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Home My WebLink About1994-09-06; Housing & Redevelopment Commission; 258 Exhibit 3; Family Housing Revenue Refunding BondsEXHIBIT 3 REDLINED 8/H/94 INDENTURE OF TRUST by and between CARLSBAD HOUSING AND REDEVELOPMENT COMMISSION and FIRST TRUST OF CALIFORNIA, NATIONAL ASSOCIATION, as Trustee Dated as of September 1, 1994 CARLSBAD HOUSING AND REDEVELOPMENT COMMISSION MULTIFAMILY HOUSING REVENUE REFUNDING BONDS, SERIES A OF 1994 (SEASCAPE VILLAGE PROJECT) 08/l 1194 TABLE OF CONTENTS Page RECITALS ^ GRANTING CLAUSES 2 Section 1.1. Section 1.2. Section 1.3. Section 2.1. Section 2.2. Section 2.3. Section 2.4. Section 2.5. Section 2.6. Section 2.7. Section 2.8. Section 2.9. Section 2.10. Section 2.11. Section 2.12. Section 2.13. Section 3.1. Section 3.2. Section 3.3. Section 3.4. Section 3.5. Section 3.6. Section 3.7. Section 3.8. ARTICLE I DEFINITIONS Definitions .................................... 7 Rules of Construction ............................. 7 Content of Certificates and Opinions .................... 7 ARTICLE II SOURCE OF PAYMENTS, GENERAL TERMS AND PROVISIONS OF THE BONDS Source of Payment ............................... 8 Medium and Place of Payment ........................ 8 Execution, Authentication and Delivery .................. 9 Form of Bonds ................................. 9 Ownership ................................... 10 Registration, Transfer and Exchange ................... 10 Cancellation; Subrogation .......................... 11 Temporary Bonds ............................... 13 Replacement Bonds .............................. 13 Completion of Bond Form ......................... 14 Credit Facility ................................. 14 Liquidity Facility ............................... 18 Definitive Bonds; Book-Entry System .................. 22 ARTICLE III AUTHORIZATION AND ISSUANCE OF BONDS Exclusive Provisions ............................. 23 Terms and Issuance of Bonds; Application of Bond Proceeds .... 23 Interest on the Bonds ............................. 24 Conversion of Interest Rate; Reset of Fixed Rate ............ 28 [Reserved.] ................................... 31 Calculation of Interest ............................ 31 Invalidity of Interest Rates ......................... 32 Interest Not to Be in Excess of Maximum Rate or Highest Lawful Rate .................................. 33 ARTICLE IV BOND REDEMPTION, PURCHASE IN LIEU OF REDEMPTION AND TENDER PROVISIONS Section 4.1. Section 4.2. Section 4.3. Section 4.4. Section 4.5. Section 4.6. Section 4.7. Section 4.8. Section 4.9. Section 5.1. Section 5.2. Section 5.3. Section 5.4. Section 5.5. Section 5.6. Section 5.7. Section 5.8. Section 5.9. Section 5.10. Section 6.1, Section 6.2. Section 7.1. Section 7.2. Section 8.1. Section 8.2.. Section 8.3. Section 8.4. Redemption of Bonds ............................ 33 Selection of Bonds for Redemption .................... 36 Notice of Redemption ........................... 2 37 Payment of Redeemed Bonds ........................ 38 Tender of Bonds for Purchase; Purchase in Lieu of Redemption . 2.2 Notice of Tender ............................... 42 Payment of Purchase Price ......................... 43 Remarketing; Disposition of Bonds .................... 46 Special Notice by Registrar During Commercial Paper Rate Period; Schedule Attached ......................... 47 ARTICLE V PAYMENT OF BONDS; FUNDS AND ACCOUNTS Creation of Funds .............................. 148 Bond Proceeds Fund ............................. 48 Revenue Fund: Principal Account; Interest Account ........ fi 49 Revenue Fund: Redemption Account. .................. 50 Revenue Fund: Tax and Insurance Reserve Account ......... 51 Revenue Fund: Administrative Expenses Account ........... 5 1 Bond Purchase Fund ............................. 52 Rebate Fund .................................. 52 Project Loan Fund .............................. 54 Lapse of Payment ............................... 54 ARTICLE VI CREDIT FACILITY; LIQUIDI‘N FACILITY Claims under Credit Facility ........................ 54 Claims under Liquidity Facility ..................... 2 58 ARTICLE VII SECURITY AND INVESTMENTS MoneyHeldinTrustasSecurity .................... fi@ Investments ................................... 60 ARTICLE VIII SPECIAL COVENANTS Enforcement of Obligations ......................... 61 Sale, Transfer of Trust Estate ...................... 2.62 Further Instruments and Actions ...................... 62 Payment of Bonds .............................. 62 PUBL:17646_1~D:17480 3 TO:~17480~2)109~B2062.14 -- ii 08/l 1194 Section 8.5. Section 8.6. Section 8.7. Section 8.8. Section 8.9. Section 8.10. Section 8.11. Section 8.12. Section 8.13. Section 8.14. Section 8.15. Section 9.1. Section 9.2. Section 9.3. Section 9.4. Section 9.5. Section 9.6. Section 9.7. Section 9.8. Section 9.9. Section 9.10. Section 9.11. Section 9.12. Section 9.13. Extension of Payment of Bonds ...................... 62 Authority to Issue Bonds and Pledge Revenues and Other Property .................................... 62 Special Covenant with Respect to Credit Facility and Liquidity Facility .................................... P 63 Compliance with Conditions Precedent .................. 63 Performance .................................. 63 Amendments of Agreement ......................... 63 Financing Statements ............................. 63 Tax Covenants ................................. 63 Liability of Commission Limited to Revenues and Other Assets Pledged ..................................... 64 Record-Keeping ................................ 64 Trustee to Monitor Compliance ..................... 2.65 ARTICLE IX EVENTS OF DEFAULT AND REMEDIES Events of Default ............................... 65 Remedies .................................... 66 Intercreditor Agreement; Control by Credit Facility Issuer ...... 67 Enforcement of Rights ............................ 68 Enforceability by Trustee .......................... 68 Termination of Proceedings ......................... 68 Direction of Proceedings .......................... 68 Limitations on Rights of Registered Owners of Bonds ......... 69 Remedies Not Exclusive ........................... 70 Delays, Omissions .............................. 70 Notice of Event of Default ......................... 70 Application of Moneys ........................... 171 Foreclosure of First Deed of Trust; Disposition of Project ...... 73 ARTICLE X THE TRUSTEE, REMARKETING AGENT, PAYING AGENT, REGISTRAR AND PURCHASE AGENT Section 10.1. Section 10.2. Section 10.3. Section 10.4. Section 10.5. Section 10.6. Section 10.7. Section 10.8. Section 10..9. Section 10.10. Section 10.11. Acceptance of Trusts ............................. 73 Performance Through Attorneys, Agents, Receivers, or Employees .................................. 2 74 Fees, Expenses, Charges and Other Disbursements .......... 74 Obligation to Take Action .......................... 74 Good Faith Reliance ............................. 74 Who May Own Bonds ............................ 75 Resignation by Trustee ............................ 75 Removal of Trustee ............................. 1% Appointment of Successor Trustee in the Event of Vacancy ..... 76 Qualifications of Successor Trustee .................... 76 Concerning Successor Trustee ....................... 76 ~~~~:17646~1(RED:17480~3~T0:_17480~2)109~B2062.14 jji 08/l 1194 Section 10.12, Merger of Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 77 Section 10.13. Conduct of Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 77 Section 10.14. Intervention by Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . 77 Section 10.15. Duties Determined Solely by Certain Documents . . . . . . . . . . . . 77 Section 10.16. Paying Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 77 Section 10.17. Registrar and Purchase Agent . . . . . . . . . . . . . . . . . . . . . . . 78 Section 10.18. Remarketing Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 79 Section 10.19. Several Capacities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 81 Section 10.20. Authority to Deal with the Credit Facility Issuer . . . . . . . . . . . . 81 ARTICLE XI INSTRUMENTS EXECUTED BY BONDHOLDERS Section 11.1. Proof of Ownership . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.82 Section 11.2. Effect of Execution . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 82 ARTICLE XII MODIFICATION OF INDENTURE, LOAN AGREEMENT, FIRST DEED OF TRUST, CREDIT FACILITY, LIQUIDITY FACILITY AND RELATED DOCUMENTS Section 12.1. Section 12.2. Section 12.3. Section 12.4. Section 12.5. Section 12.6. Section 12.7. Section 12.8. Section 12.9. Section 12.10. Section 12.11. Section 12.12. Modification .................................. 82 Supplemental Indenture ........................... 82 Consent of Bondholders ........................... 84 Effect of Supplemental Indenture ..................... 85 Required Consents .............................. 85 Consent to Modifications of First Deed of Trust Documents and Related Documents .............................. 85 Amendments of Remarketing Agreement ................. 86 Notice to Rating Agencies .......................... 86 Opinions of Counsel ............................. 86 Certificate of Owner. ............................ 5 87 Notation of Modification on Bonds; Preparation of New Bonds. .. 87 Modification of the Tax Certificate. .................... 87 ARTICLE XIII DISCHARGE OF INDENTURE Section 13.1. Discharge .................................... 87 Section 13.2. Trustee’s Rights Reserved .......................... 88 ARTICLE XIV MISCELLANEOUS Section 14.1. Section 14.2. Section 14.3. Section 14.4. Section 14.5. Successors of the Commission ....................... 88 Purpose; Exclusive Benefit ........................ 2 89 Severability ................................... 89 No Personal Liability or Accountability ................. 89 Notices ..................................... 89 PUBL:17646_l(RED:l7480 3 T0:~17480~2)109~B2062.14 -- iv 08/l l/94 Section 14.6. Governing Law ................................ 90 Section 14.7. Execution in Counterparts .......................... 90 Section 14.8. 2 Rights of Credit Facility Issuer ^ and Liquidity Facility Issuer. ........................................... 90 Appendix A: Definitions Exhibit A: Form of Bond Exhibit B: Legal Description of Real Estate 08/l 1194 PARTIES This Indenture of Trust, dated as of September 1, 1994 (together with any amendments or supplements hereto, this “Indenture”), is made and entered into by and between the Carlsbad Housing and Redevelopment Commission, a public body corporate and politic organized and existing under the laws of the State of California (herein, together with any successor to its rights, duties and obligations hereunder or under the hereinafter described Law, referred to as the “Commission”), and First Trust of California, National Association, as trustee, a national banking association duly authorized to accept and execute trusts of the character herein set out (herein, together with any successor trustee hereunder, the “Trustee “). RECITALS A. Chapter 1 of Part 2 of Division 24 of the California Health and Safety Code, as supplemented and amended (the “Law’?, authorizes and empowers the Commission to issue revenue bonds and to apply the proceeds therefrom to finance the development of multifamily rental housing, and vests the Commission with powers necessary to enable it to accomplish such purposes; and Article 11 of Chapter 3 of Part 1 of Division 2 of Title 5 of the California Government Code (the “Refunding Bond Act “) authorizes local agencies to incur indebtedness for the purpose of refunding any revenue bonds of the local agency and provides a complete and additional method for doing the things authorized thereby. B. Pursuant to the Law, the Commission issued its Multifamily Housing Revenue Bonds, Series 1985B (Seascape Village Project), in the original aggregate principal amount of $16,215,000 (the “Prior Bonds”) for the purposes described in (i) the Indenture of Trust dated as of April 1, 1985 (the “Prior Zndenture “) between the Commission and First Trust of California, National Association, as successor trustee thereunder (the “Prior Trustee”), and (ii) the Loan Agreement dated as of April 1, 1985 (the “Prior Loan Agreement”) by and between the Commission and Lincoln Seascape, A California Limited Partnership (the “Developer”), to assist in the financing of the costs of acquiring, constructing and equipping a certain multifamily rental housing complex on a certain parcel of real estate (the “Land”) located in the City of Carlsbad, California (the “Project”), all as more fully described in the Prior Loan Agreement. C. To evidence the obligation of the Developer to repay the Prior Loan under the Prior Loan Agreement, the Developer executed and delivered its Secured Note A and Secured Note B both dated as of May 21, 1985 (collectively, the “Prior Note”) payable to the order of the Commission, which Prior Note was endorsed, assigned and delivered by the Commission to the Prior Trustee. D. As security, inter alia, for payment of the principal of, premium, if any, and interest on the Prior Note and for the payment and performance by the Developer of its obligations under the Prior Loan Agreement and the Prior Reimbursement Agreement (as hereinafter defined), the Developer executed and delivered for the benefit of the Commission and Continental Casualty Company, an Illinois insurance company (the Yiurety “), a Deed of Trust, Assignment of Rents and Security Agreement dated as of April 1, 1985 from the Developer to First American Title Insurance Company, as trustee, (herein, the “Security Trustee”) for the benefit of the Commission and the Surety (herein referred to as the “Prior First Deed of Trust’~. ~~~~:17646~1(RED:17480~3~T0:_17480~2)l09~B2062.14 1 08/l l/94 The Prior First Deed of Trust, the Prior Note, the Prior Loan Agreement, the Prior Assignment (as hereinafter defined) and all financing statements filed under the Uniform Commercial Code with respect thereto are collectively referred to herein as the “Prior First Deed of Trust Documents m and, together with the Regulatory Agreement and Declaration of Restrictive Covenants dated as of April 1, 1985 (the “Prior Regulatory Agreement”) by and among the Commission, the Developer and the Prior Trustee, are collectively referred to herein as the “Prior Loan Documents n. E. In order to enhance the marketability of the Prior Bonds, the Surety issued its Surety Bond No. 1667165 (said Surety Bond, together with all renewals, replacements, amendments and reissuances thereof, hereinafter collectively referred to as the “Prior Surety Bond”). In connection with the issuance of the Prior Surety Bond, the Developer and the Surety entered into a Reimbursement Agreement dated as of April 1, 1985 (herein, the “Prior Reimbursement Agreement “), pursuant to which, inter alia, the Developer agreed to reimburse the Surety for any payments made by the Surety under the Prior Surety Bond. F. The obligations of the Developer under the Prior Reimbursement Agreement were also secured by a separate second lien on the Project created by that certain Second Deed of Trust, Assignment of Rents and Security Agreement dated as of April 1, 1985 (the “Prior Second Deed of Trust”) from the Developer to the Security Trustee for the benefit of the Surety. G. The Commission has been advised that the Developer has defaulted in its payment obligations under the Prior Note, the Prior Loan Agreement and the Prior Reimbursement Agreement resulting in the occurrence of an Event of Default under each of the Prior Note, the Prior Loan Agreement, the Prior First Deed of Trust, the Prior Second Deed of Trust and the Prior Reimbursement Agreement (collectively, the “Continuing Defaults”). H. As a consequence of the Continuing Defaults, the Surety, (as the credit instrument obligor under the Prior Indenture) and the Prior Trustee filed an action on December 19, 1990 in the Superior Court of the State of California for the County of San Diego (the “Court”), Case No. N49743, entitled Continental Casualty Company, et al. v. Lincoln Seascape, A California Limited Partnership, et al. (the “Litigation “), seeking to foreclose the Prior First Deed of Trust and the Prior Second Deed of Trust. I. On October 7, 1991, pursuant to a joint “Stipulation and Order Thereon”, the Court ordered James R. Kent to be appointed as receiver for the Project. J. On December 30, 1993, after the foreclosure sale, Seascape Apartments, Inc., an Illinois corporation (the “Owner”), acquired title to the Project. K. Prior to the Owner’s acquisition of the Project, the Surety gave notice to the Prior Trustee to call the Prior Bonds for redemption pursuant to its rights under Section 1 601 (C)(3); of the Prior Indenture. L. In order to pay a portion of the redemption price of the Prior Bonds, the Commission has agreed to issue its Multifamily Housing Revenue Refunding Bonds, Series A of 1994 (Seascape ^ Villaee Project), in the aggregate principal amount of L $15,115,000 (the “Bonds “). The Bonds have been issued under and are entitled to the security of this Indenture. ~~~~:17646~l(RED:l7480 3 T0:~17480~2)109~B2062.14 -- 2 08/l 1194 M. To evidence the Owner’s obligation to make payments sufficient to pay the principal of, premium, if any, and interest when due on the Bonds, the Owner will execute and deliver the Loan Agreement dated as of September 1, 1994 by and between the Owner and the Commission (as supplemented and amended, the “Loan Agreement”) and its Secured Note payable to the order of the Commission (as supplemented and amended, the “Secured Note” or “Note”), which will contemporaneously be assigned, endorsed and delivered, without recourse, by the Commission to the Trustee. N. Contemporaneously with the issuance of the Bonds, and as security for its payments under the Loan Agreement, the Note and the hereinafter described Reimbursement Agreement, the Owner will execute and record the First Deed of Trust, Assignment of Rents and Security Agreement dated as of September 1, 1994 (as supplemented and amended, the “First Deed of Trust “) from the Owner to a trustee for the benefit of the Commission and the Surety, creating a first priority lien and security interest encumbering the Project and the other rights and properties described therein (the “Granted Property”). The Commission will assign its interest in the First Deed of Trust to the Trustee pursuant to this Indenture and that certain Assignment of First Deed of Trust Documents dated as of September 1, 1994 (as supplemented and amended, the “Assignment “). 0. Contemporaneously with the issuance of the Bonds, the Surety (together with its 1 with the issuer of any Alternate Security pursuant to Section 2.11 hereof is referred to herein as the “Credit Facility Issuer “) will issue to the Trustee its Surety Bond No. 1667165-A (the “Surety Bond”; the Surety Bond, together with all extensions, renewals, amendments and replacements thereof and together with any Alternate Security, is herein referred to as the “Credit Facility”) under which the Surety will insure for the benefit of the Trustee, as obligee under the Surety Bond until the termination of the Surety Bond in accordance with its terms, the payment of any Deficiency (as defined in the Surety Bond, but subject to the terms and conditions thereof including receipt of a proper notice of claim) in the amount required (i) to pay any deficiency in the amounts held by the Trustee and the Paying Agent for the payment of the principal of and interest becoming due on the Bonds outstanding under this Indenture on or prior to the termination of the Surety Bond pursuant to its terms, whether at stated maturity, upon redemption or upon acceleration, but, unless amended to include such optional redemption, not upon optional redemption pursuant to Section 4.1(a) hereof; (ii) except as provided in Section 2.1 l(b) of this Indenture, to pay any preferential payments as defined in Section 6.1 of this Indenture; (iii) to pay the Purchase Price of Bonds tendered for purchase pursuant to Section 4.5(b) hereof becoming due on or prior to the termination of the Surety Bond pursuant to its terms; and (iv) to pay the Purchase Price of Bonds purchased in lieu of redemption in accordance with Section 4.5(c) hereof. P. To evidence the Owner’s obligation to repay, inter alia, the amounts paid by the Surety under the Surety Bond, the Surety and the Owner entered into that certain Reimbursement Agreement dated as of September 1, 1994 (as amended and supplemented, the “Reimbursement Agreement”). The Owner’s obligations under the Reimbursement Agreement are secured by the First Deed of Trust and a Second Deed of Trust, Assignment of Rents and Security Agreement dated as of September 1, 1994 (as amended and supplemented, the “Second Deed of Trust”) from the Owner to a trustee for the benefit of the Surety. PUBL:17646_l(RED:17480 3 T0:~I7480~2)109~B2062.14 -- 3 08/l l/94 Q. Contemporaneously with the issuance of the Bonds, the Trustee, the Commission and the Surety will enter into an Intercreditor Agreement dated as of September 1, 1994 (as supplemented and amended, the “Zntercreditor Agreement”). R. Contemporaneously with the issuance of the Bonds, the Surety (together with its successors and assigns and together with the f l issuer of any Alternate Liquidity Facility, the “Liquidity Facility Zssuer ‘7 will issue to the Trustee its Surety Bond No. 1667165-B (the “Liquidity Surety Bond”; the Liquidity Surety Bond together with all extensions, renewals, amendments and replacements thereof and together with any Alternate Liquidity Facility is herein referred to as the “Liquidity Facility “) to the Trustee, under which the Liquidity Facility Issuer will insure to the Trustee, as obligee of the Liquidity Surety Bond, for the benefit of the Holders of Bonds tendered pursuant to the terms thereof and not remarketed, the payment of any Deficiency (as defined in the Liquidity Surety Bond, but subject to the terms and conditions thereof, including receipt of a proper notice of claim) in the amount required to pay the Purchase Price of Bonds tendered for purchase pursuant to Section 4.5(a) hereof becoming due on or prior to the termination of the Liquidity Surety Bond pursuant to its terms. S. To evidence the Owner’s obligation to repay, inter alia, the Surety for amounts paid by the Surety under the Liquidity Facility, the Owner and the Surety have entered into that certain Liquidity Facility Agreement dated as of September 1, 1994 (as amended and supplemented, the “Liquidity Facility Agreement “). T. The execution and delivery of this Indenture and the issuance, execution and delivery of the Bonds have been in all respects duly and validly authorized by a resolution of the Commission. U. The Commission has executed this Indenture for the purpose of authorizing and securing the Bonds, prescribing the terms thereof and the conditions, terms, trusts and provisions upon the basis of which the Bonds will be delivered and the proceeds thereof expended and held. V. All conditions, things and acts required by the Refunding Bond Act, and by all other laws of the State of California, to exist, to have happened and to have been performed precedent to and in connection with the issuance of the Bonds exist, have happened, and have been performed in due time, form and manner as required by law, and the Commission is now duly author&d and empowered, pursuant to each and every requirement of law, to issue the Bonds for the purpose, in the manner and upon the terms herein provided. W. The Trustee has agreed to accept the trusts herein created upon the terms set forth. X. The Bonds, and the Registrar’s certificate of authentication and registration and assignment to appear thereon, are to be in substantially the forms, respectively, as set forth in Exhibit A of this Indenture, with necessary or appropriate variations, omissions and insertions, as permitted or required by this Indenture. Y. The execution and delivery of the Bonds and of this Indenture have been duly authorized and all things necessary to make the Bonds, when executed by the Commission and PUBL:l7646_l(RED:l7480 3 T0:~17480~2)109~B2062.14 -- 4 08/l 1194 authenticated by the Registrar, the valid and binding legal obligations of the Commission and to make this Indenture a valid and binding agreement have been done. In consideration of the premises and the acceptance by the Trustee of the trusts hereby created, of the purchase and acceptance of the Bonds by the purchasers thereof, and of other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, and in order to secure the payment of the principal of, Purchase Price for, premium, if any, and interest on all Bonds outstanding hereunder from time to time, according to their tenor and effect, and to secure the observance and performance by the Commission of all the covenants expressed or implied herein and in the Bonds, the Commission does hereby grant, convey, pledge, transfer, assign and deliver to the Trustee and unto its successors and assigns forever, and does hereby grant to the Trustee and its successors and assigns a security interest in and to all of the following (the “Trust Estate”) moneys, rights and properties described in the Granting Clauses hereof, as follows, to wit: GRANTING CLAUSES Clause A All of the Commission’s right, title and interest in and to all moneys in and investments of all funds and accounts created in this Indenture, 2 except for moneys held in the Tax and Insurance Reserve Account, the Administrative Exnense Account, the Rebate Fund and the Bond Purchase Fund, and except for the Bond proceeds (excluding accrued interest), which proceeds are to be held and disbursed exclusively in connection with the Escrow Agreement relating to the Prior Bonds. Clause B All of the Commission’s right, title and interest in, to and under the Loan Agreement and the Note, including all payments due under the Loan Agreement and all installments payable to the Commission with respect to the loan pursuant to the Loan Agreement, except for the Commission’s Reserved Rights. Clause C All of the Commission’s right, title and interest in, to and under the First Deed of Trust Documents; subject, however, to the prior rights and interests granted to the Credit Facility Issuer therein and in the Intercreditor Agreement. Clause D All of the Commission’s right, title and interest, if any, in, to and under the Credit Facility issued by the Credit Facility Issuer and the Liquidity Facility issued by the Liquidity Facility Issuer, to the Trustee for the benefit of the Bondholders, including all payments due under the Credit Facility and the Liquidity Facility. ~u~~:17646~1(RED:17480~3~T0:_17480~2)l09~B2062.14 5 08/11/94 Clause E Any and all property, rights and interests of every kind or description which from time to time hereafter may be sold, transferred, conveyed, assigned, pledged, mortgaged or delivered to the Trustee as additional security hereunder. TO HAVE AND TO HOLD the Trust Estate whether now owned or held or hereafter acquired, unto the Trustee and its successors or assigns, forever. IN TRUST NEVERTHELESS, upon the terms and trusts herein set forth for the equal and proportionate benefit and security of all present and future Bondholders and of the Credit Facility Issuer, without preference of any Bond over any other, except as expressly provided herein, and for enforcement of the payment of the Bonds in accordance with their terms, and all other sums payable hereunder or on the Bonds and for the performance of and compliance with the obligations, covenants and conditions of this Indenture, as if all the Bonds at any time outstanding had been authenticated, executed and delivered simultaneously with the execution and delivery of this Indenture, all as herein set forth. PROVIDED, HOWEVER, that if the Commission shall comply with the provisions of Article XIII hereof, or shall otherwise well and truly pay or cause to be paid the principal of, premium, if any, and interest due or to become due on the Bonds, at the times and in the manner specified therein, according to the true intent and meaning thereof, and shall well and truly keep and observe all the covenants and conditions in this Indenture expressed to be kept, performed and observed by it, and shall pay to the Trustee and all Paying Agents all sums of money due in accordance with the terms and provisions hereof, then this Indenture and the rights hereby granted shall cease, terminate and be void, and the Trustee in such case, on demand of the Commission, the Owner or the Credit Facility Issuer, upon payment of the Trustee’s Expenses, shall execute and deliver to the Commission, the Owner and the Credit Facility Issuer in accordance with the terms hereof, such deeds, discharges or satisfactions as shall be requisite to discharge the lien hereof and to convey to the parties entitled thereto all interests in the Trust Estate then held by the Trustee pursuant to the terms hereof, otherwise this Indenture is to be and remain in full force and effect. IN CONSIDERATION of the foregoing, it is expressly declared that all Bonds shall be issued, authenticated and delivered, and the Trust Estate shall be dealt with and disposed of under, upon and subject to the terms, conditions, stipulations, covenants, agreements, trusts, uses and purposes hereinafter expressed, and the Commission has agreed and covenanted with the Trustee, the Owner and the Credit Facility Issuer and with the respective registered owners, from time to time, of the Bonds, as follows: PUBL:17646_l(RED:l7480 3 T0:~17480~2)109~B2062.14 -- 6 08/11/94 ARTICLE I DEFINITIONS Section I. 1. Definitions. For the purposes of this Indenture, any terms not defined herein shall have the meanings set forth in Appendix A. The definition of each document referred to herein and in the Loan Agreement shall be deemed to include all supplements and amendments to any such document entered into in accordance with the terms of such documents and, if applicable, the terms of the Loan Agreement, this Indenture and the Intercreditor Agreement. Section 1.2. Rules of Construction. (a) The singular form of any word used herein, including the terms defined in Section 1 .l, shall include the plural, and vice versa, unless the context otherwise requires. The use herein of a pronoun of any gender shall include correlative words of the other genders. 0) All references herein to “Articles, ” “Sections” and other subdivisions hereof are to the corresponding Articles, Sections or subdivisions of this Indenture as originally executed; and the words “herein,” “hereof,” ” hereunder” and other words of similar import refer to this Indenture as a whole and not to any particular Article, Section or subdivision hereof. (c) The headings or titles of the several Articles and Sections hereof, and any table of contents appended to copies hereof, shall be solely for convenience of reference and shall not limit or otherwise affect the meaning, construction or effect of this Indenture or describe the scope or intent of any provisions hereof. Cd) All accounting terms not otherwise defined herein have the meanings assigned to them in accordance with applicable generally accepted accounting principles as in effect from time to time. 69 Every “request,” “order,” “demand,” “application,” “appointment,” “notice, ” “statement, ” “certificate,” ” consent,” or similar action hereunder by any party shall, unless the form thereof is specifically provided, be in writing signed by a duly authorized representative of such party with a duly authorized signature. (0 The parties hereto acknowledge that each such party and their respective counsel have participated in the drafting and revision of this Indenture and the Loan Agreement. Accordingly, the parties agree that any rule of construction which disfavors the drafting party shall not apply in the interpretation of this Indenture or the Loan Agreement or any amendment or supplement or exhibit hereto or thereto. Section 1.3. Content of Cert@cates and Opinions. Every certificate or opinion with respect to compliance with a condition or covenant provided for in this Indenture or the Loan Agreement shall include (a) a statement that the person or persons making or giving such certificate or opinion have read such covenant or condition and the definitions herein relating thereto; (b) a brief statement as to the nature and scope of the examination or investigation upon which the statements or opinions contained in such certificate or opinion are based; (c) a PUBL:l7646~1@ED:17480 3 T0:~17480~2)109(B2062.14 -- 7 08/11/94 statement that, in the opinion of the signers, they have made or caused to be made such examination or investigation as is necessary to enable them to express an informed opinion as to whether or not such covenant or condition has been complied with; and (d) a statement as to whether, in the opinion of the signers, such condition or covenant has been complied with. Any such certificate or opinion made or given by an officer of any party may be based, insofar as it relates to legal matters, upon a certificate or opinion of or representations by counsel, unless such officer knows that the certificate or opinion or representations with respect to the matters upon which his or her certificate or opinion may be based as aforesaid are erroneous, or in the exercise of reasonable care should have known that the same were erroneous. Any such certificate or opinion made or given by counsel may be based, insofar as it relates to factual matters (with respect to which information is in the possession of a party), upon the certificate or opinion of or representations by an officer of such party, unless such counsel knows that the certificate or opinion or representations with respect to the matters upon which his or her opinion may be based as aforesaid are erroneous, or in the exercise of reasonable care should have known that the same were erroneous. ARTICLE II SOURCE OF PAYMENTS, GENERAL TERMS AND PROVISIONS OF THE BONDS Section 2. I. Source of Payment. The Commission shall be obligated to pay the principal of, premium, if any, and the interest on the Bonds solely from the Trust Estate, including payments made under the Credit Facility. The Bonds shall constitute a valid claim of the respective registered owners thereof against the Trust Estate, all of which is pledged to secure the payment of the principal of, premium, if any, and interest on the Bonds in accordance with the terms and provisions of this Indenture, and which shall be utilized for no other purpose, except as expressly authorized in this Indenture. The Bonds are limited obligations of the Commission payable solely from the Trust Estate, including payments made under the Credit Facility. Neither the members, officers or staff of the Commission nor any persons executing the Bonds shall be liable personally on the Bonds by reason of their issuance. Section 2.2. Medium and Place of Payment. The Trustee is hereby appointed Paying Agent for the Bonds. The principal of and premium, if any, on the Bonds shall be payable, without exchange or collection charges, in lawful money of the United States of America upon their presentation and surrender as they respectively become due and payable, whether at maturity or by prior redemption, at the Principal Office of the Paying Agent. Interest on the Bonds shall be payable on each Interest Payment Date (and upon acceleration of the Bonds and upon any Redemption Date that is not an Interest Payment Date) as provided in the Bonds. The Paying Agent shall include the CUSIP identification number with appropriate dollar amounts for each CUSIP number with all payments of principal of, and premium, if any, and interest on the Bonds, whether such payments are made by check or wire transfer. PUB~:17646~1(RED:17480~3~T0:_17480~2)l09~B2062.14 8 O8lll194 Section 2.3. Execution, Authentication and Delivery. (4 All Bonds issued hereunder shall be executed on behalf of the Commission by the manual or facsimile signature of the Chairman of the Commission under its corporate seal or a facsimile thereof, and attested by the manual or facsimile signature of the Secretary of the Commission. Any such facsimile signatures shall have the same force and effect as if the Chairman or the Secretary had manually executed each of said Bonds. Following such execution the Bonds shall be delivered to the Registrar, who shall authenticate the same pursuant to the provisions of this Indenture and not otherwise, and shall deliver the same in accordance with the applicable provisions hereof. Only such Bonds as shall have endorsed thereon a certificate of authentication substantially in the form prescribed in Exhibit A hereto, executed by an authorized officer or agent of the Registrar, shall be valid or obligatory for any purpose or be secured by this Indenture or be entitled to any right or benefit hereunder. Such authentication by an authorized officer or agent of the Registrar upon any Bond shall be conclusive evidence and the only evidence that the Bond so authenticated has been duly issued hereunder and the owner thereof is entitled to the benefit of the trust hereby created. The Registrar’s certificate of authentication on any Bond shall be deemed to have been executed by it if signed by an authorized officer or agent of the Registrar, but it shall not be necessary that the same officer or agent sign the certificate of authentication on all of the Bonds issued hereunder. (b) In case any person who shall have signed or signed and sealed any Bond as an officer of the Commission shall have ceased to be such officer before the Bond so signed or signed and sealed shall have been actually authenticated and delivered by the Registrar, such Bond, nevertheless, may be authenticated and delivered and issued as though the person who signed or signed and sealed such Bond had not ceased to be such officer of the Commission. Any Bonds may be signed and sealed on behalf of the Commission by such persons who, as of the actual date of the execution of such Bonds, shall be the proper officers of the Commission although at the date of the authentication or delivery of such Bonds any such person shall not hold that office of the Commission. w Upon receipt of the following instruments and upon receipt of the purchase price for the Bonds, the Registrar shall authenticate the Bonds pursuant to this Section 2.3 by executing the certificate of authentication appearing on each Bond and shall deliver the Bonds to the initial purchaser or purchasers thereof: (0 executed counterparts of this Indenture, the Loan Agreement, the Note, the Assignment, the Remarketing Agreement and the Intercreditor Agreement; (ii) the Surety Bond; and (iii) the Liquidity Surety Bond. Section 2.4. Form of Bonds. The Bonds shall be substantially in the form and tenor recited in Exhibit A attached hereto, with such variations, omissions and insertions as may be required by the circumstances, and as may be permitted or required by this Indenture, or be consistent with this Indenture and necessary or appropriate to conform to the rules and requirements of any governmental authority or any usage or requirement of law with respect thereto. PUBL:17646_l(RED:l7480 3 TO:~17480~2)109~B2062.14 -- 9 08/l 1194 Section 2.5. Ownership. The Commission, the Trustee, the Paying Agent, the Purchase Agent, the Credit Facility Issuer, the Liquidity Facility Issuer, the Owner, the Remarketing Agent, and any other person may treat the person in whose name any Bond is registered on the Bond Register maintained by the Registrar as the absolute owner of such Bond for the purpose of making and receiving payment of the principal thereof, the Purchase Price therefor, and the interest and premium, if any, thereon as provided in this Indenture and the Bonds and for all other purposes and neither the Commission, the Trustee, the Paying Agent, the Purchase Agent, the Remarketing Agent, the Liquidity Facility Issuer, the Owner nor the Credit Facility Issuer shall be bound by any notice or knowledge to the contrary. All payments made to the person deemed to be the registered owner of any Bond in accordance with this Section 2.5 shall be valid and effectual and, subject to the provisions of Sections 2.7(b) and 2.7(c) hereof, shall discharge the liability of the Commission, the Trustee, the Paying Agent, the Purchase Agent, the Remarketing Agent, the Owner, the Liquidity Facility Issuer, and the Credit Facility Issuer for such payment to the extent of the sums paid. Any interest on Bonds not timely paid or duly provided for shall cease to be payable to the Persons who are the registered owners of the Bonds (or one or more predecessor Bonds) as of the Record Date, and shall be payable to the registered owners of the Bonds as of the close of business on the special record date established for the payment of such defaulted interest by the Trustee, which special record date shall not be more than fifteen (15) nor less than ten (10) days prior to the date of the proposed payment. The Trustee shall send written notice by first class mail of the proposed payment and the establishment of a special record date to the registered owners of the Bonds at their addresses appearing on the Bond Register. Section 2.6. Registration, Transfer and Exchange. So long as any Bonds remain Outstanding, the Registrar shall keep at its Principal Office a register (the “Bond Register”) in which, subject to such reasonable regulations as it may prescribe, the Registrar shall provide for the registration and transfer of Bonds in accordance with the terms of this Indenture. Except with respect to the transfer of Bonds tendered for purchase pursuant to Article IV hereof, each Bond shall be transferable only by presenting it at the Principal Office of the Registrar duly endorsed for transfer and accompanied by an assignment duly executed by the registered owner or its duly authorized representative in a form acceptable to the Registrar; provided that (a) Undelivered Bonds shall not be transferred unless other arrangements acceptable to the Registrar have been made, and (b) no Bond owned by an Excluded Bondholder shall be transferred (except to another Excluded Bondholder) unless a Credit Facility is in effect in accordance with Section 2.11(a). Bonds tendered for purchase or purchased in lieu of redemption pursuant to Article IV hereof shah be registered and delivered to the purchasers thereof as provided in Sections 4.5 and 4.8 hereof. A11 Bonds shall be exchangeable upon the presentation and surrender thereof at the Principal Office of the Registrar for a Bond or Bonds of the same maturity and interest rate and in any Authorized Denomination, in an aggregate principal amount equal to the unpaid principal amount of the Bonds presented for exchange. The Registrar shall be and is hereby authorized to authenticate, deliver and exchange Bonds in accordance with the provisions of this Section. Each Bond delivered in accordance with this Section shall constitute an original additional contractual obligation of the Commission and PUBL:17646~1(RED:17480~3~T0:~17480~2)109~B2062.14 10 0811 l/94 shall be entitled to the benefits and security of this Indenture to the same extent as the Bond or Bonds in lieu of which such Bond is delivered. Except when the Bonds bear interest at a Short Term Rate, the Registrar may charge the Bondholder for whom a new Bond is being produced the cost of printing such Bond, if any, for each new Bond issued upon any exchange or transfer except in the case of (a) the exchange of temporary Bonds for definitive Bonds, (b) the first exchange or transfer of any Bond or Bonds issued at the time of the original issuance of definitive Bonds hereunder or (c) the exchange of Bonds surrendered for exchange upon partial redemption thereof or partial purchase in lieu of redemption. In applying the foregoing provisions, the original issuance of definitive Bonds hereunder shall be deemed to be the original issuance of the full principal amount of definitive Bonds to a Person other than a member of the underwriting syndicate originally purchasing the Bonds so that if a member of the underwriting syndicate originally purchasing the Bonds is the original purchaser of any of the Bonds, said Bonds shall be considered for purposes of this paragraph to have been issued to the first purchasers therefrom. In each case any such first purchaser shall certify such fact to the Trustee at the time of exchange or transfer and the Trustee shall be entitled to conclusively rely upon any such certificate. Any such certificate need not be acknowledged. When Bonds bear interest at a Short Term Rate, all exchanges and transfers will be without charge to the Bondholders except as provided in the following paragraph and Section 2.9 hereof. The Commission or the Registrar may require any Bondholder to pay a sum sufficient to cover any tax or other governmental charge that may be imposed in connection with the transfer or exchange of such Bond; provided, the Owner shall pay such amounts with respect to Bonds owned by the Credit Facility Issuer or the Liquidity Facility Issuer. The Registrar will not transfer ownership of a Bond unless it is provided with the name, address and social security number or Federal employer identification number of the transferee and, if the transferee is a trust, the name and address of at least one trustee. During any Fixed Rate Period, the Registrar shall not be required to transfer or exchange any Bond (i) during the period commencing 15 days before the selection of Bonds for redemption and ending on the date the related notice of redemption is mailed or (ii) that has been selected for redemption. When Bonds selected for redemption are presented to the Registrar for transfer or exchange during a Short Term Rate Period after the date that a redemption notice has been given pursuant to Section 4.3 hereof and before the scheduled redemption date, the Registrar shall attach a copy of the redemption notice to the Bonds so transferred or exchanged. Section 2.7. Cancellation; Subrogation. (a) Gzncelhtion. All Bonds paid or redeemed in accordance with this Indenture, and all Bonds in lieu of which replacement Bonds are authenticated and delivered in accordance with Section 2.9 of this Indenture, shall be cancelled and destroyed upon the making of proper records regarding such payment, redemption or replacement. The Registrar shall periodically furnish the Trustee (during a Short Term Rate Period) with certificates of destruction of such Bonds. ~ua~:17646_1(RED:17480 3 TO:~17480~2)109~B2062.14 -- 11 08/l l/94 0) Subrogation Rights of Credit Facility Issuer. (0 Notwithstanding the provisions of Section 2.7(a) above, whenever the Trustee shall make any payment to any Bondholder with funds drawn under a Credit Facility pursuant to Section 6.1 hereof, the Trustee shall make such payments as agent for the Credit Facility Issuer and not as agent for the Commission, and the Credit Facility Issuer, and its assigns shall thereafter, to the extent of the amount so paid, be subrogated to the rights thereon of the Bondholders to whom such payment was made, and the Trustee shall, in the event of the payment of principal, keep a written record of such payments. When a Bondholder has been paid the entire principal of and interest on his Bond with funds drawn under the Credit Facility, such Bond shall be surrendered to the Trustee as agent for the Credit Facility Issuer, in lieu of cancellation thereof pursuant to Section 2.7(a) above, and such Bond shall be transferred and delivered to the Credit Facility Issuer or as the Credit Facility Issuer shall direct. (ii) In the event the Credit Facility Issuer makes any payment with respect to the payment of the principal or Purchase Price of or interest on any Bond to the Trustee under the Credit Facility, the Credit Facility Issuer shall be subrogated to the rights possessed under this Indenture and in and to the Trust Estate by the Trustee, the Commission and the Holders of such Bonds so paid, and the Credit Facility Issuer shall be subrogated to the rights of the Commission and the Trustee under the First Deed of Trust Documents. For purposes of the Credit Facility Issuer’s subrogation rights hereunder, (a) any reference in the Indenture to the Bondholders shall include the Credit Facility Issuer, which shall be entitled to be treated as if the Credit Facility Issuer were a registered owner of Bonds in the principal amount of any principal payment made by the Credit Facility Issuer under the Credit Facility, (b) any portion of any Bond as to which the principal or Purchase Price is paid with money collected pursuant to the Credit Facility shall be deemed to be outstanding under the Indenture and the principal amount of such Bond, together with interest due and unpaid thereon, which shall have been paid by the Credit Facility Issuer pursuant to the Credit Facility shall be deemed to be held by and owing to the Credit Facility Issuer or otherwise as the Credit Facility Issuer shall direct as provided in Section 2.7(b)(i) above, and (c) the Credit Facility Issuer may exercise any and all rights and benefits it would have under the Indenture as a Holder of Bonds to the extent of the principal amount of Bonds owned or deemed to be owned by the Credit Facility Issuer and any and all interest so due and unpaid to the Credit Facility Issuer; provided that such Credit Facility Issuer Bonds (A) shall not be taken into account in determining any Deficiency for which a claim or draw is to be made under the Credit Facility, and (B) pursuant to and in accordance with Section 9.12 hereof, shall be subordinated in right of payment as set forth therein as of any Interest Payment Date or Redemption Date or upon acceleration of the Bonds. Subrogation rights granted to the Credit Facility Issuer hereunder are not intended to be exclusive of any other rights or remedies available to the Credit Facility Issuer, and such subrogation rights shall be cumulative and shall be in addition to every right or remedy given hereunder or under any other instrument or agreement with respect to reimbursement of money paid by the Credit Facility Issuer pursuant to the Credit Facility, and every other right or remedy now or hereafter existing at law or in equity or by statute. (cl Subrogation Rights of Liquidity Facility Issuer. Notwithstanding the foregoing provisions of Section 2.7(a) above, whenever the Trustee shall make any payment to any Bondholder with funds drawn under a Liquidity Facility pursuant to Section 6.2 hereof, the Trustee shall make such payments as agent for the Liquidity Facility Issuer and not as agent for 12 08/l 1194 the Commission, and the Liquidity Facility Issuer and its assigns shall thereafter, to the extent of the amount so paid, be subrogated to the rights thereon of the Bondholders to whom such payment was made. When a Bondholder has been paid the Purchase Price of his Bond with funds drawn under the Liquidity Facility, such Bond shall be surrendered to the Trustee as agent for the Liquidity Facility Issuer and such Bond shall be transferred and delivered to the Liquidity Facility Issuer or as the Liquidity Facility Issuer shall direct. Liquidity Facility Issuer Bonds shall be deemed Outstanding and unpaid for all purposes of this Indenture (notwithstanding any provisions herein or in the Bonds to the contrary). Section 2.8. Temporary Bonds. Pending the preparation of definitive Bonds, the Commission may execute and, upon the Commission’s request, the Registrar shall authenticate and deliver, one or more fully registered temporary Bonds which are printed, lithographed, typewritten, mimeographed or otherwise produced, in any denomination, substantially of the tenor of the definitive Bonds in lieu of which they are delivered, with such appropriate insertions, omissions, substitutions and other variations as the officer of the Commission executing such temporary Bonds may determine, as evidenced by the signing of such temporary Bonds. Until exchanged for Bonds in definitive form, such Bonds in temporary form shall be entitled to the benefit and security of this Indenture. The Commission shall, without unreasonable delay, prepare, execute and deliver to the Registrar, and thereupon, upon the presentation and surrender of the Bond or Bonds in temporary form to the Registrar, the Registrar shall authenticate and deliver in exchange therefor a Bond or Bonds of the same maturity, in definitive form, in Authorized Denominations, and in the same aggregate principal amount, as the Bond or Bonds in temporary form surrendered. Such exchange shall be made without the making of any charge therefor to any Holder of the Bonds. Section 2.9. Replacement Bonds. (a) To the extent permitted by law, upon receipt by the Registrar of evidence satisfactory to the Registrar of the loss, theft, destruction or mutilation of any Bond and of an indemnity and security reasonably required by the Trustee, the Commission, the Liquidity Facility Issuer (during a Short Term Rate Period) and the Credit Facility Issuer to hold each of them harmless, and upon surrender and cancellation of such Bond if mutilated, the Commission shall execute (if the Trustee does not have executed replacement Bonds in its possession), and the Registrar shall authenticate and deliver, a new Bond of the same maturity and of like tenor and bearing a different number, in lieu of such lost, stolen, destroyed or mutilated Bond. Such new Bond may bear such endorsement or distinguishing mark as may be agreed upon by the Commission and the Registrar. The Commission and the Trustee may require from such Bondholder the payment of a sum sufficient to reimburse them for all reasonable expenses incurred in connection with the issuance of each new Bond under this Section, including the charges of the Registrar. (b) Bonds executed by the Commission and authenticated and delivered by the Registrar in lieu of any lost, mutilated, stolen or destroyed Bonds shall evidence and represent the identical obligations which, prior thereto, were evidenced and represented by the Bonds with respect to which they are executed, authenticated and delivered, all without notation of any rights, obligations or liens pertaining thereto. 