HomeMy WebLinkAbout1995-06-27; Industrial Development Authority; 002 Exhibit 3; IndentureINDUSTRIAL DEVELOPMENT AUTHORITY
OF THE CITY OF CARLSBAD, CALIFORNIA
and
FIRST INTERSTATE BANK OF CALIFORNIA,
Trustee
INDENTURE
Dated as of July 1, 1995
$1,102,500
INDUSTRIAL DEVELOPMENT AUTHORITY OF
THE CITY OF CARLSBAD, CALIFORNIA
INDUSTRIAL REVENUE BONDS
(AALTO PROJECT)
SERIES 1995
LA01/80244.1
06-01-95
TABLE OF CONTENTS
Pase
RECITALS .......................... 1
ARTICLE I . : DEFINITIONS; CONTENT OF CERTIFICATES AND
OPINIONS ................... 2
SECTION 1.01 Definitions ............... 2
SECTION 1.03 Interpretation .............. 15
SECTION 1.02 Content of Certificates and Opinions ... 14
ARTICLE I1 .. THE BONDS .................. 15
SECTION
SECTION
SECTION SECTION SECTION
SECTION
SECTION
SECTION
ARTICLE I11 . .
2.01 Authorization of Bonds .......... 15
2.02 General Terms of the Bonds ........ 15
2.03 Interest Rates .............. 16
2.04 Execution of Bonds ............ 19
2.05 Transfer of Bond ............. 20
2.06 Bond Register .............. 20
2.07 Temporary Bonds .............. 21
2.08 Bonds Mutilated, Lost. Destroyed or
Stolen .................. 21
ISSUANCE OF BONDS; CONSTRUCTION FUND 22
SECTION 3.01 Issuance of the Bonds .......... 22
SECTION 3.02 Establishment of Construction Fund .... 22
SECTION 3.03 Use of Moneys in Construction Fund .... 22
SECTION 3.04 Completion of Project .......... 22
ARTICLE IV .. REDEMPTION AND PURCHASE OF BONDS ....... 23
SECTION 4.01 Terms of Redemption ........... 23
SECTION 4.03 Notice of Redemption ........... 26
SECTION 4.04 Partial Redemption of Bonds ....... 26
SECTION 4.05 Effect of Redemption ........... 26
SECTION 4.02 Selection of Bonds for Redemption .... 25
ARTICLE V . . REVENUES; FUNDS AND ACCOUNTS; PAYMENT OF
PRINCIPAL AND INTEREST ............ 27
SECTION 5.01 Pledge and Assignment; Revenue Fund ... 27
SECTION 5.02 Allocation of Revenues .......... 28
SECTION 5.03 Use of Moneys in Revenue Fund ...... 28
SECTION 5.04 Investment of Moneys ........... 28
SECTION 5.05 Rebate Fund ............... 30
ARTICLE VI .. PARTICULAR COVENANTS ............. 31
SECTION 6.01 Punctual Payment ............. 31
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SECTION SECTION SECTION
SECTION SECTION
SECTION
SECTION
SECTION
6.02
6.03
6.04
6.05
6.06
6.07
6.08
6.09
Extension of Payment of Bonds ...... 31
Power to Issue Bonds and Make Pledge and
Assignment ................ 32
Accounting Records and Reports ...... 32
Arbitrage Covenants ........... 32
Other Covenants ............. 34 Waiver of Laws .............. 34
Further Assurances ............ 34
Against Encumbrances ........... 32
ARTICLE VI1 . . EVENTS OF DEFAULT AND REMEDIES OF BONDHOLDERS ................. 35
SECTION
SECTION
SECTION
SECTION
SECTION
SECTION
SECTION
SECTION
SECTION
7.01 Events of Default; Acceleration; Waiver
7.02 Institution of Legal Proceedings by
7.05 Right of Bondholder to Direct
7.06 Limitation on Bondholders'
of Default ................ 35
Trustee ................. 36
7.04 Trustee to Represent Bondholders ..... 37
Proceedings ............... 38
Right to Sue ............... 38
7.07 Absolute Obligation of Authority ..... 39
7.08 Termination of Proceedings ........ 39
7.09 Remedies Not Exclusive .......... 39
7.10 No Waiver of Default ........... 39
ARTICLE VI11 . . THE TRUSTEE. THE PAYING AGENT. AND THE BOND REGISTRAR ............ 40
SECTION 8.01
SECTION 8.02
SECTION 8.03 SECTION 8.04 SECTION 8.05
SECTION 8.06
SECTION 8.07
SECTION 8.08
SECTION 8.09
SECTION 8.10 SECTION 8.11
Duties. Immunities and Liabilities of
Trustee ................. 40
Merger or Consolidation ......... 43
Liability of Trustee ........... 43
Right of Trustee to Rely on Documents . . 45
Preservation and Inspection of
Documents ................ 45
Paying Agent ............... 46 Appointment and Duties of Bond Registrar ................ 46 Eligibility of Bond Registrar ...... 46
Bond Registrar's Performance of Duties . . 47
Compensation and Indemnification ..... 46
Replacement of Bond Registrar ...... 47
ARTICLE IX . . MODIFICATION OR AMENDMENT OF THE
INDENTURE .................. 47
SECTION 9.01 Amendments Permitted ........... 47
SECTION 9.02 Effect of Supplemental Indenture ..... 48
SECTION 9.03 Endorsement of Bonds; Preparation of New
Bonds .................. 49
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ARTICLE X . :
SECTION
SECTION
SECTION
ARTICLE XI . .
SECTION
SECTION
SECTION
SECTION SECTION SECTION SECTION SECTION SECTION
SECTION
SECTION
SECTION
SECTION
SECTION
SECTION
DEFEASANCE ...............
10.01 Discharge of Indenture .......
10.02 Discharge of Liability on Bonds . .
10.03 Deposit of Money or Securities with
Trustee ..............
MISCELLANEOUS .............
11.01
11.02
11.03
11.04
11.05
11.06
11.07
11.08
11.09
11.10
11.11
11.12
11.13
11.14
11.15
Liability of Authority Limited to Revenues ..............
Successor Is Deemed Included in All
References to Predecessor .....
Limitation of Rights to Parties and
Bondholders ............
Waiver of Notice ..........
Destruction of Bonds ........
Severability of Invalid Provisions .
Governing Law ...........
Arbitration ............
Notices ..............
Evidence of Rights of Bondholder . . Disaualified Bonds ......... Mongy Held for Payment of the Bonds . Funds and Accounts ..........
Execution in Several Counterparts . . Waiver of Personal Liability .....
49
49
50
50
51
51
52
52
52
52
52
53
53
56
57
57
58
58
59
58
EXHIBIT A .......................... 1
TRUSTEE’S CERTIFICATE OF AUTHENTICATION ........... 13
SCHEDULE OF PRINCIPAL PAYMENTS ............... 14
ASSIGNMENT ......................... 15
LA01/80244.1
06-01-95
THIS INDENTURE, made and entered into as of the first
day of July, 1995 by and between THE INDUSTRIAL DEVELOPMENT AUTHORITY OF THE CITY OF CARLSBAD, a public instrumentality of the State of California (the rrAuthorityrr), and FIRST INTERSTATE
BANK OF CALIFORNIA, a banking corporation organized and existing
under and by virtue of the laws of the State of California having
a corporate trust office in Los Angeles, California, and being qualified to accept and administer the trusts hereby created (the
rrTrusteell ) ;
RECITALS
WHEREAS, the Authority is authorized and empowered by
the provisions of the California Industrial Development Financing
Act, California Government Code §§ 91500 et seq., as amended (the rrACtrl) to issue bonds for the purpose of financing the acquisition, construction and rehabilitation of facilities
including both real and personal property suitable for industrial
uses such as assembling, fabricating, manufacturing or processing activities with respect to products of agriculture, forestry,
mining or manufacture; and
WHEREAS, in furtherance of the purposes of the Act and
in order to promote the prosperity, health, safety and welfare of
the citizens of the State of California (the IrStater1), the
Authority proposes to finance the cost of the acquisition,
construction, improving, or equipping of a project (the
rlProiectlr) more particularly described in Exhibit A to the Loan
Agreement (the rrAsreementrr) of even date herewith, between CIP
Limited, L.P., a California limited partnership (the rrBorrowerrr) and the Authority; and
WHEREAS, the Borrower will lease the Project to Aalto
Scientific, Ltd. (the “Userfr) ; and
WHEREAS, pursuant to and in accordance with the Act,
the Authority has authorized and undertaken to issue its
Industrial Revenue Bonds (Aalto Project), Series 1995 (the
rrBondsrr) pursuant to the Indenture in order to provide funds to finance the cost of acquiring, constructing, improving, and equipping the Project; and
WHEREAS, the Authority has undertaken to finance the
cost of the acquisition, construction, improving and equipping of the Project by loaning the proceeds derived from the sale of the Bonds to the Borrower pursuant to the Loan Agreement, under which
the Borrower is required to make loan payments sufficient to pay
when due the principal of, premium, if any, and interest on the
Bonds and related expenses; and
WHEREAS, all Bonds issued under this Indenture will be
secured by a pledge and assignment of the Agreement as set forth herein; and
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WHEREAS, the Bonds and the certificate of
authentication to be executed thereon are to be in substantially the form set forth in Exhibit A hereto, with necessary or appropriate variations, omissions and insertions, as permitted or
required by this Indenture; and
WHEREAS, all acts and proceedings required by law
necessary to make the Bonds when executed by the Authority,
authenticated and delivered by the Trustee and duly issued, the
valid, binding and legal limited obligations of the Authority,
and to constitute this Indenture a valid and binding agreement
for uses and purposes herein set forth, in accordance with its
terms, have been done and taken; and the execution and delivery
of this Indenture have been in all respects duly authorized;
NOW, THEREFORE, THIS INDENTURE WITNESSETH, that in
order to secure the payment of the principal of, and the interest
and premium, if any, on, all Bonds at any time issued and
outstanding under this Indenture, according to their tenor, and to secure the performance and observance of all the covenants and conditions therein and herein set forth, and to declare the terms and conditions upon and subject to which the Bonds are to be issued and received, and for and in consideration of the premises
and of the mutual covenants herein contained and of the purchase and acceptance of the Bonds by the holders thereof, and for other
valuable consideration, the receipt whereof is hereby
acknowledged, the Authority covenants and agrees with the Trustee, for the equal and proportionate benefit of the respective holders from time to time of the Bonds, as follows:
ARTICLE I.: DEFINITIONS; CONTENT OF CERTIFICATES AND OPINIONS
SECTION 1.01 Definitions.
Unless the context otherwise requires, the terms defined in this Article shall, for all purposes of this Indenture and of any indenture supplemental hereto and of any certificate, opinion or other document herein mentioned, have the meanings
herein specified, to be equally applicable to both the singular
and plural forms of any of the terms herein defined. Unless
otherwise defined in this Indenture, all terms used herein shall
have the meanings assigned to such terms in the Act.
IlAccountantll means any firm of independent certified public accountants selected by the Borrower.
llACtll means the California Industrial Development
Financing Act, California Government Code 5591500 et seq., as now
in effect and as it may from time to time hereafter be amended or
supplemented.
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"Additional Pavmentsll means the payments so designated
and required to be made by the Borrower pursuant to Section
4.2 (b) - (d) of the Agreement.
"Administrative Fees and Expensest1 means the reasonable
and necessary expenses incurred by the Authority pursuant to the
Agreement or this Indenture and the compensation and expenses
paid to or incurred by the Trustee, the Bond Registrar, or any
Paying Agent under the Agreement or this Indenture, which include
but are not limited to printing of Bonds, accomplishing transfers
or new registration of Bonds, or other charges and other
disbursements including those of their respective officers,
directors, members, attorneys, agents and employees incurred in
and about the administration and execution of the Loan Agreement and this Indenture.
"Aqreement or "Loan Asreement means that certain loan
agreement by and between the Authority and the Borrower, dated as
of July 1, 1995, as originally executed and as it may from time
to time be supplemented, modified or amended in accordance with the terms thereof and of this Indenture.
"Assiqnment of Project Aqreementsll means the Assignment
of Project Agreements dated as of July 1, 1995 executed by
Borrower in favor of the Trustee.
IIAssiqnment of Rents, Leases, Income and Profits" means the Assignment of Rents, Leases, Income and Profits dated July 1,
1995 executed by Borrower in favor of the Trustee.
IlAuthoritvll means the Industrial Development Authority of the City of Carlsbad, a public instrumentality of the State.
IlAuthorized Newspaperll shall mean The Bond Buver or any
other financial newspaper customarily published at least once a day for at least five days (other than legal holidays) in each calendar week, printed in the English language and of general circulation in the City of Los Angeles.
IIAuthorized Rerxesentativel' means with respect to the Borrower, the person or persons at the time designated to act on behalf of the Borrower by a written certificate signed by the Borrower and furnished to the Trustee and the Authority,
containing the specimen signature of each such person.
"Bond Counselll means any attorney at law or firm of
attorneys of nationally recognized standing in matters pertaining
to the federal tax exemption of interest on bonds issued by
states and political subdivisions, and duly admitted to practice
law before the highest court of any state of the United States of
America, acceptable to the Bondholder, but shall not include
counsel for the Borrower.
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"Bond Resistrar" or "Resistrartl means the entity or
entities performing the duties of the Bond Registrar pursuant to
Section 8.08.
"Bond Payment Date" means any Interest Payment Date and
any other date on which the principal of, premium, if any, or interest on the Bonds is to be paid to the Owners thereof, whether upon redemption, at maturity or upon acceleration of
maturity of the Bonds.
llBondholderll means First Interstate Bank of California,
and any successor thereto which owns 100% of the aggregate amount of the Bonds outstanding.
llBondsll or llBondll means any Bond or all of the Bonds, as the case may be, of the Authority authorized pursuant to
Section 2.01 and issued by the Authority, authenticated by the
Trustee and delivered hereunder.
"Borrower" means CIP Limited, L.P., a California
limited partnership, or any entity which is the surviving, resulting or transferee entity in any merger, consolidation or
transfer of assets permitted under Section 5.3 of the Agreement
and also means, unless the context otherwise requires, an
assignee of the Agreement as permitted by Section 5.6 of the
Agreement.
"Business Davit shall mean any day other than (i) a Saturday or Sunday or (ii) a day on which commercial banks in Los
Angeles, California, or the city or cities in which the Corporate
Trust Office of the Trustee are authorized or required by law to
close.
IICertificate, "Statement, lVReuuest, "Reuuisitionll and IIOrder" of the Authority or the Borrower mean, respectively,
a written certificate, statement, request, requisition or order signed in the name of the Authority by its Chairman, Executive
Director or such other person as may be designated and authorized
to sign for the Authority, or in the name of the Borrower by an Authorized Representative of the Borrower. 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. If
and to the extent required by Section 1.02, each such instrument
shall include the statements provided for in Section 1.02.
lfCodell - means the Internal Revenue Code of 1986, as
amended from time to time.
"Construction Fund" means the fund by that name
established pursuant to Section 3.02.
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IICorporate Trust Office" shall mean (i) with respect to
the Trustee, the office of the Trustee at 707 Wilshire Boulevard,
W11-1, Los Angeles, California 90017 or such other or additional offices as may be specified to the Authority by the Trustee in
writing.
llCosttf or "Cost of Proiectll means and shall be deemed
to include all of the costs of acquiring, constructing, renovating, installing and equipping the Project, to the extent
permitted by the Act and the Tax Certificate, whether incurred prior to or after the date of the Loan Agreement, including, but
not limited to the following, but not including any Costs of
Issuance:
(1) the cost of construction, improvement, repair and
reconstruction;
(2) the cost of acquisition of, including rights in
land and other property, both real and personal and improved and
unimproved, and franchises, and disposal rights;
(3) the cost of demolishing, removing, or relocating
any buildings or structures on lands so acquired, including the
cost of acquiring any lands to which such buildings or structures
may be moved or relocated;
(4) the cost of machinery, equipment and furnishings,
of engineering and architectural surveys and plans, and
specifications and of transportation and storage until the
Project is operational;
(5) the cost of agents or consultants, including,
without limitation, legal, financial, engineering, accounting,
and auditing, necessary or incident to the Project and of the
determination as to the feasibility or practicability of
undertaking the Project;
(6) the cost of financing interest on the Bonds
allocable to the period prior to and during construction of the
Project and reserves for principal and interest and for
extensions, enlargements, additions, repairs, replacements,
renovations, and improvements to the Project; and
(7) the cost of financing the Project, and the
reimbursement to any governmental entity or agency, or any
person, of expenditures made by or on behalf of such entity, agency or person in connection with the Project; provided that the Borrower shall at its own expense insure, repair, and maintain the Project, pay such taxes with respect to the Borrower's interest in the property relating to the Project as the provisions of Division 1 (commencing with Section 101) of the
Revenue and Taxation Code of California require, and pay such
assessments and other public charges on the Project or shall
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cause the same to be provided by others to the satisfaction of the Authority.
IICosts of Issuancer1 means all items of expense directly or indirectly payable by or reimbursable to the Authority or the Borrower and related to the authorization, issuance, sale and delivery of the Bonds, including but not limited to costs of preparation and reproduction of documents, printing expenses, filing and recording fees, initial fees and charges of the
Trustee, legal fees and charges, fees and disbursements of
consultants and professionals, rating agency fees, fees and charges for preparation, execution and safekeeping of the Bonds and any other cost, charge or fee in connection with the original issuance of the Bonds which constitutes a I1cost of issuancell within the meaning of Section 147(g) of the Code; provided, however, that no more than two percent (2%) of the proceeds of
the Bonds as provided in Section 147(g) of the Code shall be used
to pay such Costs of Issuance.
"Date of Delivery" means the date of initial issuance and delivery of the Bonds.
"Deed of Trust" means the Deed of Trust, Fixture Filing and Assignment of Rents dated as of July 1, 1995 executed by
Borrower in favor of the Trustee.
IlDetermination of Taxabilitv" means (i) the enactment of legislation or the adoption of final regulations or a final decision, ruling or technical advice by any Federal judicial or administrative authority which has the effect of requiring interest on the Bonds to be included in the gross income of the Bondholders for Federal income tax purposes (other than a Bondholder who is a llsubstantial user" of the Project or a "related person" as those terms are used in Section 147(a) of the Code), (ii) the receipt by the Trustee or Bondholder of an opinion of Bond Counsel to the effect that interest on the Bonds
is to be included in the gross income of the Holders for Federal
income tax purposes (other than a Bondholder who is a
Itsubstantial usert1 of the Project or a "related personll as those
terms are used in Section 147(a) of the Code; or (iii) the delivery to the Trustee or Bondholder of a written statement
signed by the Authorized Borrower Representative to the effect
that the Borrower or another "test-period beneficiary" (as said
term is defined in Section 144(a) (10) of the Code) has exceeded
or will exceed the maximum amount of tax-exempt obligations permitted to be outstanding under Section 144(a) (10) of the Code or the Borrower has exceeded or will exceed the capital expenditure limit of Section 144(a) (4) of the Code; provided that no decision by any court or decision, ruling or technical advice by any administrative authority shall be considered final (a)
unless the Bondholder involved in the proceeding or action giving
rise to such decision, ruling or technical advice (i) gives the Borrower and the Trustee prompt notice of the commencement thereof, and (ii) offers the Borrower the opportunity to control
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the contest thereof, provided the Borrower shall have agreed to
bear all expenses in connection therewith and to indemnify that
Holder against all liabilities in connection therewith, and (b)
until the expiration of all periods for judicial review or
appeal.
