HomeMy WebLinkAbout1998-04-21; Housing & Redevelopment Commission; 299; Multifamily Housing Revenue Refunding BondsCARLSBAD HOlJS,dG & REDEVELOPMENT COdllSSION - AGENDA BILL
AB# 299
MTG. 04/21/98
DEPT. FIN
TITLE:
AUTHORIZATION TO EXECUTE AND DELIVER
AMENDED DOCUMENTS AND TAKE RELATED
ACTIONS WITH RESPECT TO THE $15,115,000
CARLSBAD HOUSING AND REDEVELOPMENT
COMMISSION MULTIFAMILY HOUSING REVENUE
REFUNDING BONDS
DEPT HD. !/-
CITY ATTY. pluL/
RECOMMENDED ACTION:
Adopt Resolution No. 297 authorizing the execution and delivery of amended documents and
related actions with respect to the $15,115,000 Carlsbad Housing and Redevelopment Commission
Multifamily Housing Revenue Refunding Bonds
BACKGROUND:
In 1985, the Housing and Redevelopment Commission issued Multifamily Housing Revenue Bonds to
provide financing for a 208-unit multifamily residential rental project, known as the Seascape Village
Project, located at 6938 Seascape Drive in Carlsbad. The proceeds of the bonds were used to make
a loan to Lincoln Property Company, a California Limited Partnership, to fund the construction of
units. The incentive to the City to participate in this project was the restriction of twenty percent (20%)
of the units, or 42 units total, to rents affordable to lower income (80% of County median or below)
households.
In January 1989, the developer, Lincoln Property Company, failed to make payments to the trustee
necessary to support the annual debt service requirements. This failure constituted a default under
the terms of the documents and in December 1990, a foreclosure action was filed by Continental
Insurance Company (CCC), the bond insurer. The foreclosure action was completed in December
1993 with the sale of the project to Seascape Apartments, Inc., a corporation formed by CCC. During
the period of the default, there was no interruption of the payment of interest and principal to bond
holders. CCC provided all funds necessary to pay these costs as required by the original bond
documents. In 1994, the outstanding bonds were refunded to take advantage of the lower interest
rates. The bonds mature in 2005.
PROPOSED SALE OF THE PROJECT
CCC is now in the process of selling the project to Security Capital Pacific Trust, a Maryland real
estate investment trust (the Trust). The Trust will be assuming the obligations of CCC with respect to
the bonds. One of those obligations is to make the principal and interest payments on the bonds as
they come due. In order to secure the payment of these amounts, the owner of the project must
provide a credit instrument from an approved institution (such as a surety bond or a letter of credit). In
the event of any future default, the Trustee will draw on the credit instrument to make any and all debt
service payments. The Commission is not obligated to repay the bonds. The bonds are fully insured
during the entire period they are outstanding.
CCC has requested that the Commission make certain amendments to the bond agreements to allow
the sale of the project and the assumption of the bond obligations by the Trust. In addition, the Trust
has requested a change in the credit instrument. They would like to substitute a letter of credit in
place of the current surety bond issued by CCC. The letter of credit is to be issued by the New York
branch of Commetzbank Aktiengesellschaft, a AA rated institution. Commerzbank is acceptable to
the rating agencies and meets the requirements for a credit facility issuer as specified in the bond
ndenture.
Page 2 of Agenda Bill # L
-
Other than the change in ownership and credit facility, there are no other substantial modifications to
the agreements. Minor modifications have been made to bring the agreements up to date. All
documents have been reviewed by bond counsel, Robert Whalen of Stradling Yocca Carlson &
Rauth.
HOUSING AND REDEVELOPMENT COMMISSION ACTION:
Staff recommends that the Housing and Redevelopment Commission adopt the attached resolution
which will approve the form of the revised Loan Agreement and the Indenture of Trust and authorize
certain officers to take whatever actions are necessary to implement the terms of the documents and
the remarketing of the bonds.
FISCAL IMPACT:
The sale of the Seascape Village Project and the assumption of the obligations by the Trust does not
impose any fiscal obligation on the City of Carlsbad or the Housing and Redevelopment Commission.
The City and Agency are not obligated in any way to repay the bonds. The Redevelopment Agency
will continue to receive an annual payment of 0.23% of the principal amount of the refunded bonds to
cover ongoing administrative costs. In addition, the Trust will reimburse the City/Agency for all time
spent by staff and the Commission in completing this transaction.
EXHIBITS:
1) Resolution No. 297 authorizing the execution and delivery of amended documents and related
actions with respect to the $15,115,000 Carlsbad Housing and Redevelopment Commission Multi-
family Housing Revenue Refunding Bonds, Series A, of 1994 (Seascape Village Project).
2) Amended and Restated Loan Agreement (on file in the City Clerk’s Office).
3) Amended and Restated Indenture of Trust (on file in the City Clerk’s Office).
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RESOLUTION NO. 297
A RESOLUTION OF THE CARLSBAD HOUSING
AND REDEVELOPMENT COMMISSION
AUTHORIZING THE EXECUTION AND DELIVERY
OF AMENDED DOCUMENTS AND RELATED
ACTIONS WITH RESPECT TO THE $15,115,000
CARLSBAD HOUSING AND REDEVELOPMENT
COMMISSION MULTIFAMILY HOUSING
REVENUE REFUNDING BONDS, SERIES A, OF
1994 (SEASCAPE VILLAGE PROJECT)
WHEREAS, the Carlsbad Housing and Redevelopment
Commission (the ‘Commission”) has previously issued its $15,115,000
Multifamily Housing Revenue Refunding Bonds, Series A of 1994
(Seascape Village Project) (the “Bonds”) pursuant to an Indenture of Trust
dated as of April I, 1994 (the “Original Indenture”), between the
Commission and First Trust of California, National Association, as trustee
under the Original Indenture and as predecessor-in-interest to U. S. Bank
Trust National Association (the “Trustee”), and caused to be made a loan
(the “Loan”) from the proceeds of the Bonds to Seascape Apartments, an
Illinois corporation (the “Original Owner”), pursuant to a Loan Agreement
dated as of April 1, 1994 (the “Original Loan Agreement”), among the
Commission, the Trustee, and the Original Owner, to finance a 208-unit
apartment project occupied in part by persons of low income (the
“Project”); and
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WHEREAS, the Original Owner now desires to sell the Project to
Security Capital Pacific Trust, a Maryland real estate investment trust (the
“New Owner”), and the New Owner desires to assume the obligations of
the Original Owner with respect to the Bonds and to make certain
amendments to the Original Indenture and the Original Loan Agreement in
order to effect the delivery of a Letter of Credit (the “Alternate Security”)
from Commerzbank Aktiengesellschaft, New York Branch (the “Bank”) to
secure the repayment of-the Bonds; and
WHEREAS, there has been presented to the Board of
Commissioners the forms of an Amended and Restated Indenture of Trust
dated as of June 1, 1998 (the “Amended and Restated Indenture”) and an
Amended and Restated Loan Agreement dated as of June 1, 1998 (the
“Amended and Restated Loan Agreement”); and
WHEREAS, the Commission desires to approve the amendments
to the Original Indenture and the Original Loan Agreement requested by
the New Owner and to authorize its officers to grant any needed consents
or take any other actions required to effectuate the amendments to the
Original Indenture and the Original Loan Agreement, the delivery of the
Alternate Security and the remarketing of the Bonds following the delivery
of the Alternate Security;
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NOW, THEREFORE, BE IT RESOLVED by the Board of
Commissioners of the Carlsbad Housing and Redevelopment
Commission:
Section 1.
correct.
The above recitals, and each of them, are true and
Section 2. The proposed forms of the Amended and Restated
Indenture of Trust and the Amended and Restated Loan Agreement
presented at this meeting are hereby approved, and each of the
Chairpersons and the Secretary of the Board of Commissioners and the
Executive Director and Treasurer of the Commission is hereby authorized
and directed, for and in the name of the Commission, to execute,
acknowledge, and deliver the Amended and Restated Indenture and the
Amended and Restated Loan Agreement substantially in the forms
presented, with such additions thereto and changes therein as the officer
or officers’ executing the same may approve, upon consultation with the
City Attorney. Approval of such additions and changes shall be
conclusively evidenced by the execution and delivery thereof.
Section 3. All officers of the Commission are each authorized
and directed, jointly and severally, to do any and all things to execute and
deliver any and all documents which they deem necessary or advisable in
order to implement the terms of the Amended and Restated Indenture and
the Amended and Restated Loan Agreement and the marketing of the
Bonds following the delivery of the Alternate Security, including, but not
limited to, amending the note and deed of trust securing the Loan,
executing any documents necessary to evidence the New Owner’s
assumption of the obligations of the Original Owner with respect to the
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Bonds, giving any consents required to be given by the Commission under
any documents related to the Bonds and their remarketing, and taking
other actions necessary to effectuate the purposes of this Resolution; and
any such actions previously taken by such officers are hereby ratified and
confirmed. Should the Chairperson be unavailable to sign any documents,
then any member of the Board of Commissioners may sign in his place.
Should the Executive Director be unavailable to sign, then any designee of
the Executive Director may sign in his place.
Section 4. This Resolution shall take effect from and after its
adoption.
PASSED, APPROVED AND ADOPTED at a regular meeting of the
Carlsbad Housing and Redevelopment Commission of the City of
Carlsbad, California, held on the day of 21 ADril , 1998
by the following vote, to wit:
AYES: Commissioners Lewis, Kulchin, Hall, Nygaard & Finnila
NOES: None
ABSENT: None
Al-TEST:
(SEAL)
AMENDED AND RESTATED LOAN AGREEMENT
By and Between
CARLSBAD HOUSING AND REDEVELOPMENT COMMISSION
and
SECURITY CAPITAL PACIFIC TRUST,
a Maryland real estate investment trust
Dated as of June 1,1998
$15,115,000
CARLSBAD HOUSING AND REDEVELOPMENT COMMISSION
MULTIFAMILY HOUSING REVENUE REFUNDING BONDS, SERIES A OF 1994
(SEASCAPE VILLAGE PROJECT),
Certain rights of the Carlsbad Housing and Redevelopment Commission (the “Commission “) in and to
this Loan Agreement are being assigned to First Trust of California, National Association, as Trustee,
as security for the above-referenced Bonds pursuant to an Amended and Restated Indenture of Trust
dated as of June 1, 1998 and securing the above-referenced Bonds.
566542.2l22062.0025
ARTICLE I
DEFINITIONS AND EXHIBITS
Section 1.1. Definition of Terms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Section 1.2. Exhibits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .._........................................................................... 1
ARTICLE II
REPRESENTATIONS, W ARRANTES AND SPECIAL TAX
COVENANTS
Section 2.1. Express Warranties of the Commission; Exclusion of Other Warranties ............................ 1
Section 2.2. General Representations, Warranties and Covenants of Owner ......................................... .3
Section 2.3. Operation of Project ............................................................................................................ 5
Section 2.4. Modification and Termination of Tax Covenants ................................................................ 5
Section 2.5. Release of Regulatory Agreement ....................................................................................... 6
Section 2.6. Authorized Owner Representative ..................................................................................... .6
ARTICLE III
THE BONDS, BOND PROCEEDS, THE INDENTURE
Section 3.1. Issuance of Bonds .............................................................................................................. .6
Section 3.2. Bond Proceeds; Investments .............................................................................................. .6
Section 3.3. Indenture and the Escrow Agreement Approval ................................................................. .6
ARTICLE IV
THE LOAN, PREPAYMENTS, ASSIGNMENTS; ALTERNATE
SECURITY; PURCHASE OF BONDS BY OWNER; LIQUIDITY
FACILITY
Section 4.1. Loan by Commission.. ......................................................................................................... 7
Section 2.2. Note Payments; Other Payments ........................................................................................ .7
Section 4.3. Credits on Note Payments. ................................................................................................. .9
Section 4.4. Prepayment Generally ........................................................................................................ .9
Section 4.5. Alternate Security .............................................................................................................. 10
Section 4.6. Amounts Required for Prepayment ................................................................................... 10
Section 4.7. Maximum Rate of Interest ................................................................................................ 10
Section 4.8. Assignments to Trustee ..................................................................................................... 11
Section 4.9. Administrative Fees and Expenses; Other Expenses ......................................................... 11
Section 4.10. Insurance.. ....................................................................................................................... 11
Section 4 11. Purchase of Bonds.. .......................................................................................................... 11
Section 4.12. Liquidity Facility; Alternate Liquidity Facility.. ............................................................... 11
Section 4.13. [RESERVED]. ................................................................................................................ 12
Section 4.14. Payments Into Rebate Fund.. ........................................................................................... 12
566542.2t22062.0025
ARTICLE V
DEFEASANCE OF PRIOR INDENTURE; TRUSTEE SERVICES
Section 5.1. [RESERVED]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .._._.___._................... 12
Section 5.2. Payment for Extraordinary Services.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ._ .____ 12
ARTICLE VI
SPECIAL COVENANT
Section 6.1. Indemnification Covenant ................................................................................................. .12
Section 6.2. No Liability of Commission ............................................................................................. .14
Section 6.3. Further Assurances ........................................................................................................... 14
ARTICLE VII
BREACH OF COVENANTS, REMEDIES
Section 7.1. Event of Default.. .............................................................................................................. 14
Section 7.2. Remedies for Failure to Perform ....................................................................................... 15
Section 7.3. Discontinuance of Proceedings ........................................................................................ .16
Section 7.4. Remedies Cumulative ....................................................................................................... 16
Section 7.5. Reimbursement of Expenses ............................................................................................. 16
Section 7.6. Remedies Subject to Applicable Law ................................................................................ 16
Section 7.7. Foreclosure on First Deed of Trust ................................................................................... 17
ARTICLE VIII
MISCELLANEOUS
Section 8.1. Amounts Remaining in Funds and Accounts ................................................................... .17
Section 8.2. Payments by Credit Facility Issuer .................................................................................... 18
Section 8.3. Amendments, Changes or Modifications to Agreement.. .................................................. 18
Section 8.4. Payment ............................................................................................................................ 18
Section 8.5. Counterparts.. .................................................................................................................... 18
Section 8.6. Severability ...................................................................................................................... .18
Section 8.7. Term of Agreement .......................................................................................................... .18
Section 8.8. Notice of Changes in Fact ................................................................................................ .19
Section 8.9. Limited Recourse Provisions.. ........................................................................................... 19
Section VIII. 10. Notices ...................................................................................................................... .19
Section 8.11. Applicable Law ............................................................................................................... 20
Section 8.12. Successors and Assigns ................................................................................................. .20
Section 8.13. Rights of Credit Facility Issuer and Liquidity Facility Issuer ........................................... 20
EXHIBIT A DESCRIPTION OF PROJECT
EXHIBITB SECURED NOTE
566542.2l22062.0025
PARTIES
THIS AMENDED AND RESTATED LOAN AGREEMENT dated as of June 1, 1998 (as
amended or supplemented, the “Loan Agreement” or this “Agreement ‘7, by and between the Carlsbad
Housing and Redevelopment Commission, a public body corporate and politic organized and existing
under the laws and Constitution of the State of California (herein, together with any successor to its
rights, duties and obligations, referred to as the “Commission ‘7, and Security Capital Pacific Trust, a
Maryland real estate investment trust (together with its successors and assigns as owner of the
hereinafter defined Project, the “Owner”), amends and restates in its entirety that certain Loan
Agreement dated as of September 1, 1994 between the Commission and Seascape Apartments, Inc.;
RECITALS
The parties acknowledge and confirm the Recitals lettered A through Y set forth in the
Indenture of Trust of even date herewith between the Commission and First Trust of California,
National Association, as trustee (the “Jndenture”).
The Commission and the Owner desire to enter into this Loan Agreement for the purposes and
on the terms set forth herein and in the Indenture.
Accordingly the Commission and the Owner, each in consideration of the representations,
covenants and agreements of the other as set forth herein, mutually represent, covenant and agree as
follows, to wit:
ARTICLE I
DEFINITIONS AND EXHlBJTS
Section 1. I. Dejnition of Terms. For all purposes of this Agreement, unless the context
clearly requires otherwise, capitalized terms used herein shall have the meanings set forth in the
Regulatory Agreement and in Appendix A to the Indenture.
Section 1.2. Exhibits. All Exhibits to this Agreement referenced herein shall be deemed to
be incorporated herein and made an integral part of this Agreement, whether or not such Exhibits are
physically attached hereto.
ARTICLE II
REPRESENTATIONS, W ARRANTES AND SPECIAL TAX COVENANTS
Section 2.1. Express Warranties of the Commission; Exclusion of Other Warranties. The
Commission makes the following representations, warranties and covenants as the basis for the
undertakings on the part of the Owner herein contained:
(4 The Commission is a public body corporate and politic, duly organized and
validly existing under the laws and Constitution of the State of California.
566542.2U2062.0025
09 Under the Law and the Refunding Bond Act, the Commission has the power to
enter into the transactions contemplated by the Commission Documents, including without limitation,
the issuance and sale of the Bonds, and to carry out its obligations thereunder, and by proper action has
duly autborized the issuance and sale of the Bonds, the execution and delivery of the Commission
Documents, and the performance of all of the covenants and agreements of the Commission contained
in the Commission Documents.
(4 The issuance of the Prior Bonds to obtain funds to provide financing for the
Project for the benefit of the Developer was, and the issuance of the Bonds to refund, with other
available money, the Prior Bonds is, intended to serve the public interest and will further the purposes
of the Law, including among other purposes the assistance of persons of medium and low income in
the City of Carlsbad to obtain decent, safe and sanitary housing.
(4 The Commission will not take or permit, or omit to take or cause to be taken,
any action within its control that would have an adverse effect on the exclusion of interest payable on
the Bonds or the Prior Bonds from gross income for federal income tax purposes.
(e) The Commission has complied with all of the provisions of the Constitution
and laws of the State of California, including the Refunding Bond Act and the Law, has made all filings
and obtained all authorizations and approvals and has full power and authority (as such are necessary)
to enter into the Commission Documents and to issue the Bonds and to consummate all transactions
contemplated by the Commission Documents and the Bonds, and to perform all of its obligations
thereunder.
(0 Neither the execution and delivery by the Commission of this Agreement or
any other Commission Document or the issuance and sale of the Bonds nor the consummation by the
Commission of the transactions contemplated by this Agreement or any other Commission Document
conflicts with, will result in a breach of or default under or will (except with respect to the lien of the
Indenture, the First Deed of Trust Documents) result in the imposition of any lien on any property of
the Commission pursuant to the terms, conditions or provisions of any statute, order, rule, regulation,
agreement or instrument to which the Commission is a party or by which it is bound.
(g) Each of the Commission Documents has been duly authorized, executed and
delivered by the Commission and each constitutes the legal, valid and binding obligation of the
Commission enforceable against the Commission in accordance with its terms except as the
enforceability thereof may be limited by general equitable principles, bankruptcy, insolvency,
moratorium, reorganization or other laws affecting creditors’ rights generally. Upon the execution and
delivery thereof, the Bonds will constitute valid and binding limited obligations of the Commission,
enforceable in accordance with their respective terms, except as limited by bankruptcy, insolvency,
reorganization, moratorium and other similar laws affecting the rights of creditors generally and to the
application of equitable principles, to the exercise of judicial discretion in appropriate cases and to the
limitations on legal remedies against public bodies.