13 08lll194 Cc) In the event that any such mutilated, lost, apparently destroyed or wrongfully taken Bond has become or is about to become due and payable, the Trustee in its discretion may, instead of issuing a replacement Bond, pay such Bond. W Each Undelivered Bond shall be deemed to have been surrendered to the Registrar and the Commission shall execute and the Registrar shall authenticate, register and deliver new Bonds of like maturity and denomination in replacement for such Undelivered Bond. If funds are deposited with the Trustee sufficient for the purchase of an Undelivered Bond, from and after the Purchase Date, the indebtedness evidenced by such Undelivered Bond and the interest thereon after the Purchase Date shall cease to be payable to the prior Holder thereof, such Holder shall cease to be entitled to the benefits or security of this Indenture and shall have recourse solely to the funds held by the Trustee or the Purchase Agent, as the case may be, for the purchase of such Undelivered Bond and the Registrar shall not register any further transfer of such Undelivered Bond by such prior Holder. Section 2. IO. Completion of Bond Form. The respective numbers, CUSIP numbers, 2 maturity 2 date, interest provisions and other applicable terms and provisions with respect to the Bonds, shall be inserted by or on behalf of the Registrar or Purchase Agent in the form of Bond prescribed herein, as approved in this Indenture. Section 2. I I. Credit Facility. (a) Terms of Credit Facility. A Credit Facility shall be in effect so long as there are Outstanding Bonds (except as otherwise provided in Sections 2.1 l(g) and 13.1 hereof), unless all Outstanding Bonds are owned by the Excluded Bondholders. Each Credit Facility issued to secure the Bonds shall provide for, secure or insure (i) any deficiency in the amount of money held by the Trustee and the Paying Agent which is available for the payment of principal and interest becoming due and payable on the Bonds (whether at stated maturity, by acceleration or by call for redemption but, unless expressly stated to include, or amended to include, such optional redemption, not upon optional redemption pursuant to Section 4.1(a) hereof), (ii) except as provided in Section 2.1 l(b) hereof, reimbursement or payment of amounts required to be repaid by Bondholders as “preferential payments n (as defined in Section 6.1 hereof) with respect to the Bonds by the final order of a court of competent jurisdiction under the Bankruptcy Code or other similar state or federal laws, (iii) any deficiency in the amount of money held by the Trustee, the Paying Agent or the Purchase Agent which is available for the payment of the Purchase Price of Bonds to be tendered for purchase pursuant to Section 4.5(b) hereof, and (iv) any deficiency in the amount of money held by the Trustee, the Paying Agent and the Purchase Agent which is available for the payment of the Purchase Price of Bonds to be purchased in lieu of redemption pursuant to Section 4.5(c) hereof. No Credit Facility may terminate prior to its stated expiration date unless (A) it is replaced with an Alternate Security as provided in this Section 2.11, (B) all Bonds then outstanding are paid in full, as a result of a redemption or upon acceleration from Eligible Money, (C) all Outstanding Bonds are owned by the Credit Facility Issuer and the Credit Facility Issuer elects to terminate the Credit Facility or (D) upon discharge of this Indenture in accordance with Section 13.1 hereof. @I Terms of Alternate Security. An Alternate Security may be delivered by the Owner at any time in substitution for the Credit Facility then in effect or to replace a Credit Facility which is expiring, provided the conditions of this Section 2.11 are satisfied. An 14 08/l 1194 Alternate Security may be a surety bond, insurance policy, letter of credit, stand-by funding or bond purchase agreement or any other credit facility. Each Alternate Security shall (i) permit drafts, drawings or claims thereunder for the purposes and in the amounts described in Section 2.1 l(a) hereof, including for any amounts (including amounts in respect of payments on the Bonds that are required to be repaid by Bondholders as “preferential payments” as defined in Section 6.1 hereof) for which draws, drafts or claims could be made under the Credit Facility previously in effect and being released as of the date the Alternate Security becomes effective (including any payment made within 367 days of the effective date of the Alternate Security), (ii) meet the Credit Facility Rating Requirement, and (iii) during a Fixed Rate Period, not result in the rating on the Bonds being withdrawn or reduced below the rating on the Bonds prior to such substitution; provided, however, that in such case there shall be delivered to the Trustee an opinion of Bond Counsel to the effect that such substitution is permitted under this Indenture and will not have an adverse effect on the exclusion from gross income for federal income tax purposes of interest payable on the Bonds; provided, further, that such Alternate Security may provide for the direct payment of principal and Purchase Price (payable for Bonds tendered for purchase pursuant to Section 4.5(b) hereof and Bonds purchased in lieu of redemption pursuant to Section 4.5(c) hereof) of, and interest on, the Bonds from the proceeds of a draw thereon prior to the application of other moneys on deposit under this Indenture, in which case it need not cover amounts required to be repaid to Bondholders as “preferential payments” except to the extent of payments previously made from sources other than a draw on or payment under the prior Credit Facility. Each Alternate Security shall have a term extending at least fifteen (15) days after an Interest Payment Date and, in the case of an Alternate Security delivered with respect to Bonds bearing interest at a Fixed Rate, a term extending at least 15 days after the last day of such Fixed Rate Period. Each Alternate Security must have an Interest Payment Date as its effective date. If an Alternate Security is delivered pursuant to this Section 2.11, the Trustee, upon request of the Commission and the Credit Facility Issuer, shall enter into an Intercreditor Agreement in form and substance similar to the prior Intercreditor Agreement or such other form as may be satisfactory to the Commission and the Credit Facility Issuer issuing the Alternate Security. For all purposes of this Indenture, as of the effective date of an Alternate Security, such Alternate Security shall be considered to be the Credit Facility and the obligor on such Alternate Security shall be considered to be the Credit Facility Issuer, from and after the effective date of such Alternate Security; provided, however, that nothing contained herein shall prevent the Trustee from making a claim under any other Credit Facility for any amount available thereunder or shall impair or adversely affect any rights, liens or security for amounts due from or to a former Credit Facility Issuer or the rights of such former Credit Facility Issuer under Section 6.1 hereof. (cl Procedure for Replacement of Credit Facility. The Owner shall prior to any Credit Facility Replacement Date, and may prior to any proposed Credit Facility Substitution Date, in each case -at least forty (40) days prior to such date, deliver to the Trustee notice of the delivery on such date of an Alternate Security. Such notice shall state (i) that the Owner intends to provide for the delivery of an Alternate Security, (ii) the proposed effective date of such ~~~~:17646~l@ED:l7480 3 TO:~l7480~2)109~B2062.14 -- 15 080 l/94 Alternate Security and (iii) the identity of the issuer of the proposed Alternate Security. Such notice shall be accompanied by (A) the proposed form of the Alternate Security, (B) evidence that the rating requirements set forth in Sections 2.1 l(b)(ii) and 2.1 l(b)(iii) above will be satisfied, (C) the form of an opinion of counsel for the obligor under such Alternate Security, acceptable to the Commission, the Remarketing Agent, the Trustee, the Liquidity Facility Issuer, and the Credit Facility Issuer, addressed to the Trustee, the Commission, the Remarketing Agent, the Liquidity Facility Issuer and the Credit Facility Issuer, to the effect that such Alternate Security constitutes a legal, valid and binding obligation of such issuer of the Alternate Security and is enforceable in accordance with its terms (except to the extent that the enforceability thereof may be limited by a bankruptcy, insolvency, reorganization, moratorium or other similar event with respect to such issuer of the Alternate Security and other similar laws for the relief of debtors and by general principles of equity which permit the exercise of judicial discretion), (D) the form of an opinion of counsel, acceptable to the Remarketing Agent, the Liquidity Facility Issuer, the Trustee and the Commission, addressed to the Trustee, the Remarketing Agent, the Liquidity Facility Issuer and the Commission, to the effect that the substitution of such Alternate Security will not subject the Bonds or such Alternate Security to the registration requirements of the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, or subject the Indenture to qualification under the Trust Indenture Act of 1939, as amended, or to the effect that the Bonds and such Alternate Security have been duly registered under such laws and that this Indenture has been so qualified, Q the form of an opinion of Bond Counsel, addressed to the Commission and the Trustee, to the effect that the substitution of the Alternate Security is permitted under the Loan Agreement and this Indenture, and that such substitution will not adversely affect the exclusion from gross income for federal income tax purposes of interest payable on the Bonds, and (F) written consent of the existing Credit Facility Issuer and, if a Liquidity Facility is to be in effect after such substitution, the written consent of the Liquidity Facility Issuer, to the substitution of the Alternate Security. On the effective date of an Alternate Security, the Owner shall deliver or cause to be delivered (1) the executed Alternate Security, (2) the signed original opinions of counsel to the Credit Facility Issuer and Bond Counsel in the forms previously submitted pursuant to the foregoing paragraph, (3) confirmation from each Rating Agency of the then current rating on the Bonds, and (4) an amount sufficient to pay ail reasonable costs incurred by the Trustee, the Liquidity Facility Issuer, the Remarketing Agent, the existing Credit Facility Issuer and the Commission (including the reasonable fees and expenses of their respective counsel and Bond Counsel) in connection with the delivery of the Alternate Security. If the Credit Facility Issuer exercises its option pursuant to Section 4.5(a) of the Agreement to provide for the delivery of an Alternate Security, the Credit Facility Issuer must comply with the above provisions of this Section 2.11 in connection with such delivery in the same manner as the Owner. 63 Extension of Credit Facility. In lieu of delivering to the Trustee an Alternate Security provided by a different Credit Facility Issuer prior to any Credit Facility Replacement Date, not less than forty (40) days prior to the Credit Facility Replacement Date, the Owner may deliver an amendment to the Credit Facility (a “Credit Facility Amendment”) to the Trustee extending the term of the existing Credit Facility. The Credit Facility Amendment shall be accompanied by (i) the written consent of the Liquidity Facility Issuer, if a Liquidity Facility is to be in effect after such extension, which consent of the Liquidity Facility Issuer shall ~~~~:17646_l(RED:l7480 3 TO:~l7480~2)109~J32062.14 -- 16 08/11/94 be deemed given if the Liquidity Facility Issuer fails to notify the Owner of its objection within twenty-one (21) days from the date of its receipt of a written request from the Owner for its consent, (ii) signed original opinions of counsel to the Credit Facility Issuer and Bond Counsel meeting the requirements of clauses (D) and (E) of Section 2.1 l(c) hereof, and (iii) evidence of the Rating Agency or Agencies then rating the Bonds as to the rating or ratings to be in effect following the extension of the Credit Facility. If the Credit Facility Issuer exercises its option to provide for the delivery of an extension to the existing Credit Facility, the Credit Facility Issuer must comply with the above provisions of Section 2.11(c) in connection with such delivery in the same manner as the Owner. The Owner shall be obligated to pay all reasonable costs incurred by the Trustee, the Liquidity Facility Issuer, the Remarketing Agent, the existing Credit Facility Issuer and the Commission (including the reasonable fees and expenses of their respective counsel and Bond Counsel) in connection with the extension of the Credit Facility. (4 Notice to Bondholders of Replacement or Substitution of Credit Facility. (0 In the event of a substitution of an Alternate Security during a Fixed Rate Period, the Trustee will, not later than ten (10) days after delivery of such Alternate Security, send notice of such delivery to each Bondholder by first class mail, postage prepaid, at each Bondholder’s registered address. Such notice shall state: (1) that an Alternate Security has been delivered, the identity of the issuer thereof and the term thereof; and (2) that the rating or ratings on the Bonds have not been reduced from the rating or ratings in effect immediately prior to delivery of the Alternate Security. (ii) In the event of a substitution of an Alternate Security during a Short Term Rate Period or in the event of a replacement of an existing Credit Facility which is expiring, the Trustee shall send the notice of mandatory tender for purchase required by Section 4.6(b) hereof. (9 Failure to Provide Alternate Security; Failure of Conditions to Delivery of Alternate Security. 1 If the event of a failure of the conditions to the delivery of an Alternate Security during a Fixed Rate Period, ^ the Bonds shall continue to be secured by the existing Credit Facility. A If the existing Credit Facilitv is exdriw. the event of a failure of the conditions to delivery of an Alternate Security during a Short Term Rate Period, the Bonds shall be subject to mandatory tender for purchase pursuant to Section 4.5(b)(iv) hereof with the proceeds of a drawing on the existing Credit Facility and unless the existing Credit Facility shall remain in effect, shall not be remarketed unless and until an Alternate Security meeting the requirements of this Section 2.11 has been delivered and the conditions precedent to such delivery under this Section 2.11 have been satisfied. (8) Cancellation of Credit Facility. The Trustee shall release, cancel, and return the Credit Facility then held by it to the Credit Facility Issuer thereof: 17 08llll94 (0 on any date simultaneously with and upon receipt of an Alternate Security and satisfaction of the other conditions precedent required by this Section 2.11 with respect to such Alternate Security; (ii) simultaneously with and upon receipt by a successor Trustee of a Credit Facility issued by the same Credit Facility Issuer that issued the Credit Facility to be released and identical in terms and amount with the Credit Facility so released upon appointment and qualification of a successor Trustee pursuant to Article X hereof; (iii) promptly upon the expiration thereof, if an Alternate Security has been issued which permits draws or claims for preferential payments as described in Section 2.1 l(b), or otherwise on the first Business Day following the last day the Credit Facility secures preferential payments; (iv) Article XIII hereof; when Bonds are no longer Outstanding, as provided in 69 on any date designated by the Credit Facility Issuer if the Credit Facility Issuer is the owner of all Outstanding Bonds; and its terms. (vi) upon the termination or the expiration of the Credit Facility by 01) Costs of Substituting an Alternate Credit Facility. All reasonable costs, fees and expenses associated with the replacement of the Credit Facility then in effect shall be paid by the Owner. Section 2.12. Liquidity Facility. (a) Term of Liquidity Facility. A Liquidity Facility providing for the payment of any deficiency in the amount of money held by the Trustee or the Purchase Agent for the payment of the Purchase Price of Bonds tendered for purchase by their Holders pursuant to Section 4.5(a) hereof shall be in effect during any Short Term Rate Period unless all Outstanding Bonds are owned by Excluded Bondholders. Each Liquidity Facility shall provide for, secure or insure the payment of the Purchase Price of the Bonds tendered for purchase by the Holders thereof pursuant to Section 4.5(a) hereof which have not been remarketed in accordance with Section 4.7 hereof and, unless the Liquidity Facility is a direct pay purchase agreement, direct pay letter of credit or other direct pay instrument, shall provide for reimbursement or payment of amounts required by the final order of a court of competent jurisdiction under the Bankruptcy Code or other similar state or federal laws to be repaid to Bondholders as preferential payments (as defined in Section 6.1 hereof) with respect to Bonds which have been tendered for purchase pursuant to Section 4.5(a) hereof and purchased by the Owner. Each Liquidity Facility must be an agreement pursuant to which the Liquidity Facility Issuer agrees to pay, in immediately available funds on each Remarketing Date, amounts necessary to pay the Purchase Price of Bonds which are tendered pursuant to Section 4.5(a) hereof. (3) Terms of Alternate Liquidity Facility. An Alternate Liquidity Facility may be delivered by the Owner with the prior written consent of the Credit Facility Issuer, or by ~~~~:17646_1(RED:l7480 3 TO:~l7480~2)109~B2062.14 -- 18 08/11/94 the Credit Facility Issuer, at any time in substitution for the Liquidity Facility then in effect or to replace a Liquidity Facility which is expiring, provided the conditions of this Section 2.12 are satisfied. An Alternate Liquidity Facility may be a surety bond, insurance policy, direct pay or stand-by letter of credit, stand-by funding or bond purchase agreement or any other liquidity facility. Each Alternate Liquidity Facility shall permit drafts, draws or claims thereunder for the purposes and in the amounts described in Section 2.12(a) hereof. The term of each Liquidity Facility must begin on the Interest Payment Date it becomes effective and end no earlier than five (5) days following an Interest Payment Date during a month that is at least one year later. If an Alternate Liquidity Facility is to replace a Liquidity Facility prior to its scheduled termination date it must do so on an Interest Payment Date. If an Alternate Liquidity Facility is to replace an expiring Liquidity Facility, it shall become effective on the last Interest Payment Date prior to the scheduled expiration of the existing Liquidity Facility. For all purposes of this Indenture, an Alternate Liquidity Facility shall be considered to be the Liquidity Facility and the obligor on such Alternate Liquidity Facility shall be considered to be the Liquidity Facility Issuer, from and after the effective date of such Alternate Liquidity Facility; provided, however, that nothing contained in this paragraph (b) shall prevent the Trustee from making a claim under any other Liquidity Facility for any amount available thereunder or shall impair or adversely affect any rights, hens or security for amounts due from or to such former Liquidity Facility Issuer. Upon substitution of an Alternate Liquidity Facility for any Liquidity Facility or replacement of a Liquidity Facility which is expiring, there shall be delivered to the Trustee and the Remarketing Agent written notice from the Rating Agency or Agencies then rating the Bonds evidencing the rating or ratings to be in effect on the effective date of the Alternate Liquidity Facility. Such evidence shall demonstrate that the proposed Alternate Liquidity Facility meets the Liquidity Facility Rating Requirement. (cl Procedure for Replacement of Liquidity Facility. The Owner shall, prior to any Liquidity Facility Replacement Date (unless the interest rate on the Bonds is to be converted to a Fixed Rate on or prior to such Liquidity Facility Replacement Date) or any date on which the interest rate on the Bonds is being converted from a Fixed Rate to a Short Term Rate, and may, prior to any proposed Liquidity Facility Substitution Date, in each case at least forty (40) days prior to such date, deliver to the Trustee notice of the proposed delivery of an Alternate Liquidity Facility. Such notice shall state (i) that the Owner intends to provide for the delivery of an Alternate Liquidity Facility, (ii) the proposed effective date of such Alternate Liquidity Facility and (iii) the identity of the issuer of the proposed Alternate Liquidity Facility. Such notice shall be accompanied by (A) the proposed form of the Alternate Liquidity Facility, (B) the written consent of the Credit Facility Issuer, (C) evidence that the Liquidity Facility Rating Requirement will be satisfied, (D) the form of an opinion of counsel to the obligor under the Alternate Liquidity Facility, acceptable to the Commission, the Remarketing Agent and the Credit Facility Issuer, addressed to the Trustee, the Commission, the Remarketing Agent, and the Credit Facility Issuer, to the effect that such Alternate Liquidity Facility constitutes a legal, valid and binding obligation of the Liquidity Facility Issuer thereunder and is enforceable in accordance with its terms (except to the extent that the enforceability thereof may be limited by bankruptcy, insolvency, reorganization, moratorium and other similar laws for the relief of debtors and by ~u~~:17646~1(RED:17480~3~T0:_17480~2)109~B2062.14 19 OS/l 1194 general principles of equity which permit the exercise of judicial discretion), (E) the form of an opinion of counsel acceptable to the Owner, the Commission, the Remarketing Agent and the Credit Facility Issuer, addressed to the Owner, the Trustee, the Commission, the Remarketing Agent and the Credit Facility Issuer to the effect that the delivery of such Alternate Liquidity Facility will not subject the Bonds or such Alternate Liquidity Facility to the registration requirements of the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, or subject this Indenture to qualification under the Trust Indenture Act of 1939, as amended, or to the effect that the Bonds and such Liquidity Facility have been duly registered under such laws and that this Indenture has been so qualified, and (F) the form of an opinion or opinions of Bond Counsel, addressed to the Commission and the Trustee, to the effect that the delivery of the Alternate Liquidity Facility is permitted under the Loan Agreement and this Indenture and will not adversely affect the exclusion from gross income for federal income tax purposes of interest payable on the Bonds. On the effective date of an Alternate Liquidity Facility, the Owner shall deliver or cause to be delivered (1) the originally executed Alternate Liquidity Facility, (2) the executed original opinions of counsel to the Liquidity Facility Issuer and Bond Counsel in the forms previously submitted pursuant to the foregoing paragraph, (3) confirmation from each Rating Agency of the then current rating on the Bonds, and (4) an amount sufficient to pay all reasonable costs incurred by the Trustee, the Credit Facility Issuer, the existing Liquidity Facility Issuer, the Remarketing Agent and the Commission (including the reasonable fees and expenses of their respective counsel and Bond Counsel) in connection with the delivery of the Alternate Liquidity Facility. If the Credit Facility Issuer exercises its option pursuant to Section 4.12(a) of the Agreement to provide for the delivery of an Alternate Liquidity Facility, the Credit Facility Issuer must comply with the above provisions of this Section 2.12(c) in connection with such delivery in the same manner as the Owner. W Extension of Liquidity Facility. In lieu of delivering to the Trustee an Alternate Liquidity Facility provided by a different Liquidity Facility Issuer prior to any Liquidity Facility Replacement Date, not less than forty (40) days prior to any Liquidity Facility Replacement Date, the Owner may deliver an amendment to the existing Liquidity Facility (a “Liquidity Facility Amendment”) to the Trustee extending the term of the existing Liquidity Facility. The Liquidity Facility Amendment shall be accompanied by (i) the written consent of the Credit Facility Issuer, (ii) signed original opinions of counsel to the Liquidity Facility Issuer and Bond Counsel meeting the requirements of Section 2.12(c) hereof, (iii) an amount sufficient to pay all reasonable costs incurred by the Trustee, the Credit Facility Issuer, the Liquidity Facility Issuer, the Remarketing Agent and the Commission (including the reasonable fees and expenses of their respective counsel and Bond Counsel) in connection with the extension of the Liquidity Facility and (iv) evidence from the Rating Agency or Agencies then rating the Bonds as to the rating or ratings to be in effect following the extension of the Liquidity Facility. If the Credit Facility Issuer exercises its option pursuant to Section 4.12(a) of the Agreement to provide for the delivery of an extension to the existing Liquidity Facility, the Credit Facility Issuer must comply with the above provisions of this Section 2.12(d) in connection with such delivery in the same manner as the Owner. ~~~~:17646~1(RED:17480~3~T0:_17480~2)109~B2062.14 20 08/11/94 Cd Failure to Provide Alternate Liquidity Facility; Failure of Conditions to Delivery of Liquidity Facility. A If the existing Liauiditv Facilitv is not exuiriw, in the event of a failure of the conditions to the delivery of an Alternate Liquidity Facility, 2 the existing Liquidity Facility shall remain in effect and the Bonds shall continue to have the benefit of the existing Liquidity Facility. 1 If the event of a failure of the conditions to the delivery of an Alternate Liquidity Facility, the Bonds shall be subject to mandatory tender for purchase pursuant to Section 4.5(b)(ii) hereof with the proceeds of a drawing on the existing Credit Facility 1, shall not be remarketed during a Short Term Rate Period unless and until an Alternate Liquidity Facility meeting the requirements of this Section 2.12 has been delivered and all of the conditions precedent to such delivery under this Section 2.12 have been satisfied. (9 Cancellation of Liquidity Facility. The Trustee shall release, cancel, and return a Liquidity Facility to a Liquidity Facility Issuer as follows: its terms: (0 upon the expiration or termination of the Liquidity Facility by (ii) Article XIII hereof; when Bonds are no longer Outstanding, as provided in (iii) upon the delivery of an Alternate Liquidity Facility which satisfies the other conditions precedent required by this Section 2.12 with respect to such Alternate Liquidity Facility; (iv) upon the effective date of a Fixed Rate Period; w simultaneously with and upon receipt by the Trustee of an Alternate Liquidity Facility issued by the Liquidity Facility Issuer that issued the Liquidity Facility to be released and identical in terms and amount with the Liquidity Facility so released upon appointment and qualification of a successor Trustee pursuant to Article X hereof; (vi) on the next Interest Payment Date which is at least forty-five (45) days after notice from the Liquidity Facility Issuer is received by the Trustee that an Event of Default has occurred under the Liquidity Facility Agreement; (vii) on the effective date of any Alternate Security delivered to the Trustee pursuant to this Indenture which the Liquidity Facility Issuer has not approved; (viii) upon the occurrence of an Event of Default under this Indenture, but only in the circumstance when the initial Credit Facility Issuer is not then the Credit Facility Issuer under the Indenture; (ix) on the date the Bonds are to be tendered for purchase pursuant to Section-4.5(b) of this Indenture; or (x) the termination or expiration of the Credit Facility by its terms. ~~~~:17646~1(RED:17480~3~T0:~17480~2)109~B2062.14 21 08/11/94 (8) Costs of Substituting an Alternate Liquidity Facility. All reasonable costs, fees and expenses associated with the replacement of the Liquidity Facility then in effect shall be paid by the Owner. Section 2.13. Definitive Bonds; Book-Entry System. (a) During the initial Weekly Rate Period, without unreasonable delay, the Commission shall, if requested by and at the expense of the Owner, cause definitive Bonds to be prepared, executed, and delivered to the Trustee, which Bonds shall be fully engraved (as that term is customarily used) or lithographed or printed on steel engraved borders or lithographed borders, or, if acceptable to the purchasers of such Bonds (such acceptance to be conclusively evidenced by the acceptance of such Bonds by such purchasers thereof), such definitive Bonds may be typewritten, printed, photocopied, or any combination of the foregoing. (b) Upon the agreement of the Commission, the Credit Facility Issuer, the Liquidity Facility Issuer and the Owner, the Bonds may be issued in the form of a separate single authenticated fully registered Bond for each maturity in the aggregate principal amount of the Bonds and in substantially the form of Exhibit A hereto registered in the registry books of the Registrar in the name of a nominee of a Securities Depository. When Bonds are so registered in accordance with this Section 2.13, the following provisions shall apply: (0 The Commission, the Trustee, the Owner, the Liquidity Facility Issuer, and the Credit Facility Issuer shall have no responsibility or obligation to any Participant or to any Beneficial Owner with respect to the following: (A) the accuracy of the records of the Securities Depository, the nominee of the Securities Depository or any Participant with respect to any ownership interest in the Bonds, (B) the delivery to any Participant, any Beneficial Owner or any other person, other than the Securities Depository, of any notice with respect to the Bonds, including any notice of redemption, or (C) the payment to any Participant, any 1 or any other person, other than the Securities Depository, of any amount with respect to the Bonds. The Trustee shall make payments with respect to the Bonds only to or upon the order of the Securities Depository or its nominee, and all such payments shall be valid and effective to fully satisfy and discharge the obligations with respect to such Bonds to the extent of the sum or sums so paid. No person other than the Securities Depository shall receive an authenticated Bond. (ii) Upon receipt by the Commission and the Trustee of written notice from the Securities Depository to the effect that the Securities Depository is unable or unwilling to discharge its responsibilities, the Trustee shall issue, transfer and exchange Bonds requested by the Securities Depository in appropriate amounts. Whenever the Securities Depository requests the Commission and the Trustee to do so, the Commission and the Trustee will cooperate with the Securities Depository in taking appropriate action after reasonable notice (A) to arrange, with the prior written consent of the Commission and the Credit Facility Issuer, for a substitute depository willing and able upon reasonable and customary terms to maintain custody of the Bonds or (B) to make available Bonds registered in whatever name or names the 2. Beneficial Owners transferring or exchanging such Bonds shall designate at the expense of the Owner. ~~~~:17646_l(RED:l7480 3 TO:~l7480~2)109~Fi2062.14 -- 22 08/11/94 (iii) If the Commission, the Credit Facility Issuer, the Liquidity Facility Issuer and the Owner agree that it is desirable that certificates representing the Bonds be delivered to Bondholders and so notify the Trustee in writing, the Trustee shall so notify the Securities Depository, whereupon the Securities Depository will notify the Participants of the availability through the Securities Depository of bond certificates representing the Bonds. The cost of printing the definitive Bonds shall be borne by the Owner and the bond printer shall be subject to reasonable approval by the Owner. In such event, the Trustee shall issue, transfer and exchange bond certificates representing the Bonds as requested by the Securities Depository in appropriate amounts and in Autborized Denominations. During any Short Term Rate Period, if the use of a Securities Depository is discontinued, a Purchase Agent (which may be the Trustee) shall be appointed in compliance with Section 10.17 hereof. (iv> Notwithstanding any other provision of this Indenture to the contrary, so long as any Bond is registered in the name of a nominee of the Securities Depository, all payments with respect to such Bond and all notices with respect to such Bond shall be made and given, respectively, to the Securities Depository as provided in a representation letter in the form required by the Securities Depository. (9 Registered ownership of the Bonds may be transferred on the registration books of the Commission maintained by the Registrar and the Bonds may be delivered in physical form to the following: (1) any successor Securities Depository or its nominee; or (2) any person, upon (I) the resignation of the Securities Depository from its functions as depositary, (II) termination by the Commission of the use of the Securities Depository pursuant to this Section 2.13, or (III) the occurrence of an Event of Default under this Indenture. ARTICLE III AUTHORIZATION AND ISSUANCE OF BONDS Section 3.1. Exclusive Provisions. Except as provided herein and in the Intercreditor Agreement, no liens of any nature or kind on the Trust Estate shall ever be placed or permitted by the Commission (other than the lien created by this Indenture), and no Bonds shall be authenticated and delivered under this Indenture other than the Bonds described in Sections 2.6, 2.8, 2.9, 2.13(a) and 3.2 hereof, in the form and substance prescribed in or determined in accordance with Sections 2.3 and 2.4 hereof. Section 3.2. Term and Issuance of Bonds; Application of Bond Proceeds. (a) The Commission’s Bonds entitled “Carlsbad Housing and Redevelopment Commission Multifamily Housing Revenue Refunding Bonds, Series A of 1994 (Seascape Village Project)” in the aggregate principal amount of 1 $15.115,000 are hereby authorized to be issued under and secured by this Indenture. 23 OS/l l/94 0) The Bonds shall be issuable as fully registered Bonds, without coupons, in Authorized Denominations. The Bonds shall be numbered separately from 1 upward with such prefix as may be convenient for the Trustee or as otherwise directed by the Commission. cc> The Bonds shall bear interest from the last date to which interest has been paid on the Bonds, or if no interest has been paid, from the Closing Date. Notwithstanding any provision herein or in the Bonds to the contrary, if any date specified for payment on the Bonds (whether an Interest Payment Date, a Redemption Date or 2 & maturity date) occurs on a day other than a Business Day, payment shall be made on the next succeeding Business Day, but no additional interest will accrue. Cd) The proceeds of the sale of the Bonds received by the Trustee, concurrently with the authentication and delivery of the Bonds shall be applied in accordance with the terms of the Escrow Agreement in connection with the refunding in whole of the outstanding Prior Bonds pursuant to the Prior Indenture. Such payments shall be made in accordance with, and the payment of the Prior Bonds shall be effectuated by the Prior Trustee as provided in, the Escrow Agreement. The Trustee shall deposit the accrued interest, if any, it receives with respect to the Bonds in the Interest Account of the Revenue Fund. Section 3.3. Interest on the Bonds. Interest on the Bonds will be payable as provided in the Bonds and in this Article III. Interest on the Bonds will initially be payable at the Weekly Rate until the earlier of conversion of the interest rate on the Bonds to a Fixed Rate or another Short Term Rate or until payment in full of the Bonds (whether at t maturity or redemption or acceleration prior to 2 maturity) or unless the Bonds bear interest at the Liquidity Facility Rate or the Credit Facility Rate. If there exists an Event of Default under this Indenture, the interest rate on the Bonds will be the rate on the Bonds on the day before the Event of Default occurred, except that if interest on the Bonds was then payable at a Commercial Paper Rate, the default rate will be the highest Commercial Paper Rate then in effect for any Bond. The interest rate determination method may be changed as described in Section 3.4 below and by the Credit Facility Issuer as described in (b) below. The methods of determining the various interest rates are as follows: (a) Daily Rate. When interest on the Bonds is to be payable at a Daily Rate, the Remarketing Agent will set a Daily Rate on each Business Day (the “Daily Rate Determination Date”). Each Daily Rate will be effective from and including the Daily Rate Determination Date until, but not including the next Daily Rate Determination Date (or until the effective date of a change to a Fixed Rate or another Short Term Rate). The Daily Rate for any non-Business Day will be the rate for the last day on which a rate was set. When the effective date of a change to a Daily Rate is not a Business Day, the Daily Rate will be determined on the first Business Day after the effective date, and the Daily Rate so determined will commence accruing on said effective date. Each Daily Rate shah be the minimum rate necessary (as determined by the Remarketing Agent) for the Remarketing Agent to sell the Bonds on the Daily Rate Determination Date at their principal amount plus accrued interest, if any. (3) Weekly Rate. Initially, interest on the Bonds is to be payable at the Weekly Rate. The Weekly Rate will be determined by the Remarketing Agent on 2 Tuesday of each calendar week or if such 2 Tuesday is not a Business Day, on the first Business Day thereafter (the “Weekly Rate Determination Date”). Each Weekly Rate will be effective f on the ~~~~:17646~1(RED:17480~3~T0:_17480~2)109~B2062.14 24 08/11/94 dav following the Weekly Rate Determination Date through and including fi the next Weekly Rate Determination Date (or the effective date of a change to a Fixed Rate or another Short Term Rate); provided that (i) the initial Weekly Rate shall be effective from and including the Closing Date through and including the next succeeding the Closing Date and (ii) when the effective date of a change to a Weekly Rate is not a Business Day, the Weekly Rate will be determined on the first Business Day after the effective date, and the Weekly Rate so determined will commence accruing on said effective date. The Weekly Rate shall be the minimum rate necessary (as determined by the Remarketing Agent) for the Remarketing Agent to sell the Bonds on the Weekly Rate Determination Date at their principal amount plus accrued interest, if any. (cl Monthly Rate. When interest is to be payable at a Monthly Rate, the Remarketing Agent will set a Monthly Rate on the first Business Day of the first Monthly Rate Period (effective from and including that effective date through the remainder of that calendar month) and on the first Business Day of each month thereafter (effective for that calendar month) (the “Monthly Rate Determination Date”). Each Monthly Rate will be effective from and including the Monthly Rate Determination Date through and including the day immediately preceding the next Monthly Rate Determination Date (or the effective date of a change to a Fixed Rate or another Short Term Rate). When the effective date of a change to a Monthly Rate is not a Business Day, the Monthly Rate will be determined on the first Business Day after the effective date, and the Monthly Rate so determined will commence accruing on said effective date. The Monthly Rate shall be the minimum rate necessary (as determined by the Remarketing Agent) for the Remarketing Agent to sell the Bonds on the Monthly Rate Determination Date at their principal amount plus accrued interest, if any. 60 Quarterly Rate. When interest is to be payable at a Quarterly Rate, the Remarketing Agent will set a Quarterly Rate on the first Business Day of the first Quarterly Rate Period (effective from and including that effective date through the remainder of that Quarter) and on the first Business Day of each Quarter thereafter (effective for that Quarter) (the “Quarterly Rate Determination Date”). Each Quarterly Rate will be effective from and including the Quarterly Rate Determination Date through and including the day immediately preceding the next Quarterly Rate Determination Date (or the effective date of a change to a Fixed Rate or another Short Term Rate). When the effective date of a change to a Quarterly Rate is not a Business Day, the Quarterly Rate will be determined on the first Business Day after the effective date, and the Quarterly Rate so determined will commence accruing on said effective date. The Quarterly Rate shall be the minimum rate necessary (as determined by the Remarketing Agent) for the Remarketing Agent to sell the Bonds on the Quarterly Rate Determination Date at their principal amount plus accrued interest, if any. W Semi-Annual Rate. When interest is to be payable at a Semi-Annual Rate, the Remarketing Agent will set a Semi-Annual Rate on the first Business Day of the first Semi-Annual Rate Period (effective from and including that effective date through the remainder of that Six Month Period) and on the first Business Day of each Six Month Period thereafter (effective for that Six Month Period) (the “Semi-Annual Rate Determination Date”). Each Semi-Annual Rate will be effective from and including the Semi-Annual Rate Determination Date through and including the day immediately preceding the next Semi-Annual Rate Determination Date (or the effective date of a change to a Fixed Rate or another Short Term Rate). When the effective date of a change to a Semi-Annual Rate is not a Business Day, the Semi-Annual Rate will be determined on the first Business Day after the effective date, and the Semi-Annual Rate ~u~~:17646~1(RED:17480~3~T0:_17480~2)109~B2062.14 25 08/l 1194 so determined will commence accruing on said effective date. The Semi-Annual Rate shall be the minimum rate necessary (as determined by the Remarketing Agent) for the Remarketing Agent to sell the Bonds on the Semi-Annual Rate Determination Date at their principal amount plus accrued interest, if any. 0-l Commercial Paper Rate. (0 Determination of Commercial Paper Rate. When interest is to be payable at the Commercial Paper Rate, the Remarketing Agent will set the Commercial Paper Rate for each Bond on the first Business Day after the effective date of the change to a Commercial Paper Rate (effective from and including the effective date through the remainder of each Commercial Paper Rate Period applicable to such Bond) and on the effective date of each Commercial Paper Rate Period thereafter (effective for that Commercial Rate Period) (each, a “Commercial Paper Rate Determination Date”). The Commercial Paper Rate shall be the minimum rate necessary (as determined by the Remarketing Agent) for the Remarketing Agent to sell the Bonds on the Commercial Paper Rate Determination Date at their principal amount plus accrued interest, if any. (ii) Determination of Commercial Paper Rate Periods by Owner or Credit Facility Issuer. While the Bonds bear interest at a Commercial Paper Rate and so long as no Event of Default has occurred under any of the First Deed of Trust Documents or any of the Second Deed of Trust Documents, the Commercial Paper Rate Period for each Bond shall be determined on the first Business Day of such Commercial Paper Rate Period by the Owner unless the Owner requires the Remarketing Agent to make such determinations, in which event the Remarketing Agent shall make such determinations as described in Subsection 3.3(f)(iii) below. If an Event of Default has occurred and is continuing under any of the First Deed of Trust Documents or any of the Second Deed of Trust Documents and the Credit Facility Issuer notifies the Owner, the Commission, the Trustee and the Remarketing Agent that such Event of Default has occurred and is continuing, the Credit Facility Issuer shall have the right to determine the Commercial Paper Rate Period for each Bond on the first Business Day of such Commercial Paper Rate Period unless the Credit Facility Issuer requires the Remarketing Agent to make such determinations as set forth in Subsection 3.3(t)(iii) below. The Owner or the Credit Facility Issuer, as the case may be, shall give notice by facsimile communication of the length of any Commercial Paper Rate Period determined by the Owner or the Credit Facility Issuer, as the case may be, to the Remarketing Agent on the date of such determination. (iii) Determination of Commercial Paper Rate Periods by Remarketing Agent. The Owner with the prior consent of the Credit Facility Issuer, upon delivering the opinion of counsel referred to in the preceding paragraph, may, while the Bonds bear interest at a Commercial Paper Rate, require the Remarketing Agent to set the length of each Commercial Paper Rate Period or to cease to do so for a specific or an indefinite period of time. When the Owner or the Credit Facility Issuer, as the case may be, requires the Remarketing Agent to determine the length of Commercial Paper Rate Periods, the length of each Commercial Paper Rate Period for each Bond shall be determined on the first Business Day of such Commercial Paper Rate Period by the Remarketing Agent based upon the 26 OS/11194 Remarketing Agent’s judgment that such length will be beneficial to the market for, or the relative yield of, the Bonds based upon the factors set forth in Subsection 3.3(f)(iv) below. (iv) Length of Commercial Paper Rate Periods Determined by the Remarketing Agent. For purposes of Section 3.3(f)(iii), “beneficial to the mark-&for, or the relative yield of, the Boruis M shall be based upon (a) the performance of the Bonds, measured by market supply and demand and yield, relative to other securities which bear interest at a commercial paper rate or which, in the judgment of the Remarketing Agent, are otherwise comparable to the Bonds, or (b) any fact or circumstance relating to the Bonds or affecting the market for the Bonds or affecting such other comparable securities in a manner which, in the judgment of the Remarketing Agent, will affect the market for the Bonds, which in any event leads the Remarketing Agent to conclude that the length of the Commercial Paper Rate Period of the Bonds should be as set forth in such notice. As used in this paragraph, “beneflciai” means beneficial to the Owner and the Commission. The Remarketing Agent may use or not use any inputs and resources it deems appropriate and will make its decision based solely upon its judgment. The Remarketing Agent will not have any obligation, responsibility or liability of any kind to the Bondholders, the Commission, the Owner, the Credit Facility Issuer, the Liquidity Facility Issuer or to any other person with respect to any determination made under Subsection 3.3(f)(iii) or (iv), including but not limited to, any omission by the Remarketing Agent to consider any facts or circumstances or any resources or inputs, it being the intent of this Indenture that the Remarketing Agent may, in its unrestricted judgment, choose to consider no inputs or resources other than its own expertise. 