EXHIBIT 4.2
TRUST INDENTURE
THIS TRUST INDENTURE, dated as of August 1, 2002, between the GULF COAST
WASTE DISPOSAL AUTHORITY, a governmental agency and body politic and corporate
of the State of Texas (herein called the "Issuer"), operating as a conservation
and reclamation district and political subdivision of the State of Texas
pursuant to Article XVI, Section 59 of the Texas Constitution and the laws of
the State of Texas, particularly, Chapter 409, Acts of the 61st Legislature of
the State of Texas, Regular Session, 1969, as amended (originally compiled as
Article 7621d-2 Vernon's Texas Civil Statutes (the "Authority Act") and U.S BANK
NATIONAL ASSOCIATION (the "Trustee"), a national banking association, as
Trustee.
WITNESS:
WHEREAS, the Issuer and Waste Corporation of Texas, L.P. (the "Company"),
a limited partnership organized and existing under and by virtue of the laws of
the State of Delaware; and its successors and assigns as permitted under the
Agreement (hereinafter defined), have duly executed an Installment Sale
Agreement, dated as of August 1, 2002 (hereinafter, the "Agreement"), relating
to the below-defined Bonds;
WHEREAS, the recitals and provisions of the Agreement are incorporated
herein as if set forth in their entirety;
WHEREAS, pursuant to the Agreement, the Board of Directors of the Issuer
duly adopted a resolution authorizing the Bonds (together with any amendment or
supplement to such resolution as authorized therein, hereinafter called the
"Bond Resolution");
WHEREAS, the Company has requested that the Issuer issue and sell a
series of revenue bonds for the purpose of financing the construction,
installation and equipping of certain Facilities (as defined in the Agreement)
(the "Facilities"); and
WHEREAS, the Bonds, and the interest thereon, are and shall be payable
from and secured by a first priority lien and security interest on and pledge of
the payments designated as "Installment Sale Payments" to be made by the Company
pursuant to the Agreement in amounts sufficient to pay and redeem, and provide
for the payment of the principal of, premium, if any, and interest on, the
Bonds, when due, and the fees and expenses of the Trustee and any paying agent
for, the Bonds;
WHEREAS, the Trustee has agreed to accept the trusts herein created upon
the terms herein set forth; and
WHEREAS, all other things necessary to make the Bonds, when issued,
executed and delivered by the Issuer and authenticated pursuant to this
Indenture, the valid, legal and binding obligations of the Issuer, and to
constitute this Indenture a valid pledge of the Receipts and Revenues of the
Issuer from the Agreement (as hereinafter defined) and other amounts pledged
hereunder as security for the payment of the principal of, premium, if any, and
interest on, and
Purchase Price of, the Bonds authenticated and delivered under this Indenture,
have been performed, and the creation, execution and delivery of this Indenture
and the creation, execution and issuance of the Bonds, subject to the terms
hereof, have in all respects been duly authorized;
NOW, THEREFORE, KNOW ALL BY THESE PRESENTS, THIS INDENTURE WITNESSETH:
That the Issuer, in consideration of the premises and of the acceptance
by the Trustee of the trusts hereby created, and of the purchase and acceptance
of the Bonds by the holders thereof, and of the sum of TEN DOLLARS ($10.00),
lawful money of the United States of America, to it paid by the Trustee, at or
before the execution and delivery of these presents, and for other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, in order to secure the payment of the principal and purchase price
of, and the premium, if any, and the interest on, the Bonds and all other
amounts payable by the Issuer pursuant to the terms of the Bonds and/or this
Indenture according to their tenor and effect and to ensure the performance and
observance by the Issuer of all of the agreements expressed or implied herein
and in the Bonds (collectively, the "Bond Obligations"), has given, granted,
assigned and pledged and does by these presents give, grant, assign and pledge
to the Trustee and to its successors in the trusts hereby created, and to them
and their assigns until such time as the Bonds shall have been paid and are no
longer Outstanding:
GRANTING CLAUSE
To secure the payment of the Bond Obligations, the Issuer assigns and
pledges to the Trustee and grants to the Trustee for the benefit of the
Bondholders a security interest in all right, title and interest of the Issuer
in and to:
I.
The Agreement, including any right to delivery of the Letter of Credit,
the Receipts and Revenues of the Issuer from the Agreement, any right to bring
actions and proceedings under the Agreement or for the enforcement of the
Agreement and to do all things that the Issuer is entitled to do under the
Agreement, but excluding the Unassigned Rights (as hereinafter defined) and the
right to enforce the Unassigned Rights; and
II.
All moneys and securities held from time to time by the Trustee under
this Indenture, other than moneys and securities held in the Rebate Fund (as
hereinafter defined), for the equal and proportionate benefit of all holders of
the Bonds without priority or distinction as to lien or otherwise of any Bonds
over any other Bonds, and to otherwise secure payment and performance of the
Bond Obligations; and
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III.
Any and all real or personal property of every nature now and from time
to time hereafter by delivery or by writing of any kind conveyed, mortgaged,
pledged, assigned or transferred, as and for additional security hereunder by
the Issuer or by anyone on its behalf or with its written consent to the
Trustee, which is hereby authorized to receive any and all such property at any
and all times and to hold and apply the same subject to the terms hereof.