"Effective Rate" means the lesser of (i) the Maximum
Rate and (ii) the sum of the 90-day LIBOR Rate, plus point seven
five percent (.75%) per annum.
IlEnvironmental Indemnity" means the Environmental Indemnity dated as of July 1, 1995 executed by Borrower in favor of Trustee.
IlEurodollar Balance" means any principal balance of the Bonds which bear interest at a rate based upon the LIBOR Rate for
an Interest Period.
"Eurodollar Business Day" means any day which is a
Business Day and on which dealings in United States dollar
deposits may be carried out in the London interbank market.
"Eurodollar Reserve Reauirementll means, on any day,
that percentage (expressed as a decimal fraction) which is in
effect on such day, as provided by the Board of Governors of the
Federal Reserve System (or any successor governmental body) for
determining the reserve requirements (including without
limitation, basic, supplemental, marginal and emergency reserves)
under Regulation D with respect to "Eurocurrency liabilitiesll as
currently defined in Regulation D, or under any similar or
successor regulation.
"Event of Default" means any of the events specified in
Section 7.01.
ExemDt Cost" means as of any date of calculation, the
sum of: (i) the portion of the Net Cost of each of the facilities
comprising the Project which represents the Cost of land or
property of a character subject to the allowance for depreciation
under Section 167 of the Code and which is either attributable to
the Cost of items of such property acquired by the Borrower after
the date of "official actionll as such term is or has been
interpreted under Regulation §1.103-8(a) (5) or §150.2 or is
attributable to work performed in constructing or installing such
items of property after such date (and which does not represent
amounts to be paid to the Borrower, or a related person, as profit); and (ii) an amount equal to that portion of the interest on the Bonds theretofore incurred which is attributable to the Net Cost of the Project and which is eligible for capitalization under Section 266 of the Code and the Treasury Regulations
promulgated thereunder.
"Fiscal Year" means the period beginning on January 1 of each year and ending on the next succeeding December 31, or
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any other twelve-month, or fifty-two week, period hereafter
selected and designated as the official fiscal year period of the
Borrower.
"Guarantv Aqreementll means that certain Unconditional
Guaranty Agreement dated as of July 1, 1995 between the Bank, the Borrower, Jeffrey C. Hamann, as an individual and as Trustee of
the J.C. Hamann Family Trust, UTD 12/23/83, Gregg Hamann, as an
individual and as Trustee of the Gregg Hamann Family Trust, UTD
4/25/86, and Daniel M. Whitaker, as an individual, and Daniel M.
Whitaker and Dona C. Whitaker as Co-Trustees of the Whitaker
Family Trust, UTD 10/22/79, as Amended and Restated 12/22/83, as
said agreement may be amended from time to time.
IIHazardous Substancesll means (i) any chemical,
compound, material, mixture or substance that is now or hereafter
defined or listed in, or otherwise classified pursuant to, any
Environmental Laws as a "hazardous substance" , IIHazardous
material" , IIHazardous waste" , "extremely hazardous waste" ,
"acutely hazardous waste" , "radioactive waste" , "infectious
waste" , Ilbiohazardous waste" , I1Toxic substance" , llpollutantll ,
Iltoxic pollutant", tlcontaminantll as well as any formulation not
mentioned herein intended to define, list, or classify substances by reason of deleterious properties such as ignitability, corrosivity, reactivity, carcinogenicity, toxicity, reproductive toxicity, "EP toxicity, or "TCLP toxicity"; (ii) petroleum, natural gas, natural gas liquids, liquified natural gas, synthetic gas usable for fuel (or mixture of natural gas and such synthetic gas) and ash produced by a resource recovery facility
utilizing a municipal solid waste stream, and drilling fluids, produced by a resource recovery facility utilizing a municipal solid waste stream, and drilling fluids, produced waters and other wastes associated with the exploration, development or production of crude oil, natural gas, or geothermal resources; (iii) "hazardous substance" as defined in Section 25281(f) of the California Health and Safety Code; (iv) urea formaldehyde foam insulation; (vii) polychlorinated biphenyls (PCBs) ; (v) asbestos in any form; (vi) urea formaldehyde foam insulation; (vii) polychlorinated biphenyls (PCBs) ; (viii) radon; and (ix) any other chemical, material, or substance that, because of its quantity, concentration, or physical or chemical characteristics, exposure to which is limited or regulated for health and safety reasons by any Governmental Authority, or which poses a significant present or potential hazard to human health and safety or to the environment if released into the workplace or the environment; and (x) any substance the presence of which requires remediation or investigation under any federal, state or
local statute, regulation, ordinance, order, action, policy or
common law.
llHolder" or IIBondholder, or "Owner, whenever used
herein with respect to a Bond, means the person in whose name such Bond is registered.
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llIndenturell means this Indenture, as originally
executed or as it may from time to time be supplemented, modified
or amended by any Supplemental Indenture.
"Interbank Offered Rate" means, with respect to each Interest Period, the greater of (i) the London Interbank Offered Rate (LIBOR) quoted in The Wall Street Journal on the Interest Rate Determination Date, such rate corresponding to the rate for a period of time equal to such Interest Period and for an amount
equal to or comparable to the then outstanding principal amount
of the Bonds, or (ii), if the Bondholder is First Interstate Bank
of California, the rate of interest per annum determined by the
Bondholder (in accordance with its customary general practice) to
be the per annum rate at which deposits in immediately available
funds in U.S. Dollars are offered on or prior to the first day of
such Interest Period by the Bondholder to banks in the interbank
eurodollar market for delivery on the first day of such Interest
Period, such deposits being for a period of time equal to such
Interest Period and in an amount equal to or comparable to the
principal amount of the Bonds.
the
Interest Account
Revenue Fund established
means the account by that
pursuant to Section 5.02.
name in
"Interest Payment Date" means September 30, 1995, and
thereafter (i) with respect to interest paid on the basis of a
percentage of the Prime Rate, each October 1, January 2, April 1
and July 1, (ii) with respect to interest paid at the Effective
Rate, the last day of any Interest Period; provided, that if such
day is not a Business Day, then "Interest Payment Date" shall
mean the first Business Day immediately following the last day of
such Interest Period; and (iii) the maturity date of the Bonds.
"Interest Period" means (i) the period commencing the
date of delivery of the Bonds to and including September 30,
1995, and (ii) a period commencing on the first day following the immediately preceding Interest Period and 3 months thereafter, provided that, when the Effective Rate is determined by clause (ii) of the definition of the Effective Rate:
(a) any Interest Period which would otherwise end on a day which is not a Eurodollar Business Day shall be extended to the next succeeding Eurodollar Business Day unless such Eurodollar Business Day falls in another calendar month, in which case such Interest Period shall end
on the preceding Eurodollar Business Day,
(b) any Interest Period which begins on the last
Eurodollar Business Day of a calendar month (or on a day for
which there is no numerically corresponding day in the
calendar month at the end of such Interest Period) shall, subject to clause (c) below and clause (a) above, end on the last Eurodollar Business Day of a calendar month, and
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(c) any Interest Period which would otherwise end
after the maturity date of the Bonds, shall end on the
maturity date of the Bonds.
"Interest Rate Determination Date" means two (2)
Eurodollar Business Days immediately preceding the first day of
each Interest Period.
IlInvestment Securities1# shall mean any of the following securities:
(i) United States Treasury notes, bonds, bills or
certificates of indebtedness or those for which the faith
and credit of the United States are pledged for the payment
of principal and interest;
(ii) Bonds, notes or other obligations of any state, municipality or political subdivision the interest on which is excluded from gross income for federal income tax purposes , which are rated IIAAIl or higher by Moody's or S&P;
(iii) Investments in or shares of any "regulated
investment company" within the meaning of Section 851(a) of
the Code, the assets of which are securities or investments
described in (i) and (ii) above including any such
"regulated investment companyf1 advised, managed or maintained by the Trustee;
(iv) Commercial paper of llprimefl quality of the
highest ranking or of the highest letter and numerical rating as provided by Standard & Poor's Corporation, which
commercial paper is limited to issuing authorities that are organized and operating within the United States of America
and that have total assets in excess of five hundred million dollars ($500,000,000) and that have an "A" or higher rating for the issuer's unsecured debentures, other than commercial
paper, as provided by Standard & Poor's Corporation;
provided that purchases of eligible commercial paper may not exceed one hundred eighty (180) days maturity nor represent more than ten percent (10%) of the outstanding commercial
paper of an issuing authority;
(v) Certificates of deposit, whether negotiable or non-negotiable, issued by a state or national bank (including the Trustee) or a state or federal savings and loan association, provided that such certificates of deposit
shall be either (A) continuously and fully insured by the Federal Deposit Insurance Corporation or (B) have maturities
of not more than 365 days and issued by any state or
national bank or a state or federal savings and loan
association, the short term obligations of which are rated
in the highest short term letter and numerical rating
category by Standard & Poor's Corporation;
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(vi) Repurchase agreements with any bank, trust company or national banking association insured by the Federal Deposit Insurance Corporation and within the limits of such insurance, or with any government bond dealer
recognized as a primary dealer by the Federal Reserve Bank
of New York, which agreements are fully and continuously
secured by a valid and perfected security interest in
obligations described in paragraph (i) of this definition;
(vii) Money market funds which invest solely in
Investment Securities described in (i) and (ii) above;
(viii) The Trust Master Market Interest Account
(MMIA), an FDIC insured interest bearing time deposit
account with the Trustee.
IILIBOR Rate" means the amount equal to the quotient of
(i) the Interbank Offered Rate divided by (ii) the remainder of
1.0 minus the Eurodollar Reserve Requirement in effect on such
day.
llLoanll means the $1,102,500 loan to be made by the
Authority to the Borrower pursuant to the Agreement.
"Loan Amount" means the principal amount of $1,102,500.
"Loan Default Event" means any one or more of the events specified in Section 7.1 of the Agreement.
"Loan Documentstt means the Agreement, the Deed of
Trust, the Assignment of Rents, Leases, Income and Profits, the
Security Agreement, the Environmental Indemnity and the
Assignment of Project Agreements, together with all modifications
or extensions of the foregoing, and any other documents executed
by Borrower in connection with the Loan.
"Loan ReDavments" means the payments so designated and
required to be made by the Borrower pursuant to Section 4.2 of
the Agreement.
IlMaxirnum Rate" shall mean Twelve Percent (12%) per
annum.
ltMoodv'slf means Moody's Investors Service, a
corporation organized and existing under the laws of the State of
Delaware, its successors and their assigns, or, if such
corporation shall be dissolved or liquidated or shall no longer
perform the functions of a securities rating agency, any other
nationally recognized securities rating agency designated by the
Authority, with the approval of the Borrower.
"Net Costll means that portion of the Cost (computed
without regard to interest paid on the Bonds and legal, accounting, financial, advertising, recording and printing
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expenses and all other expenses incurred in connection with the issuance of the Bonds) which is properly chargeable by the Borrower to the capital account of the Project for Federal income tax purposes or would be so chargeable either with a proper election by the Borrower or but for a proper election by the
Borrower to deduct such amounts.
"Net Proceeds" means the proceeds from insurance or
from actual or threatened condemnation or eminent domain action
with respect to the Project, less any costs reasonably expended by the Borrower to receive such proceeds.
"Opinion of Counselll means a written opinion of counsel
selected by the Authority or the Bondholder and acceptable to the
Trustee. If and to the extent required by the provisions of
Section 1.02, each Opinion of Counsel shall include the statements provided for in Section 1.02.
llOutstandinq,ll when used as of any particular time with
reference to Bonds, means (subject to the provisions of Section
11.10) all Bonds theretofore, or thereupon being, authenticated
and delivered by the Trustee under this Indenture except (1) Bonds theretofore cancelled by the Trustee or surrendered to the Trustee for cancellation; (2) Bonds with respect to which liability of the Authority shall have been discharged in
accordance with Section 10.02, including Bonds (or portions of
Bonds) referred to in Section 11.10; and (3) Bonds for the
transfer or exchange of or in lieu of or in substitution for
which other Bonds shall have been authenticated and delivered by
the Trustee pursuant to this Indenture.
"Payinq Asent" means the paying agent described in
Section 8.07 hereof.
"Person" means an individual, corporation, firm,
association, partnership, trust, or other legal entity or group
of entities, including a governmental entity or any agency or
political subdivision thereof.
"Plans and Specificationsll means the plans and
specifications prepared for the Project, certified by an
Authorized Representative of the Borrower, as the same may be
implemented, detailed and revised from time to time.
"Prime Rate" means the prime rate or reference rate published from time to time by the Bondholder.
"Principal Account11 means the account by that name in the Revenue Fund established pursuant to Section 5.02.
I1Proiect1l means (i) all land, buildings, structures,
fixtures and improvements and (ii) all tangible personal property
purchased with proceeds of the Bonds whether now existing or
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hereafter acquired, constructed or installed as more fully described in Exhibit A to the Agreement.
"Rebate Fund" means the fund by that name created pursuant to Section 5.07.
"Rebate Instructionsll means those calculations and
directions required to be delivered to the Trustee by the Borrower under Section 5.2.1 of the Tax Certificate.
"Rebate Requirement means the Rebate Requirement defined in the Tax Certificate.
IlRecord Date" shall mean the fifteenth day of the month
prior to an Interest Payment Date.
"Redemption Accountll means the fund by that name
established pursuant to Section 5.02.
"Revenue Fund" means the fund by that name established
pursuant to Section 5.01.
IlRevenuesIl means all amounts received by the Authority or the Trustee for the account of the Authority pursuant or with respect to the Agreement, including, without limiting the
generality of the foregoing, Loan Repayments (including both
timely and delinquent payments, any late charges, and paid from
whatever source), prepayments, and all interest, profits or other income derived from the investment of amounts in any fund or account established pursuant to this Indenture, but not including any Administrative Fees and Expenses or any moneys paid for
deposit into the Rebate Fund.
llSecuritv Aqreement" means the Security Agreement dated as of July 1, 1995 between the Borrower and the Trustee.
IrS&Pll means Standard & Poor's Corporation, a
corporation organized and existing under the laws of the State of
New York, its successors and their assigns, or, if such
corporation shall be dissolved or liquidated or shall no longer
perform the functions of a securities rating agency, any other
nationally recognized securities rating agency designated by the
Authority, with the approval of the Borrower.
llSupplemental Indenture" means any indenture hereafter duly authorized and entered into between the Authority and the
Trustee, supplementing, modifying or amending this Indenture; but only if and to the extent that such Supplemental Indenture is
specifically authorized hereunder.
IISurplus Account" means the account by that name
established pursuant to Section 3.05.
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"Tax Certificate" means the Tax Certificate and
Agreement of the Borrower, the User and the Issuer dated the Date
of Delivery.
"Tax-exempt" means, with respect to interest on any
obligations of a state or local government, including the Bonds,
that such interest is excluded from gross income for federal
income tax purposes (other than in the case of a holder of any
Bonds who is a substantial user of the Project or a related
person within the meaning of Section 147(a) of the Code) whether
or not such interest is includable as an item of tax preference or otherwise includable directly or indirectly for purposes of calculating tax liabilities, including any alternative minimum
tax or environmental tax, under the Code.
llTrusteell means First Interstate Bank of California, a banking corporation organized and existing under and by virtue of the laws of the State of California having a principal Corporate Trust Office in Los Angeles, California, or its successor as
Trustee hereunder as provided in Section 8.01.
llUserll means Aalto Scientific, Ltd., a California
corporation, or any successor or assign.
SECTION 1.02 Content of Certificates and Opinions.
Every certificate or opinion provided for in this Indenture with respect to compliance with any provision hereof shall include (1) a statement that the Person making or giving such certificate or opinion has read such provision and the
definitions herein relating thereto; (2) a brief statement as to the nature and scope of the examination or investigation upon
which the certificate or opinion is based; (3) a statement that, in the opinion of such Person, he has made or caused to be made such examination or investigation as is necessary to enable him to express an informed opinion with respect to the subject matter referred to in the instrument to which his signature is affixed; (4) a statement of the assumptions upon which such certificate or
opinion is based, and that such assumptions are reasonable; and
(5) a statement as to whether, in the opinion of such Person, such provision has been complied with.
Any such certificate or opinion made or given by an
officer of the Authority or an officer or duly authorized
representative of the Borrower may be based, insofar as it relates to legal, accounting or primary matter of the business of either of them, upon a certificate or opinion of or representation by counsel, an Accountant or a management
consultant, unless such officer knows, or in the exercise of
reasonable care should have known, that the certificate, opinion
or representation with respect to the matters upon which such
certificate or statement may be based, as aforesaid, is
erroneous. counsel, an Accountant or a management consultant may be based, Any such certificate or opinion made or given by
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insofar as it relates to factual matters (with respect to which
information is in the possession of the Authority or the
Borrower, as the case may be) upon a certificate or opinion of or
representation by an officer of the Authority or the Borrower,
unless such counsel, Accountant or management consultant knows,
or in the exercise of reasonable care should have known, that the
certificate or opinion or representation with respect to the
matters upon which such Person's certificate or opinion or
representation may be based, as aforesaid, is erroneous. The
same officer of the Authority or the Borrower, or the same
counsel or Accountant or management consultant, as the case may be, need not certify to all of the matters required to be certified under any provision of this Indenture, but different officers, counsel, Accountants or management consultants may certify to different matters, respectively.
SECTION 1.03 Intemretation.
(a) Unless the context otherwise indicates, words expressed in the singular shall include the plural and vice versa and the use of the neuter, masculine, or feminine gender is for convenience only and shall be deemed to mean and include the
neuter, masculine or feminine gender, as appropriate.
(b) Headings of articles and sections herein and the
table of contents hereof are solely for convenience of reference,
do not constitute a part hereof and shall not affect the meaning, construction or effect hereof.
(c) All references herein to IIArticles, II l1SectionsI1 and
other subdivisions are to the corresponding Articles, Sections or
subdivisions of this Indenture; the words llherein,ll llhereof,ll
llhereby,lf and other words of similar import refer to
this Indenture as a whole and not to any particular Article,
Section or subdivision hereof.
ARTICLE 11.: THE BONDS
SECTION 2.01 Authorization of Bonds.
There shall be issued under and secured by this
Indenture only a single series of Bonds in the original principal
amount of Two Million Seventy Thousand Dollars ($1,102,500.00), to be designated IIIndustrial Development Authority of the City of
Carlsbad Industrial Revenue Bonds (Aalto Project) , Series 1995."
SECTION 2.02 General Terms of the Bonds.
The Bonds shall be dated the Date of Delivery and shall
mature (subject to prior redemption at the prices and dates and
upon the terms and conditions hereinafter set forth) on such date that is twenty-five (25) years from the Date of Delivery. The
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Bonds shall bear interest on the unpaid principal amount thereof
as set forth in Section 2.03 provided, however, that in no event
shall the rate of interest on any Bond exceed at any time the
Maximum Rate. If an Event of Default shall have occurred and be
continuing, the interest rate on the Bonds shall during the
continuance of such Event of Default be the rate on the Bonds on the day prior to the occurrence of such Event of Default plus
three percent (3%) per annum (but not exceeding the Maximum
Rate).