09 Limitations on Selection of Commercial Paper Rate. Notwithstanding the foregoing: (1) A Commercial Paper Rate Period may not be established unless the Credit Facility and the Liquidity Facility terminate no earlier than 20 days after the last day of such Commercial Paper Rate Period; (2) If the Owner has previously determined that the Bonds are to bear interest at a rate other than the Commercial Paper Rate effective as of a future date, a new Commercial Paper Rate Period may not be established unless the last day of such Commercial Paper Rate Period occurs on or before the effective date of the change to such other rate; (3) A Commercial Paper Rate Period may not be established after the occurrence of a Determination of Taxability; (4) If neither the Owner nor the Remarketing Agent sets the length of a Commercial Paper Rate Period for any Bond when it is required to do so, a new Commercial Paper Rate Period lasting 30 days (or until the earlier stated maturity of such Bonds) will follow; and (5) A Commercial Paper Rate Period may not be established for an Interest Period of less than fifteen (15) days. ~~~~:17646_1(RED:17480 3 TO:~17480~2)109~B2062.14 -- 27 08/l l/94 (vi) Payment of Interest. When the Bonds bear interest at a Commercial Paper Rate, interest will accrue from and including the first day of the applicable Commercial Paper Rate Period to and including the last day of such period and will be payable on the first Business Day following the last day of such period. (g> Fixed Rate. When interest on the Bonds is to be payable at a Fixed Rate, the Remarketing Agent shall set a Fixed Rate for L& Bonds on a date (the “Fixed Rate Determination Date “) no fewer than one (1) nor more than fifteen (15) Business Days before the beginning of any period in which interest on the Bonds will be payable at a Fixed Rate (the “Fixed Rate Period “). Each Fixed Rate Period shall be a period ending on the day before a June 1 or a December 1 not less than 365 days after the effective date of a Fixed Rate or on the stated maturity date of the Bonds, if earlier. Each Fixed Rate will be effective from and including the first day of the Fixed Rate Period through and including the last day of the Fixed Rate Period. Each Fixed Rate shall be the minimum rate necessary (as determined by the Remarketing Agent on the Fixed Rate Determination Date) for the Remarketing Agent to sell the Bonds for delivery on the Fixed Rate Determination Date that the Fixed Rate goes into effect at their principal amount plus accrued interest, if any. 01) Liquidity Facility Rate. During any period that Bonds are owned by the Liquidity Facility Issuer by reason of a draw or claim on the Liquidity Facility, such Bonds will bear interest at the Liquidity Facility Rate from and including the date such Bonds are so purchased by the Liquidity Facility Issuer to but excluding the date such Bonds are sold by the Liquidity Facility Issuer (through a remarketing of the Bonds or otherwise) to another Person. (0 Credit Facility Rate. During any period that Bonds are owned by the Credit Facility Issuer by reason of a draw or claim on the Credit Facility, such Bonds will bear interest at the Credit Facility Rate from and including the date such Bonds are so purchased by the Credit Facility Issuer to but excluding the date such Bonds are sold by the Credit Facility Issuer (through a remarketing of the Bonds or otherwise) to another Person. Section 3.4. Conversion of Interest Rate; Reset of Fixed Rate. (a) Change Directed by the Owner. Subject to the provisions of Section 3.4(b) below, the Owner, with the prior written consent of the Credit Facility Issuer and provided no Event of Default shall have occurred and be continuing under the First Deed of Trust Documents or any of the Second Deed of Trust Documents, may change the method of determining the interest rate on the Bonds or reset the Fixed Rate applicable to the Bonds by notifying the Commission, the Trustee, the Purchase Agent, the Paying Agent, the Liquidity Facility Issuer (if a Short Term Rate is in effect on the date such notice is sent), the Remarketing Agent and the Credit Facility Issuer, at least sixty (60) days prior to the proposed effective date of such change (other than the Liquidity Facility Rate or the Credit Facility Rate, for which no notice is required). Such notice shall contain (A) the effective date of such change or reset, which date must be an Interest Payment Date and, while the Bonds bear interest at a Fixed Rate, which date must be the day after the last day of the then current Fixed Rate Period, (B) the proposed interest rate determination method, (C) if the change is to a Commercial Paper Rate, whether the length of the Commercial Paper Rate Periods will be set by the Owner, the Credit Facility Issuer or the Remarketing Agent, (D) if the change is to a proposed Fixed Rate or in the case of a Fixed Rate reset, the end of the new Fixed Rate Period (which must be the day before 28 OS/11194 (I) a June 1 or a December 1 occurring at least one year after the effective date or (II) the final maturity date of the Bonds if earlier). The foregoing notice must be accompanied by (i) the form of an opinion of Bond Counsel stating that the change or reset is not prohibited by the Refunding Bond Act, the Law, any other laws of the State or this Indenture and will not adversely affect the exclusion from gross income for federal income tax purposes to which interest on the Bonds would otherwise be entitled and (ii) the written consent of the Credit Facility Issuer. Not later than forty (40) days prior to the proposed Conversion Date, the Owner shall deliver (X) if the change is from a Fixed Rate to a Short Term Rate (1) the notice (together with the items which must accompany such notice) required pursuant to Section 2.12(c) hereof (other than the evidence of the ratings described in Section 2.12(b) hereof, which ratings may be delivered at any time required by the Remarketing Agent but in no event after the Conversion Date), and (2) evidence of appointment of a Purchase Agent having a drop facility in New York, New York if required under Section 10.17 hereof, and (Y) if the change is from the Short Term Rate to a Fixed Rate or in the event of a reset of the Fixed Rate, if the existing Credit Facility does not have a term meeting the requirements of Section 2.11 hereof, a Credit Facility Amendment meeting the requirements of Section 2.11(d) hereof or the notice and items required for the delivery of an Alternate Security pursuant to Section 2.11(c) hereof. Upon receipt of the foregoing notice, the Trustee shall send the notice of mandatory tender of the Bonds required by Section 4.6(b) hereof. Not later than the Conversion Date, the Owner shall deliver or cause to be delivered (i) the signed original opinion of Bond Counsel in the form previously submitted pursuant to the first paragraph of this Section 3.4(a), (ii) if required, an Alternate Security and the accompanying documentation meeting the requirements of Section 2.11 hereof and (iii) if required, an Alternate Liquidity Facility and the accompanying documentation meeting the requirements of Section 2.12 hereof. The Owner shall cause the items reauested to be delivered in the tlrecedine sentence to be delivered into an escrow with the Trustee at least 10 davs txior to the Conversion Date. for final deliverv on the Conversion Date. (b) Change from Fired Interest Rate to Short Term Rate Directed by Credit Facility Issuer. During a Fixed Rate Period, the Credit Facility Issuer shall have the right upon the occurrence and continuance of an Event of Default by the Owner under any of the Financing Documents (an “Owner Event of Default7 to direct the conversion of the method for calculating the interest rate on the Bonds to a Short Term Rate without the consent of the Owner; provided that the Credit Facility Issuer shall provide the Commission, the Owner, the Trustee and the Remarketing Agent with thirty (30) days’ notice prior to commencing the process to convert the method for calculating the interest rate on the Bonds to a Short Term Rate pursuant to this Section 3.4 and a written description of such Owner Event of Default. If during such thirty (30) day period the Owner has made such payments and/or performed such obligations which are in default such that the Owner Event of Default is no longer continuing, the Credit Facility Issuer shall not be permitted to convert the method for calculating the interest rate on the Bonds as a result of such Owner Event of Default, If the Owner does not cure the Owner Event of Default during the thirty (30) day period provided above, and the Credit Facility Issuer elects to proceed with the change in-the method of calculating the interest rate on the Bonds, the notice described in Section 3.4(a) hereof shall be given by the Credit Facility Issuer and shall state, in addition to the matters required by Section 3.4(a), that the conditions in this paragraph precedent to the 29 OS/11194 Credit Facility Issuer’s right to direct such change have been satisfied. It is understood by the Owner that the above notice and time period to cure continuing Owner Events of Default relates solely to the Credit Facility Issuer’s expression of its intent to change the method for calculating interest on the Bonds, and it is not intended to be a right to notice and of a grace period to cure Owner Events of Default if the Credit Facility Issuer has not elected to change the method of calculating interest on the Bonds. (cl Change from Short Term Rate to Fixed Interest Rate Directed by Credit Facility Issuer. During a Short Term Rate Period, the Credit Facility Issuer shall have the right upon the occurrence and continuance of an Owner Event of Default by the Owner under any of the Financing Documents to convert the method for calculating the interest rate on the Bonds to a Fixed Rate without the consent of the Owner; provided that the Credit Facility Issuer shall provide the Owner, the Trustee and the Remarketing Agent with thirty (30) days’ notice prior to commencing the process of converting the method for calculating the interest rate on the Bonds to a Fixed Rate pursuant to this Section 3.4, a written description of such Owner Events of Default. If during such thirty (30) day period the Owner has made such payments and/or performed such obligations which are in default such that the Owner Event of Default is no longer continuing, the Credit Facility Issuer shall not be permitted to convert the method for calculating the interest rate on the Bonds as a result of such Owner Event of Default. If the Owner does not cure the Owner Event of Default during the thirty (30) day period above, and the Credit Facility Issuer elects to proceed with the change in the method of calculating the interest rate on the Bonds, the notice described in Section 3.4(a) hereof shall be given by the Credit Facility Issuer and shall state, in addition to the matters required by Section 3.4(a), that the conditions in this paragraph precedent to the Credit Facility Issuer’s right to direct such change have been satisfied. It is understood by the Owner that the above notice and time period to cure continuing Owner Events of Default relates solely to the Credit Facility Issuer’s expression of its intent to change the method for calculating interest on the Bonds, and it is not intended to be a right to notice and of a grace period to cure Owner Events of Default if the Credit Facility Issuer has not elected to change the method of calculating interest on the Bonds. Cd) Limitations on Conversion of Interest Rate. Any change in the method of determining interest on the Bonds or any change in the length of the next Fixed Rate Period pursuant to this Section 3.4 must comply with the following: (0 if a Commercial Paper Rate is in effect, the effective date of any change must be the day following the last day of the Commercial Paper Rate Period of all Bonds, (ii) if a Short Term Rate other than a Commercial Paper Rate is in effect, the effective date of any change must be 1 an Interest Pavment Date, (iii) if a Fixed Rate is in effect, the effective date of any change must be the Interest Payment Date following the end of the Fixed Rate Period, (iv) after a determination is made requiring mandatory redemption of all Bonds upon the occurrence of a Determination of Taxability, no change in the method of determining interest on the Bonds may be made, and PUBL:l7646_l(RED:l7480 3 T0:~17480~2)109~EI2062.14 -- 30 OS/l 1194 09 if the change is to a Short Term Rate, a Liquidity Facility complying with Section 2.12 hereof must be delivered to the Trustee prior to the effective date of the Short Term Period. (e) Failure of Conditions. The Bonds shall be subject to mandatory tender for purchase on any Conversion Date pursuant to Section 4.5(b)(i) hereof. In the event of the failure of any conditions contained in Section 3.4(a) hereof upon conversion from a Short Term Rate to a Fixed Rate, such tender shall be cancelled and the Bonds shall continue to bear interest at the then applicable Short Term Rate so long as a Liquidity Facility complying with Section 2.12 hereof shall remain in effect at least through the first Interest Payment Date following the proposed Conversion Date; and the Trustee shall provide the Bondholders with written notice of the cancellation not less than ten (10) days prior to the proposed mandatory tender date. In the event of a failure of the conversion from a Fixed Rate to a Short Term Rate, or a failure of the reset of a Fixed Rate, or the failure of a conversion from the Short Term Rate to a Fixed Rate when the Liquidity Facility is expiring, the Bonds shall be purchased on the scheduled mandatory tender date from proceeds of a draft, claim or draw on the Credit Facility and shall not be remarketed until the conditions to the conversion of the method of determining the interest rate contained in Section 3.4(a) hereof have been met. (9 Failure to Deliver Notice of Conversion or Reset. If, at least forty (40) days before the end of a Fixed Rate Period, neither the Owner nor the Credit Facility Issuer has delivered notice of the change in the method of determination of the interest rate on the Bonds or of reset of the Fixed Rate as provided in Section 3.4(a) hereof, the Bonds shall be purchased on the date specified in Section 4.5(b)(i) hereof from proceeds of a draft, draw or claim under the Credit Facility and shall not be remarketed until the conditions have been satisfied for (i) the conversion of the method of determining the interest rate contained in Section 3.4(a) hereof, or (ii) the resetting of the Fixed Rate. Section 3.5. /Reserved.] Section 3.6. Chlculution of Interest. The Paying Agent will compute the amount of interest payable on the Bonds from the rates supplied to the Trustee by the Remarketing Agent. The Remarketing Agent will notify the Trustee and the Paying Agent in writing or by telephone promptly confirmed by facsimile transmission by 12:00 noon, Trustee Time, (1) on the first Business Day after a month in which interest on the Bonds is payable at a Daily Rate, of the Daily Rate for each day in such month, (2) on each Weekly Rate Determination Date for each calendar week when the Bonds bear interest at a Weekly Rate, (3) on the first Business Day of each Commercial Paper Rate Period, of the length thereof and the Commercial Paper Rate, (4) on the first Business Day of each Interest Period when Bonds bear interest at a Monthly, Quarterly or Semi-Annual Rate, of the interest rate for such Interest Period, and ~~~~:17646_1(RED:17480 3 TO:~17480~2)109~B2062.14 -- 31 08111194 (5) on the first Business Day after the Fixed Rate Determination Date, of the Fixed Rate set on the Fixed Rate Determination Date. Using the rates supplied by such notice, the Paying Agent will calculate the interest payable on the Bonds. The Remarketing Agent will inform the Trustee, the Paying Agent, the Owner, the Liquidity Facility Issuer (during any Short Term Rate Period), the Purchase Agent and the Credit Facility Issuer orally, promptly confirmed in writing, of any interest rate set by the Remarketing Agent. The Paying Agent will confirm the effective interest rate by telephone or in writing to any Bondholder who requests it in any manner. The setting of the interest rates and the calculation of interest payable on the Bonds as provided in this Indenture will be conclusive and binding on all parties including, without limitation, the Owner, the Commission, the Credit Facility Issuer, the Liquidity Facility Issuer, the Paying Agent, all Holders and Beneficial Owners of the Bonds and the Remarketing Agent. Failure of the Remarketing Agent, the Trustee, the Registrar, the Credit Facility Issuer or the Paying Agent to give any of the notices described in this Indenture, or any defect therein, shall not affect the interest rate to be borne by any of the Bonds or conversion to a different method of calculating interest nor in any way change the rights of the registered owners of the Bonds to have their Bonds redeemed in accordance with this Indenture. Section 3.7. Invalidity of Interest Rates. 6) Invalidity of Short Term Rate. In the event that (i) calculation of the Short Term Rate as herein provided is held to be invalid or unenforceable by a court of law for any Short Term Rate Period or (ii) the Remarketing Agent fails to announce the Short Term Rate for any Short Term Rate Period, the Short Term Rate for any such period shall be determined bv the Remarketing APent (or the Trustee under the circumstances described in this Section 3.7(a): (A) if the Daily, Weekly or Monthly Rate was the interest rate most recently in effect on the Bonds, 90% of the interest rate applicable to 13-week United States Treasury bills on the basis of the average per annum discount rate at which such 13-week Treasury bills were sold at the most recent weekly Treasury auction or (B) if the Quarterly, Semi-Annual or Commercial Paper Rate was the interest rate most recently in effect on the Bonds, 90% of the interest rate applicable to the one year United States Treasury bills on the basis of the average per annum discount rate at which such one year Treasury bills were sold at the most recent Treasury auction. All determinations by the Remarketing Agent, or if the Trustee shall fail to receive the timely notice of the Short Term Rate, by the Trustee of the Short Term Rate under this Indenture shall be rounded to the nearest hundredth of one percent, or, if there be none, to the next highest hundredth of one percent. 0) Znvalidity of Fixed Rate. After the effective date of any Fixed Rate Period, in the event that calculation of the Fixed Rate as provided in this Indenture for such Fixed Rate Period is held to be invalid or unenforceable by a court of law, the Fixed Rate for that Fixed Rate Period shall be the lesser of the Highest Lawful Rate or 95% of the average yield on United States Treasury obligations having a maturity most comparable to such Fixed Rate Period, as most recently published in the Wall Street Journul or the New York Times or another publication of similar standing. If the Fixed Rate as calculated pursuant to this Section 3.7(b) is PUBL:l7646_l(RED:l7480 3 TO:~17480~2)109~B2062.14 -- 32 OS/l l/94 other than a multiple of 118 or l/20 of 1% , it shall be increased to the next higher multiple of 118 or l/20 of 1%. Section 3.8. Interest Not to Be in Excess of Maximum Rate or Highest Lawful Rate. Notwithstanding any other provisions of the Bonds or this Indenture, (a) interest payable on the Bonds shall not exceed the Maximum Rate and (b) interest payable on the Bonds and so denominated, together with any other costs, consideration or payments on the Bonds hereunder in the nature of and constituting interest on the Bonds under applicable law (whether denominated as interest, supplemental interest or any other type of payment on the Bonds hereunder) shall not exceed, and shall automatically be reduced to, the Highest Lawful Rate; and all such costs, consideration and payments constituting interest shall be prorated, spread, and allocated, to the fullest extent permitted by law, to such periods and amounts as will cause the amounts so paid or received to conform to and comply with applicable law. If any payment be made, charged or demanded that would, except for the provisions hereof, constitute interest in excess of the Highest Lawful Rate, the amount thereof exceeding such Highest Lawful Rate shall be deemed to the fullest extent allowed by law to constitute and be the result of a mathematical and good faith error, it being expressly agreed and intended that no provisions hereof or of the Bonds shall constitute or be construed to constitute a contract or obligation for, or to require or authorize the payment or charging of, any amount demanded as or constituting interest on the Bonds in excess of the Highest Lawful Rate, and no such excess shall ever be due, payable or contracted for hereunder or under the Bonds. ARTICLE IV BOND REDEMPTION, PURCHASE IN LIEU OF REDEMPTION AND TENDER PROVISIONS Section 4.1. Redemption of Bonds. (a) Optional Redenzption. The Bonds are subject to redemption upon the exercise by the Owner of an election to prepay the Loan in accordance with subsection (b) below, with the prior written consent of the Credit Facility Issuer, as follows: (0 Fired Rate Period. During each Fixed Rate Period of at least four (4) years, the Bonds are subject to redemption as a whole or in part on any date after the Call Lock Period (as hereinafter defined) at the following redemption prices (expressed as a percentage of the principal amount of Bonds to be redeemed) plus interest accrued on such Bonds to the Redemption Date: 33 08/l 1194 Redemption Date Redemption Price From the expiration of the Call Lock Period through twelve months after expiration of Call Lock Period: 102% From thirteen through twenty-four months after expiration of Call Lock Period: 101% From twenty-five months after expiration of Call Lock Period through the end of the Fixed Rate Period: 100% “Call Lock Period” means, during each Fixed Rate Period, a period beginning on the first day of such Fixed Rate Period and ending on the day before the first Interest Payment Date which is at least thirty (30) days after the date which is halfway through such Fixed Rate Period. Prior to the Remarketing Date at the commencement of any Fixed Rate Period, the Commission shall have the option, at the direction of the Owner, to modify or eliminate the Call Lock Period and/or the premium payable on any such optional Redemption Date, provided the Owner delivers to the Commission, the Credit Facility Issuer, the Remarketing Agent and the Trustee an opinion of Bond Counsel stating that such modification will not adversely affect the exclusion from gross income for federal income tax purposes to which interest on the Bonds would otherwise be entitled. (ii) Daily, Week& or Monthly Rate Period. When interest on the Bonds is payable at a Daily, Weekly or Monthly Rate, the Bonds may be redeemed, without premium, in whole or in part, on any date, at a redemption price equal to the principal amount thereof plus interest accrued thereon to the Redemption Date. (iii) Quarterly, Commercial Paper or Semi-Annual Rate Period. When interest on the Bonds is payable at a Quarterly, Commercial Paper or Semi-Annual Rate, the Bonds may be redeemed, without premium, in whole or in part, on any Interest Payment Date, at a redemption price equal to the principal amount thereof plus interest accrued thereon to the Redemption Date. 0) Sources of Payment of Optional Redemption Price. In addition to the prior written consent of the Credit Facility Issuer, the following shall be conditions precedent to the Owner’s right to exercise its election to prepay the Loan in whole or in part pursuant to Section 6(b) or (c) of the Note which results in redemption of Bonds under Section 4.1(a) of this Indenture: (i) the Owner shall (A) deposit cash with the Trustee at least 367 days prior to the date notice of redemption (which notice shall disclose that under Section 4.1(a) hereof the Trustee may rescind the same if such redemption cannot be successfully completed) is mailed to Bondholders or (B) prior to the date notice of redemption is mailed to Bondholders, deliver (1) a direct pay letter of credit issued by a banking institution in favor of the Trustee which letter of credit would not result in the lowering of the rating of the Bonds if it were being delivered as an Alternate Security hereunder, accompanied by a letter or letters from the Rating Agency or Agencies then rating the Bonds confirming such fact, (2) a redemption guaranty bond issued by a financial institution in favor of the Trustee which guaranty bond would not result in the lowering of the rating of the Bonds if it were being delivered as an Alternate Security hereunder 34 08/l 1194 accompanied by a letter or letters from the Rating Agency or Agencies then rating the Bonds to the effect that such guaranty bond so qualifies, (3) Eligible Money, (4) an amendment of the Credit Facility to permit draws to pay the optional redemption price or (5) any combination of (l), (2), (3) and (4) above, in the aggregate amount (including, as to any cash deposited, investment earnings to be received thereon prior to the Redemption Date without the need for reinvestment) equal to the full redemption price (including, without limitation, the redemption premium, if any) plus accrued interest to the anticipated Redemption Date and (ii) in the case of a redemption with money described in (A) above, the Trustee shall have received prior to giving notice of such redemption (x) a written certificate from a general partner of the Owner, if the Owner is a partnership, or the President or any Vice President of the Owner, if the Owner is a corporation, or otherwise the Authorized Representative of the Owner, dated on or after the 367th day after such deposit certifying that no Event of Bankruptcy of the Owner or its general partner in fact occurred prior to or during such 367-day period, and (y) an opinion of counsel who is an expert in bankruptcy matters to the effect that payments by the Trustee from money described in clause (A) above would not constitute transfers avoidable under 11 U.S.C. 0 547(b) and recoverable from the Holders of the Bonds under 11 U.S.C. Q 550(a) should the Commission or the Owner be the debtor in a case under the Bankruptcy Code. If for any reason Bonds cannot be redeemed in accordance with Section 4.1(a) hereof on the proposed Redemption Date after notice of such redemption has been sent to the Holders of Bonds to be redeemed, the Trustee shall rescind the redemption and send notice of such rescission to the Holders in accordance with the provisions of Section 4.3(a) hereof. cc> Mandatory Redemption. Subject to the provisions of Section 4.5(c) hereof, the Bonds shall be subject to mandatory redemption prior to the discharge of the lien of the Indenture, in each case at a redemption price equal to the principal amount thereof plus interest accrued thereon to the Redemption Date, as follows: (1) as a whole on any date or in part on any Interest Payment Date from any Net Proceeds which the Credit Facility Issuer requires to be applied to the redemption of the Bonds pursuant to the First Deed of Trust or the Second Deed of Trust; (2) as a whole or in part on the earliest date for which notice of such redemption may be given upon receipt by the Trustee of written notice from the Credit Facility Issuer requesting such redemption, specifying the principal amount of Bonds to be redeemed and stating that (i) an Event of Default has occurred and is continuing under and as defined in the Loan Agreement, the Reimbursement Agreement, the First Deed of Trust or the Second Deed of Trust, or (ii) if the Credit Facility is a letter of credit and the Credit Facility Issuer will not reinstate its letter of credit following a draw thereon for interest on an Interest Payment Date; (3) as a whole, but not in part, on the earliest date for which notice of such redemption may be given, if a Determination of Taxability shall have occurred; ~~~~:17646~1(RED:17480~3~T0:_17480~2)109~B2062.14 35 OS/11194 (4) as a whole or in part with respect to any Bonds purchased by the Credit Facility Issuer as a result of mandatory tenders for purchase by the Holders thereof pursuant to Section 4.5(b), purchased in lieu of redemption pursuant to Section 4.5(c) hereof or purchased from the Liquidity Facility Issuer, which are held by the Credit Facility Issuer as registered owner thereof on any date after such purchase, upon written notice from such Credit Facility Issuer to the Trustee, the Owner and the Commission demanding such redemption; or (5) as a whole or in part with respect to any Bonds which have been tendered for purchase pursuant to Section 4.5(a) hereof and have not been remarketed and are held by the Liquidity Facility Issuer for one hundred eighty (180) days or more (the “Minimum Hotiing Period”) on any date occurring after the Minimum Holding Period upon written notice from the Liquidity Facility Issuer to the Trustee, the Owner and the Commission demanding such redemption. Cd) Extraordinary 1 Redemption. The Bonds are subject to redemption, in whole or in part, on any date by the Commission, at a redemption price equal to the principal amount thereof plus interest accrued thereon to the Redemption Date upon (i) the direction of the Owner with the prior written consent of the Credit Facility Issuer upon the occurrence of any of the events described in (1) or (2) below; (ii) the direction of the Credit Facility Issuer upon the occurrence of any of the events described in (1) or (2) below if an Event of Default has occurred and is continuing under any of the First Deed of Trust Documents or the Second Deed of Trust Documents or an event has occurred or failed to occur which, with the passage of time or the giving of notice, or both, would constitute an Event of Default under any of the First Deed of Trust Documents or the Second Deed of Trust Documents; or (iii) the direction of the Credit Facility Issuer upon the occurrence of the event described in (3) below: (1) if the Project or any portion thereof is demolished, destroyed or damaged by fire or other casualty; (2) if the Project or any portion thereof has been taken under the exercise of the power of eminent domain by any governmental authority or conveyed in lieu of such taking or under threat thereof; or (3) if the Credit Facility Issuer elects to cause all the Bonds to be redeemed upon the foreclosure of a lien upon the Project or delivery of a deed in lieu of foreclosure and the subsequent transfer of the Project. Section 4.2. Selection of Bonds for Redemption. In the event of redemption of less than all of the Outstanding Bonds, the Trustee shall select the Bonds to be redeemed, from the Outstanding Bonds not previously called for redemption, by selecting Bonds by lot in any manner which the Trustee in its sole discretion shall deem appropriate and fair. The Trustee shall treat each Bond as representing the number of Bonds which is obtained by dividing the principal amount of such Bond by the then applicable minimum generally Authorized Denomination. The Bonds or portions of Bonds to be redeemed shall be the Bonds to which were assigned numbers so selected. For the purposes of this Section, Bonds which have theretofore been selected for ~u~~:17646~1(RED:17480~3~T0:_17480~2)109~B2062.14 36 OS/l 1194 redemption shall not be deemed Outstanding. The Trustee shall promptly notify the Commission, the Owner, the Credit Facility Issuer, the Liquidity Facility Issuer, if any, and the Remarketing Agent in writing of the Bonds or portions thereof so selected for redemption. Section 4.3. Notice of Redemption. (a) Except as provided in Section 4.9 hereof, notice of redemption shall be given by the Trustee not less than thirty (30) nor more than sixty (60) days prior to the date fixed for redemption by first class mail postage prepaid to the Credit Facility Issuer and to the Holder of each Bond to be redeemed, at the address of such Bondholder shown in the Bond Register stating: (i) the numbers of the Bonds to be redeemed, by giving the individual certificate number of each Bond to be redeemed (or stating that all Bonds between two stated certificate numbers, both inclusive, are to be redeemed); (ii) the CUSIP numbers, if available, of all Bonds being redeemed; (iii) in the case of a partial redemption of Bonds, the principal amount of each Bond being redeemed; (iv) the stated maturity date of each Bond being redeemed; (v) the place or places where amounts due upon such redemption will be payable; (vi) the notice date, Redemption Date and redemption price; (vii) that Bonds to be redeemed must be surrendered for redemption at the redemption price at the Principal Office of the Trustee, together (in the case of a purchase in lieu of redemption or if payment is to be made other than to the Holder) with an executed assignment in blank, and that interest will stop accruing as of the Redemption Date on all Bonds to be redeemed on such date whether or not properly delivered to the Trustee; and (viii) if applicable, that such notice of redemption may be rescinded as provided in Section 4.1(b) hereof or, if applicable, that the Bonds are subject to purchase in lieu of redemption as provided in Section 4.5(c) hereof. If a redemption is rescinded in accordance with Section 4.1(b) hereof, the Trustee shall send notice of such rescission as soon as practicable to the Bondholders by first class mail and to the Commission and the Credit Facility Issuer by telephone, telecopy or telex (promptly confirmed in writing). Prior to any Redemption Date, notice of such redemption of Bonds bearing interest at a Fixed Rate also shall be sent by registered or certified mail, overnight delivery service or other secure means, postage prepaid, to any Holder who requests such additional notice from the Trustee at any time, to certain municipal registered Securities Depositories (described below) which are known to the Trustee to be holding Bonds, and to at least two of the national Information Services (described below) that disseminate securities redemption notices, at least thirty (30) days, but not more than sixty (60) days, prior to the Redemption Date; provided, that neither failure to give or receive such notice nor any defect in any notice so mailed shall affect the sufficiency of the proceedings for the redemption of such Bonds. Securities Depositories include The Depository Trust Company, 711 Stewart Avenue, Garden City, New York 11530, Fax-(516) 2274039 or 4190; Midwest Securities Trust Company, Capital Structures-Call Notification, 440 South LaSalle Street, Chicago, Illinois 60605, Fax-(312) 633-2343; Philadelphia Depository Trust Company, Reorganization Division, 1900 Market Street, Philadelphia, Pennsylvania 19103, Attention: Bond Department, Fax-(215) 496-5058; or, in accordance with the then current guidelines of the Securities and Exchange Commission, to such other address and/or such other securities depositories or any such other securities depositories as the Commission may designate in writing to the Trustee. PUBL:l7646_l(RED:l7480 3 TO:~l7480~2)109~B2062.14 -- 37 08/l 1194 Information Services include Financial Information, Inc. “Daily Called Bond Service”, 30 Montgomery Street, 10th Floor, Jersey City, New Jersey 07302, Attention: Editor; Kenny Information Services, “Called Bond Service”, 55 Broad Street, 28th Floor, New York, New York 10004; Moody’s Investors Service “Municipal and Government”, 99 Church Street, 8th Floor, New York, New York 10007, Attention: Municipal News Reports; and Standard & Poor’s Corporation “Called Bond Record”, 25 Broadway, New York, New York 10004; or, in accordance with the then current guidelines of the Securities and Exchange Commission, to such other addresses and/or such other services providing information with respect to called Bonds, or any other such services as the Commission may designate in writing to the Trustee. Failure to give notice by mailing to the Holder of any Bond designated for redemption or any defect therein with respect to particular Bonds shall not affect the validity of the proceedings for the redemption of any other Bond. Failure to mail such notice to any Securities Depository or Information Service, or any defect therein, shall not affect the validity of proceedings for redemption of any Bond. Any notice mailed as provided in this Section shall be conclusively presumed to have been given, whether or not actually received by the addressee. A second redemption notice shall be sent by first-class mail, return receipt requested, not more than sixty (60) days after a Redemption Date, to each Holder of a Bond called for redemption who has not presented such Bond within thirty (30) days following the Redemption Date; provided that neither failure to give or receive such notice nor any defect therein shall affect the sufficiency of the proceedings for the redemption of such Bond. Section 4.4. Payment of Redeemed Bonds. Notice having been given in the manner provided in Section 4.3 hereof, the Bonds or portions thereof so called for redemption, shall become due and payable on the Redemption Date so designated at the redemption price set forth herein, if and to the extent the Bonds are not purchased in lieu of redemption. Subject to Section 4.5(c) hereof, upon presentation and surrender of Bonds redeemed at the Trustee’s Principal Office specified in such notice, together with, in the case of Bonds to be redeemed or purchased in lieu of redemption in part, a written instrument of assignment duly executed by the registered owner or his duly authorized attorney, such Bonds or portions thereof shall be redeemed. If less than the entire principal amount of a Bond is redeemed or purchased in lieu of redemption, the Commission shall execute and the Registrar shall authenticate and deliver, upon the surrender of such Bond, without charge to the registered owner thereof, for the unredeemed or unpurchased balance of the principal amount of the Bond so surrendered, at the option of the registered owner, Bonds in any of the Author&d Denominations. If money for the redemption of all Bonds or portions thereof to be redeemed, or for the purchase thereof in lieu of redemption, together with interest to the Redemption Date or the Purchase Date, as the case may be, shall be held by the Trustee so as to be available therefor on said Redemption Date or Purchase Date, from and after the Redemption Date or the Purchase Date, as the case may be, interest on the Bonds or portions thereof so called for redemption or purchase in lieu of redemption shall cease to accrue and become payable, such Bonds or portions thereof shall cease to be entitled to any benefit or security under this Indenture, and the Holders thereof shall have no rights in respect of such Bonds or portions thereof except to receive payment of the redemption price thereof or the Purchase Price thereof, and interest accrued to the date fixed for redemption or purchase from money held for that purpose. PUBL:l7646_l(RED:l7480 3 TO:~17480~2)109~B2062.14 -- 38 08/l 1194 Section 4.5. Tender of Bonds for Purchase; Purchase in Lieu of Redemption. (4 Optional Tenderfor Purchase. While the Bonds bear interest at a Short Term Rate, the Holders thereof (other than Excluded Bondholders) shall have the right to tender their Bonds (or portions thereof in Authorized Denominations) for purchase by the Purchase Agent at a Purchase Price equal to the principal amount thereof (or of such portions) plus, in the event Bonds bear interest at the Daily Rate or Weekly Rate, accrued interest thereon to the Purchase Date; provided that while the Bonds bear interest at the Daily Rate or Weekly Rate, if a Bond is tendered for purchase after the Record Date for an Interest Period and before the Interest Payment Date for that Interest Period, the Purchase Price of such Bond will be an amount equal to the principal amount thereof plus accrued interest thereon after the last day of the prior Interest Period and the Holder will receive interest for that Interest Period as described in Section 2.2 hereof and in the Bond. (1) Daily Rate Optional Tenders. When interest on the Bonds is payable at a Daily Rate, a Bondholder (other than an Excluded Bondholder) may tender Bonds for purchase by delivering: 0) a written notice to the Purchase Agent on a Business Day, stating the principal amount of the Bonds to be tendered and the Business Day (which shall be a date not less than seven (7) days nor more than twenty (20) days after the notice is delivered) on which the Bonds are to be purchased, and (ii) the Bonds to the Purchase Agent by lo:30 a.m., Trustee Time, on the date of purchase. (2) Week@ Rate Optional Tender. When interest on the Bonds is payable at a Weekly Rate, a Bondholder (other than an Excluded Bondholder) may tender Bonds for purchase by delivering: (0 a written notice to the Purchase Agent on a Business Day stating the principal amount of the Bonds to be tendered and the Business Day (which shall be a date not less than seven (7) days nor more than twenty (20) days after the notice is delivered), on which the Bonds are to be purchased, and (ii) the Bonds to the Purchase Agent by lo:30 a.m., Trustee Time, on the date of purchase. (3) Monthly, Quarterly or Semi-Annual Rate Optional Tender. When interest on the Bonds is payable at a Monthly Rate, Quarterly Rate or Semi-Annual Rate, each Bondholder (other than an Excluded Bondholder) may tender Bonds for purchase on the next Interest Payment Date by delivering: (0 a written notice to the Purchase Agent on a Business Day not less than seven (7) nor more than twenty (20) days prior to said Interest Payment Date stating the principal amount of the Bonds to be PUBL:l7646_1(RED:17480 3 TO:~17480~2)109~B2062.14 -- 39 08/11/94 tendered and the Interest Payment Date upon which the Bonds are to be purchased, and (ii) the Bonds to the Purchase Agent by lo:30 a.m., Trustee Time, on the date of purchase. (4) Commercial Paper Rate Optional Tender. When interest on the Bonds is payable at a Commercial Paper Rate, a Bondholder (other than an Excluded Bondholder) may tender Bonds for purchase on the next Interest Payment Date applicable to the Bonds to be tendered by delivering: (0 a written notice to the Purchase Agent on a Business Day not less than seven (7) nor more than twenty (20) days prior to said Interest Payment Date stating the principal amount of the Bonds to be tendered and the Interest Payment Date upon which the Bonds are to be purchased, and (ii) the Bonds to the Purchase Agent by lo:30 a.m., Trustee Time, on the date of purchase. (5) AaYditional Delivery Requirements. Each notice shall specify (i) the principal amount, CUSIP number, certificate number and stated maturity of the Bond to which the notice relates, (ii) the principal amount of such Bond to be purchased, (iii) the Purchase Date on which such Bond is to be purchased and (iv) payment instructions with respect to the Purchase Price. The address of the Purchase Agent may be changed by notice mailed by first class mail to the Bondholders at their addresses shown on the Bond Register. All Bonds which have been optionally tendered for purchase must be accompanied by an instrument of transfer satisfactory to the Purchase Agent, as Registrar, executed in blank by the registered owner with the signature guaranteed by a bank, trust company or member firm of the New York Stock Exchange. All Bonds for which a notice of optional tender has been given pursuant hereto shall be deemed to have been delivered on the applicable Purchase Date whether or not physically delivered to the Purchase Agent. (6) The Bonds shall not be optionally tendered for purchase pursuant to this Section 4.5(a) during any Fixed Rate Period. (7) Notwithstanding the above, during any period that the Bonds are issued in book-entry-only form pursuant to this Indenture, any notice delivered as described in this Section 4.5(a) must (A) be delivered by the Beneficial Owner of Bonds in the principal amount stated in such notice and provide evidence satisfactory to the Purchase Agent that the party delivering the notice is the Beneficial Owner of the Bonds referred to in the notice, (B) if the Beneficial Owner is other than a Participant, identify the Participant through whom the Beneficial Owner will direct the transfer referred to in the next sentence of the paragraph, and (C) state the date on which the Beneficial Owner desires such Bonds to be purchased, which must be a date permitted pursuant to this Section 4.5(a), as applicable. On or before the Purchase Date, the Beneficial Owner must direct (or if the Beneficial Owner is not a Participant, cause its ~~~~:l7646~1(RJZD:17480~3~TO:~17480~2)109~ B2062.14 40 OS/l 1194 Participant to direct) the transfer of said Bonds on the records of the Securities Depository to the account of, or as directed by, the Purchase Agent by lo:30 a.m., Trustee Time, on said Purchase Date. In such event, delivery of Bonds on the Purchase Date shall not be required pursuant to this Section or Section 4.6 hereof. Co) Mandatory Tenderfor Purchase. The Bonds shall be subject to mandatory tender to the Trustee for purchase at a Purchase Price equal to the principal amount thereof plus accrued interest thereon to the Purchase Date on the following dates: 0) (A) on each Conversion Date or (B) on each date which would have been a Conversion Date except for the failure to satisfy the conditions of a Conversion Date set forth in Section 3.4 hereof (except for a proposed conversion from a Short Term Rate to a Fixed Rate where the Liquidity Facility is not scheduled to expire, as provided in Section 3.4(e) hereof); (ii) on the last Interest Payment Date during a Short Term Rate Period (A) prior to the Termination Date of a Liquidity Facility in accordance with its terms (unless such Liquidity Facility has been extended prior to such Interest Payment Date pursuant to a Liquidity Facility Amendment) in accordance with the provisions of Section 2.12(d) hereof), (B) which is the effective date of an Alternate Liquidity Facility (other than a Liquidity Facility Amendment) delivered in substitution for the existing Liquidity Facility which is not terminating or expiring or (C) which would have been the effective date of the Alternate Liquidity Facility if the conditions for delivery of an Alternate Liquidity Facility under Section 2.12(c) or 2.12(d) hereof had been satisfied; (iii) of a Credit Facility; on the last Interest Payment Date prior to the Termination Date (iv) on the Interest Payment Date during a Short Term Rate Period (A) which is the effective date of delivery of an Alternate Security to replace an existing Credit Facility which is not terminating or expiring, or (B) which would have been the effective date of the Alternate Security if the conditions for the provision of an Alternate Security under Sections 2.11(c) or 2.11(d) hereof had been satisfied; 69 on the first Interest Payment Date during the Short Term Rate Period which is at least forty-five (45) days after receipt by the Trustee of notice from the Liquidity Facility Issuer of the occurrence of an Event of Default under the Liquidity Facility Agreement; and (vi) on the Interest Payment Date which is at least forty-five (45) days after the date of any failure to purchase Bonds tendered by the Holders thereof during a Short Term Rate Period pursuant to Section 4.5(a) hereof. Cc) Purchase in Lieu of Redemption. When Bonds are subject to mandatory redemption pursuant to Section 4.1(c)(2), (3), (4) or (5) hereof, Bonds paid by the Owner or paid from a draw or claim under the Credit Facility or otherwise paid by the Credit Facility Issuer shall be purchased in lieu of redemption on the Redemption Date at a Purchase Price equal to the principal amount thereof, plus interest accrued thereon to the Purchase Date. PUBL:17646_1@ED:17480 3 TO:~17480~2)109~B2062.14 -- 41 08/11/94 Cd) E@ct of Purchase of Bon&. No purchase of Bonds by the Owner, the Liquidity Facility Issuer or the Credit Facility Issuer or advance use of any funds to effectuate any such purchase shall be deemed to be a payment or redemption of the Bonds or of any portion thereof, and such purchase will not operate to extinguish or discharge the indebtedness evidenced by such Bonds. (e) Limitation of Tenders. No Bonds may be optionally tendered when they bear interest at a Fixed Rate. Anything herein or in the Bonds to the contrary notwithstanding, no Excluded Bondholder will have any right to tender his, her or its Bond for purchase. Section 4.6. Notice of Tender. (a) Notice of Optional Tender. During a Short Term Rate Period, so long as no Event of Default shall have occurred and be continuing hereunder, as early as practicable but not later than 1090 a.m., Trustee Time, on the Business Day following each Business Day on which the Purchase Agent receives a notice (a “Tender Notice”) from a Bondholder demanding purchase of Bonds pursuant to Section 4.5(a) hereof, the Purchase Agent will notify the Remarketing Agent, the Trustee, the Paying Agent and the Owner by telex, telecopy or telephone, promptly confirmed in writing, of the principal amount of Bonds being optionally tendered pursuant to the Tender Notice and the Purchase Date specified therein. As early as practicable but not later than 690 p.m., Trustee Time, on each Business Day on which the Purchase Agent receives a Tender Notice, the Purchase Agent will notify the Credit Facility Issuer and the Liquidity Facility Issuer by telex, telecopy or telephone, promptly confirmed in writing, of the principal amount of Bonds being tendered pursuant to the Tender Notice and the 2 t. Bondholders who tender Bonds for purchase under Section 4.5(a) hereof may repurchase any or all of the Bonds so tendered if the Remarketing Agent agrees to remarket those Bonds to such Bondholder prior to delivery of such Bonds, and the delivery requirement as set forth in this Section 4.6(a) shall be waived. A Bond shall be purchased pursuant to Section 4.5(a) hereof only if the Bond so delivered to the Trustee or other Purchase Agent shall conform in all respects to the description thereof in the Tender Notice related thereto. (b) Notice of Mandatory Tender. Not less than thirty (30) days prior to the date on which any Bonds are subject to tender for purchase pursuant to Section 4.5(b) hereof, the Trustee shall provide written notice thereof to the Holders by first-class mail, postage prepaid, at such Holders’ registered addresses, which notice shall state: 0) that all Bonds are subject to mandatory tender on the Purchase Date at a Purchase Price equal to the principal amount thereof plus interest accrued thereon to the Purchase Date; (ii) the date and time by which and the address at which the Bonds should be surrendered for mandatory purchase; (iii) the conditions, if any, to such mandatory purchase and the consequences of the failure of such conditions &xludinc. without limitation, the c condition that if the reason for the mandato PUBL:l7646-lC.RED:l7480 3 T0:~17480~2)109~B2062.14 -- 42 OS/II/94 c Facilitv remains in effect); (iv) that the Holders do not have the right to elect to retain their Bonds and that such Bonds shall be deemed tendered on the Purchase Date, whether or not such Bonds are surrendered; and 09 that after the Purchase Date and upon payment to the Purchase Agent of the Purchase Price therefor, the Holders will have no further rights with respect to the Bonds except the right to receive such Purchase Price upon surrender of the Bonds to the Purchase Agent, endorsed for transfer in blank, and that such Holders will have no right to interest accruing on the Bonds after the Purchase Date. A second notice of mandatory tender shall be sent by certified mail, return receipt requested, not more than sixty (60) days after a Purchase Date, to each Holder subject to tender for purchase pursuant to Section 4.5(b) hereof who has not presented such Bond within thirty (30) days following the Purchase Date; provided that neither failure to give or receive such notice nor any defect therein shall affect the sufficiency of the proceedings for the mandatory tender of such Bond. Section 4. Z Payment of Purchase Price. GO Manner mad Sources of Payment of Purchase Price. The Purchase Price of a Bond which has been tendered to the Purchase Agent pursuant to Section 4.5(a) or 4.5(b) hereof or which is to be purchased in lieu of redemption pursuant to Section 4.5(c) hereof shall be paid in immediately available funds by the close of business on the Purchase Date by wire transfer to the bank account in the United States directed in writing by the Bondholder to the Purchase Agent, or in the absence of such direction, in the same manner as an interest payment would be made to such Bondholder. Bonds tendered for purchase pursuant to Section 4.5(a) or 4.5(b) hereof or purchased in lieu of redemption pursuant to Section 4.5(c) hereof shall be purchased at a Purchase Price in immediately available funds equal to the principal amount thereof, plus accrued interest where applicable, but solely from the following sources in the order of priority indicated: (i) as to Bonds tendered for purchase pursuant to Section 4.5(a) or 4.5(b) hereof, proceeds from the remarketing of such Bonds pursuant to Section 4.8 hereof; (ii) money deposited with the Trustee by or on behalf of the Owner pursuant to Section 4.11 of the Agreement; (iii) when the Bonds have been tendered pursuant to Section 4.5(a) hereof, proceeds from a draw, claim or purchase under the Liquidity Facility; (iv) when Bonds have been tendered pursuant to Section 4.5(b) hereof, or when Bonds are being purchased in lieu of redemption pursuant to Section 4.5(c) hereof, money on deposit in the Interest Account to pay the interest component of the Purchase Price of such Bonds; (v) when the Bonds have been tendered pursuant to Section 4.5(b) hereof, or when the Bonds are being purchased in lieu of redemption pursuant to Section 4.5(c) hereof, proceeds from a draw or claim under the Credit Facility; and (vi) when the Bonds have been tendered pursuant to Section 4.5(a) hereof, from money provided by the Credit Facility Issuer pursuant to Section 4.7(d) hereof. Neither the Trustee nor the Purchase Agent shall have any obligation to purchase Bonds from any source other than as described in the preceding sentence. All money deposited with the Trustee or the Purchase Agent for the purchase of Bonds pursuant to this Section shall be held in trust in the Bond Purchase Fund, ~~~~:17646~1(RED:17480~3~T0:~17480~2)109~B2062.14 43 08111194 except for money paid from a claim or draw under the Credit Facility, which shall not