ARTICLE I: DEFINITIONS AND RULES OF CONSTRUCTION
Section 1.01. DEFINITIONS. For all purposes of this Indenture, unless the
context or use clearly indicates another or different meaning or intent, the
following terms shall have the following meanings, and any other words and terms
defined in the Agreement shall have the same meanings when used herein as
assigned to them in the Agreement:
"Act" means collectively, Chapter 1371, Texas Government Code, as
amended, Chapter 30, Texas Water Code, as amended, and the Authority Act.
"Agreement" means the Installment Sale Agreement, dated as of the date of
this Indenture, between the Issuer and the Company, as such Agreement may be
amended or supplemented from time to time in accordance with its terms.
"Annual Interest Rate" means (a) the rate of interest per annum
determined by the Remarketing Agent, on the Interest Rate Determination Date
immediately preceding the applicable Interest Rate Adjustment Date, to be the
lowest interest rate for the Interest Rate Period commencing on the applicable
Interest Rate Adjustment Date and ending on and including the last day of
February or August nearest to but not later than the date that is one year from
the Interest Rate Adjustment Date, in the judgment of the Remarketing Agent
(taking into consideration current transactions and comparable securities with
which the Remarketing Agent is involved or of which it is aware and prevailing
financial market conditions) at which, as of such Interest Rate Determination
Date, the Bonds could be remarketed at par, plus the accrued interest (if any)
on the Interest Rate Adjustment Date for that Interest Rate Period or (b) in the
event that the Remarketing Agent has been removed or has resigned and no
successor has been appointed, or the Remarketing Agent has failed to determine
the Annual Interest Rate for whatever reason, or the Annual Interest Rate cannot
be determined pursuant to clause (a) for whatever reason, the interest rate then
in effect with respect to the Bonds, without adjustment; provided that in no
event shall the Annual Interest Rate exceed the Maximum Rate.
"Approval Certificate" means the certificate of the Chairman, General
Manager, or Manager, Financial Services, of the Issuer approving certain terms
of the Bonds.
"Authorized Company Representative" means the person or persons
designated from time to time to act on behalf of the Company by written
instrument furnished to the Issuer and the Trustee by the Company, containing
the specimen signature of such person and signed by any officer of the Company.
Such instrument may designate an alternate or alternates.
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"Authorized Denominations" means with respect to all Bonds (i) $100,000
and any integral multiple of $5,000 in excess thereof while Bonds bear interest
at a Variable Rate, and, (ii) upon conversion of the Bonds to a Fixed Interest
Rate, when evidence is presented to the Issuer and Trustee that the Bonds will
receive an Investment Grade Rating from any one or more Rating Agency, any
integral multiple of $5,000, and otherwise, in denominations of $100,000 or any
integral multiple of $5,000 greater than $100,000.
"Authorized Officer" means the Chairman or any Vice Chair or Secretary of
the Issuer.
"Available Moneys" means moneys that are (a) continuously on deposit with
the Trustee in trust for the benefit of the Bondholders in a separate and
segregated account in which only Available Moneys are held and that are (b)
proceeds of (i) the Bonds received contemporaneously with and directly from the
issuance and sale of the Bonds, (ii) payments made by the Company, or any
affiliate or guarantor of the Company, if at the time of the deposit of such
payments and for a period of at least 91 days (366 days for any amounts paid by
any entity, including, but not limited to any affiliate or guarantor of the
Company, deemed to be an "insider" for purposes of the United States Bankruptcy
Code) thereafter no Bankruptcy Filing shall have occurred, (iii) a draw by the
Trustee on the Letter of Credit, (iv) refunding bonds for which the Trustee has
received a written opinion of Bankruptcy Counsel to the effect that payment of
such moneys to the Bondholders would not constitute an avoidable preference
under Section 547 of the United States Bankruptcy Code in the event the Company
or the Issuer were to become a debtor under the United States Bankruptcy Code,
or (v) income derived from the investment of the foregoing.
"Bank" means βββββ Fargo Bank Texas, National Association, as issuer of
the initial Letter of Credit, and upon the issuance and delivery of a Substitute
Letter of Credit, shall mean the financial institution that issues such
Substitute Letter of Credit, and in either case, its successors.
"Bank Representative" means any officer, employee, or agent of the Bank
that has been duly authorized to approve Construction Fund Certificates and
Requisitions under the terms of the Agreement.
"Bankruptcy Counsel" means any counsel nationally recognized in
bankruptcy matters that is independent of the Company and the Issuer and is
reasonably acceptable to the Bank and the Trustee.
"Bankruptcy Filing" means the filing of a petition by or against the
Company or the Issuer, as the case may be, as debtor under the United States
Bankruptcy Code or similar bankruptcy or insolvency act. If the petition has
been dismissed and the dismissal is final and not subject to appeal at the
relevant time, the filing shall not be considered to have occurred.
"Beneficial Owner" means, with respect to the Bonds, a Person owning a
Beneficial Ownership Interest therein, as evidenced to the satisfaction of the
Trustee.
"Beneficial Ownership Interest" means the beneficial right to receive
payments and notices with respect to the Bonds that are held by the Depository
under a book-entry system.
