attorneys' fees paid or incurred in connection with such default,
and shall have paid the Issuer Fee, and, if there shall then be no Event of Default existing under any
of the Bond Financing Documents, then and in every such case such Event of Default hereunder shall
be waived and annulled, but no such waiver or annulment shall affect any subsequent or other Event
of Default or impair any right consequent thereon.
Section 7.3. No Remedy Exclusive. No remedy conferred upon or reserved to the Issuer
or the Trustee by this Financing Agreement is intended to be exclusive of any other available remedy
or remedies, but each and every such remedy shall be cumulative and shall be in addition to every
other remedy given under this Financing Agreement or now or hereafter existing at law or in equity
or by statute. No delay or omission to exercise any right or power accruing upon any default shall
impair any such right or power or shall be construed to be a waiver thereof, but any such right and
power may be exercised from time to time and as often as may be deemed expedient. In order to
entitle the Issuer or the Trustee to exercise any remedy reserved to it in this Article, it shall not be
necessary to give any notice, other than such notice as may be expressly required by this Agreement.
Section 7.4. Agreement to Pay Attorneys' Fees and Expenses. In the event the Borrower
defaults under any of the provisions of this Financing Agreement and the Issuer or the Trustee
employs attorneys or incur other expenses for the collection of loan payments or the enforcement of
performance or observance of any obligation or agreement on the part of the Borrower contained in
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this Financing Agreement or in or represented by the Bond Mortgage Note, the Borrower shall on
demand therefor reimburse the reasonable fee of such attorneys and such other expenses so incurred.
Section 7.5. No Additional Waiver Implied by One Waiver. In the event any agreement
contained in this Financing Agreement should be breached by any party and thereafter waived by the
other parties, such waiver shall be limited to the particular breach so waived and shall not be deemed
to waive any other breach hereunder.
Section 7.6. Rights of Credit Facility Provider. Notwithstanding anything herein to the
contrary, except as otherwise permitted by the Intercreditor Agreement, as long as a "Wrongful
Dishonor" (as defined in the Intercreditor Agreement) has not occurred and is continuing with
respect to the Credit Facility, neither the Issuer, the Trustee nor any other person shall, upon the
occurrence of an Event of Default hereunder or an event of default under the Bond Financing
Documents, take any action to accelerate or otherwise enforce payment or seek other remedies with
respect to the Bond Mortgage Loan, except at the written direction of the Credit Facility Provider;
provided that this prohibition shall not be construed to limit the rights of the Issuer or the Trustee to
specifically enforce the Tax Regulatory Agreement in order to provide for operation of the Project in
accordance with the 1954 Code and the 1986 Code, as applicable, and the Act; and provided further
that this prohibition shall not be construed to limit the rights of the Issuer, the Trustee or any other
Indemnified Party under Section 6.1 to enforce its rights against the Borrower under Sections 4.2, 5.8
and 6.1 by mandamus or other suit, action or proceeding at law or in equity where such suit, action or
proceeding does not seek any remedies under or with respect to the Bond Mortgage or cause
acceleration of the Bond Mortgage Loan.
(End of Article VII)
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ARTICLE VIII
MISCELLANEOUS
Section 8.1. Notices. Whenever in this Financing Agreement the giving of notice by mail
or otherwise is required, the giving of such notice may be waived in writing by the person entitled to
receive such notice and in any such case the giving or receipt of such notice shall not be a condition
precedent to the validity of any action taken in reliance upon such waiver.
Any notice, request, complaint, demand, communication or other paper required or permitted
to be delivered to the Issuer, the Trustee, the Borrower or the Credit Facility Provider shall be
sufficiently given and shall be deemed given (unless another form of notice shall be specifically set
forth herein) on the Business Day following the date on which such notice or other communication
shall have been delivered to a national overnight delivery service (receipt of which to be evidenced
by a signed receipt from such overnight delivery service) addressed to the appropriate party at the
addresses set forth below. The Issuer, the Trustee, the Borrower or the Credit Facility Provider may,
by notice given as provided in this paragraph, designate any further or different address to which
subsequent notices or other communication shall be sent. Copies of all notices sent to the Borrower
hereunder shall also be sent to the Credit Facility Provider.
The Issuer:
The Trustee and
Tender Agent:
The Borrower:
with a copy to:
City of Carlsbad, California
2965 Roosevelt Street, Suite B
Carlsbad, California 92008-2389
Attn: Housing and Redevelopment Director
Telephone: (760)434-2810
Telecopy: (760) 720-2037
U.S. Bank National Association
633 West Fifth Street, 24th Floor
Los Angeles, California 90071
Attention: Corporate Trust Services
Telephone: (213)615-6062
Telecopy: (213)615-6199
Santa Fe Ranch, LLC
c/o Henderson Global Investors (North America) Inc.
One Financial Plaza, 19th Floor
Hartford, Connecticut 06103
Attention: James J. Martha
Telephone: (860) 723-8701
Telecopy: (860) 723-8601
Locke Lord Bissell & Liddell LLP
2200 Ross Avenue, Suite 2200
Dallas, Texas 75201
Attention: Mike Petersilia, Esq.
Telephone: (214) 740-8690
Telecopy: (214)740-8800
DOCSOC/1480222v4/022062-0029
30
Credit Facility Provider:
with a copy to:
Remarketing Agent:
Wells Fargo Bank, National Association
123 N. Wacker Drive, Suite 1900
Chicago, Illinois 60606
Attention: Brett Hill
Facsimile: (312)269-4812
Telephone: (312)782-0969
Wells Fargo Bank, N.A.
Minneapolis Loan Center
608 2nd Avenue South, 11th Floor
Minneapolis, Minnesota 55402
Attention: Manager
Stern Brothers & Co.
8000 Maryland, Suite 800
St. Louis, Missouri 63105
Attention: Remarketing Desk
Telephone: (313)743-4010
Telecopier: (314)727-7313
Stern Brothers & Co.
125 Town Park Drive, Suite 300
Kennesaw, Georgia 30144
Attention: Short Term Desk
Fax: ( ) -
(a) The Trustee shall provide to the Credit Facility Provider (i) prompt notice of
the occurrence of any Event of Default pursuant to Section 7.1 and (ii) any written information or
other communication received by the Trustee hereunder within ten (10) Business Days of receiving a
written request from the Credit Facility Provider for any such information or other communication.
Section 8.2. Concerning Successors and Assigns. All covenants, agreements,
representations and warranties made herein and in the certificates delivered pursuant hereto shall
survive the financing herein contemplated and shall continue in full force and effect so long as the
obligations hereunder are outstanding. Whenever in this Financing Agreement any of the parties
hereto is referred to, such reference shall be deemed to include the successors and assigns of such
party; and all covenants, promises and agreements by or on behalf of the Borrower which are
contained in this Financing Agreement shall bind its successors and assigns and inure to the benefit
of the successors and assigns of the Issuer, the Trustee and the Credit Facility Provider.
Section 8.3. Governing Law, This Financing Agreement and the Exhibits attached hereto
shall be construed in accordance with and governed by the laws of the State and, where applicable,
the laws of the United States of America.
Section 8.4. Modifications in Writing. Modification or the waiver of any provisions of
this Financing Agreement or consent to any departure by the Borrower therefrom, shall in no event
be effective unless the same shall be in writing executed by the parties hereto, with respect to any
modification shall also be subject to the requirements of the Indenture, and shall require the prior
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written consent of the Credit Facility Provider. Any such waiver or consent shall be effective only in
the specific instance and for the purpose for which given and so long as the interests of any
Bondholders are not adversely affected and the Trustee consents in writing thereto. No notice to or
demand on the Borrower in any case shall entitle it to any other or further notice or demand in the
same circumstances.
Section 8.5. Further Assurances and Corrective Instruments. The Issuer, the Trustee
and Borrower agree that they will, from time to time, execute, acknowledge and deliver, or cause to
be executed, acknowledged and delivered, such supplements hereto and such further instruments as
may reasonably be required (including such supplements or further instruments requested by the
Credit Facility Provider) for correcting any inadequate or incorrect description of the performance of
this Financing Agreement.
Section 8.6. Captions. The section headings contained herein are for reference purposes
only and shall not in any way affect the meaning or interpretation of this Financing Agreement.
Section 8.7. Severability. The invalidity or unenforceability of any provision of this
Agreement shall not affect the validity of any other provision, and all other provisions shall remain in
full force and effect.
Section 8.8. Counterparts. This Financing Agreement may be signed in any number of
counterparts with the same effect as if the signatures thereto and hereto were upon the same
instrument.
Section 8.9. Amounts Remaining in Bond Fund or Other Funds. It is agreed by the
parties hereto that any amounts remaining in the Bond Fund or other funds and accounts established
under the Indenture upon expiration or sooner termination of the term hereof, shall be paid in
accordance with the Indenture.
Section 8.10. Effective Date and Term. This Financing Agreement shall become effective
upon its execution and delivery by the parties hereto, shall be effective and remain in full force from
the date hereof, and, subject to the provisions hereof, shall expire on such date as the Indenture shall
terminate.
Section 8.11. No Liability of Officers; Limited Liability of Issuer. No recourse under or
upon any obligation, covenant, or agreement or in any Bonds, or under any judgment obtained
against the Issuer, or by the enforcement of any assessment or by any legal or equitable proceeding
by virtue of any constitution or statute or otherwise or under any circumstances, shall be had against
any incorporator, member, director, commissioner or officer, as such, past, present, or future, of the
Issuer, either directly or through the Issuer, or otherwise, for the payment for or to the Issuer or any
receiver thereof, or for or to the holder of any Bonds, of any sum that may be due and unpaid by the
Issuer upon any of the Bonds. Any and all personal liability of every nature, whether at common law
or in equity, or by statute or by constitution or otherwise, of any such incorporator, member, director,
commissioner or officer, as such, to respond by reason of any act or omission on his part or
otherwise, for the payment for or to the Issuer or any receiver thereof, or for or to the holder of any
Bonds, of any sum that may remain due and unpaid upon the Bonds or any of them, is hereby
expressly waived and released as a condition of and consideration for the execution of this Financing
Agreement and the issuance of the Bonds.
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All obligations of the Issuer incurred hereunder shall be special obligations of the Issuer,
payable solely and only from the Trust Estate. The Bonds, and the interest thereon, do not constitute
a debt, liability, general or moral obligation or pledge of the faith or loan of the credit of the Issuer,
the State or any other political subdivision of the State, within the meaning of any constitutional or
statutory limitation or provisions. Neither the faith and credit nor the taxing power of the Issuer, the
State or any other political subdivision of the State is pledged to the payment of the principal of,
premium, if any, or interest on the Bonds or any other costs incident thereto.
Section 8.12. Cross References. Any reference in this Financing Agreement to an
"Exhibit", an "Article", a "Section", a "subsection" or a "Paragraph" shall, unless otherwise
explicitly provided, be construed as referring, respectively, to an exhibit attached to this Financing
Agreement, an article of this Financing Agreement, a section of this Financing Agreement, a
subsection of the section of this Financing Agreement in which the reference appears and a paragraph
of the subsection within this Financing Agreement in which the reference appears. All exhibits
attached to or referred to in this Financing Agreement are incorporated by reference into this
Financing Agreement.
Section 8.13. Credit Facility Provider as Third-Party Beneficiary. The parties hereto
agree and acknowledge that the Credit Facility Provider is a third-party beneficiary of this Financing
Agreement.
Section 8.14. Non-Recourse, Limited Recourse and Recourse Provisions of Mortgage
Loan.
(a) Notwithstanding anything to the contrary herein, the Issuer expressly agrees
that the personal liability of the Borrower and the members in the Borrower shall be strictly and
absolutely limited to the property encumbered by the Bond Mortgage and other Bond Mortgage Loan
Documents, and the leases, rents, profits and issues thereof and any other collateral securing the
Bond Loan, except as provided in paragraph (b) herein below. If an Event of Default under this
Financing Agreement or under the Indenture shall occur, the Issuer shall not and may not seek any
judgment for a deficiency against the Borrower or any members of the Borrower (in their capacity as
members) in any action to foreclose, to exercise a power of sale, to confirm any foreclosure or sale
under power of sale, or to exercise any other rights or power under or by reason of the Bond
Mortgage or any other security documents evidencing or securing the obligations of the Borrower
hereunder or with respect to the Bond Loan; provided, however, that nothing herein shall prohibit to
the extent necessary judicial proceedings to foreclose the Bond Mortgage or other security
documents securing the obligations of the Borrower hereunder or to the extent necessary a judgment
or decree of specific performance of agreements and covenants hereunder (or the exercise of any
remedy available under the Tax Regulatory Agreement), excluded from the limitations of this
paragraph (a) by the first sentence hereof (other than a remedy for the payment of principal and
interest on the Bond Mortgage Note, if any), other than Bond Mortgage Loan payment covenants. In
the event any suit is brought on this Financing Agreement, or concerning the Bond Mortgage Loan or
any amount secured by the Bond Mortgage or other Bond Financing Documents as part of judicial
proceedings to foreclose the Bond Mortgage liens and/or security interests, or to confirm any
foreclosure or sale pursuant to power of sale thereunder, any judgment obtained in such suit shall
constitute a lien on and will be and can be enforced only against, the property encumbered by the
Bond Mortgage and other Bond Financing Documents, and the leases, rents, profits and issues
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thereof and not against any other asset of the Borrower or the member in the Borrower, and the terms
of such judgment shall expressly so provide.
(b) Notwithstanding paragraph (a) above, or anything to the contrary in this
Financing Agreement or any other Bond Financing Documents, the Borrower (but not the member of
the Borrower) shall be personally liable for, and the Issuer and the Trustee shall have the right to seek
a judgment for money damages (including a deficiency judgment) to enforce, payment of:
(i) The Issuer Fee and the Trustee's Fees and reasonable extraordinary
costs and expenses of the Issuer and the Trustee, including but not limited to
reasonable legal fees and reasonable out-of-pocket costs and expenses of Bond
Counsel, counsel to the Issuer incurred in connection with the interpretation or
enforcement of the Indenture, this Financing Agreement or the other Bond Financing
Documents and Extraordinary Trustee's Fees and Expenses;
(ii) Indemnification under Article VI hereof and under equivalent
provisions of the other Bond Financing Documents; provided, however, said
indemnification provisions shall not be deemed to alter the nonrecourse obligation of
the Borrower or its member for the payment of principal and interest under the Bond
Mortgage Note;
(iii) Intentional misapplication of Project leases, rents, profits and issues
following any payment default (without regard to the expiration of any cure period, if
any) to the extent misapplied;
(iv) Liability for intentional waste, destruction or damage to the Project or
any part thereof;
(v) Tenant security deposits, to the extent not properly accounted for, or
prepaid rent, to the extent misapplied;
(vi) Any obligations under the Tax Regulatory Agreement (for purposes
of federal income taxation, the foregoing shall not be deemed to create any personal
liability for the payment of principal and interest due under the Bond Mortgage
Note);
(vii) Misapplication of any Net Proceeds;
all of which foregoing obligations shall bear interest at a rate equal to the lesser of (i) the maximum
rate of interest permitted under applicable law or (ii) eighteen percent (18%) per annum from the due
date thereof (or, in the case of liability and indemnification for removal or cleanup of environmental
hazards, from the date demand for payment thereof is made) until the date paid in full.
Nothing in this Section shall limit the right of the Issuer or the Trustee to proceed against the
Borrower to recover any fees owing to any of them or any actual out-of-pocket expenses (including
but not limited to actual out-of-pocket attorneys' fees incurred by any of them) incurred by any of
them in connection with the enforcement of any rights under this Financing Agreement.
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(c) As among the Issuer, the Trustee and the Credit Facility Provider, the
provisions of this Section 8.14 are subject in all events to the provisions of the Intercreditor
Agreement.
Section 8.15. The Trustee. The Trustee is entering into this Financing Agreement solely in
its capacity as Trustee under the Indenture, and all provisions of the Indenture relating to the rights,
privileges, powers and protections of the Trustee, including, without limitation, those set forth in
Article X thereof, shall apply with equal force and effect to all actions taken by the Trustee in
connection with this Financing Agreement.
(End of Article VIII - Signatures to follow)
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IN WITNESS WHEREOF, the parties hereto have executed this Financing Agreement
through their duly authorized officers, all as of the date first set forth above.
CITY OF CARLSBAD, CALIFORNIA
By:
City Manager
Attest:
City Clerk
S-l
DOCSOC\893190Y22062.0028
DOCSOC/1480222v4/022062-0029
IN WITNESS WHEREOF, the parties hereto have executed this Financing Agreement
through their duly authorized officers, all as of the date first set forth above.
U.S. BANK NATIONAL ASSOCIATION, as Trustee
By:
Its: Authorized Officer
S-2
DOCSOC/1480222v4/022062-0029
IN WITNESS WHEREOF, the parties hereto have executed this Financing Agreement
through their duly authorized officers, all as of the date first set forth above.
SANTA FE RANCH, LLC, a Delaware limited
liability company
By: CASA Partners II, L.P., an Illinois limited
partnership, its sole member
By: Henderson Global Investors GP, L.L.C., a
Delaware limited liability company, its
general partner
By:
Brian Eby
Vice President
S-3
DOCSOC/1480222v4/022062-0029
CONSENTED TO BY:
WELLS FARGO BANK, NATIONAL ASSOCIATION
By:
Authorized Officer
S-4
DOCSOC/1480222v4/022062-0029
EXHIBIT A
FORM OF SECOND AMENDED AND RESTATED PROMISSORY NOTE
[SEE SEPARATE FORM]
A-l
DOCSOC/1480222v4/022062-0029
EXHIBIT B
LEGAL DESCRIPTION
Lots 1 through 4 inclusive of Carlsbad Tract No. 84-7 in the City of Carlsbad, County of San
Diego, State of California, according to map thereof No. 11391, filed in the Office of the County
Recorder of San Diego County, December 17, 1985.
Excepting therefrom, all minerals, mineral rights, oil, oil rights, natural gas, natural gas
rights, petroleum, petroleum rights, other hydrocarbon substances, geothermal steam, all
underground water, and all products derived from any of the foregoing, in or under or which may be
produced from the property which underlies a plane parallel to and 500 feet below the present surface
of the property together with the perpetual right of drilling, mining, exploring and operating therefor
and storing in and removing the same from the property or any other land, including the right to
whipstock or directionally drill and mine from lands other than the property, oil, water, or gas wells,
tunnels and shafts into, through or across the subsurface of the property, and to bottom such
whipstocked or directionally drilled wells, tunnels and shafts under the beneath or beyond the
exterior limits thereof, and to redrill, retunnel, equip, maintain, repair, deepen, and operate any such
wells or mines, without, however, the right to drill, mine, store, explore, and operate through the
surface or the upper five hundred (500) feet of the subsurface of the property; as reserved to Daon
Corporation in Grant Deed recorded October 29, 1984, Official Records, File/Page No. 84-407544.
B-l
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Table of Contents
ARTICLE I
DEFINITIONS
Section 1.1. Definitions 4
Section 1.2. Interpretation 5
ARTICLE II
REPRESENTATIONS, WARRANTIES AND COVENANTS
Section 2.1. Representations, Warranties and Covenants of the Issuer 6
Section 2.2. Representations, Warranties and Covenants of the Borrower 7
Section 2.3. Representations and Warranties of the Trustee 11
Section 2.4. Arbitrage and Rebate Fund Calculations 11
Section 2.5. Tax Covenants 11
Section 2.6. Enforcement of Bond Financing Documents 11
ARTICLE III
THE BOND MORTGAGE LOAN
Section 3.1. Conditions to Effectiveness of Amendments 13
Section 3.2. Bond Mortgage Loan Terms; Servicing 13
Section 3.3. Initial Deposits 13
Section 3.4. Assignment to Trustee 13
Section 3.5. Investment of Funds 14
Section 3.6. Damage; Destruction and Eminent Domain 14
Section 3.7. Compliance with Usury Laws 14
ARTICLE IV
LOAN PAYMENTS
Section 4.1. Payments Under the Bond Mortgage Note; Independent Obligation
of Borrower 15
Section 4.2. Payment of Certain Fees and Expenses 15
Section 4.3. Payments to Rebate Fund 16
Section 4.4. Option to Prepay Bond Mortgage Loan 16
Section 4.5. Borrower's Obligations Upon Redemption or Tender 16
Section 4.6. Mortgage Taxes 16
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Table of Contents
(continued)
ARTICLE V
SPECIAL COVENANTS OF BORROWER
Section 5.1. Performance of Obligations 18
Section 5.2. Compliance With Applicable Laws 18
Section 5.3. Indenture Provisions 18
Section 5.4. Credit Facility 18
Section 5.5. Borrower To Maintain Its Existence; Certification of No Default 20
Section 5.6. Borrower to Remain Qualified in State and Appoint Agent 20
Section 5.7. Sale or Other Transfer of Project 20
Section 5.8. Arbitrage and Rebate Collections; Tax-Exempt Status of the Bonds 20
Section 5.9. Right to Perform Borrower's Obligations 21
Section 5.10. Notice of Certain Events 21
Section 5.11. Survival of Covenants 21
Section 5.12. Operating Statements 21
Section 5.13. Access to Project and Records; Reports 21
ARTICLE VI
INDEMNIFICATION
Section 6.1. Indemnification 23
Section 6.2. Limitation With Respect to the Credit Facility Provider 26
ARTICLE VII
EVENTS OF DEFAULT AND REMEDIES
Section 7.1. Events of Default 27
Section 7.2. Remedies on Default 27
Section 7.3. No Remedy Exclusive 28
Section 7.4. Agreement to Pay Attorneys' Fees and Expenses 28
Section 7.5. No Additional Waiver Implied by One Waiver 29
Section 7.6. Rights of Credit Facility Provider 29
ARTICLE VIII
MISCELLANEOUS
Section 8.1. Notices 30
Section 8.2. Concerning Successors and Assigns 31
Section 8.3. Governing Law 31
Section 8.4. Modifications in Writing 31
Section 8.5. Further Assurances and Corrective Instruments 32
Section 8.6. Captions 32
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Table of Contents
(continued)
Page
Section 8.7. Severability 32
Section 8.8. Counterparts 32
Section 8.9. Amounts Remaining in Bond Fund or Other Funds 32
Section 8.10. Effective Date and Term 32
Section 8.11. No Liability of Officers; Limited Liability of Issuer 32
Section 8.12. Cross References 33
Section 8.13. Credit Facility Provider as Third-Party Beneficiary 33
Section 8.14. Non-Recourse, Limited Recourse and Recourse Provisions of Mortgage Loan.. 33
Section 8.15. The Trustee 35
EXHIBIT A - FORM OF SECOND AMENDED AND RESTATED PROMISSORY NOTE
EXHIBIT B - LEGAL DESCRIPTION
DOCSOC/1480222v4/022062-0029
SECOND AMENDED AND RESTATED INDENTURE OF TRUST
between
CITY OF CARLSBAD, CALIFORNIA
and
U.S. BANK NATIONAL ASSOCIATION,
as Trustee
Relating to
$15,920,000
CITY OF CARLSBAD, CALIFORNIA
Variable Rate Demand Multifamily Housing Revenue Refunding Bonds
Series A of 1993
(Santa Fe Ranch Apartments f/k/a La Costa Apartments Project)
Dated as of May 1,2011
DOCSOC/1480309v4/022062-0029
SECOND AMENDED AND RESTATED INDENTURE OF TRUST
THIS SECOND AMENDED AND RESTATED INDENTURE OF TRUST (this
"Indenture"), dated as of May 1, 2011, by and between the CITY OF CARLSBAD, CALIFORNIA, a
municipal corporation duly organized and existing under the laws of the State of California (together
with any successor to its rights, duties and obligations hereunder, (the "Issuer"), and, U.S. BANK
NATIONAL ASSOCIATION, (as successor to U.S. Bank Trust National Association, formerly
known as "First Trust of California, National Association," the "Prior Trustee") a national banking
association duly organized and existing under the laws of the United States of America, and
authorized to accept and execute trusts of the character herein set out, with a corporate trust office in
Los Angeles, California, as trustee (the "Trustee"), amends and restates in its entirety that certain
Amended and Restated Indenture of Trust, dated as of May 1, 2002, by and between the Issuer and
the Trustee (the "Amended Indenture"),
WITNESSETH:
WHEREAS, Chapter 7 of Part 5 of Division 31 (commencing with Section 52075) of the
Health and Safety Code of the State of California (herein called the "Act") authorizes the Issuer to
issue revenue bonds for the purpose of financing the construction or development of multifamily
rental housing and for the provision of capital improvements in connection with and determined
necessary to such multifamily housing; and
WHEREAS, the Issuer has previously issued the City of Carlsbad, California Variable Rate
Demand Multifamily Housing Revenue Refunding Bonds, Series A of 1993 (La Costa Apartments
Project) in the principal amount of $15,920,000 (the "Bonds") pursuant to that certain Indenture of
Trust, dated as of May 1, 1993 (as amended, supplemented or otherwise modified to the date hereof,
the "Original Indenture"); and
WHEREAS, the Bonds in the aggregate principal amount of $15,920,000 remain
outstanding on the date hereof; and
WHEREAS, the proceeds of the Bonds were used by the Issuer to fund a loan (the "Loan")
to La Costa Partners (the "Original Owner") in order to refinance a multifamily rental housing
development (the "Project") constructed by the Original Owner; and
WHEREAS, the Bonds were issued for the purpose of refunding the Issuer's $15,920,000
Multifamily Housing Revenue Bonds, Series A of 1985 (La Costa Apartments Project), the proceeds
of which financed the construction of the Project by the Original Owner; and
WHEREAS, in connection with the provision of the Loan, the Original Owner executed that
certain First Deed of Trust and Assignment of Rents and Fixture Filing dated as of May 1, 1993; and
WHEREAS, the Original Owner, the Issuer, the Trustee, and The Northwestern Mutual Life
Insurance Company (the "Prior Owner") entered into an Assignment and Assumption Agreement
(Bond Documents) dated as of June 23, 1998, whereby the Prior Owner agreed to purchase, acquire
and assume all of the Original Owner's right, title and interest in the Project; and
DOCSOC/1480309v4/022062-0029
WHEREAS, the Prior Owner sold, disposed of, assigned, conveyed and transferred all of its
right, title and interest in and to the Project to Santa Fe Ranch, LLC, a Delaware limited liability
company (the "Borrower"), pursuant to a purchase contract dated as of February 25, 2002, as
amended; and
WHEREAS, pursuant to the Assignment and Assumption Agreement dated as of May 1,
2002 by and among the Trustee, the Prior Owner, the Borrower and the Issuer, the Prior Owner has
assigned its rights and obligations to the Borrower and the Borrower has assumed the indebtedness,
obligations and liabilities of the Prior Owner; and
WHEREAS, simultaneously with the sale and transfer of the Project to the Borrower, the
Borrower caused there to be delivered to the Trustee a Credit Enhancement Agreement (the "Credit
Enhancement Agreement") by and between the Trustee and the Federal Home Loan Mortgage
Corporation which provided for (i) draws in an amount equal to Guaranteed Payments with respect to
the Bond Mortgage Loan and (ii) liquidity draws by the Trustee to the extent remarketing proceeds
were insufficient to pay the Purchase Price of the Bonds (other than Purchased Bonds) while the
Bonds bore interest at a Variable Rate; and
WHEREAS, in connection with the execution and delivery of this Indenture, the Borrower
will cause there to be delivered to the Trustee a letter of credit from Wells Fargo Bank, National
Association to replace the Credit Enhancement Agreement, which letter of credit will become the
Credit Facility hereunder; and
WHEREAS, the Issuer may, with the approval of the Borrower, the Trustee and the Credit
Facility Provider, from time to time and at any time, with the consent of the owners of all
Outstanding Bonds, enter into supplemental indentures under the Amended Indenture; and
WHEREAS, the Issuer, the Trustee, the owner of one hundred percent (100%) of the Bonds
Outstanding as of May , 2011 (the "Bondholder"), and Wells Fargo Bank, National Association, in
its capacity as Credit Facility Provider, are consenting to the amendment of the Amended Indenture
as hereinafter provided, and simultaneously with the execution and delivery of this Indenture; and
WHEREAS, the Issuer, the Trustee and Wells Fargo Bank, National Association have also
entered into an Intercreditor Agreement dated as of May 1, 2011 (the "Intercreditor Agreement") in
connection with the delivery of the Credit Facility; and
WHEREAS, all things necessary to make the Bonds valid, binding and legal obligations of
the Issuer according to the import thereof, and to constitute this Indenture a valid lien on the
properties, interests, revenues and payments herein pledged to the payment of the Bonds, have been
done and performed, and the creation, execution and delivery of this Indenture, and the execution and
delivery of the Bonds, subject to the terms hereof, have in all respects been duly authorized.
NOW, THEREFORE, the Issuer, in consideration of the premises and the acceptance by the
Trustee of the trusts hereby created and of the purchase and acceptance of the Bonds by the
Bondholders thereof, and of the sum of one dollar, lawful money of the United States of America, 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 the Bonds according to their tenor and
DOCSOC/l 480309v4/022062-0029
effect, the payment to the Credit Facility Provider of amounts due to it under the Reimbursement
Agreement, and the performance and observance by the Issuer of all the covenants expressed or
implied herein and in the Bonds, does hereby grant, bargain, sell, convey, pledge and assign a
security interest, unto the Trustee, and its successors in trust and its and their assigns in and to the
following property described under "GRANTING CLAUSES - TRUST ESTATE" to secure the
Bonds (said property being herein referred to as the "Trust Estate"), to wit:
GRANTING CLAUSES - TRUST ESTATE
I.
Except for amounts in the Rebate Fund, the Specified Fees Account and the Cost of Issuance
Fund, all right, title and interest of the Issuer in and to all Revenues.
II.