be commingled with other amounts hereunder. @I Remarketing Proceeds Not later than the close of the Remarketing Agent’s business on the Business Day before a Purchase Date, the Remarketing Agent shall give notice by telephone, telecopy or telex (promptly confirmed in writing) to the Owner, the Credit Facility Issuer, the Liquidity Facility Issuer, the Trustee and the Purchase Agent, of the principal amount of Bonds remarketed by the Remarketing Agent as of that time. The Remarketing Agent will cause proceeds of the remarketing of Bonds to be on deposit with the Purchase Agent (in the case of remarketings of Bonds tendered for purchase pursuant to - Section 4.5(a) 2 hereof) or the Trustee (in the case of remarketiws of Bonds tendered for uurchase uursuant to Section 4.5(b) hereof or Bonds to be purchased in lieu of redemption pursuant to Section 4.5(c) hereof), in each case by not later than 10:00 a.m., Trustee Time, on the applicable Purchase Date. The Purchase Agent shall promptly notify the Trustee jbut not later than 10:00 a.m.. Trustee Time, of amounts so held w, with such notification to be promptly confirmed in writing. (cl Drawings under Liquidity Facility to Pay Optional Tenders. Subject to the provisions of Section 6.2 hereof while the Liquidity Surety Bond is the Liquidity Facility hereunder, the Trustee shall give such notices, and take such other actions as may be required under the Liquidity Facility prior to 2 and/or on a Purchase Date such that the Liquidity Facility Issuer will be required to deposit with the Trustee an amount equal to the difference between the amount on deposit with the Trustee or the Purchase Agent which is available to pay the Purchase Price and the Purchase Price of all Bonds which are to be tendered for purchase pursuant to Section 4.5(a) hereof. In the event that, by no later than lo:30 a.m., Trustee Time, on any Purchase Date, the Purchase Agent does not hold money sufficient to pay the Purchase Price of Bonds tendered or deemed tendered for purchase on such date pursuant to Section 4.5(a) hereof, the Trustee, by no later than 1l:OO a.m., Trustee Time, on such Purchase Date, shall present to the Liquidity Facility Issuer all claims, drafts, demands, certificates and other documents required pursuant to the Liquidity Facility for payment of an amount equal to the difference between the amount on deposit with the Trustee or the Purchase Agent which is available to pay the Purchase Price and the amount of such Purchase Price, and shall give notice to the Owner and the Credit Facility Issuer, by telephone, telecopy or telex (promptly confirmed in writing) of the amount so demanded under the Liquidity Facility. Upon receipt of the proceeds of a drawing under the Liquidity Facility to pay the difference between the amount on deposit with the Trustee or the Purchase Agent which is available to pay the Purchase Price and the amount of the Purchase Price of the Bonds (which payment shall be made by the Liquidity Facility Issuer no later than 2:00 p.m., Trustee Time), the Trustee shall transfer such amounts to the Purchase Agent for deposit in the Bond Purchase Fund. Cd) Credit Facility Drawings to Pay Optional Tenders. In the event that a sufficient amount of money from the sources described in clauses (i), (ii) or (iii) of Section 4.7(a) above during a Short Term Rate Period is not available to purchase all Bonds which have been tendered pursuant to Section 4.5(a) hereof by 2:00 p.m., Trustee Time, on the Remarketing Date, the Trustee shall immediately notify the Credit Facility Issuer (by telephone, promptly confirmed in writing) of that fact and (unless the Credit Facility requires the Trustee to make a draw or claim against the Credit Facility to pay such Deficiency) that the Credit Facility Issuer shall have the option, at its sole and absolute discretion, to purchase or cause to be purchased by ~UBL:l7646_l(RED:l7480 3 T0:~17480~2)109~B2062.14 -- 44 OS/II/94 a third party all or any portion of such Bonds on the Remarketing Date at the Purchase Price specified in Section 4.5(a) hereof. To exercise this option, the Credit Facility Issuer must deliver to the Trustee by 3:00 p.m., Trustee Time, on the Remarketing Date, written notice of its intent to purchase the Bonds specifying the principal amount of the Bonds to be so purchased and provide to the Trustee by such time immediately available funds to effect such purchase. Unless the Credit Facility permits the Trustee to make a claim or draw against the Credit Facility for payment of the Purchase Price of Bonds tendered pursuant to Section 4.5(a) hereof, in the event there is insufficient money deposited under clauses (i), (ii) or (iii) of Section 4.7(a) above, the notice from the Credit Facility Issuer to the Trustee shall include a written amendment or endorsement to the Credit Facility permitting such draw or claim which amendment or endorsement shall not constitute an Alternate Security. W Credit Facility Drawings to Pay Mandatory Tenders. In the event that a sufficient amount of money from the sources described in (i), (ii), or (iv) of Section 4.7(a) is not available to purchase all Bonds which have been tendered pursuant to Section 4.5(b) hereof and subject to the provisions of Section 6.1 hereof while the Surety Bond is the Credit Facility hereunder, the Trustee shall give such notices, and take such other actions as may be required under the Credit Facility prior to a Purchase Date such that the Credit Facility Issuer will be required to deposit with the Trustee an amount equal to the difference between the amount on deposit with the Trustee 2 and available to pay the Purchase Price and the Purchase Price of all Bonds which are to be tendered for purchase pursuant to Section 4.5(b) hereof. In the event that, by no later than lo:30 a.m., Trustee Time, on any Purchase Date, the 1 Trustee does not hold money sufficient to pay the Purchase Price of Bonds tendered or deemed tendered for purchase on such date pursuant to Section 4.5(b) hereof, the Trustee, by no later than 1l:OO a.m., Trustee Time, on such Purchase Date, shall present to the Credit Facility Issuer all claims, drafts, demands, certificates and other documents required pursuant to the Credit Facility for payment of an amount equal to the difference between the amount on deposit with the Trustee 2 and available to pay the Purchase Price and the amount of such Purchase Price, and shall give notice to the Owner, by telephone, telecopy or telex (promptly confirmed in writing) of the amount so demanded under the Credit Facility. Upon receipt of the proceeds of a draw or claim under the Credit Facility to pay the difference between the amount on deposit with the Trustee 2 and available to pay the Purchase Price and the Purchase Price of Bonds tendered, the Trustee shall transfer such amounts to the Purchase Agent for deposit in the Bond Purchase Fund. (0 Drawings under Credit Facility to Purchase Bonds in Lieu of Redemption. In the event that money from the sources described in (ii) or (iv) of Section 4.7(a) above is not available to purchase all Bonds which are to be purchased in lieu of redemption pursuant to Section 4.5(c) hereof and subject to the provisions of Section 6.1 hereof while the Surety Bond is the Credit Facility hereunder, the Trustee shall give such notices, and take such other actions as may be required under the Credit Facility prior to a Purchase Date such that the Credit Facility Issuer will be required to deposit with the Trustee an amount equal to the difference between the amount on deposit with the fi Trustee and available to pay the Purchase Price and the amount of the Purchase Price of all Bonds which are to be purchased in lieu of redemption pursuant to Section 4.5(c) hereof. If on the Purchase Date, the Trustee does not hold money sufficient to pay the Purchase Price of Bonds to be purchased, the Trustee, by no later than 11:OO a.m., Trustee Time, on such Purchase Date, shall present to the Credit Facility Issuer all claims, drafts, demands, certificates and other documents required pursuant to the Credit Facility for payment of an amount equal to the difference between the amount on deposit with the P~~L:17646~l(RED:l7480 3 TO:~17480~2)109~ 82062.14 -- 45 08/l I I94 2 Trustee and available to pay the Purchase Price and such Purchase Price, and shall give notice to the Owner, by telephone, telecopy or telex (promptly confirmed in writing) of the amount so demanded under the Credit Facility. Upon receipt of the proceeds of a drawing under the Credit Facility to pay the difference between the amount on deposit with the Purchase Agent or the Trustee and available to pay the Purchase Price and the amount of the Purchase Price of Bonds (which payment shall be made by the Credit Facility Issuer no later than 290 p.m., Trustee Time), the Trustee shall deposit such amounts to the Redemption Account 2. in order to purchase the Bonds in lieu of redemption. (8) Bonds Deemed Tendered. On the Purchase Date, if money for the Purchase Price of all Bonds to be purchased on such date shall be held by the Trustee or the Purchase Agent so as to be available therefor on said date, from and after the Purchase Date, such Bonds shall be deemed tendered by the Holders thereof, replacement Bonds may be issued and delivered pursuant to Section 4.8(c) hereof, and the former Holders of the Bonds shall have no rights in respect of the tendered Bonds except to receive payment of the Purchase Price thereof from money held for that purpose. Section 4.8. Remarketing; Disposition of Bonds. (a) The Remarketing Agent shall offer for sale and use its best efforts to arrange sales of all Bonds tendered or to be tendered for purchase pursuant to Sections 4.5(a) and 4.5(b) hereof and Bonds purchased in lieu of redemption pursuant to Section 4.5(c) hereof (but with respect to Bonds purchased in lieu of redemption by either the Owner or the 2 Credit Facilitv Issuer, only upon the request of or consent by the 2 BFacilihtds must be remarketed under this Section 4.8 at a price of 100% of the principal amount of such Bonds (plus accrued interest if the Remarketing Date is other than an Interest Payment Date). The proceeds of the sale of Bonds remarketed by the Remarketing Agent shall be delivered to the Trustee or Purchase Agent as provided in Section 4.7(b) hereof. The Remarketing Agent shall have no obligation under any circumstances to advance its own money in connection with the remarketing of Bonds hereunder. @I The Purchase Agent shall hold all Bonds delivered to it in trust for the benefit of the respective Bondholders whose Bonds are to be purchased until money in the amount of the Purchase Price of such Bonds shall have been received by the Purchase Agent or the Trustee for the account of such Bondholders, and, upon receipt of such money, the Purchase Agent shall deliver such Bonds as provided in Section 4.8(c) hereof. Cc) Not later than the close of the Remarketing Agent’s business on the Business Day immediately preceding a Purchase Date, the Remarketing Agent shall provide the Trustee (in the case of a remarketing of Bonds L which have been or will be uurchased as a 3 purchased in lieu of redemption) or the Purchase Agent (in the case of Bonds 2 outionallv tendered for purchase) with the names, addresses, tax identification numbers and all other information requested by the Trustee or the Purchase Agent relating to the purchasers of Bonds which have been remarketed by the Remarketing Agent as of that time. The Registrar shall prepare new Bonds for each Bond purchased on a Purchase Date pursuant to Article IV hereof. Such new Bonds shall be delivered as follows: PUBL: 17646~1(RED:l7480 3 TO:~l7480~2)109 I B2062. I4 -- 46 OS/l1194 (0 Bonds delivered in replacement for Bonds purchased through remarketing shall be delivered to, and registered in the Bond Register in the name of, the Persons identified by the Remarketing Agent as the purchasers thereof; (ii) Bonds delivered in replacement for Bonds purchased with money provided by the Owner under Section 4.11 of the Agreement shall be delivered to, and registered in the Bond Register in the name of, the Owner or as it may direct; (iii) Bonds delivered in replacement for Bonds purchased with money provided under the Liquidity Facility shall be delivered to, and registered in the Bond Register in the name of, the Liquidity Facility Issuer or as it may direct; and (iv) Bonds delivered in replacement for Bonds purchased with money provided under the Credit Facility shall be delivered to, and registered in the Bond Register in the name of, the Credit Facility Issuer or as it may direct. Cd) Bonds tendered for purchase pursuant to Section 4.5(a) hereof after having been called for redemption may be remarketed before the redemption date only if the prospective purchaser receives a copy of the redemption notice. @I Bonds purchased with funds obtained by a draw or claim on the Credit Facility or the Liquidity Facility will not be remarketed until the Credit Facility Issuer or the Liquidity Facility Issuer, as appropriate, notifies the Trustee by telephone, telecopy or telex, promptly confirmed in writing, that the amount available to be drawn on the Credit Facility or the Liquidity Facility, as appropriate, has been reinstated by the amount of such funds. Bonds owned by or on behalf of the Credit Facility Issuer may be presented to the Trustee for cancellation at any time. (0 Bonds will be remarketed under this Section 4.8 during the continuance of an Event of Default or an event which with the passage of time or the giving of notice or both may become an Event of Default only in the sole discretion of the Remarketing Agent. There shall be no remarketing of Bonds by the Remarketing Agent pursuant to this Section 4.8 if a Determination of Taxability shall have occurred. (g) Bonds owned by or on behalf of the Owner may be presented to the Trustee for cancellation at any time. Section 4.9. Special Notice by Registrar During Commercial Paper Rate Period; Schedule Attached. Upon each registration of transfer of a Bond bearing interest at a Commercial Paper Rate, the Registrar shall give written notice to the transferee that (a) no notices of the length of any Commercial Paper Rate Period or the Commercial Paper Rate borne by such Bond during such period be given to the Holder of the Bond, but that such information may be obtained, upon request, from the Remarketing Agent and setting forth the manner that such information may be obtained, (b) any Bond bearing interest at a Commercial Paper Rate may be redeemed on its Interest Payment Date, and (c) no additional notice of any such redemption will be given to the Bondholder. PUBL:l7646_1(RED:17480 3 T0:~17480~2)109~B2062.14 -- 47 08/l 1194 ARTICLE V PAYMENT OF BONDS; FUNDS AND ACCOUNTS Section 5.1, Creation of Funds. accounts: (a) There are hereby created and established the following funds and (0 Bond Proceeds Fund; (ii) Revenue Fund, which shall contain a Principal Account, an Interest Account, a Redemption Account, a Tax and Insurance Reserve Account, and an Administrative Expenses Account; (iii) Rebate Fund; 04 Project Loan Fund; and (4 Bond Purchase Fund. Such funds and accounts shall be funded, administered, held and invested as set forth herein, and money credited to such funds and accounts shall be disbursed solely at the times and for the purposes provided herein. 09 The Trustee is further author&d (i) to establish and maintain for so long as is necessary one or more special or temporary funds or accounts under this Indenture, and (ii) to establish one or more special trust accounts when necessary under and in accordance with the terms of the First Deed of Trust Documents. (cl All money received for the account of any fund or account under the Indenture shall be held in trust separate and apart from all other funds and accounts held by the Trustee under the Indenture and from all other money of the Trustee. Cd) The Bonds herein authorized and all payments to be made by the Commission thereon and to the various funds and accounts established under this Indenture are not general obligations of the Commission, but are limited obligations payable solely from the Trust Estate and payments under the Credit Facility as herein provided. Section 5.2. Bond Proceeds Fund. The Bond Proceeds Fund shall be a temporary closing account for the purposes stated in this Section. The proceeds from the sale of the Bonds shall be received by the Trustee and deposited to the credit of the Bond Proceeds Fund concurrently with the initial delivery of the Bonds. The funds thus received by the Trustee shall be disbursed, paid and transferred pursuant to instructions of the Commission concurrently with the delivery of the Bonds. 48 08/l l/94 Section 5.3. Revenue Fund: Principal Account; Interest Account. (a) The Trustee shall establish and maintain the Revenue Fund so long as any of the Bonds are Outstanding. All payments upon the Loan (including all payments under the Note) as and when received by the Trustee (except (i) all payments made pursuant to the Credit Facility which are to be received pursuant to Section 6.1 hereof, (ii) proceeds of any remarketing of Bonds pursuant to Section 4.8 hereof, (iii) all payments made pursuant to the Liquidity Facility which are to be received pursuant to Section 6.2 hereof, (iv) payments made by the Owner to the Trustee pursuant to Section 4.9 of the Agreement for deposit directly into the Administrative Expenses Account, (v) payments, if any, made by the Owner to the Trustee pursuant to Section 4.13 of the Agreement for deposit directly into the Tax and Insurance Reserve Account 1 (vi) payments made pursuant to Section 4.9 of the Loan Agreement for deposit into the Rebate Fund), and (vii) Davments made uursuant to Section 4.11 of the Loan APreement, including all investment income thereon pursuant to Article VII hereof, shall be deposited in or transferred to the Revenue Fund and shall be held therein until transferred pursuant to this Indenture; provided, however, that (i) payments made by the Owner pursuant to Sections 6(a) and 6(b) of the Note resulting in a redemption of Bonds pursuant to Section 4.1(a) hereof shall be deposited by the Trustee directly into the Redemption Account pursuant to Section 5.4 hereof, (ii) payments made by the Owner in respect of the Purchase Price of Bonds which have been tendered by the Holders thereof shall be transferred from the Trustee to the Purchase Agent and deposited by the Purchase Agent into the Bond Purchase Fund and (iii) payments made by the Owner in respect of the Purchase Price of the Bonds which are to be purchased in lieu of redemption shall be deposited by the Trustee directly into the Bond Purchase Account. Moneys in the Revenue Fund shall be invested in accordance with Section 7.2 hereof. @I The Trustee shall establish and maintain, so long as any of the Bonds are Outstanding, the Interest Account as a separate account within the Revenue Fund. Money on deposit in the Interest Account shall be applied by the Trustee to pay interest on the Bonds as it becomes du&. (cl The Trustee shall establish and maintain so long as any of the Bonds are Outstanding the Principal Account as a separate account within the Revenue Fund. Money on deposit in the Principal Account shall be applied by the Trustee to pay principal of the Bonds as it becomes due at maturity or upon redemption in accordance with the provisions of Article IV hereof (excluding any optional redemption at the Owner’s direction under Section 4.1(a) 2. Cd) Amounts on deposit in the Revenue Fund and available for such purpose shall be disbursed at the following times, in the following amounts and in the following order of priority: 0) on each Interest Payment Date, Redemption Date and maturity date of the Bonds, to the Interest Account an amount which, together with amounts already on deposit therein, is sufficient to pay the interest on the Bonds coming due on such Interest Payment Date, Redemption Date or maturity date, excluding any amounts due upon Liquidity Facility Issuer Bonds, Credit Facility Issuer Bonds or Owner Bonds; (ii) on each Interest Payment Date, Redemption Date and maturity date of the Bonds, to the Principal Account an amount which, together with amounts PUBL:17646_l(RED:l7480 3 T0:~17480~2)109~B2062.14 -- 49 08/l 1194 already on deposit therein, is sufficient to pay the principal of and premium, if any, on any Bonds coming due (whether upon maturity or redemption) on such Interest Payment Date, Redemption Date or 2 maturity date, exchuiing any amounts due upon redemption of the Bonds pursuant to Section 4.1(a) hereof, and exchding any amounts due upon Liquidity Facility Issuer Bonds, Credit Facility Issuer Bonds or Owner Bonds; (iii) on each Interest Payment Date, Redemption Date and maturity date of the Bonds, to the payment first to interest and then to principal due and unpaid on Liquidity Facility Issuer Bonds plus any additional interest owing on such Bonds pursuant to the Liquidity Facility; (iv) on each Interest Payment Date, Redemption Date and maturity date of the Bonds, to the payment first to interest and then to the principal due and unpaid on Credit Facility Issuer Bonds; 09 on each Interest Payment Date, Redemption Date and maturity date of the Bonds to the payment first of interest and then of principal due and unpaid on Owner Bonds, and then as a credit to the next payment of interest or interest and principal due on the Note; provided no Event of Default has occurred and is continuing under the Loan Agreement, any of the other First Deed of Trust Documents or any of the Second Deed of Trust Documents, and further provided that (A) the Credit Facility Issuer provides written notice to the Trustee that to the best of the Credit Facility Issuer’s knowledge no Event of Default has occurred and is continuing under any First Deed of Trust Document or Second Deed of Trust Document, and no event has occurred or failed to occur which with the passage of time or the giving of notice or both, would constitute an Event of Default under any of the First Deed of Trust Documents or the Second Deed of Trust Documents, and (B) during a Short Term Rate Period, the Liquidity Facility Issuer provides written notice to the Trustee that to the best of the Liquidity Facility Issuer’s knowledge no Event of Default has occurred and is continuing as that term is defined in the Liquidity Facility Agreement and no event has occurred or failed to occur which with the passage of time or the giving of notice, or both, would constitute an Event of Default under the Liquidity Facility Agreement. If an Event of Default has occurred and is continuing under the Loan Agreement, any of the other First Deed of Trust Documents or any of the Second Deed of Trust Documents, or if the Trustee does not receive any notice required by clause (A) or (B) or this paragraph, moneys remaining in the Revenue Fund on each Interest Payment Date, Redemption Date and maturity date shall be paid to the Credit Facility Issuer to pay or reimburse the Credit Facility Issuer any amounts due and owing under the Reimbursement Agreement, and then to the Liquidity Facility Issuer to pay or reimburse the Liquidity Facility Issuer any amounts due and owing under the Liquidity Facility Agreement. The Trustee may rely on the Credit Facility Issuer and the Liquidity Facility Issuer for statements of amounts due under the Reimbursement Agreement and the Liquidity Facility Agreement, respectively. Section 5.4. Revenue Fund: Redemption Account. The Trustee shall establish and maintain so long as any of the Bonds are Outstanding the Redemption Account as a separate account within the -Revenue Fund. All prepayments made on the Loan pursuant to Section 6(b) of the Note shall be deposited into the Redemption Account. Money on deposit in the Redemption Account shall be segregated and held by the Trustee for the periods provided in PUBL:17646_l(RED:l7480 3 T0:~17480~2)109~B2062.14 -- 50 OS/l1194 Section 4.1(b) hereof, at which time such money shall be set aside by the Trustee to pay principal of and redemption premium, if any, on any Bonds to be redeemed pursuant to Section 4.1(a) hereof as a result of an optional prepayment of the Loan by the Owner pursuant to Section 6(b) of the Note. Upon the occurrence of an Event of Bankruptcy any time prior to the time such money becomes Eligible Money, the Trustee shall transfer such funds to the Interest Account of the Revenue Fund. Section 5.5. Revenue Fund: Tax and Insurance Reserve Account. GO The Trustee shall establish and maintain so long as any Bonds are Outstanding, a Tax and Insurance Reserve Account as a separate account within the Revenue Fund. Money on deposit in the Tax and Insurance Reserve Account will be applied by the Trustee to pay, or reimburse the Owner for the payment of, Taxes and Premiums with respect to the Project in accordance with the requirements of the First Deed of Trust upon receipt of invoices by the Trustee from the Owner for the payment, or reimbursement to the Owner for its payment, of such Taxes and Premiums upon receipt by the Trustee of paid receipts evidencing payment of such Taxes and Premiums; provided that, upon the occurrence of an Event of Default under the Agreement or any of the other First Deed of Trust Documents or the Second Deed of Trust Documents of which the Trustee has notice, money shall not be withdrawn from the Tax and Insurance Reserve Account without the prior written consent of the Credit Facility Issuer, and, upon the written direction of the Credit Facility Issuer, money in the Tax and Insurance Reserve Account shall be transferred for deposit to such other account of the Revenue Fund as is designated in writing to the Trustee by the Credit Facility Issuer. Investment earnings on money held in the Tax and Insurance Reserve Account shall be retained therein and applied to the purposes thereof. The Trustee may rely conclusively on the Credit Facility Issuer’s written consent as to the release of money from the Tax and Insurance Reserve Account. tb) If the Trustee receives from the Credit Facility Issuer a copy of a written direction requiring the Owner to fund the Tax and Insurance Reserve Account, the Trustee shall deposit into the Tax and Insurance Reserve Account the amounts received from the Owner pursuant to Section 4.13 of the Loan Agreement. Section 5.6. Revenue Fund: Administrative Expenses Account. 60 The Trustee shall establish and maintain so long as any of the Bonds are Outstanding the Administrative Expenses Account as a separate account within the Revenue Fund. Co) On the Closing Date, the Trustee shall deposit into the Administrative Expenses Account the amount of $ received from or at the direction of the Owner for the payment of costs of issuance of the Bonds. The Trustee shall disburse such amount for the purpose of paying such costs of issuance upon receipt by the Trustee of a written requisition of the Commission, accompanied by copies of appropriate invoices or other evidence of amounts due, and stating with respect to each payment to be made: (i) the requisition number; (ii) the name of the person to whom payment is due (which may be the Commission); (iii) the purpose for which the payment is to be made; and (iv) the amount to be paid. ~u~L:l7646_1(RED:l7480 3 T0:~17480~2)109~B2062.14 -- 51 08/l l/94 Any portion of the amount deposited as provided in the preceding paragraph remaining unspent on the date six (6) months after the Closing Date and not expected by the Commission or the Trustee to be required to pay other costs payable from the Administrative Expenses Account shall be transferred by the Trustee to the Owner. For purposes of this Section 5.6(b), costs of issuance of the Bonds shall include all costs and expenses of issuance of the Bonds, including, but not limited to: (i) underwriters’ fees; (ii) counsel fees, including bond counsel, Commission’s counsel and Trustee’s counsel; (iii) rating agency fees; (iv) Trustee’s and Purchase Agent’s initial fees and expenses; (v) Commission’s administrative fee; and (vi) Bond and official statement printing costs. (cl Not later than and of each year (commencing on the later of 1994 or the Closing Date) the Trustee shall demand, for deposit into the Administrative Expenses Account, payment from the Owner pursuant to Section 4.9 of the Loan Agreement of an amount which, together with the amount then on deposit therein and available to make such payment, will be sufficient to pay the Administrative Expenses then due. The Trustee shall disburse on [ ]land[dlofeachyear (commencing [ ] 1, 1994) ah amounts in the Administrative Expenses Account as may be required for the payment of Administrative Expenses then due. Any balance remaining in the Administrative Expenses Account after the payment of all Administrative Expenses then due shall be transferred to the Revenue Fund and used in accordance with Section 5.3(d) hereof. Section 5.7. Bond Purchase Fund. The Purchase Agent is authorized to establish the Bond Purchase Fund as a trust account under this Indenture for the purpose of receiving moneys to be deposited with the Trustee for the purchase of Bonds tendered pursuant to Section 4.5(a) or (b) hereof. Such money shall include proceeds of the remarketing of Bonds pursuant to Section 4.8 hereof, funds deposited by the Owner in accordance with Section 4.11 of the Agreement, funds transferred from the Trustee representing proceeds of a claim or drawing under the Liquidity Facility received pursuant to Section 6.2 hereof and funds transferred from the Trustee representing proceeds of a claim or drawing under the Credit Facility received pursuant to Section 6.1 hereof. Amounts on deposit in the Bond Purchase Fund shall be applied to pay the Purchase Price of Bonds as described in Section 4.7 hereof. It shah be the duty of the Purchase Agent to hold in the Bond Purchase Fund the money for the purchase of any Undelivered Bonds without liability for interest thereon (i) for the benefit of the former Holders of any such Undelivered Bonds who shall thereafter be restricted exclusively to such moneys for any claim of whatever nature on their part under this Indenture or on, or with respect to such Undelivered Bonds k& (ii) for the benefit of the Liquidity Facility Issuer to the extent such moneys are deposited by the Liquidity Facility Issuer, and (iii) for the benefit of the Credit Section 5.8. Rebate Fund. (4 There is hereby created and established a separate trust account which shall be designated the “Rebate Fund”, and the Commission and the Trustee shall comply with the requirements below. All money at any time deposited in the Rebate Fund shall be held by the Trustee in trust, for payment to the United States Treasury. All amounts on deposit in the Rebate Fund shall be governed by this Section 5.8 and the Tax Certificate, unless the Commission obtains and delivers to the Trustee an opinion of Bond Counsel to the effect that the 52 08/l 1194 exclusion from gross income for federal income tax purposes of interest on the Bonds will not be adversely affected if such requirements are not satisfied. (0 Computation. Within fifty-five (55) days after the end of the fifth Bond Year and each fifth Bond Year thereafter, the Commission shall calculate or cause to be calculated and furnished to the Trustee the amount of rebatable arbitrage, in accordance with Section 148(f)(2) of the Code and Section 1.148-2 of the Regulations (taking into account any applicable exceptions with respect to the computation of the rebatable arbitrage, described, if applicable, in the Tax Certificate (e.g., the temporary investment exception of Section 148(f)(4)(B) of the Code), within the meaning of Section 1.148-8(b) of the Regulations (the “Rebatable Arbitrage”)). In addition, within fifty-five (55) days after the payment of all the Bonds, the Commission shah calculate or cause to be calculated and furnished to the Trustee the amount of Rebatable Arbitrage. (ii) Transfer. Within fifty-five (55) days after the end of each fifth Bond Year, an amount shall be deposited to the Rebate Fund by the Trustee from any legally available funds received from the Owner, if and to the extent required, so that the balance in the Rebate Fund shall equal the amount of Rebatable Arbitrage so calculated in accordance with (i) above. In addition, within fifty-five (55) days after the payment of all the Bonds an amount shall be deposited to the Rebate Fund by the Trustee from the Owner, if and to the extent required, so that the balance in the Rebate Fund shall equal the amount of Rebatable Arbitrage so calculated in accordance with (i) above. (iii) Pavment to the Treasurv. The Trustee shall, upon receipt of written instructions from the Commission, pay to the United States Treasury the amount of Rebatable Arbitrage from amounts on deposit in the Rebate Fund, tx) Not later than sixty (60) days after the end of (A) the fifth Bond Year, and (B) each fifth Bond Year thereafter, an amount equal to at least 90% of the Rebatable Arbitrage calculated as of the end of such Bond Year; and 07 Not later than sixty (60) days after the payment of all the Bonds, an amount equal to 100% of the Rebatable Arbitrage calculated as of the end of such Bond Year, and any income attributable to the Rebatable Arbitrage, computed in accordance with Section 148(f) of the Code. In the event that, prior to the time any payment is required to be made from the Rebate Fund, the amount in the Rebate Fund is insufficient to make such payment when such payment is due, the Commission shall calculate or cause to be calculated the amount of such deficiency and direct the Trustee, in writing, to transfer to the Rebate Fund an amount received from any legally available funds of the Owner, equal to such deficiency in the Rebate Fund prior to the time such payment is due. Each payment required to be made pursuant to this Section shall be made to the Internal Revenue Service Center, Philadelphia, Pennsylvania 19255 on or before the date on which such payment is due, and shall be accompanied by Internal Revenue Service Form 8038-T provided to the Trustee in a completed form by or on behalf of the Commission, or shall be made in such other manner as provided under the Code. PUBL:17646_l(RED:l7480 3 T0:~17480~2)109~B2062.14 -- 53 0811 II94 Co) Disposition of Unextended Funds. Any funds remaining in the Rebate Fund after redemption and payment of the Bonds and the payments described in (iii) above, shall be remitted, first, to the Commission to the extent the Commission has made any contributions to the Rebate Fund or paid any unreimbursed costs for rebate consultant or 2 rebate calculation services and, second, the Owner. (cl Survival of Defeasance. Notwithstanding anything in this Section or this Indenture to the contrary, the obligation to comply with the requirements of this Section shall survive the defeasance of the Bonds. Section 5.9. Project Loan Fund. All Insurance Proceeds and Awards shall be deposited by the Trustee to the credit of the Project Loan Fund for disbursement in accordance with the provisions of Sections 10 and 11 of the First Deed of Trust. Section 5.10. Lapse of Payment. Notwithstanding any provisions of this Indenture, any moneys held by the Trustee in trust for the payment of the principal or Redemption Price of, or interest on, any Bonds and remaining unclaimed for two years after the date on which the principal of all of the Bonds has become due and payable (whether at maturity or upon call for redemption or by declaration as provided in this Indenture), if such moneys were so held at such date, or four years after the date of deposit of such moneys if deposited after said date when all of the Bonds became due and payable, shall be paid to the Credit Facility Issuer free from the hen created by this Indenture, and all liability of the Commission and the Trustee with respect to such moneys shall thereupon cease and no Bondholder shall have any rights with respect to such moneys. ARTICLE VI CREDIT FACILITY; LIQUIDITY FACILITY Section 6.1. Claims under Credit Facility. (a) The Trustee hereby agrees to take all action necessary to make draws or claims upon the Credit Facility (subject to the terms and provisions thereof) sufficient to pay any Deficiency in the amount required (i) to pay the principal of and interest on Bonds (other than Bonds known by a Responsible Officer of the Trustee to be owned by Excluded Bondholders) becoming due on or prior to the termination or expiration of the Credit Facility pursuant to its terms, whether at fi maturity or upon redemption or acceleration, but unless amended to include optional redemption, not optional redemption under Section 4.1(a) hereof; (ii) to pay the Purchase Price of Bonds tendered pursuant to Section 4.5(b) hereof becoming due on or prior to the termination or expiration of the Credit Facility pursuant to its terms, or (iii) to pay the Purchase Price of Bonds purchased in lieu of redemption pursuant to Section 4.5(c) hereof by the Credit Facility Issuer in accordance with the terms of the Credit Facility on or prior to the termination or expiration of the Credit Facility pursuant to its terms. To this end the Trustee will comply with the provisions of the Surety Bond and any similar provisions of an Alternate Security for the full and timely payment of principal and Purchase Price of, and interest on, the Bonds when due. The Surety Bond is the initial Credit Facility and the Surety is the initial Credit Facility Issuer. ~~~~:17646~l(RED:l7480 3 T0:~17480~2)109~B2062.14 -- 54 OS/ 11194 09 With respect to the Surety Bond, on the tenth (10th) Business Day preceding an Interest Payment Date, a Mandatory Tender Payment, a Purchase Payment, an Interest Payment or a Principal Payment (each as defined in the Surety Bond), the Trustee shall immediately notify the Owner and the Surety of any Deficiency of moneys in the Revenue Fund available for deposit into the Principal Account, Interest Account, the Redemption Account and of any Deficiency in the Bond Purchase Fund by telephone to be confirmed in writing within 24 hours. (cl With respect to the Surety Bond, the Trustee shall submit a notice of claim by 1l:OO a.m., Trustee Time, to the Surety by telecopy (confirmed in writing delivered or mailed by registered or certified mail within 24 hours) as provided in the Surety Bond, for a Deficiency claimed with respect to an Interest Payment, Mandatory Tender Payment, Purchase Payment, or Principal Payment (each as defined in the Surety Bond) on the seventh (7th) Business Day preceding the applicable Interest Payment, Mandatory Tender Payment, Purchase Payment, or Principal Payment, respectively. The Trustee shall also submit an amended notice of claim with the Surety as required under the Surety Bond. Cd) If the Trustee shall receive moneys from any source other than a payment under the Credit Facility after making a claim under the Credit Facility, then the Trustee shall notify the Credit Facility Issuer immediately by telecopy (confirmed in writing delivered or mailed by registered or certified mail within 24 hours) and the amount of the claim shall be reduced by such amount or the Trustee shall immediately refund to the Credit Facility Issuer in immediately available funds all or such portion of the payment under the Surety Bond, if any, which has been made and which is not required to make the payment due on the Bonds on such payment date. For purposes of this Section 6.1(d) moneys shall not be deemed to be available if a stay, injunction or restraining order is in effect preventing such moneys from being applied to make the required payment of principal or interest on, or Purchase Price (for Bonds which have been subject to mandatory tender or which have been purchased in lieu of redemption) for, the Bonds; and in the event any stay, injunction or restraining order shall be entered during the seven (7) Business Day period preceding any such payment date, the moneys affected thereby shall no longer be deemed to be available for payment hereunder and the resulting Deficiency shall be immediately determined by the Trustee and a notice of claim or amended notice of claim for such Deficiency shall be immediately submitted to the Credit Facility Issuer in accordance with the terms of the Credit Facility. (d All money received by the Trustee from the Credit Facility Issuer pursuant to the Credit Facility shall be held in a separate and segregated account for the sole benefit of the Bondholders and the Credit Facility Issuer, shall not be deemed to be moneys deposited in any other fund, account or subaccount hereunder, shall be invested by the Trustee, at the written direction of the Credit Facility Issuer, only in Government Securities maturing on or prior to such payment date, and shall be used solely to make the payment of the Purchase Price of Bonds to be tendered for purchase pursuant to Section 4.5(b) hereof, Bonds purchased in lieu of redemption pursuant to Section 4.5(c) hereof, and, at the sole option of the Credit Facility Issuer, to purchase Bonds tendered by the owners thereof pursuant to Section 4.5(a) hereof, and/or the principal of and/or interest on the Bonds for which such claim was submitted or such draw was made, or refunded to the Credit Facility Issuer. The Credit Facility Issuer shall be subrogated to the rights of the Bondholders upon or with respect to which such payment was made from the proceeds of a claim or draw under the Credit Facility, as provided in PUBL:17646~1(RED:17480~3~T0:~17480~2)109~B2062.14 55 08/l 1194 Section 2.7(b) hereof, and to the rights of the Commission and the Trustee under this Indenture, the Loan Agreement, the Note and the other First Deed of Trust Documents to the extent of such payment. The Trustee shall liquidate, without further instructions, any or all Eligible Investments held by it for the payment on such payment date of such principal of and/or interest on, or Purchase Price (for Bonds which have been subject to mandatory tender or which have been purchased in lieu of redemption) for, the Bonds to the extent, in the Trustee’s sole discretion, such liquidation shall be necessary to determine with certainty the amount of any claim or draw to be made under the Credit Facility. (9 If, at any time during the term of this Indenture, an Event of Bankruptcy (1) occurs within one year, if the Owner is a partnership or if the Credit Facility Issuer owns any corporate stock of the Owner, or (2) occurs within 91 days, after any payment (other than from amounts paid under the Credit Facility or amounts received from the purchasers of Bonds upon a remarketing of such Bonds) of the principal of, or interest on, any Bond (including the Purchase Price of any Bond pursuant to a 1 hereof or purchase of such Bond in lieu of redemption 2. pursuant to Section 4.5(c) hereof) to any Bondholder (other than an Excluded Bondholder) then the Trustee shall immediately file in the court in which any case commenced by such a petition is pending an interpleader action (if permitted) or another appropriate proceeding, on behalf of the Bondholders (other than Excluded Bondholders) to whom such payments of principal or interest, or to whom such Purchase Price (paid for Bonds which have been subject to mandatory tender pursuant to Section 4.5(b) hereof or purchased in lieu of redemption pursuant to Section 4.5(c) hereof), was paid, interpleading the Commission, if necessary, and the Credit Facility Issuer to determine whether any portion of such payment is a voidable preference subject to disgorgement by any of such Bondholders as described in paragraph (g) below. (g) If an event of Bankruptcy (1) occurs within one year, if the Credit Facility Issuer owns any corporate stock of the Owner, or (2) occurs within 91 days if the Credit Facility Issuer has no ownership interest in the Owner, after any payment to a Bondholder, and an order is entered by a court of competent jurisdiction holding that all or any portion of such payments of principal or Purchase Price (paid for Bonds which have been subject to mandatory tender pursuant to Section 4.5(b) hereof or purchased in lieu of redemption pursuant to Section 4.5(c) hereof) of, and/or interest on Bonds is an avoidable preference or transfer under Section 544, 547 or 549 of the United States Bankruptcy Code or any other applicable state or federal bankruptcy statutes (herein sometimes referred to as a uprej2rentiuZpayment”), and if, in either case, such order is final and not appealable or the period for appeal therefrom has expired without appeal having been taken, the Trustee shall make claim under the Surety Bond (or any Alternate Security covering such preferential payments) then in effect in accordance with the terms and subject to the conditions thereof on behalf of, and to the extent of, the liability of any Bondholders (other than Excluded Bondholders) so established to disgorge any portion of such payment, and shall disburse the amounts paid under such claim pro rata for the account of such Bondholders (other than Excluded Bondholders) (i) into the court entering such order to the extent of the liability established by such order, and (ii) in the event of any prior payment by a Bondholder (other than Excluded Bondholders) in satisfaction of the liability established by such order then to such Bondholder in reimbursement for such payment. If it is instead so held that such Bondholders may retain such payments of principal of, and/or interest on, and/or Purchase Price (paid as a result of Bonds tendered for purchase pursuant to Section 4.5(b) hereof or Bonds purchased in lieu of redemption pursuant to Section 4.5(c) hereof) of, the Bonds, or if all ~~~~:17646~1(FtED:17480 3 TO:~17480~2)109~B2062.14 -- 56 08/l l/94 applicable periods of limitation relating to the filing of a suit or other proceeding to recover such payments of principal of, and/or interest on, and/or premium on, and/or Purchase Price of, the Bonds pursuant to Section 544, 547 or 549 of the United States Bankruptcy Code and any other applicable state or federal bankruptcy statute which may be asserted in such case shall have expired prior to the filing of any suit or other proceeding to recover such payments of principal of, and/or interest on, and/or Purchase Price (paid as a result of Bonds tendered for purchase pursuant to Section 4.5(b) hereof or Bonds purchased in lieu of redemption pursuant to Section 4.5(c) hereof) of, the Bonds under such Sections or other statutes, or if such petition for relief is filed by or against the Owner and there is entered an order by a court of competent jurisdiction which removes the Trust Estate from the control, supervision, and jurisdiction of the court entering such order, the Trustee shall release its rights under the Surety Bond (or any Alternate Security covering such preferential payments), but only to the extent of the amount of the payments of principal and/or interest on, and/or Purchase Price (paid as a result of Bonds tendered for purchase pursuant to Section 4.5(b) hereof or Bonds purchased in lieu of redemption pursuant to Section 4.5(c) hereof) so made on the Bonds, and disburse any unapplied proceeds of amounts paid thereunder to the Credit Facility Issuer. 01) The Trustee will deliver to the Credit Facility Issuer upon the receipt thereof from each Bondholder all documents, information and other showings required by the Credit Facility Issuer; provided, however, that the Trustee shall have no obligation to any Bondholder or to the Credit Facility Issuer to provide any information and other showings except for such documents, information and other showings submitted to the Trustee by the Bondholders. (0 The Surety Bond issued by the Surety will terminate on December 15, 1 lJ!& or such earlier date as provided in Section 2.1 l(g) hereof (except as to its liability to the Bondholders other than Excluded Bondholders for any preferential payment as therein provided) unless extended at the sole option of the Surety. (i) The Credit Facility Issuer shall have no liability under the Credit Facility for any payment of principal or interest or Purchase Price (due under Section 4.5(b) or 4.5(c) hereof) of the Bonds after the date that the Credit Facility is cancelled, discharged, released or delivered to the Credit Facility Issuer by the Trustee as the obligee thereunder whether such payment of principal or Purchase Price or interest of the Bonds is due and payable prior or subsequent to the date of such cancellation, discharge, release or delivery of the Credit Facility but prior to the expiration date set forth in the Credit Facility. 00 Upon substitution of an Alternate Security satisfying the requirements of this Indenture, the Trustee shall cancel, discharge, release and deliver to the Credit Facility Issuer the Credit Facility in effect prior to such substitution. If no Alternate Security satisfying the requirements of this Indenture is delivered to the Trustee, the Trustee shall not cancel, discharge, release or deliver the Credit Facility then in effect to the Credit Facility Issuer prior to the earlier of (i) one ‘year, if the Credit Facility Issuer owns any corporate stock of the Owner (which fact the Trustee shall have written notice of), after any payment (other than from amounts paid under the Credit Facility or amounts received from the purchasers of Bonds upon a remarketing of the. Bonds) on any Bond to any Bondholder (other than an Excluded Bondholder), or (ii) 91 days, after any payment (other than from amounts paid under the Credit Facility or 57 08/l 1194 amounts received from the purchasers of Bonds upon a remarketing of the Bonds) on any Bond to any Bondholder (other than an Excluded Bondholder). Section 6.2. Claims under Liquidity Facility. (a) The Trustee shall take all action necessary to make draws or claims on the Liquidity Facility as provided therein at such times as are necessary prior to the termination thereof to provide immediately available funds to pay the Deficiency (subject to the terms and provisions of the Liquidity Facility) in the amount required to pay the Purchase Price of Bonds tendered by the Holders thereof pursuant to Section 4.5(a) hereof and not remarketed. The Liquidity Surety Bond is the initial Liquidity Facility, and the Surety is the initial Liquidity Facility Issuer. 