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"Bond Counsel" means, ββββββ, βββββββββ & ββββββ L.L.P. or such other
firm of attorneys of nationally recognized standing in the field of law relating
to municipal bond law and the exemption from federal income taxation of interest
on state or local bonds, selected by the Issuer and acceptable to the Company
and if a Letter of Credit shall then be in effect with respect to the Bonds,
approved by the Bank, and experienced in issuing opinions with respect to
tax-exempt bonds under the exemptions provided in the Code.
"Bond Fund" means the fund by that name created by Section 4.02.
"Bonds" means the Gulf Coast Waste Disposal Authority Environmental
Facilities Revenue Bonds (Waste Corporation of Texas, L.P. Project) Series 2002
being issued pursuant to this Indenture.
"Business Day" means any day other than (a) a Saturday or Sunday, (b) a
day on which commercial banks in New York, New York, or the city or cities in
which the corporate trust office of the Trustee, the primary office of the
Remarketing Agent or the paying office of the Bank are located are authorized or
required by law or executive order to close, or (c) a day on which the New York
Stock Exchange or DTC is closed. For purposes of this definition, "paying office
of the Bank" means the office of the Bank responsible for making payments under
any Letter of Credit.
"Cede & Co." means Cede & Co., the nominee of DTC or any successor
nominee of DTC with respect to the Bonds.
"Closing Date" means the date of initial delivery of and payment for the
Bonds.
"Code" means the Internal Revenue Code of 1986, as amended, the
regulations (whether temporary or final) promulgated under the Code or the
statutory predecessor of the Code, and any amendments of, or successor
provisions to, the foregoing and any official rulings, announcements, notices,
procedures and judicial determinations regarding any of the foregoing, all as
and to the extent applicable. Unless otherwise indicated, reference to a Section
of the Code means that Section of the Code, including such applicable
regulations, rulings, announcements, notices, procedures and determinations
pertinent to that Section of the Code.
"Company" means Waste Corporation of Texas, L.P., a corporation organized
and existing under the laws of the State of Texas and its successors and assigns
as permitted under the Agreement.
"Company Bonds" means any Bonds of which the Company or any affiliate or
subsidiary thereof is the registered holder.
"Construction Fund" means the fund by that name created by Section 4.06.
"Cost of Construction" means all costs incurred by the Issuer or the
Company with respect to the acquisition, construction and improvement of the
Facilities, including but not limited to, the following items:
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(i) obligations incurred or assumed for labor, materials and equipment
(including obligations payable to the Company for expenditures
made or costs incurred by the Company);
(ii) costs of any surety bonds and insurance deemed necessary or
appropriate by the Company;
(iii) costs of engineering services, including the costs incurred or
assumed for preliminary design and development, surveys, estimates
and plans and specifications, and for supervising construction and
performing all other duties required in connection with the
construction, acquisition and improvement of the Facilities;
(iv) costs that the Company shall be required to pay under the terms of
any contract or contracts in connection with the construction,
acquisition and improvement of the Facilities including, without
limitation, amounts allocated by the Company to the Facilities as
a part of the acquisition of assets of which the Facilities
comprise a part;
(v) sums required to reimburse the Company for advances made for any
of the above items, and for any other costs (including a portion
of the interest costs of general Company borrowings) incurred for
work done or caused to be done by the Company that is properly
chargeable to the Facilities;
(vi) interest on the Bonds issued by the Issuer to finance the
acquisition, construction and improvement of the Facilities,
actually paid during or attributable to the period of construction
of the Facilities;
(vii) to the extent authorized by the Acts, costs of all other items
related to the acquisition, construction and improvement of the
Facilities; and
(viii) all Costs of Issuance and other financing costs and fees to be
paid during the period of construction.
"Costs of Issuance" means all costs and expenses incurred by the Issuer
or the Company in connection with the initial issuance and sale of the Bonds,
including without limitation (i) fees and expenses of accountants, attorneys,
engineers, underwriters (whether paid as a fee or a discount) and financial
advisors, (ii) materials, supplies and printing and engraving costs, (iii)
recording and filing fees, (iv) rating agency fees, (v) initial fees and
expenses of any Trustee and Paying Agent, and (vi) the Issuer's administrative
and overhead expenses as provided for in Section 5.05(a) of the Agreement.
"Daily Interest Rate" means (a) the rate of interest per annum determined
by the Remarketing Agent on the Interest Rate Adjustment Date, to be the lowest
interest rate for the Interest Rate Period commencing on the applicable Interest
Rate Adjustment Date, and remaining in effect to, but not including, the next
succeeding Business Day, in the judgment of the Remarketing Agent (taking into
consideration current transactions and comparable securities with which the
Remarketing Agent is involved or of which it is aware and prevailing financial
market conditions), at which rate, as of such
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Interest Rate Determination Date, the Bonds could be remarketed at par, plus the
accrued interest (if any) on the Interest Rate Adjustment Date for that Interest
Rate Period or (b) in the event that the Remarketing Agent has been removed or
has resigned and no successor has been appointed, or the Remarketing Agent has
failed to determine the Daily Interest Rate for whatever reason, or the Daily
Interest Rate cannot be determined pursuant to clause (a) for whatever reason,
the interest rate then in effect with respect to the Bonds, without adjustment;
provided that in no event shall the Daily Interest Rate exceed the Maximum Rate.