The Bonds shall be issuable as a single Bond in the initial principal amount specified in Section 2.01 in substantially the form set forth in Exhibit A of this Indenture with such variations, insertions or omissions as are appropriate and not inconsistent therewith and shall conform generally to the rules and regulations of any governmental authority or usage or requirement of law with respect thereto. The Bond shall be
numbered and lettered R-1 and may bear such additional letters, numbers, legends or designations as the Bond Registrar determines
are desirable.
SECTION 2.03 Interest Rates.
(a) The Bonds shall bear interest from and including the date of first authentication and delivery thereof until
payment of the principal or redemption price thereof shall have
been made or provided for in accordance with the provisions
hereof, whether at maturity, upon redemption or otherwise. The
Bonds will have interest payable on each Interest Payment Date,
and will bear interest for each Interest Period at the Effective
Rate as calculated on each Interest Rate Determination Date, subject to the terms hereinafter set forth. The Bondholder shall
calculate the interest due for each Interest Period and send
written notice thereof to the Trustee and the Borrower. All interest hereunder shall be computed on the basis of a year of
360 days, and for the actual number of days elapsed.
Payment of the interest on any Bond shall be made on
each Interest Payment Date commencing September 30, 1995 to the
Bondholder appearing on the bond registration books of the Bond
Registrar as the Owner thereof on the Record Date, such interest
to be paid by the Paying Agent, by wire transfer in immediately
available funds at an account maintained in the United States at
such wire address as such Bondholder shall specify by written
notice to the Trustee; except, in each case, that, if and to the
extent that there shall be a default in the payment of the
interest due on such Interest Payment Date, such defaulted
interest shall be paid to the Owner in whose name any such Bonds
are registered at the close of business on the fifth to last
Business Day next preceding the date of payment of such defaulted
interest. Both the principal of and premium, if any, on the Bonds shall be payable upon surrender thereof in lawful money of the United States of America at the Corporate Trust Office of the Trustee.
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The Bonds shall be subject to redemption as provided in
Section 4.01.
(b) If the Bondholder determines that, by reason of
circumstances affecting the interbank Eurodollar market generally, deposits in U.S. Dollars (in the applicable amounts) are not being offered to the Bondholder in the interbank
Eurodollar market for such Interest Period, or that the rate at
which such U.S. Dollar deposits are being offered will not
adequately and fairly reflect the cost of making or maintaining a Eurodollar Balance for the applicable Interest Period, the Bondholder shall forthwith give notice thereof to the Borrower and the Trustee, whereupon until the Bondholder notifies the Borrower and the Trustee that the circumstances giving rise to such suspension no longer exist, (i) the Effective Rate shall be
suspended, and (ii) Borrower shall convert the interest rate on
each Eurodollar Balance into eighty percent (80%) of the Prime
Rate, in effect from time to time, in accordance with the
provisions hereof on the last day of the then-current Interest Period applicable to such Eurodollar Balance.
(c) If the adoption of any applicable law, rule or regulation, or any change therein, or any change in the
interpretation or administration thereof by any governmental
authority, central bank or comparable agency charged with the
interpretation or administration thereof, or compliance by the
Bondholder with any request or directive (whether or not having
the force of law) of any such authority, central bank or comparable agency shall make it unlawful or impossible for the Bondholder to make or maintain a Eurodollar Balance, the Bondholder shall so notify the Borrower and the Trustee. Upon receipt of such notice, the Borrower shall convert the interest rate on such Eurodollar Balance into eighty percent (80%) of the Prime Rate, in effect from time to time, on either (i) the last
day of the then-current Interest Period applicable to such
Eurodollar Balance if the Bondholder may lawfully continue to maintain and fund such Eurodollar Balance to such day, or (ii) immediately, if the Bondholder may not lawfully continue to maintain such Eurodollar Balance to such day.
(d) (A) If the adoption of any applicable law, rule or regulation, or any change therein, or any change in the interpretation or administration thereof by any governmental authority, central bank or comparable agency charged with the interpretation or administration thereof, or compliance by the Bondholder with any request or directive (whether or not having the force of law) of any such authority, central bank or comparable agency shall subject the Bondholder to any tax (including without limitation any United States interest
equalization or similar tax, however named), duty or other charge
with respect to the Eurodollar Balances, the Bonds or the
Bondholder's obligation to compute interest on the outstanding principal balance of the Bonds at a rate based upon the LIBOR Rate, or shall change the basis of taxation of payments to the
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Bondholder of the principal of or interest on the Eurodollar
Balances or any other amounts due under the Bonds in respect of
the Eurodollar Balances or the Bondholder's obligation to compute
the interest on the outstanding principal balance of the Bonds at
a rate based upon the LIBOR rate (except for changes in the rate
of the tax on the overall net income of the Bondholder imposed by the jurisdiction in which the Bondholder's principal executive office is located); or
(B) If any governmental authority, central bank or other comparable authority shall at any time impose, modify or deem applicable any reserve (including, without limitation, any reserve imposed by the Board of Governors of the Federal Reserve System but excluding any reserve requirement included in the
Eurodollar Reserve Requirement of the Bondholder), special
deposit or similar requirement against assets of, deposits with
or for the account of, or credit extended by, the Bondholder, or
shall impose on the Bondholder (or its Eurodollar lending office)
or the interbank Eurodollar market any other condition affecting
a Eurodollar Balance, the Bonds or the Bondholder's obligation to
compute the interest on the outstanding principal balance of the
Bonds at a rate based upon the LIBOR Rate; and the result of any
of the foregoing is to increase the cost to the Bondholder of maintaining a Eurodollar Balance, or to reduce the amount of any
sum received or receivable by the Bondholder under the Bonds by
an amount deemed by the Bondholder to be material, then upon
written demand by the Bondholder, Borrower shall pay to the
Trustee such additional amount or amounts as will compensate the Bondholder for such increased cost or reduction and the Trustee shall promptly remit such amounts to the Bondholder. The
Bondholder will promptly notify Borrower and Trustee of any event
of which it has knowledge, occurring after the date hereof, which will entitle the Bondholder to compensation pursuant to this
paragraph. If the Bondholder fails to notify Borrower and Trustee within 30 days of any such event of which it has knowledge, which will entitle the Bondholder to compensation
pursuant to this paragraph, the Bondholder will be deemed to have waived such compensation with regard to the period of time
preceding such notification; but the Bondholder will be entitled
to such compensation following the giving of notification to
Borrower and Trustee and thereafter. A certificate of the
Bondholder claiming compensation under this paragraph and setting forth the additional amount or amounts to be paid to the
Bondholder hereunder shall be conclusive in the absence of manifest error.
If notice has been given requiring a Eurodollar Balance to be repaid or converted, then unless and until the Bondholder notifies Borrower and Trustee that the circumstances giving rise
to such repayment no longer apply, the outstanding principal
amount of the Bonds shall bear interest at the per annum rate equal to eighty percent (80%) of the Prime Rate, in effect from time to time. If the Bondholder notifies Borrower and Trustee
that the circumstances giving rise to such repayment no longer
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apply, Borrower may thereafter notify the Bondholder and the
Trustee that the Bonds are to bear interest at the then
applicable Effective Rate.
(e) If at any time the Effective Rate is the Maximum
Rate, the following provisions shall apply notwithstanding subsection (a) of this Section 2.03, but subject to subsections
(b), (c) or (d) . For any Interest Period when the rate described
in clause (ii) of the definition of Effective Rate is greater than the Maximum Rate, the difference in the amount of interest
which could be collected by the Bondholder by applying such
clause (ii) (the IIAccumulated Interest Amount") shall be calculated and applied to a special account (the IIAccumulated Interest Accountg1) to be kept in the records of the Bondholder. Whenever, in the future, the interest rate on the Bonds
calculated by clause (ii) of the definition of Effective Rate is less than the Maximum Rate, the rate to be borne on the Bonds shall nevertheless be the Maximum Rate until the Bondholder shall have earned, as the difference between the Maximum Rate and the lower rate represented by such clause (ii), the amount credited to the Accumulated Interest Account. The calculations described
in this subsection shall be performed by the Bondholder and given
in writing to the Borrower and the Trustee.
(f) Notwithstanding any other term of this Section 2.3,
in the event that a change (the "Tax Rate Chanqe") in the highest
marginal federal corporate income tax rate occurs, the effect of
which is to change the after-tax Effective Rate received by the
Bondholder, then the interest rate on the outstanding Bonds shall
be adjusted, effective the first day of the Interest Period next succeeding the effective date of the Tax Rate Change (the "Yield Chanqe Effective Date"), in accordance with the following formula (the "Yield Formula") ) :
Effective Rate X (1 - New MFTR)
(1 - Old MFTR)
MFTR - - Marginal Federal Corporate
Income Tax Rate
The Bondholder shall calculate the Yield Formula and
provide in writing (by telefax or other similar method of
communication) the calculation of the interest rate to be
effective on the Yield Change Effective Date to the Trustee and
the Borrower within a minimum of two (2) Business Days prior to
the Yield Change Effective Date.
SECTION 2.04 Execution of Bonds.
The Bonds shall be executed in the name and on behalf
of the Authority with the manual or facsimile signature of its Chairman or Vice-chairman, and attested by the manual or facsimile signature of its Secretary. The Bonds shall then be delivered to the Trustee for authentication. In case any of the
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officers who shall have signed or attested any of the Bonds shall
cease to be such officer or officers of the Authority before the Bonds so signed or attested shall have been authenticated or delivered by the Trustee or issued by the Authority, such Bonds
may nevertheless be authenticated, delivered and issued and, upon
such authentication, delivery and issue, shall be as binding upon
the Authority as though those who signed and attested the same
had continued to be such officers of the Authority, and also any
Bonds may be signed and attested on behalf of the Authority by such persons as at the actual date of execution of such Bonds shall be the proper officers of the Authority although at the nominal date of such Bonds any such person shall not have been such officer of the Authority.
Only such of the Bonds as shall bear thereon a certificate of authentication substantially in the form set forth in Exhibit A, with the manual or facsimile signature of the
Trustee shall be valid or obligatory for any purpose or entitled to the benefits of this Indenture, and such certificate of the
Trustee shall be conclusive evidence that the Bonds so
authenticated have been duly executed, authenticated and
delivered hereunder and are entitled to the benefits of this
Indenture.
SECTION 2.05 Transfer of Bond.
The Bond may, in accordance with its terms, be transferred, upon the books required to be kept pursuant to the provisions of Section 2.06, by the person in whose name it is registered, in person or by his duly authorized attorney, upon surrender of such registered Bond for cancellation, accompanied
by delivery of a written instrument of transfer, duly executed in
a form approved by the Trustee. Transfer of a Bond shall not be
permitted by the Trustee after the Record Date prior to the next
succeeding Interest Payment Date or after any notice of
redemption for any Bonds has been issued.
Whenever any Bond shall be surrendered for transfer,
the Authority shall execute and the Trustee shall authenticate
and deliver a new Bond or Bonds for a like aggregate principal
amount. The Trustee shall require the Bondholder requesting such
transfer to pay any tax or other governmental charge required to
be paid with respect to such transfer.
SECTION 2.06 Bond Resister.
The Trustee will keep or cause to be kept at the Corporate
Trust Office of the Trustee, sufficient books for the
registration and transfer of the Bonds, which shall at all times
be open to inspection during regular business hours by the
Authority; and, upon presentation for such purpose, the Trustee shall, under such reasonable regulations as it may prescribe, register or transfer or cause to be registered or transferred, on such books, Bonds as hereinbefore provided.
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SECTION 2.07 Temporarv Bonds.
The Bonds may be issued in temporary form exchangeable for definitive Bonds when ready for delivery. Any temporary Bond
may be printed, lithographed or typewritten, shall be in fully
registered form without coupons and may contain such reference to
any of the provisions of this Indenture as may be appropriate. Every temporary Bond shall be executed by the Authority and be authenticated by the Trustee upon the same conditions and in substantially the same manner as the definitive Bond. If the
Authority issues a temporary Bond it will execute and deliver a
definitive Bond as promptly thereafter as practicable, and
thereupon the temporary Bond may be surrendered, for cancellation, in exchange therefor at the principal Corporate Trust Office of the Trustee and the Trustee shall authenticate and deliver in exchange for such temporary Bonds an equal aggregate principal amount of the definitive Bond. Until so
exchanged, the temporary Bond shall be entitled to the same benefits under this Indenture as the definitive Bond authenticated and delivered hereunder.
SECTION 2.08 Bonds Mutilated, Lost, Destroyed or Stolen.
If any Bond shall become mutilated, the Authority, at
the expense of the Holder of said Bond, shall execute, and the
Trustee shall thereupon authenticate and deliver, a new Bond of like tenor in exchange and substitution for the Bond so
mutilated, but only upon surrender to the Trustee of the Bond so
mutilated. Every mutilated Bond so surrendered to the Trustee shall be cancelled by it and upon request delivered to the
Authority. If any Bond shall be lost, destroyed or stolen, evidence of such loss, destruction or theft may be submitted to the Authority and the Trustee and, if such evidence be satisfactory to both and indemnity satisfactory to them shall be
given, the Authority, at the expense of the Holder, shall
execute, and the Trustee shall thereupon authenticate and
deliver, a new Bond of like tenor in lieu of and in substitution
for the Bond so lost, destroyed or stolen (or if any such Bond
shall have matured or shall be about to mature, instead of issuing a substitute Bond, the Trustee may pay the same without surrender thereof).
Holder of a sum not exceeding the actual cost of preparing each new Bond issued under this Section and of the expenses which may
be incurred by the Authority and the Trustee in the premises.
Any Bond issued under the provisions of this Section in lieu of any Bond alleged to be lost, destroyed or stolen shall constitute an original additional contractual obligation on the part of the Authority whether or not the Bond so alleged to be lost,
destroyed or stolen be at any time enforceable by anyone, and
shall be entitled to the benefits of this Indenture with all
other Bonds secured by this Indenture.
The Authority may require payment by the
ARTICLE 111.: ISSUANCE OF BONDS; CONSTRUCTION FUND
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SECTION 3.01 Issuance of the Bonds.
At any time after the execution and delivery of this
Indenture or from time to time thereafter, upon the execution of
the Bond by the Authority and delivery thereof to the Trustee, as
hereinabove provided, and without any further action on the part of the Authority, the Trustee shall authenticate upon request of the Authority, and deliver the Bond in an aggregate principal
amount not exceeding Two Million Seventy Thousand Dollars
($1,102,500.00).
SECTION 3.02 Establishment of Construction Fund.
There is hereby created and established with the
Trustee a Construction Fund. The Authority shall pay or cause to be paid to the Trustee the proceeds from the sale by the Authority of the Bonds, and the Trustee shall deposit in the Construction Fund the proceeds of sale of the Bonds.
SECTION 3.03 Use of Monevs in Construction Fund.
The Trustee shall make payments from the Construction Fund to an account designated by the Borrower to pay the Cost of the Project and Costs of Issuance upon receipt by the Trustee of requisitions (upon which the Trustee and the Authority shall rely and shall be protected in relying) signed by an Authorized Representative of the Borrower conforming to the requirements of Section 3.3 of the Agreement.
If an Event of Default occurs and the maturity of the
Bonds is accelerated, the Trustee will, to the extent necessary,
use moneys in the Construction Fund to make payments on the
Bonds.
SECTION 3.04 Completion of Project.
Upon the completion of the Project as evidenced by the
delivery of the Certificate of the Borrower required by Section
3.5 of the Agreement or completion of any enlargements,
improvements or extensions thereof or completion of any
additional facilities for which Bonds shall be issued, the
Trustee shall be furnished with the certificate of an Authorized Representative. Thereupon, any balance in the Construction Fund not reserved for the payment of the Cost of the Project shall be
deposited into a separate account in the Revenue Fund which the
Trustee shall establish and hold in trust and which shall be
entitled the "Sumlus Account." The moneys in the Surplus Account shall be used and applied (unless some other application of such
moneys would not, in the opinion of Bond Counsel, adversely affect the Tax-exempt status of interest on the Bonds) to pay principal only in connection with the call and redemption of Bonds to the maximum degree permissible, and at the earliest possible dates at which Bonds can be redeemed without payment of
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premium pursuant to the Indenture (unless in the opinion of Bond Counsel another use would not adversely affect the Tax-exempt status of interest on the Bonds). Notwithstanding Section 5.05,
the moneys in the Surplus Account shall be invested as directed
by the Borrower at a yield no higher than the yield on the
Outstanding Bonds (unless in the opinion of Bond Counsel
investment at a higher yield would not adversely affect the
Tax-exempt status of interest on the Bonds), and all such
investment income shall be deposited in the Surplus Account and
expended or reinvested as provided above; provided that the Trustee is not responsible for calculating the yield on such Bonds (which yield shall be calculated by the Borrower).
ARTICLE IV.: REDEMPTION AND PURCHASE OF BONDS
SECTION 4.01 Terms of Redemption.
(a) The Bonds are subject to redemption if and to the extent the Borrower is entitled to make and makes, or is required to make, a prepayment pursuant to Articles IV or VI11 of the Agreement. All such prepayments shall be deposited in the Redemption Account. The Authority shall not call the Bonds for
optional redemption, and the Trustee shall not give notice of any such redemption, unless the Borrower has so directed and payment
has been made of all required installments of the Borrower's
obligations under the Agreement; provided that the Authority may
require such payment under Section 8.3 of the Agreement.
The Bonds shall be redeemed upon the following terms:
(1) Mandatory Redemption from Sinkins Fund. The Bonds
are subject to redemption prior to their stated maturity, in
part by lot, at the principal amount thereof, without
premium, plus interest accrued to the date fixed for
redemption, as follows:
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Sinking Fund
Payment Date
Principal
Amount
Redeemed
July 1, 1996
October 1, 1996
January 1, 1997
April 1, 1997
July 1, 1997
October 1, 1997
January 1, 1998
April 1, 1998
July 1, 1998
October 1, 1998
January 1, 1999
April 1, 1999
July 1, 1999
October 1, 1999
January 1, 2000
April 1, 2000
July 1, 2000
October 1, 2000
January 1, 2001
April 1, 2001
July 1, 2001 October 1, 2001
January 1, 2002 April 1, 2002
July 1, 2002
$
(2) Mandatory Redemption Upon Invalidity or a
Determination of Taxability.
pursuant to Section 8.3 (a) or (b) of the Agreement as a
result of invalidity or a Determination of Taxability, Bonds Outstanding on the date of the occurrence of the invalidity or Determination of Taxability shall be redeemed in whole at
any time within 60 days thereafter, at a redemption price of
100% of the principal amount thereof plus accrued interest to the date of redemption. No redemption of Bonds shall be
made pursuant to any of the other provisions of this Section
4.01 following invalidity or a Determination of Taxability.
In the event of a prepayment
(3) OPtional RedemDtion. On the last day of any Interest Period on or after January 1, 1997 the Bonds may be
redeemed by the Trustee, at the option of the Borrower upon not less than five (5) days notice to the Trustee, in whole or in part, at a redemption price equal to the principal amount thereof plus accrued interest to the date of redemption, without premium.
(b) The Bonds shall also be subject to mandatory redemption or purchase at the option of the Bondholder, on the
following terms:
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are
1, the
(1) Special Mandatory Redemption. (A) The Bonds subject to special mandatory redemption in whole on July
2002 in an amount equal to the outstanding principal of Bonds, without premium, plus all accrued interest to the
date of redemption unless the Bondholder shall have provided to the Trustee and the Borrower written notice no later than
90 days prior to such redemption date that the Bondholder elects to waive the redemption of the Bonds on that date.