All right, title and interest of the Issuer in and to the Financing Agreement, the Bond
Mortgage Note, the Bond Mortgage and the Credit Facility (other than the Reserved Rights),
including all extensions and renewals of the terms thereof, if any, including, but without limiting the
generality of the foregoing, the present and continuing right to receive, receipt for, collect or make
claim for any of the moneys, income, revenues, issues, profits and other amounts payable or
receivable thereunder, whether payable under the above-referenced documents or otherwise, to bring
actions and proceedings thereunder or for the enforcement thereof, and to do any and all things which
the Issuer or any other person is or may become entitled to do under said documents, subject in all
events to the Issuer's Reserved Rights.
III.
Excluding moneys or securities in the Cost of Issuance Fund, the Specified Fees Account, the
Rebate Fund, and the Bond Purchase Fund, all other funds or accounts established hereby, and all
money and securities held therein or investments thereof, and any and all other rights and interests in
property whether tangible or intangible from time to time hereafter by delivery or by writing of any
kind, conveyed, mortgaged, pledged, assigned or transferred as and for additional security hereunder
for the Bonds by the Issuer or by anyone on its behalf or with its written consent to the Trustee,
which is hereby authorized to receive any and all such property at any and all times and to hold and
apply the same subject to the terms hereof.
TO HAVE AND TO HOLD, all the same with all privileges and appurtenances hereby
conveyed and assigned, or agreed or intended so to be, to the Trustee and its successors in said trust
and to them and their assigns forever;
IN TRUST NEVERTHELESS, upon the terms and trusts herein set forth for the equal and
proportionate benefit, security and protection of all Bondholders of the Bonds, issued under and
secured by this Indenture without privilege, priority or distinction as to lien or otherwise of any of the
Bonds over any of the other Bonds, except as set forth in this Indenture, and for the benefit, security
and protection of the Credit Facility Provider to the extent of its interests hereunder and under the
Credit Facility and the Reimbursement Agreement;
DOCSOC/1480309v4/022062-0029
PROVIDED, HOWEVER, that if the Issuer shall pay or cause to be paid to the Bondholders
the principal, interest and premium, if any, to become due thereon at the times and in the manner
provided in Article IX hereof and shall discharge or cause to be discharged any and all obligations to
the Credit Facility Provider hereunder and under the Reimbursement Agreement, and if the Issuer
shall keep, perform and observe, or cause to be kept, performed and observed, all of its covenants,
warranties and agreements contained herein, then these presents and the estate and rights hereby
granted shall, at the option of the Issuer, cease, terminate and be void, and thereupon the Trustee
shall cancel and discharge the lien of this Indenture and execute and deliver to the Issuer such
instruments in writing as shall be requisite to satisfy the lien hereof, and, subject to the provisions of
Sections 4.09, 4.11 and 4.12 hereof and Article IX hereof, reconvey to the Issuer the estate hereby
conveyed, and assign and deliver to the Issuer any property at the time subject to the lien of this
Indenture which may then be in its possession, except for the Rebate Fund and cash held by the
Tender Agent for the payment of the Purchase Price of Bonds tendered pursuant to the terms of this
Indenture or held by the Trustee for the payment of interest on and principal of the Bonds or for
payment of amounts payable to the Credit Facility Provider; otherwise this Indenture to be and
remain in full force and effect and upon the trusts and subject to the covenants and conditions
hereinafter set forth.
AND IT IS HEREBY COVENANTED AND AGREED by and between the parties hereto,
that the terms and provisions upon which the Bonds are to be issued, executed, authenticated,
delivered and secured, and the trusts and conditions upon which the Trust Estate is to be held and
disposed of, which said trusts and conditions the said Trustee hereby accepts and agrees to discharge,
are as follows (except that in the performance of the agreements of the Issuer herein contained, any
obligation it may thereby incur for the payment of money shall not be a general obligation of the
Issuer or a pledge of the faith and credit of the Issuer, but shall be payable solely from the revenues
and funds pledged for its payment in accordance with this Indenture):
(Remainder of page intentionally left blank)
DOCSOC/1480309v4/022062-0029
ARTICLE I
DEFINITIONS
Section 1.01. Definitions. The terms used in this Indenture (except as herein otherwise
expressly provided or unless the context otherwise requires) for all purposes of this Indenture and of
any indenture supplemental hereto shall have the respective meanings specified below:
"Act" means Chapter 7 of Part 5 of Division 31 (commencing with Section 52075) of the
Health and Safety Code of the State of California, as amended.
"Administration Fund" means the Administration Fund established by the Trustee pursuant to
Section 4.02 hereof.
"Administrative Expense Account" means the Administrative Expense Account within the
Administration Fund established by the Trustee pursuant to Section 4.02 hereof.
"Alternate Credit Facility" means a Credit Facility, including, without limitation, a letter of
credit, surety bond, insurance policy, standby purchase agreement, guaranty, mortgage-backed
security or other credit facility, collateral purchase agreement or similar agreement issued by a
financial institution delivered to replace the Credit Facility which provides security for payment of
the principal of and interest on the Bonds and the purchase price of the Bonds, provided in
accordance with Section 5.4 of the Financing Agreement.
"Alternate Credit Facility Provider" means the provider of an Alternate Credit Facility.
"Assignment and Assumption Agreement" means that certain Assignment and Assumption
Agreement dated as of May 1, 2002 among the Prior Owner, the Borrower, the Issuer and the
Trustee.
"Authorized Denomination" means (A) with respect to Bonds in a Variable Period, $100,000
principal amount or any integral multiple of $5,000 greater than $100,000, and (B) with respect to
Bonds during any Reset Period or the Fixed Rate Period, $5,000 principal amount or any integral
multiple thereof.
"Authorized Officer" means (A) when used with respect to the Issuer, the Mayor, the City
Clerk or the City Manager of the Issuer and such additional person or persons, if any, duly designated
by the Issuer in writing to act on its behalf, (B) when used with respect to the Borrower, the
managing member of the Borrower and such additional person or persons, if any, duly designated by
the Borrower in writing to act on its behalf, (C) when used with respect to the Trustee, any
authorized signatory of the Trustee, or any person who is authorized in writing to take the action in
question on behalf of the Trustee, (D) when used with respect to the Remarketing Agent, any Vice
President of the Remarketing Agent and such additional person or persons, if any, duly designated by
the Remarketing Agent in writing to act on its behalf, (E) when used with respect to the Tender
Agent, any authorized signatory of the Tender Agent and such additional person or persons, if any,
duly designated by the Tender Agent in writing to act on its behalf, and (F) when used with respect to
the Credit Facility Provider, any Vice President or any person who is authorized in writing to take the
action in question on behalf of the Credit Facility Provider.
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"Bankruptcy Code" means Title 11 of the United States Code entitled "Bankruptcy," as now
and hereafter in effect, or any successor federal statute.
"Bond Counser means any firm of attorneys appointed by the Issuer experienced in matters
relating to the issuance of obligations by states and their political subdivisions who are listed as
municipal bond attorneys in The Bond Buyer's Municipal Marketplace and reasonably acceptable to
the Credit Facility Provider.
"Bond Fee Component" means the regular, ongoing fees from time to time of the Issuer, the
Trustee, the Remarketing Agent, the Tender Agent and the Rebate Analyst expressed in terms of a
percentage of the principal amount of Outstanding Bonds (including Purchased Bonds) on an annual
basis.
"Bond Financing Documents" means, collectively, this Indenture, the Bonds, the Financing
Agreement, the Remarketing Agreement and the Bond Mortgage Loan Documents.
"Bond Fund" means the Bond Fund established by the Trustee pursuant to Section 4.02
hereof.
"Bond Mortgage" means the Amended and Restated First Deed of Trust and Assignment of
Rents and Fixture Filing dated as of May 1, 2002, together with all riders and addenda thereto, from
the Borrower to the Trustee, securing payment of the Bond Mortgage Loan, as such Bond Mortgage
may from time to time be amended, modified or supplemented.
"Bond Mortgage Loan" means the mortgage loan in the original amount of $15,920,000
made to the Borrower pursuant to the Financing Agreement and the Bond Mortgage Loan
Documents.
"Bond Mortgage Loan Documents" means the Bond Mortgage, the Bond Mortgage Note, the
Tax Regulatory Agreement, the Reimbursement Agreement, the Intercreditor Agreement, the Pledge
Agreement, and any and all other instruments and other documents evidencing, securing, or
otherwise relating to the Bond Mortgage Loan or any portion thereof.
"Bond Mortgage Note" means the Second Amended and Restated Promissory Note dated as
of May 1, 2011 from the Borrower to the Issuer, and subsequently assigned to the Trustee in the
principal amount of $15,920,000, together with all riders and addenda thereto, evidencing the Bond
Mortgage Loan, as such Bond Mortgage Note may be amended, supplemented or restated from time
to time.
"Bond Purchase Fund" means the Bond Purchase Fund established by the Trustee pursuant
to Section 10.03.
"Bond Register" means the books or other records maintained by the Bond Registrar setting
forth the registered Bondholders from time to time of the Bonds.
"Bond Registrar" means the Trustee acting as such, and any other bond registrar appointed
pursuant to this Indenture.
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"Bond Year" means the period commencing on June 1 of each year and ending on May 31 of
the following year, so long as the Bonds are Outstanding.
"Bondholder" "Owner" or "Holder" means any person who shall be the registered owner of
any Outstanding Bond.
"Bonds" means the $15,920,000 City of Carlsbad, California Variable Rate Demand
Multifamily Housing Revenue Refunding Bonds Series A of 1993 (Santa Fe Ranch Apartments f/k/a
La Costa Apartments Project) issued pursuant to the provisions of the Original Indenture, as
amended and restated by this Indenture.
"Borrower" means Santa Fe Ranch, LLC, a Delaware limited liability company, or any of its
successors as owner of the Project.
"Business Day" means any day other than (i) a Saturday, (ii) a Sunday, (iii) a day on which
the Federal Reserve Bank of New York (or other agent acting as the Credit Facility Provider's fiscal
agent identified to the Trustee) is authorized or obligated by law or executive order to remain closed,
(iv) a day on which the office of the Credit Facility Provider at which draws on the Credit Facility are
presented is closed and (v) a day on which (a) banking institutions in the City of New York or in the
city in which the Principal Office of the Trustee, the Tender Agent or the Remarketing Agent is
located are closed or (b) the New York Stock Exchange is closed.
"Certificate of the Issuer" "Statement of the Issuer" "Request of the Issuer" and
"Requisition of the Issuer" mean, respectively, a written certificate, statement, request or requisition
signed in the name of the Issuer by an Authorized Officer of the Issuer or such other person as may
be designated and authorized to sign for the Issuer. Any such instrument and supporting opinions or
representations, if any, may, but need not, be combined in a single instrument with any other
instrument, opinion or representation, and the two or more so combined shall be read and construed
as a single instrument.
"Closing Date" means May 23, 2002.
"Conversion" means the establishment of the interest rate on the Bonds at the Fixed Rate,
pursuant to Section 2.02(c) hereof.
"Conversion Date" means the date on which the Fixed Rate for the Bonds becomes effective.
"Cost of Issuance Fund" means the Cost of Issuance Fund established by the Trustee
pursuant to Section 4.02 hereof.
"Credit Facility" means the letter of credit from Wells Fargo Bank, National Association, or
any Alternate Credit Facility at the time in effect.
"Credit Facility Provider" means, so long as the letter of credit provided on the effective date
of this Indenture is in effect, Wells Fargo Bank, National Association, or so long as any Alternate
Credit Facility is in effect, the Credit Facility Provider then obligated under the Alternate Credit
Facility.
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"Credit Facility Substitution Date" means the date on which the Credit Facility is delivered
by Wells Fargo Bank, National Association to the Trustee.
"Determination of Taxability" means (1) the failure of the Credit Facility Provider or the
Borrower to consent in writing within forty-five (45) days from receipt of the opinion of Bond
Counsel described below to any amendment to the Indenture, the Financing Agreement or the Tax
Regulatory Agreement which in the written opinion of Bond Counsel addressed to the Issuer, the
Trustee and the Credit Facility Provider is necessary to preserve the exclusion from gross income of
interest on the Bonds for federal income tax purposes, or (2) enactment of legislation or a final
judgment or order of a court of original jurisdiction, a final order of any other court of competent
jurisdiction, or a final ruling or decision of the Internal Revenue Service, in any such case to the
effect that the interest on any of the Bonds (other than interest on any Bond for any period during
which such Bond is held by a "substantial user" of any facility financed with the proceeds of the
Bonds or a "related person," as such terms are used in Section 103(b)(13) of the Internal Revenue
Code of 1954 and except for any alternative minimum or preference tax) is not excludable for federal
income tax purposes from the gross income of the recipients thereof subject to federal income taxes
as a result of action or inaction of the Borrower while the Bonds bear interest at a Variable Rate and
as a result of any action during a Reset Period or after the Conversion Date. With respect to clause
(2) above, a judgment or order of a court or a ruling or decision of the Internal Revenue Service shall
be considered final only if no appeal or action for judicial review has been filed and the time for
filing such appeal or action has expired.
"DTC' means The Depository Trust Company, New York, New York, as securities
depository for the Bonds pursuant to Section 2.12 hereof.
"Eligible Funds" means (a) remarketing proceeds received from the Remarketing Agent or
any purchaser (other than funds provided by the Borrower, any general partner or guarantor of the
Borrower or the Issuer), (b) proceeds received pursuant to the Credit Facility, (c) proceeds of the
Bonds received contemporaneously with the issuance and sale of the Bonds, (d) proceeds of an issue
of refunding bonds received contemporaneously with the issuance and sale of such refunding bonds,
(e) proceeds from the investment or reinvestment of moneys described in clauses (a), (b), (c) and (d)
above, or (f) moneys delivered to the Trustee and accompanied by a written opinion of nationally
recognized counsel experienced in bankruptcy matters acceptable to the Rating Agency to the effect
that if the Borrower, any general partner or guarantor of the Borrower, or the Issuer were to become a
debtor in a proceeding under the Bankruptcy Code: (i) payment of such moneys to Bondholders
would not constitute a voidable preference under Section 547 of the Bankruptcy Code and (ii) the
automatic stay provisions of Section 362(a) of the Bankruptcy Code would not prevent application of
such moneys to the payment of the Bonds.
"Event of Default" or "event of default" means any of those events specified in and defined
by the applicable provisions of Article VI hereof to constitute an event of default.
"Extraordinary Services" means and includes, but not by way of limitation, services, actions
and things carried out and all expenses incurred by the Trustee in respect of or to prevent default
under this Indenture, the Financing Agreement and the Bond Mortgage Loan Documents, including
any attorneys' fees and other litigation costs that are entitled to reimbursement under the terms of the
Financing Agreement, and other actions taken and carried out which are not expressly set forth in this
Indenture.
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"Extraordinary Trustee's Fees and Expenses" means all those fees, expenses and
disbursements earned or incurred by the Trustee as described under Section 7.06 during any Bond
Year for Extraordinary Services.
"Financing Agreement" means the Second Amended and Restated Loan Agreement dated as
of May 1, 2011, among the Borrower, the Issuer and the Trustee, as such Financing Agreement may
from time to time be amended or supplemented.
"Fixed Rate" means the interest rate borne by the Bonds from and after Conversion and until
the maturity date of the Bonds, determined in accordance with Section 2.02(c) hereof.
"Fixed Rate Period" means the period during which the Bonds bear interest at the Fixed
Rate.
"Government Obligations" means Qualified Investments described in (a) and (b) of the
definition of "Qualified Investments" herein.
"Indenture" means this Second Amended and Restated Indenture of Trust, together with any
other indentures supplemental hereto.
"Information Services" means any of the following services: Financial Information, Inc.
"Daily Called Bond Service," 30 Montgomery Street, 10th Floor, Jersey City, New Jersey 07302
Attention: Editor; Kenny Information Services, "Called Bond Service," 55 Water Street, 45th Floor,
New York, New York 10041; Moody's Investors Service "Municipal and Government," 99 Church
Street, 8th Floor, New York, New York 10007, Attention: Municipal News Reports; and EXCITE,
INC. Called Bonds Dept., 5 Hanover Square, New York, New York 10004; The Bond Buyer, Muni-
Facts Secondary Market, Disclosure Services, Attention: Municipal Redemption Notices, One State
Street Plaza, 31st Floor, New York, New York 10004-1549; Bloomberg Financial Markets,
Attention: Reporting-Disclosure Documents, 100 Business Park Drive, Skillman, New Jersey 08558;
or such other services providing information with respect to called bonds as the Issuer may designate
in a certificate of the Issuer delivered to the Trustee.
"Initial Rate" means, with respect to the Bonds, the interest rate determined by the
Remarketing Agent which is in effect as of the Closing Date.
"Intercreditor Agreement" means, so long as the letter of credit provided on the effective date
of this Indenture is in effect, the Intercreditor Agreement dated as of May 1, 2011 among the Issuer,
the Trustee and the Credit Facility Provider, as the same may be amended or supplemented, or, so
long as any Alternate Credit Facility is in effect, an Intercreditor Agreement among the Issuer, the
Trustee and the Credit Facility Provider then obligated under such Alternate Credit Facility.
"Interest Payment Date" means (i) for interest accrued during any Variable Period, the first
Business Day of each month thereafter for the preceding calendar month, (ii) for interest accrued
during any Reset Period, June 1 and December 1 of each year, commencing on the June 1 or
December 1 next following the applicable Reset Adjustment Date and (iii) for interest accrued on and
after the Conversion Date, June 1 and December 1 of each year, commencing on the June 1 or
December 1 next following the Conversion Date and the Maturity Date.
DOCSOC/1480309v4/022062-0029
"Interest Requirement" means (a) during the Variable Period, 34 days interest computed at
the Maximum Rate and (b) during a Reset Period or the Fixed Rate Period, 189 days' interest
computed at the Reset Rate or the Fixed Rate, as applicable or in the case of either (a) or (b), such
lesser number of days as is acceptable to the Rating Agency.
"Issuer" means the City of Carlsbad, California, a municipal corporation of the State of
California, and any successor to its rights, duties and obligations hereunder.
"Issuer Fee" means the fee owed to the Issuer from the Borrower, accruing from the date of
issuance of the Bonds, equal to 23 basis points (.23%) per annum of the aggregate principal amount
of Bonds Outstanding as of the date of issue and each June 1 thereafter (prior to any principal
reduction on that date), payable annually in advance on each June 1 commencing June 1, 2003; and
provided, however, that such fee does not include amounts due, if any, for extraordinary services
and expenses of the Issuer, the Trustee, Bond Counsel or the Trustee's counsel to be paid by the
Borrower pursuant to the Financing Agreement.
"Market Risk Event" means (a)(i) legislation enacted by the Congress or (ii) a final non-
appealable decision rendered by a court established under Article III of the Constitution of the United
States, or the United States Tax Court, or (iii) an order, ruling or regulation issued by the United
States Department of the Treasury or the Internal Revenue Service, with the purpose or effect,
directly or indirectly, of causing interest received by any Bondholder to be included in the gross
income of such Bondholder for purposes of federal income taxation; or (b) legislation enacted or any
action taken by the Securities and Exchange Commission which, in the opinion of counsel to the
Remarketing Agent, has the effect of requiring the remarketing of the Bonds to be registered under
the Securities Act of 1933, as amended (the "Securities Act"), or any other "security," as defined in
the Securities Act, issued in connection with or as part of the remarketing of the Bonds to be so
registered or this Indenture to be qualified as an indenture under the Trust Indenture Act of 1939, as
amended; or (c) any event shall have occurred or shall exist which, in the reasonable judgment of the
Remarketing Agent, makes or has made untrue or incorrect in any material respect any statement or
information contained in a reoffering circular or other disclosure document distributed in connection
with the Conversion or Reset Adjustment Date or is not or was not reflected in such reoffering
circular or other disclosure document but should be or should have been reflected therein in order to
make the statements or information contained therein not misleading in any material respect; or (d) in
the reasonable judgment of the Remarketing Agent, any event which makes it impractical or
inadvisable for the Remarketing Agent to remarket or enforce agreements to remarket Bonds because
trading in securities generally shall have been suspended on the New York Stock Exchange, Inc., or a
general banking moratorium shall have been established by federal, New York or State authorities.
"Maturity Date" means the maturity date of the Bonds set forth in Section 2.01(c) hereof.
"Maximum Rate" means twelve percent (12%) per annum; provided that the Maximum Rate
may be increased to a specified higher Maximum Rate if there shall have been delivered to the
Trustee (a) an opinion of Bond Counsel to the effect that such higher Maximum Rate is permitted
under applicable law and will not, in itself, cause the interest on the Bonds to be included in the gross
income of the Bondholders for federal tax purposes and (b) either (1) the written consent of the
Credit Facility Provider to the specified higher Maximum Rate and evidence that the Credit Facility
will cover the Interest Requirement at such Maximum Rate, or (2) a new or amended Credit Facility
in an amount equal to the sum of (i) the then outstanding principal amount of the Bonds and (ii) the
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new Interest Requirement calculated using the new Maximum Rate; provided that the Maximum
Rate shall never exceed the maximum rate permitted by law to be paid on the Bonds or to be charged
on the Bond Mortgage Loan.
"Moody "s" means Moody's Investors Service, Inc., its successors and assigns, if such
successors and assigns shall continue to perform the functions of a securities rating agency.
"Net Proceeds" when used with respect to any insurance or condemnation award, means the
gross proceeds from the insurance or condemnation award with respect to which that term is used
remaining after payment of all reasonable expenses incurred in the collection of such gross proceeds,
including reasonable attorney fees.
"1954 Code" means the Internal Revenue Code of 1954, as amended, and the regulations
promulgated thereunder, as such 1954 Code shall have been in effect immediately preceding the
enactment of the 1986 Code.
"1986 Code" means the Internal Revenue Code of 1986, as amended, and the regulations
promulgated thereunder.
"Original Owner" means La Costa Partners and its successors and assigns.
"Outstanding" when used with respect to the Bonds, means, as of any date, all Bonds that
have been duly authenticated and delivered by the Trustee under this Indenture, except:
(a) Bonds surrendered and replaced upon exchange or transfer, or cancelled because of
payment or redemption, at or prior to such date;
(b) Bonds for the payment, redemption or purchase for cancellation of which sufficient
money has been deposited prior to such date with the Trustee (whether upon or prior to the maturity,
amortization or redemption date of the same), or which are deemed to have been paid and discharged
pursuant to the provisions of Section 9.01 hereof; provided that if such Bonds are to be redeemed
prior to the maturity thereof, other than by scheduled amortization, 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;
(c) Bonds in lieu of which others have been authenticated (or payment, when due, of
which is made without replacement) under Section 2.07 hereof; and
(d) For the purpose of determining whether the Bondholders of the requisite amount of
Bonds Outstanding have made or concurred in any notice, request, demand, direction, consent,
approval, order, waiver, acceptance, appointment or other instrument or communication under or
pursuant to this Indenture, Purchased Bonds and Bonds owned by or for the account of the Borrower
or any Person owned, controlled by, under common control with or controlling the Borrower shall be
disregarded and deemed to be not Outstanding unless all Bonds shall be so owned; the term "control"
(including the terms "controlling", "controlled by" and "under common control with") means the
possession, directly or indirectly, of the power to direct or cause the direction of the management and
policies of a Person, whether through the ownership of voting securities, by contract, or otherwise.
Beneficial ownership of 5% or more of a class of securities having general voting power to elect a
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majority of the board of directors of a corporation shall be conclusive evidence of control of such
corporation.
"Paying Agent" means the Trustee acting as such, and any other paying agent appointed
pursuant to this Indenture.
"Person" means an individual, estate, trust, corporation, partnership, limited liability
company or any other organization or entity (whether governmental or private).
"Pledge Agreement" means, so long as the letter of credit provided on the effective date of
this Indenture is in effect, that certain Pledge and Security Agreement dated as of May 1, 2011, by
and among the Credit Facility Provider, the Borrower and the Trustee, as further modified or
amended from time to time, or, so long as any Alternate Credit Facility is in effect, a Pledge
Agreement among the Issuer, the Trustee and the Credit Facility Provider then obligated under such
Alternate Credit Facility.
"Principal Office of the Remarketing Agent" means the office of the Remarketing Agent
located at 8000 Maryland, Suite 800, St. Louis, Missouri 63105, or such other office or offices as the
Remarketing Agent may designate from time to time, or the office of any successor Remarketing
Agent where it principally conducts its business of serving as remarketing agent under indentures
pursuant to which municipal or governmental obligations are issued.
"Principal Office of the Tender Agent" means the office of the Tender Agent located in Los
Angeles, California, or such other office or offices as the Tender Agent may designate from time to
time, or the office of any successor Tender Agent where it principally conducts its business of
serving as tender agent under indentures pursuant to which municipal or governmental obligations
are issued,
"Principal Office of the Trustee" means the office of the Trustee located in Los Angeles,
California, or such other office or offices as the Trustee may designate from time to time, or the
office of any successor Trustee where it principally conducts its business of serving as trustee under
indentures pursuant to which municipal or governmental obligations are issued.
"Prior Owner" means The Northwestern Mutual Life Insurance Company and its successors
and assigns.
"Project" means the land and 320 residential rental apartment units, and related fixtures,
equipment, furnishings and site improvements known as Santa Fe Ranch Apartments (f/k/a La Costa
Apartments), located at 3402 Calle Odessa, Carlsbad, California, in San Diego County, California,
including the real estate described in the Bond Mortgage.
"Purchased Bond" means any Bond during the period from and including the date of its
purchase by the Trustee on behalf of and as agent for the Borrower with amounts provided by the
Credit Facility Provider under the Credit Facility, to, but excluding, the date on which such Bond is
remarketed to any Person other than the Credit Facility Provider, the Borrower, any general partner
or guarantor of the Borrower or the Issuer.
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"Purchase Price" with respect to any Bond required to be purchased pursuant to Sections
2.02, 2.13, 10.01 and 10.02 hereof, means the principal amount of such Bond plus interest accrued
thereon to the Settlement Date and with respect to any Bond to be purchased pursuant to Section 3.06
hereof means the principal amount of such Bond plus any redemption premium due thereon plus
interest accrued thereon to the Settlement Date.
"Qualified Investments" means any of the following if and to the extent permitted by law: (a)
direct and general obligations of the United States of America; (b) obligations of any agency or
instrumentality of the United States the payment of the principal of and interest on which are
unconditionally guaranteed by the full faith and credit of the United States of America; (c) senior
debt obligations of the Federal Home Loan Mortgage Corporation; (d) senior debt obligations of
Fannie Mae; (e) demand deposits or time deposits with, or certificates of deposit issued by, the
Trustee or its affiliates or any bank organized under the laws of the United States or any state or the
District of Columbia which has combined capital, surplus and undivided profits of not less than
$50,000,000; provided that the Trustee or such other institution has been rated at least P-l by
Moody's, which deposits or certificates are fully insured by the Federal Deposit Insurance
Corporation; (f) investment agreements with the Federal Home Loan Mortgage Corporation or a
bank or any insurance company or other financial institution which has a rating assigned by Moody's
to its outstanding long-term unsecured debt which is the highest rating (as defined below) for long-
term unsecured debt obligations assigned by Moody's, and which are approved by the Credit Facility
Provider; (g) shares or units in any money market mutual fund (including mutual funds of the Trustee
or its affiliates) registered under the Investment Company Act of 1940, as amended, whose
investment portfolio consists solely of direct obligations of the United States government, and which
fund has been rated Aaa by Moody's; or (h) any other investments that have been previously
approved in writing by the Credit Facility Provider. For purposes of this definition, the "highest
rating" shall mean a rating of at least P-l for obligations with less than one year maturity; at least
Aa2/P-l for obligations with a maturity of one year or greater but less than three years; and at least
Aaa for obligations with a maturity of three years or greater. Qualified Investments must be limited
to instruments that have a predetermined fixed-dollar amount of principal due at maturity that cannot
vary or change and interest, if tied to an index, shall be tied to a single interest rate index plus a
single fixed spread, if any, and move proportionately with such index.
"Rating Agency" means each national rating agency then maintaining a rating on the Bonds,
or any successor or assign thereof.
"Rebate Analyst" means a certified public accountant, financial analyst or bond counsel, or
any firm of the foregoing or financial institution experienced in making the arbitrage and rebate
calculations required pursuant to Section 148 of the 1986 Code and retained to make the
computations and give directions required to comply with Section 148 of the 1986 Code with respect
to the Bonds. The Borrower shall inform the Issuer and the Trustee, in writing, of the name of the
Rebate Analyst.
"Rebate Analyst Fee" means the annual fee of the Rebate Analyst.
"Rebate Fund" means the Rebate Fund established by the Trustee pursuant to Section 4.02
hereof.
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"Record Date" means during any Variable Period, the Business Day immediately preceding
an Interest Payment Date and during any Reset Period or the Fixed Rate Period, the 15th day of the
month preceding any Interest Payment Date.
"Redemption Fund" means the Redemption Fund established by the Trustee pursuant to
Section 4.02 hereof.
"Refunding Law" means Article 11 of Chapter 3 of Part 1 of Division 2 of Title 5 of the
Government Code of the State of California, as now in effect and as it may from time to time
hereafter be amended or supplemented.
"Reimbursement Agreement" means the Reimbursement Agreement dated as of May 1, 2011,
between the Borrower and the Credit Facility Provider, as such Reimbursement Agreement may be
amended or supplemented from time to time, and upon the effectiveness of any Alternate Credit
Facility, any similar agreement between the Borrower and the Alternate Credit Facility Provider
pursuant to which the Borrower agrees to reimburse the Alternate Credit Facility Provider for
payments made under the Alternate Credit Facility, as such agreement may be amended or
supplemented.
"Remarketing Agent" means the remarketing agent appointed pursuant to Section 10.05
hereof, initially Stern Brothers & Co.
"Remarketing Agreement" means the Remarketing Agreement dated as of May 1, 2002,
among the Issuer, the Remarketing Agent and the Borrower, or any similar agreement between the
Remarketing Agent and the Borrower, in each case as originally executed or as it may be amended or
supplemented from time to time in accordance with its terms.