Q No member, trustee, director, officer or official of the Commission has any
interest (financial, employment or other) in the Owner or the transactions contemplated by this
Agreement.
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(0 There are no actions, suits, proceedings, inquiries, or investigations pending for
which the Commission has been served notice or, to the knowledge of the Commission, threatened
against the Commission by or before any court, governmental agency or public board or body, which
(i) affects or questions the existence or the territorial jurisdiction of the Commission or the legal
authority of any official of the Commission to sign documents, (ii) affects or seeks to prohibit, restrain
or enjoin the execution and delivery of any of the Commission Documents or the issuance, execution or
delivery of the Bonds, (iii) affects or questions the validity or enforceability of any of the Commission
Documents or the Bonds, (iv) questions the tax-exempt status of the Bonds; or (v) questions the power
or authority of the Commission to perform its obligations under any of the Commission Documents or
the Bonds or to carry out the transactions contemplated by the Commission Documents or the Bonds,
with respect to, or affecting the power or ability of the Commission to enter into and deliver (or accept,
as applicable), the Commission Documents and to issue the Bonds, or involving the validity or
enforceability of the Prior Bonds or the Bonds or any of the Commission Documents, at law or in
equity or before or by any court or governmental authority, except actions which, if adversely
determined, would not materially adversely affect or impair the enforceability of, or the power or the
ability of, the Commission to enter into, deliver (or accept, as applicable) and perform its obligations
under the Bonds and Commission Documents.
6) The Commission acknowledges (based on the representations of the Surety and
the Prior Trustee) that substantial and material defaults and events of default existed under the Prior
Loan Agreement.
04 The Commission has not assigned and will not assign its interest in this
Agreement, the Note or any other First Deed of Trust Documents, other than to the Trustee to secure
payment of the Bonds; provided that the Commission’s rights to the payment of fees and expenses
under Sections 4.2(d), 6.1 and 7.5 and the Commission’s right to receive any notices, certificates,
requests, requisitions or other communications hereunder shall not be assigned.
(1) This Loan Agreement and the other Commission Documents have been duly
executed and delivered by the Commission and constitute valid and binding obligations of the
Commission, enforceable in accordance with their respective terms, except as limited by bankruptcy,
insolvency, reorganization, moratorium and other similar laws affecting the rights of creditors
generally. Upon the execution and delivery thereof, the Bonds will constitute valid and binding limited
obligations of the Commission, enforceable in accordance with their respective terms, except as limited
by bankruptcy, insolvency, reorganization, moratorium and other similar laws affecting the rights of
creditors generally.
Section 2.2. General Representations, Warranties and Covenants of Owner. The Owner
makes the following representations, warranties and covenants, which, together with the other
representations and agreements of the Owner contained in this Agreement, are relied upon by the
Commission and serve as a basis for the undertakings on the part of the Commission contained in this
Agreement:
(a) The Owner (i) is a real estate investment trust, validly organized and existing
under the laws of the State of Maryland and is duly authorized and qualified to conduct business in the
State; (ii) has full power and authority under its organizational documents and the laws of the State of
Illinois to execute and deliver the Owner Documents, to be bound by the terms of the Indenture and to
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perform its obligations under the Owner Documents; and (iii) by proper action has duly authorized the
execution and delivery of this Agreement and the other Owner Documents.
09 There are no actions, suits or proceedings pending for which the Owner has
been served notice, or, to the best knowledge of the Owner, threatened against or tiecting the Owner
or the Project or the transactions contemplated by this Agreement and the other Owner Documents, at
law or in equity or before any court or any officer or administrative agency, and the Owner is not a
party to any contract or agreement (other than this Loan Agreement and the Regulatory Agreement and
other instruments referred to therein) or subject to any organizational restriction or to any order,
regulation, writ, injunction or decree of any court or governmental authority, or to any statute which
would adversely affect in any material way (i) the properties, business or condition (financial or
otherwise) of the Owner, (ii) the Project or (iii) the performance and observance by the Owner of the
provisions of, and the consummation of any of the transactions contemplated by, this Loan Agreement,
the Secured Note, the First Deed of Trust or any of the other First Deed of Trust Documents.
(c) The Owner has no liabilities except those incurred in the ordinary course of
business which are not delinquent or which are otherwise contemplated or permitted by this Loan
Agreement and the other First Deed of Trust Documents. The Owner is not in default in the payment
of any taxes levied or assessed against it or its assets. To the best of its knowledge, the Owner is not in
default (i) under any applicable statute, rule, order or regulation of any governmental authority, or (ii)
under this Loan Agreement or any of the other First Deed of Trust Documents or the Reimbursement
Agreement or under any other agreement to which the Owner is a party which would adversely affect
the transactions contemplated hereby.
(4 Neither the execution and delivery of this Loan Agreement or any of the other
First Deed of Trust Documents or the Reimbursement Agreement nor the consummation of the
transactions herein or therein contemplated nor compliance with the terms and provisions hereof or
thereof, conflicts with or results or will result in a breach of any of the terms, conditions or provisions
of the organizational documents of the Owner or any law, order, rule, regulation, writ, injunction or
decree of any court or governmental authority or any agreement or instrument to or by which the
Owner is a party or by which it or any of its properties is bound or constitutes or will constitute a
default thereunder, or results or will result in the creation or imposition of any Lien of any nature
whatsoever upon any of its property or assets pursuant to the terms of any such agreement or
instrument except the Liens created by the First Deed of Trust Documents.
(e) No authorization, consent, approval, order, registration, declaration or
withholding of objection on the part of, or filing of or with any governmental authority, not already
obtained or made, is required for the execution and delivery of this Loan Agreement or any of the other
First Deed of Trust Documents or the Reimbursement Agreement or the performance of the terms and
provisions thereof by the Owner.
(f) No portion of the Project will be used to provide a golf course, a country club,
a massage parlor, a tennis club, a skating facility, a racquet sports facility, a hot tub, a suntan facility, a
racetrack, a sky box or other private luxury box, a health club facility, a facility primarily used for
gambling, a store the principal business of which is the sale of alcoholic beverages, or a facility the
primary purpose of which is retail food and beverage services, automobile sales or service, or the
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provision of recreation or entertainment. No portion of the Project will be used for the acquisition of
land for farming purposes or any interest therein.
(g) This Loan Agreement and each of the other First Deed of Trust Documents
have been duly executed and delivered by the Owner and constitute valid and binding obligations of the
Owner enforceable in accordance with their respective terms, subject to bankruptcy, ‘insolvency,
moratorium and other similar laws affecting the rights of creditors generally and the usual principles of
equity including those affecting rights of rescission.
GO Any certificate signed by the Owner and delivered pursuant to the Indenture,
this Agreement, the Regulatory Agreement or otherwise in connection with the Project or the Bonds
shall be deemed a representation and warranty by the Owner as to the statements made therein.
6) The Owner (i) intends to hold the Project for its own account, (ii) has no
current plans to sell the Project (iii) has not entered into any agreement or otherwise binding
commitment to sell the Project, (iv) recognizes that the refunding of the Prior Bonds may have
independent significance apart from any future sale of the Project because of the net anticipated
reduction in total debt service costs for the Project and (v) does not intend that the issuance of the
Bonds and the refunding of the Prior Bonds constitute a formally separate step in a single prearranged
transaction to reach the end result of the sale of the Project.
ci) The Indenture has been submitted to the Owner for its examination; and the
Owner acknowledges, by execution of this Agreement, that it has approved the Indenture and agrees
that it will be bound by the terms thereof and, in particular, agrees to comply with the requirements of
Section 5.8 of the Indenture, as amended from time to time.
(k) Based upon information obtained by the Owner, not less than 90% of the
proceeds of the Prior Bonds (within the meaning of Section 103(b)(4)(A) of the 1954 Code and
applicable Regulations) have been expended for Project Costs which constitute Qualified Project
costs.
Section 2.3. Operation of Project. The Owner hereby represents and warrants that it shall
operate the Project in accordance with the provisions of the Regulatory Agreement.
Section 2.4. Modjkation and Termination of Tax Covenants.
(4 Anything contained in this Agreement or in the Indenture to the contrary
notwithstanding, the Commission, the Trustee (as assignee of the Commission’s interest herein under
the Indenture) and the Owner hereby agree to amend this Agreement and the Regulatory Agreement to
the extent required, in the opinion of Bond Counsel, in order for interest payable on the Bonds to be
excluded from gross income for federal income tax purposes under Section 103(b)(4)(A) of the 1954
Code, and, to the extent applicable, the Code. The party requesting such amendment shall notify the
other parties to the applicable agreement and the Trustee of the proposed amendment, with a copy of
such requested amendment to Bond Counsel and to the Credit Facility Issuer. After review of such
proposed amendment, Bond Counsel shall render to the Trustee, the Commission, the Owner and the
Credit Facility Issuer an opinion as to whether such proposed amendment is necessary in order to
maintain the exclusion of interest payable on the Bonds from gross income for federal income tax
566542.2U2062.0025 -5
purposes. The Owner shall pay an amount to Bond Counsel sufficient to reasonably compensate Bond
Counsel for reviewing such proposed amendment and rendering such opinion.
09 Notwithstanding anything to the contrary contained in this Agreement, this
Agreement shall not be amended in any manner which would have the effect of increasing or otherwise
modifying the terms of the Owner’s payment obligations hereunder unless such amendment shall have
been consented to in writing by the Owner and the Credit Facility Issuer.
Section 2.5. Release of Regulatory Agreement. At the time all restrictions set forth in the
Regulatory Agreement expire, the Commission and the Trustee agree to provide the Owner with a
written release of the Regulatory Agreement in recordable form.
Section 2.6. Authorized Owner Representative. Prior to or concurrently with the sale of the
Bonds, the Owner shall appoint an Authorized Representative for the purpose of taking all actions and
making all certificates required to be taken and made by the Authorized Representative under the
provisions of this Agreement, and may appoint one or more alternate Authorized Representatives to
take any such action or make any such certificate if the same is not taken or made by the Authorized
Representative. If no Person is serving as the Authorized Representative, a general partner of a
partnership Owner or the chief executive officer of a corporate Owner shall be deemed to be the
Authorized Representative.
Whenever under the provisions of this Agreement the approval of the Owner is required or the
Commission is required to take some action at the request of the Owner, such approval or such request
shall be made by the Authorized Representative unless otherwise specified in this Agreement. The
Commission or the Trustee shall be authorized to act on any such approval or request and the Owner
shall have no complaint against the Commission or the Trustee as a result of any such action taken in
conformity with such approval or request.
ARTICLE III
THE BONDS, BOND PROCEEDS, THE INDENTURE
Section 3.1. Issuance of Bonds. Subject to the satisfaction of and compliance with all of the
provisions, covenants and requirements of this Agreement, in order to provide funds to refund, with
other available money, all of the outstanding Prior Bonds, the Commission has issued and delivered the
Bonds to the purchaser or purchasers thereof in accordance with the Indenture.
Section 3.2. Bond Proceeds; Investments. The proceeds of the sale of the Bonds together
with all earnings from any investments thereof shall be held, invested, reinvested and disbursed solely
for the purposes and subject to the limitations contained in the Indenture, the Escrow Agreement and
this Agreement.
Section 3.3. Indenture and the Escrow Agreement Approval. The execution of this
Agreement shall constitute conclusive evidence of approval of the Indenture and the Escrow
Agreement by the Owner. Additionally, the Owner agrees, subject to the provisions of Section 8.10
hereof, that whenever the Indenture or the Escrow Agreement by its terms imposes a duty or obligation
upon the Owner, such duty or obligation shall be binding upon the Owner to the same extent as if the
566542.2Q2062.0025 4%
Owner were an express party to the Indenture, as applicable, and the Owner hereby agrees to carry out
and perform all of its obligations thereunder in accordance with the terms thereof.
ARTICLE IV
THE LOAN, PREPAYMENTS, ASSIGNMENTS; ALTERNATE SECURITY;
PURCHASE OF BONDS BY OWNER; LIQUIDITY FACILITY
Section 4.1. Loan by Commission.
(4 The Owner and the Commission acknowledge and agree that pursuant to the
Escrow Agreement, the outstanding Prior Bonds have been paid from the proceeds of the sale of the
Bonds, a claim paid pursuant to the Prior Surety Bond, and other available moneys.
@9 The Owner has executed and delivered this Agreement and the Note to
evidence the Owner’s obligation to make payments which are sufficient to make payments of the
principal of, premium, if any, and interest on the Bonds when due.
(9 Concurrently with the execution and delivery of this Agreement and the
issuance of the Bonds, the Owner shall cause the Credit Facility and the Liquidity Facility to be
executed and delivered to the Trustee and shall execute and deliver all First Deed of Trust Documents,
and have the same filed and recorded in the real estate records of the County where the Project is
located. The Owner hereby agrees to carry out and perform all of its obligations under all First Deed
of Trust Documents.
Section 4.2. Note Payments; Other Payments.
(9 The principal of, premium, if any, and interest on the Note shall be paid by or
on behalf of the Owner by means of payments (the “Note Payments ‘7 which, in the aggregate, shall be
in an amount sufficient for the payment in full when due of the principal of, premium, if any, and
interest on the Bonds from time to time outstanding under the Indenture, including (i) the total interest
becoming due and payable on the Bonds on the respective dates of payment thereof, (ii) the total
principal becoming due on the Bonds (whether at maturity, by redemption or acceleration or otherwise)
and (iii) the redemption premium, if any, that shall be payable upon the redemption of Bonds prior to
maturity.
(b) Note Payments shall be due and payable as provided in the Note, subject to the
credits as and to the extent provided in Section 4.3 hereof and subject to the following:
(1) Notwithstanding the provisions of the Note, when Bonds bear interest
at a Daily Rate, a Weekly Rate or a Commercial Paper Rate, the Credit Facility Issuer, in its
sole discretion, may by written notice to the Owner, the Commission and the Trustee, require
the Owner to pay interest to the Trustee, not later than 9:00 am., Trustee Time, on a date
which is five (5) Business Days prior to each Interest Payment Date, in an amount equal to the
interest on the Bonds which will be due on such Interest Payment Date. The Owner covenants
and agrees that, in all events, it is the Owner’s obligation to contact the Trustee for a
determination of the amount of interest due on the Note and the Bonds prior to each Interest
Payment Date in order to make timely monthly payments hereunder and under the Note. While
566542.2l22062.0025 -7-
the Bonds bear interest at a Daily Rate or a Weekly Rate, the Trustee shall endeavor to verify
to the Owner orally or in writing the Trustee’s estimate of the amount of interest due on the
Note and the Bonds at least seven (7) Business Days prior to each Interest Payment Date;
however, the failure of the Trustee to so notify the Owner or to provide the Owner with the
correct amount of interest due on the Note and the Bonds prior to each Interest Payment Date
shall not excuse the Owner’s obligation to make timely payment of the full amount due
hereunder or under the Note and shall not be a defense to any legal action brought against the
Owner if the Owner makes an incorrect payment hereunder or under the Note.
(2) Notwithstanding the terms and provisions of the Note, when Bonds
bear interest at a Quarterly, Semi-Annual or Fixed Rate, the Credit Facility Issuer, in its sole
discretion, may by written notice to the Commission, the Owner and the Trustee require the
Owner to make monthly payments of principal of and interest on the Note. If the Credit
Facility Issuer so elects, the Owner agrees to pay to the Trustee on the 15th day of each month
an amount equal to l/6 (in a Fixed Rate Period or Semi-Annual Rate Period) or 113 (in a
Quarterly Rate Period) of the amount payable as interest on the Bonds on the following Interest
Payment Date. Such monthly payments shall be appropriately adjusted for a short first Interest
Period so that each monthly payment is equal. In all cases the last such monthly payment
before an Interest Payment Date shall be sufficient to pay, with other available moneys, the
principal of and interest on the Bonds due on such Interest Payment Date. The Credit Facility
Issuer may, in its sole discretion by written notice to the Commission, the Owner and the
Trustee, rescind its direction to require the Owner to make monthly payments during a
Quarterly, Semi-annual or Fixed Rate Period.
Prior to consenting to a change in the interest determination method to a
Commercial Paper Rate pursuant to Section 3.3(f) of the Indenture, the Credit Facility Issuer
may, in its sole discretion, require the Owner (with written notice to the Commission and the
Trustee) to make monthly or other periodic payments similar to the foregoing and the Owner
agrees to make such payments upon the written direction of the Credit Facility Issuer. Such
requirement may be rescinded at a later date in the sole discretion of the Credit Facility Issuer.
(4 Notwithstanding any provisions to the contrary in this Agreement, in the event
the day on which any payment or other performance on the part of the Owner is scheduled to occur
under this Agreement is not a Business Day, then such payment or other performance by the Owner
shall be required to occur on the immediately succeeding Business Day.
(4 The Owner agrees to pay directly to the Trustee, the Commission, the Purchase
Agent, the Paying Agent and the Remarketing Agent the reasonable fees, charges and expenses of the
Trustee (other than the fees of the Trustee and the Commission which shall have been provided
pursuant to Section 4.9 hereof), the Commission, the Purchase Agent, the Paying Agent and the
Remarketing Agent, including, with the prior written consent of the Owner, the fees and expenses of
any rebate consultant engaged by the Trustee or the Commission for the calculation of Rebatable
Arbitrage under Section 5.8 of the Indenture, upon receipt of an invoice as and when the same become
due, together with any and all reasonable costs, fees and expenses of the Remarketing Agent, the
Commission, the Paying Agent, the Purchase Agent or the Trustee in connection with any remarketing
of Bonds (and any other reasonable fees, costs and expenses incurred in connection with the
remarketing of the Bonds, including the reasonable fees and expenses of legal counsel to any of the
566542.2Y22062.0025 -8-
foregoing and the reasonable fees for obtaining opinions of Bond Counsel or other counsel and all
printing costs for Bonds and offering materials). The Owner shall pay directly to the Liquidity Facility
Issuer the fees, charges and expenses of the Liquidity Facility Issuer as and when the same become
due, together with any and all costs, fees and expenses of the Liquidity Facility Issuer in connection
with any remarketing of Bonds (including the reasonable fees and expenses of legal counsel to the
Liquidity Facility Issuer) and the fees and expenses of legal counsel to the Credit Facility Issuer in
connection with any remarketing of Bonds. The Owner shall also pay directly to the Credit Facility
Issuer the fees, charges and expenses of the Credit Facility Issuer as and when the same come due,
together with the fees and expenses of legal counsel to the Credit Facility Issuer.