(B) In the event that the Bondholder waives the redemption of the Bonds pursuant to Section 4.01 (b) (1) (A), the Bonds are subject to special mandatory redemption in whole on July 1, 2005, in an amount equal to the outstanding
principal of the Bonds, without premium, plus all accrued interest to the date of redemption unless the Bondholder shall have provided to the Trustee and the Borrower written
notice no later than 90 days prior to such redemption date that the Bondholder elects t waive the redemption of the Bonds on that date.
(C) In the event that the Bondholder waives the redemption of the Bonds pursuant to Sections 4.01 (b) (1) (A) and 4.01 (b) (1) (B), the Bonds are subject to special mandatory redemption in whole on July 1, 2010, in an amount equal to the outstanding principal of the Bonds, without premium, plus all accrued interest to the date of redemption.
(2) SDecial Mandatory Tax RedemDtion. The Bonds are also subject to mandatory redemption, in whole, in an amount equal to the outstanding principal of the Bonds, without premium, plus all accrued interest to the date of
redemption, on the first Business Day which is not less than
180 days after the Bondholder gives written notice to the
Borrower and the Trustee that the Bondholder has determined,
in its sole discretion, that it is unable to utilize the tax
benefits of the Bonds and that it is exercising its right to
have the Bonds redeemed pursuant to this section.
Notwithstanding the foregoing, the Borrower may, in lieu of causing the redemption of the Bonds pursuant to subsections
(b) (1) or (21, arrange for the purchase of the Bonds from the
Bondholder (subject to the provisions of the Bond Purchase
Contract dated July 1, 1995, between the Issuer, the Borrower and
the Bondholder) on or before the date set for redemption, in which case, upon written notice to the Trustee, the Bonds shall not be redeemed but shall instead be transferred on the registration books of the Registrar to such new owner, which shall thereafter be the Bondholder.
SECTION 4.02 Selection of Bonds for Redemption.
Whenever provision is made in this Indenture for the
redemption of less than all of the Bond, the Trustee or the
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Bondholder shall make a notation on the Bond of the amount redeemed.
SECTION 4.03 Notice of Redemption.
(a) Notice of redemption shall be mailed not less than thirty (30) days nor more than sixty (60) days before such
redemption date, to the Bondholder at its address on the
registration books maintained by the Trustee. Each notice of redemption shall state the redemption date, the place of redemption, if less than all of the Bonds are to be redeemed, the amount to be redeemed. Each such notice shall also state that on said date there will become due and payable on said Bond the principal thereof or of said specified portion of the principal thereof in the case of a Bond to be redeemed in part only, and that from and after such redemption date interest thereon shall
cease to accrue, and shall require that such Bond be then
surrendered. Neither failure to receive such notice nor any
defect therein shall affect the sufficiency of such redemption.
(b) Notice of redemption of Bonds shall be given by the
Trustee, at the expense of the Borrower, for and on behalf of the
Authority.
SECTION 4.04 Partial Redemption of Bonds.
Upon surrender of any Bond redeemed in part only, the Authority
shall execute and the Trustee shall authenticate and deliver to
the Owner thereof, at the expense of the Authority, a new Bond
equal in aggregate principal amount to the unredeemed portion of
the Bond surrendered.
SECTION 4.05 Effect of Redemption.
Notice of redemption having been duly given as
aforesaid, and moneys for payment of the redemption price of,
together with interest accrued to the date fixed for redemption
on, the Bond (or portion thereof) so called for redemption being
held by the Trustee, on the redemption date designated in such
notice, the Bond (or portion thereof) so called for redemption
shall become due and payable, interest on the Bond so called for
redemption shall cease to accrue, said Bond (or portion thereof)
shall cease to be entitled to any benefit or security under this
Indenture, and the Holder of said Bond shall have no rights in
respect thereof except to receive payment of said principal and
interest accrued to the date fixed for redemption.
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ARTICLE V.: REVENUES; FUNDS AND ACCOUNTS;
PAYMENT OF PRINCIPAL AND INTEREST
SECTION 5.01 Pledse and Assisnment; Revenue Fund.
(a) Subject only to the provisions of this Indenture permitting the application thereof for the purposes and on the terms and conditions set forth herein, all of the Revenues and any other amounts (including proceeds of the sale of Bonds) held in any fund or account established pursuant to this Indenture
(except to the extent provided in Section 6.06 and excepting the
Rebate Fund created by Section 5.05) are hereby pledged to secure
the payment of the principal of and interest on the Bonds in
accordance with their terms and the provisions of this Indenture.
Said pledge shall constitute a lien on and security interest in
such assets and shall attach, be perfected and be valid and
binding from and after delivery of the Bonds, without any
physical delivery thereof or further act.
(b) The Authority hereby transfers in trust, and
assigns to the Trustee, for the benefit of the Holder from time
to time of the Bonds, all of the Revenues and other assets
pledged in subsection (A) of this Section and all of the right,
title and interest of the Authority in the Agreement (except for
the right to receive any Additional Payments to the extent
payable to the Authority under Sections 4.2 (c) and (d) , 7.3, 9.2
and 9.3 of the Agreement, any rights of the Authority to
indemnification and rights of inspection and consent). The
Trustee shall be entitled to and shall collect and receive all of
the Revenues, and any Revenues collected or received by the
Authority shall be deemed to be held, and to have been collected or received, by the Authority as the agent of the Trustee and shall forthwith be paid by the Authority to the Trustee. The Trustee also shall be entitled to and shall take all steps,
actions and proceedings reasonably necessary in its judgment to enforce, either jointly with the Authority or separately, all of
the rights of the Authority and all of the obligations of the
Borrower under the Agreement.
(c) All Revenues shall be promptly deposited by the
Trustee upon receipt thereof in a special fund designated as the
Revenue Fund which the Trustee shall establish, maintain and hold
in trust; except as otherwise provided in Section 5.02 and all
moneys received by the Trustee and required to be deposited in the Redemption Account shall be promptly deposited in the Redemption Account, which the Trustee shall establish, maintain and hold in trust. All Revenues deposited with the Trustee shall be held, disbursed, allocated and applied by the Trustee only as
provided in this Indenture.
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SECTION 5.02 Allocation of Revenues.
On or before any date on which interest or principal
(whether at maturity, or by redemption or acceleration) is due,
the Trustee shall transfer funds from the Revenue Fund and
deposit into the following respective accounts (each of which the
Trustee shall establish and maintain within the Revenue Fund),
the following amounts, in the following order of priority, the
requirements of each such account (including the making up of any
deficiencies in any such account resulting from lack of Revenues
sufficient to make any earlier required deposit) at the time of
deposit to be satisfied before any transfer is made to any
account subsequent in priority:
First: to the Interest Account, the aggregate amount of interest becoming due and payable on the next succeeding Interest
Payment Date on all Bonds then Outstanding, until the balance in
said account is equal to said aggregate amount of interest.
Second: to the Principal Account, the amount paid by
the Borrower and designated as or attributable to principal on
the Bonds in the most recent Loan Repayment equal to the
aggregate amount of principal due on the next principal payment
date.
Third: to the Redemption Account, the aggregate amount
of principal and premium next coming due by acceleration or by
redemption permitted or required under Article IV hereof, or any
portion thereof paid by the Borrower.
SECTION 5.03 Use of Moneys in Revenue Fund.
Funds for the payment of the principal or redemption
price of and interest on the Bonds shall be paid on each Bond
Payment Date from the funds in each of the respective accounts in
the Revenue Fund.
Notwithstanding the foregoing provisions of Sections
5.02 and 5.03, if the Borrower and the Bondholder so determine and notify the Trustee in writing, the Borrower may make Loan
Repayments directly to the Bondholder, and such payments shall be
deemed to have been made through the Revenue Fund. The
Bondholder shall keep records of all payments received which
shall be available on request to the Trustee. If the Borrower
fails to make any required payment on the Bonds pursuant to these
arrangements, the Bondholder may notify the Trustee in writing of such failure, and the Trustee shall be authorized to treat such failure as if it were default under this Indenture.
SECTION 5.04 Investment of Moneys.
All moneys in any of the funds or accounts established
pursuant to this Indenture shall be invested by the Trustee as directed by Request of the Borrower, solely in Investment
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Securities. Notwithstanding any other provision herein, in the
absence of written investment instructions directing the Trustee
by noon of the Business Day preceding the day when investments
are to be made, the Trustee is directed to invest available funds
in the Investment Securities listed in clause (viii) of the
definition thereof. The Trustee shall not be liable for any
consequences resulting from any investments made pursuant to this
Section 5.04.
Investment Securities may be purchased at such prices
as the Trustee may in its discretion determine or as may be
directed by Request of the Borrower. All Investment Securities
shall be acquired subject to any limitations set forth in the Tax Certificate, the limitations as to maturities hereinafter in this Section set forth and such additional limitations or requirements
consistent with the foregoing as may be established by Request of
the Borrower.
Moneys in all funds and accounts shall be invested in
Investment Securities maturing not later than the date on which
it is estimated that such moneys will be required for the
purposes specified in this Indenture.
All interest, profits and other income received from the investment of moneys in any fund or account established
pursuant to this Indenture shall be deposited in the fund or account which generated such earnings. to the contrary contained in this paragraph, an amount of
interest received with respect to any Investment Security equal
to the amount of accrued interest, if any, paid as part of the Purchase Price of such Investment Security shall be credited to
the fund from which such accrued interest was paid.
Notwithstanding anything
For the purpose of determining the amount in any fund,
all Investment Securities credited to such fund shall be valued
at cost plus, prior to the first payment of interest following
purchase, the amount of accrued interest, if any, paid as a part
of the Purchase Price.
Subject to Section 6.06, investments in any and all
funds and accounts may be commingled for purposes of making,
holding and disposing of investments, notwithstanding provisions
herein for transfer to or holding in particular funds and
accounts amounts received or held by the Trustee hereunder,
provided that the Trustee shall at all times account for such investments strictly in accordance with the funds and accounts to which they are credited and otherwise as provided in this Indenture. The Trustee may act as principal or agent in the making or disposing of any investment. The Trustee may sell or
present for redemption any Investment Securities so purchased
whenever it shall be necessary to provide moneys to meet any
required payment, transfer, withdrawal or disbursement from the
fund to which such Investment Security is credited, and the
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Trustee shall not be liable or responsible for any loss resulting
from such investment.
SECTION 5.05 Rebate Fund.
(a) The Trustee shall establish and maintain a fund separate from any other fund established and maintained hereunder designated as the IICIP Limited, L.P. Project Rebate Fund" (herein called the "Rebate Fund"). Within the Rebate Fund, the Trustee shall maintain such accounts as it is instructed by the Borrower as shall be necessary in order to comply with the terms and requirements of the Tax Certificate. Subject to the transfer provisions provided in paragraph (e) below, all money at any time
deposited in the Rebate Fund shall be held by the Trustee in
trust, to the extent required to satisfy the Rebate Requirement
(as defined in the Tax Certificate), for payment to the federal
government of the United States of America, and no other person
shall have any rights in or claim to such money. All amounts
deposited into or on deposit in the Rebate Fund shall be governed
by this Section 5.06, by Section 6.06 hereof and by the Tax
Certificate (which is incorporated herein by reference). The
Trustee shall be deemed conclusively to have complied with such provisions if it follows the directions of the Borrower including supplying all necessary information in the manner provided in the
Tax Certificate, shall not be required to take any actions thereunder, in the absence of written directions by the Borrower,
and shall have no liability or responsibility to enforce
compliance by the Borrower or the Authority with the terms of the
Tax Certificate.
(b) Upon the Borrower's written direction, an amount
shall be deposited to the Rebate Fund by the Trustee from
deposits by the Borrower if and to the extent required, so that
the balance of the amount on deposit thereto shall be equal to
the Rebate Requirement. Computations of the Rebate Requirement
shall be furnished by or on behalf of the Borrower in accordance
with the Tax Certificate.
(c) The Trustee shall have no obligation to rebate any
amounts required to be rebated pursuant to this Section 5.01
other than from moneys held in the funds and accounts created under this Indenture or from other moneys provided to it by or on
behalf of the Borrower.
(d) The Trustee shall invest all amounts held in the Rebate Fund in Investment Securities as instructed in writing by the Borrower, which instructions shall comply with the restrictions set forth in the Tax Certificate and upon which the Trustee may conclusively rely. Money shall not be transferred from the Rebate Fund except as provided in paragraph (e) below.
(e) Upon receipt of the Borrower's written directions,
the Trustee shall remit part or all of the balances in the Rebate
Fund to the United States, as so directed. In addition, if the
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Borrower so directs, the Trustee will deposit moneys into or
transfer moneys out of the Rebate Fund from or into such accounts
or funds as directed by the Borrower's written directions. Any funds remaining in the Rebate Fund after redemption or payment of all of the Bonds and payment and satisfaction of any Rebate Requirement, or provision made therefor satisfactory to the Trustee shall be withdrawn and remitted to the Borrower upon the Borrower's written request after having first made provisions for payment to the Trustee of any amounts due under Section 8.06
hereof.
(f) Notwithstanding any other provision of this
Indenture, including in particular Article X hereof, the
obligation to remit the Rebate Requirement to the United States
and to comply with all other requirements of this Section 5.07,
Section 6.06 hereof and the Rebate Certificate shall survive the
defeasance or payment in full of the Bonds.
ARTICLE VI.: PARTICULAR COVENANTS
SECTION 6.01 Punctual Payment.
The Authority shall punctually pay or cause to be paid the principal, premium, if any, and interest to become due in respect of all the Bonds, in strict conformity with the terms of the Bonds and of this Indenture, according to the true intent and meaning thereof, but only out of Revenues and other assets pledged for such payment as provided in this Indenture. When and as paid in full, all Bonds, if any, shall be delivered to the Trustee, shall forthwith be cancelled and shall thereafter be redelivered to the Authority.
SECTION 6.02 Extension of Payment of Bonds.
The Authority shall not directly or indirectly extend or assent to the extension of the maturity of any of the Bonds or the time of payment of any claims for interest by the purchase or funding of such Bonds or claims for interest or by any other arrangement and in case the maturity of any of the Bonds or the time of payment of any such claims for interest shall be
extended, such Bonds or claims for interest shall not be
entitled, in case of any default hereunder, to the benefits of this Indenture, except subject to the prior payment in full of the principal of all of the Bonds then Outstanding and of all claims for interest thereon which shall not have been so
extended. Nothing in this Section shall be deemed to limit the
right of the Authority to issue bonds for the purpose of refunding any Outstanding Bonds, and such issuance shall not be deemed to constitute an extension of maturity of Bonds.
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SECTION 6.03 Asainst Encumbrances.
The Authority shall not create, or permit the creation
of, any pledge, lien, charge or other encumbrance upon the
Revenues and other assets pledged or assigned under this
Indenture while any of the Bonds are Outstanding, except the
pledge and assignment created by this Indenture. Subject to this
limitation, the Authority expressly reserves the right to enter into one or more other indentures for any of its corporate purposes, including other programs under the Act, and reserves
the right to issue other obligations for such purposes.
SECTION 6.04 Power to Issue Bonds and Make Pledse and
Assisnment.
The Authority is duly authorized pursuant to law to issue the Bonds and to enter into this Indenture and to pledge
and assign the Revenues and other assets purported to be pledged
and assigned, respectively, under this Indenture in the manner
and to the extent provided in this Indenture. The Bonds and the
provisions of this Indenture are and will be the legal, valid and
binding limited obligations of the Authority in accordance with
their terms, and the Authority and Trustee shall at all times, to
the extent permitted by law, defend, preserve and protect said
pledge and assignment of Revenues and other assets and all the
rights of the Bondholders under this Indenture against all claims
and demands of all persons whomsoever, subject to the limitations
set forth in Article VI11 relating to the Trustee.
SECTION 6.05 Accountins Records and ReDorts.
The Trustee shall keep or cause to be kept proper books
of record and account in which complete and correct entries shall
be made of all transactions relating to the receipt, investment,
disbursement, allocation and application of the Revenues and the
proceeds of the Bonds. Such records shall specify the account or
fund to which each investment (or portion thereof) held by the
Trustee is to be allocated and shall set forth, in the case of each Investment Security, (a) its purchase price, (b) identifying information, including par amount, coupon rate, and payment
dates, (c) the amount received at maturity or its sale price, as
the case may be, (d) the amounts and dates of any payments made
with respect thereto, and (e) such documentation as is required
to be retained by the Trustee as evidence to establish any
requirements set forth in the Tax Certificate. Such records shall be open to inspection by the Holder at any reasonable time
during regular business hours on reasonable notice.
SECTION 6.06 Arbitrase Covenants.
(a) The Authority and the Borrower covenant and agree
that they will make no use of the proceeds of the Bonds which
will cause the Bonds to be obligations other than obligations
described in Section 103(a) of the Code. The Authority and the
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Borrower will not directly or indirectly use or permit the use of
any proceeds of the Bonds or any other funds of the Authority or
the Borrower, or take or omit to take any action that would cause
the Bonds to be “arbitrage bonds” within the meaning of Section
148(a) of the Code. To that end, the Authority and the Borrower
will comply with all requirements of Section 148 of the Code and
all applicable regulations of the United States Department of
Treasury proposed or promulgated thereunder (the “Resulationst1).
(For purposes of this Section 6.06 all capitalized terms not
defined herein shall have the meanings ascribed to such terms in
the Tax Certificate.) The Authority and the Borrower specifically agree that:
(i) except as otherwise expressly permitted under the Regulations, the Authority and the Borrower will allow no more Gross Proceeds of the Bonds than an amount equal to 150% of the Scheduled Debt Service for any Bond Year to be invested during that Bond Year in Nonpurpose Investments with a Yield in
excess of the Yield on the Bonds; and
(ii) the Borrower will pay, or cause to be paid, from time to time all amounts required to be rebated to the United States pursuant to Section 148(f) of the Code and any temporary, proposed or final Regulations as may be applicable to the Bonds from time to time. This covenant shall survive payment in full or defeasance of the Bonds. The Authority and the Borrower specifically covenant to pay or cause to be paid to the
United States at the times and in the amounts determined under Section 5.06 hereof the Rebate Requirement, as described in the Tax Certificate. The Trustee agrees to comply with all written instructions of the Borrower given in accordance with the Tax Certificate.
The Trustee conclusively shall be deemed to have complied with the provisions of this Section 6.06(a) if it
follows the directions of the Borrower set forth in the
instructions required by the Tax Certificate and shall not be
required to take any action under this Section 6.06(a) in the
absence of such directions from the Borrower. Subject to Section
8.03, the Trustee shall not be liable for any consequences
resulting from its failure to act if no instructions from the Borrower (or in the absence of Borrower instructions, instructions from the Authority) are delivered to it.
(b) Notwithstanding any provision of this Section, if
the Borrower shall provide to the Trustee and the Authority an
opinion of Bond Counsel that any action required under Section 5.06 or this Section 6.06 is no longer required, or that some further action is required to maintain the Tax-exempt status of
interest on the Bonds, the Trustee and the Authority may rely conclusively on such opinion in complying with the requirements
of this Section, and the covenants contained herein shall be
deemed to be modified to that extent.
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SECTION 6.07 Other Covenants.
(a) The Trustee shall promptly collect all amounts due from the Borrower pursuant to the Agreement, shall perform all duties imposed upon it pursuant to the Agreement and shall diligently enforce, and take all steps, actions and proceedings
reasonably necessary for the enforcement of all of the rights of the Authority and all of the obligations of the Borrower.