"Remarketing Date" means each date on which the Remarketing Agent is required to notify
the Trustee, the Tender Agent, the Borrower and the Credit Facility Provider of the Bonds for which
it has found purchasers, as set forth in Section 10.03 hereof.
"Remarketing Memorandum" means the Remarketing Memorandum dated as of May ,
2011, relating to the remarketing of the Bonds, as the same may be supplemented or amended.
"Reserved Rights" means those certain rights of the Issuer under the Bond Financing
Documents to indemnification and to payment or reimbursement of fees and expenses of the Issuer,
including the Issuer Fee as well as the fees and expenses of counsel, assumption fees and indemnity
payments, its right to give and receive notices and to enforce notice and reporting requirements and
restrictions on transfer of ownership of the Project, its right to inspect and audit the books, records
and premises of the Borrower and of the Project, its right to collect legal fees and related expenses,
its right to specifically enforce the terms of the Tax Regulatory Agreement, including the Borrower's
covenant to comply with applicable federal tax law and State law (including the Act and the rules and
regulations of the Issuer), its right to receive notices under the Bond Financing Documents and its
right to receive notices and reports under the Bond Financing Documents and its rights to give or
withhold consent to amendments, changes, modifications and alterations to the Bond Financing
Documents and to such other matters where, hereunder or under the Bond Financing Documents, the
Issuer's consent or approval is required.
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"Reset Adjustment Date" means any date on which the interest rate on the Bonds is adjusted
to a Reset Rate or to a different Reset Rate. During a Variable Period, a Reset Adjustment Date may
occur only on any Interest Payment Date, or if such Interest Payment Date is not a Business Day, the
next succeeding Business Day.
"Reset Period" means each period during which the Bonds bear interest at a Reset Rate.
"Reset Rate" means the rate of interest borne by the Bonds as determined in accordance with
Section 2.02(b) hereof.
"Responsible Officer" means any officer of the Trustee employed within or otherwise having
regular responsibility in connection with the corporate trust department of the Trustee and who is
located at the Principal Office of the Trustee.
"Revenue Fund" means the Revenue Fund established by the Trustee pursuant to Section
4.02 hereof.
"Revenues" means (i) all payments made with respect to the Bond Mortgage Loan pursuant
to the Financing Agreement, the Bond Mortgage Note or the Bond Mortgage, including all casualty
or other insurance benefits and condemnation awards paid in connection therewith (subject in all
events to the interests of the Credit Facility Provider therein under the terms of the Credit Facility
and the Reimbursement Agreement), (ii) payments made by the Credit Facility Provider pursuant to
the Credit Facility and (iii) all moneys and securities held by the Trustee in the funds and accounts
established pursuant to this Indenture (excluding moneys or securities in the Cost of Issuance Fund,
the Rebate Fund, the Specified Fees Account, and the Bond Purchase Fund), together with all
investment earnings thereon.
"S&P" means Standard & Poor's Ratings Services, a division of The McGraw-Hill
Companies, Inc., and its successors and assigns if such successors and assigns shall continue to
perform the functions of a securities rating agency.
"Securities Depositories" means The Depository Trust Company, 711 Stewart Avenue,
Garden City, New York 11530, Fax: (516) 227-4039 or 4190, or such other securities depositories as
the Issuer may designate in a certificate of the Issuer delivered to the Trustee and the Credit Facility
Provider.
"Settlement Date" means any date on which any Bond is purchased pursuant to Sections 2.02,
2.13, 3.06, 10.01 or 10.02 hereof.
"SIFMA Index Rate" means, as of any date, the per annum rate published or reported by
Municipal Market Data on its SIFMA Municipal Swap Index most recently available, or, if the
SIFMA Municipal Swap Index is no longer published or reported, the rate per annum published or
reported on the S&P Weekly High Grade Index (formerly the JJ. Kenny Index), or, if neither the
SIFMA Municipal Swap Index nor the S&P Weekly High Grade Index is published, such alternate
interest rate index as the Remarketing Agent shall select as most comparable to the SIFMA
Municipal Swap Index.
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"Specified Fees Account" means the Specified Fees Account within the Administration Fund
created under Section 4.02.
"State" means the State of California.
"Substitution Date" means the date established for the mandatory tender and purchase of the
Bonds in connection with the delivery to the Trustee of an Alternate Credit Facility pursuant to
Section 2.13 hereof.
"Tax Certificate" means that Tax Certificate executed by the Issuer and dated the Closing
Date.
"Tax Regulatory Agreement" means the Second Amended and Restated Regulatory
Agreement and Declaration of Restrictive Covenants dated as of May 1, 2002 among the Issuer, the
Trustee and the Borrower, as amended by the First Amendment to Second Amended and Restated
Regulatory Agreement and Declaration of Restrictive Covenants dated as of May 1, 2011, as the
same may be further amended, supplemented or restated from time to time.
"Tender Agent" means the Tender Agent appointed in accordance with Section 10.07.
"Tender Notice" means a notice of demand for purchase of Bonds given by any Bondholder
pursuant to Section 10.01 hereof.
"Trustee" means U.S. Bank National Association and its successors in trust hereunder.
"Trustee's Fees" means the ongoing compensation and expenses payable to the Trustee as
follows:
(a) the annual administration fees of the Trustee, as Trustee, Registrar and Paying Agent,
for the ordinary services of the Trustee rendered under this Indenture during each twelve month
period which shall be $5,310 per annum, payable in advance on each June 1, commencing June 1,
2003;
(b) the reasonable fees and charges of the Trustee for necessary extraordinary services
rendered by it and reasonable extraordinary expenses incurred by it under this Indenture as and when
the same become due, including reasonable counsel fees (including fees prior to litigation, at trial or
for appellate proceedings); provided, however, that the Trustee shall not be required to undertake any
such extraordinary services unless provision for payment of extraordinary expenses satisfactory to
the Trustee shall have been made; and
(c) for purposes of the Financing Agreement, indemnification of the Trustee by the
Borrower.
"Trust Estate" shall have the meaning set forth under "GRANTING CLAUSES - TRUST
ESTATE".
"Variable Interest Accrual Period" means, during any Variable Period, a period beginning on
the date following any Variable Interest Computation Date and ending on the next succeeding
Variable Interest Computation Date, except that the first Variable Interest Accrual Period for any
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Variable Period shall begin on the first day of such Variable Period and end on the next succeeding
Variable Interest Computation Date.
"Variable Interest Computation Date" means, with respect to any Variable Interest Accrual
Period, each Wednesday during such period, or if any such Wednesday is not a Business Day, the
next succeeding Business Day; provided, however, that, for the Variable Interest Accrual Period
beginning on the Closing Date, the Variable Interest Computation Date shall be the Closing Date.
"Variable Period" means each period during which the Bonds bear interest at a Variable
Rate.
"Variable Rate" means the variable rate of interest borne by the Bonds as determined in
accordance with Section 2.02(a) hereof.
"Variable Rate Adjustment Date'" means any date upon which the Bonds begin to bear
interest at a Variable Rate for the succeeding Variable Period.
Section 1.02. Interpretation. The words "hereof," "herein," "hereunder," and other words
of similar import refer to this Indenture as a whole. Words of the masculine gender shall be deemed
and construed to include correlative words of the feminine and neuter genders. Words importing the
singular number shall include the plural number and vice versa unless the context shall otherwise
indicate. References to Articles, Sections, and other subdivisions of this Indenture are to the
designated Articles, Sections and other subdivisions of this Indenture as originally executed. The
headings of this Indenture are for convenience only and shall not define or limit the provisions
hereof.
(End of Article I)
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ARTICLE II
THE BONDS
Section 2.01. Basic Terms.
(a) The Bonds and the Trustee's Certificate of Authentication to be endorsed on
such Bonds are to be substantially in the form of Exhibit A attached hereto, with necessary and
appropriate variations, omissions and insertions as permitted or required by this Indenture. The
Bonds shall be issued in the original aggregate principal amount of $15,920,000 and shall be
designated "City of Carlsbad, California Variable Rate Demand Multifamily Housing Revenue
Refunding Bonds, Series A of 1993 (Santa Fe Ranch Apartments f/k/a La Costa Apartments
Project)". All of the Bonds are equally and ratably secured. The Bonds shall be issued only as fully
registered bonds, without coupons. The Bonds shall be numbered from R-l upward. The Bonds
delivered on the Closing Date were dated such date. The Bonds delivered after the Closing Date
shall be dated the date they are authenticated by the Trustee.
(b) The Bonds shall bear interest payable on each Interest Payment Date, in each
case from the Interest Payment Date next preceding the date of authentication thereof to which
interest has been paid or duly provided for, unless the date of authentication is an Interest Payment
Date to which interest has been paid or duly provided for, in which case from the date of
authentication thereof, until payment of the principal thereof has been made or duly provided for.
Notwithstanding the foregoing, if a Bond is authenticated after a Record Date and before the
following Interest Payment Date, such Bond shall bear interest from such Interest Payment Date;
provided, however, that if there shall be a default as to the Bonds in the payment of interest due on
such Interest Payment Date, then the Bonds shall bear interest from the next preceding Interest
Payment Date to which interest has been paid or duly provided for.
(c) The Bonds shall be issued in Authorized Denominations and shall bear
interest payable on each Interest Payment Date at the rate per annum determined as provided in
Section 2.02 below. The Bonds shall mature, subject to redemption prior to maturity as provided
herein, on June 1, 2016.
(d) The Person in whose name any Bond is registered on the Record Date with
respect to an Interest Payment Date shall be entitled to receive the interest payable on such Interest
Payment Date (unless such Bond has been called for redemption on a redemption date which is prior
to such Interest Payment Date) notwithstanding the cancellation of such Bond upon any registration
of transfer or exchange thereof subsequent to such Record Date and prior to such Interest Payment
Date; provided, however, that if and to the extent a default exists in the payment of the interest due
on any Bond or any Interest Payment Date, such defaulted interest shall be paid as provided in the
next paragraph.
(e) Any interest on any Bond that is due and payable, but is not punctually paid
or duly provided for, on any Interest Payment Date (herein called "Defaulted Interest") shall
forthwith cease to be payable to the Bondholder on the relevant Record Date by virtue of having been
paid to such Bondholder in the manner set forth in this paragraph. The Trustee may elect to make
payment of any Defaulted Interest to the Persons in whose names the Bonds (or their respective
predecessor Bonds) are registered at the close of business on a special record date for the payment of
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such Defaulted Interest (a "Special Record Date"), which shall be fixed in the following manner.
The Trustee shall determine the amount of Defaulted Interest proposed to be paid on each Bond and
the date of the proposed payment, shall fix a Special Record Date for the payment of such Defaulted
Interest which shall be not more than 15 nor less than 10 days prior to the date of the proposed
payment and shall cause notice of the proposed payment of such Defaulted Interest and the Special
Record Date therefor to be mailed, first class, postage prepaid, to each Bondholder at such
Bondholder's address as it appears in the Bond Register not less than 10 days prior to such Special
Record Date; notice of the proposed payment of such Defaulted Interest and the Special Record Date
therefor having been mailed as aforesaid, such Defaulted Interest shall be paid to the persons in
whose names the Bonds (or their respective predecessor Bonds) are registered on such Special
Record Date.
(f) Payment of principal, premium, if any, and interest on the Bonds shall be paid
by check mailed to the registered owner thereof at such registered owner's address as it appears on
the Bond Register on the Record Date. Upon written request of a registered owner of at least
$1,000,000 in principal amount of Bonds Outstanding received by the Trustee at least five (5) days
prior to such Record Date, all payments of principal, premium, if any, and interest on the Bonds, less
any reasonable wire transfer fees imposed by the Trustee, shall be paid by wire transfer in
immediately available funds to an account within the continental United States designated by such
registered owner. Payment of the Purchase Price of any Bonds tendered for purchase on a Settlement
Date shall be payable in lawful money of the United States of America only upon presentation
thereof at the Principal Office of the Tender Agent.
(g) Before the date fixed for redemption, moneys shall be deposited with the
Trustee to pay, and the Trustee is hereby authorized and directed to apply such moneys to the
payment of, the Bonds or portions thereof called, together with accrued interest thereon to the
redemption date. CUSIP number identification with appropriate dollar amounts for each CUSIP
number must accompany all payments of principal, redemption price, premium, if any, and interest,
whether by check or by wire transfer.
(h) No Bonds may be issued under the provisions of this Indenture except in
accordance with this Article. The total principal amount of Bonds that may be issued hereunder or in
substitution for other Bonds pursuant to Section 2.07 is expressly limited to $15,920,000.
Section 2.02. Determination of Interest Rate and Establishment of Principal Payment
Dates. The Bonds shall bear interest at a Variable Rate, determined as set forth in subsection (a) of
this Section, until the first Reset Adjustment Date or Conversion Date, if any, and thereafter shall
bear interest at the applicable rate set forth in this Section.
Purchased Bonds shall bear interest at the rate established pursuant to the Reimbursement
Agreement, provided that in no event shall any such rate exceed the Maximum Rate.
(a) Variable Rate. The Bonds shall bear interest at a Variable Rate until
converted to a Reset Rate or Fixed Rate as provided herein. Following any Reset Adjustment Date,
the interest rate on the Bonds may be converted again to a Variable Rate at the election or deemed
election of the Borrower in accordance with Section 2.02(b) hereof, which date of conversion to a
Variable Rate shall be the Variable Rate Adjustment Date. The notice requirements and procedures
for establishing a Variable Rate and for tendering Bonds on a Variable Rate Adjustment Date shall
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be the same as are set forth in Section 2.02(b) hereof for establishing a Reset Rate. The Variable
Rate of interest borne by the Bonds during each Variable Period for each Variable Interest Accrual
Period shall be the Variable Rate determined by the Remarketing Agent and reported to the Trustee,
the Tender Agent, the Borrower and the Credit Facility Provider as provided in Section 10.05 hereof,
on the Variable Interest Computation Date for such Variable Interest Accrual Period. Any
Bondholder may obtain information on the Variable Rate by request to the Trustee.
The Variable Rate determined by the Remarketing Agent on each Variable Interest
Computation Date shall be that rate of interest which, if borne by the Bonds, would, in its reasonable
professional judgment, on the basis of prevailing financial market conditions, be the interest rate
necessary, but which would not exceed the interest rate necessary, to be borne by the Bonds in order
for the market value of the Bonds on such Variable Interest Computation Date to be 100% of the
principal amount thereof (disregarding accrued interest) if the Bonds were sold on such Variable
Interest Computation Date; provided, however, that in no event shall the Variable Rate at any time
exceed the Maximum Rate. If the Remarketing Agent shall fail or refuse to determine the Variable
Rate on any Variable Interest Computation Date, then the Variable Rate shall be the SIFMA Index
Rate published on each Variable Interest Computation Date until the Remarketing Agent determines
the Variable Rate as provided above.
The determination of the Variable Rate by the Remarketing Agent shall (in the
absence of manifest error) be conclusive and binding on the Bondholders, the Issuer, the Borrower,
the Credit Facility Provider, the Remarketing Agent, the Tender Agent and the Trustee, and each
shall be protected in relying on it.
(b) Reset Rate. Provided no Event of Default shall have occurred and be
continuing, at the written request of the Borrower with the prior written consent of the Credit Facility
Provider, the rate of interest on the Bonds may be established at a Reset Rate on any Interest
Payment Date during a Variable Period or on any Reset Adjustment Date, in accordance with the
procedures set forth in this subsection (b). In order to effect establishment of a Reset Rate, the
Borrower must deliver such written consent of the Credit Facility Provider and a written request to
the Trustee, the Issuer, the Credit Facility Provider, the Tender Agent and the Remarketing Agent
specifying (i) (if the Bonds then bear interest at a Variable Rate) the Reset Adjustment Date, which
shall be not less than forty (40) days after notice is received by the parties, (ii) any sinking fund
redemption amounts for each Interest Payment Date at a price equal to the principal amount of Bonds
subject to redemption plus interest accrued thereon to the date fixed for redemption, without
premium, pursuant to Section 3.01(b)(v) hereof and any applicable optional redemption provisions
pursuant to Section 3.01 (a) hereof, (iii) the proposed duration of the Reset Period, which shall be at
least one year and shall terminate on the Business Day before the last Interest Payment Date
preceding the expiration of the Credit Facility to be effective with respect to the Bonds during such
Reset Period, and (iv) the date on which the Reset Rate will be determined by the Remarketing
Agent, which date shall be not later than the Business Day immediately prior to the Reset Adjustment
Date. Such request by the Borrower must be accompanied by (i) an opinion of Bond Counsel to the
effect that the establishment of the Reset Rate in accordance with the procedure described in this
subsection (b) is permitted by this Indenture and the Act and will not adversely affect the exclusion
from gross income for federal income tax purposes of interest on the Bonds, (ii) if Bonds are to be
held publicly after the Reset Adjustment Date, either an irrevocable commitment (which commitment
may be subject to customary commercial conditions) of an Alternate Credit Facility Provider to issue
an Alternate Credit Facility, together with accompanying documentation required by Section 5.4 of
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the Financing Agreement or the written commitment of the Credit Facility Provider for an
amendment to the Credit Facility to fulfill the Interest Requirement and, if applicable, to extend the
maturity date of the Credit Facility, (iii) the form of notice to be given by the Trustee to the
Bondholders with respect to the establishment of a Reset Rate, (iv) payment to the Trustee of such
amount as the Trustee reasonably determines may be required in connection with the establishment
of the Reset Rate, including, but not limited to, its own fees and expenses and the cost of printing
Bonds, (v) the proposed form of disclosure document to be distributed in connection with the
remarketing of the Bonds on the Reset Adjustment Date, which disclosure document must be
approved in form and substance by the Issuer, and an undertaking of the Borrower which satisfies
any applicable requirements of Rule 15c2-12 of the Securities Exchange Act of 1934, (vi) if Bonds
are to be held publicly after the Reset Adjustment Date, written evidence from the Rating Agency to
the effect that the Bonds will be rated at least "Aa"/"P-l" by Moody's or "AA"/"A-1" by S&P,
without regard to pluses or minuses (or such lower ratings as shall be approved by the Issuer) on such
Reset Adjustment Date, and (vii) the written consent of the Credit Facility Provider to such request.
If (i) the Credit Facility to be in effect upon and after a Reset Adjustment Date or (ii)
an irrevocable commitment described in (ii) above is not delivered to the Trustee in escrow at least
fifteen (15) days before the applicable Reset Adjustment Date, or if on any Business Day within ten
(10) days before the applicable Reset Adjustment Date the Trustee receives notice from the Borrower
that it no longer wishes to proceed with an adjustment to a Reset Rate or from Remarketing Agent
that a Market Risk Event has occurred, the Trustee shall not give the notice specified in the next
paragraph to the Bondholders. In the event that the Trustee receives notice from the Remarketing
Agent that a Market Risk Event has occurred after giving the notice specified in the next paragraph to
the Bondholders, the Trustee shall notify the Bondholders that the Reset Adjustment Date, but not the
mandatory tender of Bonds on the proposed Reset Adjustment Date, has been cancelled. In such
event, the Bonds shall (i) continue to bear interest at a Variable Rate if the Bonds then bear interest at
a Variable Rate, or (ii) if the Bonds then bear interest at a Reset Rate, on the day following the Reset
Period, the Bonds shall be redeemed (or purchased in lieu thereof) pursuant to Section 3.01(b)(vi) or
3.06 hereof, as applicable.
The Trustee shall give notice to the Bondholders, by first class mail not less than nine
(9) days before the Reset Adjustment Date specifying: (i) the Reset Adjustment Date, and that the
interest rate on the Bonds will be established at the Reset Rate on the Reset Adjustment Date; and (ii)
that all Bonds must be tendered for purchase at the Purchase Price and surrendered to the Tender
Agent for purchase not later than 9:30 a.m., New York, New York time, on the Reset Adjustment
Date.
Any Bond not tendered to the Tender Agent for purchase in accordance with the
provisions of this Section 2.02(b) on a Reset Adjustment Date (including a canceled Reset
Adjustment Date) shall be deemed to have been tendered for purchase on such Reset Adjustment
Date pursuant to Section 10.01 hereof for all purposes of this Indenture, including particularly Article
X hereof; provided, however, payment on such Bonds shall only be made upon presentation thereof.
From and after each Reset Adjustment Date until the last day of the related Reset
Period, the Bonds will bear interest at the applicable Reset Rate, payable on each Interest Payment
Date of each year, commencing on the Interest Payment Date next following the Reset Adjustment
Date, computed on the basis of a 360-day year of twelve 30-day months. The Reset Rate shall be
that rate, determined by the Remarketing Agent on the date specified in the notice from the Borrower
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referred to in the first paragraph of this subsection (b), which, in the reasonable professional
judgment of the Remarketing Agent, on the basis of prevailing financial market conditions, would be
the interest rate necessary, but which would not exceed the interest rate necessary, to be borne by the
Bonds in order for the market value of the Bonds on said date to be 100% of the principal amount
thereof (disregarding accrued interest), provided that the Reset Rate on any Bond shall never exceed
the Maximum Rate.
The determination of a Reset Rate by the Remarketing Agent in accordance with the
provisions of this subsection (b) shall (in the absence of manifest error) be conclusive and binding
upon the Bondholders, the Issuer, the Credit Facility Provider, the Remarketing Agent, the Borrower,
the Tender Agent and the Trustee, and each shall be protected in relying on it.
At least 40 and not more than 50 days prior to the final Interest Payment Date of a
Reset Period, the Borrower shall elect to have the Bonds bear interest from and after such Interest
Payment Date at a Reset Rate for a new Reset Period or at a Variable Rate or Fixed Rate by giving
written notice of such election to the Trustee, the Tender Agent, the Issuer, the Credit Facility
Provider and the Remarketing Agent. If the Borrower fails to make such election, the Borrower shall
be deemed to have elected to have the Bonds bear interest at a Variable Rate determined in
accordance with the procedures set forth in subsection (a) of this Section commencing on the day
immediately following the last day of the Reset Period. Notwithstanding the election of the
Borrower to have the Bonds bear interest at a new Reset Rate, a Fixed Rate or a Variable Rate as the
case may be, at the end of a Reset Period or the deemed election of the Borrower to have the Bonds
bear interest at a Variable Rate, if the Borrower fails to supply the items required by subsections (a),
(b) or (c), as applicable, of this Section 2.02, the Bonds shall be redeemed (or purchased in lieu
thereof) on the day following such Reset Period pursuant to Section 3.01(b)(vi) or 3.06 hereof, as
applicable.
(c) Fixed Rate. At the written request of the Borrower, with the written consent
of the Credit Facility Provider, the rate of interest on the Bonds may be established at a Fixed Rate
on any Interest Payment Date during a Variable Period or on the day following any Reset Period, in
accordance with the procedures set forth in this subsection (c). In order to effect Conversion, the
Borrower must deliver a written request to the Trustee, the Issuer, the Credit Facility Provider, the
Tender Agent and the Remarketing Agent specifying (i) the Conversion Date, which shall be not less
than forty (40) days after such notice is received by such parties, (ii) any sinking fund redemption
amounts for each Interest Payment Date at a price equal to the principal amount of Bonds subject to
redemption plus interest accrued thereon to the date fixed for redemption, without premium, pursuant
to Section 3.01(b)(v) hereof and any applicable optional redemption provision pursuant to Section
3.01 (a) hereof, and (iii) the date on which the Fixed Rate will be determined by the Remarketing
Agent, which date shall be not later than the Business Day immediately prior to the Conversion Date.
Such request by the Borrower must be accompanied by (i) an opinion of Bond Counsel to the effect
that Conversion in accordance with the procedures described in this subsection (c) is permitted by
this Indenture and will not adversely affect the exclusion of interest on the Bonds from gross income
for federal income tax purposes, (ii) if Bonds are to be held publicly after the Conversion Date, an
irrevocable commitment (which commitment may be subject to customary commercial conditions) of
an Alternate Credit Facility Provider to issue the Credit Facility to be in effect upon and after
Conversion, together with accompanying documentation required by Section 5.4 of the Financing
Agreement or the irrevocable written commitment of the Credit Facility Provider for an amendment
to the Credit Facility to fulfill the Interest Requirement and, if applicable, to extend the maturity date
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of the Credit Facility, (iii) the form of notice to be given by the Trustee to the Bondholders with
respect to Conversion, (iv) payment to the Trustee of such amount as the Trustee reasonably
determines may be required in connection with Conversion, including, but not limited to, its own fees
and expenses and the cost of printing Bonds, (v) the proposed form of disclosure document to be
distributed in connection with the remarketing of the Bonds on the Conversion Date, which
disclosure document must be approved in form and substance by the Issuer, and an undertaking of
the Borrower which satisfies any applicable requirements of Rule 15c2-12 of the Securities Exchange
Act of 1934, (vi) if Bonds are to be held publicly after the Conversion Date, written evidence from
the Rating Agency to the effect that the Bonds will be rated at least "Aa" by Moody's or "AA" by
S&P, without regard to pluses or minuses (or such lower ratings as shall be approved by the Issuer)
on the Conversion Date, and (vii) the written consent of the Credit Facility Provider to such request.
If (i) the Credit Facility to be in effect upon and after Conversion or (ii) an
irrevocable commitment described in (ii) in the paragraph above is not delivered (such delivery may
be in escrow) to the Trustee at least fifteen (15) days before the Conversion Date, or if on any
Business Day at least ten (10) days before the Conversion Date, the Trustee receives notice from the
Borrower to the effect that it no longer wishes to proceed with the Conversion, or the Trustee
receives written notice from the Remarketing Agent that a Market Risk Event has occurred, the
Trustee shall not give the notice specified in the next paragraph to the Bondholders. In the event that
the Trustee receives notice from the Remarketing Agent that a Market Risk Event has occurred after
giving the notice specified in the next paragraph to the Bondholders, the Trustee shall notify the
Bondholders that the Conversion, but not the mandatory tender of Bonds on the proposed Conversion
Date, has been cancelled. In such event (i) if the Bonds bear interest at a Variable Rate prior to the
proposed Conversion Date, they shall continue to bear interest at a Variable Rate, and (ii) if the
proposed Conversion Date was to be the day following a Reset Period, then the Bonds shall be
redeemed (or purchased in lieu thereof) on the day following such Reset Period pursuant to Section
3.01(b)(vi) or Section 3.06 hereof, as applicable.
The Trustee shall give notice to the Bondholders, by first class mail not less than nine
(9) days before the Conversion Date, specifying: (i) that the interest rate on the Bonds will be
established at the Fixed Rate through the final maturity of the Bonds and the date the Fixed Rate will
become effective; and (ii) that all Bonds must be tendered for purchase and surrendered to the Tender
Agent for purchase not later than 9:30 a.m., New York, New York time, on the Conversion Date.
Any Bond not tendered to the Tender Agent for purchase in accordance with the
provisions of this Section 2.02(c) on the Conversion Date (including a canceled Conversion Date)
shall be deemed to have been tendered for purchase on such Conversion Date pursuant to Section
10.01 hereof for all purposes of this Indenture, including particularly Article X hereof; provided,
however, payment on such Bonds shall only be made upon presentation thereof.
From and after Conversion and until maturity, the Bonds will bear interest at the
Fixed Rate, payable on each Interest Payment Date, commencing on the Interest Payment Date next
following the Conversion Date, computed on the basis of a 360-day year of twelve 30-day months.
The Fixed Rate shall be that rate, determined by the Remarketing Agent on the date specified in the
notice from the Borrower referred to in the first paragraph of this subsection (c) which, in the
reasonable professional judgment of the Remarketing Agent, on the basis of prevailing financial
market conditions, would be the interest rate necessary, but which would not exceed the interest rate
necessary, to be borne by the Bonds in order for the market value of the Bonds on such date to be
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100% of the principal amount thereof (disregarding accrued interest), provided that in no event shall
the Fixed Rate exceed the Maximum Rate.
The determination of the Fixed Rate by the Remarketing Agent shall (in the absence
of manifest error) be conclusive and binding on the Bondholders, the Issuer, the Tender Agent, the
Trustee, the Credit Facility Provider and the Remarketing Agent, and each shall be protected by
relying on the rate. The Trustee shall, upon written request of any Bondholder, notify such
Bondholder of the Fixed Rate to be in effect on and after the Conversion Date.
Upon Conversion, the Trustee (with the cooperation of the Issuer) shall cause to be
prepared, at the expense of the Borrower, new Bonds substantially in the form set forth in Exhibit A
hereto and stating the Fixed Rate. Any such Bonds shall be executed and authenticated as provided
in Section 2.06, and shall be delivered to Bondholders on the Conversion Date without charge in
exchange for any outstanding Bonds.
(d) Establishment of Principal Payment Dates. At least fifteen (15) days before a
Reset Adjustment Date, a Variable Rate Adjustment Date or the Conversion Date, the Borrower
shall, with the prior written consent of the Credit Facility Provider, determine whether the Bonds
shall have serial maturities, term maturities with sinking fund redemptions, term maturities without
sinking fund redemptions or any combination thereof; provided, that in all events the maturity
structure shall be based upon the payments required to be made by the Borrower under the Bond
Mortgage Loan. The Borrower shall deliver or cause to be delivered to the Trustee an opinion of
Bond Counsel to the effect that such determination of maturities and/or sinking fund redemption
schedule will not adversely affect the exclusion of interest on the Bonds from gross income for
federal income tax purposes.