0) With respect to the Liquidity Surety Bond, the Trustee shall submit a notice of claim by 11:OO a.m., Trustee Time, to the Liquidity Facility Issuer by direct telecopy (confirmed in writing delivered or mailed by registered or certified mail within 24 hours), for a Deficiency (as defined in the Liquidity Surety Bond) in respect of the Purchase Price of Bonds tendered pursuant to Section 4.5(a) hereof (a “Liquidity CZuim”) on the sixth (6th) day preceding the applicable Purchase Date whenever the money on deposit with the Trustee in the Bond Purchase Fund on such date is not sufficient or available as of the sixth (6th) day to make the payment of such Purchase Price as of such Purchase Date. If the Trustee shall receive money from a source described in Section 4.7(a)(i) or (ii) hereof after making a claim under the Liquidity Surety Bond, then the Trustee shall notify the Liquidity Facility Issuer of the amount of such money immediately by telecopy (confirmed in writing delivered or mailed by registered or certified mail within 24 hours) and the amount of the claim shall be reduced by such amount or the Trustee shall immediately refund to the Liquidity Facility Issuer in immediately available funds all or such portion of the payment under the Liquidity Surety Bond, if any, which has been made and which is not required to make the payment of the Purchase Price of Bonds tendered pursuant to Section 4.5(a) hereof on the Purchase Date. The Trustee shall file an amended notice of claim with the Liquidity Facility Issuer on the Purchase Date as required by the Liquidity Surety Bond. For purposes of this Section 6.2, money shall not be deemed to be available if a stay, injunction or restraining order is in effect preventing such money from being applied to make such payment; and in the event any stay, injunction or restraining order shall be entered during the six (6) day period preceding any such Purchase Date, the moneys affected thereby shall no longer be deemed to be available for payment hereunder and the resulting Deficiency shall be immediately determined by the Trustee and a notice of claim or amended notice of claim for such Deficiency shall be immediately submitted to the Liquidity Facility Issuer in accordance with the terms of the Liquidity Surety Bond. (cl All money received by the Trustee from the Liquidity Facility Issuer pursuant to the Liquidity Facility shall be held in a separate and segregated account and not commingled with any other money for the sole benefit of the Bondholders who have tendered their Bonds and the Liquidity Facility Issuer, shall not be deemed to be money deposited in any other fund, account or subaccount hereunder, shall be invested by the Trustee, at the written direction of the Liquidity Facility Issuer, only in Government Securities maturing on or before the Purchase Date,. and shall be used solely to make the payment of the Purchase Price of Bonds tendered pursuant to Section 4.5(a) hereof on the Purchase Date, or refunded to the Liquidity Facility Issuer. The Liquidity Facility Issuer shall be subrogated to the rights of the Bondholders PUBL:17646_1(RED:17480 3 TO:~17480~2)109~B2062.14 -- 58 08/l 1194 under the Bonds with respect to which such payment was made from the proceeds of a claim or draw under the Liquidity Facility as provided in Section 2.7(c) hereof. W If, at any time during the term of this Indenture, an Event of Bankruptcy (A) occurs within one year, if the Liquidity Facility Issuer owns any corporate stock of the Owner (which fact the Trustee shall have written notice of) or (B) occurs within 91 days if the Liquidity Facility Issuer has no ownership interest in the Owner, after any payment (other than from amounts paid under the Liquidity Facility or amounts received from the purchasers of the Bonds upon a remarketing of such Bonds) of the Purchase Price of Bonds tendered pursuant to Section 4.5(a) hereof to any Bondholder (other than an Excluded Bondholder) then the Trustee shall immediately file in the court in which any case commenced by such a petition is pending an interpleader action (if permitted) or another appropriate proceeding, on behalf of the Bondholders (other than an Excluded Bondholder) to whom such Purchase Price was paid, interpleading the Commission, if necessary, and the Liquidity Facility Issuer to determine whether any portion of such payment is a voidable preference subject to disgorgement by any of such Bondholders as described in Section 6.2(e) below. (e) If an order is entered by a court of competent jurisdiction holding that all or any portion of such payments of the Purchase Price of Bonds tendered pursuant to Section 4.5(a) hereof is a preferential payment, and if such order is final and not appealable or the period for appeal therefrom has expired without appeal having been taken, the Trustee shall make a claim under the Liquidity Surety Bond (or any Alternate Liquidity Facility covering such preferential payments) then in effect in accordance with the terms and subject to the conditions thereof on behalf of, and to the extent of, the liability of any Bondholders (other than Excluded Bondholders) so established to disgorge any portion of such payment, and shall disburse the amounts paid under such claim pro rata for the account of such Bondholders (other than Excluded Bondholders) (i) into the court entering such order to the extent of the liability established by such order, and (ii) in the event of any prior payment by a Bondholder (other than Excluded Bondholders) in satisfaction of the liability established by such order then to such Bondholder in reimbursement for such payment. If it is instead so held that such Bondholders may retain such payments of the Purchase Price tendered pursuant to Section 4.5(a) hereof or if all applicable periods of limitation relating to the filing of a suit or other proceeding to recover such payments of the Purchase Price of the Bonds pursuant to Section 544, 547 or 549 of the United States Bankruptcy Code and any other applicable state or federal bankruptcy statute which may be asserted in such case shall have expired prior to the filing of any suit or other proceeding to recover such payments of the Purchase Price of the Bonds under such Sections or other statutes, or if such petition for relief is filed by or against the Owner and there is entered an order by a court of competent jurisdiction which removes the Trust Estate from the control, supervision, and jurisdiction of the court entering such order, the Trustee shall release its rights under the Liquidity Surety Bond covering such preferential payments, but only to the extent of the amount of the payments of the Purchase Price so made on the Bonds, and disburse any unapplied proceeds of amounts paid thereunder to the Liquidity Facility Issuer. (9 The Trustee will deliver to the Liquidity Facility Issuer upon the receipt thereof from each Bondholder all documents, information and other showings required by the Liquidity Facility Issuer. 59 08/l 1194 ARTICLE VII SECURITY AND INVESTMENTS Section 7. I. Money Held in Trust as Security. All money from time to time received by the Trustee and held in the funds and accounts created herein (except for money held in the Bond Purchase Fund, the Administrative Expenses Account, the Tax and Insurance Reserve Account and the Rebate Fund) shall be held in trust by the Trustee as a part of the Trust Estate as security for the benefit of the Holders from time to time of the Bonds, subject to the rights of the Credit Facility Issuer as provided herein. Money in the Rebate Fund shall be held in trust for the sole benefit of the United States of America, as and to the extent provided in the Tax Certificate. Money in the Bond Purchase Fund and in the Administrative Expenses Account shall be held in trust for the sole benefit of the persons entitled to such money. Section 7.2. Investments. (a) The money in the funds and accounts created herein (except as otherwise provided herein and subject to Sections 5.3, 5.8, 6.11 and 16.2) shall be invested or reinvested by the Trustee in Eligible Investments at the direction of an Author&d Representative, so long as no Event of Default shall exist under the Loan Agreement, and no event has occurred or failed to occur which, with the giving of notice or the passage of time or both, would constitute an Event of Default under the Agreement, or if such Event of Default exists or an event has occurred or failed to occur which, with the giving of notice or the passage of time or both, would constitute an Event of Default under the Agreement, if the Credit Facility Issuer so elects by written notice to the Trustee and the Owner, at the direction of the Credit Facility Issuer, which direction may be oral, but which shall be confirmed in writing; provided, however, (i) money derived from a payment under the Credit Facility or the Liquidity Facility shall be segregated from any other funds as provided in Section 6.1 or Section 6.2 of this Indenture and shall be invested only in Government Securities maturing on or before the applicable date for payment on the Bonds at the direction of the Credit Facility Issuer or the Liquidity Facility Issuer, as appropriate, (ii) money deposited in the Redemption Account shall be invested only in Government Securities maturing on or before the applicable Redemption Date pursuant to Section 4.1(a) hereof, (iii) money held as a part of the Bond Purchase Fund shall be invested only in Government Securities maturing on or before such Remarketing Date, and (iv) all money deemed Available Funds (as defined in the Credit Facility) from a Calculation Date (as defined in the Credit Facility) which is not a date for payment on the Bonds to the applicable date for payment on the Bonds shall be invested (at the written direction of the Surety) only in Government Securities maturing on or before the applicable date for payment on the Bonds (as long as the Surety Bond is the Credit Facility). Notwithstanding the foregoing provisions, the Trustee shall invest money held as a part of the Bond Purchase Fund, the Interest Account of the Revenue Fund, the Principal Account of the Revenue Fund, or the Redemption Account of the Revenue Fund, as the case may be, only in Eligible Investments rated by a Rating Agency in a rating category at least as high as such Rating Agency’s then current rating on the Bonds during the period from and including the date the Trustee files a draft, draw request or notice of claim under a Credit Facility or a Liquidity Facility to the payment date relating to such draft, draw request or notice of claim. For the purposes of this Indenture, any interest-bearing deposits, including certificates of deposit, issued by or on deposit with the Trustee shall be deemed to be investments and not deposits. Notwithstanding the foregoing provisions, the Trustee shall have the right to liquidate investments as provided in Section 6.1(e) and Section 6.2(c) of this ~~~~:17646~1(RED:17480~3~T0:_17480~2)109~B2062.14 60 08/l 1194 Indenture without any further instructions. Any Eligible Investments may be purchased at the offering or market price thereof at the time of such purchase. All such investments shall mature or be subject to withdrawal or a redemption by the Trustee prior to maturity, without penalty, in such amounts and at such times as such funds shall be needed to make required disbursements or other payments hereunder. The Trustee may make any and all such investments through the bond or other investment personnel employed by it or any of its affiliates. The Trustee or its affiliates may sponsor any investments permitted in accordance with this Indenture. 0) The securities purchased with the moneys in each such fund or account shall be deemed a part of such fund or account. Monthly accountings of the earnings or losses, disbursements and deposits, and any other changes in the fund balances shall be submitted by the Trustee to the Owner and the Credit Facility Issuer and by the Purchase Agent to the Owner and the Liquidity Facility Issuer. If at any time it shall become necessary that some or all of the securities purchased with the moneys in any such fund be redeemed or sold in order to raise moneys necessary to comply with the provisions of this Indenture, the Trustee shall effect such redemption or sale employing, in the case of sale, any commercially reasonable method of effecting the same, in its sole discretion. Neither the Owner nor the Credit Facility Issuer nor the Liquidity Facility Issuer shall direct the Trustee to make any investments or reinvestments other than those permitted by this Indenture. In making any such investments, the Trustee may rely on directions delivered to it pursuant to this Section 7.2, and the Trustee shall be relieved of all liability with respect to making such investments in accordance with such directions or otherwise in accordance with this Section 7.2. The Trustee shall not be liable or responsible for any depreciation on the value of any investment or any loss resulting from any such investment made in accordance with the directions of the Owner or the Credit Facility Issuer during a Short Term Rate Period, the Liquidity Facility Issuer or resulting from the redemption or sale of any such investment as herein authorized. In the absence of any investment directions, the Trustee, to the extent practicable, will invest such funds in a tax-exempt money market fund or U.S. Treasury obligation fund (or a comparable fund comprised of Government Securities) and will give the Owner and the Credit Facility Issuer telephonic notice (promptly confirmed in writing) of such investment. (cl Except as otherwise provided herein, all investment earnings on all funds and accounts hereunder (except investment earnings on moneys in any fund or account maintained under Sections 6.1 and 6.2) shall be transferred to the Revenue Fund and used for the purposes thereof. (d) All investments made under this Indenture shall be valued by the Trustee at the lower of cost or market value. ARTICLE VIII SPECIAL COVENANTS Section 8. I. Enforcement of Obligations. The Commission and the Trustee, if reasonably requested by the Credit Facility Issuer and otherwise as provided in the Intercreditor Agreement, shall perform all reasonable actions to seek to enforce all obligations of the Owner under the Loan Agreement and the Regulatory Agreement; provided that the Commission shall not be required to enforce any obligations of the Owner to parties other than the Commission. In PUBL:17646~1@ED:17480~3~T0:~17480~2)109~B2062.14 61 08/11/94 addition, the Trustee, acting jointly with or independently of the Commission, subject to the provisions of the Intercreditor Agreement, shall have, and is hereby assigned and granted, the full and complete right and power to enforce all obligations of the Owner under the Loan Agreement and all other documents and instruments relating to the issuance, payment and security of the Bonds (except the Reserved Rights of the Commission). Section 8.2. Sale, Transfer of Trust Estate. Except for the assignments to the Trustee, the Assignment and otherwise as contemplated by the Intercreditor Agreement and this Indenture, the Commission will not sell, transfer or otherwise dispose, assign or encumber its interest in any part or all of the Trust Estate and any such purported sale, transfer or other disposition, assignment or encumbrance shall be void and of no force and effect. Section 8.3. Further Instruments and Actions. The Commission and the Trustee will from time to time file any and all additional instruments as may be reasonably necessary to perfect the security interests herein granted. Section 8.4. Payment of Bonds. Subject to Section 2.1 hereof, the Commission shall duly and punctually pay or cause to be paid, solely from the sources and otherwise as herein provided, the principal of or the Purchase Price of Bonds 1 subject to mandatory tender or purchased in lieu of redemption), premium, if any, and the interest on the Bonds, at the dates and places and in the manner stated in the Bonds, according to the true intent and meaning thereof. Section 8.5. Extension of Payment of Bonds. Neither the Commission nor the Trustee shall directly or indirectly extend or assent to the extension of the maturity of any of the Bonds or the extension of the time of payment of any claims for the Purchase Price or interest on the Bonds or by any other arrangement, and in the event that the maturity of any of the Bonds or the time for payment of any such claims for the Purchase Price or interest shall be extended with the consent of registered owners of Bonds, such Bonds or claims for the Purchase Price or interest shall not be entitled to the benefit of this Indenture or to any payment out of the Funds or Accounts established pursuant to this Indenture, including the investments, if any, thereof, or out of any assets or revenues pledged hereunder, prior to benefits accorded to or the payment of the principal of all Bonds the maturity of which has not been extended. Section 8.6. Authority to Issue Bonds and Pledge Revenues and Other Property. The Commission hereby represents that it is duly author&d by law to authorize and borrow money through the issuance of the Bonds and to enter into, execute and deliver this Indenture, the Loan Agreement, the Regulatory Agreement, the Escrow Agreement and the Intercreditor Agreement, and to pledge the assets and revenues purported to be pledged hereby and thereby in the manner and to the extent herein and therein provided. Except as described herein, the assets and revenues so pledged are and will be free and clear of any pledge, lien, charge or encumbrance thereon, or with respect thereto, prior to, or of equal rank with, the pledge created hereby, and all corporate or other action on the part of the Commission to that end has been or will be duly and validly taken. The Bonds and the provisions of this Indenture, the Loan Agreement, the Regulatory Agreement, the Escrow Agreement and the Intercreditor Agreement are and will be the valid and legally enforceable obligations of the Commission in accordance with their terms and the terms of this Indenture. The Commission hereby directs that the Trustee shall at all times, to the extent permitted by law (subject to the Intercreditor Agreement), defend, preserve and protect the pledge of the revenues and other assets, including rights therein pledged under PUBL:17646~1@ED:17480~3~T0:~17480~2)109~B2062.14 62 08/l l/94 this Indenture, and all the rights of the Holders of Bonds under this Indenture against all claims and demands of all persons whomsoever. Section 8.7. Special Covenant with Respect to Credit Facility and Liquidity Facility. Neither the Commission nor the Trustee shall take any action which will result in the loss of any right to obtain any amount payable under the Credit Facility or the Liquidity Facility, and the Purchase Agent and the Trustee shall proceed to claim or cause to be claimed the benefits of the Credit Facility or the Liquidity Facility in cash and take all steps necessary to realize such benefits in full. Section 8.8. Compliance with Conditions Precedent. All conditions, acts and things required by law or by this Indenture to exist, to have happened or to have been performed by the Commission and the Trustee precedent to or in the execution and delivery of this Indenture and in the issuance of the Bonds exist, have happened and have been performed by the Commission or the Trustee, respectively, in due time, form and manner as required by law. Section 8.9. Per$x-mance. The Commission and the Trustee shall do and perform or cause to be done and performed all acts and things required to be done or performed by the Commission or the Trustee, respectively, under the provisions of the Act, the Code and this Indenture in accordance with the terms of such provisions, subject to the terms of the Intercreditor Agreement. Section 8. IO. Amendments of Agreement. Neither the Commission nor the Trustee shall, without the prior written consent of the Credit Facility Issuer, enter into any agreement with the Owner amending the Loan Agreement or any other First Deed of Trust Document or grant any consent or waive any provision thereof, and any such purported amendment, consent or waiver shall be void and of no force and effect. Section 8. I I. Financing Statements. The Trustee and the Commission shall execute or join in the execution of any such further or additional instruments or financing statements and shall file such instruments or instrument at such time or times and in such place or places as Bond Counsel shall require to perfect any security interest under this Indenture or the other Financing Documents at the time of issuance of the Bonds. The Trustee shall execute and file, at the Owner’s expense, continuation statements under the Uniform Commercial Code of the State at such times and in such places as shall be required to continue any financing statements tiled at the time of issuance of the Bonds. Section 8.12. Tax Covenants. (4 The Commission and the Trustee shall not use or permit the use of any gross proceeds of Bonds, directly or indirectly, to purchase any securities or obligations, and shall not use or permit the use of any amounts received by the Commission or the Trustee with respect to any amounts paid under the Note or the Loan Agreement or any other First Deed of Trust Document in any manner, and shall not take or permit to be taken any other action or actions, which would cause any Bond to be an “arbitrage bond” within the meaning of Section 148 of the-Code. PUBL:17646_l(RED:17480 3 TO:~17480~2)109~B2062.14 -- 63 08/l 1194 (b) The Commission and the Trustee shall not use or permit the use of any gross proceeds of the Bonds directly or indirectly, in any manner, and shall not take or permit to be taken any other action or actions, which would result in any of the Bonds being treated as an obligation not described in Section 103(a) of the 1954 Code by reason of classification of such Bond as an “industrial development bond” within the meaning of Section 103(b) of the 1954 Code or an obligation described in Section 103(o) of the 1954 Code or “federally guaranteed” within the meaning of Section 103(h) of the 1954 Code. (cl The Commission shall at all times do and perform all acts and things permitted by law and this Indenture which are necessary or desirable in order to assure that interest payable on the Bonds shall be excluded from gross income for federal income tax purposes, shall not take any action inconsistent with its expectations stated in the Tax Certificate and shall comply with the covenants and requirements stated therein, which Tax Certificate is incorporated herein by reference and made a part hereof as if fully set forth herein. By its acceptance of this Indenture, the Trustee acknowledges receipt of the Tax Certificate and its incorporation herein and agrees to comply with the provisions of the Tax Certificate. This covenant shall survive payment in full and defeasance of the Bonds. (4 In the event the Commission or the Owner is of the opinion that it is necessary to restrict or limit the yield on the investment of any money paid to or held by the Trustee hereunder in order to avoid classification of the Bonds as “arbitrage bonds” within the meaning of Section 148 of the Code, the Commission or the Owner may issue to the Trustee a written instrument to such effect (along with appropriate written instructions in the form of an order of the Commission or the Owner), in which event the Trustee will take such action as is necessary so to restrict or limit the yield on such investment in accordance with such instrument and instructions, irrespective of whether the Trustee shares such opinion. The Trustee may conclusively rely upon any such instructions and shall be responsible for no loss resulting from investment of any money held hereunder in accordance with such instructions. 64 The Commission shall pay to the United States of America at the times and in the amounts described in Section 5.8 hereof, in such manner and accompanied by such forms or other information as is or may be required by Section 148(f) of the Code and the Regulations. The Commission shall not, at any time prior to the maturity of the Bonds, enter into any transaction that would reduce the amounts so required to be paid to the United States of America pursuant to Section 5.8 hereof because such transaction would result in a smaller profit or a larger loss than would have resulted if the transaction had been at arm’s length and had the yield of the Bonds not been relevant to either party. Section 8.13. Liability of Commission Limited to Revenues ana’ Other Assets Pledged. Notwithstanding anything in this Indenture or in the Bonds contained, the Commission 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 or redemption price of or interest on the Bonds or for any other purpose of this Indenture. Section 8.14. Record-Keeping. The Trustee shall keep accurate records of all amounts, and the proceeds thereof, received under this Indenture, and the Commission shall keep such records as are specifically required of it by federal or state law. The Trustee shall provide 64 08/l l/94 monthly written reports to the Commission, the Owner, the Credit Facility Issuer and the Liquidity Facility Issuer indicating the balances held in each sub-account, account and fund held by the Trustee or the Purchase Agent hereunder and the investment of such amounts. Section 8.15. Trustee to Monitor Compliance. The Trustee or its agents shall confirm (on request of the Credit Facility Issuer, the Commission, or the Owner) that it has received all reports, certifications and other documents required to be delivered to it under the Agreement and shall notify the Credit Facility Issuer, the Commission and the Owner promptly if it has not timely received such reports, certifications or other documents. The Trustee shall maintain all such documents in its files for the term of the Agreement and shall, at the Owner’s expense and upon reasonable notice, provide copies thereof to the Owner. ARTICLE IX EVENTS OF DEFAULT AND REMEDIES Section 9.1. Events of Default. Each of the following events shall constitute and be referred to in this Indenture as an Event of Default: (a) the failure to make due and punctual payment of the principal of, and interest on, any Outstanding Bond when due (whether at the 2 maturity thereof, or upon proceedings for redemption thereof other than pursuant to Section 4.1(a) hereof or upon the maturity thereof by declaration or acceleration); provided, however, that no Event of Default shall be deemed to exist under this paragraph (a) unless and until the Trustee shall have submitted claims or draw requests pursuant to the Credit Facility and the Credit Facility Issuer shall fail to make payment of such claims or draw requests in accordance with the terms and conditions of the Credit Facility, and providedfurther, if such failure is due to any stay, injunction or restraining order by a court or administrative body having jurisdiction, the continuance of such failure for 120 consecutive days; or 0)) if the Surety (or such other Credit Facility Issuer subject to the Liquidation Act) is the Credit Facility Issuer hereunder, the entry of a decree or order by a court of competent jurisdiction appointing a receiver, liquidator, rehabilitator or conservator for the Surety (or such Credit Facility Issuer subject to the Liquidation Act) in a delinquency proceeding applicable to the Surety (or such other Credit Facility Issuer subject to the Liquidation Act) under, and as defined in, the Liquidation Act, or in any reciprocal state statute as defined therein, and the continuance of any such decree or order unstayed and in effect for 120 consecutive days; or (cl the Credit Facility Issuer shall commence a voluntary case or other proceeding in liquidation, reorganization or bankruptcy or consent to any such case or proceeding against it, or an involuntary case or other proceeding is commenced against it seeking such relief and remains unstayed for 120 days, or an order for relief is entered. Upon the occurrence of any event set forth above, the Trustee shall immediately notify the Owner, the Credit Facility Issuer, the Liquidity Facility Issuer, if any, the Commission and the Remarketing Agent in writing. Notwithstanding the foregoing, the occurrence of an event set ~~~~:17646~1(RED:17480~3~T0:~1748C~2)109~B2062.14 65 0811 l/94 forth in paragraph (b) or (c) above shall not constitute an Event of Default hereunder until the Owner has been given written notice of the occurrence of such event and 120 days shall have elapsed during which (i) the Owner has failed to replace the Credit Facility (which replacement must comply with the provisions of Section 2.11 hereof) or (ii) in the case of an event described in paragraph (b) above, the decree or order has not been vacated or (iii) in the case of an event described in paragraph (c) above, the case or proceeding shall not have been dismissed with no further right of appeal. Section 9.2. Remedies. (a) Upon the occurrence and continuance of any Event of Default specified in Section 9.1 hereof, the Trustee may proceed and, upon the written request of the registered owners of a majority in principal amount of the Outstanding Bonds, shall proceed, in its own name, subject to the provisions of Section 10.4 hereof, to protect and enforce the rights of the Holders by such of the following remedies as the Trustee, being advised by counsel, shall deem most effectual to protect and enforce such rights: (0 by mandamus or other suit, action or proceeding at law or in equity, to enforce all rights of the Holders or the Trustee, including the acceleration of the full indebtedness due under the Note, the collection of all sums due and unpaid under the Credit Facility or the Liquidity Facility, if appropriate, the exercise of remedies under the Loan, the First Deed of Trust Documents, and the right to require the Commission to receive and collect revenues adequate to carry out the covenants and agreements with the Holders and to perform its duties under the Act; (ii) by action or suit upon the Bonds limited, upon recovery thereunder, to the available revenues and assets pledged hereunder; (iii) by action or suit in equity, to require the Commission to account as if it were the trustee of an express trust for the registered owners of the Bonds for the revenues and assets pledged under this Indenture; 04 by action or suit in equity to enjoin any acts or things which may be unlawful or in violation of the rights of the registered owners of the Bonds; w to declare the entire principal amount of all Bonds Outstanding and the interest accrued thereon to be immediately due and payable by giving written notice thereof to the Owner with copies to the Commission, the Liquidity Facility Issuer (during a Short Term Rate Period), the Remarketing Agent and the Credit Facility Issuer, whereupon the entire outstanding principal amount of, and accrued interest on, the Bonds shall become due and payable immediately; provided, however, if all arrears of interest upon such Bonds, and interest on overdue installments of interest (to the extent permitted by law) at the rate borne by the Bonds, and the principal and redemption premium, if any, on all Bonds then Outstanding which shall have become due and payable otherwise than by acceleration, and all other sums payable under this Indenture,- except the principal of, and interest on, the Bonds which by such declaration shall have become due and payable, shall be paid, together with the reasonable expenses of the Trustee, including reasonable attorneys’ fees paid or incurred, the Trustee may 66 08/l 1194 annul such declaration of maturity and its consequences; providedfurther, however, that if all Bonds Outstanding shall have been declared to be due and payable at the request of the Holders of not less than a majority in aggregate principal amount of the Bonds then Outstanding, the Trustee may not annul such declaration without (A) the prior written consent of the registered owners of a majority in aggregate principal amount of the Bonds then Outstanding; and (B) written evidence that the Credit Facility and the Liquidity Facility, if appropriate, have been reinstated to the full amount available under each of them immediately prior to such Event of Default (less any amount equal to the amount of Bonds which have been redeemed, if any). No such waiver, rescission and annulment shall extend to or affect any subsequent default or impair any right or remedy consequent thereon and any waiver and annulment described in this paragraph shall be binding upon all Bondholders; and 64 in the event that all Outstanding Bonds are declared due and payable, to sell, assign or otherwise dispose of all of the revenues and assets pledged under this Indenture free and clear of the lien of this Indenture. 0) In the enforcement of any rights and remedies under this Indenture, the Trustee shall be entitled to sue for, enforce payment of and receive any and all amounts then due or during any default becoming due, and at any time remaining due and unpaid for principal, redemption price, interest or otherwise, under any provisions of this Indenture or a supplemental indenture or of the Bonds, with interest on overdue payments at the rate of interest specified in such Bonds, together with any and all costs and expenses of collection and of all proceedings thereunder and under such Bonds, without prejudice to any other right or remedy of the Trustee or of the Bondholders, and to recover and enforce a judgment or decree for any portion of such amounts remaining unpaid, with interest, costs and expenses (including, without limitation, pre-trial, trial and appellate attorney fees), and to collect from any assets pledged hereunder, in any manner provided by law, the moneys adjudged or decreed to be payable. (cl Upon the occurrence of any Event of Default, and upon the filing of a suit or other commencement of judicial proceedings to enforce the rights of the Bondholders under this Indenture, the Trustee shall be entitled, as a matter of right, to the appointment of a receiver or receivers of the revenues and of the assets pledged hereunder, pending such proceedings, with such powers as the court making such appointment shall confer, provided that it is the intent of this Indenture that such receiver or receivers shall be granted broad powers subject, however, to the supervision of the Trustee. Section 9.3. Intercreditor Agreement: Control by Credit Facility Issuer. In consideration for and as an inducement to the Credit Facility Issuer for the issuance of the Credit Facility, the Commission has entered into, and hereby authorizes the Trustee to enter into, the Intercreditor Agreement. Notwithstanding any other provisions of this Indenture to the contrary, the Trustee shall not, without the prior written consent, or upon the direction, of the Credit Facility Issuer, or in accordance with the Intercreditor Agreement, exercise any right or remedy under the First Deed of Trust Documents (including, without limitation, any right to accelerate the indebtedness evidenced by the Note or to foreclose and/or cause the sale of any rights or properties subject to the lien of the First Deed of Trust or any other First Deed of Trust Document) as long as (i) no PUBL:17646_l@ED:l7480 3 TO:~17480~2)109~B2062.14 -- 67 08/l l/94 Event of Default shall have occurred and be continuing under Section 9.1 hereof or (ii) the Credit Facility Issuer shall be the Holder of all Outstanding Bonds; provided that this restriction and the provisions of the Intercreditor Agreement shall in no way limit the right of the Trustee to exercise its obligations hereunder not expressly limited by the foregoing, including, without limitation, to apply moneys on deposit under this Indenture to the payment of principal or the Purchase Price (payable as a result of Bonds purchased pursuant to a mandatory tender pursuant to Section 4.5(b) hereof or purchased in lieu of redemption pursuant to Section 4.5(c) hereof) of, premium, if any, and interest on, the Bonds when due, to make a claim or draw for payment under the Credit Facility or to give notices required hereunder. All rights of the Credit Facility Issuer or the Liquidity Facility Issuer, respectively, to request, direct, consent or approve matters under this Indenture shall be suspended for such period of time as the Credit Facility Issuer or the Liquidity Facility Issuer, as applicable, remains in default under the Credit Facility or the Liquidity Facility, as applicable, or if the Credit Facility or the Liquidity Facility, as applicable, has been repudiated. Section 9.4. Enforcement of Rights. The Trustee, as pledgee and assignee hereunder of all of the right, title and interest of the Commission in and to the Trust Estate (except for the Commission’s Reserved Rights and subject to the rights of the Credit Facility Issuer hereunder and under the Intercreditor Agreement), shall, upon compliance with applicable requirements of law and except as otherwise set forth in this Article IX, be the sole real party in interest and shall have standing, exclusive of the Holders, to enforce each and every right granted to or by the Commission with respect to any part or all of the Trust Estate. Section 9.5. Enforceability by Trustee. All rights of action under this Indenture or under any of the Bonds secured hereby which are enforceable by the Trustee may be enforced by it without the possession of any of the Bonds or the production thereof at the trial or other proceedings relative thereto, and any such suit, action or proceeding instituted by the Trustee may be brought in its name, as Trustee, or, if necessary, in the name of the Commission, for the equal and ratable benefit of the Holders subject to the provisions of this Indenture. Section 9.6. Terminution of Proceedings. In case any proceedings taken by the Trustee on account of any Event of Default hereunder shall have been discontinued or abandoned for any reason, then in every such case the Commission, the Trustee, the Credit Facility Issuer, the Liquidity Facility Issuer, and the Holders shall be restored to their former positions and rights hereunder, respectively, and all rights, remedies, powers and duties of the Trustee shall continue as though no such proceeding had been taken. Section 9.7. Direction of Proceedings. (a) If an Event of Default under Section 9.1 hereof shall have occurred and be continuing, the registered owners of a majority in principal amount of the Bonds then Outstanding 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 to be taken by the Trustee hereunder, provided that such direction shall not be otherwise than in accordance with law or the provisions of this Indenture or result in personal liability for the Trustee. In the event that the Trustee shall receive conflicting directions from two or more groups of Bondholders, each with combined holdings of not less than 25% of the principal PUBL:l7646_l(RED:l7480 3 TO:~17480~2)109~B2062.14 -- 68 08/11/94 amount of Outstanding Bonds, the directions given by the group of Bondholders which hold the largest percentage of Bonds shall be controlling and the Trustee shall follow such directions to the extent required herein. @I Anything in this Indenture to the contrary notwithstanding, if an Event of Default shall have occurred and be continuing under the Loan Agreement and so long as no Event of Default shall have occurred and be continuing hereunder, the Credit Facility Issuer shall have the exclusive right to take or, by an instrument or concurrent instruments in writing executed and delivered to the Trustee, to require remedial proceedings to be taken hereunder and under the Note, the Regulatory Agreement and the other First Deed of Trust Documents (with or without requiring acceleration or redemption of the Bonds) and to conduct and/or direct the method of conducting all remedial proceedings to be taken hereunder and thereunder, including the right to declare and have the Commission and the Trustee declare (or join in any such declaration of) the entire principal amount of the Note and all other indebtedness of the Owner under the Loan Agreement and the Note to be immediately due and payable, and no such remedial proceeding or any other action shall be taken under such documents to enforce the provisions thereof without the prior written consent of the Credit Facility Issuer; provided that such direction shall not be otherwise than in accordance with law and the provisions of this Indenture and the Loan Agreement. Section 9.8. Limitations on Rights of Registered Owners of Bonds. (a) No registered owner of any Bond shall have any right to institute any suit, action, mandamus or other proceeding in equity or at law hereunder, or for the protection or enforcement of any right under this Indenture unless an Event of Default shall have occurred under Section 9.1 hereof and such Holder shall have given to the Trustee written notice of the Event of Default or breach of duty on account of which such suit, action or proceeding is to be taken, and unless the registered owners of not less than a majority in principal amount of the Bonds then Outstanding shall have made written request of the Trustee after the right to exercise such powers or right of action, as the case may be, shall have occurred, and shall have afforded the Trustee a reasonable opportunity either to proceed to exercise the powers herein granted or granted under the law or to institute such action, suit or proceeding in its name, and unless there shall also have been offered to the Trustee reasonable security and indemnity against the costs, expenses and liabilities to be incurred therein or thereby, and the Trustee shall have refused or neglected to comply with such request within a reasonable time; and such notification, request and offer of indemnity are hereby declared in every such case, at the option of the Trustee, to be conditions precedent to the execution of the powers under this Indenture or for any other remedy hereunder or by law. It is understood and intended that no one or more registered owners of the Bonds hereby secured shall have any right in any manner whatever by its or their action to affect, disturb or prejudice the security of this Indenture, or to enforce any right hereunder or under law with respect to the Bonds or this Indenture, except in the manner herein provided, and that all proceedings at law or in equity shall be instituted, and maintained in the manner herein provided and for the benefit of all owners of the Outstanding Bonds. Nothing contained in this Article shall affect or impair the right of any registered owner of Bonds to enforce the payment of the principal, premium, if any, Purchase Price and interest on its Bonds, or the obligation of the Commission to pay principal, premium, if any, Purchase Price and interest on each Bond issued hereunder (from the source and in the manner provided herein) to the Holder thereof at the time and place stated in said Bond. 69 08/l l/94 0) Notwithstanding any provision of this Indenture to the contrary, each Holder of any Bond by acceptance thereof shall be deemed to have agreed that any court in its discretion may require, in any suit for the enforcement of any right or remedy under this Indenture, or in any suit against the Trustee for any action taken or omitted by it as Trustee, the filing by any party litigant in such suit of an undertaking to pay the reasonable costs of such suit, and that such court may in its discretion assess reasonable costs, including reasonable pre-trial, trial and appellate attorneys’ fees, against any party litigant in such suit, having due regard to the merits and good faith of the claims or defenses made by such party litigant; but the provisions of this paragraph shall not apply to any suit instituted by the Trustee, or any suit instituted by any Holder for the enforcement of the payment of any Bond on or after the respective due date thereof expressed in such Bond. Section 9.9. Remedies Not Exclusive. No remedy herein conferred upon or reserved to the Trustee, to the Credit Facility Issuer or to the registered owners is intended to be exclusive of any other remedy or remedies, and each and every such remedy shall be cumulative and shall be in addition to any other remedy given hereunder or now or hereafter existing at law or in equity or by statute. Section 9. IO. Delays, Omissions. No delay or omission by the Trustee, by the Credit Facility Issuer (unless the Credit Facility Issuer’s delay or omission constitutes an Event of Default hereunder) or by any registered owners to exercise any right or power accruing upon any default shall impair any such right or power or shall be construed to be a waiver of any such default, or an acquiescence therein; and every power and remedy given by this Article to the Trustee, to the Credit Facility Issuer and to the registered owners, respectively, may be exercised from time to time and as often as may be deemed expedient. Section 9.11. Notice of Event of Default. 60 The Trustee shall give notice to the Holders, the Commission, the Credit Facility Issuer, the Remarketing Agent, the Liquidity Facility Issuer (during a Short Term Rate Period) and the Owner of each Event of Default hereunder known to the Trustee immediately after a Responsible Officer of the Trustee has actual knowledge of the occurrence thereof, unless such Event of Default shall have been remedied or cured before the giving of such notice. Each such notice of an Event of Default shall be given by the Trustee: (i) by mailing written notice thereof to all registered owners of Bonds, as the names and addresses of such owners appear upon the books for registration and transfer of Bonds as kept by the Registrar, and (ii) to the Commission, the Credit Facility Issuer, the Owner, the Liquidity Facility Issuer (during a Short Term Rate Period) and the Remarketing Agent as provided in Section 14.5 hereof. 0) The Trustee shall promptly give to the Commission, the Credit Facility Issuer, the Liquidity Facility Issuer (during a Short Term Rate Period) and the Owner written notice of each default (regardless of whether it constitutes an Event of Default hereunder, or under the First Deed of Trust Documents) under the Loan Agreement known to a Responsible Officer of the Trustee. (cl The Trustee shall, upon the written direction of the Credit Facility Issuer, and may, in its discretion, give written notice to the owners of the Bonds of an Event of Default under the Loan Agreement known to a Responsible Officer of the Trustee, explaining ~UBL:17646~l(RED:17480 3 TO:~17480~2)109(EK2062.I4 -- 70 OS/ 11194 that until an Event of Default shall occur under this Indenture, the owners of the Bonds have no right to accelerate the Bonds. Section 9.12. Application of Moneys. All moneys received by the Trustee pursuant to any action taken under the provisions of this Article IX following an Event of Default under Section 9.1 hereof, after payment of the Trustee’s Expenses (excluding payment of any amounts due the Credit Facility Issuer and the Liquidity Facility Issuer, if any), shall be deposited in the Revenue Fund, and all moneys so deposited in the Revenue Fund during the continuance of an Event of Default (other than moneys for the payment of Bonds which have matured or otherwise become payable prior to such Event of Default or for the payment of interest due prior to such Event of Default) and after payment of any moneys required to be paid to the United States under Section 148 of the Code and any Regulations promulgated thereunder shall be applied as follows: (a) Unless the principal of all the Bonds shall have become or shall have been declared due and payable, all such moneys shall be applied: First - by transfer to the Interest Account for payment of all unpaid installments of interest then due on the Bonds (other than Owner Bonds, Liquidity Facility Issuer Bonds or Credit Facility Issuer Bonds) and if the amounts available shall not be sufficient to pay in full any particular installment, then to the payment of such interest ratably, according to the amounts due on such installment, to the persons entitled thereto, without any discrimination or privilege; Second - by transfer to the Principal Account for payment of the unpaid principal and premium, if any, on any of the Bonds (other than Owner Bonds, Liquidity Facility Issuer Bonds or Credit Facility Issuer Bonds) which shall have become due (other than Bonds which have matured or otherwise become payable prior to such Event of Default and moneys for the payment of which are held in the Revenue Fund or otherwise held by the Trustee), and, if the amount available shall not be sufficient to pay in full the amount of principal, premium, if any, and the interest due on any particular date, then to the payment of such principal, premium, if any, and interest ratably, according to the amount of principal due on such date, to the persons entitled thereto, without any discrimination or privilege; Third - to the payment of, first, interest and then to the payment of principal due and unpaid on Liquidity Facility Issuer Bonds and then to the payment of any other amounts due and owing to the Liquidity Facility Issuer; Fourth - to the payment of, first, interest and then to the payment of principal due and unpaid on Credit Facility Issuer Bonds and then to the payment of any other amounts due and owing to the Credit Facility Issuer; and Fifth - to the payment of, first, interest and then principal due and unpaid on the Owner Bonds. 