(b) The Authority shall not amend, modify or terminate any of the terms of the Agreement, or consent to any such amendment, modification or termination, without the written
consent of the Trustee. The Trustee shall give such written
consent only if (1) in the Opinion of Counsel, such amendment, modification or termination will not materially adversely affect the interests of the Bondholders or result in any material impairment of the security hereby given for the payment of the Bonds, or (2) the Trustee first obtains the written consent of the Holders of a majority in principal amount of the Bonds then
Outstanding to such amendment, modification or termination,
provided that no such amendment, modification or termination
shall reduce the amount of Loan Repayments to be made to the
Authority or the Trustee by the Borrower pursuant to the
Agreement, or extend the time for making such payments, without the written consent of all of the Holders of the Bonds then Outstanding. The Trustee shall be entitled to rely upon an opinion of counsel with respect to the effect of any amendments hereto or to the Agreement.
SECTION 6.08 Waiver of Laws.
The Authority shall not at any time insist upon or
plead in any manner whatsoever, or claim or take the benefit or
advantage of, any stay or extension law now or at any time
hereafter in force that may affect the covenants and agreements
contained in this Indenture or in the Bonds, and all benefit or
advantage of any such law or laws is hereby expressly waived by the Authority to the extent permitted by law.
SECTION 6.09 Further Assurances.
The Authority will make, execute and deliver any and
all such further indentures, instruments and assurances as may be
reasonably necessary or proper to carry out the intention or to
facilitate the performance of this Indenture and for the better
assuring and confirming unto the Holders of the Bonds of the rights and benefits provided in this Indenture.
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ARTICLE VII.: EVENTS OF DEFAULT AND REMEDIES OF BONDHOLDERS
SECTION 7.01 Events of Default; Acceleration: Waiver of Default.
Each of the following events shall constitute an “Event
of Default” hereunder:
(a) default in the due and punctual payment of the principal of, or premium (if any) on, the Bond when and as the same shall become due and payable, whether at maturity as therein expressed, by proceedings for redemption, by declaration or otherwise;
(b) default in the due and punctual payment of any installment of interest on the Bond, when and as such interest installment shall become due and payable and the continuation of such failure for a period of five days after the due date for such payment;
(c) failure by the Authority to perform or observe any other of the covenants, agreements or conditions on its part in this Indenture or in the Bonds contained, and the
continuation of such failure for a period of sixty (60) days after written notice thereof, specifying such default and requiring the same to be remedied, shall have been given to the Authority, and the Borrower by the Trustee, or to the Authority, the Borrower and the Trustee by the holders of not less than sixty-six percent (66%) in aggregate principal amount of the Bonds at the time Outstanding; or
(d) the occurrence and continuance of a Loan
Default Event described in Section 7.1 of the Agreement.
No default specified in (c) above shall constitute an
Event of Default unless the Authority and the Borrower shall have failed to correct such default within the applicable period; provided, however, that if the default shall be such that it cannot be corrected within such period, it shall not constitute an Event of Default if corrective action is instituted by the
Authority or the Borrower within the applicable period and diligently pursued.
concerning which notice is given to the Borrower under the
provisions of this Section, the Authority hereby grants the Borrower full authority for account of the Authority to perform any covenant or obligation the non-performance of which is alleged in said notice to constitute a default in the name and
stead of the Authority with full power to do any and all things
and acts to the same extent that the Authority could do and
perform any such things and acts and with power of substitution.
With regard to any alleged default
During the continuance of an Event of Default, unless the principal of all the Bonds shall have already become due and
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payable, the Trustee may, and upon the written request of the Bondholder, the Trustee shall, immediately, by notice in writing to the Authority and the Borrower, declare the principal of all the Bonds then Outstanding, and the interest accrued thereon, to be due and payable immediately, and upon any such declaration the same shall become and shall be immediately due and payable, anything in this Indenture or in the Bonds contained to the contrary notwithstanding. Interest on the Bonds and on any overdue payments as provided in the Loan Agreement shall continue to accrue until paid. The Trustee shall notify the Bondholders of the date of acceleration in the same manner as for a notice of redemption.
The preceding paragraph, however, is subject to the
condition that if, at any time after the principal of the Bonds
shall have been so declared due and payable, and before any
judgment or decree for the payment of the moneys due shall have
been obtained or entered as hereinafter provided, there shall have been deposited with the Trustee a sum sufficient to pay all
the principal of the Bonds matured prior to such declaration and
all matured installments of interest (if any) upon all the Bonds, with interest on such overdue installments of principal as provided in the Agreement, and the reasonable expenses of the Trustee, and any and all other defaults known to the Trustee (other than in the payment of principal of and interest on the Bonds due and payable solely by reason of such declaration) shall
have been made good or cured to the satisfaction of the Trustee or provision deemed by the Trustee to be adequate shall have been
made therefor, then, and in every such case, the holders of at
least a majority in aggregate principal amount of the Bonds then
Outstanding, by written notice to the Authority and to the
Trustee, may, on behalf of the holders of all the Bonds, rescind
and annul such declaration and its consequences and waive such
default; but no such rescission and annulment shall extend to or
shall affect any subsequent default, or shall impair or exhaust
any right or power consequent thereon.
SECTION 7.02 Institution of Lesal Proceedinss by Trustee.
If one or more of the Events of Default shall happen and be continuing, the Trustee in its discretion may, and upon
the written request of the Bondholder and upon being indemnified
to its satisfaction therefor shall, proceed to protect or enforce
its rights or the rights of the holders of Bonds under the Act or
under this Indenture or the Agreement by a suit in equity or action at law, either for the specific performance of any covenant or agreement contained herein or therein, or in aid of the execution of any power herein or therein granted, or by mandamus or other appropriate proceeding for the enforcement of
any other legal or equitable remedy as the Trustee shall deem
most effectual in support of any of its rights or duties
hereunder.
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SECTION 7.03 Application of Revenues and Other Funds After
Default.
If an Event of Default shall occur and be continuing,
all Revenues and any other funds then held or thereafter received
by the Trustee under any of the provisions of this Indenture
(subject to Sections 5.05, 6.06 and 11.11) shall be applied by
the Trustee as follows and in the following order:
(1) To the payment of any expenses necessary in the
opinion of the Trustee to protect the interests of the
Bondholder and payment of reasonable charges and expenses (including those previously outstanding) of the Trustee
(including reasonable fees and disbursements of its counsel)
incurred in and about the performance of its powers and
duties under this Indenture;
(2) To the payment of the principal of and interest
then due on the Bonds (upon presentation of the Bonds to be
paid, and stamping thereon of the payment if only partially paid, or surrender thereof if fully paid) subject to the provisions of this Indenture (including Section 6.021, as
follows:
First: To the payment of interest then due on the Bond in the order of the maturity of such installments, and, if the amount available shall not be sufficient to pay in full any installment or installments maturing on the same date, then to the payment thereof ratably, according to the amounts due thereon, without any
discrimination or preference; and
Second: To the payment of the unpaid principal of the Bond which shall have become due, whether at
maturity or by call for redemption, with interest on the overdue principal at the rate borne by the Bond,
and, if the amount available shall not be sufficient to
pay in full all the Bond, together with such interest, then to the payment thereof ratably, according to the amounts of principal due on such date without any discrimination or preference.
SECTION 7.04 Trustee to Represent Bondholders.
The Trustee is hereby irrevocably appointed (and the
successive respective Holders of the Bond, by taking and holding
the same, shall be conclusively deemed to have so appointed the
Trustee) as trustee and true and lawful attorney-in-fact of the
Bondholder for the purpose of exercising and prosecuting on its
behalf such rights and remedies as may be available to such
Holder under the provisions of the Bonds, this Indenture, the Agreement, the Act and applicable provisions of any other law. Upon the occurrence and continuance of an Event of Default or other occasion giving rise to a right in the Trustee to represent
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the Bondholder, the Trustee in its discretion may, and upon the
written request of the Bondholder, and upon being indemnified to its satisfaction therefor, shall, proceed to protect or enforce its rights or the rights of such Holder by such appropriate action, suit, mandamus or other proceedings as it shall deem most effectual to protect and enforce any such right, at law or in equity, either for the specific performance of any covenant or agreement contained herein, or in aid of the execution of any power herein granted, or for the enforcement of any other appropriate legal or equitable right or remedy vested in the Trustee or in such Holder under this Indenture, the Agreement, the Act or any other law; and upon instituting such proceeding, the Trustee shall be entitled, as a matter of right, to the appointment of a receiver of the Revenues and other assets
pledged under this Indenture, pending such proceedings. All
rights of action under this Indenture or the Bonds or otherwise
may be prosecuted and enforced by the Trustee without the
possession of any of the Bonds or the production thereof in any
proceeding relating thereto, and any such suit, action or
proceeding instituted by the Trustee shall be brought in the name of the Trustee for the benefit and protection of the Holder of such Bond, subject to the provisions of this Indenture (including Section 6.02).
SECTION 7.05 Riqht of Bondholder to Direct Proceedinqs.
Anything in this Indenture to the contrary
notwithstanding, the Bondholder shall have the right, by an
instrument or concurrent instruments in writing executed and
delivered to the Trustee, to direct the method of conducting all
remedial proceedings taken by the Trustee hereunder.
SECTION 7.06 Limitation on Bondholders’ Risht to Sue.
No Holder of any Bond shall have the right to institute any suit, action or proceeding at law or in equity, for the
protection or enforcement of any right or remedy under this Indenture, the Agreement, the Act or any other applicable law
with respect to such Bond, unless (1) such Holder shall have
given to the Trustee written notice of the occurrence of an Event
of Default; (2) such Holder shall have tendered to the Trustee reasonable indemnity against the costs, expenses and liabilities to be incurred in compliance with such request; and (3) the
Trustee shall have refused or omitted to comply with such request for a period of sixty (60) days after such written request shall have been received by, and said tender of indemnity shall have been made to, the Trustee.
Such notification, request, tender of indemnity and refusal or omission are hereby declared, in every case, to be
conditions precedent to the exercise by the Bondholder of any
remedy hereunder or under law; it being understood and intended
that the Holder shall not have any right in any manner whatever
by his or their action to affect, disturb or prejudice the
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security of this Indenture, or to enforce any right under this
Indenture, the Agreement, the Act or other applicable law with respect to the Bonds, except in the manner herein provided.
SECTION 7.07 Absolute Oblisation of Authoritv.
Nothing in Section 7.06 or in any other provision of
this Indenture, or in the Bonds contained, shall affect or impair
the obligation of the Authority, which is absolute and unconditional, to pay the principal of and interest on the Bonds
to the Bondholder at its dates of maturity, or upon call for
redemption, as herein provided, but only out of the Revenues and
other assets herein pledged therefor, or affect or impair the
right of such Holder, which is also absolute and unconditional,
to enforce such payment by virtue of the contract embodied in the
Bond.
SECTION 7.08 Termination of Proceedinss.
In case any proceedings taken by the Trustee or the
Bondholder on account of any Event of Default shall have been
discontinued or abandoned for any reason or shall have been
determined adversely to the Trustee or the Bondholder, then in
every such case the Authority, the Trustee and the Bondholder, subject to any determination in such proceedings, shall be
restored to their former positions and rights hereunder,
severally and respectively, and all rights, remedies, powers and
duties of the Authority, the Trustee and the Bondholder shall
continue as though no such proceedings had been taken.
SECTION 7.09 Remedies Not Exclusive.
No remedy herein conferred upon or reserved to the
Trustee, or to the Bondholder is intended to be exclusive of any other remedy or remedies, and each and every such remedy, to the
extent permitted by law, shall be cumulative and in addition to
any other remedy given hereunder or now or hereafter existing at
law or in equity or otherwise.
SECTION 7.10 No Waiver of Default.
No delay or omission of the Trustee or of the
Bondholder to exercise any right or power arising upon the
occurrence of any default shall impair any such right or power or
shall be construed to be a waiver of any such default or an acquiescence therein; and every power and remedy given by this
Indenture to the Trustee or to the Bondholder may be exercised from time to time and as often as may be deemed expedient.
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ARTICLE VIII.: THE TRUSTEE, THE PAYING AGENT,
AND THE BOND REGISTRAR
SECTION 8.01 Duties, Immunities and Liabilities of Trustee.
(A) The Trustee shall, prior to an Event of Default,
and after the curing of all Events of Default which may have
occurred, perform such duties and only such duties as are
specifically set forth in this Indenture. The Trustee shall,
during the existence of any Event of Default (which has not been
cured), exercise such of the rights and powers vested in it by
this Indenture, and use the same degree of care and skill in their exercise, as prudent persons would exercise or use under the circumstances in the conduct of their own affairs. Notwithstanding any other provision of this Indenture, the Trustee shall perform all duties required of it hereunder.
No provision of this Indenture shall be construed to
relieve the Trustee, the Registrar or the Paying Agent from
liability for its own negligent action or its own negligent
failure to act, except that:
(a) Prior to such an Event of Default hereunder and
after the curing of all Events of Default which may have occurred,
(1) the duties and obligations of the Trustee and
the Registrar, as the case may be, shall be determined solely by the express provisions of this Indenture, the
Trustee and Registrar, as the case may be, shall not be
liable except for the performance of such duties and
obligations as are specifically set forth in this
Indenture, and no implied covenants or obligations shall be read into this Indenture against the Trustee and the Registrar, as the case may be; and
(2) in the absence of bad faith on the part of the
Trustee, the Registrar or the Paying Agent, as the case may be, the Trustee or Registrar, as the case may be,
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, the Registrar or the Paying
Agent, as the case may be, conforming to the
requirements of this Indenture; but in the case of any
such certificate or opinion which by any provision
hereof is specifically required to be furnished to the
Trustee, the Registrar or the Paying Agent, as the case may be, shall be under a duty to examine the same to determine whether or not it conforms to the requirements of this Indenture; and
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(b) At all times, regardless of whether or not any
Event of Default shall exist,
(1) the Trustee and the Registrar shall not be
liable for any error of judgment made in good faith by
a responsible officer or officers of the Trustee, the
Registrar or the Paying Agent unless it shall be proved
that the Trustee, the Registrar or the Paying Agent, as
the case may be, was negligent in ascertaining the
pertinent facts;
(2) neither the Trustee nor the Registrar shall 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 Bondholder under Section 7.05 relating
to the time, method and place of conducting any proceeding for any remedy available to the Trustee, or exercising any trust or power conferred upon the Trustee, the Registrar or the Paying Agent under this Indenture.
None of the provisions contained in this Indenture shall require the Trustee or Registrar to expend or risk their own funds or otherwise incur individual financial liability in the performance of any of their duties or in the exercise of any
of their rights or powers other than to notify the Authority that they intend to take no particular action or to notify the Bondholder that they will take no action. All indemnifications and releases from liability granted herein to the Trustee shall extend to the directors, officers, employees and agents of the Trustee.
(B) The Authority may remove the Trustee at any time upon its own decision or upon request of the Borrower, or the Bondholder or if at any time the Trustee shall cease to be
eligible in accordance with subsection (E) of this Section, or
shall become incapable of acting, or shall be adjudged bankrupt
or insolvent, or a receiver of the Trustee or its property shall be appointed, or any public officer shall take control or charge
of the Trustee or of its property or affairs for the purpose of
rehabilitation, conservation or liquidation, in each case by
giving written notice of such removal to the Trustee, and
thereupon shall appoint, with the consent of the Bondholder, a
successor Trustee by an instrument in writing.
(C) The Trustee may at any time resign by giving written notice of such resignation to the Authority and by giving
the Bondholder notice of such resignation by mail at the
addresses shown on the registration books maintained by the
Trustee. Upon receiving such notice of resignation, the
Authority shall promptly appoint, with the consent of the Bondholder, a successor Trustee by an instrument in writing. The Trustee shall not be relieved of its duties until such successor Trustee has accepted appointment.
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(D) Any removal or resignation of the Trustee pursuant
to (B) or (C) above and appointment of a successor Trustee shall
only become effective upon acceptance of appointment by the
successor Trustee. If no successor Trustee shall have been
appointed and have accepted appointment within forty-five (45)
days of giving notice of removal or notice of resignation as
aforesaid, the resigning Trustee or the Bondholder may petition
any court of competent jurisdiction for the appointment of a
successor Trustee, and such court may thereupon, after such
notice (if any) as it may deem proper, appoint such successor
Trustee. Any successor Trustee appointed under this Indenture,
shall signify its acceptance of such appointment by executing and delivering to the Authority and to its predecessor Trustee a
written acceptance thereof, and thereupon such successor Trustee,
without any further act, deed or conveyance, shall become vested
with all the moneys, estates, properties, rights, powers, trusts,
duties and obligations of such predecessor Trustee, with like
effect as if originally named Trustee herein; but, nevertheless
at the Request of the Authority or the request of the successor
Trustee, such predecessor Trustee shall execute and deliver any
and all instruments of conveyance or further assurance and do
such other things as may reasonably be required for more fully
and certainly vesting in and confirming to such successor Trustee
all the right, title and interest of such predecessor Trustee in
and to any property held by it under this Indenture and shall pay
over, transfer, assign and deliver to the successor Trustee any
money or other property subject to the trusts and conditions
herein set forth. Upon request of the successor Trustee, the
Authority shall execute and deliver any and all instruments as
may be reasonably required for more fully and certainly vesting in and confirming to such successor Trustee all such moneys, estates, properties, rights, powers, trusts, duties and obligations. Upon acceptance of appointment by a successor Trustee as provided in this subsection, the Authority shall mail a notice of the succession of such Trustee to the trusts hereunder, to the Bondholder at the address shown on the
registration books maintained by the Trustee. If the Authority fails to mail such notice within fifteen (15) days after
acceptance of appointment by the successor Trustee, the successor
Trustee shall cause such notice to be mailed at the expense of
the Authority.
(E) Any Trustee appointed under the provisions of this
Section in succession to the Trustee shall be a trust company or bank having the powers of a trust company, 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 bank or trust company
publishes a report of condition at least annually, pursuant to law or to the requirements of any supervising or examining authority above referred to, then for the purpose of this subsection the combined capital and surplus of such bank or trust
company shall be deemed to be its combined capital and surplus as
set forth in its most recent report of condition so published.
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In case at any time the Trustee shall cease to be eligible in
accordance with the provisions of this subsection (E), the Trustee shall resign immediately in the manner and with the effect specified in this Section.
(F) The Trustee is not responsible for effecting,
maintaining or renewing any policies of insurance or for any representations regarding the sufficiency of any policy of insurance.
(G) The Trustee is not responsible for filing financing
or continuation statements.
(H) Subject to the provisions of Section 10.03, all
moneys received by the Trustee shall, until used or applied as herein provided, be held in trust for the purposes for which they were received. Any interest allowed on any such moneys shall be deposited in the fund to which such moneys are credited. Any moneys held by the Trustee may be deposited by it in its banking
department and invested as provided herein.
(I) The Trustee shall not be obligated to file claims,
or proofs of loss in the case of insurance, or to pay taxes or
assessments.
SECTION 8.02 Merser or Consolidation.
Any company into which the Trustee may be merged or converted or with which it may be consolidated or any company resulting from any merger, conversion or consolidation to which
it shall be a party or any company to which the Trustee may sell
or transfer all or substantially all of its corporate trust business, provided such company shall be eligible under subsection (E) of Section 8.01 shall be the successor to such
Trustee without the execution or filing of any paper or any further act, anything herein to the contrary notwithstanding.