Section 2.03. Limited Obligations. The Bonds and the interest thereon are limited
obligations of the Issuer, payable solely from the Trust Estate under the Indenture, including, without
limitation, its interest in payments received under the Bond Mortgage Note and the Credit Facility
and give rise to no pecuniary liability of the Issuer. THE BONDS SHALL NOT BE A DEBT,
EITHER GENERAL OR SPECIAL, OF THE STATE OR ANY POLITICAL SUBDIVISION
THEREOF, AND NEITHER THE STATE NOR ANY POLITICAL SUBDIVISION THEREOF
SHALL BE LIABLE THEREON. NEITHER THE FAITH, REVENUES, CREDIT NOR TAXING
POWER OF THE ISSUER, THE STATE OR ANY POLITICAL SUBDIVISION THEREOF
SHALL BE PLEDGED TO THE PAYMENT OF THE PRINCIPAL OF, PREMIUM (IF ANY), OR
INTEREST ON THE BONDS. THE BONDS ARE PAYABLE, AS TO PRINCIPAL, PREMIUM
(IF ANY), AND INTEREST, SOLELY OUT OF THE TRUST ESTATE WHICH ARE THE SOLE
ASSETS OF THE ISSUER PLEDGED THEREFOR, AND THEN ONLY TO THE EXTENT
HEREIN PROVIDED. NEITHER THE MEMBERS OF THE CITY COUNCIL OF THE ISSUER
NOR ANY PERSONS EXECUTING THE BONDS SHALL BE LIABLE PERSONALLY ON THE
BONDS BY REASON OF THEIR ISSUANCE.
No agreement or obligation contained herein shall be deemed to be an agreement or
obligation of any councilmember, officer, employee, commissioner, servant or agent of the Issuer in
his or her individual capacity, and neither the councilmembers of the Issuer nor any officer thereof
executing any Bond shall be liable personally on such Bond or be subject to any personal liability or
accountability by reason of the issuance thereof. No councilmember, officer, employee,
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commissioner, servant or agent of the Issuer shall incur any personal liability with respect to any
other action taken by him or her pursuant to this Indenture.
Section 2.04. Indenture Constitutes Contract. In consideration of the purchase and
acceptance of the Bonds issued hereunder by those who shall hold them from time to time, the
provisions of this Indenture shall be part of the contract of the Issuer with the Bondholders and shall
be deemed to be a contract between the Issuer and the Bondholders from time to time.
Section 2.05. Execution. The Bonds shall be executed on behalf of the Issuer by the
manual or facsimile signature of the Mayor of the Issuer, and attested by the manual or facsimile
signature of the City Clerk of the Issuer. Any facsimile signatures shall have the same force and
effect as if said officers had manually signed the Bonds. Any reproduction of the official seal of the
Issuer on the Bonds shall have the same force and effect as if the official seal of the Issuer had been
impressed on the Bonds.
In case any officer whose manual or facsimile signature shall appear on any Bond shall cease
to be such officer before the delivery of the same, such signature or such facsimile shall nevertheless
be valid and sufficient for all purposes, the same as if he had remained in office until delivery, and
also any Bond may bear the facsimile signatures of, or may be signed by, such persons as at the
actual time of the execution of such Bond shall be the proper officers to sign such Bond although at
the date of such Bond such persons may not have been such officers.
Section 2.06. Authentication. Only such Bonds as shall have endorsed thereon a certificate
of authentication substantially in the form set forth in Exhibit A hereto, duly executed by the Trustee
shall be entitled to any right or benefit under this Indenture. No Bond shall be valid or obligatory for
any purpose unless and until such certificate of authentication shall have been duly executed by the
Trustee; and such executed certificate shall be conclusive evidence that such Bond has been
authenticated and delivered under this Indenture. The Trustee's certificate of authentication on any
Bond shall be deemed to have been executed by it if signed by an authorized signatory of the Trustee,
but it shall not be necessary that the same person sign the certificate of authentication on all of the
Bonds.
Section 2.07. Mutilated, Lost, Stolen or Destroyed. In the event any Bond is mutilated,
lost, stolen or destroyed, the Issuer shall execute and the Trustee shall authenticate a new Bond of
like date, series, maturity and denomination as that mutilated, lost, stolen or destroyed. Any
mutilated Bond shall first be surrendered to the Trustee; and in the case of any lost, stolen or
destroyed Bond, there shall first be furnished to the Trustee evidence of such loss, theft or destruction
reasonably satisfactory to it together with indemnity reasonably satisfactory to it. In the event any
such Bond shall have matured, instead of issuing a duplicate the Trustee may pay the same without
surrender thereof upon receipt of indemnity satisfactory to it. The Trustee may charge the
Bondholder of such Bond with its reasonable fees and expenses.
Section 2.08. Transfer and Exchange; Persons Treated as Owners. The Trustee, as Bond
Registrar, shall cause a Bond Register to be kept for the registration of transfers of Bonds. Any Bond
may be transferred only upon an assignment duly executed by the registered owner or such registered
owner's duly authorized representative in such form as shall be satisfactory to the Bond Registrar and
upon surrender of such Bond to the Trustee for cancellation. Whenever any Bonds shall be
surrendered for transfer, the Issuer shall execute and the Trustee shall authenticate and deliver to the
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transferee replacement fully registered Bonds, of Authorized Denomination or Denominations and
for the amount of such Bonds so surrendered.
Any Bond may, in accordance with its terms, be exchanged, at the office of the Trustee, for
new fully registered Bonds, respectively, of the same maturity, of any Authorized Denomination or
Denominations and for the aggregate amount of such Bond then Outstanding.
In all cases in which Bonds shall be transferred or exchanged hereunder, the Trustee may
make a charge sufficient to reimburse it for any tax, fee or other governmental charge required to be
paid with respect to such transfer or exchange.
The person in whose name any Bond shall be registered shall be deemed and regarded as the
absolute owner thereof for all purposes and payment of or on account of the principal of and
premium, if any, and interest on any such Bond shall be made only to or upon the order of the
registered owner thereof, or such registered owner's legal representative, and neither the Issuer nor
the Trustee shall be affected by any notice to the contrary. 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 to be
paid.
Neither the Issuer nor the Trustee shall be required to make any such exchange, registration
or transfer of Bonds during the period of fifteen (15) days immediately preceding an Interest
Payment Date, or, in the case of any proposed redemption of Bonds, during the period of fifteen (15)
days immediately preceding the selection of Bonds for such redemption and after the giving of notice
of redemption the Trustee is not required to transfer or exchange any Bond or portion thereof which
has been called for redemption.
Section 2.09. Temporary Bonds. Until definitive Bonds are ready for delivery, there may
be executed, and upon the request of the Issuer the Trustee shall authenticate and deliver, in lieu of
definitive Bonds temporary printed, typewritten, engraved or lithographed Bonds, in such
denomination or denominations as shall be determined by the Issuer, in fully registered form, in
substantially the form hereinabove set forth and with such appropriate omissions, insertions and
variations as may be required.
If temporary Bonds shall be issued, the Issuer shall cause the definitive Bonds to be prepared
and to be executed and delivered to the Trustee, and the Trustee, upon presentation to it at its
principal trust office of any temporary Bond shall cancel the same and authenticate and deliver in
exchange therefor, without charge to the owner thereof, a definitive Bond or Bonds, as the case may
be, of an equal aggregate principal amount, of the same maturities and bearing interest at the same
rates as the temporary Bond surrendered. Until so exchanged the temporary Bonds shall in all
respects be entitled to the same benefit and security of this Indenture as the definitive Bonds to be
issued and authenticated hereunder. Interest on temporary Bonds, when due and payable, if the
definitive Bonds shall not be ready for exchange, shall be paid on presentation of such temporary
Bonds and notation of such payment shall be endorsed thereon by the Trustee.
Section 2.10. Remarketing of Bonds. Upon the execution and delivery of this Indenture,
the Issuer shall execute and deliver to the Trustee, and the Trustee shall authenticate the Bonds in
exchange for the form of Bonds outstanding under the Amended Indenture and deliver them to or
upon the order of the Issuer upon receipt by the Trustee of the following:
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(a) executed counterparts of this Indenture, the Financing Agreement, the Tax
Regulatory Agreement, the Intercreditor Agreement, the Pledge Agreement and the Credit Facility;
(b) an opinion of Bond Counsel or counsel to the Issuer to the effect that the
Issuer is duly organized and existing under the laws of the State and has duly authorized, executed
and delivered this Indenture, the Financing Agreement, the Intercreditor Agreement, the Tax
Regulatory Agreement and the Bonds, and that the Bonds are entitled to the benefits of this Indenture
and are valid and binding obligations of the Issuer;
(c) the executed Bond Mortgage Note;
(d) an opinion of counsel to the Borrower to the effect that the Borrower is duly
organized and validly existing and in good standing under the laws of the state in which it has been
organized and in good standing under the laws of each other state in which the Borrower transacts
business and has full power and authority to enter into the agreements described herein to which it is
a party, that its execution and delivery of and performance of its covenants in such agreements do not
contravene law or any provision of any other agreement to which it is a party or by which it or such
property is bound or affected, and that all such agreements are legal, valid and binding agreements of
the Borrower enforceable against the Borrower in accordance with their respective terms;
(e) an opinion of Bond Counsel to the effect that the Indenture (i) is authorized or
permitted by the Original Indenture and complies with its terms, (ii) will be valid and binding upon
the Issuer in accordance with its terms after their execution by the Issuer and the Trustee, and (iii)
will not impair the exclusion of interest on the Bonds from gross income for federal income tax
purposes;
(f) an opinion of Bond Counsel to the effect that the Financing Agreement is
authorized or permitted by the Original Indenture and will not adversely affect the exclusion of
interest on the Bonds from gross income for federal income tax purposes;
(g) a certified copy of the Issuer's Bond Resolution;
(h) the written request and authorization to the Trustee by the Issuer to
authenticate and deliver the Bonds to the purchasers thereof upon the remarketing of the Bonds on
the Credit Facility Substitution Date; and
(i) receipt of the Trustee of the amounts specified in Section 2.11 of this
Indenture and Section 3.3 of the Financing Agreement.
Section 2.11. Deposit to Cost of Issuance Fund. The Issuer shall cause the Borrower to
deliver to the Trustee, on or prior to the Credit Facility Substitution Date, $ for deposit to
the credit of the Cost of Issuance Fund.
Section 2.12. Book-Entry Only System of Registration.
(a) Notwithstanding the foregoing provisions of this Article II, the Bonds shall
initially be issued in the form of one fully-registered bond for the aggregate principal amount of the
Bonds of each maturity, which Bonds shall be registered in the name of Cede & Co., as nominee of
DTC. Except as provided in paragraph (f) below, all of the Bonds shall be registered in the Bond
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Register in the name of Cede & Co., as nominee of DTC; provided that if DTC shall request that the
Bonds be registered in the name of a different nominee, the Trustee shall exchange all or any portion
of the Bonds for an equal aggregate principal amount of Bonds registered in the name of such
nominee or nominees of DTC. No person other than DTC or its nominee or any "FAST" agent for
DTC shall be entitled to receive from the Issuer or the Trustee either a Bond or any other evidence of
ownership of the Bonds, or any right to receive any payment in respect thereof unless DTC or its
nominee shall transfer record ownership of all or any portion of the Bonds on the Bond Register in
connection with discontinuing the book entry system as provided in paragraph (f) below or
otherwise.
(b) So long -as the Bonds or any portion thereof are registered in the name of
DTC or any nominee thereof, all payments of the principal or redemption price of or interest on such
Bonds shall be made to DTC or its nominee in same day funds on the dates provided for such
payments under this Indenture. Each such payment to DTC or its nominee shall be valid and
effective to fully discharge all liability of the Issuer or the Trustee with respect to the principal or
redemption price of or interest on the Bonds to the extent of the sum or sums so paid. In the event of
the redemption of less than all of the Bonds Outstanding of any maturity, the Trustee shall not
require surrender by DTC or its nominee of the Bonds so redeemed, but DTC (or its nominee) may
retain such Bonds and make an appropriate notation on the Bond certificate as to the amount of such
partial redemption; provided that DTC shall deliver to the Trustee, upon request, a written
confirmation of such partial redemption and thereafter the records maintained by the Trustee shall be
conclusive as to the amount of the Bonds of such maturity which have been redeemed.
(c) The Issuer and the Trustee may treat DTC (or its nominee) as the sole and
exclusive owner of the Bonds registered in its name for the purposes of payment of the principal or
redemption price of or interest on the Bonds, selecting the Bonds or portions thereof to be redeemed,
giving any notice permitted or required to be given to Bondholders under this Indenture, registering
the transfer of Bonds, obtaining any consent or other action to be taken by Bondholders and for all
other purposes whatsoever; and neither the Issuer nor the Trustee shall be affected by any notice to
the contrary. Neither the Issuer nor the Trustee shall have any responsibility or obligation to any
participant in DTC, any person claiming a beneficial ownership interest in the Bonds under or
through DTC or any such participant, or any other person which is not shown on the Bond Register
as being a Bondholder, with respect to either: (1) the Bonds; or (2) the accuracy of any records
maintained by DTC or any such participant; or (3) the payment by DTC or any such participant of
any amount in respect of the principal or redemption price of or interest on the Bonds; or (4) any
notice which is permitted or required to be given to Bondholders under this Indenture; or (5) the
selection by DTC or any such participant of any Person to receive payment in the event of a partial
redemption of the Bonds; or (6) any consent given or other action taken by DTC as Bondholder.
(d) So long as the Bonds or any portion thereof are registered in the name of
DTC or any nominee thereof, all notices required or permitted to be given to the Bondholders under
this Indenture shall be given to DTC as provided in DTC's procedures, as the same may be amended
from time to time.
(e) In connection with any notice or other communication to be provided to
Bondholders pursuant to this Indenture by the Issuer or the Trustee with respect to any consent or
other action to be taken by Bondholders, DTC shall consider the date of receipt of notice requesting
such consent or other action as the record date for such consent or other action, provided that the
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Issuer or the Trustee may establish a special record date for such consent or other action. The Issuer
or the Trustee shall give DTC notice of such special record date not less than 15 calendar days in
advance of such special record date to the extent possible.
(f) The book-entry system for registration of the ownership of the Bonds may be
discontinued at any time if either: (1) DTC determines to resign as securities depository for the
Bonds; or (2) the Issuer determines that continuation of the system of book-entry transfers through
DTC (or through a successor securities depository) is not in the best interests of the Issuer. In either
of such events (unless, in the case described in clause (2) above, the Issuer appoints a successor
securities depository), the Bonds shall be delivered in registered certificate form to such Persons, and
in such maturities and principal amounts, as may be designated by DTC, but without any liability on
the part of the Issuer or the Trustee for the accuracy of such designation. Whenever DTC requests
the Issuer and the Trustee to do so, the Issuer and the Trustee shall cooperate with DTC in taking
appropriate action after reasonable notice to arrange for another securities depository to maintain
custody of certificates evidencing the Bonds.
Section 2.13. Mandatory Tender of Bonds on Substitution Date. The Borrower, pursuant
to Section 5.4 of the Financing Agreement, is permitted to provide an Alternate Credit Facility to
replace the then outstanding Credit Facility at the times specified in the Financing Agreement.
The Bonds shall be subject to mandatory tender for purchase on any proposed Substitution
Date from the sources available pursuant to Sections 10.03 and 10.04, at a Purchase Price equal to
the principal amount thereof plus accrued interest to the Substitution Date.
Upon receipt by the Trustee of (i) notice from the Borrower of a planned substitution
specifying the Substitution Date (which may occur only on a date specified in Section 5.4 of the
Financing Agreement), and (ii) the form of Alternate Credit Facility to be in effect on and after the
Substitution Date, the written approval of the Issuer of the form and substance of the disclosure
document to be used in connection with the remarketing of the Bonds on the Substitution Date, and
forms of the other documents required pursuant to Section 5.4 of the Financing Agreement (except
the rating letter specified therein), the Trustee shall establish the Substitution Date for the mandatory
tender and purchase of the Bonds.
The Trustee shall give notice to the Bondholders and the Rating Agency, by first class mail
not less than nine (9) days before the Substitution Date specifying: (i) the Substitution Date; and (ii)
that all Bonds must be surrendered to the Tender Agent for purchase not later than 9:30 a.m., New
York, New York time, on the Substitution Date.
(a) Any Bond not tendered to the Tender Agent for purchase in accordance with
the provisions of this Section 2.13 on the Substitution Date (including any Substitution Date that fails
to occur) shall be deemed to have been tendered for purchase on such Substitution Date pursuant to
Section 10.01 hereof for all purposes of this Indenture, including particularly Article X hereof;
provided, however, payment on such Bonds shall only be made upon presentation thereof.
(End of Article II)
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ARTICLE III
REDEMPTION OF BONDS PRIOR TO MATURITY
Section 3.01. Redemption of Bonds Prior to Maturity.
(a) Optional Redemption.
(i) With the prior written consent of the Credit Facility Provider, the
Bonds are subject to optional redemption in whole or in part from payments made
under the Credit Facility following an optional prepayment on the Bond Mortgage
Loan in accordance with the prepayment restrictions set forth in the Bond Mortgage
Note or from Eligible Funds deposited with the Trustee at the redemption prices set
forth below:
1. During the Variable Period, on any Interest Payment Date, at a redemption
price of 100% of the principal amount thereof, plus accrued interest thereon
to the redemption date.
2. During a Reset Period or the Fixed Rate Period, on any Business Day during
the periods set forth in the table below and at the respective redemption prices
set forth below expressed as percentages of the principal amounts of the
Bonds called for redemption, such redemption prices declining as set forth
below until such redemption price equals 100% of the principal amount of the
Bonds, plus accrued interest, if any, to the redemption date:
Term of Reset Period or Fixed
Rate Period
Less than or equal to 5 years
and greater than 2 years
Less than or equal to 2 years
and greater than 1 year
Equal to 1 year
Redemption Prices as a
Percentage of Principal Amounts
101% after 1 year, declining !/2%
per 6 months to 100%
100'/2% after 1 year, declining
!/2% per 6 months to 100%
100% after 6 months
Earliest Call Date
2 years from Reset Adjustment
Date or Conversion Date, as
applicable
1 year from Reset Adjustment
Date or Conversion Date, as
applicable
6 months from Reset
Adjustment Date or
Conversion Date, as applicable
provided that, notwithstanding the foregoing, the Borrower and the Remarketing
Agent may, not later than fifteen (15) days before the Reset Adjustment Date,
Variable Rate Adjustment Date or Conversion Date, as applicable, give notice to the
Issuer, the Credit Facility Provider and the Trustee setting forth a redemption
schedule different from that set forth in this paragraph, accompanied by (A) the
written consent of the Credit Facility Provider, if any, to be in effect for the ensuing
Reset Period or Fixed Rate Period, as applicable, and (B) an opinion of Bond Counsel
to the effect that such change will not adversely affect the exclusion of interest on the
Bonds from gross income for federal income tax purposes; and upon such notice and
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delivery of the consent and the opinion, such different redemption schedule shall
apply to any redemption pursuant to this paragraph for such Reset Period or Fixed
Rate Period, as applicable, without further action by any party.
(ii) Optional redemption of Bonds at a premium may only be made if the
Trustee shall have received Eligible Funds (not consisting of funds drawn under the
Credit Facility) in an amount sufficient to pay the applicable redemption premium.
(iii) The Trustee shall effect a redemption of Bonds pursuant to this
Section 3.01 (a) not later than 35 days following its receipt of moneys representing an
optional prepayment of the Bond Mortgage Loan.
(b) Mandatory Redemption. The Bonds are subject to mandatory redemption
on any date, at a redemption price equal to the principal amount thereof plus accrued interest to the
redemption date, without premium, at the earliest practicable date from payments made under the
Credit Facility or receipt by the Trustee of Eligible Funds upon the occurrence of any of the
following:
(i) in whole or in part (and if in part, in Authorized Denominations),
following receipt by the Trustee of a written direction by the Credit Facility Provider
to redeem such Bonds as a result of the payment to the Trustee of Net Proceeds
representing casualty insurance proceeds or condemnation awards paid as a
prepayment of the Bond Mortgage Loan; or
(ii) in whole, as a result of the occurrence of a default under any Bond
Mortgage Loan Document and receipt by the Trustee of a written direction by the
Credit Facility Provider to redeem the Bonds; or
(iii) in whole, on the last Business Day which is not less than five days
before the date of expiration of any Credit Facility unless the Trustee receives a
renewal or extension of or replacement for or commitment to replace such Credit
Facility meeting the requirements of Section 5.4 of the Financing Agreement or, in
the case of a replacement of the Credit Facility in connection with a Reset
Adjustment Date or the Conversion Date pursuant to Section 2.02(b) or (c), an
irrevocable commitment of an entity to issue an Alternate Credit Facility to be in
effect upon and after such Reset Adjustment Date or Conversion Date, in each case
not less than thirty (30) days before the expiration of the then-existing Credit Facility;
or
(iv) while the Bonds are registered in the name of the Borrower pursuant
to the Pledge Agreement (or in such other name as the Credit Facility Provider shall
have directed) as a result of a mandatory tender for purchase of the Bonds pursuant to
Section 3.06 hereof, in whole or in part (and if in part, in Authorized Denominations),
at a redemption price equal to the principal amount of the Bonds specified by the
Credit Facility Provider for redemption, plus accrued interest to the redemption date,
without premium; or
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(v) in part, in Authorized Denominations on each Interest Payment Date,
during any Reset Period or Fixed Rate Period, with respect to the Bonds that have
term maturities occurring during such Reset Period or Fixed Rate Period commencing
on the first sinking fund mandatory redemption date established for the Bonds for
such Reset Period or Fixed Rate Period as provided in subsection (c) below; provided
that if less than all the Bonds shall have been redeemed pursuant to Section 3.01(a),
3.01(b)(i) or 3.01(b)(iv), the amount of Bonds to be redeemed in each year from
sinking fund installments as provided in this Section 3.01(b)(v) shall be decreased by
an amount, in proportion, as nearly as practicable, to the decrease in the payments on
the Bond Mortgage Loan in such year; or
(vi) in whole, on the day following any Reset Period if the Trustee has not
received the items required by Sections 2.02(a), (b) or (c), as applicable, to effect a
new Variable Period, Reset Period or a Conversion or upon cancellation of a rate
adjustment on a Reset Adjustment Date or upon cancellation of a conversion to a
Fixed Rate; or
(vii) in whole, upon receipt by the Trustee of notice from the Issuer of a
Determination of Taxability, or subject to the provisions of the Intercreditor
Agreement, upon acceleration of the Bond Mortgage Loan pursuant to Section 7.3 of
the Financing Agreement following a default by the Borrower under the Financing
Agreement or the Tax Regulatory Agreement.
Section 3.02. Selection of Bonds for Redemption.
(a) The Trustee shall select Bonds subject to mandatory sinking fund redemption
pursuant to Section 3.01(b)(v) hereof by lot within the appropriate maturity. If less than all the
Bonds then outstanding shall be called for redemption other than as a result of mandatory sinking
fund redemption pursuant to Section 3.01(b)(v) hereof, the Trustee shall redeem an amount of Bonds
so that the resulting decrease in debt service on the Bonds in each semiannual period ending on an
Interest Payment Date is proportional, as nearly as practicable, and the Bonds shall be selected by lot
within each maturity, the cost of such selection being at the Borrower's expense.
(b) Bonds shall be redeemed pursuant to this Article HI only in Authorized
Denominations.
Section 3.03. Notice of Redemption. Notice of the intended redemption of each Bond shall
be given by the Trustee by first class mail, postage prepaid, to the registered owner at the address of
such owner shown on the Bond Register. All such redemption notices shall be given not less than ten
(10) days (not less than thirty (30) days in the case of optional or mandatory sinking fund
redemptions) nor more than sixty (60) days prior to the date fixed for redemption. The Trustee may
provide a conditional notice of optional redemption upon the direction of the Credit Facility Provider
or the Borrower (with the prior written consent of the Credit Facility Provider).
Notices of redemption shall state the redemption date and the redemption price, the place or
places where amounts due upon such redemption will be payable, and, if less than all of the then
Outstanding Bonds are called for redemption, shall state (i) the numbers of the Bonds to be redeemed
by giving the individual certificate of each Bond to be redeemed or shall state that all Bonds between
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two stated certificate numbers, both inclusive, are to be redeemed or that all of the Bonds of one or
more maturities have been called for redemption; (ii) the CUSIP numbers of all Bonds being
redeemed if available; (iii) the amount of each Bond being redeemed (in the case of a partial
redemption); (iv) the date of issue of the Bond as originally issued; (v) the rate of interest borne by
each Bond being redeemed; (vi) the maturity date of each Bond being redeemed; (vii) the possibility
of a purchase of Bonds in lieu of redemption, if applicable; (viii) the conditions, if any, which must
be satisfied in order for the redemption to take place on the scheduled date of redemption, including,
in the case of an optional redemption, the receipt of Eligible Funds on the redemption date to pay any
redemption premium; and (ix) any other descriptive information needed to identify accurately the
Bonds being redeemed.
Each notice of redemption shall state that further interest on such Bonds will not accrue from
and after the redemption date and that payment of the principal amount and premium, if any, will be
made upon presentation and surrender of the Bonds endorsed in blank unless the Bonds are then held
in a book-entry only system of registration.
Notice of such redemption shall also be sent by certified mail, overnight delivery service,
facsimile transmission or other secure means, postage prepaid, to the Credit Facility Provider, to the
Rating Agency, to all municipal registered Securities Depositories and to at least two of the national
Information Services that disseminate securities redemption notices, when possible, at least five (5)
days prior to the mailing of notices required by the first paragraph above, and in any event no later
than simultaneously with the mailing of notices required by the first paragraph above; provided, that
neither failure to mail notice pursuant to this paragraph nor any defect in any notice so mailed shall
affect the sufficiency of the proceedings for the redemption of such Bonds.
In addition to providing notice of redemption as set forth above, the Trustee shall send a
second notice of redemption within sixty (60) days following the redemption date, by certified mail,
overnight delivery service, or other secure means, postage prepaid to the registered owners of any
Bonds called for redemption, at their addresses appearing on the Bond Register, who have not
surrendered their Bonds for redemption within thirty (30) days following the redemption date.
Neither the failure of the registered owner of a Bond to receive a notice of redemption mailed
by the Trustee nor any defect in any notice so mailed shall affect the sufficiency of the proceedings
for the redemption of such Bonds. Failure to give notice by mailing to the registered owner of any
Bond designated for redemption or tender or to any depository or information service shall not affect
the validity of the proceedings for the redemption of any other Bond if notice of such redemption
shall have been mailed as herein provided.
Section 3.04. Cancellation. All Bonds that have been redeemed shall be marked cancelled
by the Trustee, and shall not be reissued. A counterpart of the certificate of cancellation evidencing
such cancellation shall, upon request, be furnished by the Trustee to the Issuer.
Section 3.05. Effect of Notice of Redemption. If a conditional notice of redemption has
been provided pursuant to the terms of this Indenture and the conditions are not satisfied, such notice
of redemption shall be of no force and effect and the Bondholders shall be restored to their former
positions as though no such notice of redemption had been delivered. Notice of redemption having
been given in the manner provided in this Article III and if either there were no conditions to such
redemption or the conditions have been satisfied (or in the event no such notice is required under
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Section 3.03), and money for the redemption being held by the Trustee or Paying Agent for that
purpose, thereupon the Bonds so called for redemption shall become due and payable on the
redemption date, and interest thereon shall cease to accrue on such date; and such Bonds shall
thereafter no longer be entitled to any security or benefit under this Indenture except to receive
payment of the redemption price thereof.
Section 3.06. Purchase of Bonds in Whole in Lieu of Redemption. Notwithstanding
anything in this Indenture to the contrary, at any time the Bonds are subject to redemption in whole
pursuant to the provisions of this Indenture, all (but not less than all) of the Bonds to be redeemed
may be purchased by the Trustee (for the account of the Borrower or the Credit Facility Provider or
their respective designee, as directed by such party) on the date which would be the redemption date
at the written direction of the Credit Facility Provider or the Borrower, with the prior written consent
of the Credit Facility Provider (which direction shall specify that such purchase is pursuant to this
Section 3.06), who shall give the Trustee at least one Business Day's notice prior to such redemption
date, at a purchase price equal to the redemption price which would have been applicable to such
Bonds on the redemption date. The Bonds shall be purchased in lieu of redemption only from
amounts provided by the Credit Facility Provider or from other Eligible Funds. In the event the
Trustee is so directed to purchase Bonds in lieu of redemption, no notice to the holders of the Bonds
to be so purchased (other than the notice of redemption otherwise required hereunder) shall be
required, and the Trustee shall be authorized to apply to such purpose the funds in the Redemption
Account which would have been used to pay the redemption price, for such Bonds if such Bonds had
been redeemed rather than purchased. Such Bonds so purchased for the account of the Borrower
shall for all purposes under this Indenture constitute Purchased Bonds held by the Trustee pursuant to
the Pledge Agreement and may be remarketed by the Remarketing Agent in accordance with the
provisions of Section 10.03. Such Purchased Bonds, if not remarketed or transferred as provided
herein, shall be automatically canceled and deemed extinguished by the Trustee on the date which is
not later than five years from the date of purchase, unless an opinion of Bond Counsel is delivered to
the Trustee to the effect that not canceling such Purchased Bonds will not adversely affect the
exclusion from gross income for federal income tax purposes of interest on the Bonds.
Section 3.07. Cancellation of Purchased Bonds. Upon a redemption date on which all
Bonds (other than Purchased Bonds) are redeemed or on a date on which all Bonds (other than
Purchased Bonds) are presented to the Trustee for cancellation, all Purchased Bonds shall be deemed
cancelled. No further moneys shall be required to be paid by the Issuer or the Credit Facility
Provider in connection with such cancellation; provided, however, that such cancellation shall not
release the obligation of the Borrower to reimburse the Credit Facility Provider for payments made in
respect of principal of, interest on or Purchase Price of the Bonds, including Purchased Bonds.