"Depository" means any securities depository that is a clearing agency
under federal law operating and maintaining, with its participants or otherwise,
a book-entry system to record ownership of book entry interests in Bonds, and to
effect transfers of book entry interests in Bonds in book entry form, and
includes and means initially DTC.
"Determination of Taxability" has the meaning set forth in Section
3.01(d) hereof.
"DTC" means The Depository Trust Company, a limited purpose company
organized under the laws of the State of New York, and its successors and
assigns.
"DTC Participant" or "DTC Participants" means securities brokers and
dealers, banks, trust companies and clearing corporations that have access, as
participants or otherwise (directly or indirectly) to the DTC system.
"Eligible Investments" means and includes any of the following
securities, if and to the extent the same are permitted under applicable law:
(a) Bonds, notes and other evidences of indebtedness of the State or any
political subdivision thereof and securities unconditionally guaranteed as to
payment of principal and interest by the State, and that currently carry at
least the fourth highest rating by any Rating Agency, or all if the Bonds are
rated by all of the Rating Agencies;
(b) U.S. Government Obligations;
(c) Bonds, debentures, notes or other evidence of indebtedness issued by
any of the following agencies or any other like governmental or
government-sponsored agencies that are hereafter created: Bank for Cooperatives;
Federal Intermediate Credit Banks; Consolidated Farm Credit System-wide Bonds;
Federal Financing Bank; Federal Home Loan Bank System; Export-Import Bank of the
United States; Rural Economic and Community Development; Small Business
Administration; Inter-American Development Bank; International Bank for
Reconstruction and Development; Federal Land Banks; Government National Mortgage
Association; and Federal National Mortgage Association;
(d) Repurchase agreements for such obligations specified in paragraphs
(b) and (c) above subject to the limitations set forth below;
(e) Savings accounts, time deposits, certificates of deposit or other
interest-bearing accounts in any bank (including the Trustee and the Bank)
within the State, or without the State having
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shareholders' equity of not less than $10,000,000, provided such investment is
not then prohibited by the laws of the State and is either (i) fully insured by
the Federal Deposit Insurance Corporation or similar federal agency or (ii)
collateralized or otherwise secured to the full extent required by law, and
provided, further, that no such deposits made under this subsection (e) shall be
made for any period in excess of one year;
(f) Commercial paper, with a maturity of 270 days or less, of issuing
corporations organized under the laws of the United States or of any state
thereof, including paper issued by banks and bank holding companies, and if
rated by βββββ'β Investors Service, Inc. within its NCO/Moody's ratings of prime
1 or prime 2, or rated by Standard & Poor's Credit Market Services, a division
of The ββββββ-ββββ Companies, Inc. within its ratings of A-1 or A-2, or rated by
their corporate successors, within their comparable ratings;
(g) Shares of an open-end, diversified investment company registered
under the Investment Company Act of 1940, as amended, or of a mutual fund or a
common trust fund of the Trustee, in any of which cases, that (i) invests its
assets solely in obligations of or guaranteed by the United States of America or
any instrumentality thereof having in each instance a final maturity date of
less than one year from their date of purchase; (ii) seeks to maintain a
constant net asset value per share; and (iii) has aggregate net assets of not
less than $10,000,000 on the date of purchase of such shares including, but not
limited to, a registered investment company described herein for which the
Trustee or an affiliate of the Trustee serves as an investment advisor and/or
receives compensation from such investment company for that service;
(h) Bonds, notes, debentures and evidences of indebtedness with a
maturity of one year or more of corporations organized under the laws of the
United States, or of any state thereof, carrying at least the third highest
rating of any one or all of the Rating Agencies, or their corporate successors;
and/or
(i) Any other securities permitted by applicable laws of the State.
A repurchase agreement pursuant to (d) above shall be made with any bank
as principal, including the Trustee or an affiliate of the Trustee, within or
without the State having a combined capital, surplus and undivided profits of
not less than $50,000,000, provided the bank is obligated to repurchase within
one year. Such repurchase agreement shall be considered a purchase of such
securities even if title and/or possession of such securities is not transferred
to the Trustee so long as (1) the repurchase obligation of the bank is
collateralized by the securities themselves and the interest to be paid is
secured by collateral of comparable credit rating to the securities that are the
subject of the repurchase agreement, (2) the securities have on each day the
repurchase agreement is in effect a fair market value equal to at least 100% of
the amount of the repurchase obligation of the bank (which shall include
principal and interest accrued thereunder), (3) the securities are free and
clear of any lien, charge or encumbrance of any person other than of the Trustee
or the Bank, (4) the securities are held by a third party and segregated from
securities owned generally by the bank, (5) a perfected security interest under
the Uniform Commercial Code of the applicable state or book-entry procedures
prescribed by federal law in such securities is created for the benefit of the
holders of the Bonds, and (6) if the repurchase agreement is with the bank
serving as Trustee or any affiliated
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party, the third party holding such securities holds them as agent for the
benefit of the holders of the Bonds rather than as agent for the bank serving as
Trustee or any other party.