(e) Subject to Section 8.9 hereof, the obligation of the Owner to make the
payments required by this Section 4.2 and the Note shall be absolute and unconditional. Subject to
Section 8.9 hereof and to the credits permitted in Section 4.3 hereof, the Owner will pay without
abatement, diminution, postponement or deduction (whether for taxes or otherwise) all such amounts
regardless of any cause or circumstance whatsoever, including, without limitation, any defense, setoff,
recoupment or counterclaim which the Owner may have or assert against the Commission, Trustee,
Credit Facility Issuer, the Liquidity Facility Issuer, if any, any owner of a Bond or any other person. In
the event the Owner shall fail to make any of the payments required in this Article IV, the payment so
in default shall continue as an obligation of the Owner until the amount in default shall have been fully
paid. Any payment to the Trustee under the Credit Facility or the Liquidity Facility shall not release or
discharge the Owner from its obligation to make such payments hereunder unless the Trustee receives
written notice from the Credit Facility Issuer that it has been reimbursed for such payment under the
Reimbursement Agreement or written notice from the Liquidity Facility Issuer that it has been
reimbursed or otherwise elects to have such payment so credited.
(9 In addition to the payments otherwise required hereunder, the Owner shall be
obligated to make the payments required by Section 5.8 of the Indenture.
Section 4.3. Credits on Note Payments. Notwithstanding any provision contained in this
Agreement or in the Indenture to the contrary:
(4 Investment earnings on the Revenue Fund and money deposited in the Revenue
Fund from earnings on invested funds which are to be deposited into the Revenue Fund in accordance
with the provisions of the Indenture shall be credited against the obligations of the Owner to make Note
Payments hereunder to the extent such amounts are applied to reimburse the Credit Facility Issuer.
@I The principal amount of Bonds purchased by the Owner and delivered to the
Trustee for cancellation with the prior written consent of the Credit Facility Issuer shall be credited
against the obligation of the Owner to pay the principal on the Note corresponding to the maturity date
of the Bonds delivered to the Trustee and cancelled, provided in no event shall the Owner or any other
Person have the right to deliver Bonds to the Trustee for cancellation without the prior written consent
of the Credit Facility Issuer, and further provided that Bonds owned by or on behalf of the Credit
Facility Issuer may be presented to the Trustee for cancellation, but solely at the option of the Credit
Facility Issuer.
Section 4.4. Prepayment Generally. No prepayment of the Note may be made except to
the extent and in the manner expressly permitted by the Note. Upon receipt of written notice from the
Owner that a deposit is being made by the Owner for the purpose of prepaying the Note and thereby
566542.2l22062.0025 -9-
effecting the redemption of the Bonds, the Trustee at the direction of the Owner, and subject to the
provisions of the Indenture, shall redeem the Bonds as required by the redemption provisions of the
Indenture.
Section 4.5. Alternate Security.
(4 The Owner agrees to provide a Credit Facility securing the Bonds so long as
the Bonds are outstanding which Credit Facility complies with the provisions of Section 2.11 of the
Indenture. At the times required by Section 2.11 (c) or 2.11 (d) of the Indenture, as applicable, the
Owner shall, or if the Owner fails to do so the Credit Facility Issuer may (in its sole discretion), deliver
to the Trustee the notice and accompanying documentation required by Section 2.11 (c) of the Indenture
to replace a Credit Facility which is expiring or the documentation required by Section 2.11 (d) of the
Indenture to extend a Credit Facility which is expiring.
The Owner may at any time elect to replace the Credit Facility then in effect with an
Alternate Security, provided that the Alternate Security satisfies the requirements of Section 2.11 of the
Indenture. If the Owner elects to deliver an Alternate Security to replace a Credit Facility issued by a
Credit Facility Issuer before the end of the term of the replaced Credit Facility, the Credit Facility
Issuer must be indemnified or otherwise protected to its satisfaction against any claims that might be
payable by it under the Credit Facility.
09 The Owner shall also promptly pay an amount sufficient to pay all costs
incurred by the Trustee, and, if applicable, the Liquidity Facility Issuer and the Commission (including
reasonable fees and expenses for its counsel and Bond Counsel) in connection with the substitution of
such Alternate Security.
Section 4.6. Amounts Required for Prepayment. The amount payable by the Owner
hereunder upon any prepayment of the Note under Section 6 thereof shall include an amount of money
equal to the Administrative Expenses and redemption premium, if any, to accrue through the payment
and redemption of the Bonds.
Section 4.7. A4aximum Rate of Interest. Notwithstanding any provision of this Agreement
to the contrary, the Commission and the Owner hereby agree that in no event shall the interest
contracted for, charged or received in connection with this Agreement or the Note (including any other
costs or considerations that constitute interest under the laws of the State which are contracted for,
charged or received pursuant to this Agreement) exceed the maximum rate of nonusurious interest
allowed under the laws of the State or the United States as presently in effect (the “Ahximum LegaZ
Rate of Interest “) and to the extent an increase is allowable by such laws, but in no event shall any
amount ever be paid or payable by the Owner greater than the amount contracted for herein; and in the
event the maturity of the principal amount of the Note is accelerated pursuant to the terms of the Note
or Article VII hereof, or prepaid in accordance with the provisions hereof requiring mandatory
prepayment, then such amounts that constitute payments of interest on the Note and under this
Agreement, together with any costs or considerations which constitute interest under the laws of the
State, may never exceed an amount which would result in payment of interest at a rate in excess of the
Maximum Legal Rate of Interest, whichever applicable laws permit the highest rate, as presently in
effect and to the extent an increase is allowable by such laws; and excess interest, if any, provided for
in this Agreement, or otherwise, shall be cancelled automatically or, if theretofore paid, shall be
credited on the principal amount of the Note.
566542.2l22062.0025 -lO-
Section 4.8. Assignments to Trustee. It is understood and agreed that all right, title and
interest of the Commission in and to the Note, the other First Deed of Trust Documents and this
Agreement (excepting the Reserved Rights of the Commission), are to be pledged and assigned by the
Commission to the Trustee as security for the Bonds under and pursuant to the Indenture and the
Assignment. The Owner consents to such assignments, transfers and pledges. The Commission
directs the Owner, and the Owner agrees, to pay or cause to be paid to the Trustee at its Principal
Office all Note Payments when due pursuant to this Agreement.
Section 4.9. Administrative Fees and Expenses; Other Expenses. The Owner hereby
agrees to pay to the Trustee the amount necessary to pay the Administrative Expenses for deposit into
the Administrative Expenses Account for payment of the Administrative Expenses prior to their due
date. The Owner will obtain and deposit with the Trustee statements from each Person to be paid from
the Administrative Expenses Account of the amount of the Administrative Expenses for which deposits
are to be made. Any amount to be paid to such Persons from the Administrative Expenses Account not
specifically provided for in the Indenture or this Agreement must be approved in writing by the Credit
Facility Issuer.
The Owner will pay all reasonable fees, expenses, advances, and other payments owing
to the Credit Facility Issuer under the Credit Facility and First Deed of Trust Documents as described
therein, all reasonable fees, expenses, advances, and other payments owing to the Liquidity Facility
Issuer under the Liquidity Facility Agreement as described therein, and all reasonable fees and
expenses owing to the Remarketing Agent under the Remarketing Agreement as described therein.
Section 4.10. Insurance. The Owner shall cause the Project to be insured to the extent
required by the First Deed of Trust.
Section 4.1 I. Purchase of Bonds.
The Owner shall not purchase any Bonds without obtaining an opinion of Bond
Counsel to the effect that such purchase will not adversely affect the exclusion from gross income for
federal income tax purposes of interest on the Bonds.
Section 4.12. Liquidity Facility; Alternate Liquidity Facility.
(a) (0 The Owner agrees to provide a Liquidity Facility in accordance with
this Section 4.12 and Section 2.12 of the Indenture providing for the payment of the purchase price of
Bonds tendered by their owners during any Short Term Rate Period. At the times required by Section
2.12(c) or 2,12(d) of the Indenture, as applicable, the Owner shall, or if the Owner fails to do so the
Credit Facility Issuer may (in its sole discretion), deliver to the Trustee the notice and accompanying
documentation required by Section 2.12(c) of the Indenture to replace a Liquidity Facility which is
expiring or the documentation required by Section 2.12(d) of the Indenture to extend a Liquidity
Facility which is expiring.
(ii) The Owner shall have the right to replace a Liquidity Facility with an
Alternate Liquidity Facility at any time, provided that the Alternate Liquidity Facility meets the
requirements of Section 2.12 of the Indenture.
566542.2Y22062.0025 -ll-
(W Each Liquidity Facility must be approved in writing by the Credit Facility
Issuer and must be a municipal bond insurance policy, bond purchase or standby funding agreement,
letter of credit or Surety Bond which is acceptable to the Credit Facility Issuer in all respects and
pursuant to which the Liquidity Facility Issuer agrees to pay, in immediately available funds the
amounts necessary to pay the purchase price of Bonds tendered pursuant to Section 4.5(a) of the
Indenture and not remarketed pursuant to Article IV of the Indenture and must otherwise comply with
the provisions of Section 2.12 of the Indenture.
Section 4.13. [l?ESERl?!ZD]. If required by the Credit Facility Issuer, the Owner shall make
an initial payment and monthly payments into the Tax and Insurance Reserve Account in accordance
with the provisions of Section 8 of the First Deed of Trust.
Section 4.14. Payments Into Rebate Fund. The Owner agrees to comply with the covenants
and procedures set forth in Section 5.8 of the Indenture and the Tax Certificate and to pay to the
Trustee for deposit in the Rebate Fund such amounts as may be necessary to enable the Trustee to pay
any Rebatable Arbitrage to the United States Government.
ARTICLE V
DEFEASANCE OF PRIOR INDENTURE; TRUSTEE SERVICES
Section 5. I. [RESERK?ZDJ. If the money available from the proceeds of the sale of the
Bonds together with any available money then on deposit with the Prior Trustee under the Prior
Indenture shall not be sufficient to pay or provide for the payment of the Prior Bonds in accordance
with Article XIII of the Prior Indenture, the Owner shall pay the amount of any deficiency to the Prior
Trustee immediately upon demand.
Section 5.2. Payment for Extraordinary Services.
(4 The Owner hereby covenants and agrees to pay all reasonable fees of Bond
Counsel in connection with rendering opinions after the issuance of the Bonds which are described in
the Indenture and this Agreement.
04 If upon or after the occurrence of any default or breach by the Owner
hereunder or under any First Deed of Trust Document (regardless of whether it constitutes an Event of
Default), the Commission or the Trustee shall incur Extraordinary Expenses for the enforcement of
performance or observance of any obligation or agreement on the part of the Owner contained herein,
or in any First Deed of Trust Document, the Owner will on demand therefore reimburse the
Commission or the Trustee or both for, or pay directly, Extraordinary Expenses so incurred.
ARTICLE VI
SPECIAL COVENANT
Section 6.1. Indemnzjkation Covenant. The Owner shall indemnify, hold harmless and
defend the City, the Commission, the Prior Trustee, the Trustee and the respective officers, members,
councilmembers, directors, officials, agents and employees of each of them (collectively, the
“Indemnified Parties”) to the maximum extent permitted by law against any and all losses, costs,
566542.2V22062.0025 -12-
damages, claims, actions, expenses and liabilities of whatever nature, kind or character (including,
without limitation, attorneys’ fees of counsel reasonably acceptable to the Indemnified Party, litigation
and court costs, amounts paid in settlement, and amounts paid to discharge judgments) directly or
indirectly arising out of or related to any claim, suit, investigation, proceeding or action commenced or
threatened, arising out of or related to (a) any default or alleged default under the Prior Loan
Agreement or the Prior Reimbursement Agreement; (b) the redemption of the Prior Bonds; (c) the
issuance of the Bonds; or (d) any written statements or representations with respect to the Owner, the
Project, the Prior Bonds or the Bonds made or given to the Commission, the Prior Trustee or the
Trustee, or any underwriters or purchasers of any of the Bonds, by the Owner, or any of its agents or
employees, including, but not limited to, statements or representations of fact, or financial information;
provided, however, that this provision shall not require the Owner to indemnify the Prior Trustee or the
Trustee from any claims, costs, fees, expenses or liabilities arising from the negligence or willful
misconduct of the Prior Trustee or the Trustee.
The indemnification provided herein shall apply whether any such claim, suit,
investigation, proceeding or action complains of (a) any alleged interference with or breach of any
existing contract between the Commission and the owners of the Prior Bonds, or (b) any other alleged
wrongful act of the Indemnified Parties related to any default or alleged default under the Prior
Reimbursement Agreement or the redemption of the Prior Bonds, and regardless of whether the
Indemnified Parties, or any agent thereof, made any investigation with respect to the facts relating to
the Project which was financed with the Prior Bonds or the Developer or any affiliate thereof or the
Prior Loan or the Prior Bonds for the purpose of determining whether the proceedings described in the
preceding paragraph were appropriate.
Upon the sale or transfer of the Project, the acquiring person or entity shall indemnify
and hold harmless the Indemnified Parties as provided herein, and upon such indemnification, and only
upon such indemnification, by the acquiring party, the Owner shall thereafter have no further liability
hereunder except for claims arising from any act or omission of the Owner occurring while the Project
was owned by the Owner.
In the event that any claim, suit, investigation, action or proceeding is brought against
an Indemnified Party, with respect to which indemnity may be sought hereunder, the Owner, upon
receipt of written notice from an Indemnified Party, shall assume and have the right to direct the
investigation, defense and settlement thereof, including the employment of counsel acceptable to the
Indemnified Party and the payment of all expenses; provided that the Indemnified Party shall have the
right to review and approve or disapprove any compromise or settlement in connection with any such
claim, suit, investigation, proceeding or action brought against such Indemnified Party or to which it is
a party (provided that the Indemnified Parties shall not unreasonably withhold or delay this approval
and shall not unreasonably disapprove any compromise or settlement). The Indemnified Parties also
agree to cooperate with the Owner in the Owner’s investigation, defense and/or settlement of any such
claim, suit, proceeding or action. Any Indemnified Party shall have the right to employ separate
counsel in any suit, investigation, action or proceeding and to participate in the defense thereof; but
unless such separate counsel is employed with the approval and consent of the Owner, or pursuant to a
court order, the Owner shah not be required to pay the fees and expenses of such separate counsel.
The Owner also shall pay and discharge and shall indemnify and hold harmless the
Commission and the Trustee from (x) any lien or charge upon payments by the Owner to the
566542.2L22062.0025 -13-
Commission and the Trustee hereunder and (y) any taxes (including, without limitation, all ad valorem
taxes and sales taxes), assessments, impositions and other charges in respect of any portion of the
Project. If any such claim is asserted, or any such lien or charge upon payments, or any such taxes,
assessments, impositions or other charges, are sought to be imposed, the Commission or the Trustee
shall give prompt notice to the Owner and the Owner shall have the sole right and duty to assume, and
will assume, the defense thereof, with full power to litigate, compromise or settle the same in its sole
discretion.
The Commission represents and warrants to the Owner that it has no knowledge of a
claim of the nature described in this Section 6.1 above having been filed in any court, tribunal or other
body of competent jurisdiction or otherwise threatened.
Section 6.2. No Liability of Commission. The Bonds, together with interest thereon, shall
be limited obligations of the Commission giving rise to no pecuniary liability of the Commission nor
any charge against its general credit, shall be payable solely from the revenues pledged therefor under
the Indenture, and shall be a valid claim of the respective Holders only against the revenues pledged
therefor. The Bonds shall not constitute an indebtedness, liability, general, special or moral obligation
or a pledge or loan of the faith or credit or taxing power, within the meaning of any constitutional or
statutory provisions, of the State or any political subdivision thereof, and neither the State nor any
political subdivision thereof shall be liable thereon, and in no event shall the Bonds be payable out of
any funds or properties other than the revenues pledged therefor.
Section 6.3. Further Assurances. To the extent permitted by law, the Commission and the
Owner each acknowledges that it will, from time to time, execute, acknowledge, and deliver, or cause
to be executed, acknowledged and delivered, such supplements hereto and such further instruments as
may be reasonably required or desirable for carrying out the intention of or facilitating the performance
of this Agreement.
ARTICLE VII
BREACH OF COVENANTS, REMEDIES
Section 7. I.
this Agreement if
Event of Default. An Event of Default shall be deemed to have occurred under
(a) Any amount required to be paid by Section 4(a), 4(b) or 6(a) of the Note
(taking into account any credits described in Section 4.3 hereof) or Section 4.2 or 4.14 of this Loan
Agreement is not paid to the Trustee by the Owner when due; or
04 The Owner shall fail to comply with the provisions of Section 4.5 or Section
4.12 hereof and the continuation of such failure for a period of 10 days or more; or
(4 The Owner shall fail to comply with or to perform any one or more of the
covenants, conditions or agreements on its part to be observed or performed hereunder or in the Note
(other than Section 4(a), 4(b) or 6(a) of the Note or Section 4.2,4.12 or 4.14 of this Loan Agreement),
for a period of 30 days after written notice specifying such breach or failure and requesting that it be
remedied is given to the Owner; provided, however, that in the event such breach or failure is such that
it cannot be corrected within said 30-day period, the same shall not constitute an Event of Default
566542.2l22062.0025 -14-
hereunder if corrective action is instituted by the Owner within said 30-day period, is being diligently
pursued and is corrected within 90 days after such notice; or
(4 Any Event of Default under the Regulatory Agreement shall occur and be
continuing for a period of 30 days; or
(4 Any Event of Default under any of the other First Deed of Trust Documents
shall occur and be continuing, but only if the Credit Facility Issuer in its sole discretion notifies the
Trustee and the Commission in writing that such has occurred and that such is to constitute an Event of
Default hereunder; or
@I Any Event of Default under the Reimbursement Agreement shall occur and be
continuing, but only if the Credit Facility Issuer in its sole discretion notifies the Trustee and the
Commission in writing that such has occurred and that such is to constitute an Event of Default
hereunder.
Section 7.2. Remedies for Failure to Petiorm.
(4 If an Event of Default occurs hereunder and is continuing, then the Trustee
may, with the written consent of the Credit Facility Issuer (except in the case of an Event of Default
under the Indenture or the Regulatory Agreement), and upon receipt of the written direction of the
Credit Facility Issuer shall, declare the principal of the Note and all other Note Payments to be due and
payable immediately, by a notice in writing to the Owner and the Commission, and upon any such
declaration such principal shall become immediately due and payable. So long as no Event of Default
has occurred and is continuing pursuant to Section 9.1 of the Indenture, any action by the Trustee or the
Commission shall be taken only at the Credit Facility Issuer’s written direction.
04 Upon the occurrence of an Event of Default specified in Section 7.1 hereof, if
(i) there has been paid to or deposited with the Trustee a sum sufficient to pay all overdue principal of,
premium, if any, and interest on the Bonds and any Administrative Expenses, Extraordinary Fees and
Extraordinary Expenses of the Trustee and the Commission, (ii) such payment is made prior to the first
to occur of the time notice of redemption of the Bonds is given by the Trustee under Section 4.3 of the
Indenture or the Project is sold upon foreclosure of the First Deed of Trust, (iii) no Event of Default
shall have occurred and be continuing under the Indenture and (iv) the Credit Facility Issuer consents
to the rescission of such acceleration; then the acceleration of all amounts due under this Agreement
shall be rescinded, and the parties shall be restored to the same position as though no such Event of
Default had occurred.