0) If the principal of all the Bonds shall have become or shall have been declared due and payable, all such moneys shall be transferred to the Interest Account and the Principal Account and first shall be applied to the payment of the principal of, premium, if any, PUBL:l7646_1@ED:17480 3 TO:~l7480~2)109~ B2062.14 -- 71 OS/l 1194 and interest then due and unpaid upon the Bonds (other than Bonds which have matured or otherwise become payable prior to such Event of Default and money for the payment of which are held in the Revenue Fund or otherwise held by the Trustee and other than Owner Bonds, Liquidity Facility Issuer Bonds or Credit Facility Issuer Bonds), without preference or priority of principal and premium, if any, over interest or of interest over principal and premium, if any, or of any installment of interest over any other installment of interest, or of any Bond over any other Bond, ratably, according to the amounts due respectively for principal, premium, if any, and interest, to the persons entitled thereto without any discrimination or privilege, and second shall be applied to the payment of the principal of and interest due and unpaid upon, first, Liquidity Facility Issuer Bonds, then Credit Facility Issuer Bonds. cc> Next, the amount of any fees or expenses due pursuant to Section 5.6 hereof to the extent money in the Administrative Expenses Account is insufficient. Cd) The surplus, if any, shall be paid first to the Liquidity Facility Issuer to the extent necessary to pay the Liquidity Facility Issuer for the total amount of moneys owed to it under the Liquidity Facility and/or the Liquidity Facility Agreement (the Trustee being herein author&d to pay such amount upon receipt by the Trustee of a certificate executed by the Liquidity Facility Issuer certifying the amount then due to it and without further inquiry); second, to the Credit Facility Issuer, to the extent necessary to pay the Credit Facility Issuer for the total amount of moneys paid to the Trustee by the Credit Facility Issuer in satisfaction of unreimbursed claims or draws made under the Credit Facility for principal due on the Bonds (to the extent not recovered under (b) above) together with interest thereon and any other amounts which the Credit Facility Issuer notifies the Trustee is due under the Reimbursement Agreement and the other Second Deed of Trust Documents (the Trustee being herein author&d to pay such amount upon receipt by the Trustee of a certificate executed by the Credit Facility Issuer certifying the amount then due and without further inquiry); third, to the Owner or to any other Person lawfully entitled to receive the same or as a court of competent jurisdiction may direct; fourth, to pay principal of and interest due on Owner Bonds; and, fifth, to the Owner. W Notwithstanding the foregoing provisions, no moneys paid upon a claim or draw under the Credit Facility or Liquidity Facility shall be paid to the United States or used to reimburse the Bondholders, the Trustee, the Commission, the Owner, or their respective counsel for any costs, fees or expenses. Such moneys shall be used solely to make payment of the principal of and/or interest on, and/or Purchase Price of the Bonds (other than Owner Bonds, Liquidity Facility Issuer Bonds or Credit Facility Issuer Bonds) for which such claim or draw was submitted or shall be returned to the Credit Facility Issuer or the Liquidity Facility Issuer as provided in the Credit Facility or the Liquidity Facility, as applicable. Whenever moneys are to be applied pursuant to the provisions of this Section 9.12, such moneys shall be applied at such time, and from time to time, as the Trustee shall have determined, having due regard to the amount of such moneys available for application and the likelihood of additional moneys becoming available for such application in the future. Whenever the Trustee shall apply such funds, it shall (A) fix the date (which shall be an Interest Payment Date unless it shall deem another date more suitable) upon which such application is to be made and upon- such date, interest on the amount of principal to be paid on such dates shall cease to accrue, and (B) on or before such date, set aside from the appropriate funds created by this Indenture the moneys necessary to effect such application. The Trustee shall give such PUBL:17646_1(RECD:17480 3 TO:~17480~2)109~B2062.14 -- 72 08111194 notice, if any, as it may deem appropriate of the deposit with it of any such moneys and of the fixing of any such date. The Trustee shall not be required to make payment to the Holder of any Bond until such Bond shall be presented for appropriate endorsement or for cancellation if fully paid. Section 9.13. Foreclosure of First Deed of Trust; Disposition of Project. (a) Subject to the terms of the Intercreditor Agreement and prior to the occurrence of an Event of Default hereunder, in the event the Trustee shall purchase the Project at any foreclosure sale or shall otherwise acquire title to the Project by exercising its rights under the First Deed of Trust in accordance with Section 9.7 hereof or the Intercreditor Agreement, the Trustee shall permit the Credit Facility Issuer or its agent to operate the Project in compliance with the covenants and agreements of the Owner contained in the Loan Agreement, the First Deed of Trust Documents and the Regulatory Agreement. @I Subject to the terms of the Intercreditor Agreement and prior to the occurrence of an Event of Default hereunder, if at any time after the Trustee shall have so acquired the Project the Credit Facility Issuer shall direct the Trustee to sell or otherwise transfer the Project, the Trustee shall execute such documents or other instruments as may be required for such sale or other transfer, provided that (i) in the opinion of Bond Counsel such sale or transfer will not have an adverse effect on the exclusion of interest payable on the Bonds from gross income for federal income tax purposes, and (ii) to the extent the Trustee or the Credit Facility Issuer realizes any cash proceeds as a result of such sale or transfer, such proceeds shall be applied to payment of any amounts then owing to the Credit Facility Issuer hereunder or under the Reimbursement Agreement and the other Second Deed of Trust Documents (the Trustee being herein authorized to pay such amount upon receipt by the Trustee of a certificate executed by the Credit Facility Issuer certifying as to the amount then owing to it) and/or the redemption of Bonds on the earliest practicable date as the Credit Facility Issuer shall determine in its sole discretion, and any remaining proceeds shall be applied in accordance with Section 9.12 hereof. Other than as provided herein, any such sale or transfer shall be upon such terms and conditions as the Credit Facility Issuer in its sole discretion shall determine, including without limitation the execution, delivery, recording and filing of agreements (including any agreement assuming, if and to the extent required by the Credit Facility Issuer, the obligations of the Owner under the First Deed of Trust Documents) by the Person to whom the Project is sold or transferred. ARTICLE X THE TRUSTEE, REMARKETING AGENT, PAYING AGENT, REGISTRAR AND PURCHASE AGENT Section IO. 1. Acceptance of Trusts. Subject to the provisions of this Article X, the Trustee hereby accepts the trusts imposed upon it by this Indenture and the duties placed upon the Trustee by the Loan Agreement, and agrees to perform the same. In addition, the Trustee hereby accepts its appointment as Paying Agent, Purchase Agent and Registrar with respect to the Bonds. The Trustee shall not be required to give any bond or surety in respect of the execution of the said trusts, powers or otherwise. ~~~~:17646~1(RED:17480~3~T0:~17480~2)109(B2062.14 73 OS/l l/94 Section IO. 2. Performance Through Attorneys, Agents, Receivers, or Employees. The Trustee may execute any of the trusts or powers hereof and perform the duties required of it hereunder by or through attorneys, agents, receivers, or employees, and shall be entitled to advice of counsel concerning all matters of trust and its duties hereunder. The Trustee may act upon the opinion or advice of counsel approved by the Trustee. in the exercise of due care. Section IO. 3. Fees, Expenses, Charges and Other Disbursements. Pursuant to Section 4.9 of the Loan Agreement, the Owner on behalf of the Commission shall pay to the Trustee as compensation for all services rendered by it hereunder the Trustee’s Expenses and also shall pay all of the Trustee’s reasonable expenses, charges and other disbursements and those of attorneys, agents and employees incurred in and about the administration and execution of the trusts hereby created and the performance of its powers and duties hereunder (including, without limitation, pursuant to Section 10.7), except as a result of the willful misconduct or negligence of the Trustee or its attorneys, agents or employees, provided that the Owner may contest in good faith the necessity for and reasonableness of any expenses, charges and disbursements of the Trustee provided that the Owner places in escrow with the Trustee or the Commission the amount being contested. In default of such payment, the Trustee may deduct the same from any moneys coming into its hands, provided, however, in no event shall the Trustee be entitled to payment of the Trustee’s Expenses from any amounts claimed or collected under the Credit Facility or the Liquidity Facility or from any amounts held under this Indenture except moneys on deposit in the Administrative Expenses Account, and in no event shall the Trustee be entitled to a preference in payment over any of the Bonds Outstanding hereunder. 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 any of its rights or powers if it shall have reasonable grounds for believing that repayment of such funds or adequate indemnity against such risk or liability is not reasonably assured to it. Section 10.4. Obligation to Take Action. The Trustee shall be under no obligation to take any action in respect of any Event of Default or otherwise, or toward the execution or enforcement of any of the trusts hereby created, or to institute, appear in or defend any suit or other proceedings in connection therewith, unless expressly required by this Indenture, the Loan Agreement, the Regulatory Agreement or the Intercreditor Agreement or requested in writing so to do by Holders of at least a majority in aggregate principal amount of the Bonds then Outstanding, and if in its opinion such action may tend to involve it in expense or liability, unless furnished, from time to time as often as it may require, with security and indemnity satisfactory to it, provided that the Trustee shall perform its obligations under Sections 6.1 and 6.2 hereof without the necessity of any Bondholder request and the Trustee shall not be entitled to request any indemnity in connection therewith. The foregoing provisions are intended only for the protection of the Trustee, and shall not affect any discretion, power or obligation given by any provisions of this Indenture to the Trustee to take action in respect of any Event of Default, or under the Loan Agreement or the Regulatory Agreement without such notice or request from the Bondholders, or without such security or indemnity. Section IO. 5. Good Faith Reliance. The Trustee, the Remarketing Agent and the Commission shall be protected and shall incur no liability in acting or proceeding in good faith upon any resolution, notice (whether written or telephonic), telegram, request, consent, waiver, certificate, statement, affidavit, voucher, bond, requisition or other paper or document which it shall in good faith believe (i) to be genuine and correct, (ii) to have been passed or signed by the PuBL:17646~1(RED:17480~3~TO:~17480~2)109~B2062.14 74 08/11/94 proper board, body or person, or (iii) to have been prepared and furnished pursuant to any of the provisions of this Indenture, the Credit Facility, the Liquidity Facility, any First Deed of Trust Document, any Second Deed of Trust Document or the Intercreditor Agreement and shall be under no duty to make any independent investigation or inquiry as to any statements contained or matters referred to in any such instrument, but may accept and rely upon the same as conclusive evidence of the truth and accuracy of such statements. The Trustee shall not be bound to recognize any person as a registered owner of any Bond or to take any action at such person’s request unless evidence of the type required by Section 11.1 hereof concerning the ownership of such Bond shall be furnished to Trustee, or unless such Bond shall be deposited with the Trustee or evidence satisfactory to the Trustee of the ownership of such Bond shall be furnished to the Trustee. Section 10.6. Who May Own Bonds. Upon compliance with all applicable laws, the Trustee, the Commission, the Owner, the Credit Facility Issuer, the Liquidity Facility Issuer, the Purchase Agent, the Remarketing Agent and any Paying Agent may in good faith buy, sell, own, hold and deal in any of the Bonds issued hereunder and secured by this Indenture, and subject to the last paragraph of the definition of “Outstanding” in Appendix A hereof, may join in any action which any owner of Bonds may be entitled to take with like effect as if it did not act in any capacity under this Indenture. The Trustee, the Purchase Agent, the Remarketing Agent and any Paying Agent, either as principal or agent, or in any other commercial or banking capacity, also may engage in or be interested in any financial or other transaction with the Commission, the Credit Facility Issuer, the Liquidity Facility Issuer or the Owner, and may act as depository, trustee, or agent for the Commission, the Owner, the Credit Facility Issuer, the Liquidity Facility Issuer or any committee or body of the registered owners of the Bonds secured hereby or other obligations of the Commission as freely as if it did not act in any capacity under this Indenture. Section IO. 7. Resignation by Trustee. The Trustee may resign and be discharged of the trusts created by this Indenture by executing an instrument in writing resigning such trust and specifying the date when such resignation is expected to take effect, and filing the same with the Commission and a copy thereof with the Owner, the Remarketing Agent, the Liquidity Facility Issuer, the Purchase Agent, the Paying Agent and the Credit Facility Issuer not less than 60 days before the date specified in such instrument when such resignation is expected to take effect. Upon receiving such notice of resignation, the Commission shall promptly appoint a successor trustee following consultation with the Credit Facility Issuer, by written instrument, in duplicate, executed by the Commission, one copy of which instrument shall be delivered to the resigning Trustee and one copy to the successor Trustee, with a copy to the Owner, the Remarketing Agent, the Liquidity Facility Issuer, the Purchase Agent, the Paying Agent and the Credit Facility Issuer. If no successor Trustee shall have been so appointed within 60 days after the mailing of such notice of resignation, the Credit Facility Issuer may appoint the successor Trustee, and if the Credit Facility Issuer fails to appoint a successor Trustee within 90 days after the receipt by it of notice from the Trustee that the Commission has failed to appoint a successor Trustee, the resigning Trustee may petition any court of competent jurisdiction for the appointment of a successor Trustee, or any registered owner of Bonds may, on behalf of such registered owner and all others similarly situated, petition any such court for the appointment of a successor Trustee. Such court may thereupon, after such notice, if any, as it may deem proper and prescribe, appoint -a successor Trustee. Any resignation of the Trustee shall become effective upon acceptance of appointment by the successor Trustee in accordance with Section 10.11 hereof. A resigning Trustee shall be entitled to retain from any funds in the Administrative PuaL:17646~1(RED:17480~3~T0:_17480~2)109~ B2062.14 75 OS/l l/94 Expenses Account hereunder an amount equal to its unpaid fees and expenses incurred pursuant to this Indenture. Section 10.8. Removal of Trustee. The Trustee may be removed at any time by an instrument in writing appointing a successor filed with the Trustee so removed and executed by the Commission, the Credit Facility Issuer or by the Holders of not less than 66-213% in aggregate principal amount of the Bonds then Outstanding, provided, that such removal will not take effect prior to the receipt by the Commission, the Owner, the Remarketing Agent, the Liquidity Facility Issuer and the Credit Facility Issuer of notice thereof, in writing and acceptance of appointment by the successor Trustee in accordance with Section 10.11 hereof. A Trustee removed pursuant to this Section, excluding a removal for failure to perform its obligations under this Indenture, shall be entitled to retain from any funds in the Administrative Expenses Account hereunder an amount equal to the accrued but unpaid Trustee’s Expenses incurred pursuant to this Indenture. Section IO. 9. Appointment of Successor Trustee in the Event of Vacancy. In the event the Trustee shall be dissolved, or if its property or affairs shall be taken under the control of any state or federal court or administrative body because of insolvency or bankruptcy or for any other reason, a vacancy shall forthwith and ipso facto exist in the office of Trustee, within a period of 15 days thereafter, a successor shall be appointed by the Commission, upon consultation with the Credit Facility Issuer. If the Commission fails to make such appointment within such 15 day period, the Credit Facility Issuer or the registered owners of a majority in aggregate principal amount of the Bonds then Outstanding, with the consent of the Credit Facility Issuer, may make such appointment during the following 15 day period. Appointments made under this Section shall be made by an instrument or instruments in writing tiled at the offices of the Commission, signed by the Commission, by the Credit Facility Issuer or by such registered owners, as the facts may require. Copies of each instrument shall be promptly delivered by the Commission to the predecessor Trustee, the Trustee so appointed, the Owner, the Remarketing Agent, the Paying Agent, the Purchase Agent, the Liquidity Facility Issuer, if any, and the Credit Facility Issuer. Section 10.10. Qual~jkations of Successor Trustee. Every successor Trustee hereunder appointed pursuant to the foregoing provisions shall be a trust company or a bank with trust powers acceptable to the Commission and to the Credit Facility Issuer, having a combined capital, surplus and undivided profits on a consolidated basis with its affiliates of at least $50,000,000, if such trust company or bank with trust powers willing and able to accept the trust on customary terms can be located with reasonable effort. Section IO. I I. Concerning Successor Trustee. Any successor Trustee appointed hereunder shall execute, acknowledge and deliver to the Commission and the Credit Facility Issuer an instrument accepting such appointment hereunder and agreeing to be bound by the Intercreditor Agreement, and, thereupon and upon receipt of the assignment of, and the delivery of, the Credit Facility to such successor Trustee pursuant to the terms of the Credit Facility, such successor Trustee, without any further act, deed or conveyance, shall become duly vested with all the estates, property, rights, powers, trusts, duties and obligations of its predecessor in the trust hereunder, with like effect as if originally named Trustee. Upon request of such successor Trustee, the Trustee ceasing to act and the Commission shall execute and deliver an instrument transferring to such successor Trustee all the estates, property, rights, powers and trusts PUBL:17646~1(RED:17480~3~T0:_17480~2)109~B2062.14 76 08/l l/94 hereunder of the Trustee so ceasing to act, and the Trustee so ceasing to act shall pay over or deliver to the successor Trustee all moneys, records and other assets at the time held by it hereunder. Section 10.12. Merger of Trustee. Any corporation into which any Trustee hereunder may be merged or with which it may be consolidated, or any corporation resulting from any merger or consolidation to which any Trustee hereunder shall be a party, or any corporation to which any Trustee hereunder may transfer substantially all of its corporate trust assets, shall be a successor Trustee under this Indenture and under the Intercreditor Agreement or a successor Paying Agent (as the case may be), without the execution or filing of any paper, other than notice of such merger filed with the Commission, or any further act on the part of the parties hereto, anything herein to the contrary notwithstanding. Section 10.13. Conduct of Trustee. Notwithstanding any other provisions of this Article X, the Trustee shall, during the existence of an Event of Default known to a Responsible Officer of the Trustee, exercise such of the rights and powers vested in it by this Indenture and use the same degree of skill and care in their exercise as a prudent person would use and exercise under the circumstances in the conduct of such person’s own affairs. Section 10.14. Intervention by Trustee. In any judicial proceeding to which the Commission is a party and which, in the opinion of the Trustee and its counsel, has a substantial bearing on the interest of the registered owners of the Bonds, the Trustee may intervene on behalf of the registered owners of the Bonds, and shall, upon receipt of indemnity satisfactory to it, do so if requested in writing by the owners of at least 25% in principal amount of Bonds then Outstanding, if permitted by the court having jurisdiction in the premises. Section 10.15. Duties Determined Solely by Certain Documents. The duties and obligations of the Trustee shall be determined solely by the express provisions of this Indenture, the Credit Facility, the Liquidity Facility, the Loan Agreement, Intercreditor Agreement, the Regulatory Agreement, the Escrow Agreement and the First Deed of Trust Documents, and the Trustee shall not be liable except for the performance of such duties and obligations as are specifically set forth in this Indenture, the Credit Facility, the Liquidity Facility, the Loan Agreement, the Intercreditor Agreement, the Regulatory Agreement, the Escrow Agreement or the First Deed of Trust Documents, and no implied covenants or obligations shall be read into such documents against the Trustee. Section 10.16. Paying Agent. (a) The Trustee is hereby appointed as Paying Agent for the Bonds. With the prior written consent of the Commission and the Credit Facility Issuer, the Trustee may appoint as its agent a third-party Paying Agent hereunder, and any such Paying Agent shall designate to the Commission, the Trustee, the Remarketing Agent, the Owner, the Liquidity Facility Issuer, and the Credit Facility Issuer its Principal Office and signify its acceptance of the duties and obligations imposed upon it hereunder by a written instrument of acceptance delivered to the Commission under which such Paying Agent will agree, particularly, and the Trustee as Paying Agent hereunder hereby agrees: PUBL:17646~1(RED:17480~3~T0:~17480~2)109~B2062.14 77 OS/11194 (0 to hold all sums held by it for the payment of the principal of or interest on Bonds in trust for the benefit of the Bondholders until such sums shall be paid to such Bondholders or otherwise disposed of as herein provided; (ii) to keep such books and records as shall be consistent with prudent industry practice, to make such books and records available for inspection by the Commission, the Credit Facility Issuer, the Owner and the Trustee, at all reasonable times; and (iii) if, the Paying Agent is not the Trustee, upon the request of the Trustee, to forthwith deliver to the Trustee all sums so held in trust by the Paying Agent. @I The Paying Agent shall be a corporation duly organized under the laws of the United States of America or any state or territory thereof, having a combined capital stock, surplus and undivided profits on a consolidated basis with its affiliates of at least $50,000,000 and author&d by law to perform all the duties imposed upon it by this Indenture. The Paying Agent (if other than the Trustee) may at any time resign and be discharged of the duties and obligations created by this Indenture by giving at least 60 days notice to the Commission, the Trustee, the Remarketing Agent, the Owner, the Liquidity Facility Issuer, if any, and the Credit Facility Issuer. The Paying Agent (if other than the Trustee) may be removed at any time, by the Commission fi with the prior written consent of the Credit Facility Issuer; provided that such removal shall not be effective until a new Paying Agent has assumed in writing the obligations of the Paying Agent under this Indenture. Such removal shall be accomplished by an instrument of the Commission filed with the Paying Agent, the Trustee, the Remarketing Agent, the Owner, the Credit Facility Issuer and the Liquidity Facility Issuer, if any. Upon any such removal the Trustee shall perform as Paying Agent hereunder. In the event of the resignation or removal of the Paying Agent (if other than the Trustee), the Paying Agent shall pay over, assign and deliver any moneys held by it in such capacity to its successor or, if there be no successor, to the Trustee. In the event that the Paying Agent (if other than the Trustee) shall resign or be removed, or be dissolved, or if the property or affairs of the Paying Agent shall be taken under the control of any state or federal court or administrative body because of bankruptcy or insolvency, or for any other reason, and the Commission shall not have appointed a successor as Paying Agent, the Trustee shall ipso facto be deemed to be the Paying Agent for all purposes of this Indenture until the appointment of a successor Paying Agent, if any, by the Trustee. Section 10.17. Registrar and Purchase Agent. (a) The Trustee is hereby appointed as the Registrar for the Bonds and hereby agrees to keep such books and records as shall be consistent with prudent industry practice and to make such books and records available for inspection by the Commission, the Owner, the Liquidity Facility Issuer, the Credit Facility Issuer and the Remarketing Agent at all reasonable times. The Commission shall cooperate with the Registrar to cause the necessary arrangements to be made and to be thereafter continued whereby Bonds, executed by the Commission, shall be made available for authentication by the Registrar and exchange, registration and registration of transfer at the Principal Office of the Registrar. mL:17646~1(RED:17480~3~T0:_17480~2)109~B2062.14 78 OS/l l/94 0) The Trustee is hereby appointed as Purchase Agent for the Bonds, and hereby agrees to perform as Purchase Agent in accordance with Article IV hereof in connection with any purchase of Bonds tendered for purchase pursuant to Article IV hereto. When Bonds bear interest at a Short Term Rate and the Trustee does not have a New York office capable, in the opinion of the Trustee and the Remarketing Agent, of receiving tendered Bonds and paying the Purchase Price of Bonds tendered by their Holders in a timely fashion, the Owner shall appoint a Purchase Agent acceptable to the Credit Facility Issuer, the Liquidity Facility Issuer and the Remarketing Agent to effect purchases of Bonds tendered by their Holders and to perform the functions of Purchase Agent hereunder. The Trustee may designate such Purchase Agent as a Co-Registrar and Co-Paying Agent to facilitate re-registrations of the Bonds in connection with purchases. Each reference in this Indenture or the Loan Agreement to purchase by “the Trustee” or notice to or filing with “the Trustee” in connection with (i) tenders of Bonds for purchase, or (ii) the Bond Purchase Fund includes purchase by, or notice to or filing with, the Purchase Agent, as appropriate. The Purchase Agent (if not the Trustee) shall be a bank or trust company duly organized under the laws of the United States of America or any state or territory thereof, having corporate trust powers and having a combined capital stock, surplus and undivided profits, on a consolidated basis with its Affiliates, of at least $50,000,000 and authorized by law to perform all the duties imposed upon it by this Indenture. A third party Purchase Agent shall signify its acceptance of its duties and obligations imposed upon it hereunder by written instrument of acceptance delivered to the Owner, the Commission, the Liquidity Facility Issuer, the Credit Facility Issuer, the Remarketing Agent and the Trustee to perform its obligations as Purchase Agent hereunder and to be bound by the terms and provisions of this Indenture. In the event that the Purchase Agent (if other than the Trustee) shall resign or be removed, or be dissolved, or if the property or affairs of the Purchase Agent shall be taken under the control of any state or federal court or administrative body because of bankruptcy or insolvency, or for any other reason, and the Owner shall not have appointed a successor Purchase Agent with the consent of the Credit Facility Issuer and the Remarketing Agent, the Trustee shall ipso facto be deemed to be the Purchase Agent for all purposes of this Indenture until the appointment of a successor Purchase Agent, if any, by the Trustee. Section IO. 18. Remarketing Agent. (a) Duties of Remarketing Agent. The Commission hereby appoints A.G. Edwards & Sons, Inc., as the Remarketing Agent for the Bonds. The Remarketing Agent shall designate its Principal Office to the Trustee, the Owner, the Liquidity Facility Issuer, the Purchase Agent, the Paying Agent and the Credit Facility Issuer and signify its acceptance of the duties and obligations imposed upon it hereunder, for the compensation provided for in the Remarketing Agreement, by a written instrument of acceptance delivered to the Commission, the Trustee, the Credit Facility Issuer, the Liquidity Facility Issuer, the Purchase Agent, the Paying Agent and the Owner under which the following obligations shall be imposed on the Remarketing Agent: 0) to hold all money delivered to it hereunder in trust for the benefit of the Person which shall have so delivered such money until the Bonds to be purchased with such money shall have been delivered to or for the account of such Person: PUBL:17646~1(RED:17480~3~T0:~17480~2)109~B2062.14 79 OS/l l/94 (ii) to keep such books and records as shall be consistent with prudent industry practice and to make such books and records available for inspection by the Commission, the Trustee, the Purchase Agent, the Paying Agent, the Owner, the Liquidity Facility Issuer and the Credit Facility Issuer at all reasonable times; (iii) to perform its obligations under Section 3.3 hereof; (iv) to use its best efforts to remarket all Bonds to be purchased on a Remarketing Date in accordance with Section 4.8 hereof; and w to perform all other obligations imposed on the Remarketing Agent under this Indenture and the Remarketing Agreement. In the event of a conflict between the provisions of this Indenture and the provisions of the Remarketing Agreement, the provisions of this Indenture shall control. 0) Quulijications of Remarketing Agent. Any successor Remarketing Agent shall be approved by the Owner and by the Credit Facility Issuer and shall be a member of the National Association of Securities Dealers, Inc., having a capitalization of at least $25,000,000 and author&d by law to perform all the duties imposed upon it by this Indenture. (cl Resignation and Removal of Remarkting Agent, The Remarketing Agent may at any time resign and be discharged of the duties and obligations created by this Indenture by giving at least 90 days’ written notice to the Trustee, the Owner, the Commission, the Liquidity Facility Issuer, the Purchase Agent and the Credit Facility Issuer, provided that no resignation shall take effect until a successor Remarketing Agent shall have been appointed by the Owner with prior written notice to the Commission and with the consent of the Credit Facility Issuer and the Liquidity Facility Issuer, and such successor Remarketing Agent shall have accepted such appointment. The Owner may remove the Remarketing Agent at any time upon 30 days’ notice to the Remarketing Agent with the consent of the Commission, the Credit Facility Issuer and the Liquidity Facility Issuer; provided that if an Event of Default has occurred as that term is defined under any of the First Deed of Trust Documents or under any of the Second Deed of Trust Documents, or an event has occurred or failed to occur which with the passage of time or the giving of notice, or both, would result in the occurrence of an Event of Default under any of the First Deed of Trust Documents or any of the Second Deed of Trust Documents, then the Owner shall have no right to remove the Remarketing Agent, and the Credit Facility Issuer shall have the sole right to remove the Remarketing Agent. The Commission may by written direction, with the prior written consent of the Credit Facility Issuer and the Liquidity Facility Issuer, remove the Remarketing Agent at the time specified in such direction, which time shall be sufficient to enable the Owner to provide the Remarketing Agent with 30 days’ notice of its removal. The Credit Facility Issuer may by written direction remove the Remarketing Agent at any time upon 30 days’ notice to the Remarketing Agent. The removal of the Remarketing Agent shall be accomplished by delivery of an instrument filed with the Remarketing Agent, with copies to the Trustee, the Paying Agent, the Purchase Agent, the Owner, the Liquidity Facility Issuer, the Commission and the Credit Facility Issuer. (d) Appoinment of Successor Remarketing Agent. Upon resignation or removal of the Remarketing Agent, or if the Remarketing Agent is dissolved, or if the property 80 08/l l/94 or affairs of the Remarketing Agent shall be taken under the control of any state or federal court or administrative body because of a bankruptcy or insolvency, or for any other reason, the Owner, with prior written notice to the Commission, and with the prior written consent of the Credit Facility Issuer and the Liquidity Facility Issuer, will appoint a successor Remarketing Agent. If the Owner fails to appoint a successor Remarketing Agent within 30 days after the resignation of the Remarketing Agent or within 30 days after the receipt of the Credit Facility Issuer’s consent and the Liquidity Facility Issuer’s consent, the Credit Facility Issuer, in its sole discretion, shall have the right to appoint the successor Remarketing Agent with the consent of the Commission and the Liquidity Facility Issuer. If an Event of Default has occurred under any of the First Deed of Trust Documents or under any of the Second Deed of Trust Documents, or an event has occurred or failed to occur which, with the passage of time or the giving of notice or both, would result in an Event of Default under any of the First Deed of Trust Documents or the Second Deed of Trust Documents, then the Credit Facility Issuer, in its sole discretion, shall have the right to appoint the successor Remarketing Agent, with the consent of the Liquidity Facility Issuer. In the event of the resignation or removal of the Remarketing Agent, the Remarketing Agent shall pay over, assign and deliver any moneys and Bonds held by it in such capacity (together with a full accounting thereof) to its successor or, if there be no successor, to the Trustee to be held in a separate account pursuant to Section 5.7 hereof. In the event of a conflict between the provisions of this Indenture and the provisions of the Remarketing Agreement, the provisions of this Indenture shall control. Section 10.19. Several Capacities. Anything in this Indenture to the contrary notwithstanding, the same entity may serve hereunder as the Trustee, the Paying Agent, the Purchase Agent and the Registrar, or as the Remarketing Agent, the Purchase Agent, the Paying Agent and the Registrar, and in any combination of such capacities, to the extent permitted by law. Section 10.20. Authority to Deal with the Credit Facility Issuer. Various provisions of the Loan Agreement and this Indenture contemplate that the Trustee will enter into the Intercreditor Agreement, engage in certain dealings with the Credit Facility Issuer and in some instances require that the Trustee engage in such dealings. The Trustee is hereby expressly author&d to deal with the Credit Facility Issuer in any way contemplated in the Loan Agreement, the Intercreditor Agreement, this Indenture or the other First Deed of Trust Documents. Until the termination and release to the Credit Facility Issuer of the Credit Facility, the Trustee shall send to the Credit Facility Issuer a copy of every required notice or report which the Trustee sends to any other person or entity pursuant to the Loan Agreement or this Indenture. PUBL:17646~1(RED:17480~3~T0:~17480~2)109~B2062.14 81 OS/l 1194 ARTICLE XI INSTRUMENTS EXECUTED BY BONDHOLDERS Section 11.1. Proof of Ownership. Any request, direction, consent or other instrument in writing required or permitted by this Indenture to be signed or executed by registered owners of Bonds may be in any number of concurrent instruments of similar tenor, and may be signed or executed by such registered owners in person or by agent appointed by an instrument in writing. Proof of the execution of any such instrument and of the ownership of Bonds shall be sufficient for any purpose of this Indenture, and shall be conclusive in favor of the Trustee, the Owner, the Commission, the Liquidity Facility Issuer and the Credit Facility Issuer with regard to any action taken under such instrument if made in the following manner: (a) the fact and date of the execution by any person of any such instrument may be proved by (i) the certificate of any officer in any jurisdiction who, by the laws thereof, has power to take acknowledgments within such jurisdiction, to the effect that the person signing such instrument acknowledged before him the execution thereof, or (ii) by an affidavit of a witness to such execution and (b) the ownership of the Bonds shall be proven by the Bond Register of the Commission kept by the Registrar. Section 11.2. Efict of Execution. Nothing contained in this Article XI shall be construed as limiting the Trustee or the Credit Facility Issuer to the proof described in Section 11.1 hereof, it being intended that the Trustee and the Credit Facility Issuer may accept any other evidence of the matters herein stated which they may deem sufficient. Any request or consent of the registered owner of any Bond shall bind every future registered owner of the same Bond or any Bond issued in replacement therefor in respect of anything done in pursuance of such request or consent. ARTICLE XII MODIFICATION OF INDENTURE, LOAN AGREEMENT, FIRST DEED OF TRUST, CREDIT FACILITY, LIQUIDITY FACILITY AND RELATED DOCUMENTS Section 12.1. Modijication. This Indenture shall not be modified or amended in any respect except as provided in and in accordance with and subject to the provisions of this Article XII. Section 12.2. Supplemental Indenture. The Commission and the Trustee may, with the approval of the Liquidity Facility Issuer (while its Liquidity Facility is in effect and it is not in default thereunder) and the Credit Facility Issuer, from time to time and at any time, without the consent of registered owners of the Bonds, execute and deliver indentures supplemental to this Indenture for the following purposes: (a) To make any change which shall not materially adversely affect the interests of the registered owners of the Bonds; 0)) To cure any defect, omission, conflict or ambiguity in this Indenture, including, without limitation, any cure made in order to comply with the Law, the Refunding Bond Act, the 1954 Code, the Code or the Trust Indenture Act of 1939; waL:17646~1(RED:17480~3~T0:_17480~2)109~B2062.14 82 08/l l/94 (4 To grant to or confer upon the Trustee for the benefit of the registered owners of the Bonds any additional rights, remedies, powers, authority or security which may lawfully be granted or conferred and which are not contrary to or inconsistent with this Indenture as theretofore in effect; Cd) To add to the covenants and agreements of the Commission in this Indenture, other covenants and agreements to be observed by the Commission which are not contrary to or inconsistent with this Indenture as theretofore in effect; (e) To add to the limitations and restrictions in this Indenture, other limitations and restrictions to be observed by the Commission which are not contrary to or inconsistent with this Indenture as theretofore in effect; (0 To confirm, as further assurance, any pledge under this Indenture, and the subjection to any claim, lien or pledge created or to be created by this Indenture of the revenues arising from the pledge of any moneys, securities, funds or other parts of the Trust Estate; (g) To make any change requested by the Credit Facility Issuer other than a change requiring the consent of Bondholders under Section 12.3(a) hereof; 01) To evidence the substitution of, or to comply with the requirements of any Alternate Security or Alternate Liquidity Facility, or to evidence a permitted sale or transfer of the Project other than a change requiring the consent of Bondholders under Section 12.3(a) hereof; 0) To make any change which, in the opinion of Bond Counsel, is required to preserve the exclusion from gross income for federal income tax purposes of interest on the Bonds; 0) To facilitate the discharge of the lien of this Indenture pursuant to Article XIII hereof; 00 To comply with the existing provisions of the Credit Facility or the Liquidity Facility; (1) To subject to this Indenture additional revenues, properties or collateral; 0-4 To evidence the succession of a new Trustee, Purchase Agent or Paying Agent hereunder or to provide for a Co-Paying Agent or Co-Registrar in addition to the Trustee; or 0-9 To modify, alter, amend or supplement this Indenture in any other respect (including without limitation, a modification, alteration, amendment or supplement that otherwise would be permitted only as described in Section 12.3) (i) on any date of mandatory purchase of Bonds under Section 4.5(b) or (c) hereof, or (ii) during any Short Term Rate Period if not less than thirty days before the effective date of the modification, alteration, amendment or supplement, the Trustee sends notice of the 83 OS/l 1194 proposed modification, alteration, amendment or supplement to the Bondholders and the Bondholders have the right to tender their Bonds before such effective date or (iii) if the effective date of the modification, alteration, amendment or supplement corresponds with the effective date of a remarketing of all Outstanding Bonds such that the purchasers of the remarketed Bonds have been sent notice of such modification, alteration, amendment or supplement prior to their purchase of Bonds. Section 12.3. Consent of Bondholders. (a) Subject to the terms and provisions contained in this Section 12.3 and Sections 12.05 and 12.09 and not otherwise, in addition to supplements or amendments not requiring Bondholder consents under Section 12.2 hereof, the registered owners of not less than a majority of the aggregate principal amount of Bonds then Outstanding shall have the right from time to time to consent to and approve the execution and delivery by the Commission and the acceptance by the Trustee of any supplemental indenture as shall be approved by the Commission and the Liquidity Facility Issuer (while its Liquidity Facility is in effect and it is not in default thereunder) and the Credit Facility Issuer for the purposes of modifying, altering, amending, adding to or rescinding, in any particular, any of the terms or provisions contained in this Indenture. Except as provided in Section 12.2(n) above, nothing in this Indenture shall permit, or be construed as permitting without the consent of the registered owners affected by such change (i) a change in the times, amounts or currency of payment of the principal of, premium, if any, or interest on, or Purchase Price of, any Outstanding Bond, or a reduction in the principal amount or redemption price, or a change in the dates or terms of redemption of any Outstanding Bond or the rate of interest thereon (other than changes in any terms permitted by Section 4.1(a)(i) hereof with respect to changes in optional redemption provisions on a Conversion Date), or (ii) the creation of a claim or lien upon the proceeds of a claim or draw under the Credit Facility or the Liquidity Facility payable to the registered owners of Bonds with respect to which such claim or draw shall be in accordance with this Indenture, or (iii) the creation of a preference or priority of any Bond or Bonds over any other Bond or Bonds, or (iv) any change which in the opinion of Bond Counsel will adversely affect the exclusion from gross income for federal income tax purposes of interest on the Bonds, or (v) a reduction of the aggregate principal amount of the Bonds required for consent under this Indenture. The foregoing shall not limit the right of the Commission to make any amendment permitted under Section 12.6 hereof. 0) If at any time the Commission and the Trustee shall determine to execute and deliver any supplemental indenture for any of the purposes of this Section 12.3, the Trustee shall cause notice of the proposed supplemental indenture to be sent by first class mail to registered owners of the Bonds at their respective addresses shown on the registration books kept by the Trustee. Such notice shall briefly set forth the nature of the proposed supplemental indenture and shall state that a copy thereof is on file at the office of the Trustee for inspection by all registered owners of Bonds. (cl Within two years after the date of such notice or at such other period as is specified in such notice, the Commission may execute and deliver and the Trustee may accept and execute such supplemental indenture in substantially the form described in such notice only if 84 OS/l l/94 there shall have first been filed with the Trustee (i) the written consents of Holders of not less than a majority in aggregate principal amount of the Bonds Outstanding at the time of such execution, (ii) the opinions required by Section 12.9, and (iii) the approvals required by Section 12.5. A written consent by any registered owner of any Bond executed on or subsequent to the date of such notice shall be binding upon any subsequent registered owner of such Bond. Cd) If the registered owners of not less than the percentage of Bonds required by this Section 12.3 shall have consented to and approved the adoption thereof as herein provided, no registered owner of any Bond shall have any right to object to the execution, delivery and acceptance of such supplemental indenture, or to object to any of the terms and provisions contained therein or the operation thereof, or in any manner to question the propriety of the adoption thereof, or to enjoin or restrain the Commission from adopting the same or from taking any action pursuant to the provisions thereof. 63 The Trustee may, with respect to any approval or consent to be given by the Holders of all or any portion of the Bonds, establish a special record date with respect to such action by notice to the Bondholders who may give such consent or approval. Any instrument or instruments signed by the registered Holders as set forth in the Bond Register at the end of business on any such special record date in accordance with the provisions of this Section 12.3 shall be sufficient for the purposes of this Indenture and shall be conclusive in favor of the Commission and the Trustee with respect to any actions taken in connection therewith. Section 12.4. Efect of Supplemental Indenture. Upon the execution, delivery and acceptance of any supplemental indenture pursuant to the provisions of this Article XII, this Indenture shall be, and be deemed to be, modified, amended or supplemented in accordance therewith, and the respective rights, duties and obligations under this Indenture of the Commission, the Trustee and all registered owners of Bonds then Outstanding shall be thereafter determined, exercised and enforced under this Indenture subject in all respects to such modifications and amendments. Section 12.5. Required Consents. Anything herein to the contrary notwithstanding, any supplemental indenture under this Article XII shall not become effective unless and until the Owner (as long as no default or event of default under and as defined in any of the First Deed of Trust Documents shall have occurred and be continuing), the Liquidity Facility Issuer (during a Short Term Rate Period and as long as the Liquidity Facility Issuer is not in default under the Liquidity Facility) and the Credit Facility Issuer shall have approved the same in writing. Notwithstanding anything to the contrary contained in this Article XII, the Trustee shall not be required to enter into or consent to any amendment, supplement, change or modification of or to the Indenture, the Loan Agreement, any other First Deed of Trust Document, or any other document or agreement executed in connection therewith if, in the sole judgment of the Trustee, its duties, obligations, liabilities, indemnities, protections or its rights or the interests of the Bondholders will be materially adversely affected hereunder or thereunder. Section 12.6. Consent to Mod@cations of First Deed of Trust Documents and Related Documents. Without the consent of or notice to the registered owners of the Bonds, the Trustee, the Commission, the Owner and the Credit Facility Issuer may enter into any modification or amendment of the Loan Agreement, any First Deed of Trust Document and any other document relating to or affecting the Loan, and may consent to any such modification or amendment, PlJBL:17646~t~D:17480~3~T0:~17480~2)109~t32062.14 85 08111194 provided that such modification or amendment is made (i) for the purpose of curing any ambiguity, conflict, defect or omission in such document, (ii) in connection with any permitted sale or transfer of the Project to a new owner by the Owner or any foreclosure sale or transfer in lieu of foreclosure or any other sale or transfer, (iii) in accordance with the Regulatory Agreement and the Intercreditor Agreement, (iv) in accordance with Section 2.6 of the Loan Agreement, (v) in connection with any author&d supplement or amendment to this Indenture, (vi) in connection with the issuance of an Alternate Security or Alternate Liquidity Facility, (vii) in connection with any other change therein requested by the Credit Facility Issuer which does not fall within the scope of a change described in the second paragraph of Section 12.3(a) or (viii) at any time that the Indenture may be amended pursuant to Section 12.2(n) hereof; provided that in each case the Commission and the Trustee receive an opinion of Bond Counsel in a form acceptable to the Commission, the Trustee and the Credit Facility Issuer to the effect that such amendment will not adversely affect the exclusion from gross income for federal income tax purposes of interest on the Bonds; provided, further, that, as long as no Event of Default has occurred and is continuing hereunder, neither the Trustee nor the Commission shall enter into any modification or amendment of any First Deed of Trust Document or any other instrument or document relating to or affecting the Loan, or consent to any such modification or amendment, or grant any consent or waiver thereunder without the express written consent of the Credit Facility Issuer. Notwithstanding any provision of this Indenture or any other document to the contrary, neither the Trustee nor the Commission shall approve or accept any amendment of or modification to the Credit Facility or the Liquidity Facility without first receiving written confirmation from the Rating Agency or Rating Agencies whose rating of the Bonds is then in effect that each such rating will remain in effect. Section 12.7. Amendments of Remarketing Agreement. Without the consent of or notice to Bondholders, the Commission, the Owner or the Trustee, and the Remarketing Agent, with the prior written consent of the Credit Facility Issuer and the Liquidity Facility Issuer (during any Short Term Rate Period), may consent to any document amending, changing or modifying of the Remarketing Agreement, and shall deliver a copy of such document to the Commission and the Trustee. Section 12.8. Notice to Rating Agencies. The Trustee shall immediately notify each Rating Agency if any of the following events occur: (i) the termination, amendment or endorsement of the Credit Facility or the Liquidity Facility, (ii) the replacement of the Credit Facility with an Alternate Security, (iii) the replacement of the Liquidity Facility with an Alternate Liquidity Facility, (iv) any amendments to this Indenture or the Loan Agreement, (v) any mandatory purchase of Outstanding Bonds, (vi) any change in the Trustee or the Remarketing Agent, or (vii) the final redemption or defeasance of the Bonds. Notwithstanding the foregoing, it is expressly understood and agreed that failure to provide any such notice to any Rating Agency or any defect therein will not affect the validity of any action with respect to which notice is to be given or the effectiveness of any such action. Section 12.9. Opinions of Counsel. The Trustee may obtain, and shall be fully protected in relying upon, an opinion of counsel as conclusive evidence that any supplemental indenture or any amendment to any document executed pursuant to the provisions of this Article is authorized and permitted by this Indenture. No supplemental Indenture or amendment to any document referred to in this Article shall be effective until the Commission and the Trustee shall have received an opinion of Bond Counsel to the effect that such supplemental indenture or such PusL:17646~1(RED:17480~3~T0:_17480~2)109~B2062.14 86 08/l 1194 amendment will not adversely affect the exclusion of interest on the Bonds from gross income for federal income tax purposes. Section 12.10. Certificate of Owner. In connection with any amendment to the Indenture or any other document requested by the Owner, the Trustee and the Commission may obtain and shall be fully protected in relying upon a certificate of the Owner to the effect that, as of the date of such certificate, the Owner and the Project are in compliance with all requirements of the Loan Agreement and the Regulatory Agreement (with such exceptions as shall be acceptable to the Commission in its sole discretion). Section 12. II. Notation of Modification on Bonds: Preparation of New Bonds. Bonds authenticated and delivered after the execution of any supplemental indenture pursuant to the provisions of this Article may bear a notation, in form approved by the Trustee and the Commission, as to any matter provided for in such supplemental indenture, and if such supplemental indenture shall so provide, new Bonds, so modified as to conform, in the opinion of the Trustee and the Commission, to any modification of this Indenture contained in any such supplemental indenture, may be prepared by the Commission, authenticated by the Trustee and delivered without cost to the Holders of the Bonds then Outstanding, upon surrender for cancellation of such Bonds in equal aggregate principal amounts. Section 12.12. Modjkation of the Tax Certificate. The Tax Certificate may be amended or modified without the consent of or notice to the Bondholders in accordance with the Tax Certificate. ARTICLE XIII DISCHARGE OF INDENTURE Section 13. I. Discharge. (a) The Commission may discharge its obligations under this Indenture and satisfy its obligations to make payments due and owing on the Bonds pursuant to the provisions of this Section 13.1. @I If and when the whole amount of the principal, premium, if any, and interest due and payable upon all of the Bonds shall be paid from Eligible Money, or provision shall have been made for the payment of the same from Eligible Money, and when all other sums payable hereunder and under the Loan Agreement and the First Deed of Trust Documents are paid in full, then and in that case, the right, title and interest of the Trustee in and to the Trust Estate, including all covenants, agreements and other obligations of the Commission, the Credit Facility Issuer, the Liquidity Facility Issuer and the Owner to the Bondholders shall thereupon cease, terminate and become void and be discharged and satisfied including any right of any mandatory redemption of the Bonds pursuant to the terms of this Indenture or the Bonds, including, without limitation, Section 