"Event of Default" is defined in Section 8.01.
"Facilities" means the solid waste collection and disposal facilities
described in Exhibit A to the Agreement.
"First Optional Redemption Date" means the first Interest Payment Date
that is at least thirty (30) days after the date that is the midpoint of the
Fixed Rate Period; provided however, that in no event shall the First Optional
Redemption Date be less than five years or greater than ten years after the
commencement of the Fixed Interest Rate Period. In addition, prior to the
commencement of the Fixed Rate Period, at the written direction of the
Remarketing Agent, upon the request of the Company and in order to achieve the
lowest interest rate which, in the judgment of the Remarketing Agent, on the
basis of then current financial market conditions as to interest rates and
redemption periods would permit the sale of the Bonds at par plus accrued
interest upon the commencement of the Fixed Rate Period, the Issuer and the
Trustee agree to modify the First Optional Redemption Date and/or the premium
payable in connection with any such optional redemption if the Company delivers
to the Issuer, the Bank, the Remarketing Agent and the Trustee an Opinion of
Bond Counsel stating that such modification will not adversely affect the
exclusion of interest on the Bonds from gross income for federal tax purposes.
"Fiscal Year" means the Company's fiscal year.
"Five-Year Interest Rate" means (a) the rate of interest per annum
determined by the Remarketing Agent, on the Interest Rate Determination Date
immediately preceding the applicable Interest Rate Adjustment Date, to be the
lowest interest rate for the Interest Rate Period commencing on the applicable
Interest Rate Adjustment Date and ending on and including the last day of
February or August nearest to but not later than the date that is five years
from the Interest Rate Adjustment Date, in the judgment of the Remarketing Agent
(taking into consideration current transactions and comparable securities with
which the Remarketing Agent is involved or of which it is aware and prevailing
financial market conditions) at which, as of such Interest Rate Determination
Date, the Bonds could be remarketed at par, plus the accrued interest (if any)
on the Interest Rate Adjustment Date for that Interest Rate Period or (b) in the
event that the Remarketing Agent has been removed or has resigned and no
successor has been appointed or the Remarketing Agent has failed to determine
the Five-Year Interest Rate for whatever reason, or the Five-Year Interest Rate
cannot be determined pursuant to clause (a) for whatever reason, the interest
rate then in effect with respect to the Bonds, without adjustment; provided that
in no event shall the Five-Year Interest Rate exceed the Maximum Rate.
"Fixed Interest Rate" means the fixed rate of interest per annum
determined by the Remarketing Agent, on the Interest Rate Determination Date
immediately preceding the Fixed Interest Rate Conversion Date, to be the lowest
interest rate from the Fixed Interest Rate Conversion Date to the final maturity
date of the Bonds, in the judgment of the Remarketing Agent (taking into
consideration current transactions and comparable securities with which the
Remarketing Agent is involved or of which it is aware and prevailing financial
market conditions) at which, as of such
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Interest Rate Determination Date, the Bonds could be remarketed at par, plus the
accrued interest (if any) on the Fixed Interest Rate Conversion Date without
credit enhancement.
"Fixed Interest Rate Conversion Date" means the Interest Period Reset
Date from and after which the Bonds shall bear interest at the Fixed Interest
Rate, as that date shall be established as provided in Section 2.02(c) hereof.
"Fixed Rate Period" means the Interest Rate Mode during which the
interest rate on the Bonds is fixed to the final maturity date of the Bonds,
during which period the Bonds bear interest at the Fixed Interest Rate.
"Indenture" means this Trust Indenture, as it may be amended or
supplemented from time to time in accordance with its terms.
"Installment Sale Payment" means each payment, as defined in Section 5.01
hereof, required to be paid by the Company with respect to the Bonds, including
the principal of, redemption premium, if any, and interest on, and Purchase
Price of, the Bonds.
"Instructions to Sell" means the "Notice of Exercise of Tender Option
Instructions to Sell" attached to the form of Bond.
"Interest Payment Date" or "Interest Payment Dates" means (a) while the
Bonds bear interest at the Semiannual Interest Rate, the Annual Interest Rate,
the Five-Year Interest Rate or the Fixed Interest Rate, the first day of each
March and September, and (b) while the Bonds bear interest at the Daily Interest
Rate, the Weekly Interest Rate, the Monthly Interest Rate, or the Quarterly
Interest Rate, the first Business Day of each month, commencing on the date
specified in the Approval Certificate.
"Interest Period Reset Date" means any date on which the interest rate on
the Bonds converts from the Interest Rate Mode applicable to the Bonds prior to
such date to a new Interest Rate Mode in accordance with the provisions of
Section 2.02(b) hereof. An Interest Period Reset Date shall be an Interest Rate
Adjustment Date for the Interest Rate Mode in effect prior to such conversion.