(4 Upon the occurrence of an Event of Default specified in Section 7.1 above, the
Trustee may, but only with the written consent of the Credit Facility Issuer (unless an Event of Default
has occurred under Section 9.1 of the Indenture or the Regulatory Agreement), and upon receipt of the
written direction of the Credit Facility Issuer shall exercise one or more of the following remedies
subject in all respects to the provisions relating thereto in the Indenture:
(9 Through its duly authorized agents, have access to and inspect,
examine and make copies of, the books, records and accounts of the Owner during normal
business hours, upon reasonable notice;
566542.2D2062.0025 -15
(ii) Petition a court of competent jurisdiction for the appointment of a
receiver to take possession of and manage and operate the Project in conformity with the
provisions of this Agreement and the Regulatory Agreement;
(iii) Take whatever action at law or in equity may appear necessary or
desirable to enforce observance or performance of any covenant, condition or agreement of the
Owner under this Agreement, the Note and the First Deed of Trust Documents, and to collect
the amounts then due and thereafter to become due consistent with the provisions of Section
8.9 of this Agreement and Sections 4(a) and 4(b) of the Note; or
(iv) Exercise any remedy available under the First Deed of Trust
Documents or at law or in equity.
Section 7.3. Discontinuance of Proceedings. In case any proceeding taken by the
Commission or the Trustee (or the Credit Facility Issuer in the exercise of its rights under the First
Deed of Trust Documents) on account of any failure of the Owner to perform under this Agreement
shall have been discontinued or determined adversely to the Commission or the Trustee (or the Credit
Facility Issuer), then and in every case the Commission, the Trustee, the Owner and the Credit Facility
Issuer shall be restored to their former positions and rights hereunder and under the other First Deed of
Trust Documents, respectively, and all rights, remedies and powers of the Commission, the Trustee
and the Credit Facility Issuer shall continue as though no such proceeding had been taken, except with
respect to any final and binding determination rendered in such proceeding.
Section 7.4. Remedies Cumulative. Subject to Section 8.9, no remedy conferred upon or
reserved to the Commission, the Trustee or the Credit Facility Issuer by this Agreement is intended to
be exclusive of any other available remedy or remedies, but each and every such remedy shall be
cumulative and shall be in addition to every other remedy given under this Agreement, the other First
Deed of Trust Documents or the Indenture or now or hereafter existing at law or in equity. No delay or
omission to exercise any right or power accruing upon any failure of the Owner to perform under this
Agreement shall impair any such right or power or shall be construed to be a waiver thereof In order
to entitle the Commission or the Trustee to exercise any remedy reserved to it in this Article, it shall not
be necessary to give any notice other than as otherwise specified in this Agreement.
Section 7.5. Reimbursement of Expenses. If, upon or after the occurrence of any default
hereunder, the Commission or the Trustee or both shall employ attorneys or incur other expenses for
the enforcement of performance or observance of any obligation or agreement on the part of the Owner
contained herein, the Owner will on demand therefor pay, or reimburse the Commission or the Trustee
or both for the payment of, the reasonable fees of such attorneys and such other reasonable expenses so
incurred.
Section 7.6. Remedies Subject to Applicable Law. All rights, remedies, and powers
provided by this Article may be exercised only to the extent that the exercise thereof does not violate
any applicable provisions of law, and all the provisions of this Article are intended to be subject to all
applicable mandatory provisions of law which may be controlling in the premises and to be limited to
the extent necessary so that they will not render this Agreement invalid, unenforceable, or not entitled
to be recorded, registered, or filed under the provisions of any applicable law.
566542.2Q2062.0025 -16-
Section 7.7. Foreclosure on First Deed of Trust, Notwithstanding anything in the
Indenture, the First Deed of Trust or this Agreement to the contrary, the Trustee shall not be required
to initiate foreclosure proceedings with respect to the Project, and shall not otherwise be required to
acquire possession of, or take other action with respect to the Project which could cause it to be,
considered an “other” or “operator” as described below, unless:
(a) the Trustee has sought and received an Opinion of Counsel rendered by
counsel independent of the Owner to the effect that the Trustee would not by such initiation, acquisition
or other action be considered to hold title to, to be a “mortgagee-in-possession” of, or to be an “owner”
or “operator” of such Project within the meaning of the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, as amended from time to time, or any other law dealing with
the environmental matters or hazardous substances (collectively, “Environmental Laws”); or
@I the Trustee has sufficient comfort, based on previous determinations by experts
on which Trustee can rely, including an environmental report, that:
(0 the Project is in compliance with the Environmental Laws or, if not,
that it would nevertheless be in the best economic interest of the Trustee and the Bondholders
to take such actions as are necessary for the Project to comply therewith;
(ii) there are no circumstances present at the Project relating to the use,
management or disposal of any hazardous substances, hazardous materials, hazardous wastes,
or petroleum-based materials for which investigation, testing, monitoring, contaminant, clean
up or remedial action could be required under any Environmental Laws, or that if any such
materials are present for which such action could be required, that it would be nevertheless in
the best economic interest of the Trustee and the Bondholders to take such actions with respect
to the Project;
(iii) if the Trustee has determined that it would be in the best economic
interest of the Trustee and the Bondholders, the Trustee must be satisfied that it will suffer no
unreimbursed liabilities and will be adequately reimbursed for all liabilities, expenses and costs
from available funds in Trustee’s possession and control; and
(iv) if the Trustee has determined that it would be in the best economic
interest of the Trustee and the Bondholders to take any such action and its aforementioned
liabilities, expenses and costs are adequately reimbursed, the Trustee has so notified the
Bondholders and has not received, within 30 days of such notification, instructions from
Bondholders of 66b% or more in principal amount of the then Outstanding Bonds directing it
not to take such action.
ARTICLE VIII
MISCELLANEOUS
Section 8. I. Amounts Remaining in Funds and Accounts. Any amounts remaining in any
fund or account established under the Indenture after payment of the Bonds in full including interest
and premium, if any, thereon, or provision for payment thereof having been made in accordance with
the provisions of the Indenture, and payment of all other reasonable and necessary obligations owing to
566542.2Y22062.0025 -17-
the Commission, the Registrar, the Paying Agent, the Remarketing Agent, the Credit Facility Issuer,
the Liquidity Facility Issuer, if any, and the Trustee under this Agreement or the Indenture, shall be
paid in accordance with Section 13.1 of the Indenture.
Section 8.2. Payments by Credit Facility Issuer. The Credit Facility Issuer shall, to the
extent of any payments made by it pursuant to the Credit Facility or otherwise, be subrogated to all
rights of the Commission or its assigns (including, without limitation, the Trustee) as to all obligations
of the Owner with respect to which such payments shall be made by the Credit Facility Issuer, but, so
long as any of the Bonds remain Outstanding under the terms of the Indenture, such right of
subrogation on the part of the Credit Facility Issuer shall be subordinate as provided in Section 2.7 of
the Indenture to all rights and claims of the registered owners of Bonds (other than Excluded
Bondholders) Outstanding from time to time under the Indenture to receive payments of principal,
premium, if any, and interest which shall be or become due and payable on the Bonds at maturity or on
any Interest Payment Date or Redemption Date and to receive the purchase price for Bonds purchased
in accordance with the Indenture. The Trustee and the Commission shall execute and deliver any
instrument reasonably requested by the Credit Facility Issuer to evidence such subrogation, and the
Trustee shall assign its rights in any obligations of the Owner with respect to which payment of the
principal thereof (including purchase price), accrued interest thereon and other amounts with respect
thereto is paid by the Credit Facility Issuer.
Section 8.3. Amendments, Changes or Modjkations to Agreement. This Agreement may
be amended, changed or modified only subject to the requirements for and limitations on such
amendments, changes or modifications set forth in the Indenture.
Section 8.4. Payment. At such time as the principal of, premium, if any, and interest on a.ll
Bonds Outstanding under the Indenture shall have been paid, or shall be deemed to be paid in
accordance with the Indenture, and all other sums payable by the Owner under this Agreement and the
Indenture shall have been paid, the obligations of the Owner hereunder and under the Note shall be
deemed to be fully paid, and the Owner upon request is entitled to receive acknowledgment of such
payment in full from the Trustee and the Commission.
Section 8.5. Counterparts. This Agreement 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 Agreement, and, in making proof of this
Agreement, it shall not be necessary to produce or account for more than one such counterpart.
Section 8.6. Severability. If any clause, provision or section of this Agreement shall be held
illegal or invalid by any court, the invalidity of such provisions or sections shall not affect any other
provisions or sections hereof, and this Agreement 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 clause, provision or section had not been contained herein.
Section 8.7. Term of Agreement. This Agreement shall be in full force and effect from the
date hereof and shall continue in effect until the last to occur of (a) the first date on which there are no
Bonds Outstanding, or (b) the first day on which the lien of the Indenture is discharged in accordance
with the provisions of Section 13.1 of the Indenture.
566542.2Y22062.0025 -18-
Section 8.8. Notice of Changes in Fact, Promptly after the Owner becomes aware of the
same, the Owner will notify the Trustee, the Commission, the Credit Facility Issuer and the
Remarketing Agent of (a) any change in any material fact or circumstance represented or warranted by
the Owner in this Agreement or in connection with the issuance of the Bonds, and (b) any default,
event or condition which, with notice or lapse of time or both, could become an Event of Default under
this Agreement or the Indenture, specifying in each case, the nature thereof and what action the Owner
has taken, is taking, and proposes to take with respect thereto.
Section 8.9. Limited Recourse Provisions. Notwithstanding any provisions of the
Indenture, the Note, this Agreement (except as provided in Sections 4.9 and 6.1 of this Agreement),
the First Deed of Trust or any other First Deed of Trust Document to the contrary, in any action
commenced to enforce the obligations of the Owner created or arising hereunder the judgment shall not
be enforceable personally against the Owner or its successors or assigns (or against any affiliate,
subsidiary or corporate parent of the Owner), or against any assets of the Owner or its successors or
assigns (or against the assets of any affiliate, subsidiary or corporate parent of the Owner), except for
the Granted Property and all rents, issues, profits, proceeds, revenues, insurance proceeds and awards
and other income from the Granted Property.
Section WI. IO. Notices. Any notices or other communications required or permitted
hereunder shall be sufficiently given if delivered personally or sent by registered or certified mail,
return receipt requested, or by private courier service, postage prepaid:
if to the Owner to: Security Capital Pacific Trust
7670 South Chester Street, Suite 100
Englewood, Colorado 80 112
Attention:
with a copy to: Security Capital Pacific Trust
25B Technology Drive, Suite 210
b-vine, California 926 18-2302
Attention:
if to the Credit Facility
Issuer to:
CommerzBank, A.G., Los Angeles Branch
633 West Fifth Street, Suite 6600
Los Angeles, California 90071
Attention:
if to the Commission: Carlsbad Housing and Redevelopment Commission
2965 Roosevelt Road, Suite B
Carlsbad, California 92008
Attention: Housing and Redevelopment Director
if to the Trustee: First Trust of California, National Association
101 California Street, Suite 1150
San Francisco, California 94111
Attention: Multifamily Housing Group
566542.2Y22062.0025 -19-
or at such other address as shall be furnished in writing by any such party to the others, and shall be
deemed to have been given as of the date so delivered. A duplicate copy of each notice or
communication given hereunder by the Commission or the Owner shall also be given to the Trustee,
the Credit Facility Issuer and the Liquidity Facility Issuer, if any.
Section 8.11. Applicable Law. This Agreement and the rights and obligations of the
respective parties hereunder shall be governed by and construed and enforced in accordance with the
substantive laws of the State, without reference to the conflict of laws principles of the State.
Section 8.12. Successors and Assigns. This Agreement is made for the sole protection of
Owner, the Commission, the Credit Facility Issuer and Trustee, and each of their successors and
assigns, and no other person shall have any right of action hereunder.
Section 8.13. Rights of Credit Facility Issuer and Liquidity Facility Issuer, All rights of
the Credit Facility Issuer or the Liquidity Facility Issuer, respectively, to request, direct, consent or
approve matters under this Loan Agreement 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.
566542.2D2062.0025 -2o-
IN WITNESS WHEREOF, the Commission, the Owner and the Trustee have caused this Loan
Agreement to be executed in their respective names and their seals, if any, to be hereunto affixed and
attested by their duly authorized representatives, all as of the date first above written.
CARLSBAD HOUSING AND REDEVELOPMENT
COMMISSION
By:
Chairperson
Attest:
By:
Secretary
SECURITY CAPITAL PACIFIC TRUST, a Maryland
real estate investment trust
By:
566542.2Y22062.0025 -21-
EXHIBIT A
DESCRIPTION OF PROJECT
A 208~unit multifamily rental housing project known as Seascape Village and located generally east of
Paseo de1 Norte between Caminito De Las Ondas and Buttercup Lane in the City of Carlsbad, all as
more particularly described as follows:
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 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
500.0 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. 157190, 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.
566542.2i22062.0025 A-l
EXHIBIT B
AMENDED AND RESTATED SECURED NOTE
$15,115,000 June 1,1998
For value received, Security Capital Pacific Trust, a Maryland real estate investment trust
(together with its successors and assigns, the “Owner”), hereby promises to pay to the order of the
Carlsbad Housing and Redevelopment Commission (the “Commission “), the principal sum of Fifteen
Million One Hundred Fifteen Thousand Dollars and No/l00 Cents ($15,115,000.00) and to pay
interest thereon from the date of this Note, all as hereinafter provided. Terms used in this Note and not
otherwise defined herein shall have the meanings set forth in the Amended and Restated Loan
Agreement dated as of June 1, 1998 (as amended or supplemented from time to time, the “‘Loan
Agreement”) between the Owner and the Commission.
1. Note Payments; Bonds. The principal of, premium, if any, and interest on this Note
shall be paid by the Owner by means of payments which, in the aggregate, shah be in an amount
sufficient for the payment in full when due of the principal of, premium, if any, and interest on the
Carlsbad Housing and Redevelopment Commission Multifamily Housing Revenue Refunding Bonds,
Series A of 1994 (Seascape Village Project) in the aggregate principal amount of $15,115,000 (the
“Bonds ‘7 from time to time outstanding under the Indenture (defined below), including (i) the total
interest becoming due and payable on the Bonds on the respective dates of payment thereof, (ii) the
total principal becoming due on the Bonds (whether at maturity, by redemption or acceleration or
otherwise) and (iii) the redemption premium, if any, that shah be payable upon the redemption of
Bonds prior to maturity. Note Payments under this paragraph shall be reduced in each case to the
extent of any credit provided in Section 4.3 of the Loan Agreement.
Unless sooner paid, the entire unpaid principal balance of this Note shall be due and payable on
December 1,2005.
2. Interest Determination. This Note shah bear interest at the same rates, for the same
periods, and determined in the same manner from time to time as the Bonds, all as determined in
accordance with the Indenture.
When interest is payable at a Daily, Weekly, Monthly, Commercial Paper Rate, Liquidity
Facility Rate or Credit 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. Interest on overdue principal and,
to the extent lawful, on overdue premium and interest will be payable on demand at the rate per annum
then borne by this Note.
3. Interest Accrual Interest will accrue on the unpaid portion of the principal of the
Bonds from the last date to which interest was paid, or if no interest has been paid, from the date of the
original issuance of the Bonds until the entire principal amount of the Bonds is paid.
566542.2Q2062.0025 B-l
4. Payment Ins tallmen ts.
(a) Subject to the provisions of Section 4.2(b) of the Loan Agreement, interest and
principal payments on this Note shall be due and payable in immediately available funds at the
Principal Office of First Trust of California, National Association, as Trustee (herein, together with its
successors and assigns, the “Trustee “) under the Amended and Restated Indenture of Trust dated as of
June 1, 1998 (as amended and supplemented from time to time, the “Indenture “) between the
Commission and the Trustee, not later than 10:00 a.m., Trustee’s Time, on the same dates and in the
same amounts principal and interest is due on the Bonds. The Owner covenants and agrees that it is
the Owner’s obligation to contact the Trustee for a determination of the amount of interest due
hereunder and on the Bonds prior to each Interest Payment Date in order to make timely monthly
payments hereunder. While the Bonds bear interest at a Daily or a Weekly Rate, the Trustee shall
endeavor to verify to the Owner orally or in writing the Trustee’s estimate of the amount of interest due
on this Secured Note and the Bonds at least seven (7) Business Days prior to each Interest Payment
Date; provided, however, the failure of the Trustee to so notify the Owner or to provide the Owner with
the correct amount of interest due on this Secured Note and the Bonds prior to an Interest Payment
Date shall not excuse the Owner’s obligation to make timely payment of the full amount due hereunder
and shall not be a defense to any legal action brought against the Owner if the Owner makes an
incorrect payment hereunder.
(b) The Owner shah make all other payments required to be made by the Owner
when due in accordance with the provisions of the Loan Agreement.
(4 Notwithstanding any provisions to the contrary in this Note, in the event the day
on which any payment is scheduled to occur is not a Business Day, then such payment shah be
required to occur on the immediately succeeding Business Day.
(4 In no event shall the aggregate of the interest contracted for, charged or
received hereon, plus any other amounts contracted for, charged or received in connection herewith
which are deemed “interest” under the laws of the State and the United States of America’ as
applicable, in effect on the date hereof permitting the charging and collecting of the highest non-
usurious interest rate hereon (hereinafter referred to as “Applicable Law ‘7, ever exceed the maximum
amount of non-usurious interest which could be lawfully charged hereon under Applicable Law,
anything to the contrary herein, in the Loan Agreement, or in any other related agreement
notwithstanding, and if any amount of interest taken or received by the holder of this Note shall be in
excess of the maximum amount of deemed “interest” which, under Applicable Law, could lawfully
have been collected hereon, then the excess shall be deemed to have been the result of a mathematical
error by the Owner, the Trustee hereinafter referred to, and such holder and shall be credited on the
principal amount of this Note or, if at the time insufficient principal remains unpaid, refunded promptly
to the Owner. All interest and amounts paid or agreed to be paid in connection with the indebtedness
evidenced hereby which under Applicable Law would be deemed “interest” shah, to the extent
permitted by Applicable Law, be amortized, prorated, allocated, and spread throughout the full term
hereof
5. ObZigations Absolute. Subject to Section 13 hereunder, the obligation of the Owner to
make the payments required by this Note shall be absolute and unconditional. Subject to the credits as
and to the extent provided in Section 4.3 of the Loan Agreement, the Owner will pay without
566542.2L22062.0025 B-2
abatement, diminution, postponement or deduction (whether for taxes or otherwise) all such amounts
regardless of any cause or circumstance whatsoever, including, without limitation, any defense, setoff,
recoupment or counterclaim which the Owner may have or assert against the Commission, the Trustee,
the Credit Facility Issuer, the Liquidity Facility Issuer, if any, any Holder of a Bond or any other
person.
6. Prepayments. This Note is prepayable only as provided and upon the terms set forth
below:
(a) Mandatory Prepayment upon Mandatory Redemption of Bonds. This Note
shall be prepaid, as a whole or in part on any date on which and to the extent that the Bonds are subject
to mandatory redemption pursuant to Section 4.1(c) of the Indenture. The prepayment price hereunder
shall be equal to the redemption price set forth in Section 4.1 (c) of the Indenture plus accrued interest
on the Bonds to the date of redemption. Anything to the contrary in this Note notwithstanding, when
this Note is subject to prepayment in connection with a redemption of Bonds pursuant to Section
4.1(c)(2), (3), (4) or (5) of the Indenture and such Bonds or any portion thereof are purchased in lieu of
redemption, no prepayment of this Note will occur or be permitted to the extent that the Bonds are, in
fact, purchased in lieu of redemption rather than redeemed. This Note shall only be prepaid to the
extent and in the amount that Bonds are actually redeemed and cancelled.