SECTION 8.03 Liability of Trustee.
(A) The recitals of facts herein and in the Bonds contained shall be taken as statements of the Authority, and the Trustee shall assume no responsibility for the correctness of the
same, or make any representations as to the validity or
sufficiency of this Indenture or of the Bonds. In addition, the
Trustee shall assume no responsibility with respect to this
Indenture or Bonds other than in connection with the duties or
obligations assigned to or imposed upon the Trustee herein or in
the Bonds. The Trustee shall, however, be responsible for its
representations contained in its certificate of authentication on the Bonds. The Trustee shall not be liable in connection with the performance of its duties hereunder, except for its own
negligence or default. The Trustee may become the owner of Bonds
with the same rights it would have if it were not Trustee and, to the extent permitted by law, may act as depository for and permit
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any of its officers or directors to act as a member of, or in any
other capacity with respect to, any committee formed to protect
the rights of Bondholders, whether or not such committee shall
represent the Holders of a majority in principal amount of the
Bonds then Outstanding.
The Trustee may execute any of the trusts or powers set
forth herein and perform the duties required of it hereunder by
or through attorneys, agents, or receivers, and shall be entitled
to the advice of counsel concerning all matters of trusts and its
duties herein, and the Trustee shall not be answerable for the
default or misconduct of any such attorney, agent or receiver
selected by it with reasonable care.
(B) The Trustee shall not be liable for any error of
judgment made in good faith by a responsible officer, unless it
shall be proved that the Trustee was negligent in ascertaining
the pertinent facts.
(C) The Trustee shall be under no obligation to
exercise any of the rights or powers vested in it by this
Indenture at the request, order or direction of the Bondholder
pursuant to the provisions of this Indenture unless the Trustee
shall have been offered reasonable security or indemnity against
the costs, expenses and liabilities which may be incurred therein
or thereby.
(D) The Trustee shall not be liable for any action
taken by it in good faith and believed by it to be authorized or
within the discretion or rights or powers conferred upon it by this Indenture.
(E) The Trustee shall not be deemed to have knowledge
of any default or Event of Default hereunder unless and until it shall have actual knowledge thereof, or shall have received
written notice thereof, at its principal Corporate Trust Office.
Except as otherwise expressly provided herein, the Trustee shall
not be bound to ascertain or inquire as to the performance or
observance of any of the terms, conditions, covenants or
agreements herein or of any of the documents executed in
connection with the Bonds, or as to the existence of a default or
Event of Default thereunder. The Trustee shall not be
responsible for the validity or effectiveness of any collateral
given to or held by it.
(F) No provision of this Indenture shall require the
Trustee to expend or risk its own funds or otherwise incur any financial liability in the performance of any of its duties hereunder, or in the exercise of its rights or powers, if it shall have reasonable grounds for believing that payment for such funds or adequate indemnity against such risk or liability is not
reasonably assured to it.. The Trustee shall, however, in any
case pay principal of or interest on the Bonds as it becomes due
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and accelerate the Bonds as required by the Indenture,
notwithstanding anything to the contrary herein.
(G) The Trustee shall have no responsibility, opinion
or liability with respect to any information statement or recital
found in any Official Statement or other disclosure material,
prepared or distributed with respect to the issuance of such
Bonds, except for information provided in writing by the Trustee.
SECTION 8.04 Risht of Trustee to Relv on Documents.
The Trustee shall be protected in acting upon any
notice, resolution, request, consent, order, certificate, report,
opinion, bond or other paper or document believed by it to be
genuine and to have been signed or presented by the proper party or parties. In particular, the Trustee shall be entitled to rely upon a Borrower's Certificate to the effect that no Act of Bankruptcy has occurred. The Trustee may consult with counsel, who may be counsel of or to the Authority or the Borrower, with regard to legal questions, and the opinion of such counsel shall be full and complete authorization and protection in respect of any action taken or suffered by it hereunder in good faith and in
accordance therewith.
The Trustee shall not be bound to recognize any person
as the Holder of a Bond unless and until such Bond is submitted
for inspection, if required, and his title thereto is
satisfactorily established, if disputed.
Whenever in the administration of the trusts imposed upon it by this Indenture the Trustee shall deem it necessary or desirable that a matter be proved or established prior to taking or suffering any action hereunder, such matter (unless other evidence in respect thereof be herein specifically prescribed) may be deemed to be conclusively proved and established by a Certificate of the Authority, and such Certificate shall be full warrant to the Trustee for any action taken or suffered in good faith under the provisions of this Indenture in reliance upon such Certificate, but in its discretion the Trustee may, in lieu thereof, accept other evidence of such matter or may require such additional evidence as to it may deem reasonable.
SECTION 8.05 Preservation and Inspection of Documents.
All documents received by the Trustee under the provisions of this Indenture shall be retained in its possession
and shall be subject at all reasonable times to the inspection of
the Authority and the Bondholder and their agents and representatives duly authorized in writing, at reasonable hours
and under reasonable conditions.
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SECTION 8.06 ComDensation and Indemnification.
The Authority shall pay to the Trustee, the Registrar and the Paying Agent (solely from Additional Payments) from time
to time reasonable compensation for all services rendered under this Indenture, and also all reasonable expenses, charges, legal
and consulting fees and other disbursements and those of its
attorneys, agents and employees, incurred in and about the performance of its powers and duties under this Indenture, and the Trustee shall have a lien therefor on any and all funds (except the Rebate Fund) at any time held by it under this
Indenture which lien shall be prior and superior to the lien of the Holders of the Bonds. The Authority further covenants and agrees to indemnify and save the Trustee harmless against any loss, expense and liabilities which it may incur arising out of
or in the exercise and performance of its powers and duties
hereunder, including the costs and expenses of defending against
any claim of liability, but excluding liabilities which are due
to the Trustee's negligence or willful default. The obligations
of the Authority under this Section shall survive resignation or
removal of the Trustee under this Indenture and payment of the Bonds and discharge of this Indenture.
SECTION 8.07 Pavins Asent.
The Authority, with the written approval of the
Trustee, may appoint and at all times have a Paying Agent in such cities as the Authority deems desirable, for the payment of the
principal of, and the interest (and premium, if any) on, the
Bonds. It shall be the duty of the Trustee to make such credit arrangements with such Paying Agent as may be necessary to
assure, to the extent of the moneys held by the Trustee for such
payment, the prompt payment of the principal of, and interest
(and premium, if any) on, the Bonds presented at either place of payment. The Trustee will not be responsible for the failure of the Borrower or any other party to make funds available to the Trustee or Paying Agent. The Trustee is the initial Paying Agent.
SECTION 8.08 ADDointment and Duties of Bond Resistrar.
The Authority hereby designates the Trustee as initial
Bond Registrar.
The Bond Registrar shall not be entitled to any compensation from the Authority or the Trustee but, rather, shall only be entitled to compensation from the Borrower.
SECTION 8.09 Elisibilitv of Bond Resistrar.
A Bond Registrar appointed pursuant to the Indenture
shall be a corporation organized and doing business under the laws of the United States or any state or the District of Columbia, subject to supervision or examination by the United
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States, any state or the District of Columbia authority and
having a combined capital and surplus of at least $50,000,000 as
set forth in its most recent published annual report of
condition.
SECTION 8.10 Bond Resistrar’s Performance of Duties.
The Bond Registrar shall perform the duties provided
for in the Indenture and in exercising such duties shall be
entitled to the same rights and immunities applicable to the
Trustee as set forth in this Indenture and shall not be liable
for any action or omission to act except for negligence or
willful misconduct.
SECTION 8.11 Replacement of Bond Resistrar.
The Bond Registrar may resign by notifying the
Authority, the Trustee, and the Borrower at least 30 days before
the effective date of such resignation. The Authority, with the
consent of the Borrower, may remove the Bond Registrar and
appoint a successor by notifying the Bond Registrar, and the
Trustee. No removal shall be effective until the successor has
delivered an acceptance of its appointment to the Trustee and the
predecessor Bond Registrar.
In the event of the resignation or removal of the Bond
Registrar, such Bond Registrar shall pay over, assign and deliver
any moneys held by it as Bond Registrar to its successor, or if
there is no successor, to the Trustee. In the event that for any
reason there shall be a vacancy in the office of Bond Registrar, the Trustee shall act as such Bond Registrar to the extent it has operational capacity to perform such tasks.
ARTICLE IX.: MODIFICATION OR AMENDMENT OF THE INDENTURE
SECTION 9.01 Amendments Permitted.
(A) This Indenture and the rights and obligations of
the Authority and of the Holders of the Bonds and of the Trustee may be modified or amended from time to time and at any time by an indenture or indentures supplemental hereto, which the Authority and the Trustee may enter into with the written consent
of the Holder of all Bonds. It shall not be necessary for the
consent of the Bondholder to approve the particular form of any
Supplemental Indenture, but it shall be sufficient if such
consent shall approve the substance thereof. Promptly after the
execution by the Authority and the Trustee of any Supplemental
Indenture pursuant to this subsection (A), the Trustee shall mail
a notice, setting forth in general terms the substance of such
Supplemental Indenture, to the Bondholder at the address shown on
the registration books of the Trustee. Any failure to give such
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notice, or any defect therein, shall not, however, in any way
impair or affect the validity of any such Supplemental Indenture.
the Authority, of the Trustee and of the Holders of the Bonds may
also be modified or amended from time to time and at any time by
an indenture or indentures supplemental hereto, which the Authority and the Trustee may enter into without the consent of any Bondholder, but only to the extent permitted by law and after receipt of an opinion of counsel that the provisions of such Supplemental Indenture shall not materially adversely affect the interests of the Bondholder, including, without limitation, for
any one or more of the following purposes:
(B) This Indenture and the rights and obligations of
(1) to add to the covenants and agreements of the
Authority in this Indenture contained other covenants and
agreements thereafter to be observed, to pledge or assign
additional security for the Bonds (or any portion thereof),
or to surrender any right or power herein reserved to or
conferred upon the Authority;
(2) to make such provisions for the purpose of
curing any ambiguity, inconsistency or omission, or of
curing or correcting any defective provision, contained in
this Indenture, or in regard to matters or questions arising
under this Indenture, as the Authority may deem necessary or
desirable and not inconsistent with this Indenture;
(3) to modify, amend or supplement this Indenture
in such manner as to permit the qualification hereof under
the Trust Indenture Act of 1939, as amended, or any similar
federal statute hereafter in effect, and to add such other
terms, conditions and provisions as may be permitted by said
act or similar federal statute;
(C) The Trustee may in its discretion, but shall not be obligated to, enter into any such Supplemental Indenture authorized by subsections (A) or (B) of this Section which materially adversely affects the Trustee's own rights, duties or immunities under this Indenture or otherwise.
SECTION 9.02 Effect of Sumlemental Indenture.
Upon the execution of any Supplemental Indenture
pursuant to this Article, this Indenture shall be deemed to be modified and amended in accordance therewith, and the respective rights, duties and obligations under this Indenture of the Authority, the Trustee and the Holder of Bonds Outstanding shall thereafter be determined, exercised and enforced hereunder
subject in all respects to such modification and amendment, and
all the terms and conditions of any such Supplemental Indenture
shall be deemed to be part of the terms and conditions of this Indenture for any and all purposes.
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Any such Supplemental Indenture shall comply with the terms of
this Article IX, and the Trustee may conclusively rely on the
opinion of counsel that the Supplemental Indenture complies with
the provisions therein.
SECTION 9.03 Endorsement of Bonds; PreDaration of New
Bonds.
Bonds delivered after the execution of any Supplemental Indenture pursuant to this Article may, and if the Trustee so determines shall, bear a notation by endorsement or otherwise in form approved by the Authority and the Trustee as to any modification or amendment provided for in such Supplemental Indenture, and, in that case, upon demand of the Holder of any Bond Outstanding at the time of such execution and presentation of its Bond for the purpose at the office of the Trustee or at such additional offices as the Trustee may select and designate for that purpose, a suitable notation shall be made on such Bond. If the Supplemental Indenture shall so provide, new Bonds so
modified as to conform, in the opinion of the Authority and the
Trustee, to any modification or amendment contained in such Supplemental Indenture, shall be prepared and executed by the Authority and authenticated by the Trustee, and upon demand of the Holders of any Bonds then Outstanding shall be exchanged at the principal Corporate Trust Office of the Trustee, without cost
to any Bondholder, for Bonds then Outstanding, upon surrender for cancellation of such Bonds, in equal aggregate principal amounts of the same maturity.
ARTICLE X.: DEFEASANCE
SECTION 10.01 Discharse of Indenture.
The Bonds may be paid by the Authority in any of the following ways, provided that the Authority also pays or causes to be paid any other sums payable hereunder by the Authority:
(a) by paying or causing to be paid the principal of, interest and premium, if any, on the Bond, as and when the
same become due and payable;
(b) by depositing with the Trustee, in trust, at or before maturity, money or securities in the necessary amount (as provided in Section 10.03) to pay or redeem all Bonds then Outstanding; or
(c) by delivering to the Trustee, for cancellation by
it, the Bond then Outstanding.
If the Authority shall also pay or cause to be paid all other sums payable hereunder by the Authority, and if, after payment of all amounts due to the Trustee under Section 8.06, the
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Trustee has transferred any moneys remaining in any funds or accounts (other than the Rebate Fund or moneys held for particular Bondholders) to the Borrower as provided in Section
4.5 of the Agreement, then and in that case, at the election of
the Authority (evidenced by a Certificate of the Authority, filed with the Trustee, signifying the intention of the Authority to discharge all such indebtedness and this Indenture), and notwithstanding that any Bonds shall not have been surrendered for payment, this Indenture and the pledge of Revenues and other assets made under this Indenture and all covenants, agreements and other obligations of the Authority under this Indenture shall cease, terminate, become void and be completely discharged and satisfied except only as provided in Section 10.02. In such
event, upon Request of the Authority, the Trustee shall cause an accounting for such period or periods as may be requested by the Authority to be prepared and filed with the Authority and shall execute and deliver to the Authority all such instruments as may be necessary or desirable to evidence such discharge and satisfaction, and the Trustee shall pay over, transfer, assign or deliver to the Borrower all moneys or securities or other
property held by it pursuant to this Indenture which are not required for the payment or redemption of Bonds not theretofore
surrendered for such payment or redemption.
SECTION 10.02 Discharse of Liability on Bonds.
Upon the deposit with the Trustee, in trust, at or
before maturity, of money or securities in the necessary amount
(as provided in Section 10.03) to pay or redeem any Outstanding
Bond (whether upon or prior to its maturity or the redemption
date of such Bond), provided that, if the Bond is to be redeemed
prior to maturity, notice of such redemption shall have been given as in Article IV provided or provision satisfactory to the Trustee shall have been made for the giving of such notice, then all liability of the Authority in respect of the Bond shall cease, terminate and be completely discharged, except only that the Holder thereof shall thereafter be entitled to payment of the principal of and interest on the Bond by the Authority, and the Authority shall remain liable for such payment, but only out of such money or securities deposited with the Trustee as aforesaid for their payment, provided further, however, that the provisions of Section 10.03 shall apply in all events.
The Authority may at any time surrender to the Trustee for cancellation by it the Bond previously issued and delivered, which the Authority may have acquired in any manner whatsoever,
and such Bonds, upon such surrender and cancellation, shall be deemed to be paid and retired.
SECTION 10.03 DeDosit of Money or Securities with Trustee.
Whenever in this Indenture it is provided or permitted that there be deposited with or held in trust by the Trustee money or securities in the necessary amount to pay or redeem the
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Bond, the money or securities to be deposited or held may include
money or securities held by the Trustee in the funds and accounts
established pursuant to this Indenture (exclusive of the Rebate
Fund,) and shall be--
(a) Moneys in an equal amount to the principal amount
of such Bond, 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 notice of such
redemption shall have been given as in Article IV provided
or provision satisfactory to the Trustee shall have been made for the giving of such notice, the amount to be
deposited or held shall be the principal amount or redemption price of such Bonds and all unpaid interest thereon to the redemption date; or
(b) Investment Securities of the type described in clause (ii) of the definition of Investment Securities in Section 1.01 hereof which are non-callable, the principal of and interest on which when due will provide money sufficient
(in the opinion of an independent certified public accountant) to pay the principal of, all unpaid interest to maturity, or to the redemption date, and purchase price as the case may be, on the Bonds to be paid or redeemed, as such principal and interest become due, with maturities no longer than 30 days or as may be necessary to make the required payment on the Bond provided that, in the case of Bonds which are to be redeemed prior to the maturity thereof, notice of such redemption shall have been given as
in Article IV provided or provision satisfactory to the
Trustee shall have been made for the giving of such notice;
provided, in each case, that the Trustee shall have been
irrevocably instructed (by the terms of this Indenture or by
Request of the Authority) to apply such money to the payment of
such principal and interest with respect to such Bonds.
ARTICLE XI.: MISCELLANEOUS
SECTION 11.01 Liabilitv of Authoritv Limited to Revenues.
Notwithstanding anything in this Indenture or in the Bonds contained, the Authority shall not be required to advance any moneys derived from any source other than the Revenues and other assets pledged under this Indenture for any of the purposes in this Indenture mentioned, whether for the payment of the
principal of or interest on the Bonds or for any other purpose of
this Indenture. Nevertheless, the Authority may, but shall not
be required to, advance for any of the purposes hereof any funds
of the Authority which may be made available to it for such
purposes.
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SECTION 11.02 Successor Is Deemed Included in All References to Predecessor.
Whenever in this Indenture either the Authority or the
Trustee is named or referred to, such reference shall be deemed
to include the successors or assigns thereof, and all the covenants and agreements in this Indenture contained by or on behalf of the Authority or the Trustee shall bind and inure to the benefit of the respective successors and assigns thereof whether so expressed or not. All the covenants, stipulations,
promises and agreements in this Indenture contained, by or on behalf of the Authority, shall bind and inure to the benefit of its successors and assigns, whether so expressed or not. If any
of the powers or duties of the Authority shall hereafter be
transferred by any law of the State of California, and if such transfer shall relate to any matter or thing permitted or required to be done under this Indenture by the Authority, then
the body or official of the State of California who shall succeed
to such powers or duties shall act and be obligated in the place
and stead of the Authority as in this Indenture provided.
SECTION 11.03 Limitation of Rishts to Parties and Bondholders.
Nothing in this Indenture or in the Bonds expressed or
implied is intended or shall be construed to give to any person
other than the Authority, the Trustee, the Borrower and the
Bondholder, any legal or equitable right, remedy or claim under
or in respect of this Indenture or any covenant, condition or
provision therein or herein contained; and all such covenants,
conditions and provisions are and shall be held to be for the
sole and exclusive benefit of the Authority, the Trustee, the
Borrower and the Bondholder.
SECTION 11.04 Waiver of Notice.
Whenever in this Indenture the giving of notice by mail
or otherwise is required, the giving of such notice may be waived in writing by the person entitled to receive such notice and in any such case the giving or receipt of such notice shall not be a condition precedent to the validity of any action taken in reliance upon such waiver.
SECTION 11.05 Destruction of Bonds.
Whenever in this Indenture provision is made for the
cancellation by the Trustee and the delivery to the Authority of the Bond, the Trustee may, upon Request of the Authority, in lieu of such cancellation and delivery, destroy such Bond, and deliver a certificate of such destruction to the Authority.
SECTION 11.06 Severabilitv of Invalid Provisions.