"Interest Rate Adjustment Date" means any date on which the interest rate
on the Bonds may be adjusted, either as the result of (i) the conversion of the
interest rate on the Bonds to a different Interest Rate Mode, or (ii) the
adjustment of the interest rate on the Bonds within the applicable Interest Rate
Mode. For the initial Interest Rate Period of an Interest Rate Mode, the initial
Interest Rate Adjustment Date shall be the Interest Period Reset Date and
thereafter, for each succeeding Interest Rate Period, the first day of the first
month of the next Interest Rate Period if the Bonds bear interest at the
Semiannual, Annual or Five-Year Interest Rate, the first Business Day of the
first month of the next Interest Rate Period if the Bonds bear interest at the
Quarterly Interest Rate; the first Business Day of a month if the Bonds bear
interest at the Monthly Rate; Thursday of each week if the Bonds bear interest
at the Weekly Interest Rate; and on each Business Day if the Bonds bear interest
at the Daily Interest Rate.
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"Interest Rate Determination Date" means (a) with respect to the
Quarterly Interest Rate, the Semiannual Interest Rate, the Annual Interest Rate,
the Five-Year Interest Rate and the Fixed Interest Rate, the tenth Business Day
preceding an Interest Rate Adjustment Date, (b) with respect to the Monthly
Interest Rate, the seventh Business Day preceding an Interest Rate Adjustment
Date, (c) with respect to the Weekly Interest Rate, not later than 2:00 p.m.
according to local time at the Operations Office of the Trustee on Wednesday of
each week, or the next preceding Business Day if such Wednesday is not a
Business Day; provided that upon any conversion to the Weekly Interest Rate from
a different Interest Rate Mode, the first Interest Rate Determination Date shall
mean not later than 2:00 p.m. according to the local time at the Operations
Office of the Trustee on the Business Day preceding the Interest Period Reset
Date; and (d) with respect to the Daily Interest Rate, not later than 10:30
a.m., New York City time, and provided to the Trustee by the Remarketing Agent
by electronic notice by 12:00 noon, New York City time, on that same day;
provided that no notice need be given if the Daily Rate then in effect is to be
the Daily Rate for the next Daily Rate Period.
"Interest Rate Mode" means any of those modes of interest with respect to
the Bonds permitted by this Indenture, specifically, the Daily Interest Rate,
the Weekly Interest Rate, the Monthly Interest Rate, the Quarterly Interest
Rate, the Semiannual Interest Rate, the Annual Interest Rate, the Five-Year
Interest Rate and the Fixed Interest Rate.
"Interest Rate Period" means that period of time for which the interest
rate with respect to the Bonds has been determined by the Remarketing Agent or
otherwise as provided in the definition of the applicable Interest Rate Mode,
commencing on the applicable Interest Rate Adjustment Date, and terminating on
the day immediately preceding the following Interest Rate Adjustment Date, if
any.
"Investment Grade Rating" means one of the top four rating categories for
long-term debt of a Rating Agency, without regard to any refinement or gradation
of such rating category or categories by a numerical modifier or otherwise.
"Issuer" means the Gulf Coast Waste Disposal Authority, a governmental
agency and body politic and corporate of the State of Texas.
"Issuer Representative" means the person or persons designated at the
time to act on behalf of the Issuer by a written instrument furnished to the
Trustee containing the specimen signature of such person or persons and signed
on behalf of the Issuer by an Authorized Officer of the Issuer.
"Letter of Credit" means an irrevocable direct-pay letter of credit
having the characteristics of a "credit" or "letter of credit" set forth in the
Uniform Commercial Code of the State of Texas (or in the case of a Substitute
Letter of Credit, in the Uniform Commercial Code of the state under whose laws
such Substitute Letter of Credit is governed) except that a letter of credit (a)
may not be revocable and (b) may only be issued by (i) a national bank, (ii) any
banking institution organized under the laws of any state, territory or the
District of Columbia, the business of which is substantially confined to banking
and is supervised by the state or territorial banking commission or similar
officials, or (iii) a branch or agency of a foreign bank, provided that the
nature and extent of federal and/or state regulation and the supervision of the
particular branch or agency is substantially
11
equivalent to that applicable to federal or state chartered domestic banks doing
business in the same jurisdiction and that meets the requirements of Section
5.07 of the Agreement. Initially, the term "Letter of Credit" shall mean the
irrevocable, direct-pay letter of credit issued by the Bank to the Trustee in
accordance with Section 5.07 of the Agreement, including any permitted
supplements or amendments thereto and any renewals or extensions thereof, and,
upon the expiration or termination of the Letter of Credit and the issuance and
delivery of a Substitute Letter of Credit meeting the requirements set forth in
this paragraph, in Section 5.03 hereof and in Section 5.07 of the Agreement,
"Letter of Credit" shall mean such Substitute Letter of Credit.
"Letter of Credit Termination Date" means the expiration date of the
Letter of Credit (initially September 30, 2005) or of any Substitute Letter of
Credit, as such date may be extended from time to time in accordance with the
provisions of the Letter of Credit.
"Maturity Date" shall mean the date or dates specified as such in the
Approval Certificate.
"Maximum Rate" means ten percent (10%) per annum, or such higher rate
covered by any Letter of Credit or Substitute Letter of Credit then in effect,
provided that the Maximum Rate shall be limited to an amount that shall not
exceed the maximum nonusurious rate of interest allowed by the applicable laws
of the State of Texas, or any applicable law of the United States permitting a
higher maximum nonusurious rate that preempts such applicable Texas laws, that
could lawfully be contracted for, charged or received.