4.1(c)(3) hereof. In such event, provided that such payment is from Eligible Money or (i) one year, if the Owner is a corporation and if the Credit Facility Issuer owns any corporate stock of the Owner, or (ii) 91 days if the Credit Facility Issuer has no ownership interest in the Owner, shall have elapsed following the last payment made on the Bonds from a source other than Eligible Money during which period no Event of Bankruptcy PUBL:17646~l(RED:17480~3~TO:~t7480~2)t09~B2062.t4 87 08/l 1194 shall have occurred, the Trustee shall release and return the Credit Facility to the Credit Facility Issuer marked “cancelled and discharged,” and the Trustee shall deliver any other separate releases and discharges of the Credit Facility requested by the Credit Facility Issuer to evidence the Trustee’s release and discharge of the Credit Facility, and shall assign and convey all rights in the Trust Estate, first, to the Credit Facility Issuer, to the extent and under the conditions specified in Section 9.12(d) hereof, and, second, to the Owner. The Trustee shall execute such documents as may be reasonably required to effect such assignments and transfers. There shall be deemed to be such payment or provision for the same when (a) there has been placed in escrow or in trust with a trust company or bank located within or without the State, Eligible Money in an amount sufficient (as certified by an independent certified public accountant, if required by the Commission or the Trustee) (including the known minimum yield available without reinvestment for such purpose from non-callable Government Securities in which such amount wholly or in part may be initially invested) to meet all requirements of the Outstanding Bonds, as the same become due at the final maturities of the Bonds or upon any Redemption Date and (b) the Trustee and the Commission receive an opinion of Bond Counsel to the effect that such deposit (1) does not adversely effect the exclusion from gross income for federal income tax purposes of interest on the Bonds, and (2) will effect a discharge of this Indenture in accordance with the terms hereunder. The Government Securities shall become due prior to the respective times on which the proceeds thereof shall be needed, in accordance with a schedule established and agreed upon between the Trustee, the Commission, the Credit Facility Issuer and the Owner at the time of the creation of the escrow or trust, or the Government Securities shall be subject to redemption at the option of the Holders thereof to assure such availability as so needed to meet such schedule. Nothing herein shall operate as a discharge of, or empower the Trustee to discharge, any of the Credit Facility Issuer’s rights hereunder or under the First Deed of Trust Documents. Any redemption of the Bonds under this Article XIII shall take place on or prior to the last Business Day of the then current interest rate period. Anything herein to the contrary notwithstanding, the provisions of this Article shall not become effective during any Short Term Rate Period unless the Trustee shall have received a letter from the Rating Agency by which the Bonds are then rated confirming that the rating then in effect for the Bonds will not be lowered by reason of such defeasance. Section 13.2. Trustee’s Rights Reserved. Any discharge under this Article XIII shall be without prejudice to the right of the Trustee to be paid reasonable compensation for all services rendered by it hereunder. ARTICLE XIV MISCELLANEOUS Section 14. I. Successors of the Commission. In the event of the dissolution of the Commission, all the covenants, stipulations, promises and agreements contained in this Indenture by or on behalf of, or for the benefit of, the Commission, shall bind or inure to the benefit of the successors of the Commission from time to time and any entity, governing body, board, commission, issuer or instrumentality to whom or to which any power or duty of the Commission shall be transferred. In the event no successor shall exist, then all rights and duties of the Commission may be exercised and fulfilled by the Trustee, but the Trustee shall be under no obligation to exercise and fulfil1 such rights and duties. PUBL: t 7646-t (RED: 17480~3~TO:~17480~2)1~ 1 B2062.14 88 08/l 1194 Section 14.2. Purpose; Exclusive Benefit. Except as herein otherwise specifically provided, nothing in this Indenture expressed or implied is intended or shall be construed to confer upon any Person other than the Commission, the Trustee, the registered owners of the Bonds, the Credit Facility Issuer, the Liquidity Facility Issuer and the Owner, any right, remedy or claim under or by reason of this Indenture, this Indenture being intended to be for the sole and exclusive benefit of such parties. Section 14.3. Severability. In case any one or more of the provisions of this Indenture or of the Bonds, for any reason, is held to be illegal or invalid, such illegality or invalidity shall not affect any other provisions of this Indenture or the Bonds, and this Indenture and the Bonds shall be construed and enforced to the end that the transactions contemplated hereby be effected and the obligations contemplated hereby be enforced as if such illegal or invalid provisions had not been contained therein. Section 14.4. No Personal Liability or Accountability. No covenant or agreement contained in the Bonds or in this Indenture shall be deemed to be the covenant or agreement of any present, past or future member, director, officer, official, agent or employee of the Commission, the Trustee or the Purchase Agent in his or her individual capacity, and neither the members or directors of the Commission, any official of the Commission or the Trustee or the Purchase Agent nor any official executing the Bonds shall be liable personally on the Bonds or be subject to any personal liability or accountability by reason of the issuance thereof. Section 14.5. Notices. Any notices, certificates or other communications required or permitted hereunder to the following parties shall be in writing and shall be deemed sufficiently given or served for all purposes when presented personally or sent by registered or certified mail return receipt requested or by private courier service, postage or charges prepaid: if to the Trustee, First Trust of California, National Association 101 California Street, Suite 1150 San Francisco, California 94111 Attention: Multifamily Housing Group if to the Owner, Seascape Apartments, Inc. c/o Continental Casualty Company CNA Plaza Chicago, Illinois 60685 Attention: Vice President with a copy to Continental Casualty Company CNA Plaza Chicago, Illinois 60685 Attention: Corporate Secretary and Continental Casualty Company CNA Plaza Chicago, Illinois 60685 Attention: Senior Vice President/General Counsel PueL:l7646~t(RED:17480~3~TO:~17480~2)109~B2062.14 89 08/l 1194 if to the Credit Facility Issuer or to the Liquidity Facility Issuer, with a copy to if to the Commission, if to the Remarketing Agent, if to the Purchase Agent, Continental Casualty Company CNA Plaza Chicago, Illinois 60685 Attention: Senior Vice President/General Counsel Continental Casualty Company CNA Plaza Chicago, Illinois 60685 Attention: Corporate Secretary Carlsbad Housing and Redevelopment Commission 2965 Roosevelt Road Carlsbad, California 92008 Attention: Housing and Redevelopment Director A.G. Edwards & Sons, Inc. One North Jefferson Avenue St. Louis, Missouri 63103 Attention: Municipal Bond Department First Trust of California, National Association c/o IBJ Schroeder Bank and Trust One State Street New York, New York 10014 Attention: Securities Transfer Department or at such other address as shall be furnished in writing by such party or the Liquidity Facility Issuer, if any. Notices sent by registered or certified mail or by private courier service shall be deemed to have been given if and when received (unless the addressee refuses to accept delivery in which case they shall be deemed to have been given when first presented to the addressee for acceptance). Section 14.6. Governing Law. The substantive laws of the State of California shall govern the construction of this Indenture and of all Bonds issued hereunder. Section 14.7. Execution in Counterparts. This Indenture may be executed in any number of counterparts, each of which, when so executed and delivered, shall be an original, but such counterparts shall together constitute but one and the same Indenture, and in making proof of this Indenture, it shall not be necessary to produce or account for more than one such counterpart. Section 14.8. Rights of Credit Facility Issuer and Liquidity Facility Issuer. Notwithstanding anything contained in this Indenture to the contrary, all rights of the Credit Facility Issuer or the Liquidity Provider, respectively, to request, direct, consent or approve matters under this Indenture shall be suspended for such period of time as the Credit Facility Issuer or the Liquidity Provider, as applicable, remains in default under the Credit Facility or the Liquidity Facility, as applicable, or if the Credit Facility or the Liquidity Facility, as applicable, has been repudiated. PusL:t7646~1(RED:17480~3~T0:_17480~2)109~B2062.t4 90 08/l 1194 IN WITNESS WHEREOF, the Carlsbad Housing and Redevelopment Commission has caused these presents to be signed in its name and behalf by its Chairman and its corporate seal to be hereunto affixed and attested by its Secretary, and First Trust of California, National Association, to evidence its acceptance of the trusts hereby created has caused these presents to be signed in its name and on its behalf and the same to be attested by its duly authorized officer, all as of the date first above written CARLSBAD HOUSING AND REDEVELOPMENT COMMISSION Chairman ATTEST: By: Secretary FIRST TRUST OF CALIFORNIA, NATIONAL ASSOCIATION, as Trustee By: Authorized Officer ATTEST: By: Authorized Officer PUBL:17646~1(RED:17480~3~T0:~17480~2)109~B2062.14 91 08/l 1194 The undersigned as the Remarketing Agent designated to act under the foregoing Indenture hereby acknowledges receipt of an executed counterpart thereof and accepts its appointment as Remarketing Agent and agrees to perform the duties imposed upon it under the foregoing Indenture. Dated: , 1994 A.G. EDWARDS & SONS, INC. By: Title: 92 08/l 1194 The undersigned, First Trust of California, National Association, hereby agrees to perform its obligations as Registrar, as Purchase Agent and as Paying Agent pursuant to the terms and provisions of this Indenture. Dated: , 1994 FIRST TRUST OF CALIFORNIA, NATIONAL ASSOCIATION Author&xl Officer 93 08/l l/94 APPENDIX A Table of Contents Definitions ................................................. “Administrative Expenses” ....................................... “Administrative Expenses Account” ................................. “Affiliate” or “Affiliated Party” .................................... “Agreement” or “Loan Agreement” ................................. “Alternate Liquidity Facility” ..................................... “Alternate Security” ........................................... “Appurtenant Rights” .......................................... “Assignment” ............................................... “Authorized Denomination” ...................................... “Author&d Representative” ...................................... “Awards” ................................................. “Bankruptcy Code” ........................................... “Beneficial Owner” ........................................... “Bonds” .................................................. “Bond Counsel” ............................................. “Bondholder n or “Holder ” or “registered owner ” ......................... “Bond Proceeds Fund” ......................................... “Bond Purchase Agreement” ...................................... “Bond Purchase Fund” ......................................... “Bond Register” ............................................. “Bond Resolution” ............................................ Page A-l A-l A-l A-l A-l A-l A-2 A-2 A-2 A-2 A-2 A-2 A-2 A-2 A-2 A-2 A-2 A-3 A-3 A-3 A-3 A-3 PUBL:17646~t(RED:17480_3_T0:_17480~2)109~FS2062.14 A - i 08/l l/94 “Business Day” .............................................. A-3 “Call Lock Period” ........................................... A-3 “Claim” .................................................. A-3 “Closing Date” .............................................. A-3 “Code” ................................................... A-3 “Collateral” ................................................ A-3 “Commission” .............................................. A-3 “Commission Consent”, “Commission Order”, and “Commission Request” ......... A-3 “Commission Documents” ....................................... A-4 “Commercial Paper Rate” ....................................... A-5 “Commercial Paper Rate Period” ................................... A-4 “Computation Date” ..................................... . ..... A-4 “Conversion Date” ............................................ A-4 “Credit Facility” ............................................. A-4 “Credit Facility Amendment” ..................................... A-4 “Credit Facility Issuer” ......................................... A-4 “Credit Facility Issuer Bonds” ..................................... A-4 “Credit Facility Rate” .......................................... A-4 “Credit Facility Rating Requirement” ................................ A-4 “Credit Facility Replacement Date” ................................. A-4 “Credit Facility Substitution Date” .................................. A-4 “Daily Rate” ............................................... A-5 “Default” ................................................. A-5 “Deficiency” ............................................... A-5 PUBL:17646~l(RED:t7480~3~TO:~l7480~2)t09~B2062.14 A - ii 08/l l/94 “Determination Date” .......................................... A-5 “Determination of Taxability n ..................................... A-5 “Developer” ................................................ A-5 “Eligible Investments” .......................................... A-5 “Eligible Money” ............................................ A-6 “Escrow Agreement” .......................................... A-6 “Event of Bankruptcy” ......................................... A-6 “Event of Default” ............................................ A-7 “Event of Default” ............................................ A-7 “Event of Default” ............................................ A-7 “Excluded Bondholder” ......................................... A-7 “Expiration Date” ............................................. A-7 “Extraordinary Expenses” and “Extraordinary Services” .................... A-7 “Final Maturity Date” .......................................... A-7 “Financing Documents” ......................................... A-7 “First Deed of Trust” .......................................... A-7 “First Deed of Trust Documents” ................................... A-7 “Fixed Rate” ............................................... A-7 “Fixed Rate Period” ........................................... A-8 “Government Securities” ........................................ A-8 “Granted Property” ........................................... A-8 “Highest Lawful Rate” ......................................... A-8 “Improvements” ............................................. A-8 “Indenture” ................................................ A-8 PUBL:l7646_t(RED: t7480~3~T0:~17480~2)109~B2062.14 A - iii 08/l l/94 uInsurance Policies” ........................................... Ynsurance Proceeds” .......................................... “Intercreditor Agreement” ....................................... “Interest Account” ............................................ “Interest Payment Date” ........................................ “Interest Period” ............................................. “Land” ................................................... L(Law” ................................................... “Legal Requirements” .......................................... “Lien” or “lien” ............................................. “Liquidation Act” ............................................ “Liquidity Agreement” or “Liquidity Facility Agreement” .............. _ ..... “Liquidity Facility” ........................................... “Liquidity Facility Amendment” ................................... “Liquidity Facility Rate” ........................................ “Liquidity Facility Rating Requirement” ............................... “Liquidity Facility Replacement Date” ................................ “Liquidity Facility Substitution Date” ................................ “Liquidity Facility Issuer” ....................................... “Liquidity Facility Issuer Bonds” ................................... “Liquidity Surety Bond” ........................................ “Loan” ................................................... A-8 A-8 A-8 A-8 A-8 A-8 A-8 A-8 A-8 A-9 A-9 A-9 A-9 A-9 A-9 A-9 A-9 A-9 A-10 A-10 A-10 A-10 PUBL:17646~1(RED:17480~3~T0:_17480~2)109~B2062.14 A - iv 08/l 1194 “Maximum Legal Rate of Interest” . . . . . . . . , . . . . . . . . . . . . . . . . . . . . . . . . . A-10 “Maximum Rate” . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-10 “Mechanics Liens” . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-10 “Moody’s” . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-10 “MonthlyRate” . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-10 “NetProceeds” . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-10 “1954 Code” . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-10 “Note” or “Secured Note” . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-10 “NotePayments” . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-10 “Outstanding” or “outstanding” . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-10 “Owner” . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-11 “OwnerBonds”.............................................. A-l 1 “Owner Documents” . . . . . . . . . . , . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-12 “Owner Event of Default” . . . , . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-12 “Participants” . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-12 “Paying Agent” . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-12 puBL:17646~1(RED:17480~3~T0:_17480~2)109~B2062.14 A-v 08/l 1194 “Permitted Encumbrances” . . . . . . . . . . . . . . . . . , . . . . . . . . . . . . . . . . . . . . . A-12 “Person” or &person” . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-12 “Personal Property” . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-12 “Premiums” . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-12 “Principal Account” . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-12 “Principal Office” . . . . . . . . . . . . . . . , . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-12 “Prior Bonds” . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-12 “Prior Deed of Trust Documents” . . . . . . . . . . . . . , . . . . . . . . . . . . . . . . . . . . A-12 “Prior First Deed of Trust” . . . , . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-12 “Prior Indenture” . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-12 “PriorLoan” . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-12 “Prior Loan Agreement” . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-12 “Prior Note” . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-12 “Prior Reimbursement Agreement” . . . . . . . . . , . . . . . . . . . . . . . . . . . . . . . . . . A-12 “Prior Second Deed of Trust” . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-13 “Prior Surety Bond” . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-13 !‘uBL:17646~1(RED:17480~3~T0:~17480~2)109~ES2062.14 A - vi 08/l 1194 “PriorTrustee” . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-13 “Project” . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-13 “Project Loan Fund” . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-13 “Project Revenues” . . . . . . . . . . . . . . . , . . . . . . . . . . . . . . . . . . . . . . . . . . . A-13 “Purchase Agent” . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-13 “Purchase Date” . . . i . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-13 “Purchase Price” or “purchase price” . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-13 Y&irter” . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-13 “Quarterly Rate” . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-13 “Rating Agency” . . . . . . . . . . . . . . . . . . . . . . . . . . . , . . . . . . . . . . . . . . . . . A-13 “Rebate Requirement” . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-13 “Rebate Fund” . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-13 “Record Date” . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-13 “Redemption Account” . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-13 “Redemption Date” . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-13 1 “Refunding Bond Act” . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-13 PueL:17646~1(RED:17480~3~T0:_17480~2)109~B2062.14 A - vii OS/l II94 “Registrar” . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-14 “Regulatory Agreement” . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-14 “Regulations” . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . , . . . . . . . . . . . . . . . . A-14 “Reimbursement Agreement” . . . . . . . . . . . . . . . . . . . , . . . . . . . . . . . . . . . . . A-14 “Remarketing Agent” . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-14 “Remarketing Agreement” . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-14 “Remarketing Date” . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-14 “Responsible Officer” . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-14 “Restoration” . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-14 “Revenue Fund” . . . . . . . . . . . . . . . . . . . . . . , . . . . . . . . . . . . . . . . . . . . . . A-14 “Second Deed of Trust” . . . . . . . . . . . . . . . . . . . . . . . . . . , . . . . . . . . . . . . . A-14 “Second Deed of Trust Documents” . . . . . . . . . . . . . . . . . . . . , . . . . . . . . . . . . A-15 “Securities Depository” . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-15 “Semi-Annual Rate” . . . . . . . . . . . . . . . . . . . , . . . . . . . . . . . . . . . . . . . . . . . A-15 “Short Term Rate” . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-15 “Short Term Rate Period” . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-15 “Six Month Period” . . . . . . . . . . . . . . . . . , . . . . . . . . . . . . . . . . . . . . . . . . . A-15 PuBL:17646~1(RED:17480~3~T0:_17480~2)109~B2062.14 A - viii 08/l 1194 “S&P” . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-15 “State” . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-15 “Surety” . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-15 “Surety Bond” . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-15 “Taxes” . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-15 “Tender Notice” . . . : . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-15 “Termination Date” . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-15 “Trust Estate” . . . . . . . . . . . . . . . . . . . , . . . . . . . . . . . . . . . . . . . . . . . . . . . A-15 “Trustee” . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-15 “Trustee’s Expenses” . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-16 “TrusteeTime”.............................................. A-16 “Undelivered Bonds” . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-16 “Unit” . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-16 “WeeklyRate” . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-16 ~u~~:17646~1(RED:17480_3_T0:_17480~2)109~B2062.14 A - ix 08/11194 APPENDIX A DEFINITIONS For all purposes of any document defined in this Appendix A: (a) All references in a document designated “Section,s” and other subdivisions are to the designated Sections and other subdivisions of that document as originally executed and delivered. The words “herein”, “hereof”, “hereto”, “hereby n and “hereunder n in a document, and other words of similar import as used therein, refer to that document as a whole and not to any particular Section or other subdivision. (b) All defined terms shall include the plural as well as the singular. (cl All references in a document to any other document defined in this Appendix A shall be deemed to include all supplements and amendments to any such document entered into in accordance with the terms thereof and, if applicable, the terms of the Agreement, the Indenture, and the Intercreditor Agreement. For purposes of the document to which this Appendix A is attached, the following defined terms shall have the following meanings: “Administrative Expenses n means the Commission’s Expenses, the Trustee’s Expenses, and, if other than the Trustee, all other fees and expenses of the Paying Agent, the Purchase Agent and the Registrar. “Administrative Expenses Account” means the trust account established and so designated under Section 5.6 of the Indenture. “AJiliate D or “Afiliated Party” means (i) a Person whose relationship with the Owner or the Developer would result in a disallowance of losses under Section 267 or 707(b) of the Code, (ii) a Person who together with the Owner are members of the same controlled group of corporations (as defined in Section 1563(a) of the Code, except that “more than 50 percent” shall be substituted for “at least 80 percent” each place it appears therein), (iii) a partnership and each of its partners (and their spouses and minor children) whose relationship with the Owner would result in a disallowance of losses under Section 267 or 707(b) of the Code and (iv) an S corporation and each of its shareholders (and their spouses and minor children) whose relationship with the Owner would result in a disallowance of losses under Section 267 or 707(b) of the Code. “Agreement” or “Loan Agreement” is the Loan Agreement dated as of September 1, 1994 between the Commission and the Owner, as amended and supplemented. “Alternate Liquidity Facility” means any guaranty agreement, letter of credit, bond insurance policy, standby funding or bond purchase agreement, surety bond or other arrangement substituted for the Liquidity Facility or the Alternate Liquidity Facility then in effect which Alternate Liquidity Facility complies with Section 2.12 of the Indenture and which is delivered to mL:17646~1(RED:17480~3~T0:_17480~2)109~B2062.14 A-l 08/l l/94 the Trustee accompanied by evidence of satisfaction of the requirements of Section 2.12(c) of the Indenture or Section 2.12(d) of the Indenture in the case of a Liquidity Facility Amendment. The term “Alternate Liquidity Facility” shall include any Liquidity Facility Amendment delivered pursuant to Section 2.12(d) of the Indenture. To the extent that the then current Credit Facility qualifies as a Liquidity Facility, and the Credit Facility Issuer provides a written statement to the Trustee that such Credit Facility shall also be deemed a Liquidity Facility, “Alternate Liquidity Facility ” shall refer to those portions of the Credit Facility that so qualify. “Alternute Security” means any Credit Facility (other than the Surety Bond) which complies with Section 2.11 of the Indenture and which is delivered to the Trustee accompanied by evidence of the satisfaction of the requirements set forth in Section 2.1 l(c) of the Indenture, or Section 2.11(d) of the Indenture in the case of a Credit Facility Amendment. The term “Alternate Security” shall include any Credit Facility as extended by a Credit Facility Amendment which complies with the provisions of Section 2.1 l(d) of the Indenture. “Appurtenant Rights” is defined in the First Deed of Trust. “Assignment” means the Assignment of First Deed of Trust Documents dated as of September 1, 1994 from the Commission to the Trustee. “Authorized Denomination” means denominations of $100,000 and any integral multiple thereof during any Short Term Rate Period (except that one Bond may be issued in the denomination of 2 $115.000) and in denominations of $5,000 or any integral multiple thereof during any Fixed Rate Period. UAuthorized Representative” means any Person or Persons at the time designated to act on behalf of the Owner by written certificate furnished to the Commission, the Trustee, the Liquidity Facility Issuer (while the Liquidity Facility remains in effect) and the Credit Facility Issuer containing the specimen signature of such Person or Persons and signed on behalf of the Owner by the President, any Vice President or any Assistant Secretary of the Owner (if the Owner is a corporation) or by a general partner of the Owner (if the Owner is a partnership). The Owner may change an Author&d Representative at any time by filing a certificate aforesaid. “Awards” is defined in the First Deed of Trust. “Bankruptcy Code” means the United States Bankruptcy Code or any other applicable federal bankruptcy statutes. “Benejicial Owner n means the beneficial owner of an interest in the Bonds as shown on the records of the Securities Depository or its Participants. “Bonds” is defined in the twelfth paragraph of the Recitals to the Indenture. “Bond Counsel” means a firm of attorneys of nationally recognized standing in matters pertaining to the tax status of interest on bonds issued by states and their political subdivisions selected by the Commission and duly admitted to the practice of law before the highest court of any state of the United States or the District of Columbia. 08/l 1194 “Bondholder I or “Holder * or “registered owner n means the Person in whose name any Bond is registered at the time of reference on the Bond Register. “Bond Proceeds Fund” means a temporary closing fund established and so designated under Section 5.1 of the Indenture. “Bond Purchase Agreement n means the Bond Purchase Agreement among the Commission, the Owner and A.G. Edwards & Sons, Inc. “Bond Purchase Fund n means a fund established and so designated under Section 5.1 of the Indenture. “Bond Register” is defined in Section 2.6 of the Indenture. “Bond Resolutiop” means the resolution of the Commission authorizing the issuance and delivery of the Bonds. “Bond Year” means the period beginning on September 1 l3, 1994 and ending on September fi l2, 1995, and each one year or shorter period thereafter, beginning on September 1 IJ, until Bonds are no longer outstanding. “Business Day m means any day other than a Saturday, Sunday or a day when banks are authorized or required to be closed under the laws of the state or states where the respective Principal Offices of the Trustee, any Purchase Agent or the Remarketing Agent are located or the state or states in which are located the offices of the Credit Facility Issuer and the Liquidity Facility Issuer at which claims or draws under the Credit Facility and Liquidity Facility, if any, may be made, and on which the New York Stock Exchange is not scheduled to be closed. “CizZZ Lock Period n has the meaning set forth in Section 4.1 of the Indenture. “Claim n means any claim for payment on the Surety Bond or any Alternate Security. “CZosing Date” means the date on which the Trustee first authenticates and delivers the Bonds, or September 2 l3, 1994. “Code” means the Internal Revenue Code of 1986, as amended, together with corresponding and applicable final, temporary or proposed regulations and revenue rulings issued or amended with respect thereto by the United States Treasury Department or Internal Revenue Service of the United States. “Collateral” is defined in the First Deed of Trust. “Commission” is defined in the first paragraph of the Indenture and the Loan Agreement. “Commission Consent -, “Commission Order “, and “Commission Request n mean, respectively, a written consent, order, or request signed in the name of the Commission by the Chairman and delivered to the Trustee. ~u~~:17646~1(RED:17480~3~T0:~17480~2)109~B2062.14 A-3 OS/l l/94 “Commission Documents” means the Indenture, the Loan Agreement, the Assignment, the Bond Purchase Agreement, the Remarketing Agreement, the Escrow Agreement, the First Deed of Trust Documents, the Intercreditor Agreement and the Regulatory Agreement. “Ckwnmission ‘s Expenses n means the amounts payable to the Commission pursuant to Section 4.9 of the Loan Agreement. “Commercial Paper Rate” means the interest rate on the Bonds set under Section 3.3(f) of the Indenture. “Commercial Paper Rate Period * means with respect to any Bond, the period (which may be from 15 to 270 days) determined as provided in Section 3.3(f) of the Indenture. “Conversion Date” means the (i) effective date of a change in the method of determining the interest rate on the Bonds from a Fixed Rate to a Short Term Rate or from a Short Term Rate to a Fixed Rate or another Short Term Rate and (ii) the effective date of the reset of a Fixed Rate to a new rate or rates for a new Fixed Rate Period of the same or different duration. “Credit Facility n means the Surety Bond or any Alternate Security. To the extent the Credit Facility is also a Liquidity Facility, the term “Credit Facility” shall not include those provisions that constitute the Liquidity Facility. “Credit Facility Amendment” is defined in Section 2.1 l(d) of the Indenture; “Credit Facility Issuer N is defined in the Recitals to the Indenture. To the extent that the Credit Facility Issuer is also the Liquidity Facility Issuer, the term “Credit Facility Issuer” shall refer to such Person solely in its capacity as issuer of the Credit Facility. “Credit FaciZity Issuer Bonds m means Bonds owned by the Credit Facility Issuer (or an Affiliate of the Credit Facility Issuer), including Bonds owned by the Liquidity Facility Issuer when the Liquidity Facility Issuer is the same entity as, or an Affiliate of, the Credit Facility Issuer. “Credit Facility Rate W is defined in the form of Bond attached as Exhibit A to the Indenture. “Credit Facility Rating Requirement” means that the delivery of the Credit Facility will result in the Bonds bearing a long-term rating of not lower than A from S&P (if S&P then rates the Bonds) or A from Moody’s (if Moody’s then rates the Bonds), and that, to the best knowledge of a responsible officer of the Credit Facility Issuer, the Credit Facility Issuer is not then under credit review (with negative implications) by the Rating Agency. In the event a Rating Agency other than Moody’s or S&P has been appointed as provided herein, the foregoing requirement shall be deemed to refer to the most nearly equivalent rating issued by such Rating Agency. “Credit FaciZity RepZucement Date” means the Interest Payment Date prior to expiration of a Credit Facility. ~~~~:17646~1(RED:17480~3~T0:_17480~2)109~ B2062.14 A - 4 08/11/94 “Credit Facility Substitution Date n means the date specified as the effective date of a proposed Alternate Security in the notice required by Section 2.1 l(c) of the Indenture in the event the Credit Facility is being replaced prior to its stated expiration. “Daily Rate n means an interest rate on the Bonds set under Section 3.3(a) of the Indenture. “Default * means the occurrence of any Event of Default under a document, or the occurrence of any event or condition which with the lapse of time or giving of notice, or both, would become an Event of Default thereunder. “Deficiency n is defined in the Surety Bond or in the Liquidity Facility, as the context requires. “Determination Date” with respect to each Short Term Rate and the Fixed Rate, is defined in Section 3.3(a) of the Indenture. “Detemhution of Taxability” means a judgment or order of a court of competent jurisdiction which is final (either because the time for appeal thereof has expired or because the judgment or order is issued by a court having final appellate jurisdiction over the matter and is not subject to collateral attack), or a notice of deficiency, ruling or decision of the Internal Revenue Service which is final (because no action has been taken to cause such ruling or decision to be administratively or judicially reviewed and the time for taking such action has expired), in any case as a result of a proceeding in which the Owner and/or the Credit Facility Issuer and/or the Commission had an opportunity to participate (to the extent such participation is allowed by law), to the effect that the interest on the Bonds is includable for federal income tax purposes in the income of any recipient thereof subject to federal income taxes, except during such period as the Bonds are owned by a “substantial user n of the Project or a “related person, n within the meaning of Section 147(a) of the Code, which final determination of taxability was based upon a determination that there was a failure to comply with the provisions of Section 103(b)(4)(A) of the 1954 Code relating to the use of the Prior Bond proceeds or the provisions of the Regulatory Agreement relating to the occupancy of completed units in the Project, or based upon a determination that a violation of Section 148 of the Code has occurred. “Developer” is defined in the Recitals, “Eligible Investments” means any of the following which at the time are legal investments for fiduciaries under the laws of the State for moneys held hereunder which are then proposed to be invested therein: (a) Government Securities; (b) bonds, debentures, notes or other evidences of indebtedness issued by any of the following: Bank for Cooperatives; Federal Intermediate Credit Banks; Federal Home Loan Banks; Export-Import Bank of the United States; federal land banks; Federal National Mortgage Association; Government National Mortgage Association; Federal Financing Bank; Small Business Administration; or any other agency or instrumentality of the United States of America, created by an Act of Congress, substantially similar to the foregoing in its legal relationship to the United States of America; provided that no investment shall be made in obligations of the type described in this clause (b) which does not constitute a full faith and credit obligation of the United States of America without the prior approval of the Credit Facility Issuer; (c) interest-bearing time or demand deposits, certificates of deposit, or PUBL:17646~1(RED:17480~3~T0:~17480~2)109~B2062.14 A - 5 08/l 1194 other similar banking arrangements (including deposits or arrangements with the Trustee or its affiliates), provided that the deposits are fully insured by the Federal Deposit Insurance Corporation, and that the depository institution as of its latest published report of condition prior to any such investment has a combined capital, surplus and undivided profits of at least $25,000,000; (d) contracts for the purchase and sale of obligations which are Eligible Investments as described in (a) or (b) above, provided that if the parties with which the contracts are made are not members of the Federal Reserve System, or if the parties, including members of the Federal Reserve System, will not agree to set aside and otherwise identify, to the satisfaction of the Credit Facility Issuer, the obligations described in (a) and (b) above covered by such contracts as security or reserve therefor in an amount at least equal to the face value of such contract, then the obligations shall be delivered to and held by the Trustee during the term of the contracts; (e) one or more investment contracts approved by the Credit Facility Issuer with one or more financial institutions approved by the Credit Facility Issuer and having a credit rating of one of the three highest credit ratings available by a nationally recognized rating agency and as of its latest published report of condition prior to any such investment a combined capital, surplus and undivided profits of at least $25,000,000; (I) tax-exempt municipal bonds qualifying for exemption from the arbitrage rebate requirements of Section 148 of the Code; and (g) tax-exempt money market funds or U.S. Treasury obligation funds (or comparable funds comprised of Government Securities). All such obligations or securities (or, as to (d) or (e) above, the contracts for purchase and sale, but not necessarily the underlying obligations or securities or investment contracts) shall mature no later than the date the proceeds thereof shall be required for payments under the Indenture, unless otherwise directed by the Credit Facility Issuer. “Eligible Money” means (a) original proceeds of the Prior Bonds and the Bonds held in any fund or account under the Indenture, together with investment earnings on such proceeds; (b) money paid by the Owner to the Trustee pursuant to the Loan Agreement, together with investment earnings on such moneys, if, at the time of such payment and, thereafter, (i) for a period of at least one year, if the Owner is a partnership or if the Credit Facility Issuer or the Liquidity Facility Issuer owns any corporate stock of the Owner, no Event of Bankruptcy relating only to the Owner has occurred, or (ii) for a period of at least 91 days, no Event of Bankruptcy shall have occurred; (c) proceeds of the sale by the Remarketing Agent of the Bonds to purchasers other than the Owner or the Commission; (d) money received by the Trustee from the Liquidity Facility Issuer as a payment under the Liquidity Facility to the extent that such money is not furnished by and does not come into the possession of the Owner; (e) money received by the Trustee from the Credit Facility Issuer as a payment under the Credit Facility or otherwise; (f) proceeds of bonds issued for the purpose of refunding the Bonds, together with investment earnings on such proceeds, provided that such proceeds are paid directly to the Trustee for the benefit of the Holders of the Bonds and do not come into the possession of or under the control of the owner and provided that the Trustee has received an unqualified opinion of counsel experienced in bankruptcy matters to the effect that payment of such amounts to Bondholders would not be preferential payments as defined in Section 6.1(g) of the Indenture; and (g) money which is derived from any other source if the Trustee has received an unqualified opinion of counsel experienced in bankruptcy matters to the effect that payment of such amounts to Bondholders would not be preferential payments as defined in Section 6.1(g) of the Indenture; provided that under all circumstances above, if the Owner is also the Credit Facility Issuer, any moneys paid by the Owner shall automatically be deemed Eligible Money. ~u~~:17646~1(RED:17480_3_T0:_17480~2)109~B2062.14 A - 6 OS/l l/94 “Escrow Agreement” means the Escrow Agreement dated as of September 2 13, 1994 among the Trustee, the Prior Trustee, the Suretv. the Owner and the Commission. “Event of Bankruptcy” means the filing of a petition by or against the Owner under the United States Bankruptcy Code or any other bankruptcy or similar act of the United States or any state which may now or hereafter be enacted, which is not dismissed pursuant to a final court order not subject to appeal. “Event ofDefault” as used in the Indenture means any Event of Default specified in Section 9.1 of the Indenture. “Event of Default” as used in the Loan Agreement means any Event of Default specified in Section 7.1 of the Agreement. “Event of Default” as used in the First Deed of Trust Documents (other than the Loan Agreement) means any Event of Default specified in Section 18 of the First Deed of Trust. “Excluded Bondholder” means any one or more of the following Persons: the Owner, the Commission, any Affiliate of either of them (of which fact the Trustee shall have written notice) and the Credit Facility Issuer to the extent that it is a Bondholder pursuant to its rights of subrogation or otherwise pursuant to the Credit Facility, the Indenture or the Liquidity Facility. “Expiration Date n means, with respect to the Surety Bond, December 15, 1995, as that date may be extended, or any other date on which any Alternate Security expires pursuant to the terms thereof. “Extraordinary Expenses n and “Extraordinary Services n means services performed by, or as applicable, expenses incurred by the Commission or the Trustee which services or expenses, as applicable, are rendered or incurred in addition to the normal and reasonable services or expenses of such party; provided such additional services or expenses are reasonable and not attributable to any negligence or willful misconduct of the Commission or the Trustee. “Final Maturity Date” means ^ December 1, 2005. “Financing Documents” means the Indenture, the First Deed of Trust Documents and the Second Deed of Trust Documents. “First Deed of Trust n means that certain First Deed of Trust, Assignment of Rents and Security Agreement dated as of September 1, 1994, from the Owner to a trustee for the benefit of the Commission and the Credit Facility Issuer, securing the obligations of the Owner under the Loan Agreement, the Note and the Reimbursement Agreement, granting a first priority mortgage lien on and security interest in the Project and collaterally assigning all leases, rents and profits inuring from or in connection with the Project, together with all amendments and supplements thereto. “First Deed of Trust Documents m means, collectively, the Note, the Loan Agreement, the First Deed of Trust, the Reimbursement Agreement, all financing and continuation statements filed to perfect the liens and security interests granted thereby, the Assignment and all other PUBL:17646~1(RED:17480~3~T0:~17480~2)109~B2062.14 A - 7 OS/l 1194 documents, instruments and agreements executed and delivered by the Owner to evidence or secure the obligations of the Owner under the Note, the Loan Agreement and the Reimbursement Agreement (other than the Second Deed of Trust Documents) as such documents, instruments and agreements may be amended and supplemented from time to time, but not including the Regulatory Agreement. “Fixed Rate n means an interest rate on the Bonds set under Section 3.3(g) of the Indenture. “Fired Rate Period” is defined in Section 3.3(g) of the Indenture. “Government Securities” means direct obligations of the United States of America and obligations the timely payment of which is fully guaranteed by the full faith and credit of the United States of America, including securities or receipts evidencing ownership interests in obligations or specified portions (such as principal or interest) of such obligations. “Granted Property” means all property now or hereafter encumbered or covered by the liens and security interests created by the First Deed of Trust Documents, including, without limitation, the land, buildings, fixtures, equipment, personal property, leases, rents and profits constituting or inuring from the Project (excluding leased personal property). “Highest Lawful Rate” means the highest lawful rate of interest allowed to be paid on the Bonds from time to time by law now in effect or, to the extent allowed by law, such higher lawful rate as may be hereafter in effect. “Zmprovements” is defined in the First Deed of Trust. “Indenture n means the Indenture of Trust between the Commission and the Trustee dated as of September 1, 1994, together with any amendments or supplements thereto. “Insurance Policies” is defined in the First Deed of Trust. “Znsurance Proceeds fl is defined in the First Deed of Trust. “Intercreditor Agreement” is defined in the Recitals to the Indenture. “Interest Account n means a trust account within the Revenue Fund established and so designated under Section 5.3 of the Indenture. “Interest Payment Date” is defined in the 2 form of Bond attached to the Indenture as Exhibit A. A. - “Interest Period” is defined in the 2 form of Bond attached to the Indenture as Exhibit “Lund” is defined in the First Deed of Trust. waL:17646~1(RED:17480~3~T0:~17480~2)109)B2062.14 A-8 08/I 1 J94 “Lawn means Chapter 1 of Part 2 of Division 24 of the California Health and Safety Code, as supplemented and amended. “Z,egaZ Requirements n means all laws, statutes, codes, ordinances, orders, judgments, decrees, injunctions, rules, regulations, permits, licenses, authorizations, directions and requirements of, and agreements with, all governments, departments, commissions, boards, courts, authorities, agencies, officials and officers, foreseen or unforeseen, ordinary or extraordinary, and any restrictions or agreements of record, including without limitation the Loan Agreement, which now or at any time hereafter may be applicable to the Granted Property or any part thereof, or any of the adjoining sidewalks, vaults and vault space, if any, streets or rights-of-way, or any use or condition of the Granted Property or any part thereof or any Persons from time to time employed thereon or occupants thereof or any activity thereat or business conducted therefrom; including, but without limiting the generality of the foregoing, all zoning, building, land use, noise abatement, occupational health and safety and other governmental requirements relating to health, safety, welfare and environmental protection. “Lien ” or “lien n means any interest in the Granted Property or any part thereof or any right therein, including without limitation any of the Project Revenues and proceeds therefrom, securing an obligation owed to, or claimed by, any Person, whether such interest is based on the common law, statute or contract, and including but not limited to the lien and security interest lien arising from a mortgage, deed of trust, encumbrance, pledge, conditional sale or trust receipt or a lease, consignment or bailment for security purposes; and the term “lien” shall also include any and all reservations, exceptions, encroachments, easements, rights of way, covenants, conditions, restrictions, leases and other title exceptions and encumbrances affecting the Granted Property or any part thereof or any interest therein. “Liquidation Act” means the Uniform Insurers Liquidation Act as enacted in the State of Illinois at Section 833.1 through 833.13 of the Illinois Insurance Code (Ill. Rev. Stat. 1985 ch. 73, par. 833.1-833.13), as amended. “Liquidity Agreement” or “Liquidity Facility Agreement” means the agreement between the Owner and the Liquidity Facility Issuer pursuant to which the Liquidity Facility has been issued and/or pursuant to which the Owner agrees to reimburse the Liquidity Facility Issuer for any amounts paid under the Liquidity Facility. “Liquidity FaciZity ” means any guaranty agreement, letter of credit, bond insurance policy, standby funding or bond purchase agreement, surety bond or other arrangement which complies with Section 2.12 of the Indenture and any Alternate Liquidity Facility. “Liquidity Facility Amendment” is defined in Section 2.12(d) of the Indenture. “Liquidity Facility Rate” is defined in the form of Bond attached as Exhibit A to the Indenture. “Liquidity Facility Rating Requirement” means that the delivery of the Liquidity Facility will result in the Bonds bearing a short-term rating of not lower than A-l from S&P (if S&P then rates the Bonds) or MIG2 from Moody’s (if Moody’s then rates the Bonds) and that, to the best knowledge of a responsible officer of the Liquidity Facility Issuer, the Liquidity Facility Issuer is PUBL:17646~1(RED:17480~3~T0:~17480~2)109~ B2062.14 A - 9 08/I 1194 not then under credit review (with negative implications) by the Rating Agency. In the event a Rating Agency other than Moody’s or S&P has been appointed as provided herein, the foregoing requirement shall be deemed to refer to the most nearly equivalent rating issued by such Rating Agency. “Liquidity Facility Replacement Date” means the Interest Payment Date prior to expiration of a Liquidity Facility. “Liquidity Facility Substitution Date’ means the date specified as the effective date of a proposed Alternate Liquidity Facility in the notice required by Section 2.12(c) of the Indenture in the event the Liquidity Facility is being replaced prior to its stated expiration. =Liquidity Facility Issuer” is defined in the Recitals to the Indenture. “Liquidity Facility Issuer Bonds” means Bonds owned by the Liquidity Facility Issuer (or an Affiliate of the Liquidity Facility Issuer) or its successors and assigns