If any one or more of the provisions contained in this Indenture or in the Bonds shall for any reason be held to be
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invalid, illegal or unenforceable in any respect, then such provision or provisions shall be deemed severable from the
remaining provisions contained in this Indenture and such
invalidity, illegality or unenforceability shall not affect any
other provision of this Indenture, and this Indenture shall be
construed as if such invalid or illegal or unenforceable
provision had never been contained herein. The Authority hereby
declares that it would have entered into this Indenture and each
and every other Section, paragraph, sentence, clause or phrase
hereof and authorized the issuance of the Bonds pursuant thereto
irrespective of the fact that any one or more Sections,
paragraphs, sentences, clauses or phrases of this Indenture may
be held illegal, invalid or unenforceable.
SECTION 11.07 Governins Law.
This Indenture shall be governed exclusively by and
construed in accordance with the applicable laws of the State of
California.
SECTION 11.08 Arbitration.
(a) Bindins Arbitration. Upon the demand of any party
(ltParty/PartiestI) , to a Document (as defined below), whether made
before the institution of any judicial proceeding or not more than 60 days after service of a complaint, third party complaint,
cross-claim or counterclaim or any answer thereto or any amendment to any of the above, any Dispute (as defined below)
shall be resolved by binding arbitration in accordance with the terms of this arbitration program ("Arbitration Program"). A llDispute" shall include any action, dispute, claim or controversy of any kind, whether founded in contract, tort, statutory or common law, equity, or otherwise, now existing or hereafter arising between any of the Parties arising out of, pertaining to or in connection with any agreement, document or instrument to which this Arbitration Program is attached or in which it appears or is referenced or any related agreements, documents, or instruments ("Documents"). Any Party who fails to submit to binding arbitration following a lawful demand by another Party shall bear all costs and expenses, including reasonable attorneys' fees (including those incurred in any trial,
bankruptcy proceeding or on appeal), incurred by the other Party
in obtaining a stay of any pending judicial proceeding and
compelling arbitration of any Dispute. The Parties agree that any agreement, document or instrument which includes, attaches to or incorporates this Arbitration Program represents a transaction involving commerce as that term is used in the Federal Arbitration Act, Title 9 United States Code (llFAAfr). THE PARTIES
UNDERSTAND THAT BY THIS AGREEMENT THEY HAVE DECIDED THAT THEIR
DISPUTES SHALL BE RESOLVED BY BINDING ARBITRATION RATHER THAN IN
COURT, AND ONCE DECIDED BY ARBITRATION NO DISPUTE CAN LATER BE
BROUGHT, FILED OR PURSUED IN COURT.
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(b) Governins Rules. Arbitrations conducted pursuant
to this Arbitration Program shall be administered by the American
Arbitration Association ( IIAAAIt) , or other mutually agreeable
administrator (I1Administratorlt) in accordance with the terms of this Arbitration Program and the Commercial Arbitration Rules of the AAA. Proceedings hereunder shall be governed by the
provisions of the FAA. The arbitrator(s1 shall resolve all Disputes in accordance with the applicable substantive law designated in the Documents. Judgment upon any award rendered
hereunder may be entered in any court having jurisdiction; provided, however, that nothing herein shall be construed to be a
waiver by any Party that is a bank of the protections afforded
pursuant to 12 U.S.C. 91 or any similar applicable state law.
(c) Arbitrator Powers and Oualifications; Awards. The
Parties agree to select a neutral qualified arbitrator or a panel
of three qualified arbitrators to resolve any Dispute hereunder.
ttQualifiedll means a retired judge or practicing attorney, with
not less than 10 years practice in commercial law, licensed to
practice in the state of the applicable substantive law
designated in the Documents. A Dispute in which the claims or
amounts in controversy do not exceed $1,000,000, shall be decided
by a single arbitrator. A single arbitrator shall have authority
to render an award up to but not to exceed $1,000,000.00
including all damages of any kind whatsoever, costs, fees,
attorneys' fees and expenses. Submission to a single arbitrator shall be a waiver of all Parties' claims to recover more than
$1,000,000.00. A Dispute involving claims or amounts in
controversy exceeding $1,000,000.00 shall be decided by a
majority vote of a panel of three qualified arbitrators. All three arbitrators on the arbitration panel must actively participate in all hearings and deliberations. The arbitrator(s) shall be empowered to, at the written request of any Party in any
Dispute, 1) to consolidate in a single proceeding any multiple party claims that are substantially identical or based upon the same underlying transaction; 2) to consolidate any claims and Disputes between other Parties which arise out of or relate to the subject matter hereof, including all claims by or against borrowers, guarantors, sureties and/or owners of collateral; and 3) to administer multiple arbitration claims as class actions in accordance with Rule 23 of the Federal Rules of Civil Procedure. In any consolidated proceeding the first arbitrator(s) selected in any proceeding shall conduct the consolidated proceeding
unless disqualified due to conflict of interest. The
arbitrators(s) shall be empowered to resolve any dispute
regarding the terms of this arbitration clause, including questions about the arbitrability of any Dispute, but shall have no power to change or alter the terms of the Arbitration Program. The prevailing Party in any Dispute shall be entitled to recover its reasonable attorneys' fees in any arbitration, and the arbitrator(s1 shall have the power to award such fees. The award
of the arbitrator(s1 shall be in writing and shall set forth the
factual and legal basis for the award.
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(d) Real ProDertv Collateral. Notwithstanding the
provisions of Paragraphs (a) through (c), no Dispute shall be submitted to arbitration without the consent of all Parties if, at the time of the proposed submission, such Dispute arises from
or relates to an obligation which is secured directly or indirectly and in whole or in part by real property collateral. If all Parties do not consent to submission of such a Dispute to arbitration, the Dispute shall be determined as provided in
Paragraph (e) .
(e) Judicial Reference. At the request of any Party,
a Dispute which is not submitted to arbitration as provided and
limited in Paragraphs (a) through (d) shall be determined by a
reference in accordance with California Code of Civil Procedure
Section 638 et seq. If such an election is made, the Parties
shall designate to the court a referee or referees selected under the auspices of the AAA, unless otherwise agreed to in writing by
all parties. With respect to a Dispute in which the amounts in
controversy do not exceed $1,000,000, a single referee shall be
chosen and shall resolve the Dispute. The referee shall have
authority to render an award up to but not to exceed $1,000,000,
including all damages of any kind whatsoever, including costs,
fees and expenses. A Dispute involving amounts in controversy
exceeding $1,000,000 shall be decided by a majority vote of a
panel of three referees (a "Referee Panel") , provided, however, that all three referees on the Referee Panel must actively
participate in all hearings and deliberations. Referees, including any Referee Panel, may grant any remedy of relief deemed just and equitable and within the scope of this Arbitration Program and may also grant such ancillary relief as is necessary to make effective any award. The presiding referee of the Referee Panel, or the referee if there is a single
referee, shall be a retired judge. Judgment upon the award rendered by such referee(s1 shall be entered in the court in which such proceeding was commenced in accordance with California Code of Civil Procedure Sections 644 and 645. Determinations and awards by a referee or Referee Panel shall be binding on all Parties and shall not be subject to further review or appeal except as allowed by applicable law.
(f) Preservation of Remedies. No provision of, nor the exercise of any rights under, this Arbitration Program shall limit the right of any Party to: (1) foreclose against and/or sale of any real or personal property collateral or other security, or obtain a personal or deficiency award; (2) exercise self-help remedies (including repossession and setoff rights); or
(3) obtain provisional or ancillary remedies such as injunctive
relief, sequestration, attachment, replevin, garnishment, or the
appointment of a receiver from a court having jurisdiction. Such rights can be exercised at any time except to the extent such
action is contrary to a final award or decision in any
arbitration proceeding. The institution and maintenance of an action as described above shall not constitute a waiver of the right of any Party to submit the Dispute to arbitration, nor
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render inapplicable the compulsory exercise of any self-help, auxiliary or other rights under this paragraph shall be a Dispute hereunder.
(9) Miscellaneous. All statutes of limitation applicable to any Dispute shall apply to any proceeding in accordance with this Arbitration Program. The Parties agree, to the maximum extent practicable, to take any action necessary to conclude an arbitration hereunder within 180 days of the filing
of a Dispute with the Administrator. The arbitrator(s) shall be empowered to impose sanctions for any Party’s failure to proceed within the times established herein. Arbitrations shall be conducted in the state of the applicable substantive law designated in the Documents. The provisions of this Arbitration
Program shall survive a termination, amendment, or expiration
hereof or of the Documents unless the Parties otherwise expressly
agree in writing. Each Party agrees to keep all Disputes and
arbitration proceedings strictly confidential, except for
disclosures of information required in the ordinary course of
business of the Parties or as required by applicable law or
regulation. If any provision of this Arbitration Program is
declared invalid by any court, the remaining provisions shall not
be affected thereby and shall remain fully enforceable.
SECTION 11.09 Notices.
Notices shall be delivered to each Bondholder by first-class mail, postage prepaid, at the address set forth for such Bondholder on the Books of Registry. Any notice to or
demand upon the Trustee may be served or presented, and such demand may be made, at the principal Corporate Trust Office of
the Trustee in Los Angeles, California, which at the date of
adoption of this Indenture is located at the following address:
First Interstate Bank of California
707 Wilshire Boulevard, W11-1
Los Angeles, California 90017
or at such other address as may have been filed in writing by the Trustee with the Authority. Any notice to or demand upon the Authority or the Borrower shall be deemed to have been sufficiently given or served for all purposes by being delivered or sent by telex or by being deposited, postage prepaid, in a
post office letter box, or sent by courier providing receipt of delivery, or sent by facsimile transmission promptly confirmed in writing, addressed, as the case may be, as follows:
To the Authority: Industrial Development Authority
of the City of Carlsbad
2075 Las Palmas Drive
Carlsbad, California 92009
Attn: Cynthia Haas Telecopy No.: (619) 434-8367
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To the Borrower: CIP Limited, L.P.
475 W. Bradley Avenue El Cajon, California 92020
Attn: Jeffrey C. Hamann
Telecopy No. : (619) 440-8914
or such other addresses as may have been filed in writing with
the Trustee.
SECTION 11.10 Evidence of Rishts of Bondholder.
(a) Any request, consent or other instrument required
or permitted by this Indenture to be signed and executed by the
Bondholder may be in any number of concurrent instruments of
substantially similar tenor and shall be signed or executed by
such Bondholder in person or by an agent or agents duly appointed
in writing. Proof of the execution of any such request, consent
or other instrument or of a writing appointing any such agent,
shall be sufficient for any purpose of this Indenture and shall
be conclusive in favor of the Trustee and of the Authority if made in the manner provided in this Section.
(b) The fact and date of the execution by any person of any such request, consent or other instrument or writing may be proved by the 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 request, consent or other instrument acknowledged to him the execution thereof, or by an affidavit of a witness of such execution duly sworn to before such notary public or other officer.
(c) The ownership of registered Bonds shall be proved by the bond registration books held by the Registrar. The Registrar, the Trustee and the Authority may conclusively assume that such ownership continues until written notice to the contrary is served upon the Trustee. The fact and the date of execution of any request, consent or other instrument and the
amount and distinguishing numbers of Bonds held by the person so
executing such request, consent or other instrument may also be
proved in any other manner which the Trustee may deem sufficient.
The Trustee may nevertheless, in its discretion, require further
proof in cases where it may deem further proof desirable.
Any request, consent, or other instrument or writing of the Bondholder shall bind every future Bondholder, in respect of anything done or suffered to be done by the Trustee or the Authority in accordance therewith or reliance thereon.
SECTION 11.11 Disaualified Bonds.
In determining whether the Holders of the requisite
aggregate principal amount of Bonds have concurred in any demand,
request, direction, consent or waiver under this Indenture, Bonds
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which are owned or held by or for the account of the Authority or the Borrower, or by any other obligor on the Bonds, or by any person directly or indirectly controlling or controlled by, or
under direct or indirect common control with, the Authority or
the Borrower or any other obligor on the Bonds, shall be disregarded and deemed not to be Outstanding for the purpose of any such determination. 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 and that
the pledgee is not a person directly or indirectly controlling or
controlled by, or under direct or indirect common control with,
the Authority or the Borrower or any other obligor on the Bonds.
In case of a dispute as to such right, any decision by the
Trustee taken upon the advice of counsel shall be full protection
to the Trustee.
SECTION 11.12 Monev Held for Payment of the Bonds.
The money held by the Trustee for the payment of the
interest, principal or premium due on any date with respect to
particular Bonds (or portion of the Bond in the case of
redemption in part only) shall, on and after such date and pending such payment, be set aside on its books and held in trust by it for the Bondholder entitled thereto, subject, however, to the provisions of Section 10.03.
SECTION 11.13 Funds and Accounts.
Any fund or account required by this Indenture to be established and maintained by the Trustee may be established and
maintained in the accounting records of the Trustee, either as a fund or an account, and may, for the purposes of such records, any audits thereof and any reports or statements with respect thereto, be treated either as a fund or as an account; but all such records with respect to all such funds and accounts shall at all times be maintained in accordance with appropriate and accurate accounting principles and with due regard for the requirements of Section 6.05 and for the protection of the security of the Bonds and the rights of every Holder thereof.
SECTION 11.14 Waiver of Personal Liability.
No member, officer, agent or employee of the Authority, and no officer, official, agent or employee of the State of California or any department, board or agency of the foregoing shall be individually or personally liable for the payment of the principal of or premium or interest on the Bonds or be subject to
any personal liability or accountability by reason of the
issuance thereof; but nothing herein contained shall relieve any
such member, officer, agent or employee from the performance of
any official duty provided by law or by this Indenture.
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SECTION 11.15 Execution in Several Counterparts.
This Indenture may be executed in any number of
counterparts and each of such counterparts shall for all purposes be deemed to be an original; and all such counterparts, or as many of them as the Authority and the Trustee shall preserve undestroyed, shall together constitute but one and the same
instrument.
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IN WITNESS WHEREOF, the INDUSTRIAL DEVELOPMENT AUTHORITY OF THE CITY OF CARLSBAD has caused this Indenture to be signed in its name by its Chairman and attested by its Secretary, and FIRST INTERSTATE BANK OF CALIFORNIA, in token of its acceptance of the trusts created hereunder, has caused this Indenture to be signed in its corporate name by one of the officers thereunto duly authorized all as of the day and year first above written.
INDUSTRIAL DEVELOPMENT AUTHORITY OF THE CITY OF CARLSBAD
By : Chairman
Attest
By :
Secretary
FIRST INTERSTATE BANK OF
CALIFORNIA, as Trustee
By : Authorized Officer
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EXHIBIT A
NO. R- $1,102,500.00
July 1, 1995
INDUSTRIAL DEVELOPMENT AUTHORITY OF
THE CITY OF CARLSBAD
INDUSTRIAL REVENUE BOND AALTO PROJECT SERIES 1995
NEITHER THE FULL FAITH AND CREDIT NOR THE TAXING POWER OF THE STATE OF CALIFORNIA, THE CITY OF CARLSBAD, OR ANY POLITICAL
SUBDIVISION OF THE STATE IS PLEDGED TO THE PAYMENT OF THE
PRINCIPAL OF, PREMIUM, IF ANY, OR INTEREST ON THIS BOND, NOR IS
THE STATE, SAID CITY, OR ANY POLITICAL SUBDIVISION OF THE STATE
IN ANY MANNER OBLIGATED TO MAKE ANY APPROPRIATION FOR SUCH
PAYMENT.
MATURITY DATE: DATED : INTEREST RATE: July 1, 2002 Delivery Variable Date
Registered Owner : First Interstate Bank of California
Principal Amount: $1,102,500
The Industrial Development Authority of the City of
CARLSBAD, a public instrumentality of the State of California
(the llAuthorityll) , for value received, hereby promises to pay
(but only out of Revenues as hereinafter provided) to the
registered owner identified above or registered assigns, on the
maturity date set forth above, the principal sum set forth above
and to pay (but only out of Revenues, as hereinafter provided)
interest on the balance of said principal amount from time to
time remaining unpaid from and including the date hereof until
payment of said principal amount has been made or duly provided
for, at the Effective Rate (or other rate as specified herein)
and on the dates determined as described herein and in the Indenture (as hereinafter defined). Capitalized terms used herein and not otherwise defined shall have the meanings ascribed
to them in the Indenture. If an Event of Default shall have
occurred and be continuing, the interest rate on the Bonds shall
be the rate on the Bonds on the day prior to the occurrence of
such Event of Default. The principal of and premium, if any, on
this Bond are payable at final maturity, acceleration or redemption in lawful money of the United States of America upon surrender hereof at the corporate trust office of First Interstate Bank of California in Los Angeles, California, as trustee, or its successor in trust (the llTrusteell). Payment of interest on any Bond shall be made on each Interest Payment Date commencing September 30, 1995, to the Bondholder appearing on the
bond registration books of the Bond Registrar as the Owner
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thereof on the Record Date, such interest to be paid by the
Paying Agent, by wire transfer in immediately available funds at
an account maintained in the United States of America, at such
wire address as such Bondholder shall specify by written notice
to the Trustee; except, in each case, that, if and to the extent
that there shall be a default in the payment of the interest due
on such Interest Payment Date, such defaulted interest shall be
paid to the Owner in whose name any such Bonds are registered at
the close of business on the fifth to last Business Day next
preceding the date of payment of such defaulted interest.
The Bonds are authorized to be issued pursuant to the
provisions of the California Industrial Development Financing Act
of the State of California, California Government Code Section
91500 m. as amended and supplemented (the IIACtIl). The Bonds
are limited obligations of the Authority and, as and to the
extent set forth in the Indenture, are payable solely from, and
secured by a pledge of and lien on, the Revenues. Proceeds from
the sale of the Bonds will be loaned by the Authority to CIP Limited, L. P., a California Limited Partnership (the "Borrower1') under the terms of a Loan Agreement, dated as of July 1, 1995
(the llAsreement"), between the Authority and the Borrower. The
Bonds are all issued under and secured by and entitled to the benefits of an Indenture, dated as of July 1, 1995 (the
l1Indenturel1), between the Authority and the Trustee; all receipts of the Trustee credited under the provisions of the Indenture against such payments; and any moneys held by the Trustee under
the Indenture for such purpose, and there shall be no other recourse against the Authority or any property now or hereafter owned by it.
This Bond is one of a duly authorized issue of bonds of
the Authority designated as the IIIndustrial Development Authority
of the City of Carlsbad Industrial Revenue Bonds (Aalto Project),
Series 1995" (the I1Bond1l or llBondsll) , limited in aggregate principal amount as provided in, and issued under and secured by, the Indenture. Reference is hereby made to the Indenture and all indentures supplemental thereto for a description of the rights thereunder of the registered owner of the Bond, of the nature and
extent of the security, of the rights, duties and immunities of
the Trustee and of the rights and obligations of the Authority
thereunder, to all of the provisions of which Indenture and of
the Agreement the holder of this Bond, by acceptance hereof,
assents and agrees.
This Bond is issuable only as a single fully registered bond without coupons in the initial principal amount of
$1,102,500.00
This Bond is transferable by the registered owner
hereof, in person, or by its attorney duly authorized in writing,
at the corporate trust office of the Trustee, but only in the
manner, subject to the limitations and upon payment of the charges provided in the Indenture, and upon surrender and
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cancellation of this Bond. Upon such transfer a new fully
registered Bond for the same aggregate principal amount, will be
issued to the transferee in exchange therefor. The Authority,
the Trustee and the Bond Registrar may treat the registered owner
hereof as the absolute owner hereof for all purposes, and the
Authority, the Trustee and the Bond Registrar shall not be
affected by any notice to the contrary.