"Monthly Interest Rate" means (a) the rate of interest per annum
determined by the Remarketing Agent, on the Interest Rate Determination Date
immediately preceding the applicable Interest Rate Adjustment Date, to be the
lowest interest rate for the Interest Rate Period commencing on the applicable
Interest Rate Adjustment Date to and including the day preceding the first
Business Day of the next month, in the judgment of the Remarketing Agent (taking
into consideration current transactions and comparable securities with which the
Remarketing Agent is involved or of which it is aware and prevailing financial
market conditions) at which, as of such Interest Rate Determination Date, the
Bonds could be remarketed at par, plus the accrued interest (if any) on the
Interest Rate Adjustment Date for that Interest Rate Period or (b) in the event
that the Remarketing Agent has been removed or has resigned and no successor has
been appointed, or the Remarketing Agent has failed to determine the Monthly
Interest Rate for whatever reason, or the Monthly Interest Rate cannot be
determined pursuant to clause (a) for whatever reason, the interest rate then in
effect with respect to the Bonds, without adjustment; provided that in no event
shall the Monthly Interest Rate exceed the Maximum Rate.
"Operations Office" means the operations office of the Trustee located at
U.S. Bank National Association, βββ ββββ βββββ ββββββ, ββββ: Corporation Trust
Department ββ-ββ-ββββ, ββ. ββββ, βββββββββ βββββ.
"Opinion of Bond Counsel" means a written opinion of Bond Counsel.
"Opinion of Counsel" means a written opinion of Counsel who is reasonably
acceptable to the Trustee. The counsel may be an employee of or counsel to the
Issuer, the Trustee, the Remarketing Agent or the Company.
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"Outstanding" when used with reference to Bonds, or "Bonds outstanding"
means all Bonds that have been authenticated and delivered by the Trustee under
this Indenture, except the following:
(a) Bonds canceled or purchased by or delivered to the Trustee for
cancellation pursuant to the provisions of this Indenture. Except as otherwise
provided in Section 3.09, Bonds purchased by the Company pursuant to optional
tender or mandatory repurchase under Section 3.06, Section 3.07 or Section 3.08
(including Pledged Bonds) shall continue to be outstanding until the holder of
such Bonds directs the Trustee to cancel them;
(b) Bonds that have become due (at maturity or on redemption,
acceleration or otherwise) and for the payment, including interest accrued to
the due date, of which sufficient moneys are held by the Trustee;
(c) Bonds deemed paid pursuant to Section 7.01; and
(d) Bonds in lieu of which others have been authenticated under Section
2.05 (relating to registration and exchange of Bonds) or Section 2.06 (relating
to mutilated, lost, stolen, destroyed or undelivered Bonds).
"Owner," "owner," "Bondholder," "bondholder," "Holder," "holder" or words
of similar import mean: (a) in the event that the book-entry system of evidence
and transfer of ownership in the Bonds is employed pursuant to Section 2.05(c),
Cede & Co., as nominee for DTC, or its nominee, and (b) in all other cases, the
registered owner or owners of any Bond fully registered as shown on the register
maintained by the Trustee.
"Person" means (a) any individual, (b) any corporation, partnership,
limited liability company, joint venture, association, joint-stock company,
business trust or unincorporated organization, or grouping of any such entities,
in each case formed or organized under the laws of the United States of America,
any state thereof or the District of Columbia, or (c) the United States of
America or any state thereof, or any political subdivision of either thereof, or
any agency, authority or other instrumentality of any of the foregoing.
"Pledged Bonds" means Bonds purchased by the Company with proceeds from a
draw under the Letter of Credit, pledged to, and registered in the name of, the
Bank as security for the obligations of the Company under the Reimbursement
Agreement as provided in Section 3.10 hereof.
"Purchase Agreement" means the Bond Purchase Agreement, dated as of
August 29, 2002, among the Company, the Issuer, and βββββ Fargo Brokerage
Services, LLC, as the underwriter, with respect to the initial purchase of the
Bonds.
"Purchase Price" means, with respect to a Bond or any portion thereof
that is mandatorily or optionally tendered or deemed tendered for purchase in
accordance with this Indenture, 100% of the principal amount thereof tendered or
deemed tendered for purchase plus accrued but unpaid interest, if any, thereon
to the date established for the purchase thereof.
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"Quarterly Interest Rate" means (a) the rate of interest per annum
determined by the Remarketing Agent, on the Interest Rate Determination Date
immediately preceding the applicable Interest Rate Adjustment Date, to be the
lowest interest rate for the Interest Rate Period commencing on the applicable
Interest Rate Adjustment Date to and including the day preceding the first
Business Day of the March, June, September or December nearest to but not later
than the date that is three months from the Interest Rate Adjustment Date, in
the judgment of the Remarketing Agent (taking into consideration current
transactions and comparable securities with which the Remarketing Agent is
involved or of which it is aware and prevailing financial market conditions) at
which, as of such Interest Rate Determination Date, the Bonds could be
remarketed at par, plus the accrued interest (if any) on the Interest Rate
Adjustment Date for that Interest Rate Period or (b) in the event that the
Remarketing Agent has been removed or has resigned and no successor has been
appointed, or the Remarketing Agent has failed to determine the Quarterly
Interest Rate for whatever reason, or the Quarterly Interest Rate cannot be
determined pursuant to clause (a) for whatever reason, the interest rate then in
effect with respect to the Bonds, without adjustment; provided that in no event
shall the Quarterly Interest Rate exceed the Maximum Rate.