(End of Article III)
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ARTICLE IV
REVENUES AND FUNDS
Section 4.01. Pledge of Revenues and Assets. The pledge and assignment of and the
security interest granted in the Trust Estate pursuant to the Granting Clauses hereof shall attach, be
perfected and be valid and binding from and after the time of the delivery of the Bonds by the
Trustee or by any person authorized by the Trustee to deliver the Bonds. The Trust Estate so pledged
and then or thereafter received by the Trustee shall immediately be subject to the lien of such pledge
and security interest without any physical delivery thereof or further act, and the lien of such pledge
and security interest shall be valid and binding and prior to the claims of any and all parties having
claims of any kind in tort, contract or otherwise against the Issuer irrespective of whether such parties
have notice thereof.
Section 4.02. Establishment of Funds. In addition to the Bond Purchase Fund established
pursuant to Section 10.03 hereof, the Trustee shall establish, maintain and hold in trust the following
funds and accounts, each of which shall be disbursed and applied only as herein authorized:
(a) Revenue Fund, and within the Revenue Fund a General Account and a Credit
Facility Account;
(b) Bond Fund and within the Bond Fund a Purchased Bonds Account;
(c) Redemption Fund;
(d) Administration Fund and within the Administration Fund a Specified Fees
Account and an Administration Expense Account;
(e) Cost of Issuance Fund; and
(f) Rebate Fund.
Section 4.03. Application of Revenues.
(a) There shall be deposited in the Credit Facility Account of the Revenue Fund
all amounts received pursuant to draws on the Credit Facility. All Revenues (other than amounts
paid under the Credit Facility) shall be deposited by the Trustee, promptly upon receipt thereof, to
the General Account of the Revenue Fund, except (i) as otherwise specifically provided in Section
4.03(b) hereof with respect to certain deposits into the Redemption Fund; (ii) the Bond Fee
Component shall be deposited to the Specified Fees Account; (iii) as otherwise specifically provided
in the second paragraph of Section 4.06(b) hereof with respect to deficiencies in the Administration
Fund; (iv) with respect to investment earnings to the extent required under the terms hereof to be
retained in the funds and accounts to which they are attributable; and (v) with respect to amounts
required to be transferred between funds and accounts as provided in this Article IV.
On each Interest Payment Date or any other date on which payment of principal of or interest
on the Bonds becomes due and payable, the Trustee, out of moneys in the Credit Facility Account
and the General Account of the Revenue Fund, shall credit the following amounts to the following
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funds, but in the order and within the limitations hereinafter indicated with respect thereto, as
follows:
FIRST: To the Bond Fund from moneys in the Credit Facility Account of the Revenue
Fund, an amount equal to the principal of and interest due on the Bonds on such Interest
Payment Date (excluding principal or interest on any Purchased Bonds and excluding the
principal constituting a mandatory sinking fund payment on any Bonds on such Interest
Payment Date); and
SECOND: To the Bond Fund from moneys in the Credit Facility Account of the Revenue
Fund, an amount equal to the principal amount due and payable on the Bonds with respect to
mandatory sinking fund redemption (excluding principal of any Purchased Bonds) on such
Interest Payment Date; and
THIRD: To the Redemption Fund from moneys in the Credit Facility Account (i) amounts
paid to the Trustee under the Credit Facility to be applied to the mandatory redemption of all
or a portion of the Bonds pursuant to Section 3.01(b) hereof (other than a mandatory sinking
fund redemption) and (ii) amounts paid to the Trustee under the Credit Facility to be applied
to the optional redemption of all or a portion of the Bonds pursuant to Section 3.01(a)(i)
hereof; and
FOURTH: To the Purchased Bonds Account in the Bond Fund from moneys in the General
Account, an amount equal to the interest due on the Purchased Bonds on such Interest
Payment Date.
(b) Immediately upon receipt, the Trustee shall deposit directly to the
Redemption Fund (i) Net Proceeds representing casualty insurance proceeds or condemnation awards
paid as a prepayment of the Bond Mortgage Loan, such amount to be applied to reimburse the Credit
Facility Provider for a draw under the Credit Facility in such amount to provide for extraordinary
mandatory redemption of all or a portion of the Bonds pursuant to Section 3.01(b)(i); and (ii) Eligible
Funds (other than draws under the Credit Facility) paid to the Trustee to be applied to the optional
redemption of all or a portion of the Bonds pursuant to Section 3.01(a)(i); provided, however, any
premium paid in connection with an optional redemption of the Bonds shall not be paid from
amounts drawn on the Credit Facility.
(c) Immediately upon receipt, the Trustee shall deposit directly to the Specified
Fees Account of the Administration Fund the Bond Fee Component received from the Borrower and
to the Administrative Expense Account any additional amounts paid by the Borrower for deposit
therein.
(d) Should the amount in the Bond Fund or in the Redemption Fund, as
applicable, be insufficient to pay the amount due on the Bonds on any given Interest Payment Date or
other payment date after the transfers from the Credit Facility Account, the Trustee shall credit to the
Bond Fund the amount of such deficiency by charging the following Funds and Accounts in the
following order of priority: (1) the General Account of the Revenue Fund; (2) the Administration
Expense Account; and (3) the Redemption Fund, except no such charge to the Redemption Fund
shall be made from moneys to be used to effect a redemption for which notice of redemption has
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been provided for or from moneys which are held for payment of Bonds which are no longer
Outstanding hereunder.
Section 4.04. Application of Bond Fund. The Trustee shall charge the Bond Fund, on each
Interest Payment Date, an amount equal to the unpaid interest and principal due on the Bonds on
such Interest Payment Date, and shall cause the same to be applied to the payment of such interest
and principal when due (excluding principal on any Purchased Bond). Any moneys remaining in the
Bond Fund on any Interest Payment Date after application as provided in the preceding sentence
may, to the extent there shall exist any deficiency in the Redemption Fund to redeem Bonds called
for mandatory sinking fund redemption on such Interest Payment Date, be transferred to the
Redemption Fund to be applied for such purpose. Any balance remaining in the Bond Fund on the
Business Day immediately succeeding an Interest Payment Date shall be transferred to the Credit
Facility Provider to be applied in accordance with the Reimbursement Agreement.
Income realized from the investment or deposit of moneys in the Bond Fund shall be
deposited by the Trustee upon receipt thereof in the General Account of the Revenue Fund.
No amount shall be charged against the Bond Fund except as expressly provided in this
Article IV.
Section 4.05. Application of Redemption Fund. Any moneys credited to the Redemption
Fund and not otherwise restricted shall be applied FIRST, to reimburse the Credit Facility Provider to
the extent of any draw made under the Credit Facility for redemption of the Bonds pursuant to
Section 3.01(b)(i); SECOND, to pay the redemption price of Bonds called for redemption pursuant to
Sections 3.01(a)(i), or 3.01(b); and THIRD, to make up any deficiency in the Bond Fund on any
Interest Payment Date, to the extent moneys then available in accordance with Section 4.03(d) hereof
in the General Account of the Revenue Fund and the Administration Expense Account are
insufficient to make up such deficiency, provided that no moneys to be used to effect a redemption
for which a conditional notice of redemption, the conditions of which have been satisfied, or an
unconditional notice of redemption has been provided or moneys which are held for payment of
Bonds which are no longer Outstanding hereunder shall be so transferred to the Bond Fund.
On or before each Interest Payment Date, the income realized from the investment of moneys
in the Redemption Fund shall be credited by the Trustee to the General Account of the Revenue
Fund.
No amount shall be charged against the Redemption Fund except as expressly provided in
this Article IV.
Section 4.06. Application of Administration Fund.
(a) Amounts in the Specified Fees Account shall be withdrawn or maintained, as
appropriate, by the Trustee to pay (i) on each June 1, commencing June 1, 2011, to, or at the
direction of, the Issuer, the Issuer Fee, (ii) on each June 1, commencing June 1, 2011, to the Trustee
amounts due pursuant to subpart (a) of the Trustee's Fee, (iii) upon receipt, to the Trustee, any
amounts due to the Trustee which have not been paid, other than amounts paid in accordance with
clause (ii) hereof, (iv) upon receipt, to, or at the direction of, the Issuer, any portion of the Issuer Fee
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due and unpaid, other than amounts paid in accordance with clause (i) hereof, and (v) to the Rebate
Analyst the Rebate Analyst Fee.
(b) Amounts in the Administration Expense Account shall be withdrawn or
maintained, as appropriate, by the Trustee and used FIRST, in accordance with Section 4.03(d), to
make up any deficiency in the Bond Fund on any Interest Payment Date, to the extent moneys then
available in the General Account of the Revenue Fund are insufficient to make up such deficiency;
SECOND, to pay to the Trustee any Extraordinary Trustee's Fees and Expenses due and payable
from time to time, as set forth in an invoice submitted to the Borrower, the Issuer and the Credit
Facility Provider; THIRD, subject to the limitations in Section 7.06, to pay to the Issuer any
extraordinary expenses it may incur in connection with the Bonds or this Indenture from time to time,
as set forth in an invoice submitted to the Borrower, Trustee and the Credit Facility Provider;
FOURTH, to make up any deficiency in the Redemption Fund on any redemption date of Bonds, to
the extent moneys then available in accordance with Section 4.03(d) hereof in the Redemption Fund
are insufficient to redeem Bonds called for redemption on such redemption date; FIFTH, to pay to
the Rating Agency the annual rating maintenance fee, if any, of the Rating Agency upon presentment
of an invoice from the Rating Agency to the Trustee; SIXTH, to pay to the Remarketing Agent and
the Rebate Analyst fees and expense due from time to time; and SEVENTH, to transfer any
remaining balance after application as aforesaid to the General Account of the Revenue Fund.
In the event that the amounts on deposit in the Administration Fund are not equal to the
amounts payable from the Administration Fund as provided in the preceding paragraph on any date
on which such amounts are due and payable, the Trustee shall give notice to the Borrower of such
deficiency and of the amount of such deficiency and request payment within two Business Days to
the Trustee of the amount of such deficiency. Upon payment by the Borrower of such deficiency, the
amounts for which such deficiency was requested shall be paid.
On or before each Interest Payment Date, the income realized from the investment of moneys
in the Administration Fund shall be credited by the Trustee to the General Account of the Revenue
Fund.
No amount shall be charged against the Administration Fund except as expressly provided in
this Article IV.
Section 4.07. Investment of Funds. The moneys held by the Trustee shall constitute trust
funds for the purposes hereof. Any moneys attributable to each of the funds and accounts hereunder
shall be invested by the Trustee, at the written direction of the Borrower, with respect to all other
Funds and Accounts, in Qualified Investments which mature on the earlier of (i) six months from the
date of investment and (ii) the date such moneys are needed; provided, that if the Trustee shall have
entered into any investment agreement requiring investment of moneys in any fund or account
hereunder in accordance with such investment agreement and if such investment agreement
constitutes a Qualified Investment, such moneys shall be invested in accordance with such
requirements; and provided, further, that amounts in the Credit Facility Account of the Revenue Fund
shall be held uninvested or shall be invested only in Government Obligations or in Qualified
Investments of the type described in subparagraph (g) thereof. Such investments may be made
through the investment or securities department of the Trustee. All such Qualified Investments
purchased with money in any fund or account hereunder shall mature, or shall be subject to
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redemption or withdrawal without discount or penalty at the option of the Trustee, prior to the next
succeeding Interest Payment Date.
Qualified Investments representing an investment of moneys attributable to any fund or
account shall be deemed at all times to be a part of said fund or account, and, except as otherwise
may be provided expressly in other Sections hereof, the interest thereon and any profit arising on the
sale thereof shall be credited to the General Account of the Revenue Fund, and any loss resulting on
the sale thereof shall be charged against the General Account of the Revenue Fund. Such
investments shall be sold at the best price reasonably obtainable whenever it shall be necessary so to
do in order to provide moneys to make any transfer, withdrawal, payment or disbursement from said
fund or account. In the case of any required transfer of moneys to another such fund or account, such
investments may be transferred to that fund or account in lieu of the required moneys if permitted
hereby as an investment of moneys in that fund or account.
The Trustee shall not be liable or responsible for any loss resulting from any investment
made in accordance herewith.
In computing for any purpose hereunder the amount in any fund or account on any date,
obligations so purchased shall be valued at the lower of cost or par exclusive of accrued interest.
The Issuer (and the Borrower by its execution of the Financing Agreement) acknowledges
that, to the extent regulations of the Comptroller of the Currency or other applicable regulatory entity
grant the Issuer or the Borrower the right to receive brokerage confirmations of security transactions
as they occur, the Issuer and the Borrower will not receive such confirmations to the extent permitted
by law. The Trustee will furnish the Borrower periodic cash transaction statements which include
detail for all investment transactions made by the Trustee hereunder. The Trustee may make any
investments hereunder through its own bond or investment department or trust investment
department, or those of its parent or any affiliate. The Trustee or any of its affiliates may act as
sponsor, advisor or manager in connection with any investments made by the Trustee hereunder.
Section 4.08. Moneys Held for Particular Bonds; Funds Held in Trust. The amounts held
by the Trustee for the payment of the interest, principal or redemption price due on any date with
respect to particular Bonds pending such payment, shall be set aside and held in trust by it for the
holders of the Bonds entitled thereto, and for the purposes hereof such interest, principal or
redemption price, after the due date thereof, shall no longer be considered to be unpaid.
All moneys held by the Trustee, as such, at any time pursuant to the terms of this Indenture
shall be and hereby are assigned, transferred and set over unto the Trustee in trust for the purposes
and under the terms and conditions of this Indenture.
Section 4.09. Accounting Records. The Trustee shall maintain accurate books and records
for all funds and accounts established hereunder.
Section 4.10. Amounts Remaining in Funds. After full payment of the Bonds (or
provision for payment thereof having been made in accordance with Section 9.01 hereof) and full
payment of the fees, charges and expenses of the Trustee and other amounts required to be paid
hereunder or under any Bond Mortgage Loan Document, the Credit Facility or the Reimbursement
Agreement, including fees and expenses payable to the Issuer and the Credit Facility Provider, any
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amounts remaining in any fund or account hereunder other than the Rebate Fund shall be paid to the
Borrower; provided however, that if a default shall have occurred and remain uncured under any
Bond Mortgage Loan Document of which the Trustee shall have received written notice from the
Credit Facility Provider, then any such amounts remaining in any fund or account hereunder shall be
paid to the Credit Facility Provider in accordance with the Reimbursement Agreement.
Section 4.11. Rebate Fund. The Rebate Fund shall be established by the Trustee and be
held and applied as provided in this Section. All money at any time deposited in the Rebate Fund
shall be held by the Trustee in trust, to the extent required to satisfy the Rebatable Arbitrage (as
defined below) and as calculated by the Rebate Analyst, for payment to the United States
Government, and neither the Issuer, the Borrower, the Credit Facility Provider nor the Bondholders
shall have any rights in or claim to such moneys. All amounts deposited into or on deposit in the
Rebate Fund shall be governed by this Section and the Tax Certificate. The Trustee shall
conclusively be deemed to have complied with such provisions if it follows the written instructions
of the Issuer, Bond Counsel, the Borrower or the Rebate Analyst, and shall not be required to take
any actions under this Section 4.12 or the Tax Certificate in the absence of written instructions from
the Issuer, Bond Counsel, the Borrower or the Rebate Analyst.
Within 55 days of the end of each fifth Bond Year, the Borrower shall cause the Rebate
Analyst to calculate the amount of rebatable arbitrage, in accordance with Section 148(f)(2) of the
1986 Code and Treasury Regulations Section 1.148-3 (taking into account any exceptions with
respect to the computation of the rebatable arbitrage, if applicable (e.g., the temporary investments
exceptions of Section 148(f)(4)(B) and (C) of the 1986 Code)), for this purpose treating the last day
of the applicable Bond Year as a (computation) date, within the meaning of Treasury Regulations
Section 1.148-l(b) (the "Rebatable Arbitrage").
Within 55 days of the end of each fifth Bond Year, upon the written direction of the Issuer,
Bond Counsel, the Borrower or the Rebate Analyst, an amount shall be deposited to the Rebate Fund
by the Trustee from amounts provided by the Borrower, if and to the extent required so that the
balance in the Rebate Fund shall equal the amount of Rebatable Arbitrage so calculated in
accordance with the preceding paragraph.
The Trustee shall pay, as directed by the Borrower or the Rebate Analyst, to the United States
Treasury, out of amounts in the Rebate Fund:
(i) Not later than 60 days after the end of (A) the fifth Bond Year, and
(B) each applicable fifth Bond Year thereafter, an amount equal to at least 90% of the
Rebatable Arbitrage calculated as of the end of such Bond Year; and
(ii) Not later than 60 days after the payment of all the Bonds, an amount
equal to 100% of the Rebatable Arbitrage calculated as of the end of such applicable
Bond Year, and any income attributable to the Rebatable Arbitrage, computed in
accordance with Section 148(f) of the 1986 Code.
Each payment required to be made under this Section shall be made to the Internal Revenue
Service Center, Ogden, Utah 84201 on or before the date on which such payment is due, and shall be
accompanied by Internal Revenue Service Form 8038-T, which shall be prepared by the Rebate
Analyst and provided to the Trustee.
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Notwithstanding any provision of this Indenture to the contrary, the obligation to remit
payment of the Rebatable Arbitrage to the United States and to comply with all other requirements of
this Section 4.11, Sections 2.4 and 4.3 of the Financing Agreement shall survive the defeasance or
payment in full of the Bonds.
Any funds remaining in the Rebate Fund after redemption and payment of all of the Bonds
and payment and satisfaction of any Rebatable Arbitrage, or provision made therefor satisfactory to
the Trustee, shall be withdrawn and remitted to the Borrower.
The Trustee shall keep such records of the computations made pursuant to this Section 4.11
as are required under Section 148(f) of the 1986 Code to the extent furnished to the Trustee. The
Rebate Analyst shall provide to the Issuer copies of all rebate computations made pursuant to this
Section 4.11. The Trustee shall keep and make available to the Borrower such records concerning
the investments of the gross proceeds of the Bonds and the investments of earnings from those
investments made by the Trustee as may be requested by the Borrower in order to enable the
Borrower to cause the Rebate Analyst to make the aforesaid computations as are required under
Section 148(f) of the 1986 Code.
Notwithstanding the foregoing, the computations and payments of Rebatable Arbitrage need
not be made to the extent that neither the Issuer nor the Borrower will thereby fail to comply with
any requirements of Section 148(f) of the 1986 Code based on an opinion of Bond Counsel that such
failure will not adversely affect the exclusion from gross income for federal income tax purposes of
interest on the Bonds, a copy of which shall be provided to the Trustee, at the expense of the
Borrower.
Section 4.12. Cost of Issuance Fund. The Trustee shall use moneys on deposit to the
credit of the Cost of Issuance Fund to pay on the Credit Facility Substitution Date, or as soon as
practicable thereafter, the costs related to effecting the delivery of the Credit Facility in accordance
with written instructions to be given to the Trustee by the Borrower, upon delivery to the Trustee of
appropriate invoices for such expenses. Amounts remaining on deposit in the Cost of Issuance Fund
six (6) months after the Closing Date shall be transferred to the Borrower. Upon such final
disbursement, the Trustee shall close the Cost of Issuance Fund.
Section 4.13. Reports From the Trustee. The Trustee shall furnish to the Borrower, the
Issuer and the Credit Facility Provider, upon request, monthly statements of the activity and assets
held in each of the Funds and Accounts maintained by the Trustee hereunder.
Section 4.14. Drawings Under Credit Facility. The Credit Facility shall be held by the
Trustee and drawn upon in accordance with its terms and the provisions of this Indenture. Moneys
derived from draws upon the Credit Facility shall be deposited in the Credit Facility Account of the
Revenue Fund and applied by the Trustee to pay the principal of and interest on the Bonds and, in the
event of a purchase of the Bonds, to pay, to the extent provided in the Credit Facility, the Purchase
Price of the Bonds in accordance with this Indenture.
The Trustee shall draw moneys under the Credit Facility in accordance with the terms thereof
in an amount sufficient to make timely payments of the principal of and interest, but not premium, on
the Bonds required to be made from the Bond Fund and the Redemption Fund.
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While the Bonds bear interest at the Variable Rate, should any Variable Interest Computation
Date fall between the date of the draw on the Credit Facility and the next Interest Payment Date on
the Bonds, the Trustee shall assume that the Bonds will bear interest at the Maximum Rate from such
Variable Interest Computation Date to the next Interest Payment Date and shall draw on the Credit
Facility accordingly. In the event that the Maximum Rate exceeds the actual interest rate during such
period, the excess interest shall be returned to the Credit Facility Provider.
Should the Credit Facility Provider become the owner of the Project by foreclosure or
otherwise, the Trustee shall nevertheless continue to make payments on the Bonds only from draws
on the Credit Facility or from Eligible Funds.
The Trustee shall send to the Borrower a copy of any documents which are presented to the
Credit Facility Provider in connection with a drawing on the Credit Facility concurrently with its
submission of those documents to the Credit Facility Provider. The Borrower shall be permitted to
provide the Trustee with an Alternate Credit Facility in accordance with this Indenture and the
Financing Agreement.
Section 4.15. Notices Under Credit Enhancement Agreement. The Trustee hereby agrees
to provide to the Credit Facility Provider all such notices, including any notice of failure to receive a
payment, as shall be required under the Credit Facility in the manner and within the periods of time
provided therein, and the Trustee and the Issuer each hereby acknowledges that certain notices
constitute a condition precedent to payment by the Credit Facility Provider under the Credit Facility.
(End of Article IV)
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ARTICLE V
GENERAL COVENANTS AND REPRESENTATIONS
Section 5.01. Payment of Principal and Interest. The Issuer covenants that it shall
promptly pay or cause to be paid, but only from the sources provided herein, the principal of,
including any applicable redemption premiums, the Purchase Price of and interest on every Bond
issued under this Indenture at the place, on the dates and in the manner provided herein and in the
Bonds, according to the true intent and meaning thereof.
Section 5.02. Performance of Covenants. The Issuer covenants that it shall faithfully
perform at all times any and all of its covenants, undertakings, stipulations and provisions contained
in this Indenture, in any and every Bond executed, authenticated and delivered hereunder and in all
proceedings pertaining thereto.
Section 5.03. Instruments of Further Assurance. The Issuer covenants that it will do,
execute, acknowledge and deliver or cause to be done, executed, acknowledged and delivered, such
indentures supplemental hereto, and such further acts, instruments and transfers as may be reasonably
required for the better assuring, transferring, conveying, pledging, assigning and confirming unto the
Trustee all and singular its interest in the property herein described and the revenues, receipts and
other amounts pledged hereby to the payment of the principal of, premium, if any, and interest on the
Bonds. Any and all interest in property hereafter acquired which is of any kind or nature herein
provided to be and become subject to the lien hereof shall and without any further conveyance,
assignment or act on the part of the Issuer or the Trustee, become and be subject to the lien of this
Indenture as fully and completely as though specifically described herein, but nothing in this
sentence contained shall be deemed to modify or change the obligations of the Issuer under this
Section of this Indenture. The Issuer covenants and agrees that, except as herein otherwise expressly
provided, it has not and will not sell, convey, mortgage, encumber or otherwise dispose of any part of
its interest in the Trust Estate, or the revenues or receipts therefrom.
Section 5.04. Inspection of Project Books. The Issuer covenants and agrees that all books
and documents in its possession relating to the Project shall at all times be open to inspection and
copying by such accountants or other agents as the Trustee or the Credit Facility Provider may from
time to time reasonably designate.
Section 5.05. No Modification of Security; Additional Indebtedness. The Issuer covenants
that it will not, without the written consent of the Trustee and the Credit Facility Provider, alter,
modify or cancel, or agree to consent to alter, modify or cancel any agreement to which the Issuer is
a party, or which has been assigned to the Issuer, and which relates to or affects the security for the
Bonds or the payment of any amount owed to the Credit Facility Provider. The Issuer further
covenants not to incur any additional indebtedness prior to or on a parity with the lien of this
Indenture.
Section 5.06. Damage, Destruction or Condemnation. Net Proceeds resulting from
casualty to or condemnation of the Project shall be applied as provided in the Bond Mortgage Loan
Documents and, to the extent consistent therewith, Section 3.01(b)(i) hereof.
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Section 5.07. Tax Covenants.
(a) The Issuer shall at all times do and perform all acts and things permitted by
law and necessary or desirable in order to assure that the interest paid on the Bonds shall be excluded
from gross income for federal income tax purposes. Notwithstanding any other provisions hereof or
of any other instrument, the Issuer will neither make nor cause to be made any investment or other
use of the proceeds of the Bonds that would cause the Bonds to be arbitrage bonds under Section 148
of the 1986 Code and the regulations thereunder or otherwise cause the interest on the Bonds to
become included in gross income for federal income tax purposes. This covenant shall extend
throughout the term of the Bonds, to all funds and accounts created hereunder and all money on
deposit to the credit of any such fund or account.
(b) The Trustee agrees that it will invest funds held under this Indenture in
accordance with the terms of this Indenture (this covenant shall extend throughout the term of the
Bonds to all Funds and Accounts created under this Indenture and all moneys on deposit to the credit
of any Fund or Account). The Trustee further covenants that should the Issuer or the Borrower file
with the Trustee (it being understood that neither the Issuer nor the Borrower has an obligation to so
file), or should the Trustee receive, an opinion of Bond Counsel to the effect that any proposed
investment or other use of proceeds of the Bonds would cause the Bonds to become "arbitrage
bonds," then the Trustee will comply with any written instructions of the Borrower or Bond Counsel
regarding such investment or use so as to prevent the Bonds from becoming "arbitrage bonds," and
the Trustee will bear no liability to the Issuer, the Borrower, the holders of the Bonds or the Credit
Facility Provider for investments made in accordance with such instructions. Notwithstanding the
foregoing, the Trustee shall have no responsibility or liability with respect to the tax status of the
Bonds.
Section 5.08. Representations and Warranties of the Issuer. The Issuer hereby represents
and warrants as follows:
(a) The Issuer is a municipal corporation duly created, organized and existing
under the laws of the State. The Issuer has all necessary power and authority to issue the Bonds and
to execute and deliver this Indenture, the Financing Agreement and the other Bond Financing
Documents to which it is a party, and to perform its duties and discharge its obligations hereunder
and thereunder. The revenues and assets pledged for the repayment of the Bonds are and will be free
and clear of any pledge, lien or encumbrance prior to, or equal with, the pledge created by this
Indenture, and all action on the part of the Issuer to that end has been duly and validly taken. The
Bond Financing Documents to which the Issuer is a party have been validly authorized, executed and
delivered by the Issuer, and assuming due authorization, execution and delivery by the other parties
thereto, constitute valid and binding obligations of the Issuer, enforceable against the Issuer in
accordance with their respective terms, except as enforceability may be limited by bankruptcy,
insolvency, moratorium or other laws affecting creditors' rights generally and the application of
equitable principles.
(b) Subject to the Intercreditor Agreement, the Issuer agrees that it will cooperate
with the Trustee to enforce all obligations of the Borrower under the Financing Agreement, the Tax
Regulatory Agreement, the Bond Mortgage and the Bond Mortgage Note. Subject to the
Intercreditor Agreement, the Trustee, acting jointly with or independently of, but, if necessary, in the
name of the Issuer, shall have, and is hereby assigned and granted the full and complete right and
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power to enforce all obligations of the Borrower under the Financing Agreement and all other
documents and instruments relating to the issuance, payment and security of the Bonds, and to act in
the name, place and stead of the Issuer for that purpose, subject to the Reserved Rights; provided,
however, that the Issuer reserves the right to enforce the Tax Regulatory Agreement through
foreclosure of the Bond Mortgage if it deems necessary, subject in all events to the Intercreditor
Agreement.
(End of Article V)
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ARTICLE VI
DEFAULT PROVISIONS AND
REMEDIES OF TRUSTEE AND BONDHOLDERS
Section 6.01. Events of Default. Each of the following shall be an "event of default" with
respect to the Bonds (an "Event of Default") under this Indenture:
(a) failure to pay the principal or Purchase Price of, premium, if any, or interest
on any Bond (other than Purchased Bonds) when due, whether at the stated maturity thereof, or on
proceedings for redemption thereof, or on the maturity thereof by declaration;
(b) failure by the Credit Facility Provider to make when due a required payment
under the Credit Facility; or
(c) failure to observe or perform any of the covenants, agreements or conditions
on the part of the Issuer (other than those set forth in Section 5.01 hereof) in this Indenture or in the
Bonds and the continuance thereof for a period of thirty (30) days after written notice to the Issuer
from the Trustee or the Bondholders of more than 51% of the aggregate principal amount of Bonds
then Outstanding at such time specifying such default and requiring the same to be remedied;
provided that the Credit Facility Provider shall have directed in writing that the same shall have
constituted an Event of Default.
The Trustee and the Issuer agree that, notwithstanding the provisions hereof, no default under
the terms of this Indenture shall be construed as resulting in a default under the Bond Mortgage Note,
the Bond Mortgage or any other Bond Mortgage Loan Document, unless such event also constitutes
a default thereunder.
The Trustee will immediately notify the Issuer, the Borrower and the Credit Facility
Provider after a Responsible Officer obtains actual knowledge of the occurrence of an Event of
Default or obtains actual knowledge of the occurrence of an event which would become an Event of
Default with the passage of time or the giving of notice or both.