Interest on the Bonds
(a) The Bonds shall bear interest from and including
the date of first authentication and delivery thereof until
payment of the principal or redemption price thereof shall have
been made or provided for in accordance with the provisions of
the Indenture, whether at maturity, upon redemption or otherwise.
The Bonds will have interest payable on each Interest Payment
Date, and will bear interest at the Effective Rate as calculated
on each Interest Rate Determination Date, subject to the terms as
set forth in the Indenture. The Bondholder shall calculate the interest due for each Interest Period and send written notice thereof to the Trustee and the Borrower. All interest hereunder
shall be computed on the basis of a year of 360 days, and for the
actual number of days elapsed.
(b) If the Bondholder determines that, by reason of circumstances affecting the interbank Eurodollar market generally, deposits in U.S. Dollars (in the applicable amounts) are not being offered to the Bondholder in the interbank
Eurodollar market for such Interest Period, or that the rate at which such U.S. Dollar deposits are being offered will not adequately and fairly reflect the cost of making or maintaining a
Eurodollar Balance for the applicable Interest Period, the Bondholder shall forthwith give notice thereof to the Borrower
and the Trustee, whereupon until the Bondholder notifies the
Borrower and the Trustee that the circumstances giving rise to such suspension no longer exist, (i) the Effective Rate shall be suspended, and (ii) Borrower shall convert the interest rate on
each Eurodollar Balance into eighty percent (80%) of the Prime
Rate, in effect from time to time, in accordance with the provisions of the Indenture on the last day of the then-current Interest Period applicable to such Eurodollar Balance.
(c) If the adoption of any applicable law, rule or regulation, or any change therein, or any change in the interpretation or administration thereof by any governmental authority, central bank or comparable agency charged with the interpretation or administration thereof, or compliance by the
Bondholder with any request or directive (whether or not having
the force of law) of any such authority, central bank or
comparable agency shall make it unlawful or impossible for the
Bondholder to make or maintain a Eurodollar Balance, the
Bondholder shall so notify the Borrower and the Trustee. Upon
receipt of such notice, the Borrower shall convert the interest rate on such Eurodollar Balance into eighty percent (80%) of the
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Prime Rate, in effect from time to time, on either (i) the last day of the then-current Interest Period applicable to such Eurodollar Balance if the Bondholder may lawfully continue to maintain and fund such Eurodollar Balance to such day, or (ii) immediately, if the Bondholder may not lawfully continue to
maintain such Eurodollar Balance to such day.
(d) (A) If the adoption of any applicable law, rule or
regulation, or any change therein, or any change in the interpretation or administration thereof by any governmental
authority, central bank or comparable agency charged with
the interpretation or administration thereof, or compliance
by the Bondholder with any request or directive (whether or
not having the force of law) of any such authority, central
bank or comparable agency shall subject the Bondholder to
any tax (including without limitation any United States of
America interest equalization or similar tax, however
named), duty or other charge with respect to the Eurodollar
Balances, the Bonds or the Bondholder's obligation to
compute interest on the outstanding principal balance of the
Bonds at a rate based upon the LIBOR Rate, or shall change
the basis of taxation of payments to the Bondholder of the
principal of or interest on the Eurodollar Balances or any
other amounts due under the Bonds in respect of the
Eurodollar Balances or the Bondholder's obligation to
compute the interest on the outstanding principal balance of
the Bonds at a rate based upon the LIBOR rate (except for
changes in the rate of the tax on the overall net income of
the Bondholder imposed by the jurisdiction in which the
Bondholder's principal executive office is located); or
(B) If any governmental authority, central bank or
other comparable authority shall at any time impose, modify
or deem applicable any reserve (including, without
limitation, any reserve imposed by the Board of Governors of
the Federal Reserve System but excluding any reserve
requirement included in the Eurodollar Reserve Requirement
of the Bondholder), special deposit or similar requirement
against assets of, deposits with or for the account of, or credit extended by, the Bondholder, or shall impose on the
Bondholder (or its Eurodollar lending office) or the
interbank Eurodollar market any other condition affecting a
Eurodollar Balance, the Bonds or the Bondholder's obligation
to compute the interest on the outstanding principal balance of the Bonds at a rate based upon the LIBOR Rate; and the
result of any of the foregoing is to increase the cost to the Bondholder of maintaining a Eurodollar Balance, or to
reduce the amount of any sum received or receivable by the
Bondholder under the Bonds by an amount deemed by the
Bondholder to be material,
then upon written demand by the Bondholder, the Borrower shall pay to the Trustee such additional amount or amounts as will compensate the Bondholder for such increased cost or reduction
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and the Trustee shall promptly remit such amounts to the
Bondholder. The Bondholder will promptly notify the Borrower and
the Trustee of any event of which it has knowledge, occurring
after the date thereof, which will entitle the Bondholder to
compensation pursuant to the Indenture. If the Bondholder fails
to notify the Borrower and the Trustee within 30 days of any such
event of which it has knowledge, which will entitle the
Bondholder to compensation pursuant to the Indenture, the
Bondholder will be deemed to have waived such compensation with
regard to the period of time preceding such notification; but the Bondholder will be entitled to such compensation following the giving of notification to the Borrower and the Trustee and thereafter. A certificate of the Bondholder claiming compensation pursuant to the Indenture and setting forth the additional amount or amounts to be paid to the Bondholder under the Indenture shall be conclusive in the absence of manifest error.
If notice has been given requiring a Eurodollar Balance to be repaid or converted, then unless and until the Bondholder
notifies the Borrower and the Trustee that the circumstances
giving rise to such repayment no longer apply, the outstanding principal amount of the Bonds shall bear interest at the per annum rate equal to eighty percent (80%) of the Prime Rate, in
effect from time to time. If the Bondholder notifies Borrower and Trustee that the circumstances giving rise to such repayment no longer apply, the Borrower may thereafter notify the
Bondholder and the Trustee that the Bonds are to bear interest at the then applicable Effective Rate.
(e) If at any time the Effective Rate is the Maximum
Rate, the following provisions shall apply notwithstanding
section (a) above, but subject to sections (b), (c) or (d) above.
For any Interest Period when the rate described in clause (ii) of
the definition of Effective Rate is greater than the Maximum
Rate, the difference in the amount of interest which could be
collected by the Bondholder by applying such clause (ii) shall be
calculated and applied to a special account (the "Accumulated Interest Account") to be kept in the records of the Bondholder.
Whenever, in the future, the interest rate on the Bonds
calculated by clause (ii) of the definition of Effective Rate is less than the Maximum Rate, the rate to be borne on the Bonds
shall nevertheless be the Maximum Rate until the Bondholder shall
have earned, as the difference between the Maximum Rate and the
lower rate represented by such clause (ii), the amount credited
to the Accumulated Interest Account. The calculations described in this subsection shall be performed by the Bondholder and given in writing to the Borrower and the Trustee.
(f) Notwithstanding any other provision of this Bond,
in the event that a change (the "Tax Rate Chanse") in the highest
marginal federal corporate income tax rate occurs, the effect of which is to change the after-tax Effective Rate received by the Bondholder, then the interest rate on the outstanding Bonds shall
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be adjusted, effective the first day of the Interest Period next succeeding the effective date of the Tax Rate Change (the "Yield Chanse Effective Date"), in accordance with the following formula (the "Yield Formula") :
Effective Rate X (1 - New MFTR)
(1 - Old MFTR)
MFTR - - Marginal Federal Corporate Income Tax Rate
The Bondholder shall calculate the Yield Formula and
provide in writing (by telefax or other similar method of
communication) the calculation of the interest rate to be
effective on the Yield Change Effective Date to the Trustee and
the Borrower within a minimum of 2 Business Days prior to the
Yield Change Effective Date.
IlEffective Rate" means the lesser of (i) the Maximum
Rate and (ii) the sum of the LIBOR Rate, plus point seven five
percent (. 75%) per annum.
"Eurodollar Balance" means any principal balance of the
Bonds which bear interest at a rate based upon the LIBOR Rate for
an Interest Period.
"Eurodollar Business Dav" means any day which is a
Business Day and on which dealings in United States dollar
deposits may be carried out in the London interbank market.
"Eurodollar Reserve Reauirementll means, on any day,
that percentage (expressed as a decimal fraction) which is in
effect on such day, as provided by the Board of Governors of the
Federal Reserve System (or any successor governmental body) for
determining the reserve requirements (including without
limitation, basic, supplemental, marginal and emergency reserves)
under Regulation D with respect to "Eurocurrency liabilitiesll as currently defined in Regulation D, or under any similar or successor regulation.
"Interbank Offered Rate" means, with respect to each
Interest Period, the greater of (i) the London Interbank Offered
Rate (LIBOR) quoted in The Wall Street Journal on the Interest
Rate Determination Date, such rate corresponding to the rate for
a period of time equal to such Interest Period and for an amount
equal to or comparable to the then outstanding principal amount of the Bonds, or (ii), if the Bondholder is First Interstate Bank
of [California], the rate of interest per annum determined by the
Bondholder (in accordance with its customary general practice) to be the per annum rate at which deposits in immediately available
funds in U.S. Dollars are offered on or prior to the first day of such Interest Period by the Bondholder to banks in the interbank eurodollar market for delivery on the first day of such Interest Period, such deposits being for a period of time equal to such
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Interest Period and in an amount equal to or comparable to the principal amount of the Bonds.
"Interest Payment Date" means September 30, 1995, and
thereafter (i) with respect to interest paid on the basis of a percentage of the Prime Rate, each October 1, January 2, April 1 and July 1, (ii) with respect to interest paid at the Effective Rate, the last day of any Interest Period; provided, that if such
day is not a Business Day, then "Interest Payment Date" shall mean the first Business Day immediately following the last day of such Interest Period; and (iii) the maturity date of the Bonds.
"Interest Period" means (i) the period commencing the date of delivery of the Series 1995 Bonds to and including
September 30, 1995, and (ii) a period commencing on the first day
following the immediately preceding Interest Period and 3 months
thereafter, provided that, when the Effective Rate is determined
by clause (ii) of the definition of the Effective Rate:
any Interest Period which would otherwise end on a day which is not a Eurodollar Business Day shall be extended to the next succeeding Eurodollar Business Day unless such Eurodollar Business Day
falls in another calendar month, in which case
such Interest Period shall end on the preceding
Eurodollar Business Day,
any Interest Period which begins on the last Eurodollar Business Day of a calendar month (or on a day for which there is no numerically corresponding day in the calendar month at the end of such Interest Period) shall, subject to clause (c) below and clause (a) above, end on the last Eurodollar Business Day of a calendar month, and
any Interest Period which would otherwise end
after the maturity date of the Bonds, shall end on the maturity date of the Bonds.
"Interest Rate Determination Date" means two (2)
Eurodollar Business Days immediately preceding the first day of
each Interest Period.
"LIBOR Rate" means the amount equal to the quotient of (i) the Interbank Offered Rate divided bv (ii) the remainder of
1.0 minus the Eurodollar Reserve Requirement in effect on such
day.
IIMaximum Rate" shall mean Twelve Percent (12%) per
annum.
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Redemption of Bonds
(a) The Bonds are subject to redemption if and to the extent the Borrower is entitled to make and makes, or is required
to make, a prepayment pursuant to the Agreement. All such
prepayments shall be deposited in the Redemption Account. The
Authority shall not call the Bonds for optional redemption, and
the Trustee shall not give notice of any such redemption, unless
the Borrower has so directed and payment has been made of all
required installments of the Borrower’s obligations under the
Agreement; provided that the Authority may require such payment
under Section 8.3 of the Agreement.
The Bonds shall be redeemed upon the following terms:
(1) Mandatory Redemption from Sinkins Fund. The
Bonds are subject to redemption prior to their stated
maturity, in part by lot, at the principal amount thereof,
without premium, plus interest accrued to the date fixed for
redemption, as set forth in the Indenture.
(2) Mandatory Redemption Upon Invalidity or a
Determination of Taxability. In the event of a prepayment
pursuant to the Agreement as a result of invalidity or a
Determination of Taxability, Bonds Outstanding on the date
of the occurrence of invalidity or Determination of Taxability shall be redeemed in whole at any time within 60
days thereafter, at a redemption price of 100% of the
principal amount thereof plus accrued interest to the date of redemption. No redemption of Bonds shall be made
pursuant to any of the other provisions following invalidity or a Determination of Taxability.
(3) Optional Redemption. On any the last day of
any Interest Period on or after January 1, 1997 the Bonds
may be redeemed by the Trustee, at the option of the Borrower upon not less than five (5) days notice to the Trustee, in whole or in part, at a redemption price equal to
the principal amount thereof plus accrued interest to the date of redemption, without premium.
(b) The Bonds shall also be subject to mandatory
redemption or purchase at the option of the Bondholder, on the
following terms:
(1) Special Mandatorv RedemDtion. (A) The Bonds
are subject to special mandatory redemption in whole on July 1, 2002 in an amount equal to the outstanding principal of the Bonds, without premium, plus all accrued interest to the date of redemption unless the Bondholder shall have provided to the Trustee and the Borrower written notice no later than 90 days prior to such redemption date that the Bondholder elects to waive the redemption of the Bonds.
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(B) In the event that the Bondholder waives the
redemption of the Bonds pursuant to Section 4.01 (b) (1) (A) ,
the Bonds are subject to special mandatory redemption in
whole on July 1, 2005, in an amount equal to the outstanding
principal of the Bonds, without premium, plus all accrued
interest to the date of redemption unless the Bondholder
shall have provided to the Trustee and the Borrower written
notice no later than 90 days prior to such redemption date
that the Bondholder elects t waive the redemption of the
Bonds on that date.
(C) In the event that the Bondholder waives the
redemption of the Bonds pursuant to Sections 4.01(b) (1) (A)
and 4.01(b) (1) (B) , the Bonds are subject to special
mandatory redemption in whole on July 1, 2010, in an amount
equal to the outstanding principal of the Bonds, without premium, plus all accrued interest to the date of redemption.
(2) SDecial Mandatory Tax RedemDtion. The Bonds
are also subject to mandatory redemption, in whole, in an
amount equal to the outstanding principal of the Bonds,
without premium, plus all accrued interest to the date of
redemption, on the first Business Day which is not less than
[60 days] after the Bondholder gives written notice to the
Borrower and the Trustee that the Bondholder has determined,
in its sole discretion, that it is unable to utilize the tax
benefits of the Bonds and that it is exercising its right to
have the Bonds redeemed pursuant to this paragraph.
Notwithstanding the foregoing, the Borrower may, in lieu of causing a Special Mandatory Redemption or a Special Mandatory Tax Redemption of the Bonds pursuant to Sections 4.01(b) (1) or
4.01(b) (2) of the Indenture, arrange for the purchase of the
Bonds from the Bondholder subject to the provisions of the
Indenture.
Each sinking fund or optional redemption of part of
this Bond shall be noted by the Bondholder on the Schedule
attached hereto.
General Matters
The holder of this Bond shall have no right to
institute any suit, action or proceeding at law or in equity, for
any remedy under or upon the Indenture except as provided in the
Indenture.
No recourse shall be had for the payment of the
principal of, premium, if any, or interest on any of the Bonds or for any claim based thereon or upon any obligation, covenant or agreement in the Indenture contained, against any past, present or future member, director, officer, employee or agent of the
Authority, or through the Authority, or any successor to the
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Authority, under any rule of law or equity, statute or
constitution or by the enforcement of any assessment or penalty
or otherwise, and all such liability of any such member,
director, officer, employee or agent as such is hereby expressly
waived and released as a condition of and in consideration for
the execution of the Indenture and the issuance of any of the Bonds.
Amendments Permitted
The Indenture contains provisions permitting the
Authority and the Owner of the Bond at the time outstanding to
execute supplemental indentures, or add any provisions to, or
change in any manner, or eliminate any of the provisions of, the
Indenture.
The Indenture also contains provisions permitting the
Authority and the Trustee to execute supplemental indentures
without consent of the Owners of the Bonds, subject to certain
conditions in the Indenture, for any one or more of the following
purposes :
(1) to add to the covenants and agreements of the
Authority in the Indenture contained other covenants and
agreements thereafter to be observed, to pledge or assign
additional security for the Bonds (or any portion thereof),
or to surrender any right or power herein reserved to or
conferred upon the Authority;
(2) to make such provisions for the purpose of
curing any ambiguity, inconsistency or omission, or of
curing or correcting any defective provision, contained in
the Indenture, or in regard to matters or questions arising
under the Indenture, as the Authority may deem necessary or desirable and not inconsistent with the Indenture;
(3) to modify, amend or supplement the Indenture
in such manner as to permit the qualification hereof under
the Trust Indenture Act of 1939, as amended, or any similar
federal statute hereafter in effect, and to add such other
terms, conditions and provisions as may be permitted by said
act or similar federal statute.
The Indenture prescribes the manner in which it may be
discharged and after which the Bonds shall no longer be secured
by or entitled to the benefits of the Indenture, except for the
purposes of transfer and exchange of Bonds and of payment of the
principal of and premium, if any, and interest on the Bonds as
the same become due and payable, including a provision that under certain circumstances the Bonds shall be deemed to be paid if certain securities, as defined therein, maturing as to principal and interest in such amounts and at such times as to insure the availability of sufficient moneys to pay the principal of, premium, if any, and interest on the Bonds and all necessary and
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proper fees, compensation and expenses of the Trustee shall have
been deposited with the Trustee.
No member or officer of the Authority, nor any person
executing this Bond, shall in any event be subject to any personal liability or accountability by reason of the issuance of
the Bonds.
It is hereby certified that all of the conditions,
things and acts required to exist, to have happened and to have
been performed precedent to and in the issuance of this Bond do
exist, have happened and have been performed in due time, form
and manner as required by the Constitution and statutes of the
State of California.
This Bond shall not be entitled to any benefit under the Indenture, or become valid or obligatory for any purpose, until the certificate of authentication hereon endorsed shall
have been signed by the Bond Registrar.
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IN WITNESS WHEREOF, the Industrial Development
Authority of the City of Carlsbad has caused this Bond to be executed in its name and on its behalf by the signature of its Chairman and attested by the signature of its Secretary, all as of the above date.
INDUSTRIAL DEVELOPMENT AUTHORITY OF
THE CITY OF CARLSBAD
BY Chairman
ATTEST :
Secretary
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TRUSTEE’S CERTIFICATE OF AUTHENTICATION
Dated: July 1, 1995
This is one of the Bonds described in the within-
mentioned Indenture.
FIRST INTERSTATE BANK OF
CALIFORNIA, as Trustee
YY * Authorized Signature
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Date
LA01/80244.1
06-01-95
SCHEDULE OF PRINCIPAL PAYMENTS
Principal Amount
Redeemed
-14-
Remaining
Principal Amount
t
ASSIGNMENT
For value received the undersigned do(es) hereby sell, assign and transfer unto
the within-mentioned Registered Bond and do(es) hereby irrevocably constitute and armoint attorney, to transfer the saK on the books of the Bond Registrar
with full power of substitution in the premises.
J-
Dated:
Note: The signature(s1 to this Assignment must correspond
with the name(s) as written on the face of the within
Registered Bond in every particular, without alteration
or enlargement or any change whatsoever, and must be
guaranteed by a qualified guarantor institution.
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