Go OptionaZ Prepayment. This Note may be prepaid at the election of the Owner
with the prior written consent of the Credit Facility Issuer, as a whole or in part on any date which the
Bonds may be redeemed pursuant to Section 4.1(a) of the Indenture, but only upon compliance with
Section 4.1(b) of the Indenture. The prepayment price hereunder shall be equal to the redemption price
set forth in Section 4.1 (a) of the Indenture and in the Bonds plus accrued interest on the Bonds to the
date of redemption.
w Extraordinary Prepayment. This Note may be prepaid in whole or in part, on
any date on which the Bonds may be redeemed pursuant to Section 4.1(d) of the Indenture in
accordance with the provisions of Section 4.1(d) of the Indenture. The prepayment price hereunder
shall be equal to the redemption price set forth in Section 4.1 (d) of the Indenture plus accrued interest
on the Bonds to the date of redemption.
7. The Loan; Security. This Note is issued pursuant to the Loan Agreement and is issued
in consideration of the Loan made thereunder and to evidence the obligations of the Owner to repay
such Loan. It is intended by the Owner that the payments of principal of, premium, if any, and interest
hereon will be sufficient at all times to enable the Commission to pay the principal of, premium, if any,
and interest on, and the purchase price of, the Bonds when due. The payment of this Note and the
performance of the Owner’s obligations under the Loan Agreement are secured by the First Deed of
Trust Documents and otherwise as provided in the Indenture and Loan Agreement.
Reference is hereby made to the Loan Agreement, the First Deed of Trust Documents and the
Indenture for a statement of the terms and provisions thereof Reference is hereby made to the Loan
Agreement for a complete statement of the terms and conditions under which the maturity or the
principal installments of this Note may be accelerated. As more fully set forth in the Loan Agreement,
the entire principal balance and all accrued interest on this Note may be declared to be immediately due
and payable upon the occurrence of an Event of Default as therein defined. In such event, but subject
to Section 40 of the First Deed of Trust and Section 13 hereof, the holder of this Note shall have the
566542.2Y22062.0025 B-3
right to exercise various remedies including foreclosure of the First Deed of Trust and the other First
Deed of Trust Documents and sale of any part or all of the Granted Property.
8. Payments to Trustee. All payments of principal, premium, if any, and interest on this
Note shall be made to the holder of this Note at the principal office of the Trustee under the Indenture,
in lawful money of the United States of America.
9. No Modjications; Owner Waiver. The granting, without notice, of any extension or
extensions of time for payment of any sum or sums due hereunder, or under the Loan Agreement or the
First Deed of Trust, or any of the other First Deed of Trust Documents or for the performance of any
covenant, condition or agreement contained herein or therein, or the granting of any other indulgence,
or the taking or releasing or subordinating of any security for the indebtedness evidenced hereby, or any
other modification or amendment of this Note, the Loan Agreement, the First Deed of Trust or any
First Deed of Trust Documents will in no way release or discharge the liability of the Owner on this
Note and under the Loan Agreement, whether or not granted or done with the knowledge or consent of
the Owner.
The Owner and any other party (including, without restricting the foregoing, any endorsers,
sureties and guarantors) hereafter liable for the indebtedness represented by this Note, hereby (a) waive
presentment for payment, notice of dishonor, protest and notice of protest, and (b) agree that the time
of payment of the indebtedness or any part thereof may be extended from time to time without
modifying or releasing the lien of the First Deed of Trust or any other First Deed of Trust Document or
the liability of the Owner or any other such parties hereunder and under the Loan Agreement.
10. Default; No Waiver. Subject to Section 40 of the First Deed of Trust and to Section 13
hereof, in the event of any Event of Default under the Loan Agreement, the holder of this Note and the
secured parties or beneficiaries under the First Deed of Trust or any of them may exercise any remedy
or remedies, in any combination whatsoever, available by operation of law or under this Note, or the
Loan Agreement, or the First Deed of Trust or any of the other First Deed of Trust Documents, and the
holder of this Note and the secured parties or the beneficiaries under the First Deed of Trust shah be
entitled to collect their respective costs of collection, including specifically (but without limitation)
attorneys’ fees, and including costs incurred in participating in any insolvency proceeding or seeking
relief from any stay in effect in any such proceeding.
The holder of this Note and the secured parties or the beneficiaries under the First Deed of
Trust shall not by any act or omission or commission be deemed to waive any of their respective rights
or remedies hereunder or under any other First Deed of Trust Documents, unless such waiver be in
writing and signed by the holder hereof and such secured parties or the beneficiaries, and then only to
the extent specifically set forth therein. A waiver of one event shall not be construed as a continuing
waiver or as a bar to or waiver of such rights with respect to a subsequent event.
566542.2D2062.0025 B-4
Time is of the essence hereof
11. Governing Law. The Owner agrees that: (i) this instrument and the rights and
obligations of all parties hereunder shall be governed by and construed under the substantive laws of
the State of California’ without reference to the conflict of laws principles of such state; (ii) the
obligation evidenced by this Note is an exempted transaction under the Truth in Lending Act, 15
U.S.C. Section 1601, et seq.; (iii) the proceeds of the indebtedness evidenced by this Note will not be
used for the purchase of registered equity securities within the purview of Regulation “U” issued by
the Board of Governors of the Federal Reserve System; and (iv) upon the maturity date, the holder of
this Note shall not have any obligation to refinance the indebtedness evidenced by this Note or to
extend further credit to the Owner.
12. Successors. This Note shall bind the Owner and its successors and assigns, and the
benefits hereof shall inure to the holder of the Note and the secured parties or the beneficiaries under
the First Deed of Trust.
13. Limited Liability. Notwithstanding any provisions of this Note, the First Deed of
Trust, the Loan Agreement (except as provided in Sections 4.9 and 6.1 thereof) or any other First Deed
of Trust Document to the contrary, in any action commenced to enforce the obligations of the Owner
created or arising hereunder the judgment shall not be enforceable personally against the Owner, its
successors or assigns (or against any tiliate, subsidiary, or corporate parent of the Owner) or against
any assets of the Owner or its successors or assigns (or against the assets of any affiliate, subsidiary or
corporate parent of the Owner), except for the Granted Property and all rents, issues, profits, proceeds,
revenues, insurance proceeds and awards and other income from the Granted Property.
566542.2l22062.0025 B-5
-
IN WITNESS WHEREOF, Seascape Apartments, Inc., has executed and delivered this Note
on June - 1998.
SECURITY CAPITAL PACIFIC TRUST, a Maryland
real estate investment trust
By:
566542.2D2062.0025 B-6
The undersigned hereby assigns and transfers this Note to First Trust of California, National
Association, and its successors and assigns as Trustee under the Amended and Restated Indenture of
Trust dated as of June 1, 1998, without recourse to the undersigned.
CARLSBAD HOUSING AND REDEVELOPMENT
COMMISSION
By:
Chairperson
[Se4
Attest:
By:
Secretary
566542.2l22062.0025 B-7
AMENDED AND RESTATED
INDENTURE OF TRUST
by and between
CARLSBAD HOUSING AND REDEVELOPMENT COMMISSION
and
U.S. BANK TRUST,
NATIONAL ASSOCIATION,
as Trustee
Dated as of June 1,199s
%15,115,000
CARLSBAD HOUSING AND REDEVELOPMENT COMMISSION
MULTIFAMILY HOUSING REVENUE REFUNDING BONDS, SERIES A OF 1994
(SEASCAPE VILLAGE PROJECT)
566485.2V22062.0025
ARTICLE I
DEFINITIONS
Section 1.1. Definitions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .6
Section 1.3. Content of Certificates and Opinions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .6
ARTICLE II
SOURCE OF PAYMENTS, GENERAL TERMS AND PROVISIONS OF
THE BONDS
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 3.1.
Section 3.2.
Section 3.3.
Section 3.4.
Section 3.5.
Section 3.6.
Section 3.7.
Section 3.8.
Section 4.1.
Section 4.2.
Section 4.3.
Section 4.4.
Section 4.5.
Section 4.6.
Source of Payment. ....................................................................................................... .7
Medium and Place of Payment ..................................................................................... .7
Execution, Authentication and Delivery.. ...................................................................... .8
Form of Bonds.. ............................................................................................................ .8
Ownership .................................................................................................................... .9
Registration, Transfer and Exchange ............................................................................ .9
Cancellation; Subrogation ............................................................................................ 10
Temporary Bonds ........................................................................................................ 11
Replacement Bonds ..................................................................................................... 12
Completion of Bond Form .......................................................................................... .12
Credit Facility ............................................................................................................. .12
Definitive Bonds; Book-Entry System ........................................................................ .16
ARTICLE III
AUTHORIZATION AND ISSUANCE OF BONDS
Exclusive Provisions ................................................................................................... .17
Terms and Issuance of Bonds; Application of Bond Proceeds .................................... .18
Interest on the Bonds .................................................................................................. .18
Conversion of Interest Rate; Reset of Fixed Rate ....................................................... .22
[Reserved.] ................................................................................................................. .24
Calculation of Interest ................................................................................................. .24
Invalidity of Interest Rates .......................................................................................... .25
Interest Not to Be in Excess of Maximum Rate or Highest Lawful Rate .................... .26
ARTICLE Iv
BOND REDEMPTION, PURCHASE IN LIEU OF
REDEMPTION AND TENDER PROVISIONS
Redemption of Bonds ................................................................................................. .26
Selection of Bonds for Redemption ............................................................................ .29
Notice of Redemption.. ............................................................................................... .29
Payment of Redeemed Bonds ..................................................................................... .3 1
Tender of Bonds for Purchase; Purchase in Lieu of Redemption ................................ .3 1
Notice of Tender ......................................................................................................... .34
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. Draws under Credit Facility.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ..___...... . . . . . . . . . . . . . . . . . . . . . . 43
Section 6.2. [Reserved] . . . . . . . . . . . . . . . . . .._.... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ..__........... . . . . . . . . . . . . . . . .44
Section 7.1.
Section 7.2.
Section 8.1.
Section 8.2.
Section 8.3.
Section 8.4.
Section 8.5.
Section 8.6.
Section 8.7.
Section 8.8.
Section 8.9.
Section 8.10.
Section 8.11.
Section 8.12.
Payment of Purchase Price .......................................................................................... .3 5
Remarketing; Disposition of Bonds ............................................................................ .3 6
Special Notice by Registrar During Commercial Paper Rate Period;
Schedule Attached ...................................................................................................... .3 8
ARTICLE V
PAYMENT OF BONDS; FUNDS AND ACCOUNTS
Creation of Funds ....................................................................................................... .38
Bond Proceeds Fund ................................................................................................... .3 9
Revenue Fund: Principal Account; Interest Account .................................................. .39
[Reserved] .................................................................................................................. .40
[Reserved] .................................................................................................................. .40
Revenue Fund: Administrative Expenses Account ..................................................... .40
Bond Purchase Fund ................................................................................................... .4 1
Rebate Fund.. .............................................................................................................. .41
Project Loan Fund ....................................................................................................... .42
Lapse of Payment ....................................................................................................... .42
ARTICLE VI
CREDIT FACILITY
ARTICLE VII
SECURITY AND INVESTMENTS
Money Held in Trust as Security . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
Investments.. . . . . . . . . . . . . . . . . . . . . __. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .44
ARTICLE VIII
SPECIAL COVENANTS
Enforcement of Obligations ........................................................................................ .45
Sale, Transfer of Trust Estate ..................................................................................... .45
Further Instruments and Actions ................................................................................. .46
Payment of Bonds.. ..................................................................................................... .46
Extension of Payment of Bonds .................................................................................. .46
Authority to Issue Bonds and Pledge Revenues and Other Property.. ......................... .46
Special Covenant with Respect to Credit Facility ....................................................... .46
Compliance with Conditions Precedent ...................................................................... .46
Performance ................................................................................................................ .47
Amendments of Agreement ........................................................................................ .47
Financing Statements .................................................................................................. .47
Tax Covenants ................ .: .......................................................................................... .47
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.
Liability of Commission Limited to Revenues and Other Assets
Pledged ....................................................................................................................... .48
Record-Keeping .......................................................................................................... .48
Trustee to Monitor Compliance .................................................................................. .48
ARTICLE IX
EVENTS OF DEFAULT AND REMEDIES
Events of Default.. ...................................................................................................... .48
Remedies .................................................................................................................... .49
[Reserved.] .................................................................................................................. 50
Enforcement of Rights ................................................................................................. 50
Enforceability by Trustee.. .......................................................................................... .50
Termination of Proceedings ........................................................................................ .5 1
Direction of Proceedings.. ........................................................................................... .5 1
Limitations on Rights of Registered Owners of Bonds ............................................... .5 1
Remedies Not Exclusive ............................................................................................. .52
Delays, Omissions ....................................................................................................... 52
Notice of Event of Default .......................................................................................... .52
Application of Moneys ................................................................................................ .53
Foreclosure of First Deed of Trust; Disposition of Project .......................................... .54
ARTICLE X
THE TRUSTEE, REMARKE TYING AGENT, PAYING AGENT,
REGISTRAR AND PURCHASE AGENT
Section 10.1. Acceptance of Trusts .................................................................................................. .5 5
Section 10.2. Performance Through Attorneys, Agents, Receivers, or Employees ........................... .55
Section 10.3. Fees, Expenses, Charges and Other Disbursements .................................................... 55
Section 10.4. Obligation to Take Action.. ......................................................................................... .56
Section 10.5. Good Faith Reliance .................................................................................................... 56
Section 10.6. Who May Own Bonds.. ............................................................................................... 56
Section 10.7. Resignation by Trustee ............................................................................................... .57
Section 10.8. Removal of Trustee ..................................................................................................... .57
Section 10.9. Appointment of Successor Trustee in the Event of Vacancy ....................................... .57
Section IO. 10. Qualifications of Successor Trustee ............................................................................ .58
Section 10.11. Concerning Successor Trustee.. .................................................................................. .58
Section 10.12. Merger of Trustee.. ...................................................................................................... 58
Section 10.13. Conduct of Trustee ..................................................................................................... .58
Section 10.14. Intervention by Trustee.. .............................................................................................. 58
Section 10.15. Duties Determined Solely by Certain Documents.. ..................................................... .58
Section 10.16. Paying Agent .............................................................................................................. .59
Section 10.17. Registrar and Purchase Agent ..................................................................................... .59
Section 10.18. Remarketing Agent ..................................................................................................... .60
Section 10.19. Several Capacities ....................................................................................................... .62
Section 10.20. Authority to Deal with the Credit Facility Issuer ......................................................... .62
ARTICLE XI
INSTRUMENTS EXECUTED BY BONDHOLDERS
Section 11.1. Proof of Ownership.. . . . . . . . . ._. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .62
Section 11.2. Effect of Execution . . . . . . . . . . . . .._ . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .63
ARTICLE XII
MODIFICATION OF INDENTURE, LOAN AGREEMENT, FIRST DEED
OF TRUST,
CREDIT 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 ................................................................................................................ .63
Supplemental Indenture .............................................................................................. .63
Consent of Bondholders.. ............................................................................................ .64
Effect of Supplemental Indenture ................................................................................ .65
Required Consents.. .................................................................................................... .66
Consent to Modifications of First Deed of Trust Documents and
Related Documents ..................................................................................................... .66
Amendments of Remarketing Agreement ................................................................... .66
Notice to Rating Agencies .......................................................................................... .66
Opinions of Counsel .................................................................................................... .67
Certificate of Owner ................................................................................................... .67
Notation of Modification on Bonds; Preparation of New Bonds ................................. .67
Modification of the Tax Certificate.. ........................................................................... .67
ARTICLE XIII
DISCHARGE OF INDENTURE
Section 13.1. Discharge .................................................................................................................... .67
Section 13.2. Trustee’s Rights Reserved.. ......................................................................................... .68
ARTICLE XIV
MISCELLANEOUS
Section 14.1.
Section 14.2.
Section 14.3.
Section 14.4.
Section 14.5.
Section 14.6.
Section 14.7.
Section 14.8.
Section 14.9.
Successors of the Commission.. .................................................................................. .68
Purpose; Exclusive Benefit ......................................................................................... .69
Severability ................................................................................................................. .69
No Personal Liability or Accountability ...................................................................... .69
Notices.. ...................................................................................................................... .69
Goveming Law ........................................................................................................... .70
Execution in Counterparts ........................................................................................... .70
Payments Due on Days That Are Not Business Days.. ................................................ 70
Rights of Credit Facility Issuer ................................................................................... .70
-
PARTIES
THIS AMENDED AND RESTATED INDENTURE OF TRUST, dated as of June 1,1998
(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 U.S. Bank Trust, National Association (formerly 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 “), and amends and restates in its entirety that certain Indenture of Trust by and
between the Commission and the Trustee dated as of September 1,1994.
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
“Refinding 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 $16,2 15,000
(the “Prior Bonds “) for the purposes described in (i) the Indenture of Trust dated as of April 1,1985
(the “Prior Indenture “) 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 “Prior Credit FaciZity Issuer “), 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 “Secutity Trustee “) for the benefit of the Commission and
the Prior Credit Facility Issuer (herein referred to as the “Prior First Deed of Trust”). The Prior First
566485.2i22062.0025
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” and, together with the
Regulatory Agreement and Declaration of Restrictive Covenants dated as of April 1,1985 (the “Prior
ReguZatory Agreement “) by and among the Commission, the Developer and the Prior Trustee, are
collectively referred to herein as the “Prior Loan Documents “.
E. In order to enhance the marketability of the Prior Bonds, the Prior Credit Facility Issuer
issued its Credit Facility No. 1667165 (the “Prior Credit Facility “). In connection with the issuance
of the Prior Credit Facility, the Developer and the Prior Credit Facility Issuer 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 Prior Credit Facility
Issuer for any payments made by the Prior Credit Facility Issuer under the Prior Credit Facility.
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 Credit Facility Issuer.
G. The Commission has been advised that the Developer 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 Prior Credit Facility Issuer (as the
credit instrument obligor under the Prior Indenture) and the Prior Trustee filed an action on December
19,199O 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 “Seascape “), acquired title to the Project.
K. Prior to Seascape’s acquisition of the Project, the Prior Credit Facility Issuer gave
notice to the Prior Trustee to call the Prior Bonds for redemption pursuant to its rights under Section
601 (C)(3) of the Prior Indenture.
L. In order to pay a portion of the redemption price of the Prior Bonds, the Commission
agreed to issue its Multifamily Housing Revenue Refunding Bonds, Series A of 1994 (Seascape
Village Project), in the aggregate principal amount of $15,115,000 (the “Bonds “). The Bonds have
been issued under and are entitled to the security of this Indenture.