Section 6.02. Acceleration; Other Remedies Upon Event of Default. Upon the occurrence
of an Event of Default as provided in Section 6.01 (a) hereof, the Trustee shall, but so long as no
Event of Default has occurred and is then continuing under Section 6.01(b) hereof, only upon receipt
from the Credit Facility Provider of a notice directing such acceleration (which notice may be given
in the sole discretion of the Credit Facility Provider), by notice in writing delivered to the Issuer,
declare the principal of all Bonds then Outstanding and the interest accrued thereon immediately due
and payable, and such principal and interest shall thereupon become and be immediately due and
payable and interest shall cease to accrue. Upon the occurrence of an Event of Default as provided in
Section 6.01(c) hereof, the Trustee may, but so long as no Event of Default has occurred and is then
continuing under Section 6.01(b) hereof, only upon receipt of the written consent of the Credit
Facility Provider (which consent may be given in the sole discretion of the Credit Facility Provider),
by notice in writing delivered to the Issuer, declare the principal of all Bonds then Outstanding and
the interest accrued thereon immediately due and payable, and such principal and interest shall
thereupon become and be immediately due and payable and interest shall cease to accrue. Upon the
occurrence of an Event of Default under Section 6.01(b) hereof, the Trustee may, and upon the
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written request of the Bondholders of more than 51 % of the Bonds then Outstanding and receipt of
indemnity satisfactory to it shall, by notice in writing delivered to the Issuer, declare the principal of
all Bonds then Outstanding and the interest accrued thereon immediately due and payable, and such
principal and interest shall thereupon become and be immediately due and payable and interest shall
cease to accrue. The payment on the Bonds resulting from a declaration of acceleration on the Bonds
as the result of an Event of Default occurring under Section 6.01 (a) or (c) shall be made from the
Credit Facility.
If at any time after the Bonds shall have been so declared due and payable, and before any
judgment or decree for the payment of the money due shall have been obtained or entered, the Issuer,
the Borrower or the Credit Facility Provider, as applicable, shall pay to or deposit with the Trustee a
sum sufficient to pay all principal of the Bonds then due (other than solely by reason of such
declaration) and all unpaid installments of interest (if any) upon all the Bonds then due, with interest
at the rate borne by the Bonds on such overdue principal and (to the extent legally enforceable) on
such overdue installments of interest, and the reasonable expenses of the Trustee shall have been
made good or cured or adequate provision shall have been made therefor, and all outstanding
amounts then due and unpaid under the Reimbursement Agreement shall have been paid in full, and
all other defaults hereunder shall have been made good or cured or waived in writing by the Credit
Facility Provider (or, if an Event of Default under Section 6.01(b) hereof has occurred and is then
continuing, by the Bondholders of more than 51% of the aggregate principal amount of the Bonds
then Outstanding), then and in every case, the Trustee on behalf of the Bondholders of all the
Outstanding Bonds shall rescind and annul such declaration and its consequences; but no such
rescission and annulment shall extend to or shall affect any subsequent default, nor shall it impair or
exhaust any right or power consequent thereon.
Upon the happening and continuance of an Event of Default, the Trustee in its own name and
as trustee of an express trust, on behalf and for the benefit and protection of the Bondholders of all
Bonds with respect to which such an Event of Default has occurred and of the Credit Facility
Provider (if no Event of Default has occurred and is continuing under Section 6.01(b)), may also
proceed to protect and enforce any rights of the Trustee and, to the full extent that the Bondholders of
such Bonds themselves might do, the rights of such Bondholders under the laws of the State or under
this Indenture by such of the following remedies as the Trustee shall deem most effectual to protect
and enforce such rights; provided that, so long as no Event of Default has occurred and is then
continuing under Section 6.01(b) hereof, the Trustee may undertake any such remedy only upon the
receipt of the prior written consent of the Credit Facility Provider (which consent may be given in the
sole discretion of the Credit Facility Provider) or in accordance with the provisions of the
Intercreditor Agreement:
(1) by mandamus or other suit, action or proceeding at law or in equity,
to enforce the payment of the principal of, premium, if any, or interest on the Bonds
then Outstanding, or for the specific performance of any covenant or agreement
contained herein or in the Credit Facility, the Financing Agreement or the Tax
Regulatory Agreement, or to require the Issuer to carry out any other covenant or
agreement with Bondholders and to perform its duties under the Act;
(2) by pursuing any available remedies under the Financing Agreement,
the Tax Regulatory Agreement or the Credit Facility;
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(3) by realizing or causing to be realized through sale or otherwise upon
the security pledged hereunder; and
(4) by action or suit in equity, to enjoin any acts or things that may be
unlawful or in violation of the rights of the Bondholders and to execute any other
papers and documents and do and perform any and all such acts and things as may be
necessary or advisable in the opinion of the Trustee in order to have the respective
claims of the Bondholders against the Issuer allowed in any bankruptcy or other
proceeding.
No remedy by the terms of this Indenture conferred upon or reserved to the Trustee or to the
Bondholders is intended to be exclusive of any other remedy, but each and every such remedy shall
be cumulative and shall be in addition to any other remedy given to the Trustee, the Credit Facility
Provider or the Bondholders hereunder or under the Financing Agreement, the Tax Regulatory
Agreement, the Credit Facility or the Reimbursement Agreement, as applicable, or now or hereafter
existing at law or in equity or by statute. No delay or omission to exercise any right or power
accruing upon any Event of Default shall impair any such right or power or shall be construed to be a
waiver of any such Event of Default or acquiescence therein, and every such right and power may be
exercised from time to time and as often as may be deemed expedient. No waiver of any Event of
Default hereunder, whether by the Trustee, the Credit Facility Provider or the Bondholders, shall
extend to or shall affect any subsequent default or event of default or shall impair any rights or
remedies consequent thereto.
Section 6.03. Rights of Bondholders. If an Event of Default under Section 6.01 (b) hereof
shall have occurred and is then continuing, and if requested in writing so to do by the Bondholders of
more than 51% of the aggregate principal amount of the Bonds then Outstanding with respect to
which there is a default, and if indemnified to its satisfaction, the Trustee shall, subject to the terms
of the Intercreditor Agreement, exercise one or more of the rights and powers conferred by this
Article as the Trustee, being advised by counsel, shall deem most expedient in the interest of the
affected Bondholders. If an Event of Default under Section 6.01(b) hereof shall have occurred and is
then continuing, the Bondholders of more than 51% of the aggregate principal amount of the Bonds
then Outstanding with respect to which an Event of Default has occurred shall have the right at any
time, subject to the provisions of Section 6.08 hereof, by an instrument 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, in accordance with the provisions of
law and of this Indenture.
Section 6.04. Waiver by the Issuer. Upon the occurrence of an Event of Default, to the
extent that such right may then lawfully be waived, neither the Issuer nor anyone claiming through or
under it shall set up, claim or seek to take advantage of any appraisal, valuation, stay, extension or
redemption laws now or hereinafter in force, in order to prevent or hinder the enforcement of the
Indenture; and the Issuer, for itself and all who may claim through or under it, hereby waives, to the
extent that it lawfully may do so, the benefit of all such laws and all right of appraisement and
redemption to which it may be entitled under the laws of the State and the United States.
Section 6.05. Application of Moneys After Default. All moneys collected by the Trustee at
any time pursuant to this Article shall, except to the extent, if any, otherwise directed by a court of
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competent jurisdiction, be credited by the Trustee to the General Account of the Revenue Fund.
Such moneys so credited to the General Account of the Revenue Fund and all other moneys from
time to time credited to the General Account of the Revenue Fund shall at all times be held,
transferred, withdrawn and applied as prescribed by the provisions of Article IV hereof and this
Section 6.05.
In the event that at any time the moneys credited to the Revenue Fund, the Bond Fund, the
Redemption Fund and the Administration Expense Account available for the payment of interest or
principal then due with respect to the Bonds shall be insufficient for such payment, such moneys
(other than moneys held for the payment or redemption of particular Bonds as provided in Section
4.09 hereof) shall be applied as follows and in the following order of priority:
(a) For payment of costs and expenses of suit or settlement, if any, and the
reasonable compensation of the Trustee and the Issuer, their agents, attorneys, experts and advisors
actually incurred, and of all proper expenses, liability and advances incurred or made hereunder by
the Trustee and of all taxes, assessments or liens superior to the lien of these presents.
(b) So long as no Event of Default has occurred and is then continuing under
Section 6.01(b) hereof, for the payment to the Credit Facility Provider of all amounts then due and
unpaid under the Reimbursement Agreement.
(c) Unless the principal of all Bonds shall have become or have been declared
due and payable:
FIRST, to the payment to the persons entitled thereto of all installments of
interest then due in the order of the maturity of such installments, and, if the
amount available is not sufficient to pay in full any installment, then to the
payment thereof ratably, according to the amounts due on such installment, to
the persons entitled thereto, without any discrimination or preference; and
SECOND, to the payment to the persons entitled thereto of the unpaid
principal of and premium, if any (which payment of premium shall not be
restricted to Eligible Funds), on any Bonds which shall have become due,
whether at maturity or by call for redemption, in the order in which they
became due and payable, and, if the amount available is not sufficient to pay
in full all the principal of and premium, if any, on the Bonds so due on any
date, then to the payment of principal ratably, according to the amounts due
on such date, to the persons entitled thereto, without any discrimination or
preference, and then to the payment of any premium due on the Bonds,
ratably, according to the amounts due on such date, to the persons entitled
thereto, without any discrimination or preference.
(d) If the principal of all of the Bonds shall have become or have been declared
due and payable, to the payment of the principal of, premium, if any (which payment of premium
shall not be restricted to Eligible Funds), and interest then due and unpaid upon the Bonds 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 Bond over any other Bond, ratably, according
to the amounts due, respectively, for principal, premium and interest, to the persons entitled thereto
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without any discrimination or preference except as to any differences in the respective rates of
interest specified in the Bonds.
(e) If an Event of Default has occurred and is then continuing under Section
6.01(b) hereof, for the payment to the Credit Facility Provider of all amounts then due and unpaid
under the Reimbursement Agreement to the date of such Event of Default.
(f) To the payment of the amounts payable from the Specified Fees Account
including, without limitation, the Issuer Fee and all other unpaid fees, costs and expenses incurred by
the Trustee and the Issuer or their respective counsel or representatives.
Section 6.06. Rights of the Credit Facility Provider. If an Event of Default under Section
6.01 (a) or (c) shall have occurred and so long as no Event of Default has occurred and is then
continuing under Section 6.01(b) hereof, upon receipt of the written direction of the Credit Facility
Provider (which direction may be given in the sole discretion of the Credit Facility Provider), the
Trustee shall, to the extent indemnified to its satisfaction from any liability or expense, be obligated
to exercise any right or power conferred by this Article in the manner set forth in such written
direction of the Credit Facility Provider. If such written direction expressly states that the Trustee
may exercise one or more of the rights and powers conferred in this Article as the Trustee shall deem
to be in the interest of the Bondholders and the Credit Facility Provider, the Trustee shall exercise
one or more of such rights and powers as the Trustee shall deem to be in the best interests of the
Bondholders and the Credit Facility Provider; provided, however, that, in any event, so long as no
Event of Default has occurred and is then continuing under Section 6.01(b) hereof, except as
provided in the Intercreditor Agreement, the Trustee may not undertake any action to realize, through
sale or otherwise, upon the Bond Mortgage Loan without the express written direction of the Credit
Facility Provider. So long as no Event of Default has occurred and is then continuing under Section
6.01(b) hereof, in the case of an Event of Default under Section 6.01(a) or (c) hereof, the Credit
Facility Provider shall have the right, by an instrument in writing executed and delivered to the
Trustee, to direct the time, method and place of conducting any proceeding for any remedy available
to the Trustee, or exercising any trust or power conferred upon the Trustee.
Section 6.07. Remedies Vested in Trustee. All rights of action, including the right to file
proof of claims, under this Indenture or under any of the Bonds may be enforced by the Trustee
without the possession of any of the Bonds or the production thereof in any trial or other proceedings
relating thereto and any such suit or proceeding instituted by the Trustee shall be brought in its name
as Trustee without the necessity of joining as plaintiffs or defendants any Bondholders, and any
recovery or judgment shall be for the mutual benefit as provided herein of all of the Bondholders of
the Outstanding Bonds.
Section 6.08. Remedies of Bondholders. No Bondholder shall have any right to institute
any suit, action or proceeding in equity or at law for the enforcement of this Indenture or for the
execution of any trust hereunder or for the appointment of a receiver or any other remedy hereunder,
unless (a) a default shall have occurred of which the Trustee shall have been notified as provided
herein; (b) such default shall have become an Event of Default under Section 6.01(b) hereof; (c) the
Bondholders of more than 51% of the Bonds then Outstanding with respect to which there is such an
Event of Default shall have made written request to the Trustee and shall have offered reasonable
opportunity to the Trustee either to proceed to exercise the powers hereinbefore granted or to institute
such action, suit or proceeding in its own name; (d) such Bondholders shall have offered to the
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Trustee indemnity as provided in this Indenture; and (e) the Trustee shall within sixty (60) days
thereafter fail or refuse to exercise the powers hereinbefore granted, or to institute such action, suit or
proceeding; it being understood and intended that no one or more Bondholders shall have any right in
any manner whatsoever to affect, disturb or prejudice the lien of this Indenture or the rights of any
other Bondholders or to obtain priority or preference over any other Bondholders or to enforce any
right under this Indenture, except in the manner herein provided with respect to the equal and ratable
benefit of all Bondholders with respect to which there is a default. Nothing contained in this
Indenture shall, however, affect or impair the right of any Bondholder to enforce the payment of the
principal of, the premium, if any, and interest on any Bond at the maturity thereof or the obligation of
the Issuer to pay the principal of, premium, if any, and interest on the Bonds issued hereunder to the
respective holders thereof, at the time, in the place, from the sources and in the manner expressed in
said Bonds.
Section 6.09. Termination of Proceedings. In case the Trustee shall have proceeded to
enforce any right under this Indenture by the appointment of a receiver, by entry or otherwise, and
such proceedings shall have been discontinued or abandoned for any reason, or shall have been
determined adversely, then and in every such case the Issuer, the Trustee, the Credit Facility
Provider, the Borrower and the Bondholders shall be restored to their former positions and rights
hereunder with respect to the Trust Estate herein conveyed, and all rights, remedies and powers of
the Trustee shall continue as if no such proceedings had been taken.
Section 6.10. Waivers of Events of Default. So long as no Event of Default has occurred
and is then continuing under Section 6.01(b) hereof, the Trustee shall waive any Event of Default
hereunder and its consequences and rescind any declaration of maturity of principal of, premium, if
any, and interest on the Bonds upon the written direction of the Credit Facility Provider. If there
shall have occurred and is then continuing an Event of Default under Section 6.01 (b) hereof, the
Trustee shall waive any Event of Default hereunder and its consequences and rescind any declaration
of maturity of principal of, premium, if any, and interest on the Bonds upon the written request of the
Bondholders of 100% of the Bonds then Outstanding with respect to which there is a default;
provided, however, that there shall not be waived (a) any Event of Default in the payment of the
principal of any Bonds (other than Purchased Bonds) at the date of maturity specified therein, or
upon proceedings for mandatory redemption or in the Purchase Price of any Bonds (other than
Purchased Bonds), (b) any default in the payment when due of the interest or premium on any such
Bonds (other than Purchased Bonds), unless prior to such waiver or rescission all arrears of interest,
with interest (to the extent permitted by law) at the rate borne by the Bonds in respect of which such
default shall have occurred on overdue installments of interest, or all arrears of payments of principal
or premium, if any, when due (whether at the stated maturity thereof or upon proceedings for
mandatory redemption), as the case may be, and the Issuer Fee then due, and all expenses of the
Trustee in connection with such default shall have been paid or provided for, and in case of any such
waiver or rescission, or in case any proceeding taken by the Trustee on account of any such default
shall have been discontinued or abandoned or determined adversely, then and in every such case the
Issuer, the Trustee, the Credit Facility Provider and the Bondholders shall be restored to their former
positions and rights hereunder, respectively, but no such waiver or rescission shall extend to any
subsequent or other default, or impair any right consequent thereto.
Section 6.11. Notice to Bondholders if Default Occurs. Upon the occurrence of an Event
of Default, or if an event occurs which could lead to a default with the passage of time and of which
the Trustee is required to take notice pursuant to Section 6.01 hereof, the Trustee shall, within thirty
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(30) days, give written notice thereof by first class mail to the registered Bondholders of all Bonds
then Outstanding. Notwithstanding the foregoing, except in the case of Event of Default with respect
to the payment of principal of or premium, if any, and interest on the Bonds, the Trustee shall be
protected in withholding such notice if and so long as the board of directors of the Trustee, the
executive committee, or a trust committee of directors or officers of the Trustee in good faith
determines that the withholding of such notice is in the best interests of the Bondholders.
(End of Article VI)
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ARTICLE VII
CONCERNING THE TRUSTEE
Section 7.01. Standard of Care. The Trustee, prior to an Event of Default as defined in
Section 6.01 and after the curing or waiver of all such events which may have occurred, shall
perform such duties and only such duties as are specifically set forth in this Indenture. The Trustee,
during the existence of any such Event of Default (which shall not have been cured or waived), shall
exercise such rights and powers vested in it by this Indenture and use the same degree of care and
skill in their exercise as a prudent person would exercise or use under the circumstances in the
conduct of such person's own affairs.
No provision of this Indenture shall be construed to relieve the Trustee from liability for its
own negligence or willful misconduct, except that:
(a) prior to an Event of Default hereunder, and after the curing of all such Events
of Default which may have occurred:
(i) the duties and obligations of the Trustee shall be determined solely by
the express provisions of this Indenture, and the Trustee shall not be liable except for
the performance of such duties and obligations as are specifically set forth in this
Indenture;
(ii) in the absence of bad faith on the part of the Trustee, the Trustee may
conclusively rely, as to the truth of the statements and the correctness of the opinions
expressed therein, upon any certificate or opinion furnished to the Trustee by the
person or persons authorized to furnish the same; and
(iii) the Trustee shall be under no obligation to exercise those rights or
powers vested in it by this Indenture, other than such rights and powers which it shall
be obliged to exercise in the ordinary course of its trusteeship under the terms and
provisions of this Indenture, at the request or direction of any of the Bondholders
pursuant to Sections 6.03 and 6.08 of this Indenture, unless such Bondholders shall
have offered to the Trustee reasonable security or indemnity against the costs,
expenses and liabilities which might be incurred by it in the compliance with such
request or direction;
(b) at all times, regardless of whether or not any such Event of Default shall
exist:
(i) the Trustee shall not be liable for any error of judgment made in good
faith by an officer or employee of the Trustee; and
(ii) the Trustee shall not be liable with respect to any action taken or
omitted to be taken by it in good faith in accordance with the direction of the Credit
Facility Provider or the Bondholders of more than 51% of the aggregate principal
amount of the Bonds then Outstanding (or such lesser or greater percentage as is
specifically required or permitted by this Indenture) relating to the time, method and
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place of conducting any proceeding for any remedy available to the Trustee, or
exercising any trust or power conferred upon the Trustee under this Indenture.
Section 7.02. Reliance Upon Documents. Except as otherwise provided in Section 7.01:
(a) the Trustee may rely upon the authenticity or truth of the statements and the
correctness of the opinions expressed in, and shall be protected in acting upon any resolution,
certificate, statement, instrument, opinion, report, notice, notarial seal, stamp, acknowledgment,
verification, request, consent, order, bond, or other paper or document of the proper party or parties;
(b) any notice, request, direction, election, order or demand of the Issuer
mentioned herein shall be sufficiently evidenced by an instrument signed in the name of the Issuer by
an Authorized Officer of the Issuer (unless other evidence in respect thereof be herein specifically
prescribed), and any resolution of the Issuer may be evidenced to the Trustee by a copy of such
resolution duly certified by the City Clerk of the Issuer;
(c) any notice, request, direction, election, order or demand of the Borrower
mentioned herein shall be sufficiently evidenced by an instrument purporting to be signed in the
name of the Borrower by any Authorized Officer of the Borrower (unless other evidence in respect
thereof be herein specifically prescribed), and any resolution or certification of the Borrower may be
evidenced to the Trustee by a copy of such resolution duly certified by a secretary or other authorized
representative of the Borrower;
(d) any notice, request, direction, election, order or demand of the Credit Facility
Provider mentioned herein shall be sufficiently evidenced by an instrument purporting to be signed in
the name of the Credit Facility Provider by any Authorized Officer of the Credit Facility Provider
(unless other evidence in respect thereof be herein specifically prescribed);
(e) any notice, request, direction, election, order or demand of the Rernarketing
Agent mentioned herein shall be sufficiently evidenced by an instrument purporting to be signed in
the name of the Rernarketing Agent by any Authorized Officer of the Rernarketing Agent (unless
other evidence in respect thereof be herein specifically prescribed);
(f) any notice, request, direction, election, order or demand of the Tender Agent
mentioned herein shall be sufficiently evidenced by an instrument purporting to be signed in the
name of the Tender Agent by any Authorized Officer of the Tender Agent (unless other evidence in
respect thereof be herein specifically prescribed);
(g) in the administration of the trusts of this Indenture, the Trustee may execute
any of the trusts or powers hereby granted directly or through its agents or attorneys, and the Trustee
may consult with counsel (who may be counsel for the Issuer) and the opinion or advice of such
counsel shall be full and complete authorization and protection in respect of any action taken or
permitted by it hereunder in good faith and in accordance with the opinion of such counsel;
(h) whenever in the administration of the trusts of this Indenture, the Trustee
shall deem it necessary or desirable that a matter be proved or established prior to taking or
permitting any action hereunder, such matters (unless other evidence in respect thereof be herein
specifically prescribed) may, in the absence of negligence or willful misconduct on the part of the
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Trustee, be deemed to be conclusively proved and established by a certificate of an officer or
authorized agent of the Issuer or the Borrower and such certificate shall in the absence of bad faith on
the part of the Trustee be full warrant to the Trustee for any action taken or permitted by it under the
provisions of this Indenture, but in its discretion the Trustee may in lieu thereof accept other evidence
of such matter or may require such further or additional evidence as it may deem reasonable;
(i) the recitals herein and in the Bonds (except the Trustee's Certificate of
Authentication thereon) shall be taken as the statements of the Issuer and the Borrower and shall not
be considered as made by or imposing any obligation or liability upon the Trustee. The Trustee
makes no representations as to the value or condition of the Trust Estate, or any part thereof, or as to
the title of the Issuer or the Borrower to the same, or as to the security of this Indenture, or of the
Bonds issued hereunder, and the Trustee shall incur no liability or responsibility in respect of any of
such matters;
(j) the Trustee shall not be personally liable for debts contracted or for damages
incurred in the management or operation of the Trust Estate; and every provision of this Indenture
relating to the conduct or affecting the liability of or affording protection to the Trustee shall be
subject to the provisions of this subsection (j);
(k) the Trustee shall not be required to ascertain or inquire as to the performance
or observance of any of the covenants or agreements herein or in any contracts or securities assigned
or conveyed to or pledged with the Trustee hereunder, except defaults that are evident under Section
6.01(a) or Section 6.01(b) hereof. The Trustee shall not be required to take notice or be deemed to
have notice or actual knowledge of any default or Event of Default specified in Section 6.01(c)
hereof unless the Trustee shall receive from the Credit Facility Provider, the Issuer, or the
Bondholders of more than 51 % of the aggregate principal amount of the Bonds then Outstanding
written notice stating that a default or Event of Default has occurred and specifying the same, and in
the absence of such notice the Trustee may conclusively assume that there is no such default. Every
provision contained in this Indenture or related instruments or in any such contract or security
wherein the duty of the Trustee depends on the occurrence and continuance of such default shall be
subject to the provisions of this subsection (k); and
(1) the Trustee shall be under no duty to confirm or verify any financial or other
statements or reports or certificates furnished pursuant to any provisions hereof, and shall be under
no other duty in respect of the same except to retain the same in its files and permit the inspection of
the same at reasonable times by the Bondholder of any Bond.
None of the provisions contained in this Indenture shall require the Trustee to expend or risk
its own funds or otherwise incur personal financial liability in the performance of any of its duties or
in the exercise of any of its rights or powers.
The Trustee is authorized and directed to execute in its capacity as Trustee the Financing
Agreement, the Intercreditor Agreement and the Tax Regulatory Agreement and shall have no
responsibility or liability with respect to any information, statement or recital in any offering
memorandum or other disclosure material prepared or distributed with respect to the issuance of the
Bonds.
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The Trustee or any of its affiliates may act as advisor or sponsor with respect to any
Qualified Investments.
Section 7.03. Use of Proceeds. The Trustee shall not be accountable for the use or
application by the Issuer of any proceeds of the Bonds except as provided in Articles II and V hereof.
Section 7.04. Trustee May Hold Bonds. The Trustee and its officers and directors may
acquire and hold, or become the pledgee of Bonds and otherwise deal with the Issuer and the
Borrower in the manner and to the same extent and like effect as though it were not Trustee
hereunder.
Section 7.05. Trust Imposed. All money received by the Trustee shall, until used or
applied as herein provided, be held in trust for the purposes for which they were received, but need
not be segregated from other moneys except to the extent required by law.
Section 7.06. Compensation of Trustee. The Trustee shall be entitled to its Trustee's Fees
and expenses in connection with the services rendered by it in the execution of the trusts hereby
created and in the exercise and performance of any of the powers and duties hereunder of the Trustee
to the extent moneys are available therefor, in accordance with Section 4.06 hereof, exclusive of
Extraordinary Services. The Trustee shall be entitled to Extraordinary Trustee's Fees and Expenses
in connection with any Extraordinary Services performed; provided the Trustee shall not incur any
Extraordinary Trustee's Fees and Expenses without the consent of the Credit Facility Provider. If
any property, other than cash, shall at any time be held by the Trustee subject to this Indenture, or
any supplemental indenture, as security for the Bonds, the Trustee, if and to the extent authorized by
a receivership, bankruptcy, or other court of competent jurisdiction or by the instrument subjecting
such property to the provisions of this Indenture as such security for the Bonds, shall be entitled to
make advances for the purpose of preserving such property or of discharging tax liens or other liens
or encumbrances thereon. The Trustee shall also be indemnified by the Borrower for, and held
harmless against, any loss, liability, expense or advance incurred or made without negligence or
willful misconduct on the part of the Trustee, arising out of or in connection with the acceptance of
this trust, including the costs and expenses of defending itself against any claim or liability in
connection with the Project. Payment to the Trustee for its services and reimbursement to the
Trustee for its expenses, disbursements, liabilities and advances, shall be limited to the sources
described in Section 4.06 hereof and in the Financing Agreement. The Issuer shall have no liability
for Trustee's fees, costs or expenses. Subject to the provisions of Section 7.09 hereof, the Trustee
agrees that it shall continue to perform its duties hereunder even in the event that moneys designated
for payment of its fees shall be insufficient for such purposes or in the event that the Borrower fails
to pay the Trustee's Fees and expenses, as required by the Financing Agreement.
Section 7.07. Maintenance of Office. There shall at all times be a Trustee hereunder which
shall be a corporation or association organized and doing business under the laws of the United
States of America or any state thereof, authorized under such laws to exercise corporate trust powers,
having its principal office and place of business in any state, having a combined capital and surplus
of at least Fifty Million Dollars ($50,000,000), and subject to supervision or examination by federal
or state authority. If such corporation or association publishes reports of condition at least annually,
pursuant to law or to the requirements of any supervising or examining authority above referred to,
then for the purposes of this Section the combined capital and surplus of such corporation or
association shall be deemed to be its combined capital and surplus as set forth in its most recent
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report of condition so published. In case at any time the Trustee shall cease to be eligible in
accordance with the provisions of this Section, the Trustee shall resign immediately in the manner
and with the effect specified in Section 7.09 hereof.
Section 7.08. Successor Trustee. Any corporation or association into which the Trustee
may be converted or merged, or with which it may be consolidated, or to which it may sell or transfer
its trust business and assets as a whole or substantially as a whole, or any corporation or association
resulting from any such conversion, sale, merger, consolidation or transfer to which it is a party shall,
ipso facto, be and become successor Trustee hereunder and vested with all the title to the Trust
Estate, and all other property contemplated hereby, and all the trusts, powers, discretions,
immunities, privileges and all other matters as was its predecessor, without the execution or filing of
any instruments or any further act, deed or conveyance on the part of any of the parties hereto,
anything herein to the contrary notwithstanding, and shall also be and become successor Trustee in
respect of the beneficial interest of the Trustee in the Bond Mortgage Loan.
Section 7.09. Resignation by the Trustee. The Trustee and any successor Trustee may at
any time resign from the trusts hereby created by giving written notice to the Issuer, the Borrower,
the Tender Agent, the Remarketing Agent and the Credit Facility Provider, and by giving notice by
certified mail or overnight delivery service to each Bondholder of the Bonds then Outstanding. Such
notice to the Issuer, the Borrower, the Tender Agent, the Remarketing Agent and the Credit Facility
Provider may be served personally or sent by certified mail. The Trustee shall not resign until a
successor Trustee has been appointed. If no successor Trustee shall have been appointed and have
accepted appointment within sixty (60) days following delivery of all required notices of resignation,
the resigning Trustee may petition any court of competent jurisdiction for the appointment of a
successor Trustee.
Section 7.10. Removal of the Trustee. The Trustee may be removed at any time, by an
instrument in writing signed by the Issuer with the consent of the Credit Facility Provider (which
consent shall not be unreasonably withheld) and delivered to the Trustee, the Borrower, the Tender
Agent, the Remarketing Agent and the Credit Facility Provider, and if an Event of Default shall have
occurred and be continuing, if other than an Event of Default under Section 6.01(b) by a written
instrument signed by the Credit Facility Provider and delivered to the Trustee, the Issuer, the
Borrower, the Tender Agent and the Remarketing Agent. If an Event of Default under Section
6.01(b) shall have occurred and be continuing the Trustee may be removed, by a written instrument
or concurrent instruments in writing signed by the Bondholders of more than 51% of the aggregate
principal amount of the Bonds then Outstanding and delivered to the Trustee, the Issuer, the
Borrower, the Tender Agent, the Remarketing Agent and the Credit Facility Provider. The Trustee
may also be removed for cause, at the direction of the Credit Facility Provider, by an instrument in
writing signed by the Issuer consenting to such removal (which consent of the Issuer shall not be
unreasonably withheld) and delivered to the Trustee and the Borrower. The Trustee may not be
removed until a successor Trustee has been appointed and has accepted such appointment.