pursuant to the Liquidity Facility. “Liquidity Surety Bond” is defined in the Recitals to the Indenture. “Loan” means the mortgage loan originated by the Commission to the Owner in the amount of ^ $15.115.000. “Maximum Legal Rate of Znterest” is defined in Section 4.7 of the Agreement. “Maximum Rate” means the lower of (i) the Highest Lawful Rate, (ii) the maximum rate of interest, if any, provided for in the then current Credit Facility, and (iii) the maximum rate of interest, if any, provided for in the then current Liquidity Facility. “Mechanics Liens” is defined in the First Deed of Trust. “Moody’s ” means Moody’s Investors Service, a corporation organ&d and existing under the laws of the State of Delaware, its successors and assigns, and, if such corporation shall for any reason no longer perform the functions of a securities rating agency, “Moody’s ” shall be deemed to refer to any other nationally recognized rating agency designated by the Credit Facility Issuer 1. “Monthly Rate” means an interest rate on the Bonds set under Section 3.3(c) of the Indenture. Wet Proceeds” is defined in the First Deed of Trust. “1954 Code” means the Internal Revenue Code of 1954, as amended, as in effect on the day before the date of enactment of the Tax Reform Act of 1986, together with corresponding and applicable final, temporary or proposed regulations and revenue rulings issued or amended with respect thereto by the Treasury Department or Internal Revenue Service of the United States. ~~~~:17646~1(RED:17480~3~T0:~17480~2)109~B2062.14 A - 10 OS/l l/94 “Note n or “Secured Note n means the Secured Note executed by the Owner evidencing the Owner’s obligations under the Loan Agreement. “Note Payments” is defined in Section 4.2(a) of the Loan Agreement. “Outstmding m or “outstanding n means, when used with reference to Bonds, as at any particular date, the aggregate of all Bonds authenticated and delivered under the Indenture, except: (a) subject to the provisions of Sections 2.7(b) and (c) of the Indenture, Bonds cancelled or surrendered to the Trustee for cancellation at or prior to such date and Bonds for which replacement Bonds have been issued pursuant to Section 2.6 or Section 2.9 of the Indenture; 0) subject to the provisions of Sections 2.7(b) and (c) of the Indenture, Bonds for the redemption of which moneys or Government Securities shall have been theretofore deposited with the Trustee or otherwise provided under the Indenture; provided that notice of such redemption shall have been given as provided in Article IV of the Indenture or provisions satisfactory to the Trustee shall have been made therefor; (cl subject to the provisions of Sections 2.7(b) and (c) of the Indenture, Undelivered Bonds; Cd) subject to the provisions of Sections 2.7(b) and (c) of the Indenture, Bonds for the payment of which moneys or Government Securities shall have been theretofore deposited as provided under the Indenture in an amount equal to the principal amount thereof and interest thereon to maturity or earlier redemption in accordance with Article XIII of the Indenture; and 69 subject to the provisions of Sections 2.7(b) and (c) of the Indenture, Bonds otherwise paid or deemed to be paid in accordance with the Indenture. In determining (i) whether the Holders of a requisite aggregate principal amount of Outstanding Bonds have concurred in any request, demand, authorization, direction, notice, consent or waiver under the provisions of the Indenture or (ii) whether a Default has occurred under Section 9.1(a) of the Indenture, Bonds which are owned by the Owner, the Credit Facility Issuer, the Liquidity Facility Issuer, the Commission, or any Affiliate of any of them shall be disregarded and deemed not to be Outstanding hereunder for the purpose of any such determination, unless, in the case of a determination for purposes of (i) above, all Bonds are owned by the Owner and/or by the Credit Facility Issuer and/or the Commission and/or the Liquidity Facility Issuer and/or by one Affiliate thereof, respectively, in which case all such Bonds owned by one such Person shall be considered Outstanding for the purpose of such determination or unless, in the case of a determination for purposes of (ii) above, the Credit Facility Issuer gives written notice to the Trustee that such Bonds should be deemed Outstanding for purposes of Section 9.1 of the Indenture. Bonds purchased by the Owner, the Credit Facility Issuer or the Liquidity Facility Issuer pursuant to tenders by the Holders thereof or in lieu of redemption will continue to be PUBL:17646~1(RED:17480~3~T0:~17480~2)109~B2062.14 A- 11 08/l 1194 Outstanding until the Credit Facility Issuer or the Owner, with the prior written consent of the Credit Facility Issuer, directs the Trustee to cancel them. Undelivered Bonds are not Outstanding, but there will be Outstanding Bonds authenticated and delivered in lieu of such Undelivered Bonds as provided in Section 2.9(d) of the Indenture. “Owner” means Seascape Apartments, Inc., an Illinois corporation, provided that from and after any transfer of the Project by foreclosure under the First Deed of Trust or the Second Deed of Trust or other transfer or sale, the Person succeeding to the ownership of the Project shall be the Owner for all purposes of the Indenture and the First Deed of Trust Documents and the Second Deed of Trust Documents from and after the date of such Person’s acquisition and so long as such Person owns the Project. “Owner Bonds n means Bonds owned by the Owner, or any Affiliate of the Owner. “Owner Documents” means the Loan Agreement, the First Deed of Trust Documents, the Second Deed of Trust Documents, the Remarketing Agreement, the Bond Purchase Agreement, the Regulatory Agreement, and all other documents or agreements executed by the Owner in connection with the foregoing documents or the Bonds. “Owner Event of Default” is defined in Section 3.4(b) of the Indenture. “Participants” shall mean broker-dealers, banks and other financial institutions and other Persons for whom, from time to time, the Securities Depository effects book-entry- transfers and pledges of securities deposited with the Securities Depository. *Paying Agent” means the Trustee or any other Paying Agent and any successor thereto appointed in accordance with Section 10.16 of the Indenture. “Permitted Encumbrances” is defined in the First Deed of Trust. “Person n or “person n means one or more, as applicable, natural person, partnership, corporation or other legally constituted entity. “Personal Propeny” is defined in the fifth granting clause of the First Deed of Trust. “Premiums” is defined in Section 1 of the First Deed of Trust. “Principal Account” means a trust account within the Revenue Fund established and so designated under Section 5.3 of the Indenture. “Principal @Yce I means the office or offices designated as such by the respective party in writing to the Commission, the Owner, the Trustee, the Credit Facility Issuer, the Liquidity Facility Issuer, the Remarketing Agent and the Purchase Agent. Initially, such offices shall be the offices designated in Section 14.5 of the Indenture. “Prior Bonds” is defined in the Recitals to the Indenture. ~~~~:17646~1(RED:17480~3~T0:_17480~2)109~B2062.14 A - 12 OS/I 1194 “Prior Deed of Trust Documents n means the Prior First Deed of Trust and the Prior Second Deed of Trust. “Prior First Deed of Trust n is defined in the Recitals to the Indenture. “Prior Indenture” is defined in the Recitals to the Indenture. #Prior Loan n means the loan of the proceeds of the sale of the Prior Bonds by the Commission to the Prior Owner as evidenced by the Prior Note and the Prior Loan Agreement. “Prior Loan Agreement n is defined in the Recitals to the Indenture. “Prior Note” is defined in the Recitals to the Indenture. “Prior Reimbursement Agreement n is defined in the Recitals to the Indenture. “Prior Second Deed of Trust” is defined in the Recitals to the Indenture. “Prior Surety Bond” is defined in the Recitals to the Indenture. “Prior Trustee” is defined in the Recitals to the Indenture. “Project” means the 208~unit multifamily housing project known as “Seascape Village” located in the City of Carlsbad and as more fully described in Exhibit A to the Loan Agreement. “Project Loan Fund” means the trust fund established and so designated under Section 5.9 of the Indenture. “Project Revenues” is defined in the seventh granting clause of the First Deed of Trust. “Purchase Agent n means the entity appointed under Section 10.17 of the Indenture or any successor thereto appointed in accordance with Section 10.17 of the Indenture. “Purchase Date” means any day on which Bonds are to be purchased pursuant to Section 4.5(a), (b) or (c) of the Indenture. *Purchase Price n or “purchase price n means the price at which Bonds are to be purchased pursuant to (i) optional tenders during a Short Term Period pursuant to Section 4.5(a) of the Indenture, (ii) mandatory tenders pursuant to Section 4.5(b) of the Indenture, or (iii) purchases in lieu of redemption pursuant to Section 4.5(c) of the Indenture, as the context requires. *Quarter n means three full calendar months commencing on the first day of a month and continuing through and including the last day of the third calendar month. “Quarterly Rate m means an interest rate on the Bonds set under Section 3.3(d) of the Indenture. ~~~~:17646~1(RED:17480~3~T0:_17480~2)109~B2062.14 A - 13 08/l 1194 “Rating Agency” means Moody’s and/or S&P, and their successors and assigns, as long as each of them is then rating the Bonds. “Rebate Fund” is defined in Section 5.8 of the Indenture. “Record Date * is defined in the fi form of Bond attached to the Indenture as Exhibit A E& “Redemption Account” means the account within the Revenue Fund established and so designated under Section 5.4 of the Indenture. “Redemption Date” means any date fixed by the Trustee as a date upon which Bonds are to be redeemed prior to their stated maturity. “Refunding Bond Act” means Article 11 of Chapter 3 of Part 1 of Division 2 of Title 5 of the California Government Code. “Registrar” means the entity designated under Section 10.17 of the Indenture or any successor thereto appointed in accordance with Section 10.17 of the Indenture. “Regulatory Agreement n means the Regulatory Agreement and Declaration of Restrictive Covenants dated as of April 1, 1985 by and among the Commission, the Developer and the Prior Trustee, as amended and restated by the Amended and Restated Regulatory Agreement and Declaration of Restrictive Covenants dated as of September 1, 1994, by and among the Commission, the Owner and the Trustee. “Regulations” means the applicable proposed, temporary or final income tax regulations promulgated pursuant to Sections 103 or 141-150 of the 1954 Code or the Code, as such regulations may be amended or supplemented from time to time and as such regulations are applicable to the Bonds. “Reimbursement Agreement” means (i) the Reimbursement Agreement, dated as of September 1, 1994, between the Owner and the Surety pursuant to which the Owner agrees to reimburse or pay the Surety or (ii) any agreement entered into by a Credit Facility Issuer in connection with a Credit Facility, in each case including all amendments and supplements thereto. “Remarketing Agent” means the entity appointed in accordance with Section 10.18 of the Indenture and any successor appointed pursuant thereto, which is initially Newman and Associates, Inc. “Remarketing Agreement” means that certain Remarketing Agreement dated as of September 1, 1994 between the Remarketing Agent and the Owner. “Remarketing Date” means each Purchase Date. “Reserved Rights” means those certain rights of the Commission under the Loan Agreement to indemnification and to payment or reimbursement of fees and expenses of the Commission, including payments under Sections 4.2(d), 4.9, 6.1 and 7.5 thereof, its right to ~~~~:17646~1(RED:17480~3~TO:~17480~2)109~B2062.14 A - 14 08/l 1194 enforce notice and reporting requirements and restrictions on transfer of ownership, its right to inspect and audit the books, records and premises of the Owner and of the Project, its right to collect attorneys’ fees and related expenses, its right to enforce the Owner’s covenant to comply with applicable federal tax law and State law (including the Law and the rules of the Commission), and its right to receive notices thereunder and to grant or withhold approvals or consents. “Responsible UJker” means, when used with respect to the Trustee or the Purchase Agent, the President, any Vice President, any Assistant Vice President or Trust Officer of the Trustee or the Purchase Agent, but in each case only if such person is working at the Principal Office of the Trustee or the Purchase Agent. “Restoration” is defined in the First Deed of Trust. “Revenue Fund” means the trust fund established and so designated under Section 5.1 of the Indenture. “Second Deed of Trust” means that certain Second Deed of Trust, Assignment of Rents and Security Agreement dated as of September 1, 1994, granted by the Owner to a trustee for the benefit of the Credit Facility Issuer, securing the obligations of the Owner under the Reimbursement Agreement, granting a second priority mortgage on and security interest in and to the Project and collaterahy assigning all leases, rents and profits inuring from or in connection with the Project, together with all supplements and amendments thereto. “Second Deed of Trust Documents” means, collectively, the Second Deed of Trust, the Reimbursement Agreement, and all financing and continuation statements filed to perfect the liens and security interests granted thereby and all other documents, instruments and agreements executed and delivered by the Owner to evidence or secure the obligations under the Reimbursement Agreement (other than the First Deed of Trust Documents) as such documents, instruments and agreements may be amended or supplemented from time to time. “Securities Depository” means The Depository Trust Company and its successors and assigns, or any other securities depositary which agrees to follow the procedures required to be followed by a securities depositary in connection with the Bonds and which is selected by the Owner, with the prior written consent of the Credit Facility Issuer, or by the Credit Facility Issuer, with notice to the Commission, the Trustee, the Purchase Agent and the Remarketing Agent, in the event that (i) the current Securities Depository resigns from its functions as depositary of the Bonds or (ii) the use of the Securities Depository is discontinued pursuant to Section 2.13 of the Indenture. “Semi-Annual Rate n means an interest rate on the Bonds set under Section 3.3(e) of the Indenture. “Short Term Rate m means the Daily, Weekly, Monthly, Quarterly, Semi-Annual or Commercial Paper Rate. “Short Term Rate Period” means any period when interest on the Bonds is calculated at a Short Term Rate. PUBL:17646~l(RED:l7480~3~TO:~17480~2)109~B2062.14 A- 15 08/11/94 “Six Month Period” means six full calendar months commencing on the first day of a month and continuing through and including the last day of the sixth calendar month. “S&P” means Standard & Poor’s Ratings Group, a corporation organized and existing under the laws of the State of New York, its successors and assigns, and, if such corporation shall for any reason no longer perform the functions of a securities rating agency, “S&P” shall be deemed to refer to any other nationally recognized securities rating agency designated by the Credit Facility Issuer with the approval of the Commission (in its sole and absolute discretion), the Owner, the Liquidity Facility Issuer, if any, and the Remarketing Agent. “State” means the State of California. “Surety” is defined in the Recitals to the Indenture. “Surety Bond” is defined in the Recitals to the Indenture. “Tax Cert@cate” means that certain Tax Certificate executed by the Commission on the Closing Date. “Taxes” is defined in the First Deed of Trust. “Tender Notice” is defined in Section 4.6 of the Indenture. “Termination Date n means, with respect to the Credit Facility or the Liquidity Facility, as applicable, the date of expiration or termination thereof in accordance with its terms. “Trust Estate n means all of the moneys, properties and rights described in Clauses A through E of the Granting Clauses of the Indenture. “Trustee” is defined in the first paragraph of the Indenture. “Trustee’s Expenses M means the compensation and expenses payable to the Trustee as follows: (a) an amount equal to the acceptance fee set forth in a separate letter agreement, and the administration fee of the Trustee, as Trustee, Registrar and Paying Agent under the Indenture in the amount set forth in a separate letter agreement payable semiannually in advance for the ordinary services of the Trustee rendered and its ordinary expenses (except attorneys’ fees) incurred under the Indenture during each semiannual period; 0) the reasonable attorneys’ fees and charges incurred by the Trustee in connection with its ordinary services rendered under the Indenture, and the reasonable fees and charges of the Trustee for necessary Extraordinary Services rendered by it and Extraordinary Expenses incurred by it under the Indenture as and when the same become due, including reasonable counsel fees and expenses (including fees and expenses at trial or appellate proceedings); PUBL:17646~1(RED:17480~3~T0:~17480~2)109~B2062.14 A- 16 08/l 1194 provided, that the Owner may, without creating a default under the Loan Agreement or the Indenture, contest in good faith the necessity for any such Extraordinary Services and Extraordinary Expenses and the reasonableness of any such fees, charges or expenses, provided that to the extent required by Section 10.3 of the Indenture the Owner shall place in escrow with the Trustee the amount in contest. “Trustee Time n means, as of any date, the time then in effect in the city in which the Trustee (or the Purchase Agent in connection with the procedures relating to tenders of Bonds for purchase) is located for the transaction of business between banks in accordance with applicable Clearing House Rules which may mean daylight savings time, and initially means California time. “Undelivered Bonds” means all Bonds that shall be deemed delivered on any Remarketing Date pursuant to Article IV of the Indenture. “Unit” means an accommodation containing separate and complete facilities for living, sleeping, eating, cooking, and sanitation. 3VeekZy Rate n means an interest rate on the Bonds set under Section 3.3(b) of the Indenture. PUBL:17646~1(RED:17480~3~T0:~17480~2)109~l32062.14 A - 17 08/l l/94 EXHIBIT A FORM OF BOND The text of the Bonds, and the authentication certificate of the Trustee to be printed thereon shall be, respectively, in substantially the following form: No. $ CARLSBAD HOUSING AND REDEVELOPMENT COMMISSION MULTI-FAMILY HOUSING REVENUE REFUNDING BONDS (SEASCAPE - VILLAGE PROJECT) SERIES A OF 1994 Issue Date: Maturity Date: Interest Rate Mode: CUSIP No.: , 1994 Registered Owner: Principal Amount: The Carlsbad Housing and Redevelopment Commission, a public body corporate and politic organized and existing under the laws of the State of California (the “Commission”), for value received, hereby promises to pay, solely from the sources and in the manner hereinafter provided, to the Registered Owner identified above, or registered assigns, on the Maturity Date specified above (or if this Bond is called for earlier redemption as described herein, on the Redemption Date), the Principal Amount specified above and to pay interest on such Principal Amount on the Interest Payment Dates and at the rate or rates provided in this Bond, until the Maturity Date or earlier redemption of this Bond. Capitalized terms not otherwise defined herein shall have the meanings ascribed to them in the hereinafter defined Indenture. .The principal of and premium, if any, on this Bond shall be payable in lawful money of the United States of America, without exchange or collection charges, upon presentation and surrender of this Bond at the Principal Office of First Trust of California, National Association, as Trustee, or any successor trustee (the “Trustee”). Except as otherwise provided herein, interest will be paid to the registered owner hereof as of the Record Date by check mailed to such registered owner’s registered address, except that a registered owner of $l,OOO,OOO or more in principal amount of Bonds may be paid interest at a Daily, Weekly, Monthly, Quarterly, Semi-Annual or Fixed Rate by wire transfer to an account in the continental United States if such registered owner makes a written request of the Trustee at least 15 days before the Record Date specifying the account address. Interest at the Commercial Paper Rate will be made only upon A - 1 08/l l/94 presentation and surrender of the Bond for purchase to the Trustee or other Purchase Agent. While a Securities Depository is the registered owner of Bonds, all payments of principal of, premium, if any, and interest on such Bonds shall be paid by wire transfer to the Securities Depository. The Bonds have been issued under and pursuant to the provisions of Article 11 of Chapter 3 of Part 1 of Division 2 of Title 5 of the California Government Code (the “Refunding Bond Act”), and pursuant to an Indenture of Trust, dated as of September 1, 1994, (as amended and supplemented, the “Indenture”) by and between the Commission and the Trustee. REFERENCE IS HEREBY MADE TO THE FURTHER PROVISIONS OF THIS BOND SET FORTH ON THE REVERSE HEREOF, AND SUCH FURTHER PROVISIONS SHALL FOR ALL PURPOSES HAVE THE SAME EFFECT AS IF SET FORTH AT THIS PLACE. THE BONDS ARE LIMITED OBLIGATIONS OF THE COMMISSION PAYABLE SOLELY FROM THE TRUST ESTATE PLEDGED UNDER THE INDENTURE, INCLUDING PAYMENTS MADE UNDER THE CREDIT FACILITY. THE BONDS ARE NOT A DEBT OF THE COMMISSION, THE CITY OF CARLSBAD, THE STATE OF CALIFORNIA OR ANY POLITICAL SUBDIVISION THEREOF WITHIN THE MEANING OF ANY CONSTITUTIONAL OR STATUTORY DEBT LIMITATION. NEITHER THE FAITH AND CREDIT, NOR THE TAXING POWER OF THE COMMISSION, THE CITY OF CARLSBAD, THE STATE OF CALIFORNIA OR ANY POLITICAL SUBDIVISION THEREOF ARE PLEDGED FOR THE PAYMENT OF THE BONDS; NOR IN ANY EVENT SHALL THE BONDS BE PAYABLE OUT OF ANY FUNDS OR PROPERTIES OTHER THAN THOSE OF THE COMMISSION SPECIFICALLY PLEDGED THEREFOR. This Bond shall not be valid or become obligatory for any purpose or be entitled to any security or benefit under the Indenture until the certificate of authentication hereon shall have been duly executed by or on behalf of the Registrar under the Indenture. It is hereby certified and recited that all acts and conditions required to be performed precedent to and in the execution and delivery of the Indenture and the issuance of this Bond have been performed in due time, form and manner as required by law and that the issuance of this Bond does not exceed or violate any Constitutional or statutory limitation of the State of California. 08/11/94 IN WITNESS WHEREOF, the Carlsbad Housing and Redevelopment Commission has caused this Bond to be executed in its name by the facsimile signature of its Chairman and its corporate seal or a facsimile thereof to be impressed or printed hereon and attested by the facsimile signature of its Secretary. CARLSBAD HOUSING AND REDEVELOPMENT COMMISSION By: Chairman Attest: By: Secretary Registrar’s Certificate of Authentication This Bond is one of the Bonds described in the within mentioned Indent& and has been authenticated this date: , . FIRST TRUST OF CALIFORNIA, NATIONAL ASSOCIATION, as Registrar By: Author&d Signatory PUBL:17646~1(RED:17480~3~T0:~17480~2)109~B2062.14 A _ 3 08/I 1194 meverse Pages Begin Here] 1. Indenture; Loan Agreement. This Bond is one of the Carlsbad Housing and Redevelopment Commission Multifamily Housing Revenue Refunding Bonds, Series A of 1994 (Seascape Village Project) (the “Bonds”), limited to 2 $15,115.000 in principal amount, issued under the Indenture of Trust dated as of September 1, 1994, between the Commission and the Trustee (the “Indenture”). Reference is hereby made to the Indenture (a copy of which is on file at the Principal Office of the Trustee) and all indentures supplemental thereto and to the Refunding Bond Act for a description of the rights thereunder of the registered owners of the Bonds, of the nature and extent of the security, of the rights, duties and immunities of the Trustee and of the rights and obligations of the Commission thereunder, to all the provisions of which Indenture the registered owner of this Bond, by acceptance hereof, assents and agrees. The Commission will loan the proceeds of the Bonds to Seascape Apartments, Inc., an Illinois corporation (together with its successors and assigns, the “Owner”), pursuant to a Loan Agreement dated as of September 1, 1994 between the Commission and the Owner. The Bonds are being issued to refund the Carlsbad Housing and Redevelopment Commission Multifamily Housing Revenue Bonds, Series 1985B (Seascape Village Project) (the “Prior Bonds”) which were issued to finance the acquisition and construction of a multifamily rental housing development in the City of Carlsbad, California (the “Project”). 2. Interest Determination. Interest on this Bond will be paid at the lesser of (a) the Daily Rate, Weekly Rate, Monthly Rate, Quarterly Rate, Commercial Paper Rate, Semi-Annual Rate, Fixed Rate or Liquidity Facility Rate, whichever interest rate mode is then in effect, as determined in accordance with the Indenture, or (b) the Maximum Rate. Interest initially will be payable at the Weekly Rate. While there exists an Event of Default under the Indenture, the interest rate on the Bonds will be the rate on the Bonds on the day before the Event of Default occurred, except that if interest on the Bonds was then payable at a Commercial Paper Rate, the default rate will be the highest Commercial Paper Rate then in effect for any Bond. The Owner (with the prior written consent of the Credit Facility Issuer) or, under certain circumstances, the Credit Facility Issuer, may change the interest rate determination method from time to time. A change in the method will result in the mandatory tender of the Bonds. During any period that Bonds are owned by the Liquidity Facility Issuer by reason of a draw or claim on the Liquidity Facility, the Bonds so owned will bear interest at a rate equal to the prime lending rate per annum announced from time to time by The First National Bank of Chicago, as such prime lending rate may change from time to time (the “Liquidity Facility Rate”) from and including the date such Bonds are so purchased by the Liquidity Facility Issuer to but excluding the date such Bonds are sold by the Liquidity Facility Issuer (through a remarketing or otherwise) to another Person. During any period that Bonds are owned by the Credit Facility Issuer by reason of a draw or claim on the Credit Facility, the Bonds so owned will bear interest at a rate equal to the prime lending rate per annum announced from time to time by The First National Bank of Chicago, as such prime lending rate may change from time to time plus four percent (4%) (the “Credit Facility Rate “) from and including the date such Bonds are so purchased by the Credit Facility Issuer to but excluding the date the Bonds are sold by the Credit Facility Issuer (through a remarketing or otherwise) to another Person. 08111194 When interest is payable at a Daily, Weekly, Monthly, Commercial Paper Rate or Liquidity Facility Rate, it will be computed on the basis of the actual number of days elapsed over a year of 365 days (366 in leap years), and when payable at a Quarterly, Semi-Annual or Fixed Rate, on the basis of a 360-day year of twelve 30-day months. 3. Credit Facility and Liquidity Facility. The payment of principal of and interest on the Bonds (other than Bonds owned by Excluded Bondholders and other than Bonds optionally redeemed at the direction of the Owner pursuant to Section 5(a) below) is secured by a Credit Facility issued by the Credit Facility Issuer in favor of the Trustee. While Bonds bear interest at a Short Term Rate, the Owner is required to maintain a Liquidity Facility in favor of the Trustee to pay the Purchase Price of Bonds optionally tendered by the registered owners thereof, as provided herein. 4. Interest Payment and Record Dates. Interest will accrue on the unpaid portion of the principal of this Bond from the last date to which interest was paid, or if no interest has been paid, from the date of the initial delivery of this Bond, until the entire principal amount of this Bond is paid, provided that Bonds authenticated after a Record Date and before the next Interest Payment Date shall bear interest from such Interest Payment Date (or, if earlier, from the last Interest Payment Date to which interest has been paid). When interest is payable in the interest rate mode specified in the first column below, interest accrued during the period (an “Interest Period”) specified in the second cohunn will be paid on the date (an “Interest Payment Date”) specified in the third column to registered owners on the date (a “Record Date”) in the fourth column: Interest Rate Mode Interest Payment Daily WeekZy Monthly Calendar month Commercial Paper Quarterly Interest Period Calendar month (or portion thereof for the first interest period) Calendar month (or portion thereof for the first interest period) From 15 to 270 days as determined for each Bond pursuant to the Indenture (“Commercial Paper Rate Period “) Three full calendar months ending on the last day of the third calendar month Date- Record Date 2 First Business Day 2 Second Business Day of the next calendar 2 before the Interest 2 month Pavment Date A First Business Day 1 Second Business Day of the next calendar f before the Interest ^ month Pavment Date First 2. ) Business Dav 2 Second Business Day of the next calendar 2 before the Interest f month Pavment First day after 2 Second Business Day applicable before the Interest Commercial Paper Payment Date Rate Period First day of the month Fifteenth day of the following the Interest month before the Interest Period Payment Date PUBL:l7646-1 @ED:17480~3~T0:~17480~2)109~ B2062.14 A _ 5 OS/l 1194 Semi-Annual Six full calendar months First day of the month ending on the last day of the following the Interest sixth calendar month Period Fixed Not less than 365 days (except for the initial Fixed Rate Period which shall not be less than 6 months) and ending on the day before the next June 1 or December 1 Each June 1 and December 1 during the Interest Period Fifteenth day of the month before the Interest Payment Date Fifteenth day of the month before the Interest Payment Date If Bonds are called for redemption on a date other than an Interest Payment Date, the Record Date for the interest payment on the Redemption Date will be the same number of days prior to the Redemption Date as for interest payments in the applicable interest rate mode as set forth above. Payment of defaulted interest will be made to registered owners on the fifth-to-last Business Day before payment. If any date specified for payment on the Bonds (whether an Interest Payment Date, a Redemption Date or the Maturity Date) occurs on a day other than a Business Day, payment shall be made on the next succeeding Business Day, but no additional interest will accrue. 5. Redemptions. As provided below, the Owner or the Credit Facility-Issuer has the right to purchase Bonds in lieu of redemption in certain circumstances. By acceptance of this Bond, the registered owner agrees to sell and surrender this Bond, properly endorsed, to the Owner or the Credit Facility Issuer, as appropriate, in lieu of redemption under the conditions described below. No purchase of Bonds by the Remarketing Agent, the Owner, the Liquidity Facility Issuer or the Credit Facility Issuer or advance use of any funds to effectuate any such purchase shall be deemed to be a payment or redemption of the Bonds or of any portion thereof, and such purchase will not operate to extinguish or discharge the indebtedness evidenced by such Bonds. (a) Optional Redemption. The Bonds are subject to redemption upon exercise by the Owner of an election to prepay the Loan in accordance with the Indenture, with the prior written consent of the Credit Facility Issuer as follows: (0 Fixed Rate Periods. During each Fixed Rate Period of at least four (4) years, the Bonds are subject to redemption, as a whole or in part on any date after the Call Lock Period (as hereinafter defined) at the following redemption prices (expressed as a percentage of the principal amount of Bonds to be redeemed) plus interest accrued on such Bonds to the Redemption Date: PUBL: 17646-I (RJZD:l7480~3~TO:~l7480~2)109 1 B2062.14 A - fj 08/l 1194 Redemption Date Redemption Price From the expiration of the Call Lock Period through twelve months after 102% expiration of Call Lock Period: From thirteen through twenty-four months after expiration of Call Lock Period: 101% From twenty-five months after expiration of Call Lock Period through the end of the Fixed Rate Period: 100% “Call Lock Period” means, during each Fixed Rate Period, a period beginning on the first day of such Fixed Rate Period and ending on the day before the first Interest Payment Date which is at least thirty (30) days after the date which is halfway through such Fixed Rate Period. Prior to the Remarketing Date at the commencement of any Fixed Rate Period, the Commission shall have the option, at the request of the Owner, to modify or eliminate the Call Lock Period and/or the premium payable on any such optional Redemption Date, provided the Owner delivers to the Commission, the Credit Facility Issuer, the Remarketing Agent and the Trustee an opinion of Bond Counsel stating that such modification will not adversely affect the exclusion from gross income for federal income tax purposes to which interest on the Bonds would otherwise be entitled. (ii) Daily, Weekly or Monthly Rate Period. When interest on the Bonds is payable at a Daily, Weekly or Monthly Rate, the Bonds may be redeemed, without premium, in whole or in part, on any date at a redemption price equal to the principal amount thereof plus interest accrued thereon to the Redemption Date. (iii) Quarterly, Commercial Paper or Semi-Annual Rate Period. When interest on the Bonds is payable at a Quarterly, Commercial Paper or Semi-Annual Rate, the Bonds may be redeemed, without premium, in whole or in part, on any Interest Payment Date, at a redemption price equal to the principal amount thereof plus interest accrued thereon to the Redemption Date. 0) Mandatory Redemption. Subject to the provisions of the Indenture, the Bonds shall be subject to mandatory redemption at a redemption price equal to the principal amount thereof plus interest accrued thereon to the Redemption Date, as follows: (1) as a whole on any date or in part on any Interest Payment Date from any Net Proceeds which the Credit Facility Issuer requires to be applied to the redemption of the Bonds pursuant to the First Deed of Trust or the Second Deed of Trust; 69 as a whole or in part on the earliest date for which notice of such redemption can be given upon receipt by the Trustee of written notice from the Credit Facility Issuer requesting such redemption, specifying the principal amount of Bonds to be redeemed and stating that (i) an Event of Default has occurred and is continuing under and as defined in the Loan Agreement, the Reimbursement Agreement, the First Deed of Trust or the Second Deed of Trust, or (ii) if the Credit Facility is a PUBL:17646~1@ED:17480~3~T0:~17480~2)109~B2062.14 A - 7 08/l 1194 letter of credit and the Credit Facility Issuer will not reinstate its letter of credit following a draw thereon for interest on an Interest Payment Date; (3) as a whole, but not in part, on the earliest date for which notice of such redemption may be given, if a Determination of Taxability shall have occurred; (4) as a whole or in part with respect to any Bonds purchased by the Credit Facility Issuer as a result of mandatory tenders for purchase or purchased in lieu of redemption pursuant to the Indenture or purchased from the Liquidity Facility Issuer, which are held by the Credit Facility Issuer as registered owner thereof on any date after such purchase, upon written notice from such Credit Facility Issuer to the Trustee, the Owner and the Commission demanding such redemption; or (5) as a whole or in part with respect to any Bonds which have been tendered for purchase and have not been remarketed and are held by the Liquidity Facility Issuer for one hundred eighty (180) days or more (the “Minimum Holding Period”) on any date occurring after the Minimum Holding Period upon written notice from the Liquidity Facility Issuer to the Trustee, the Owner and the Commission demanding such redemption. When Bonds are subject to mandatory redemption pursuant to clauses (1) through (5) above, Bonds paid by the Owner or paid from a draw or claim under the Credit Facility or otherwise paid by the Credit Facility Issuer shall be purchased in lieu of redemption on the Redemption Date at a purchase price equal to the principal amount thereof, plus interest accrued thereon to the Purchase Date. (cl Extraordinary Redemption. The Bonds are subject to redemption, in whole or in part, on any date, at a redemption price equal to the principal amount thereof plus interest accrued thereon to the Redemption Date upon (i) the direction of the Owner with the prior written consent of the Credit Facility Issuer upon the occurrence of any of the events described in (1) or (2) below; (ii) the direction of the Credit Facility Issuer upon the occurrence of any of the events described in (1) or (2) below if an Event of Default has occurred and is continuing under any of the First Deed of Trust Documents or the Second Deed of Trust Documents or an event has occurred or failed to occur which, with the passage of time or the giving of notice, or both, would constitute an Event of Default under any of the First Deed of Trust Documents or the Second Deed of Trust Documents; or (iii) the direction of the Credit Facility Issuer upon the occurrence of the event described in (3) below: (1) if the Project or any portion thereof is demolished, destroyed or damaged by fire or other casualty; (2) if the Project or any portion thereof has been taken under the exercise of the power of eminent domain by any governmental authority or conveyed in lieu of such taking or under threat thereof; or 08/l 1194 (3) if the Credit Facility Issuer elects to cause all the Bonds to be redeemed upon the foreclosure of a lien upon the Project or delivery of a deed in lieu of foreclosure and the subsequent transfer of the Project. If the Lien of the Indenture is discharged prior to the occurrence of a Determination of Taxability or prior to the occurrence of any other event which would or could result in a mandatory or extraordinary redemption of Bonds, the Bonds will not be subject to redemption as described above. 6. Optional Tenders. While the Bonds bear interest at a Short Term Rate, the registered owners thereof shall have the right to tender their Bonds (or portions thereof in Authorized Denominations) for purchase by the Purchase Agent at a Purchase Price equal to the principal amount thereof (or of such portions) plus, in the event Bonds bear interest at the Daily Rate or Weekly Rate, accrued interest thereon to the Purchase Date; provided that while the Bonds bear interest at the Daily Rate or Weekly Rate, if a Bond is tendered for purchase after the Record Date and before the Interest Payment Date for that Interest Period, the Purchase Price of such Bond will be an amount equal to the principal amount thereof plus interest accruing after the last day of that prior Interest Period and the Holder will receive interest for that prior Interest Period as described above. (0 Daily or Weekly Rate Optional Tenders. When interest on the Bonds is payable at a Daily Rate, a Bondholder (other than an Excluded Bondholder) may tender Bonds for purchase by delivering: (A) a written notice to the Purchase Agent on a Business Day, stating the principal amount of the Bonds to be tendered and the Business Day (which shall be a date not less than seven (7) days nor more than twenty (20) days after the notice is delivered) on which the Bonds are to be purchased, and @I the Bonds to the Purchase Agent by lo:30 a.m., Trustee Time, on the date of purchase. (ii) Monthly, Quarterly or Semi-Annual Rate Optional Tender. When interest on the Bonds is payable at a Monthly Rate, Quarterly Rate or Semi-Annual Rate, each Bondholder (other than an Excluded Bondholder) may tender Bonds for purchase on the next Interest Payment Date by delivering: (A) a written notice to the Purchase Agent on a Business Day not less than seven (7) nor more than twenty (20) days prior to said Interest Payment Date stating the principal amount of the Bonds to be tendered and the Interest Payment Date upon which the Bonds are to be purchased, and 09 the Bonds to the Purchase Agent by lo:30 a.m., Trustee Time, on the date of purchase. (iii) Commercial Paper Rate Optional Tender. When interest on the Bonds is payable at a Commercial Paper Rate, a Bondholder (other than an Excluded PUBL:17646~1~D:17480~3~T0:~17480~2)109~B2062.14 A - 9 08/l 1194 Bondholder) may tender Bonds for purchase on the next Interest Payment Date applicable to the Bonds to be tendered by delivering: (4 a written notice to the Purchase Agent on a Business Day not less than seven (7) nor more than twenty (20) days prior to said Interest Payment Date stating the principal amount of the Bonds to be tendered and the Interest Payment Date upon which the Bonds are to be purchased, and 09 the Bonds to the Purchase Agent by lo:30 a.m., Trustee Time, on the date of purchase. (iv) Additional Delivery Requirements. Each notice shall specify (A) the principal amount, CUSIP number, certificate number and stated maturity of the Bond to which the notice relates, (B) the principal amount of such Bond to be purchased, (C) the Purchase Date on which,such Bond is to be purchased and (D) payment instructions with respect to the Purchase Price. Fixed Rate Period. 09 The Bonds shall not be optionally tendered for purchase during any 7. Mandatory Tenders. The Bonds shall be subject to mandatory tender to the Trustee for purchase at a Purchase Price equal to the principal amount thereof plus accrued interest thereon to the Purchase Date as follows: (0 (A) on each Conversion Date or (B) on each date which would have been a Conversion Date except for the failure to satisfy the conditions of a Conversion Date set forth in the Indenture (except for a proposed conversion from a Short Term Rate to a Fixed Rate where the Liquidity Facility is not scheduled to expire, as provided in the Indenture); (ii) on the last Interest Payment Date during a Short Term Rate Period (A) prior to the Termination Date of a Liquidity Facility in accordance with its terms (unless such Liquidity Facility has been extended prior to such Interest Payment Date pursuant to a Liquidity Facility Amendment) in accordance with the provisions of Section 2.12(d) of the Indenture, (B) which is the effective date of an Alternate Liquidity Facility (other than a Liquidity Facility Amendment) in substitution for the existing Liquidity Facility which is not terminating or expiring; or ta which would have been the effective date of the Alternate Liquidity Facility if the conditions for the provisions of an Alternate Liquidity Facility under the Indenture had been satisfied; (iii) a Credit Facility; on the last Interest Payment Date prior to the Termination Date of (iv) on the Interest Payment Date during a Short Term Rate Period (A) which is the effective date of delivery of an Alternate Security to replace an existing Credit Facility which is not terminating or expiring or (B) which would have been the effective date of the Alternate Security if the conditions for the provisions of an Alternate Security under the Indenture had been satisfied; PUBL:17646~1(RED:17480~3~T0:~17480~2)109~B2062.14 A - 10 08lll194 69 on the Interest Payment Date during the Short Term Rate Period which is at least forty-five (45) days after receipt by the Trustee of notice from Liquidity Facility Issuer of the occurrence of an Event of Default under the Liquidity Facility Agreement; and (vi) on the Interest Payment Date which is at least forty-five (45) days after the date of any failure to purchase Bonds tendered by the registered owners thereof during a Short Term Rate Period pursuant to the Indenture. 8. Notice of Redemption. Except as provided in the Indenture for Bonds bearing interest at a Commercial Paper Rate, at least thirty (30) but not more than sixty (60) days before each redemption of a Bond, the Trustee will mail a notice of redemption by first-class mail, postage prepaid, to each Bondholder at the Bondholder’s registered address. Failure to give any required notice of redemption as to any particular Bonds will not affect the validity of the call for redemption of any Bonds in respect of which no failure occurs. Any notice mailed as provided in this paragraph will be conclusively presumed to have been given whether or not actually received by the addressee. When notice of redemption is required and given, Bonds called for redemption become due and payable on the Redemption Date at the applicable redemption price, subject to the Owner’s and the Credit Facility Issuer’s right to purchase Bonds as provided above and as provided in the Indenture and further subject to the provisions of the Indenture relating to the cancellation of a scheduled redemption under certain circumstances; in such case when funds are deposited with the Trustee or the Purchase Agent sufficient for redemption or for purchase, interest on the Bonds to be redeemed or purchased shall cease to accrue as of the date of redemption or purchase, notwithstanding that any Bond or portion thereof so called for redemption shall not have been surrendered for payment. 9. Event ofDe$zuZt. Upon the occurrence of an Event of Default, as defined in the Indenture, the principal of this Bond may become or be declared due and payable before the 2 maturity hereof in the manner, with the effect, and subject to the conditions provided in the Indenture. The Event of Default and its consequences may be waived as provided in the Indenture. 10. Transjkr. This Bond shall be transferable only upon the presentation and surrender hereof at the Principal Office of the Trustee as Registrar duly endorsed for transfer and accompanied by an assignment duly executed by the registered owner or such registered owner’s duly authorized representative, all subject to the terms and conditions of the Indenture. During any Fixed Rate Period, the Registrar shall not be required to transfer or exchange any Bond (i) during the period commencing fifteen (15) days before the selection of Bonds for redemption and ending on the date the related notice of redemption is mailed or (ii) that has been selected for redemption. The Registrar shall be supplied with the name, address, social security number or federal employer identification number of the transferee hereof prior to making such transfer. Upon such transfer a new Bond or Bonds of the same Maturity Date and of authorized denomination or denominations, for the same aggregate principal amount will be issued to the transferee in exchange therefor. P~~L:17646~1(RED:17480~3~T0:~17480~2)109~B2062.14 A- 11 08/l 1194 The Commission, the Credit Facility Issuer, the Liquidity Facility Issuer, the Owner, the Paying Agent, the Purchase Agent and the Trustee shall deem and treat the person in whose name this Bond is registered in the Bond Register as the absolute owner hereof for the purpose of receiving payment of or on account of principal hereof and interest due hereon and for all other purposes, and neither the Commission nor the Trustee shall be affected by any notice to the contrary. 11. Denominations. The Bonds are issuable only as fully registered Bonds (i) in denominations of $100,000 and any integral multiple thereof (except that one Bond may be issued in the denomination of = $115.000) during any Short Term Rate Period, and (ii) in denominations of $5,000 or any integral multiple thereof during any Fixed Rate Period. Bonds are exchangeable at the Principal Office of the Registrar, subject to the limitations and upon payment of the charges provided in the Indenture. 12. Amendments. The Indenture contains provisions permitting the Commission and the Trustee, with the approval of the Owner, the Liquidity Facility Issuer (while its Liquidity Facility is outstanding and there is no default thereunder) and the Credit Facility Issuer, but without the consent of or notice to the registered owners of the Bonds, to execute indentures supplemental to the Indenture. In addition, the Indenture contains provisions permitting the Commission and the Trustee, with the consent of the Owner, the Liquidity Facility Issuer (while its Liquidity Facility is outstanding and it is not in default thereunder) and the Credit Facility Issuer and with the consent of the owners of not less than a majority in aggregate principal amount of the Bonds at the time outstanding, to execute supplemental indentures amending in any particular the provisions of the Indenture subject to certain limitations contained in the Indenture. P1~~~:17646~1(RED:17480~3~T0:~17480~2)109~B2062.14 A - 12 08/l 1194 Form of Assignment] For Value Received, the undersigned hereby sells, assigns and transfers unto (Please insert Social Security or taxpayer identification number of assignee) (Please print or typewrite name and address of assignee) the within Bond, and all rights thereunder, and hereby does irrevocably constitute and appoint agent to transfer the within Bond on the books kept for the registration thereof, with full power of substitution in the premises. Dated: Signature (Signature guaranty) NOTICE: The signature to this assignment must correspond with the name as it appears upon the face of the within Bond in every particular, without alteration or enlargement or any change whatever. Commercial Bank or Trust Company or Member of National Association of Securities Dealers, Inc. By: ~u~~:17646~1(RED:17480~3~T0:~17480~2)109~B2062.14 A- 13 08/l 1 I94 EXHIBIT B (LEGAL DESCRIPTION OF REAL ESTATE) Description of Land Seascape Village Apartments All that certain real property situated in the City of Carlsbad, County of San Diego, State of California, described as follows: Lots 100 and 101 of CARLSBAD TRACT NO. 73-23, in the City of Carlsbad, County of San Diego, State of California, according to Map thereof No. 8081, filed in the Office of the County Recorder of San Diego County, February 28, 1975. Excepting all crude, oil, petroleum, gas, brea, asphaltum and all kindred substances and other minerals in and under said land, but without the right to enter upon the surface of said land above a depth of 500.00 feet to explore for or extract same, as reserved in a Deed recorded August 27, 1969 as File No. 157186 and that Deed recorded August 27, 1969 as File No. 157.190, both of Official Records. Also excepting all oil, oil rights, mineral rights, natural gas rights and other hydrocarbons by whatsoever name known, together with all geothermal steam and steam power that may be within or under the parcel of land hereinafter described, together with the perpetual right of drilling, mining, exploring and operating therefor and storing in and removing the same from said land, or any other land, including the right to whipstock or directionally drill and mine from lands other than those hereinafter described, oil or gas wells, tunnels and shafts into, through or across the subsurface of the land hereinafter described and to bottom such whipstocked or directionally drilled wells, tunnels and shafts under and beneath or beyond the exterior limits thereof, and to redrill, retunnel, equip, maintain, repair, deepen and operate such wells or mines, without, however, the right to drill, mine, store, explore and operate through or on the surface or the upper 500 feet of the subsurface of the land herein described. ~u~~:17646~1(RED:17480~3~T0:~17480~2)109~B2062.14 A-l 08/l 1194