566485.2D2062.0025 -2-
M. Concurrently with the execution and delivery of this Indenture, Seascape is selling the
Project to Security Capital Pacific Trust (the “Owner”).
N. 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 concurrently
with the execution of this Indenture an Amended and Restated Loan Agreement dated as of June 1,
1998 which amends and restates in its entirety the Loan Agreement dated as of September 1, 1994 by
and between Seascape and the Commission (as supplemented and amended, the “Loan Agreement”)
and an Amended and Restated Secured Note payable to the order of the Commission (as supplemented
and amended, the “SecuredNote ” or “Note “), which will contemporaneously be assigned, endorsed
and delivered, without recourse, by the Commission to the Trustee.
0. Contemporaneously with its execution of the Loan Agreement and as security for its
payments under the Loan Agreement and the Note, the Owner will execute and record an Amended
and Restated 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, 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 June 1, 1998 (as supplemented and
amended, the “Assignment “).
P. Contemporaneously with the execution of this Indenture, Commerzbank
Aktiengesellschaft, Los Angeles Branch (“Commerzbank Los Angeles”) will cause Commerzbank
Aktiengesellschaft, New York Branch (together with its successors and assigns and together with the
issuer of any Alternate Security pursuant to Section 2.11 hereof is referred to herein as the “Credit
FaciZity Issuer”) to issue to the Trustee its Letter of Credit (together with all extensions, renewals,
amendments and replacements thereof and together with any Alternate Security, is herein referred to as
the “Credit FaciZiry “) under which the Credit Facility Issuer will pay to the Trustee the amount
required (i) 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 Credit Facility pursuant to its terms, whether
at stated maturity, upon redemption or upon acceleration; and (ii) to pay the Purchase Price of Bonds
tendered for purchase pursuant to Section 4.5 hereof becoming due on or prior to the termination of the
Credit Facility pursuant to its terms.
Q. To evidence the Owner’s obligation to repay, inter alia, the amounts paid by the Credit
Facility Issuer under the Credit Facility, Commerzbank Los Angeles and the Owner entered into that
certain Reimbursement Agreement dated as of June 1,1998 (as amended and supplemented, the
“Reimbursement Agreement”).
R. 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.
S. 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.
566485.2\22062.0025 -3-
T. 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 authorized 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.
U. The Trustee has agreed to accept the trusts herein created upon the terms set forth
V. 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.
W. 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
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 sufkiency 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, except for moneys held in the Administrative Expenses
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.
566485.2\22062.0025 -4-
Clause C
All of the Commission’s right, title and interest in, to and under the First Deed of Trust
Documents.
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, to the Trustee for the benefit of the Bondholders, including all
payments due under the Credit Facility.
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
566485.2D2062.0025 -5-
and the Credit Facility Issuer and with the respective registered owners, from time to time, of the
Bonds, as follows:
ARTICLE I
DEFINITIONS
Section 1.1. 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 and this Indenture.
Section 1.2. Rules of Construction.
(a) The singular form of any word used herein, including the terms defined in
Section 1.1, 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.
09 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.
Cc) 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
(4 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.
(e) 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 Certificates 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
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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 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 2.1. 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 by check 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 Trustee or the Paying Agent shall, upon
the written request of any holder of $1 ,OOO,OOO or more in aggregate principal amount of the Bonds
made at least 15 days before a Record Date, make payments of principal of or interest on such Bonds
by wire transfer in immediately available funds to an account in the continental United States
designated by such holder. The Paying Agent shah include the CUSIP identification number with
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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.
Section 2.3. Execution, Authentication and Delivery.
(a) All Bonds issued hereunder shah be executed on behalf of the Commission by
the manual or facsimile signature of the Chairperson 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 Chairperson 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, shah 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.
@I 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, shah be the proper officers of the Commission although at the date of the authentication or
delivery of such Bonds any such person shah not hold that office of the Commission.
(4 Upon receipt of the following instruments and upon receipt of the proceeds
from the sale of 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
(9 executed counterparts of this Indenture, the Loan Agreement, the Note,
the Assignment and the Remarketing Agreement; and
(ii) the Credit Facility.
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.
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Section 2.5. Ownership. The Commission, the Trustee, the Paying Agent, the Purchase
Agent, the Credit 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 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
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 2.1 l(a). Bonds tendered
for purchase or purchased in lieu of redemption pursuant to Article IV hereof shall be registered and
delivered to the purchasers thereof as provided in Sections 4.5 and 4.8 hereof
All 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 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.
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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.
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) Cancellation. 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.
03 Subrogation Rights of Credit Facility Issuer.
(9 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
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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 this 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
this 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 determinin g any draw 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.
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
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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 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.
(4 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.
(4 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 shah not register any further transfer of such Undelivered Bond by such prior Holder.
Section 2.10. Completion of Bond Form. The respective numbers, CUSIP numbers,
maturity 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 2.11. Credit Facility.
(4 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
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Outstanding Bonds are owned by the Excluded Bondholders. Each Credit Facility issued to secure the
Bonds shall provide for (i) the payment of principal and interest becoming due and payable on the
Bonds (whether at stated maturity, by acceleration or by call for redemption, (ii) the payment of the
Purchase Price of Bonds to be tendered for purchase pursuant to Section 4.5 hereof, and (iii) with
respect to the Credit Facility replacing the Prior Credit Facility on June 1, 1998, payment to the Trustee
of “preferentialpayments ” as defined in Section 6.1 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 acceleration, (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. Each Alternate Security
shall (i) permit draws thereunder for the purposes and in the amounts described in Section 2.11 (a)
hereof, (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.
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 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
(4 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 (or such shorter period as is acceptable to the
Trustee), 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 Alternate Security and (iii) the identity of the issuer of the proposed
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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 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 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 Trustee and the
Commission, addressed to the Trustee, the Remarketing Agent 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, (E) 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) in the case of a Credit Facility Substitution Date, written consent of the existing
Credit 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 all reasonable costs incurred by the Trustee, 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.
(4 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 (or such shorter period as is acceptable to the Trustee) 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 or providing for
the purchase of Bonds during a Short-Term Rate Period. The Credit Facility Amendment shall be
accompanied by (i) signed original opinions of counsel to the Credit Facility Issuer and Bond Counsel
meeting the requirements of clauses (C), (D) and (E) of Section 2.1 l(c) hereof, and (ii) 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. Ifthe 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
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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 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.
69 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. If the existing Credit Facility is not expiring, in 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. If the existing Credit Facility is expiring, in 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.
(g) Cancellation of Credit Facility. The Trustee shall release, cancel, and return
the Credit Facility then held by it to the Credit Facility Issuer thereof
(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
566485.2i22062.0025 -15-
otherwise on the first Business Day following the last day the Credit Facility secures preferential
payments;
hereofr (iv) when Bonds are no longer Outstanding, as provided in Article XIII
69 on any date designated by the Credit Facility Issuer if the Credit
Facility Issuer is the owner of all Outstanding Bonds; and
terms.
upon the termination or the expiration of the Credit Facility by its
0-d 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. Definitive Bonds; Book-Entry System.
G-4 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.
09 Upon the agreement of the Commission, the Credit 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:
(9 The Commission, the Trustee, the Owner 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 Beneficial Owner 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
566485.2Y22062.0025 -16-
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 Beneficial Owners transferring or exchanging such Bonds shall designate
at the expense of the Owner.
(iii) If the Commission, the Credit 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 Authorized 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.
69 Registered ownership of the Bonds may be transferred on the
registration books 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, 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
566485.2Gi2062.0025 -17-
Section 3.2. Terms and Issuance of Bonds; Application of Bond Proceeds.
69 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 $15,115,000 are hereby authorized to be issued under and
secured by this Indenture. The Bonds shall be dated as of the Closing Date and shall mature on
December 1,2005. No obligations other than the Bonds shall be issuable pursuant to this Indenture.
09 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.
(4 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 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.
(4 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 maturity or redemption or acceleration prior to maturity)
or unless the Bonds bear interest at 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:
69 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 “DuiZy 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. Each Daily Rate shall 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.
566485.2l22062.0025 -1%
0-Q 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 Tuesday of each calendar
week or if such Tuesday is not a Business Day, on the first Business Day thereafter (the “Weekly Rate
Determination Date “). Each Weekly Rate will be effective on the day following the Weekly Rate
Determination Date through and including 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 Tuesday next
succeeding the Closing Date, (ii) when any Tuesday is not a Business Day, the Weekly Rate will be
effective on the Weekly Rate Determination Date, and (iii) if a new Weekly Rate is scheduled to
become effective on a Record Date or on any date succeeding such Record Date but preceding the
related Interest Payment Date, the existing Weekly Rate shall remain effective to but excluding the
applicable Interest Payment Date and the new Weekly Rate shall become effective on such Interest
Payment 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.
(4 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 the first day of that calendar month 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
first day of that calendar month through and including the last day of such month (or the effective date
of a change to a Fixed Rate or another Short Term Rate). 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.
(d) 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 the first day of that Quarter 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 first day of
such Quarter through and including the last day of such Quarter (or the effective date of a change to a
Fixed Rate or another Short Term Rate). 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 the first day of that Six-Month Period 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 first day of that Six-Month Period through and including the
last day of that Six-Month Period Date (or the effective date of a change to a Fixed Rate or another
Short Term Rate). 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.
566485.2Y22062.0025 -19-
(0 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, 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 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(f)(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 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 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 marketfor, or the relative
yield of; the Bonds ” 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
566485.2D2062.0025 -2o-
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, “benejcial” 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, 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.
the foregoing: (4 Limitations on Selection of Commercial Paper Rate. Notwithstanding
(1) A Commercial Paper Rate Period may not be established
unless the Credit Facility terminates 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.
(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 the 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
566485.2\22062.0025 -21-
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.
(h) 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, may change
the method of determinin g 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
Remarketing Agent and the Credit Facility Issuer, at least sixty (60) days prior to the proposed
effective date of such change (other than 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 (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 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 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 2.1 I(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), and (ii) if required, an Alternate Security and the accompanying
documentation meeting the requirements of Section 2.11 hereof. The Owner shall cause the items
requested to be delivered in the preceding sentence to be delivered into an escrow with the Trustee at
least 10 days prior to the Conversion Date, for final delivery on the Conversion Date.
566485.2Q2062.0025 -22-
(b) Change from Fixed 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 Default “) 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. Ifthe
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 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.
(4 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.
566485.2i22062.0025 -23-
(4 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 an Interest Payment 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
(4 if the change is to a Short Term Rate, an Alternate Credit Facility or a
Credit Facility Amendment complying with Section 2.11 hereof must be delivered to the Trustee prior
to the effective date of the Short Term Rate Period.
(9 Failure of Conditions. The Bonds shall be subject to mandatory tender for
purchase on any Conversion Date pursuant to Section 4.5(b)(i) h ereof. 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 Credit Facility complying with Section 2.11 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 Credit 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.
0 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 draw 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. Calculation 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
566485.2U2062.0025 -24-
Remarketing Agent will notify the Trustee and the Paying Agent in writing or by telephone promptly
confirmed by facsimile transmission by 12:OO 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
(5) on the first Business Day after the Fixed Rate Determination
Date, of the Fixed Rate set on the Fixed Rate Determination Date.
The Remarketing Agent will inform the Trustee, the Paying Agent, the Owner, , 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 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.
(9 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 by the Remarketing
Agent (or the Trustee under the circumstances described in this Section 3.7(a) below) and shall be:
(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
566485.2U2062.0025 -25-
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.
04 Invalidity 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 Journal or the New York Times or another publication of similar standing. Ifthe
Fixed Rate as calculated pursuant to this Section 3.7(b) is other than a multiple of l/8 or l/20 of l%, 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, but, if such excess shall nevertheless be paid, it shall be credited on the
principal amount of the Bonds.
ARTICLE IV
BOND REDEMPTION, PURCHASE IN LIEU OF
REDEMPTION AND TENDER PROVISIONS
Section 4.1. Redemption of Bonds.
(a) Optional Redemption. The Bonds are subject to redemption upon the exercise
by the Owner of an election to prepay the Loan in accordance with subsection @) below, with the prior
written consent of the Credit Facility Issuer, as follows:
0) Fixed 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:
Redemption Date Redemption Price
566485.2tZ2062.0025 -26-
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, 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.
(W Sources of Payment of Optional Redemption Price. If the Credit Facility then
in effect does not cover the payment of any premium due on the Bonds in connection with an optional
redemption of Bonds under Section 4.1 (a) of this Indenture, then, 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 unless (i) the Owner shall
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 to pay such optional redemption premium,
or (ii) one day prior to the date notice of redemption is mailed to Bondholders, the Owner shall deliver
to the Trustee (1) a direct pay letter of credit issued by a banking institution in favor of the Trustee,
which letter of credit would pay the optional redemption premium and 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) an amendment of the Credit Facility to permit draws to pay the optional redemption price, (3) any
combination of (1), (2) and (3) a b ove, in the case of a redemption with money described in (i) 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,
566485.2Y22062.0025 -27-
dated on or after the 367th day after such deposit certifj%rg 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 a recognized experienced practitioner in bankruptcy matters to the effect that payments
by the Trustee from money described in clause (i) above would not constitute transfers avoidable under
11 U.S.C. Section 547(b) and recoverable from the Holders of the Bonds under 11 U.S.C. Section
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
6) Manchtoly 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 in an
amount equal to any Net Proceeds which the Credit Facility Issuer requires to be
applied to prepay the Loan pursuant to the First 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 or the
First Deed of Trust, or (ii) title to the Project has been transferred by foreclosure, sale
or deed in lieu of foreclosure or sale following the occurrence of an Event of Default
under and as defined in the Loan Agreement, the Reimbursement Agreement or the
First Deed of Trust, or (iii) 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 by the Holders thereof
pursuant to Section 4.5(b), purchased in lieu of redemption pursuant to Section 4.5(c)
hereof, 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 Credit 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 Credit Facility Issuer to the Trustee, the Owner
and the Commission demanding such redemption.
566485.2i22062.0025 -28-
(4 Extraordinary 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 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 (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, first by selecting Credit Facility Issuer Bonds for
redemption and second 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 redemption shall not be deemed Outstanding. The Trustee
shall promptly notify the Commission, the Owner, the Credit Facility Issuer and the Remarketing
Agent in writing of the Bonds or portions thereof so selected for redemption.
Section 4.3. Notice of Redemption.
(4 The Trustee shall mail a notice of redemption not later than five(5) days
following its receipt of notice in accordance with Section 4.1 above directing a redemption to occur.
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 Holder 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
566485.2U2062.0025 -29-
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-(5 16) 227-4039 or 4190; Midwest Securities Trust Company,
Capital Structures-Call Notification, 440 South LaSalle Street, Chicago, IIlinois 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.
Information Services include Financial Information, Inc. “Daily Culled 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.
566485.2i22062.0025 -3o-
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 shah 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 such registered owner’s
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
Authorized 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.
Section 4.5. Tender of Bonds for Purchase; Purchase in Lieu of Redemption.
(4 Optional Tender for 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:
566485.2U2062.0025 -31-
(9 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 10: 3 0 a.m.,
Trustee Time, on the date of purchase.
(2) Weekly 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:
(9 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:
(i) 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.
(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) Additional Delivery Requirements. Each notice shah specify
(i) the principal amount, CUSIP number, certificate number and stated maturity of the Bond to which
566485.2i22062.0025 -32-
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 shah 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, identity 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 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
shah not be required pursuant to this Section or Section 4.6 hereof
O-9 Mandatory Tender for 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:
(9 (A) on each Conversion Date or (B) on each date which would have
been a Conversion Date except for the failure to satisfl 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 Credit Facility is not scheduled to expire, as provided in Section 3.4(e) hereof);
(ii) on the last Interest Payment Date prior to the Termination Date of a
Credit Facility, unless the term of such Credit Facility has been extended prior to such Interest Payment
Date pursuant to a Credit Facility Amendment in accordance with the provisions of Section 2.1 l(d)
hereof;
(iii) 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; and
566485.2l22062.0025 -33-
(iv) 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
(4 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 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.
69 Effect of Purchase of Bonds. No purchase of Bonds by the Credit Facility
Issuer 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 10:00 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. S(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 6:00 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 by telex, telecopy or telephone, promptly confirmed in writing, of the
principal amount of Bonds being tendered pursuant to the Tender Notice and the Purchase Date
specified therein. 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.
69 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:
(9 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;
566485.2l22062.0025 -34-
(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 (including, without limitation, the condition that, if the
reason for the mandatory tender is a conversion from a Short Term Rate to a Fixed Rate, such tender
shall be cancelled and the Bonds shah continue to bear interest at the then applicable Short Term Rate
if the Credit Facility remains in effect);
(iv) that the Holders do not have the right to elect to retain their Bonds and
that such Bonds shah be deemed tendered on the Purchase Date, whether or not such Bonds are
surrendered; and
(9 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 shah 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 4.7. Payment of Purchase Price.
(4 Manner and 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 to the Trustee
pursuant to Section 4.5(b) hereof or which is to be purchased in lieu of redemption pursuant to Section
4.5(c) hereof shah 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 to the Trustee, as the case may be, 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 shah 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; and (ii)
when the Bonds have been tendered pursuant to Section 4.5(a), (b) or (c) hereof from proceeds of a
draw under the Credit Facility. Neither the Trustee nor the Purchase Agent shah 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, except for money paid from a claim or draw under the
Credit Facility, which shah not be commingled with other amounts hereunder.
(b) Remarketing Proceeds. Not later than the close of the Remarketing Agent’s
business on the Business Day before a Purchase Date, the Remarketing Agent shah give notice by
566485.2l22062.0025 -35
telephone, telecopy or telex (promptly confirmed in writing) to the Owner, the Credit 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) hereof) or the Trustee (in the case of remarketings of Bonds tendered for
purchase pursuant 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 notie the Trustee (but not later than 10:00 a.m.,
Trustee Time, on the applicable Purchase Date) of amounts so held by the Purchase Agent, with such
notification to be promptly confirmed in writing.
(4 Drawings under Credit Facility to Pay Optional Tenders. Subject to the
provisions of Section 6.1 hereof, the Trustee shall give such notices, and take such other actions as may
be required under the Credit Facility prior to and/or on 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 of remarketing proceeds on deposit with the Trustee or the Purchase Agent on a Purchase Date
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 on such Purchase Date. 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
described in Section 4.7(b) sufficient to pay the Purchase Price of Bonds tendered or deemed tendered
for purchase on such date pursuant to Section 4.5 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 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 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 or the Purchase Agent which is available under Section 4.7(b) above to pay the Purchase Price
and the amount of the Purchase Price of the Bonds (which payment shall be made by the Credit 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, but shall not commingle the amounts drawn on the
Credit Facility with any other amounts.
(4 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.
(4 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. S(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 the Credit Facility Issuer, only upon the request of or consent
566485.2l22062.0025 -36-
by the Credit Facility Issuer). Bonds 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.
09 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.
(cl If the Bonds are no longer held in book-entry form only hereunder, or in the
case of Bonds purchased by the Credit Facility Issuer, 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 which have been or will be purchased
as a result of a mandatory tender or purchased in lieu of redemption) or the Purchase Agent (in the case
of Bonds optionally 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:
(9 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; and
(ii) Bonds delivered in replacement for Bonds purchased with money
provided under the Credit Facility shall be registered in the Bond Register in the name of the
Owner and be held by the Trustee in accordance with the terms of the Pledge Agreement.