Section 7.11. Appointment of Successor Trustee. In case the Trustee hereunder shall
resign or be removed, or be dissolved, or shall be in course of dissolution or liquidation, or otherwise
become incapable of acting hereunder, or in case it shall be taken under the control of any public
officer or officers, or of a receiver appointed by a court, a successor may be appointed by the Issuer
with the approval of the Credit Facility Provider, or if the Issuer is then in default hereunder, by the
Bondholders of more than 51% of the aggregate principal amount of the Bonds then Outstanding,
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with the approval of the Credit Facility Provider, by an instrument or concurrent instruments in
writing signed by such Bondholders, or by their duly authorized attorneys, delivered to the Issuer, the
Borrower, the Credit Facility Provider and such successor Trustee; provided, nevertheless, that in
case of vacancy the Issuer may appoint a temporary Trustee to fill such vacancy until a successor
Trustee shall be appointed by such Bondholders in the manner above provided; and any such
temporary Trustee so appointed by the Issuer shall immediately and without further act be
superseded by the Trustee so appointed by such Bondholders. Every such Trustee appointed
pursuant to the provisions of this Section shall be a trust company or bank with existing contractual
relationships with the Issuer to serve as Trustee organized under the laws of the United States of
America or any state thereof and which is in good standing, within or outside the State, having a
reported capital and surplus of not less than $50,000,000 and at least $50,000,000 in trust assets
under management if there be such an institution willing, qualified and able to accept the trust upon
reasonable or customary terms. Such successor Trustee shall agree to be the successor beneficiary
under the Bond Mortgage.
Section 7.12. Concerning Any Successor Trustee. Every successor Trustee appointed
hereunder shall execute, acknowledge and deliver to its predecessor and also to the Issuer an
instrument in writing accepting such appointment hereunder, accepting assignment of the beneficial
interest in the Bond Mortgage, and thereupon such successor, without any further act, deed or
conveyance, shall become fully vested with all the estates, properties, rights, powers, trusts, duties
and obligations of its predecessor; but such predecessor shall, nevertheless, on the written request of
the Issuer, the Borrower or the Credit Facility Provider, or of its successor, and upon payment of all
amounts due such predecessor, including but not limited to fees and expenses of counsel, execute and
deliver such instruments as may be appropriate to transfer to such successor Trustee all the estates,
properties, rights, powers and trusts of such predecessor hereunder; and every predecessor Trustee
shall deliver all securities and money held by it as Trustee hereunder to its successor. Should any
instrument in writing from the Issuer be required by a successor Trustee for more fully and certainly
vesting in such successor the estate, rights, powers and duties hereby vested or intended to be vested
in the predecessor, any and all such instruments in writing shall, on request, be executed,
acknowledged and delivered by the Issuer. The resignation of any Trustee and the instrument or
instruments removing any Trustee and appointing a successor hereunder, together with all other
instruments provided for in this Article, shall be filed and/or recorded by the successor Trustee in
each recording office where the Indenture shall have been filed and/or recorded.
Section 7.13. Successor Trustee as Trustee, Paying Agent and Bond Registrar. In the
event of a change in the office of Trustee, the predecessor Trustee which shall have resigned or shall
have been removed shall cease to be trustee and paying agent on the Bonds and Bond Registrar, and
the successor Trustee shall become such Trustee, Paying Agent and Registrar.
Section 7.14. Co-Trustee or Separate Trustee. It is the purpose of this Indenture that there
shall be no violation of any law of any jurisdiction (including particularly the laws of the State)
denying or restricting the right of banking corporations or associations to transact business as Trustee
in such jurisdiction. It is recognized that in case of litigation under or connected with this Indenture,
the Financing Agreement or any of the other Bond Financing Documents, and in particular in case of
the enforcement thereof upon an Event of Default, or in case the Trustee deems that by reason of any
present or future law of any jurisdiction it may not exercise any of the powers, rights or remedies
herein or therein granted to the Trustee or hold title to the properties, in trust, as herein granted, or
take any other action which may be desirable or necessary in connection therewith, the Issuer and the
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Trustee shall have power to appoint an institution or individual as a co-trustee or separate trustee, and
upon the request of the Trustee or of the Bondholders of at least ten percent (10%) of the aggregate
principal amount of the Bonds then Outstanding, the Issuer shall for such purpose join with the
Trustee in the execution, delivery and performance of all instruments and agreements necessary or
proper to appoint such institution or individual to act as co-trustee jointly with the Trustee or as a
separate trustee of all or any part of the Trust Estate, and to vest in such person or institution, in such
capacity, such title to the Trust Estate, or any part thereof, and such rights, powers, duties, trusts or
obligations as the Issuer and the Trustee may consider necessary or desirable, subject to the
remaining provisions of this Section.
If the Issuer shall not have made such appointment within thirty (30) days after the receipt by
it of a request so to do, or in case an Event of Default shall have occurred and be continuing, the
Trustee alone shall have the power to make such appointment.
The Trustee, the Issuer and the Borrower shall execute, acknowledge and deliver all such
instruments as may be required by any such co-trustee or separate trustee for more fully confirming
such title, rights, powers, trusts, duties and obligations to such co-trustee or separate trustee.
Every co-trustee or separate trustee shall, to the extent permitted by law, but to such extent
only, be appointed subject to the following terms, namely:
(a) all rights, powers, trusts, duties and obligations by this Indenture conferred
upon the Trustee in respect of the custody, control or management of money, papers, securities and
other personal property shall be exercised solely by the Trustee;
(b) all rights, powers, trusts, duties and obligations conferred or imposed upon
the Trustee shall be conferred or imposed upon or exercised or performed by the Trustee, or by the
Trustee and such co-trustee, or separate trustee jointly, as shall be provided in the instrument
appointing such co-trustee or separate trustee, except to the extent that under the law of any
jurisdiction in which any particular act or acts are to be performed the Trustee shall be incompetent
or unqualified to perform such act or acts, in which event such act or acts shall be performed by such
co-trustee or separate trustee;
(c) any request in writing by the Trustee to any co-trustee or separate trustee to
take or to refrain from taking any action hereunder shall be sufficient warrant for the taking or the
refraining from taking of such action by such co-trustee or separate trustee;
(d) any co-trustee or separate trustee to the extent permitted by law shall delegate
to the Trustee the exercise of any right, power, trust, duty or obligation, discretionary or otherwise;
(e) the Trustee at any time by an instrument in writing with the concurrence of
the Issuer evidenced by a certified resolution may accept the resignation of or remove any co-trustee
or separate trustee appointed under this Section and in case an Event of Default shall have occurred
and be continuing, the Trustee shall have power to accept the resignation of or remove any such co-
trustee or separate trustee without the concurrence of the Issuer, and upon the request of the Trustee,
the Issuer shall join with the Trustee in the execution, delivery and performance of all instruments
and agreements necessary or proper to effectuate such resignation or removal. A successor to any
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co-trustee or separate trustee so resigned or removed may be appointed in the manner provided in
this Section;
(f) no Trustee hereunder shall be personally liable by reason of any act or
omission of any other Trustee hereunder;
(g) any demand, request, direction, appointment, removal, notice, consent, waiver
or other action in writing executed by the Bondholders and delivered to the Trustee shall be deemed
to have been delivered to each such co-trustee or separate trustee; and
(h) any money, papers, securities or other items of personal property received by
any such co-trustee or separate trustee hereunder shall forthwith, so far as may be permitted by law,
be turned over to the Trustee.
Upon the acceptance in writing of such appointment, any such co-trustee or separate trustee
shall be vested with such title to the Trust Estate or any part thereof, and with such rights, powers,
duties, trusts or obligations as shall be specified in the instrument of appointment jointly with the
Trustee (except insofar as local law makes it necessary for any such co-trustee or separate trustee to
act alone) subject to all the terms of this Indenture. Every such acceptance shall be filed with the
Trustee and the Issuer.
In case any co-trustee or separate trustee shall die, become incapable of acting, resign or be
removed, the title to the Trust Estate and all rights, powers, trusts, duties and obligations of said co-
trustee or separate trustee shall, so far as permitted by law, vest in and be exercised by the Trustee
unless and until a successor co-trustee or separate trustee shall be appointed in the manner herein
provided.
The total compensation of the Trustee and co-trustee or separate trustee shall be as provided
in (and may not exceed the amount provided in) Section 7.06 hereof.
Section 7.15. Compliance of Borrower Under Tax Regulatory Agreement. The Trustee
shall give written notice to the Issuer and the Credit Facility Provider of any failure by the Borrower
to comply with the terms of the Tax Regulatory Agreement of which a Responsible Officer of the
Trustee has actual knowledge.
Section 7.16. Limitation on Action by Trustee. Notwithstanding anything in this Indenture
to the contrary, the Trustee shall not initiate or commence any proceeding for a declaratory judgment,
interpleader or similar action to determine the rights and duties of the parties hereunder or of the
Bondholders, without prior written notice to the Issuer and the Credit Facility Provider.
(End of Article VII)
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ARTICLE VIII
SUPPLEMENTAL INDENTURES AND
AMENDMENTS OF CERTAIN DOCUMENTS
Section 8.01. Supplemental Indentures Not Requiring Consent of Bondholders. The
Issuer and the Trustee may without the consent of, or notice to, any of the Bondholders, but with the
prior written consent of the Credit Facility Provider, and after written notice to the Rating Agency,
enter into an indenture or indentures supplemental to this Indenture as shall not be inconsistent with
the terms and provisions hereof or materially adverse to the Bondholders for any one or more of the
following purposes:
(a) to cure any ambiguity or formal defect or omission herein;
(b) to grant to or confer upon the Trustee for the benefit of the Bondholders any
additional rights, remedies, powers or authority that may lawfully be granted to or conferred upon the
Bondholders or the Trustee or either of them;
(c) to subject to the lien and pledge of this Indenture additional revenues,
properties or collateral;
(d) to modify, amend or supplement this Indenture or any indenture supplemental
hereto in such manner as to permit the qualification hereof and thereof under the Trust Indenture Act
of 1939, as amended, or any similar federal statute hereafter in effect or to permit the qualification of
the Bonds for sale under any state blue sky laws;
(e) in connection with any other change in this Indenture which will not
adversely affect the interest of the Trustee or the Bondholders;
(f) to insert such provisions as are, in the opinion of Bond Counsel, necessary to
maintain the exclusion from gross income for federal income tax purposes of interest on the Bonds;
(g) to modify or amend the Indenture as necessary to maintain the then current
rating on the Bonds, except no change may be made that will adversely affect the interests of the
Bondholders;
(h) during a Variable Period, to modify, alter, amend or supplement this
Indenture in any other respect, including amendments which would otherwise be described in Section
8.02 hereof, if notice of the proposed supplemental indenture is given to Bondholders (in the same
manner as notices of redemption are given) at least thirty (30) days before the effective date thereof
and, on or before such effective date, the Bondholders have the right to demand purchase of their
Bonds pursuant to Section 10.01 hereof; or
(i) to modify, alter, amend or supplement this Indenture in connection with the
delivery of any Alternate Credit Facility.
Section 8.02. Supplemental Indentures Requiring Consent of Bondholders. With the
prior written consent of the Credit Facility Provider, the Bondholders of more than 51% of the
aggregate principal amount of the Bonds then Outstanding shall have the right, from time to time, to
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consent to and approve the execution by the Issuer and the Trustee of such indenture or indentures
supplemental hereto as shall be deemed necessary and desirable by the Issuer 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 nothing in this Section contained shall
permit, or be construed as permitting, (a) an extension of the time for payment of or reduction in the
Purchase Price, or an extension of the time for payment of, or an extension of the stated maturity or
reduction in the principal amount or reduction in the rate of interest on or extension of the time of
payment of, interest on, or reduction of any premium payable on the redemption of, any Bonds, or a
reduction in the Borrower's obligation on the Bond Mortgage Note, without the consent of the
Bondholders of all of the Bonds then Outstanding, or (b) the creation of any lien prior to or on a
parity with the lien of this Indenture, or (c) a reduction in the aforesaid percentage of the principal
amount of Bonds which is required in connection with the giving of consent to any such
supplemental indenture, without the consent of the Bondholders of all of the Bonds then Outstanding,
or (d) the modification of the rights, duties or immunities of the Trustee, without the written consent
of the Trustee, or (e) a privilege or priority of any Bond over any other Bonds or (f) any action that
results in the interest on the Bonds becoming included in gross income for federal income tax
purposes.
If at any time the Issuer shall request the Trustee to enter into any such supplemental
indenture for any of the purposes of this Section, the Trustee shall, upon being satisfactorily
indemnified with respect to expenses, cause notice of the proposed execution of such supplemental
indenture to be mailed, postage prepaid, to all registered Bondholders, the Rating Agency and to the
Credit Facility Provider. Such notice shall briefly set forth the nature of the proposed supplemental
indenture and shall state that copies thereof are on file at the corporate trust office of the Trustee for
inspection by all Bondholders. A copy of such supplemental indenture shall be delivered to the
Credit Facility Provider no less than forty-five (45) days prior to the proposed effective date of such
supplemental indenture. If, within sixty (60) days or such longer period as shall be prescribed by the
Issuer following the mailing of such notice, the Bondholders of more than 51 % of the aggregate
principal amount of the Bonds then Outstanding at the time of the execution of any such
supplemental indenture shall have consented to and approved the execution thereof as herein
provided and the Credit Facility Provider shall have delivered to the Trustee its written consent to
such supplemental indenture, no Bondholder shall have any right to object to any of the terms and
provisions contained therein, or the operation thereof, or in any manner to question the propriety of
the execution thereof, or to enjoin or restrain the Trustee or the Issuer from executing the same or
from taking any action pursuant to the provisions thereof. Upon the execution of any such
supplemental indenture as in this Section permitted and provided, this Indenture shall be and be
deemed to be modified and amended in accordance therewith. The Trustee may rely upon an opinion
of counsel as conclusive evidence that execution and delivery of a supplemental indenture has been
effected in compliance with the provisions of this Article.
Anything in this Article VIII to the contrary notwithstanding, unless the Borrower shall then
be in default of any of its obligations under the Financing Agreement, the Reimbursement
Agreement, the Tax Regulatory Agreement, the Bond Mortgage Note or the Bond Mortgage, a
supplemental indenture under this Article which affects any rights of the Borrower shall not become
effective unless and until the Borrower shall have expressly consented in writing to the execution and
delivery of such supplemental indenture. In this regard, the Trustee shall cause notice of the
proposed execution and delivery of any such supplemental indenture to be mailed by certified or
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registered mail to the Borrower or the Borrower's attorney at least fifteen (15) days prior to the
proposed date of execution and delivery of any supplemental indenture.
Notwithstanding any other provision of this Indenture, the Issuer and the Trustee may
consent to any supplemental indenture upon receipt of the consent of the Credit Facility Provider and
of the Bondholders of all Bonds then Outstanding, and the Borrower.
Section 8.03. Amendments to Financing Agreement Not Requiring Consent of
Bondholders. The Trustee shall, without the consent of, or notice to, the Bondholders, but with the
consent of the Borrower and the Credit Facility Provider, consent to any amendment, change or
modification of the Financing Agreement as follows:
(a) as may be required by the provisions of the Credit Enhancement Agreement,
by the Financing Agreement or by this Indenture;
(b) to cure any ambiguity or formal defect or omission in the Financing
Agreement;
(c) in connection with any other change in the Financing Agreement which will
not materially adversely affect the interest of the Trustee or the Bondholders;
(d) to modify or amend the Financing Agreement as necessary to maintain the
then current rating on the Bonds;
(e) to make such additions, deletions or modifications as may be necessary, in the
opinion of Bond Counsel delivered to the Issuer, the Trustee and the Credit Facility Provider to
maintain the exclusion from gross income for federal income tax purposes of interest on the Bonds;
(f) during a Variable Period, to modify, alter, amend or supplement the Bond
Financing Documents in any other respect, if notice of the proposed amendments is given to
Bondholders (in the same manner as notices of redemption are given) at least thirty (30) days before
the effective date thereof and, on or before such effective date, the Bondholders have the right to
demand purchase of their Bonds pursuant to Section 10.01 hereof; or
(g) to modify, alter, amend or supplement the Financing Agreement in
connection with the delivery of an Alternate Credit Facility to the extent such modification,
alteration, amendment or supplement will not materially adversely affect the interest of the
Bondholders.
Section 8.04. Amendments to Financing Agreement Requiring Consent of Bondholders.
Except for the amendments, changes or modifications of the Financing Agreement as provided in
Section 8.03 hereof, neither the Issuer nor the Trustee shall consent to any other amendment, change
or modification of the Financing Agreement without the consent of the Credit Facility Provider and
the Borrower and without the giving of notice and the written approval or consent of the Bondholders
of at least 51% of the aggregate principal amount of the Bonds then Outstanding given and procured
in accordance with the procedure set forth in Section 8.02 hereof; provided, however, that nothing
contained in this Section 8.04 shall permit, or be construed as permitting, any amendment, change or
modification of the Borrower's obligation to make the payments required under the Financing
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Agreement. If at any time the Issuer and the Borrower shall request the consent of the Trustee to any
such proposed amendment, change or modification of the Financing Agreement, the Trustee shall
cause notice of such proposed amendment, change or modification to be given in the same manner as
provided in Section 8.02 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 Bondholders.
Notwithstanding any other provision of this Indenture, the Issuer and the Trustee may
consent to any amendment to the Financing Agreement upon receipt of the consent of the Credit
Facility Provider and of the Bondholders of all Bonds then Outstanding, and the Borrower.
Section 8.05. Amendments to the Credit Facility. The Trustee and the Issuer may, without
the consent of, or notice to, any of the Bondholders, enter into any amendment, change or
modification of the Credit Facility (a) as may be required by the provisions of the Credit Facility, (b)
to cure any ambiguity or formal defect or omission in the Credit Facility, (c) in a manner which is not
prejudicial to the interests of the Bondholders (which shall be conclusively evidenced by an opinion
of counsel delivered to the Trustee and the Issuer or by a written confirmation from the Rating
Agency of the then existing rating on the Bonds delivered to the Trustee and the Issuer), or (d) as
may be required to maintain the then current rating on the Bonds.
(End of Article VIII)
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ARTICLE IX
SATISFACTION AND DISCHARGE OF INDENTURE
Section 9.01. Discharge of Lien. If the Issuer shall pay or cause to be paid to the
Bondholders of the Bonds the principal, interest and premium, if any, to become due thereon at the
times and in the manner stipulated therein and herein, in any one or more of the following ways:
(a) by the payment of the principal of (including redemption premium, if any)
and interest on all Bonds outstanding; or
(b) by (i) the deposit or credit to the account of the Trustee, in trust, of money or
securities in the necessary amount (as provided in Section 9.04) to pay the principal, redemption
price or Purchase Price and interest to the date established for purchase or redemption (calculated at
the Maximum Rate to the extent the Bonds then bear interest at a Variable Rate) whether by
redemption, purchase or otherwise, and (ii) if the Bonds then bear interest at the Variable Rate, the
delivery to the Trustee of a written confirmation by the Rating Agency of the then existing rating on
the Bonds as of the date of such deposit or credit will not be withdrawn, qualified or reduced; or
(c) by the delivery to the Trustee, for cancellation by it, of all Bonds outstanding;
and shall have paid all amounts due and owing to the Credit Facility Provider under the
Reimbursement Agreement, and shall have paid all fees and expenses of the Issuer, the Trustee, the
Tender Agent, the Remarketing Agent and each Paying Agent, and if the Issuer shall keep, perform
and observe all and singular the covenants and promises in the Bonds and in this Indenture expressed
as to be kept, performed and observed by it or on its part, then these presents and the estates and
rights hereby granted shall cease, determine and be void, and thereupon the Trustee shall cancel and
discharge the lien of this Indenture and execute and deliver to the Issuer such instruments in writing
as shall be requisite to satisfy the lien hereof, and reconvey to the Issuer the estate hereby conveyed,
and assign and deliver to the Issuer any interest in property at the time subject to the lien of this
Indenture which may then be in its possession, except amounts held by the Trustee for the payment
of principal of, interest and premium, if any, on the Bonds, the payment of any amounts owed to the
United States pursuant to Section 4.11 or the payment of any amounts payable to the Credit Facility
Provider.
Any Outstanding Bond shall, prior to the maturity or redemption date thereof, be deemed to
have been paid within the meaning and with the effect expressed in the first paragraph of this Section
if, under circumstances which do not render interest on the Bonds subject to inclusion in the
Bondholders' gross income for purposes of federal income taxation, the following conditions shall
have been fulfilled: (a) in case such Bond is to be redeemed on any date prior to its maturity, the
Trustee shall have given to the Bondholder irrevocable notice of redemption on said date; (b) there
shall be on deposit with the Trustee either money or direct obligations of the United States of
America in an amount, together with anticipated earnings thereon (but not including any
reinvestment of such earnings), which will be sufficient to pay, when due, the principal or
redemption price, if applicable, and interest due and to become due on such Bond on the redemption
date or maturity date thereof, as the case may be; and (c) the Trustee shall have received an opinion
of nationally recognized bankruptcy counsel that payments from such moneys are not subject to
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Sections 544, 547 or 550 of the United States Bankruptcy Code or any other applicable bankruptcy
provisions.
The Trustee shall in no event cause the Bonds to be optionally redeemed from moneys
deposited pursuant to this Article IX unless the requirements of Article III have been met with
respect to such redemption, including the requirements of Section 3.01(a)(iii) or (iv) hereof.
Section 9.02. Discharge of Liability. Upon the deposit with the Trustee, in trust, at or
before maturity, of money or securities in the necessary amount (as provided in Section 9.04) to pay
or redeem outstanding Bonds (whether upon or prior to their maturity or the redemption date thereof)
provided that, if Bonds are to be redeemed prior to the maturity thereof, notice of such redemption
shall have been given as required in Article III or provision satisfactory to the Trustee shall have
been made for the giving of such notice, all liability of the Issuer in respect of such Bonds shall
cease, terminate and be completely discharged, except only that thereafter the holders thereof shall be
entitled to payment by the Issuer, and the Issuer shall remain liable for such payment, but only out of
the money or securities deposited with the Trustee as aforesaid for their payment, subject, however,
to the provisions of Section 9.03.
Section 9.03. Payment after Discharge of Indenture. Notwithstanding any provisions of
this Indenture, any moneys deposited with the Trustee or any paying agent in trust for the payment of
the principal of, or interest or premium on, any Bonds remaining unclaimed for two (2) years after
the principal of all the outstanding Bonds, or any interest thereon, has become due and payable
(whether at maturity or upon call for redemption or by declaration as provided in this Indenture),
shall then be paid to the Issuer, and the Bondholders of such Bonds shall thereafter be entitled to look
only to the Issuer for payment thereof, and only to the extent of the amount so paid to the Issuer, and
all liability of the Trustee or any paying agent with respect to such moneys shall thereupon cease. In
the event of the payment of any such moneys to the Issuer as aforesaid, the Bondholders in respect of
which such moneys were deposited shall thereafter be deemed to be unsecured creditors of the Issuer
for amounts equivalent to the respective amounts so paid to the Issuer and deposited for the payment
of such Bonds (without interest to such holders thereon).
Section 9.04. Deposit of Money or Securities with Trustee. Whenever in this Indenture it
is provided or permitted that there be deposited with or credited to the account of or held in trust by
the Trustee money or securities in the necessary amount to pay or redeem any Bonds, the money or
securities so to be deposited or held shall be Eligible Funds (or Government Obligations purchased
with Eligible Funds) constituting:
(a) lawful money of the United States of America in an amount equal to the
principal amount of such Bonds and all unpaid interest thereon to maturity, except that, in the case of
Bonds which are to be redeemed prior to maturity and in respect of which there shall have been
furnished to the Trustee proof satisfactory to it that notice of such redemption on a specified
redemption date has been duly given or provision satisfactory to the Trustee shall be made for such
notice, the amount so to be deposited or held shall be the principal amount of such Bonds and interest
thereon to the redemption date, together with the redemption premium, if any; or
(b) noncallable and nonprepayable direct obligations of the United States of
America or noncallable and nonprepayable obligations which as to principal and interest constitute
full faith and credit obligations of the United States of America, in such amounts and maturing at
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such times that the proceeds of said obligations received upon their respective maturities and interest
payment dates, without further reinvestment, will provide funds sufficient, in the opinion of a
nationally recognized firm of certified public accountants, to pay the principal, premium, if any, and
interest to maturity, or to the redemption date, as the case may be, with respect to all of the Bonds to
be paid or redeemed, as such principal, premium and interest become due; provided that the Trustee
shall have been irrevocably instructed by the Issuer to apply the proceeds of said obligations to the
payment of said principal, premium, if any, and interest with respect to such Bonds.
(End of Article IX)
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ARTICLE X
REMARKETING AND PURCHASE OF BONDS
Section 10.01. Demand for and Mandatory Purchase of Bonds. Any Bonds (other than
Purchased Bonds), or any units of principal amount thereof in Authorized Denominations, shall be
purchased from the proceeds of remarketing thereof as described in Section 10.03 or from the
sources prescribed in Section 10.04 hereof, (i) on demand of the owner of such Bond (or, so long as
Bonds are in "book-entry only" form pursuant to Section 2.12, demand of a DTC Participant, as
defined in Section 2.12 hereof, with respect to such Bonds) on any Business Day during a Variable
Period, or (ii) upon being tendered or deemed tendered pursuant to Section 2.02, 2.13 or 10.02
hereof, on any Reset Adjustment Date, Variable Rate Adjustment Date, the Conversion Date and any
Substitution Date (even if such Reset Adjustment Date, Variable Rate Adjustment Date, the
Conversion Date or any Substitution Date for which notice has been given by the Trustee to the
Bondholders fails to occur). Bonds shall be purchased for a Purchase Price equal to the principal
amount thereof, or of any units thereof purchased in Authorized Denominations, plus interest accrued
thereon, if any, to the Settlement Date. Bonds shall be purchased upon (a) in the case of a purchase
upon the demand of an owner or DTC Participant, delivery to the Tender Agent, with a copy to the
Trustee and the Remarketing Agent, of a written notice in the form set forth as Exhibit B hereto (a
"Tender Notice") which states (i) the principal amount of such Bond for which payment is
demanded, (ii) that such demand is irrevocable and (iii) the date on which such Bond or units of
principal amount thereof in Authorized Denominations shall be purchased pursuant to this Section
10.01, which date shall be a Business Day not prior to the seventh (7th) day next succeeding the date
of the receipt of the Tender Notice by the Tender Agent; and (b) in all cases, delivery of such Bond
(with an appropriate transfer of registration form executed in blank and in form satisfactory to the
Tender Agent) to the Tender Agent, at or prior to 9.30 a.m., New York, New York time, on the
Settlement Date. In the event that a depository is appointed pursuant to Section 2.12 hereof and a
"book-entry only" system is in effect with respect to the Bonds, delivery of Bonds for purchase on
the Settlement Date may be effected in the manner set forth by such depository.
Bonds not delivered to the Tender Agent on or prior to 9:30 a.m., New York, New York time,
on the Settlement Date shall be deemed tendered and purchased for all purposes of this Indenture and
interest shall cease to accrue on such Bonds on the related Settlement Date.
Payment of the Purchase Price of any Bond shall be made on the Settlement Date by check or
by wire transfer (if requested in writing by the Bondholder) or as designated in the Tender Notice
with respect to such Bond, but only upon delivery and surrender of such Bond to the Tender Agent.
If the Trustee shall have received the items required by Sections 2.02 or 2.13, as the case may
be, the Trustee shall (i) not later than the fifteenth (15th) day before any such Reset Adjustment Date,
Variable Rate Adjustment Date, the Conversion Date or Substitution Date (or, if such day is not a
Business Day, then on the next succeeding Business Day), notify the Tender Agent by telephone,
promptly confirmed in writing, with a copy to the Remarketing Agent and (ii) not later than the ninth
(9th) day before any such Reset Adjustment Date, Variable Rate Adjustment Date, Conversion Date
or Substitution Date, notify the Bondholders by first class mail, that all outstanding Bonds (other than
Purchased Bonds) shall be subject to mandatory tender and if not so tendered, shall be deemed to
have been tendered for purchase on each such Reset Adjustment Date or Variable Rate Adjustment
Date as provided in Section 2.02(b), Conversion Date as provided in Section 2.02(c) or the
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Substitution Date as provided in Section 2.13, at the Purchase Price. Such notices from the Trustee
shall be treated as a Tender Notice for all purposes of this Indenture, including this Section and
Article X hereof.
If all of the Bonds shall have been called for redemption during any Variable Period, the
Bonds may continue to be remarketed until the redemption date, provided the purchasers of such
Bonds are given notice of the call for redemption prior to purchase of any Bonds.
Anything herein to the contrary notwithstanding, no Bonds shall be purchased pursuant to
this Section or remarketed pursuant to Section 10.03 if an Event of Default hereunder (other than an
Event of Default under Section 6.01(c) hereof) shall have occurred and be continuing and would not
be cured as a result of such tender and remarketing of the Bonds; nor shall any Bond be purchased
pursuant to this Section if such Bond is registered in the name of the Issuer, the Borrower or the
Credit Facility Provider, or known by the Trustee (the Trustee shall have no duty to inquire as to any
such nominees) to be registered in the name of any general partner or guarantor of the Borrower or
any nominee of the Issuer, the Borrower, the Credit Facility Provider, or any such general partner or
guarantor unless the Credit Facility will be in full force and effect after such purchase with respect to
such Bonds.
Section 10.02. Mandatory Tender of Bonds.
(a) Bondholders shall be required to tender their Bonds to the Tender Agent on:
(i) any Reset Adjustment Date, Variable Rate Adjustment Date, or the
Conversion Date in accordance with the provisions of Section 2.02; and
(ii) any Substitution Date in accordance with and subject to the provisions
of Section 2.13.