(4 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.
63 Bonds purchased with funds obtained by a draw or claim on the Credit Facility
will not be remarketed until the Credit Facility Issuer notifies the Trustee by telephone, telecopy or
telex, promptly confirmed in writing, that the amount available to be drawn on the Credit Facility 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.
03 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.
566485.2l22062.0025 -37-
(8) 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 shah 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.
ARTICLE V
PAYMENT OF BONDS; FUNDS AND ACCOUNTS
Section 5.1. Creation of Funds.
(4 There are hereby created and established the following funds and accounts:
0) Bond Proceeds Fund;
(ii) Revenue Fund, which shah contain a Principal Account, an Interest
Account and an Administrative Expenses Account;
(iii) Rebate Fund;
(iv) Project Loan Fund; and
69 Bond Purchase Fund.
Such funds and accounts shah be funded, administered, held and invested as set forth
herein, and money credited to such funds and accounts shah be disbursed solely at the times and for the
purposes provided herein.
04 The Trustee is further authorized (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.
Cc) All money received for the account of any fund or account under the Indenture
shah 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.
(4 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.
566485.2D2062.0025 -38-
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.
Section 5.3. Revenue Fund: Principal Account; Interest Account.
(4 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) payments made by the Owner to the Trustee pursuant to Section 4.9 of the
Agreement for deposit directly into the Administrative Expenses Account, and (iv) payments made
pursuant to Section 4.9 of the Loan Agreement for deposit into the Rebate Fund), 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. Moneys in the
Revenue Fund shall be invested in accordance with Section 7.2 hereof
C-9 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 due.
(4 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).
w So long as all amounts due and payable under the Credit Facility have been
paid, moneys in the Revenue Fund on each Interest Payment Date, Redemption Date and maturity date
shall be paid first to the Credit Facility Issuer to pay or reimburse the Credit Facility Issuer any
amounts due and owing under the Reimbursement Agreement. The Trustee may rely on the Credit
Facility Issuer for statements of amounts due under the Reimbursement Agreement. In the event that
timely payment is not made on the Credit Facility, 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 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 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
566485.2i22062.0025 -39-
or maturity date, excluding any amounts due upon redemption of the Bonds pursuant to Section
4.1 (a) hereof, and excluding any amounts due upon Credit Facility Issuer Bonds or Owner
Bonds; and
(iii) 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.
Section 5.4. [Reserved.].
Section 5.5. [Reserved].
Section 5.6. Revenue Fund: Administrative Expenses Account.
(4 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.
c-3 On the Closing Date, the Trustee shall deposit into the Administrative
Expenses Account the amount of $200,504.20 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.
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.
(9 Not later than March 1 and September 1 of each year (commencing on March
1, 1995) 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 April 1 and October 1 of each year
(commencing April 1, 1995) all 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
566485.2\22062.0025 -4o-
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
transferred from the Trustee representing proceeds of a 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 shall 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 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.
Section 5.8. Rebate Fund.
(a) 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 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 shall 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) Payment to the Treasury. 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,
m 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
566485.2i22062.0025 -41-
(Y) 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 803 8-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.
W Disposition of Unexpended 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 rebate calculation services and,
second, the Owner.
(4 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.
(4 The Trustee shall conclusively be deemed to have complied with the provisions
of this Section if it follows the written directions of the Owner and the Commission set forth in Section
5.8 and shall not be required to take any actions under this Section in the absence of such direction
upon which the Trustee may conclusively rely.
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 lien 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.
566485.2Y22062.0025 -42-
ARTICLE VI
CREDIT FACILITY
Section 6.1. Draws under Credit Facility.
(4 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) 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 maturity or upon redemption or acceleration; and
(ii) to pay the Purchase Price of Bonds tendered pursuant to Section 4.5 hereof becoming due on or
prior to the termination or expiration of the Credit Facility in accordance with the terms of the Credit
Facility. To this end the Trustee will comply with the provisions of the Credit Facility 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.
co 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 hereof and/or the principal of and/or interest on the Bonds for which such draw
was made. 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 draw under the Credit Facility, as
provided in 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.
(c) The Credit Facility Issuer shall have no liability under the Credit Facility for
any payment of principal or interest or Purchase Price 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.
(4 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.
566485.2\22062.0025 -43-
Section 6.2. [Reserved].
ARTICLE VII
SECURITY AND INVESTMENTS
Section 7.1. 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 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.
(4 The money in the funds and accounts created herein (except as otherwise
provided herein and subject to Sections 5.3, 5.8 and 6.1) shall be invested or reinvested by the Trustee
in Eligible Investments at the direction of an Authorized 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 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, and (ii) money held as a part of the Bond Purchase
Fund shall be invested only in Government Securities maturing on or before such Remarketing Date.
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 or draw
request under a Credit 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.
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 and its affiliates may act as sponsor, agent, principal or advisor of any
investments permitted in accordance with this Indenture.
566485.2\22062.0025 -44-
09 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
Issuer, the Owner and the Credit Facility Issuer and by the Purchase Agent to the Owner. 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 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, 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.
(4 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) shall be transferred to the Revenue Fund and used for the purposes thereof
(4 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 8.1. Enforcement of Obligations. The Commission and the Trustee, if and as
reasonably requested by the Credit Facility Issuer, 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 addition, the Trustee, acting jointly with or independently of the
Commission, 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 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.
566485.2i22062.0025 -45-
Section 8.3. Further Instruments and Actions. The Commission will from time to time
file or direct the Trustee to 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 (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
shah 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 authorized 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 and the Escrow 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 other pledge, lien, charge or encumbrance thereon by the Commission, 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 and the Escrow 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 shah at all times, to
the extent permitted by law, defend, preserve and protect the pledge of the revenues and other assets,
including rights therein pledged under 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. 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, and the Trustee shall proceed to claim or cause to be claimed the
benefits of the Credit 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.
566485.2t22062.0025 -46-
Section 8.9. Performance. At the expense of the Owner or the Credit Facility Issuer, 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 Law, the Refunding Bond Act, the Code and this Indenture in accordance with the
terms of such provisions.
Section 8.10. 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 8.11. 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. At the direction of the Owner, 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 fhrancing statements filed 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.
09 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 “jkderally guaranteed” within the meaning
of Section 103(h) of the 1954 Code.
(4 The Commission and the Trustee 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 follow
the written direction of the Commission with respect to the provisions of the Tax Certificate. This
covenant shall survive payment in full and defeasance of the Bonds.
566485.2D2062.0025 -47-
(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.
(e) 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 and 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 monthly written reports to
the Commission, the Owner and the Credit 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:
566485.2V22062.0025 -48-
(4 the failure to make due and punctual payment of the principal of, and interest
on, any Outstanding Bond when due (whether at the 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, except in the case where all Outstanding Bonds
are Credit Facility Issuer Bonds, no Event of Default shall be deemed to exist under this paragraph (a)
unless and until the Trustee shall have submitted draw requests pursuant to and in accordance with 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.
Upon the occurrence of any event set forth above, the Trustee shall immediately notify the
Owner, the Credit Facility Issuer, the Commission and the Remarketing Agent in writing.
Section 9.2. Remedies.
(4 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, 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;
pledged under this I.nde:le.
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
,
(iv) 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;
(4 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 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
566485.2i22062.0025 -49-
reasonable attorneys’ fees paid or incurred, the Trustee may annul such declaration of maturity and its
consequences; provided further, 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 has 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-J) 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.
(c) 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. [Reserved.]
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), 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
566485.2D2062.0025 -5o-
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. Termination 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 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) Ifan 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 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, no remedial proceeding or any other action
shall be taken under the Note, the Regulatory Agreement and the other First Deed of Trust Documents
which would cause or result in an acceleration of the Bonds or the indebtedness evidenced by the Note
or any foreclosure of the lien of the First Deed of Trust 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.
(4 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
566485.2\22062.0025 -51-
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.
@I 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 9.10. 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.
(4 The Trustee shall give notice to the Holders, the Commission, the Credit
Facility Issuer, the Remarketing Agent and the Owner of each Event of Default hereunder known to the
Trustee promptly 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 and the Remarketing Agent as provided in Section
14.5 hereof.
566485.2V22062.0025 -52-
09 The Trustee shall promptly give to the Commission, the Credit Facility Issuer
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.
(c) The Trustee shall, upon the written direction of the Credit Facility Issuer, and
may, in its discretion, give written notice to the registered owners of the Bonds of an Event of Default
under the Loan Agreement known to a Responsible Officer of the Trustee, explaining that until an
Event of Default shall occur under this Indenture, the registered 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), 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:
69 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 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 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; and
Third - 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.
04 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, and interest then due and
unpaid upon the Bonds (other than Bonds which have matured or otherwise become payable prior to
566485.2V22062.0025 -53-
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 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 Credit Facility Issuer Bonds.
w 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.
(4 The surplus, if any, shall be paid first 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 or other sums 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 (the Trustee being herein authorized 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); and, second, to the Owner.
(e) Notwithstanding the foregoing provisions, no moneys paid upon a claim or
draw under the Credit 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 Credit Facility Issuer Bonds) for which such claim or draw
was submitted or shall be returned to the Credit Facility Issuer as provided in the Credit Facility.
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 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.
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
566485.2i22062.0025 -54-
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 (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 10.1. 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.
Section 10.2. 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 10.3. 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
(other than as provided in Section 9.12) shall the Trustee be entitled to payment of the Trustee’s
Expenses from any amounts claimed or collected under the Credit 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
566485.2D2062.0025 -55-
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 or the
Regulatory 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 Section 6.1
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 10.5. 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 proper board, body or
person, and (iii) to have been prepared and furnished pursuant to any of the provisions of this
Indenture, the Credit Facility or any First Deed of Trust Document 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 Credit 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 registered owner 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 or the Owner, and may act as depository, trustee, or agent for the
Commission, the Owner, the Credit 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.
566485.2l22062.0025 -56-
Section 10.7. 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 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 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 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 66-2/3% 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 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 10.9. 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 filed 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 and the Credit Facility Issuer.
566485.2i22062.0025 -57-
Section 10.10. Qualifications 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.
Section 10.11. 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, 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 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 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 reasonable 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 Loan Agreement, the Regulatory Agreement, the Escrow Agreement and the other
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 Loan
Agreement, the Regulatory Agreement, the Escrow Agreement and the other First Deed of Trust
Documents, and no implied covenants or obligations shall be read into such documents against the
Trustee.
566485.2i22062.0025 -58-
Section 10.16. Paying Agent.
(a) Pursuant to Section 2.2, the Trustee is 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 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:
(9 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.
0) 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 authorized 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 and the Credit Facility Issuer. The Paying Agent (if other than the Trustee) may be removed at
any time, by the Commission 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 and the
Credit Facility Issuer. 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.
566485.2i22062.0025 -59-
(4 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 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.
(b) 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 Bonds are not in book-entry form 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 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) optional 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 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 &airs 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 10.18. Remarketing Agent.
(4 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 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 Purchase Agent,
566485.2D2062.0025 -6O-
the Paying Agent and the Owner under which the following obligations shall be imposed on the
Remarketing Agent:
(9 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;
(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 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
(VI 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.
(b) Qualifications 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 authorized
by law to perform all the duties imposed upon it by this Indenture.
(4 Resignation and Removal of Remarketing 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 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 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 and the Credit 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 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, 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, 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’ written notice of its removal. The Credit Facility Issuer
may by written direction remove the Remarketing Agent at any time upon 30 days’ written 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 Commission and the Credit Facility Issuer.
566485.2i22062.0025 -61-
(4 Appointment of Successor Remarketing Agent. Upon resignation or removal
of the Remarketing Agent, or if the Remarketing Agent is dissolved, or if the property 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, 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, the Credit Facility Issuer, in its sole discretion, shall have the right to appoint
the successor Remarketing Agent with the consent of the Commission. If an Event of Default has
occurred under any of the First 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, then the Credit Facility Issuer, in its sole discretion,
shall have the right to appoint the successor Remarketing Agent, with the consent of the Credit 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. The Trustee is hereby
expressly authorized to deal with the Credit Facility Issuer in any way contemplated in the Loan
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.
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 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
566485.2i22062.0025 -62-
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. Effect 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 AND RELATED DOCUMENTS
Section 12.1. Modification. 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 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:
(4 To make any change which shall not materially adversely affect the interests of
the registered owners of the Bonds;
09 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;
(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;
(4 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;
(f) 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;
566485.2i22062.0025 -63-
(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;
09 To evidence the substitution of, or to comply with the requirements of any
Alternate Security, 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;
hereof; (i) To facilitate the discharge of the lien of this Indenture pursuant to Article XIII
04 To comply with the existing provisions of the Credit Facility;
(1) To subject to this Indenture additional revenues, properties or collateral;
(m) 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
(4 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 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.
64 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 horn 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 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
566485.2I22062.0025 -64-
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 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
09 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.
(4 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 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.
(4 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
(e) 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. Effect 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.
566485.2I22062.0025 -65-
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) 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 Modifications 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, 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, (iv) in accordance with Section 2.6 of the
Loan Agreement, (v) in connection with any authorized supplement or amendment to this Indenture,
(vi) in connection with the issuance of an Alternate Security, (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 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, 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, (ii) the replacement of the Credit Facility with an Alternate Security, (iii) any
566485.2i22062.0025 -66-
amendments to this Indenture or the Loan Agreement, (iv) any mandatory purchase of Outstanding
Bonds, (v) 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 amendment will not adversely
affect the exclusion of interest on the Bonds horn 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 12.11. 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. Modification 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 13.1. Discharge.
(4 The Commission may discharge its obligations under this Indenture and satisfjl
its obligations to make payments due and owing on the Bonds pursuant to the provisions of this Section
13.1.
04 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,
566485.2k22062.0025 -67-
agreements and other obligations of the Commission, the Credit 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, 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,
under the First Deed of Trust Documents or under the Regulatory Agreement, if any. Any redemption
of the Bonds under this Article XIIl 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 14.1. 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
566485.2l22062.0025 -68-
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.
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 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, U.S. Bank Trust, National Association
101 California Street, Suite 1150
San Francisco, California 94 111
Attention: Multifamily Housing Group
if to the Owner,
with a copy to
Security Capital Pacific Trust
7670 South Chester Street, Suite 100
Englewood, Colorado 8 0 112
Attention:
Security Capital Pacific Trust
25B Technology Drive, Suite 2 10
Irvine, California 926 18-2302
Attention:
566485.2i22062.0025 -69-
if to the Credit Facility
Issuer,
Commerzbank, Aktiengesellschaft, Los Angeles Branch
633 West Fifth Street, Suite 6600
Los Angeles, California 9007 1
Attention: Steven F. Larsen
Commerzbank Aktiengesellschaft, New York Branch
2 World Financial Center
New York, New York 10281-1050
Attention: Letters of Credit
if to the Commission, Carlsbad Housing and Redevelopment Commission
2965 Roosevelt Road
Carlsbad, California 92008
Attention: Housing and Redevelopment Director
if to the Remarketing Agent, A.G. Edwards & Sons, Inc.
One North Jefferson Avenue
St. Louis, Missouri 63 103
Attention: Municipal Bond Department
if to the Purchase Agent, 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 . 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. Payments Due on Days That Are Not Business Days. In any case where
the date required for payment of principal of or interest on the Bonds or the date fixed for redemption
or mandatory purchase of any Bonds shall not be a Business Day, then payment of such principal,
interest or redemption or purchase price need not be made on such date but shall be made on the next
succeeding Business Day, with the same force and effect as if made on the due date therefor, and, in
the case of such payment, no interest shall accrue for the period from and after such due date.
Section 14.9. Bights of Credit Facility Issuer. Notwithstanding anything contained in this
Indenture to the contrary, all rights of the Credit Facility Issuer to request, direct, consent or approve
566485.2Y22062.0025 -7o-
matters under this Indenture shall be suspended for such period of time as the Credit Facility Issuer
remains in default under the Credit Facility, or if the Credit Facility has been repudiated.
IN WITNESS WHEREOF, the Carlsbad Housing and Redevelopment Commission has caused
these presents to be signed in its name and behalf by its Chairperson and its corporate seal to be
hereunto affixed and attested by its Secretary, and U.S. Bank Trust, 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
By:
Chairperson
ATTEST:
By:
Secretary
U.S. BANK TRUST, NATIONAL ASSOCIATION,
as Trustee
By:
Authorized Officer
ATTEST:
By:
Authorized Officer
566485.2i22062.0025 -71-
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: June 1, 1998
A.G. EDWARDS & SONS, INC.