(b) Any Bond required to be tendered on a Reset Adjustment Date, a Variable
Rate Adjustment Date, the Conversion Date or a Substitution Date which is not tendered as of such
date shall be deemed to have been tendered to the Tender Agent on such date and shall thereafter
cease to bear interest and no longer be considered to be Outstanding hereunder.
Section 10.03. Remarketing of Bonds. Upon the receipt by the Remarketing Agent of any
notice from the Tender Agent that any Bondholder (or DTC Participant, with respect to any Bonds in
"book-entry only" form) has delivered a Tender Notice pursuant to Section 10.01 hereof, or upon
receipt of any notice from the Trustee of Bonds deemed to have been tendered in accordance with the
provisions of Section 2.02(b), 2.02(c) or 2.13, the Remarketing Agent shall offer for sale and use its
best efforts to market the Bonds referred to in such Tender Notice or such notice from the Trustee
(which shall be deemed to be a Tender Notice as provided in Section 10.01) at a price of par plus
accrued interest to the Settlement Date, in accordance with the Remarketing Agreement; provided,
however, that the Remarketing Agent shall not offer for sale or sell such Bonds to the Issuer, the
Borrower or any general partner or any guarantor of the Borrower. The Remarketing Agent has no
obligation to remarket Bonds registered in the name of the Borrower, the Credit Facility Provider or
any general partner or guarantor of the Borrower unless the Credit Facility shall be in full force and
effect after such remarketing. On the Business Day immediately prior to each Settlement Date (each,
a "Remarketing Date"), the Remarketing Agent shall give telephonic notice, promptly confirmed in
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writing and transmitted by facsimile, to the Trustee, the Tender Agent, the Borrower and the Credit
Facility Provider by 11:00 a.m., New York, New York time, stating whether all tendered Bonds have
been remarketed successfully, specifying the names, addresses, and taxpayer identification numbers
of the purchasers of, and the principal amount and denominations of, such Bonds, if any, for which it
has found purchasers as of such Remarketing Date, and the Purchase Price at which the Bonds are to
be sold (which shall be par plus accrued interest to the Settlement Date). The Remarketing Agent
shall instruct such purchasers to deliver to the Tender Agent, no later than 9:30 a.m., New York, New
York time, on the Settlement Date, in immediately available funds, the amount required to purchase
such Bonds. Upon receipt by the Tender Agent of such amount from such purchasers, the Tender
Agent as co-authenticating agent, shall transfer the registered ownership of the Bonds to the
respective new purchasers and deliver such Bonds to such purchasers upon deposit of the Purchase
Price with the Tender Agent. The Tender Agent shall hold all Bonds delivered to it in trust for the
benefit of the respective Bondholders which shall have so delivered such Bonds until moneys
representing the Purchase Price of such Bonds shall have been delivered to or for the account of or to
the order of such Bondholders. The Tender Agent shall remit the Purchase Price of such Bonds to
the tendering Bondholder or Bondholders entitled to the same as provided in Section 10.01. In the
event that any purchaser which shall have been identified by the Remarketing Agent to the Trustee
and the Tender Agent shall fail to pay the Purchase Price for any Bonds prior to 10:00 a.m., New
York, New York time, on the Settlement Date, the Tender Agent shall not be obligated to accept such
amount after such time. The Tender Agent will immediately notify by telephone the Trustee, the
Credit Facility Provider, the Borrower and the Remarketing Agent of any such failure to receive the
Purchase Price for such Bonds. On the Settlement Date, the Tender Agent shall notify by telephone
the Trustee, the Credit Facility Provider, the Borrower and the Remarketing Agent of the amount of
funds held by the Tender Agent as of 10:00 a.m., New York, New York time, on such date
constituting the Purchase Price of the Bonds remarketed by the Remarketing Agent, promptly
confirmed in writing and transmitted by facsimile. The Tender Agent shall hold all moneys
delivered to it for the purchase of Bonds (including any remarketing proceeds or proceeds of draws
on the Credit Facility) in trust in a non-commingled account to be known as the "Bond Purchase
Fund" for the benefit of the person or entity which shall have so delivered such moneys until the
Bonds purchased with such moneys shall have been delivered to or for the account of such Person.
Such moneys shall be held uninvested except as directed in writing by the Credit Facility Provider
and then only in Qualified Investments of the type described in clauses (a) and (b) of the definition
thereof. The Issuer and the Borrower shall not have any right, title or interest in such moneys.
Except with respect to Bonds to be held under the terms of the Pledge Agreement and any
Bonds purchased in lieu of redemption or acceleration pursuant to the provisions hereof, the Issuer,
the Borrower or any general partner or any guarantor of the Borrower may not purchase any Bonds,
from the Remarketing Agent or otherwise.
Section 10.04. Purchase of Bonds not Remarketed. In the event that either the Tender
Agent shall not have received notice of successful remarketing of tendered Bonds by the day which
is one (1) Business Day prior to the Settlement Date, or the proceeds of remarketing of any tendered
Bond have not been received by the Tender Agent on or prior to 10:00 a.m., New York, New York
time on the Settlement Date, the Trustee shall, within the time required by the terms of the Credit
Facility, draw on the then existing Credit Facility in an amount sufficient to enable the Tender Agent
to pay the Purchase Price of each such Bond. On each Settlement Date, the Trustee shall pay or
cause to be paid to the Tender Agent the Purchase Price of any Bonds for which it has received a
Tender Notice and which have not been remarketed pursuant to Section 10.03 hereof, but only from
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(i) moneys obtained by the Trustee pursuant to the Credit Facility then in effect to enable the Trustee
to pay the Purchase Price of such tendered Bonds, which amounts shall be transferred by the Trustee
to the Tender Agent at or before 3:00 p.m., New York, New York time, on the Settlement Date; and
(ii) Eligible Funds from the Borrower to the extent that moneys obtained pursuant to (i) above are
insufficient on any date to pay the Purchase Price of tendered Bonds.
Upon receipt of such Purchase Price and upon receipt of the Bonds tendered for purchase
pursuant to Section 10.01 hereof, the Tender Agent shall pay such Purchase Price to the registered
owners thereof; provided, that if the Purchase Price was theretofore paid from the proceeds of a draw
on the Credit Facility, the Tender Agent shall pay such amount to the Credit Facility Provider. Any
amounts drawn under the Credit Facility to purchase Bonds shall be used solely for such purpose.
Any Bonds so purchased with amounts drawn under the Credit Facility by the Trustee shall be
purchased for the account of the Borrower and registered as provided in the Pledge Agreement.
Amounts drawn under the Credit Facility which are not used to purchase Bonds pursuant to this
Section 10.04 shall be remitted by the Trustee or the Tender Agent to the Credit Facility Provider
promptly upon payment of the Purchase Price of the Bonds.
Section 10.05. Remarketing Agent, The Issuer, with the approval of the Credit Facility
Provider and the Borrower, shall appoint a Remarketing Agent for the Bonds, subject to the
conditions set forth in this Section 10.05. The Remarketing Agent initially appointed hereunder is
Stern Brothers & Co. The Remarketing Agent shall designate to the Trustee its Principal Office and
signify its acceptance of the duties and obligations imposed upon it hereunder by execution of the
Remarketing Agreement. The Remarketing Agent shall, and shall agree in the Remarketing
Agreement to, do each of the following:
(a) act as agent for the Issuer in determining the interest rates to be borne by the
Bonds, act as agent for Bondholders in receiving and holding moneys to pay the Purchase Price
thereof;
(b) use its best efforts to remarket bonds tendered for purchase (including
Purchased Bonds) except in the circumstances described in the last paragraph of Section 10.01 and in
the Remarketing Agreement;
(c) notify the Trustee, the Credit Facility Provider, the Borrower and the Tender
Agent of the Variable Rate determined in accordance with Section 2.02(a) the Reset Rate determined
in accordance with Section 2.02(b) and the Fixed Rate determined in accordance with Section
2.02(c), on the Variable Interest Computation Date or other date required for such determination,
each such notification to be in writing or by telex or telecopier or other communication device which
produces a written record thereof, or by telephone confirmed within one Business Day by any such
written communication; and upon request by the Issuer, submit copies of any such notices to the
Issuer;
(d) hold all moneys delivered to it hereunder for the purchase of Bonds in trust
for the benefit of the Person which shall have so delivered such moneys until the Bonds purchased
with such moneys shall have been delivered to the Tender Agent, and not commingle such moneys
with other funds of the Remarketing Agent;
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(e) keep such books and records with regard to the remarketing of the Bonds as
shall be consistent with prudent industry practice and make such books and records available for
inspection by the Issuer, the Trustee, the Borrower and the Credit Facility Provider at all reasonable
times;
(f) perform the duties and comply with the provisions set forth in Article X
hereof; and
(g) notify the Tender Agent, the Trustee, the Borrower and the Credit Facility
Provider of the status of the remarketing of tendered Bonds one (1) Business Day prior to the
Settlement Date and if remarketing proceeds for all tendered Bonds have not been received by the
Remarketing Agent by 10:00 a.m., New York, New York time, on the Settlement Date.
Section 10.06. Qualifications and Resignation or Removal of Remarketing Agent,
(a) The initial and any successor Remarketing Agent shall be a commercial bank
or trust company or a member of the National Association of Securities Dealers, Inc., and authorized
by law to perform all the duties imposed upon it by this Indenture and the Remarketing Agreement.
(b) The Remarketing Agent may at any time resign and be discharged of the
duties and obligations created by this Indenture by giving at least sixty (60) days' written notice to
the Issuer, the Borrower, the Credit Facility Provider, the Trustee and the Tender Agent, but any such
resignation shall not be effective until a successor is appointed and has accepted such appointment.
(c) The Remarketing Agent may be removed (i) at any time by the Issuer with
the consent of the Credit Facility Provider (which consent shall not be unreasonably withheld,
conditioned or delayed), (ii) by direction of the Issuer at the request of the Credit Facility Provider
(which direction shall not be unreasonably withheld, conditioned or delayed) or (iii) by direction of
the Issuer at the request of the Borrower with the consent of the Credit Facility Provider (which
direction and consent shall not be unreasonably withheld, conditioned or delayed), in each case by an
instrument signed by an Authorized Officer of the Issuer filed with the Remarketing Agent, the
Borrower, the Credit Facility Provider, the Trustee and the Tender Agent (A) if the Remarketing
Agent suspends its remarketing efforts or (B) without cause, upon at least thirty (30) days' notice to
the Remarketing Agent. Any successor Remarketing Agent shall be selected by the Issuer with the
written consent of the Credit Facility Provider (unless the Credit Facility Provider shall have failed to
honor a properly presented and conforming draw under the Credit Facility) (which consent shall not
be unreasonably withheld, conditioned or delayed) and the written consent of the Borrower. No
removal of the Remarketing Agent shall be effective until a successor is appointed and has accepted
such appointment.
(d) In the event of the resignation or removal of the Remarketing Agent, the
Remarketing Agent shall pay over, assign and deliver any moneys held by it in such capacity to its
successor.
Section 10.07. Tender Agent. The Trustee, with the written consent of the Credit Facility
Provider, shall appoint the Tender Agent for the Bonds, subject to the conditions set forth in Section
10.08 hereof. The Trustee shall initially serve as the Tender Agent. The Tender Agent shall
designate to the Trustee its Principal Office and signify its acceptance of the duties and obligations
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imposed upon it hereunder by a written instrument of acceptance delivered to the Issuer, the Trustee
and the Remarketing Agent under which the Tender Agent acknowledges its qualifications and
authority to act as Tender Agent under this Indenture and agrees, particularly, as follows:
(1) The Tender Agent shall, upon receipt of a Tender Notice from any
Bondholder (or DTC Participant, with respect to a Bond in "book-entry only" form), give
prompt telephonic notice thereof to the Trustee and the Remarketing Agent, specifying the
amount of Bonds to be purchased and the Settlement Date, and shall, not later than the
following Business Day, confirm such telephonic notice in writing and deliver to the
Remarketing Agent, the Trustee and the Credit Facility Provider a copy of such Tender
Notice.
(2) On each Settlement Date, the Tender Agent shall give the Remarketing
Agent, the Credit Facility Provider and the Trustee telephonic notice, confirmed in writing by
the following Business Day, of the principal amount of Bonds delivered pursuant to Section
10.01.
(3) The Tender Agent shall hold all Bonds delivered to it pursuant to Section
10.01 in trust for the benefit of the respective Bondholders which shall have so delivered
such Bonds until such Bonds are required by this Indenture to be delivered to the respective
purchasers thereof.
(4) The Tender Agent shall cancel all Bonds for which it has received written
notice of remarketing from the Remarketing Agent and shall authenticate new Bonds in a like
aggregate principal amount in the names and in the denominations set forth in the written
notice given to the Tender Agent by the Remarketing Agent pursuant to Section 10.03 hereof.
(5) The Tender Agent shall deliver Bonds to the purchasers thereof in accordance
with Section 10.04 hereof. The Tender Agent shall remit the Purchase Price of tendered
Bonds to the tendering Bondholders in accordance with Section 10.03 hereof.
(6) The Tender Agent shall deliver to the Trustee all tendered Bonds canceled.
(7) The Tender Agent shall keep such books and records as shall be consistent
with prudent industry practice and shall make such books and records available for inspection
by the Issuer, the Trustee and the Credit Facility Provider at all reasonable times.
(8) The Tender Agent shall send to the Trustee a copy of its transfer journal
evidencing all changes in registration of the Bonds within two (2) days of making such
changes.
The Tender Agent shall pay to tendering Bondholders the Purchase Price of any Bonds for
which it has received a Tender Notice and which have not been remarketed pursuant to Section 10.03
hereof, but solely from the sources listed in Section 10.04 hereof; and the Tender Agent shall pay to
tendering Bondholders the Purchase Price of any Bonds for which it has received a Tender Notice
and which have been remarketed pursuant to Section 10.03 hereof, but solely from amounts received
from the Remarketing Agent.
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Section 10.08. Qualifications of Tender Agent. The Tender Agent shall be a commercial
bank or trust company with a principal office, or with an affiliate with an office, in New York, New
York, having a capitalization of at least $10,000,000 and authorized by law to perform all the duties
imposed upon it by this Indenture; provided that, in any event, the Trustee may serve as the Tender
Agent so long as the Bonds are in "book-entry-only" form. The Tender Agent shall be an affiliate of
the Trustee (unless the Tender Agent is the Trustee), unless the Trustee has no affiliate meeting the
requirements of the first sentence of this Section, in which case the selection of the Tender Agent
shall be an entity appointed by the Trustee with the written consent of the Credit Facility Provider
and the Borrower.
The Tender Agent may at any time resign and be discharged by giving at least sixty (60)
days' notice to the Trustee, the Issuer, the Borrower and the Credit Facility Provider. The Tender
Agent may be removed at any time, with the written consent of the Credit Facility Provider, by an
instrument signed by the Trustee and filed with the Tender Agent, the Remarketing Agent and the
Issuer.
In the event of the resignation or removal of the Tender Agent, the Tender Agent shall pay
over, assign and deliver any moneys and Bonds held by it in such capacity, and shall deliver all
books and records relating thereto, to its successor or, if there be no successor, to the Trustee.
In the event that the Trustee shall fail to appoint a Tender Agent hereunder, or in the event
that the Tender Agent shall resign or be removed, or be dissolved, or if the property or affairs of the
Tender Agent shall be taken under the control of any state or federal court or administrative body
because of bankruptcy or insolvency, or for any other reason, and the Trustee shall not have
appointed its successor as Tender Agent, the Trustee, notwithstanding the provisions of the first
paragraph of this Section 10.08, shall be deemed to be the Tender Agent for all purposes of this
Indenture until the appointment by the Trustee of the Tender Agent or a successor Tender Agent, as
the case may be, notwithstanding the fact that the Trustee may not meet the qualifications set forth in
the first paragraph of this Section 10.08.
Insofar as such provisions may be applicable, the Tender Agent shall enjoy the same
protective provisions in the performance of its duties hereunder as are specified in Sections 7.01 and
7.02 with respect to the Trustee. The Tender Agent shall perform such duties, and only such duties,
as are specifically set forth in this Indenture and no implied covenants shall be read into this
Indenture against the Tender Agent.
Section 10.09. Dealing in Bonds. The Credit Facility Provider, the Trustee, the Tender
Agent or the Remarketing Agent, in its individual capacity, may each in good faith buy, sell, own,
hold and deal in any of the Bonds, and may join in any action which any Bondholder may be entitled
to take with like effect as if it did not act in any capacity hereunder. The Trustee, the Tender Agent,
the Credit Facility Provider or the Remarketing Agent, in its individual capacity, either as principal
or agent, may also engage in or be interested in any financial or other transaction with the Issuer or
the Credit Facility Provider, and may act as depository, trustee or agent for any committee or body of
Bondholders secured hereby or other obligations of the Issuer as freely as if it did not act in any
capacity hereunder. It is expressly understood that the Trustee and the Tender Agent in carrying out
their respective duties hereunder shall each be acting as a conduit with respect to deliveries of Bonds
for purchase pursuant to Section 10.01 hereof.
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Section 10.10. Purchased Bonds.
(a) Unremarketed Bonds as Purchased Bonds; No Credit Facility Support.
Bonds for which the Purchase Price is funded with moneys provided under the Credit Facility and
which are not remarketed in accordance with the Remarketing Agreement shall be deemed to be
Purchased Bonds. The Credit Facility shall not constitute security for or provide liquidity for
Purchased Bonds.
(b) Ownership and Pledge of Purchased Bonds. Purchased Bonds shall be
owned by the Borrower and held by the Trustee, subject to a security interest in favor of the Credit
Facility Provider under the Pledge Agreement. As set forth in the Pledge Agreement, the Tender
Agent shall either (i) ensure that Purchased Bonds are delivered to the Trustee under the Pledge
Agreement or (ii) if, and only if, delivery of the Bonds is not possible, deliver a written entitlement
order to the applicable financial intermediaries on whose records ownership of the Purchased Bonds
is reflected directing the intermediaries to credit the security entitlement to the Purchased Bonds to
the account of the Trustee for the benefit of the Credit Facility Provider and deliver to the Trustee a
written confirmation of such credit, whether or not the Borrower notifies the Remarketing Agent to
do so.
(c) Payment Failure Not a Default. Failure to pay interest on Purchased Bonds
when due or failure to pay principal and interest on Purchased Bonds upon any redemption date or
Settlement Date or the Maturity Date shall not constitute an Event of Default. Upon the Maturity
Date, any redemption date or Settlement Date, all Purchased Bonds shall be deemed canceled.
Purchased Bonds shall also be canceled upon direction of the Credit Facility Provider.
(d) Remarketing of Purchased Bonds. At such time as Purchased Bonds are
remarketed by the Remarketing Agent (i) the Trustee or the Tender Agent, as appropriate, shall remit
the proceeds of the remarketing to the Credit Facility Provider to reimburse the Credit Facility
Provider for amounts paid under the Credit Facility to purchase the Bonds, (ii) the Trustee or Tender
Agent, as appropriate, upon receipt of notice from the Credit Facility Provider that it has received
reimbursement for the amount provided under the Credit Facility (or notice from the Tender Agent
that the Tender Agent has received funds that it will immediately remit to the Credit Facility
Provider) and that the Credit Facility has been reinstated in accordance with its terms, the Trustee
shall release all remarketed Purchased Bonds in accordance with the Pledge Agreement and (iii) the
Trustee or the Tender Agent shall give written notice to the Remarketing Agent, the Borrower and
the Credit Facility Provider that such Bonds are no longer Purchased Bonds.
(End of Article X)
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ARTICLE XI
MISCELLANEOUS
Section 11.01. Consents and Other Instruments of Bondholders. Any consent, request,
direction, approval, waiver, objection, appointment or other instrument required by this Indenture to
be signed and executed by the Bondholders may be signed and executed in any number of concurrent
writings of similar tenor and may be signed or executed by such Bondholders in person or by agent
appointed in writing. Proof of the execution of any such instrument, if made in the following
manner, shall be sufficient for any of the purposes of this Indenture, and shall be conclusive in favor
of the Trustee with regard to any action taken under such instrument, namely:
(a) the fact and date of the execution by any person of any such instrument may
be proved by the affidavit of a witness of such execution or by the certificate of any notary public or
other officer of any jurisdiction, authorized by the laws thereof to take acknowledgments of deeds,
certifying that the person signing such instrument acknowledged the execution thereof. Where such
execution is by an officer of a corporation or association or a member of a partnership on behalf of
such corporation, association or partnership, such affidavit or certificate shall also constitute
sufficient proof of such authority;
(b) the ownership of registered Bonds shall be proved by the Bond Register;
(c) any request, consent or vote of the Bondholder of any Bond shall bind every
future Bondholder of the same Bond and the Bondholder of every Bond issued in exchange therefor
or in lieu thereof, in respect of anything done or permitted to be done by the Trustee or the Issuer in
pursuance of such request, consent or vote; and
(d) in determining whether the Bondholders of the requisite percentage of the
principal amount of Bonds then Outstanding have concurred in any demand, request, direction,
consent or waiver under this Indenture, Bonds which are owned by the Issuer or the Borrower or by
any person directly or indirectly controlling or controlled by or under direct or indirect common
control with the Issuer or the Borrower shall be disregarded and deemed not to be Outstanding for the
purpose of determining whether the Trustee shall be protected in relying on any such demand,
request, direction, consent or waiver unless all Outstanding Bonds shall be owned or controlled by
either the Issuer or the Borrower. Only Bonds which the Trustee knows to be so owned shall be
disregarded. Bonds so owned which have been pledged in good faith may be regarded as
Outstanding for the purposes of this Section if the pledgee shall establish to the satisfaction of the
Trustee the pledgee's right to vote such Bonds. In case of a dispute as to such right, any decision by
the Trustee taken upon the advice of counsel shall be full protection to the Trustee.
Section 11.02. Limitation of Rights. With the exception of rights herein expressly
conferred, nothing expressed or to be implied from this Indenture or the Bonds is intended or shall be
construed to give to any person other than the Parties hereto, the Credit Facility Provider, the
Borrower and the Bondholders of the Bonds, any legal or equitable right, remedy or claim under or in
respect to this Indenture or any covenants, conditions and provisions hereof.
Section 11.03. Construction of Conflicts; Severability. Notwithstanding anything provided
herein, or in any of the documents referred to herein, in the event that any contracts or other
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documents executed by the Borrower or any other arrangements agreed to by the Borrower in order
to finance or refinance the Project with the proceeds of the Bonds are inconsistent with the Bond
Mortgage Loan Documents, then the Bond Mortgage Loan Documents shall be controlling in all
respects. If any provision of this Indenture shall be held or deemed to be, or shall in fact be
inoperative or unenforceable as applied in any particular case in any jurisdiction or jurisdictions or in
all jurisdictions, or in all cases because it conflicts with any other provision or provisions hereof or
any constitution, statute, rule of law or public policy, or for any other reason, such circumstances
shall not have the effect of rendering the provision in question inoperative or unenforceable in any
other case or circumstance, or of rendering any other provision or provisions herein contained
invalid, inoperative, or unenforceable to any extent whatever.
The invalidity of any one or more phrases, sentences, clauses or sections in this Indenture
contained, shall not affect the remaining portions of this Indenture, or any part thereof.
Section 11.04. Notices.
(a) Any provision of this Indenture relating to the mailing of notice or other
communication to Bondholders shall be deemed fully complied with if such notice or other
communication is mailed, by first class mail, postage prepaid, to each registered owner of any Bonds
then Outstanding at the address of such registered owner as it appears on the Bond Register.
Whenever in this Indenture the giving of notice by mail or otherwise is required, the giving of such
notice may be waived in writing by the person entitled to receive such notice and in any such case the
giving or receipt of such notice shall not be a condition precedent to the validity of any action taken
in reliance upon such waiver.
Any notice, request, complaint, demand, communication or other paper required or permitted
to be delivered to the Issuer, the Trustee, the Credit Facility Provider or the Borrower shall be
sufficiently given and shall be deemed given (unless another form of notice shall be specifically set
forth herein) on the Business Day following the date on which such notice or other communication
shall have been delivered to a national overnight delivery service (receipt of which to be evidenced
by a signed receipt from such overnight delivery service) addressed to the appropriate party at the
addresses set forth below. The Issuer, the Trustee, the Credit Facility Provider or the Borrower may,
by notice given as provided in this paragraph, designate any further or different address to which
subsequent notices or other communication shall be sent.
The Issuer: City of Carlsbad, California
2965 Roosevelt Street, Suite B
Carlsbad, California 92008-2389
Attn: Housing and Redevelopment Director
Telephone: (760) 434-2810
Telecopy: (760) 720-2037
The Trustee: U.S. Bank National Association
633 West Fifth Street, 24th Floor
Los Angeles, California 90071
Attention: Corporate Trust Services
Telephone: (213)615-6062
Telecopy: (213)615-6199
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The Borrower:
with a copy to:
Credit Facility
Provider:
with a copy to:
Remarketing Agent:
Santa Fe Ranch, LLC
c/o Henderson Global Investors (North America) Inc.
One Financial Plaza, 19th Floor
Hartford, Connecticut
Attention: James G. Martha
Telephone: (860) 723-8701
Telecopier: (860) 723-8601
Locke Lord Bissell & Liddell LLP
2200 Ross Avenue, Suite 2200
Dallas, Texas 75201
(which copy shall not constitute notice to
Borrower)
Attention: Mike Petersilia, Esq.
Telephone: (214)740-8690
Telecopier: (214) 740-8800
Wells Fargo Bank, National Association
123 N. Wacker Drive, Suite 1900
Chicago, Illinois 60606
Attention: Brett Hill
Facsimile: (312)269-4812
Telephone: (312)782-0969
Wells Fargo Bank, N.A.
Minneapolis Loan Center
608 2nd Avenue South, 11th Floor
Minneapolis, Minnesota 55402
Attention: Manager
Stern Brothers & Co.
8000 Maryland, Suite 8020
St. Louis, Missouri 63105
Attention: Bob Swanger
Telephone: (314)743-4009
Telecopier: (314)727-7313
Stern Brothers & Co.
125 Town Park Drive, Suite 300
Kennesaw, Georgia 30144
Attention: Short Term Desk
Fax: ( ) -
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S&P: Standard & Poor's
55 Water Street
New York, New York 10043
Attention: Housing Group Surveillance
Telephone: (212)438-2063
Facsimile: (212)438-2157
(b) The Trustee shall provide to the Credit Facility Provider (i) prompt notice of
the occurrence of any Event of Default pursuant to Section 6.01 hereof and (ii) any written
information or other communication received by the Trustee hereunder within ten (10) Business
Days of receiving a written request from the Credit Facility Provider for any such information or
other communication. The Trustee shall provide to the Rating Agency any information requested by
the Rating Agency needed to maintain the rating on the Bonds.
(c) The Trustee shall provide to the Rating Agency notice of (a) any change in
Trustee or Remarketing Agent hereunder, (b) any material amendment to any of the Bond Financing
Documents, (c) any substitution, termination, expiration or extension of the Credit Facility (d) any
change of the interest rate on the Bonds to a Reset Rate or the Fixed Rate, (e) any mandatory tender,
acceleration or redemption in whole or defeasance of the Bonds and (f) Conversion.
Section 11.05. Trustee as Paying Agent and Bond Registrar. The Trustee is hereby
designated and agrees to act as Paying Agent and Bond Registrar for and in respect to the Bonds.
Section 11.06. Payments Due on Non-Business Days. In any case where a date of payment
with respect to any Bonds shall be a day other than a Business Day, then such payment need not be
made on such date but may be made on the next succeeding Business Day with the same force and
effect as if made on such date, and no interest shall accrue for the period after such date providing
that payment is made on such next succeeding Business Day.
Section 11.07. 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 11.08. Laws Governing Indenture and Administration of Trust. The effect and
meanings of this Indenture and the rights of all parties hereunder shall be governed by, and construed
according to, the laws of the State without regard to conflicts of laws principles.
Section 11.09. No Recourse. No recourse under or upon any obligation, covenant or
agreement contained in the Indenture or in any Bond shall be had against any member, officer,
commissioner, director or employee (past, present or future) of the Issuer, either directly or through
the Issuer or its governing body or otherwise, for the payment for or to the Issuer or any receiver
thereof, or for or to the Bondholder of any Bond issued hereunder, or otherwise, of any sum that may
be due and unpaid by the Issuer or its governing body upon any such Bond. Any and all personal
liability of every nature whether at common law or in equity or by statute or by constitution or
otherwise of any such member, officer, commissioner, director or employee, as such, to respond by
reason of any act or omission on his/her part or otherwise, for the payment for or to the Bondholder
of any Bond issued hereunder or otherwise of any sum that may remain due and unpaid upon any
Bond hereby secured is, by the acceptance hereof, expressly waived and released as a condition of
and in consideration for the execution of the Indenture and the issuance of the Bonds.
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Section 11.10. Successors and Assigns. All the covenants and representations contained in
this Indenture by or on behalf of the parties hereto shall bind and inure to the benefit of their
successors and assigns, whether so expressed or not.
[Signatures follow]
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IN WITNESS WHEREOF, the Issuer and the Trustee have caused this Indenture of Trust to
be executed and delivered by duly authorized officers thereof as of the day and year first written
above.
(SEAL)
Attest:
City Clerk
CITY OF CARLSBAD, CALIFORNIA
By:
City Manager
U.S. BANK NATIONAL ASSOCIATION, as Trustee
By:
Its: Authorized Officer
DOCSOC\892810\22062.0028
DOCSOC/1480309v4/022062-0029
S-l
Consenting Signature of provider of Credit Facility
WELLS FARGO BANK, NATIONAL
ASSOCIATION
By:
Authorized Officer
Consenting Signature of Borrower:
SANTA FE RANCH, LLC, a Delaware limited
liability company
By: CASA PARTNERS II, L.P., an Illinois limited
partnership, its sole member
By: Henderson Global Investors GP,
L.L.C., a Delaware limited liability
company, its general partner
By:
Brian Eby
Vice President
S-2
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