By:
Title:
566485.2i22062.0025 -72-
The undersigned, U.S. Bank Trust, 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: June 1, 1998
U.S. BANK TRUST, NATIONAL ASSOCIATION
By:
Authorized Officer
566485.2V22062.0025 -73-
APPENDIX A
Table of Contents
Page
Definitions A-l
“Administrative Expenses”
“Administrative Expenses Account”
“Affiliate or “Affiliated Party”
“Agreement or “Loan Agreement”
“Alternate Security”
“Appurtenant Rights”
“Assignment”
“Authorized Denomination”
“Authorized Representative”
“Awards
“Bankruptcy Code”
“Beneficial Owner”
“Bonds”
“Bond Counsel”
“Bondholder” or “Holder” or “Registered owner”
“Bond Proceeds Fund’
“Bond Purchase Agreement”
“Bond Purchase Fund’
“Bond Register”
“Bond Resolution”
“Bond Year”
“Business Day”
“Call Lock Period”
“Claim”
“Closing Date”
“Code”
“Collateral”
“Commission”
“Commission Consent”, “Commission Order”, and “Commission Request”
“Commission Documents”
“Commercial Paper Rate”
“Commercial Paper Rate Period’
“Computation Date”
“Conversion Date”
“Credit Facility”
“Credit Facility Amendment”
“Credit Facility Issuer”
“Credit Facility Issuer Bonds”
“Credit Facility Rate”
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-2
A-2
A-2
A-2
A-3
A-3
A-3
A-3
A-3
A-3
A-3
A-3
A-3
A-3
A-3
A-3
A-3
A-3
A-4
A-4
A-4
A-4
A-4
566485.2V22062.0025
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“Credit Facility Rating Requirement”
“Credit Facility Replacement Date”
“Credit Facility Substitution Date”
“Daily Rate”
“Default”
“Deficiency”
“Determination” Date”
“Determination of Taxability”
“Developer”
“Eligible Investments”
“Eligible Money”
“Escrow Agreement”
“Event of Bankruptcy”
“Event of Default”
“Excluded Bondholder”
“Expiration Date”
“Extraordinary Expenses” and “Extraordinary Services”
“Final Maturity Date”
“Financing Documents”
“First Deed of Trust”
“First Deed of Trust Documents”
“Fixed Rate”
“Fixed Rate Period”
“Government Securities”
“Granted Property”
“Highest Lawful Rate”
“Improvements”
“Indenture”
“Insurance Policies”
“Insurance Proceeds”
“Interest Account”
“Interest Payment Date”
“Interest Period”
“Latld”
“Law”
“Legal Requirements”
“Lien or Alien”
“Liquidation Act”
“Loan”
“Maximum Legal Rate of Interest”
“Maximum Rate”
“Mechanics Liens”
“Moody’s”
“Monthly Rate”
“Net Proceeds”
“1954 Code”
“Note or “Secured Note”
A-4
A-4
A-4
A-4
A-4
A-4
A-4
A-4
A-5
A-5
A-5
A-6
A-6
A-6
A-6
A-6
A-6
A-6
A-6
A-7
A-7
A-7
A-7
A-7
A-7
A-7
A-7
A-7
A-7
A-7
A-7
A-7
A-7
A-7
A-8
A-8
A-8
A-8
A-8
A-8
A-8
A-8
A-8
A-8
A-8
A-8
A-9
566485.2i22062.0025 -2-
“Note Payments”
“Outstanding” or “outstanding”
“Owner”
“Owner Bonds”
“Owner Documents”
“Owner Event of Default”
“Participants”
“Paying Agent”
“Permitted Encumbrances”
“Person” or “person”
“Personal Property”
“Premiums”
“Principal Account”
“Principal Office”
“Prior Bonds”
“Prior Deed of Trust Documents”
“Prior First Deed of Trust”
“Prior Indenture”
“Prior Loan”
“Prior Loan Agreement”
“Prior Note”
“Prior Reimbursement Agreement”
“Prior Second Deed of Trust”
“Prior Surety Bond”
“Prior Trustee”
“Project”
“Project Loan Fund”
“Project Revenues”
“Purchase Agent”
“Purchase Date”
“Purchase Price” or “Purchase price”
“Quarter”
“Quarterly Rate”
“Rating Agency”
“Rebate Fund’
“Rebate Requirement”
“Record Date”
“Redemption Account”
“Redemption Date”
“Refunding Bond Act”
“Registrar”
“Regulations”
“Regulatory Agreement”
“Reimbursement Agreement”
“Remarketing Agent”
“Remarketing Agreement”
“Remarketing Date”
A-9
A-9
A-10
A-10
A-10
A-10
A-10
A-10
A-10
A-10
A-10
A-10
A-10
A-10
A-10
A-11
A-11
A-11
A-11
A-11
A-11
A-11
A-11
A-11
A-11
A-11
A-11
A-11
A-11
A-11
A-11
A-11
A-11
A-11
A-12
A-12
A-12
A-12
A-12
A-12
A-12
A-12
A-12
A-12
A-12
A-12
A-12
566485.2l22062.0025 -3-
“Responsible Officer”
“Reserved Rights”
“Restoration”
“Revenue Fund”
“Securities Depository”
“Semi-Annual Rate”
“Short Term Rate”
“Short Term Rate Period”
“Six Month Period”
“S&P”
“State”
“Taxes”
“Tender Notice”
“Termination Date”
“Trust Estate”
“Trustee”
“Trustee’s Expenses”
“Trustee Time”
“Undelivered Bonds”
“Unit”
“Weekly Rate”
A-12
A-12
A-13
A-13
A-13
A-13
A-13
A-13
A-13
A-13
A-13
A-13
A-13
A-13
A-14
A-14
A-14
A-14
A-14
A-14
A-14
566485.2V22062.0025 -4-
APPENDIX A
DEFINITIONS
For all purposes of any document defined in this Appendix A:
(4 All references in a document designated “Sections” 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” and “hereunder” 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.
(c) 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 and the Indenture.
For purposes of the document to which this Appendix A is attached, the following defined
terms shall have the following meanings:
“Administrative Expenses” 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.
“Affiliate or “Affiliated 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 Amended and Restated Loan Agreement dated as of
June 1,1998 between the Commission and the Owner, as amended and supplemented.
“Alternate Security” means any Credit Facility 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 2.11 (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 2.11 (d) of
the Indenture.
566485.2\22062.0025 A-l
“Appurtenant Rights” is defined in the First Deed of Trust.
“Assignment” means the Assignment of First Deed of Trust Documents dated as of June 1,
1998 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
$115,000) and in denominations of $5,000 or any integral multiple thereof during any Fixed Rate
Period.
“Authorized 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 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 Authorized 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.
“Beneficial Owner” 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.
“Bondholder” or “Holder” or “Registered owner 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” means the Bond Purchase Agreement among the Commission,
the Owner and A.G. Edwards & Sons, Inc.
“Bond Purchase Fund” 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 Resolution” means the resolution of the Commission authorizing the issuance and
delivery of the Bonds.
566485.2\22062.0025 A-2
“Bond Year” means the period beginning on September 27,1994 and ending on September 26,
1995, and each one year or shorter period thereafter, beginning on September 27, until Bonds are no
longer outstanding.
“Business Day” means any day other than (a) a Saturday or a Sunday or (b) 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, Paying Agent or the Remarketing Agent are
located or (c) a day when banks are authorized or required to be closed under the laws of the state or
states in which are located the offices of the Credit Facility Issuer at which draws under the Credit
Facility may be made, or (d) a day on which the New York Stock Exchange is not scheduled to be
closed.
“Call Lock Period” has the meaning set forth in Section 4.1 of the Indenture.
“Closing Date” means the date on which the Trustee first authenticates and delivers the Bonds,
or September 27, 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” mean, respectively,
a written consent, order, or request signed in the name of the Commission by the Chairperson or the
Housing and Redevelopment Director of the Commission and delivered to the Trustee.
“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 and the Regulatory Agreement.
Commission’s Expenses” means the amounts payable to the Commission pursuant to Section
4.9 of the Loan Agreement, which shall include the Commission’s annual fee of .23 percent of the
original principal amount of the Bonds as of the Closing Date payable in arrears on October 1 of each
year, commencing October 1, 1995.
“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
566485.2\22062.0025 A-3
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” means the Credit Facility provided by the Credit Facility Issuer or any
Alternate Security
“Credit Facility Amendment” is defined in Section 2.11 (d) of the Indenture.
“Credit Facility Issuer” is defined in the Recitals to the Indenture.
“Credit Facility Issuer Bonds” means Bonds owned by the Credit Facility Issuer (or an Affiliate
of the Credit Facility Issuer).
“Credit Facility Rate” 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 Facility Replacement Date” means the Interest Payment Date prior to expiration of a
Credit Facility.
“Credit Facility Substitution Date” 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” 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.
“Determination Date” with respect to each Short Term Rate and the Fixed Rate, is defined in
Section 3.3(a) of the Indenture.
“Determination 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
566485.2D2062.0025 A-4
federal income taxes, except during such period as the Bonds are owned by a “Substantial user” of the
Project or a “related person,” 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 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; (f) 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 (including funds of
the Trustee and its affiliates) 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) proceeds
of the sale by the Remarketing Agent of the Bonds to purchasers other than the Owner or the
Commission; (c) money received by the Trustee from the Credit Facility Issuer as a payment under the
566485.2\22062.0025 A-5
Credit Facility or otherwise; (d) 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 of the Indenture; and (e) 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 of the Indenture.
“Escrow Agreement” means the Agreement Regarding Redemption, Defeasance and Payment
of Prior Bonds dated as of the Closing Date among the Trustee, the Prior Trustee, 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 of Default” 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 AfIiliate of either of them (of which fact the Trustee shall have written notice) and the
Credit Facility Issuer, to the extent it is a Bondholder pursuant to its rights of subrogation or otherwise
pursuant to the Credit Facility or the Indenture.
“Expiration Date” means, with respect to the Credit Facility, ,2001, as that date
may be extended, or any other date on which any Alternate Security expires pursuant to the terms
thereof.
“Extraordinary Expenses” and “Extraordinary Services” 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 and the First Deed of Trust Documents.
566485.2Y22062.0025 A-6
“First Deed of Trust” means that certain Amended and Restated First Deed of Trust,
Assignment of Rents and Security Agreement dated as of June 1, 1998, 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 and the Note, 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” means, collectively, the Note, the Loan Agreement, the First
Deed of Trust, all financing and continuation statements filed to perfect the liens and security interests
granted thereby, the Assignment and all other documents, instruments and agreements executed and
delivered by the Owner to evidence,or secure the obligations of the Owner under the Note and the
Loan Agreement as such documents, instruments and agreements may be amended and supplemented
from time to time, but not including the Regulatory Agreement.
“Fixed Rate” means an interest rate on the Bonds set under Section 3.3(g) of the Indenture.
“Fixed 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.
“Improvements” is defined in the First Deed of Trust.
“Indenture” means the Amended and Restated Indenture of Trust between the Commission and
the Trustee dated as of June 1, 1998, together with any amendments or supplements thereto.
“Insurance” Policies” is defined in the First Deed of Trust.
“Insurance” Proceeds” is defined in the First Deed of Trust.
“Interest Account” 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 form of Bond attached to the Indenture as Exhibit A.
“Interest Period” is defined in the form of Bond attached to the Indenture as Exhibit A.
“Land” is defined in the First Deed of Trust.
566485.2\22062.0025 A-7
“Law” means Chapter 1 of Part 2 of Division 24 of the California Health and Safety Code, as
supplemented and amended.
“Legal Requirements” 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 Alien” 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 Alien” 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.
“Loan means the mortgage loan originated by the Commission to the Owner in the amount of
$15,115,000, as evidenced by the Note and the Loan Agreement.
“Maximum Legal Rate of Interest” 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 Credit Facility.
“Mechanics Liens” is defined in the First Deed of Trust.
“Moody’s” means Moody’s Investors Service, a corporation organized 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.
“Monthly Rate” means an interest rate on the Bonds set under Section 3.3(c) of the Indenture.
566485.2\22062.0025 A-8
“Net 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.
“Note” or “Secured Note” means the Amended and Restated 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.
“Outstanding” or “outstanding” means, when used with reference to Bonds, as at any particular
date, the aggregate of all Bonds authenticated and delivered under the Indenture, except:
(4 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;
09 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;
(4 subject to the provisions of Sections 2.7(b) and (c) of the Indenture,
Undelivered Bonds;
(4 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 XlIl of the Indenture; and
(e) 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 determinin g (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 or an Event of Default has
occurred under Section 9.1(a) of the Indenture, Bonds which are owned by the Credit Facility Issuer or
its Affiliate 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 Credit Facility Issuer and/or an Affiliate, 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.
566485.2U2062.0025 A-9
Bonds purchased by the Credit Facility Issuer pursuant to tenders by the Holders thereof or in
lieu of redemption will continue to be Outstanding until 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 Security Capital Pacific Trust, a Maryland real estate investment trust,
provided that from and after any transfer of the Project by foreclosure under the First 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 Owner Documents from and after the date of such Person’s
acquisition and so long as such Person owns the Project.
“Owner Documents” means the Loan Agreement, the First 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” or “Person” means one or more, as applicable, natural person, partnership,
corporation or other legally constituted entity.
“Personal Property” 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 Office” 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 Remarketing Agent,
Paying Agent and the Purchase Agent. Initially, such offices shall be the offices designated in Section
14.5 of the Indenture (except, with respect to the Trustee, for payment, surrender and exchange of the
Bonds, which shall be c/o First Trust National Association, 180 East Fifth Street, St. Paul, Minnesota
55101; Attn: Corporate Trust).
“Prior Bonds” is defined in the Recitals to the Indenture.
566485.2Y22062.0025 A-10
“Prior Deed of Trust Documents” means the Prior First Deed of Trust and the Prior Second
Deed of Trust.
“Prior First Deed of Trust” is defined in the Recitals to the Indenture.
“Prior Indenture” is defined in the Recitals to the Indenture.
“Prior Loan” 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” is defined in the Recitals to the Indenture.
“Prior Note” is defined in the Recitals to the Indenture.
“Prior Reimbursement Agreement” is defined in the Recitals to the Indenture.
“Prior Second Deed of Trust” is defined in the Recitals to the Indenture.
“Prior Credit Facility” 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” 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” or “Purchase price 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” 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” means an interest rate on the Bonds set under Section 3.3(d) of the Indenture.
“Rating Agency” means Moody’s if Moody’s rates the Bonds and S&P if S&P then rates the
Bonds, and their successors and assigns.
566485.2\22062.0025 A-11
“Rebate Fund’ is defined in Section 5.8 of the Indenture.
“Record Date” is defined in the form of Bond attached to the Indenture as Exhibit A.
“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” 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 June 1,
1998, between the Owner and the Credit Facility Issuer pursuant to which the Owner agrees to
reimburse or pay the Credit Facility Issuer or (ii) any agreement entered into by a Credit Facility Issuer
in connection with an Alternate 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 A. G. Edwards & Sons, 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 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.
566485.2Q2062.0025 A-12
“Responsible Officer” 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 having regular responsibility for corporate trust matters, 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.
“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” means an interest rate on the Bonds set under Section 3.3(e) of the
Indenture.
“Short Term Rate” 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.
“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 division of McGraw-Hill, Inc., 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 and the Remarketing Agent.
“State” means the State of California.
“Tax Certificate” 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” means, with respect to the Credit Facility, the date of expiration or
termination thereof in accordance with its terms.
566485.2\22062.0025 A-13
“Trust Estate” 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” 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, Purchase Agent
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;
09 the reasonable attorneys’ fees and charges incurred by the Trustee and
its agents 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);
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” means Pacific Standard 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.
“Weekly Rate” means an interest rate on the Bonds set under Section 3.3(b) of the Indenture.
566485.2\22062.0025 A-14
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. :
September 27, 1994 December 1,2005 Weekly
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 by check 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 applicable 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 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.
566485.2\22062.0025 A-l
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 Amended and Restated Indenture of Trust, dated as of June 1,1998 (as amended and
supplemented, the “Indenture”), by and between the Commission and the Trustee.
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 SUBDMSION THEREOF WITHIN THE MEANING OF ANY CONSTITUTIONAL
OR STATUTORY DEBT LIMITATION. NEITHER THE FAITH AND CREDIT, NOR THE
TAXING POWER, IF ANY, 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. THE COMMISSION HAS NO TAXING POWER.
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.
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 $15,115,000 in principal amount, issued under
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. Security Capital Pacific Trust, a Maryland real estate
investment trust (together with its successors and assigns, the “Owner”), is obligated to repay to the
Commission the loan of Bond proceeds pursuant to an Amended and Restated Loan Agreement dated
as of June 1, 1998 between the Commission and the Owner. The Bonds were 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 Credit 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.
566485.2D2062.0025 A-2
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 interest rate during the existence of such Event of
Default 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 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 (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 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.
When interest is payable at a Daily, Weekly, Monthly, Commercial Paper Rate or Credit
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. The payment of principal of and interest on the Bonds (other than
Bonds owned by Excluded Bondholders) 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 Credit 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 corresponding period (an “Interest Period”) specified in the
second column will be paid on the corresponding date (an “Interest Payment Date”) specified in the
third column to registered owners on the corresponding date (a “Record Date”) in the fourth column:
566485.M2062.0025 A-3
Interest Rate Mode Interest Period
Daily Calendar month (or
portion thereof for the
first interest period)
Weekly
Monthly
Calendar month (or
portion thereof for the
first interest period)
Calendar month
Quarterly
Semi-Annual
Fixed
Commercial Paper 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
Six full calendar
months ending on the
last day of the sixth
calendar month
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
Interest Payment
Date
First Business Day of
the next calendar month
First Business Day of
the next calendar month
First Business Day of
the next calendar month
First day after
applicable Commercial
Paper Rate Period
First day of the month
following the Interest
Period
First day of the month
following the Interest
Period
Each June 1 and
December 1 during the
Interest Period
Record Date
Second Business Day
before the Interest
Payment Date
Second Business Day
before the Interest
Payment Date
Second Business Day
before the Interest
Payment
Second Business Day
before the Interest
Payment Date
Fifteenth day of the
month before the
Interest Payment Date
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
566485.2i22062.0025 A-4
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 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 Credit Facility Issuer, in lieu of
redemption under the conditions described below. No purchase of Bonds by the Remarketing Agent,
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.
(4 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:
Redemption Date Redemption Price
From the expiration of the Call Lock Period through
twelve months after expiration of Call Lock Period:
From thirteen through twenty-four months after expiration
of Call Lock Period:
102%
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 afler 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.
566485.2V22062.0025 A-5
(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-J) 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 in the amount of any Net Proceeds which the Credit Facility Issuer requires to be applied to
prepay the Loan pursuant to the First Deed of Trust;
(2) 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 or the First Deed of Trust, or (ii) title to the Project has been transferred by foreclosure,
sale or deed in lieu of foreclosure or sale following the occurrence of an Event of Default under and as
defined in the Loan Agreement or the First Deed of Trust, or (iii) 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;
(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 Credit 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 Credit 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 Credit 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 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.
w 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
566485.2L22062.0025 A-6
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 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 (iii) the direction of the Credit Facility Issuer upon the occurrence of the event described in (3)
below:
(1) damaged by fire or other casualty;
if the Project or any portion thereof is demolished, destroyed or
(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.
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
m 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:
566485.2i22062.0025 A-7
(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
(B) 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 Bondholder) may tender
Bonds for purchase on the next Interest Payment Date applicable to the Bonds to be tendered by
delivering:
69 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. 69 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:
(9 (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
Credit 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 Credit Facility in accordance with its terms (unless such Credit
Facility has been extended prior to such Interest Payment Date pursuant to a Credit Facility
Amendment) in accordance with the provisions of Section 2.12(d) of the Indenture, (B) which is the
effective date of an Alternate Credit Facility (other than a Credit Facility Amendment) in substitution
for the existing Credit Facility which is not terminating or expiring; or (C) which would have been the
effective date of the Alternate Credit Facility if the conditions for the provisions of an Alternate Credit
Facility under the Indenture had been satisfied;
566485.2l22062.0025 A-8
(iii) on the last Interest Payment Date prior to the Termination Date of a
Credit Facility, unless the term of such Credit Facility has been extended prior to such Interest Payment
Date pursuant to a Credit Facility Amendment in accordance with the provisions of the Indenture;
(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;
(9 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 Credit Facility Issuer of the
occurrence of an Event of Default under the Credit Facility Agreement; and
w 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 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
sufkient 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 of Default. 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 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. Transfer. 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.
566485.2V22062.0025 A-9
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.
The Commission, the Credit 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 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 and the Credit Facility Issuer and with the consent of the registered owners of not
less than a majority in aggregate principal amount of the Bonds then outstanding, to execute
supplemental indentures amending in any particular the provisions of the Indenture subject to certain
limitations contained in the Indenture.
566485.2i22062.0025 A-10
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 Chairperson 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:
Chairperson
Attest:
By:
Secretary
Certificate of Authentication
This Bond is one of the Bonds described in the within mentioned Indenture and has been
authenticated this date: ,
U.S. BANK TRUST, NATIONAL ASSOCIATION,
as Registrar
By:
Authorized Signatory
566485.2i22062.0025 A-11
[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:
566485.2Y22062.0025 A-12
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. 808 1, filed in the Office of the County
Recorder of San Diego County, February 28, 1975.
Excepting all crude, oil, petroleum, gas, brea, asphalturn 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. 157190, 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 witbin 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.
566485.2D2062.0025