"Rating Agency" means, if the Bonds are rated, βββββ'β Investors Service,
Inc., if such agency's ratings are in effect with respect to the Bonds, Standard
& Poor's Credit Market Services, a division of The ββββββ-ββββ Companies, Inc.,
if such agency's ratings are in effect with respect to the Bonds, and Fitch
IBCA, Inc., if such agency's ratings are in effect with respect to the Bonds,
and their respective successors and assigns. If any such corporation ceases to
act as a securities rating agency, the Company may, with the approval of the
Remarketing Agent and the Bank, appoint any nationally recognized securities
rating agency as a replacement.
"Rebate Fund" means the fund by that name created by Section 4.12.
"Rebate Instructions" means the Rebate Instructions set forth in the
No-Arbitrage Certificate, delivered by the Issuer at the time of the issuance
and delivery of the Bonds, as the same may be amended or supplemented in
accordance with its terms.
"Receipts and Revenues of the Issuer from the Agreement" means all money
paid to the Issuer pursuant to Section 5.04(a) of the Agreement, and receipts of
the Trustee credited under the provisions of this Indenture against such
payments, including all moneys received by the Trustee from a draw under the
Letter of Credit (other than moneys drawn to purchase Bonds pursuant to the
terms hereof).
"Record Date" means, with respect to any Bond bearing interest at a
Variable Rate, the fifth Business Day next preceding an Interest Payment Date
applicable to that Bond, or, with respect to any Bond bearing interest at a
Fixed Interest Rate, the February 15 or August 15 next preceding the Interest
Payment Date.
"Reimbursement Agreement" means the agreement among the Company, WCA
Waste Systems, Inc., and the Bank pursuant to which the Letter of Credit is
issued by the Bank and delivered to the Trustee, and any and all modifications,
alterations, amendments and supplements thereto. Initially, the "Reimbursement
Agreement" means the Reimbursement Agreement, dated as of August 1, 2002,
between the Company and the Bank.
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"Remarketing Agent" means initially βββββ Fargo Brokerage Services, LLC,
and any successor agent or agents appointed from time to time pursuant to
Section 9.09.
"Remarketing Agreement" means (a) initially the Remarketing Agreement
between the Remarketing Agent and the Company, dated as of August 1, 2002, and
any and all modifications, alterations, amendments and supplements thereto, and
(b) any agreement between the Company and any successor remarketing agent
appointed pursuant to Section 9.09.
"Responsible Officer" means, when used with respect to the Trustee, any
officer within the Corporate Trust Department (or any successor group of the
Trustee) including any vice president, assistant vice president, assistant
secretary or any other officer or assistant officer of the Trustee customarily
performing functions similar to those performed by the persons who at the time
shall be such officers, respectively, or to whom any corporate trust matter is
referred at the Trustee's address set forth in Section 12.01 because of his
knowledge of and familiarity with the particular subject.
"Semiannual Interest Rate" means (a) the rate of interest per annum
determined by the Remarketing Agent, on the Interest Rate Determination Date
immediately preceding the applicable Interest Rate Adjustment Date, to be the
lowest interest rate for the Interest Rate Period commencing on the applicable
Interest Rate Adjustment Date and ending on the last day of February or August
nearest to but not later than the date that is six months from the Interest Rate
Adjustment Date, in the judgment of the Remarketing Agent (taking into
consideration current transactions and comparable securities with which the
Remarketing Agent is involved or of which it is aware and prevailing financial
market conditions) at which, as of such Interest Rate Determination Date, the
Bonds could be remarketed at par, plus the accrued interest (if any) on the
Interest Rate Adjustment Date for that Interest Rate Period or (b) in the event
that the Remarketing Agent has been removed or has resigned and no successor has
been appointed, or the Remarketing Agent has failed to determine the Semiannual
Interest Rate for whatever reason, or the Semiannual Interest Rate cannot be
determined pursuant to clause (a) for whatever reason, the interest rate then in
effect with respect to the Bonds, without adjustment; provided that in no event
shall the Semiannual Interest Rate exceed the Maximum Rate.
"Substitute Letter of Credit" is defined in Section 5.03.
"Trust Estate" means all of the moneys, properties and rights described
in the Granting Clause of this Indenture.
"Trustee" means the entity identified as such in the heading of this
Indenture and such entity's successors under this Indenture, and any separate or
co-trustee at the time serving as such under this Indenture.
"Unassigned Rights" means the rights of the Issuer under Section 5.05
(relating to fees and indemnification), Section 6.01 (relating to expenses of
collection), and Section 6.05 (relating to payment of counsel fees and
expenses), of the Agreement and the rights of the Issuer to receive
documentation and notices, to give or withhold consents in connection with the
provisions of this Indenture or the Agreement and the right to enforce any of
the foregoing.
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"U.S. Government Obligations" means (a) direct obligations of the United
States for which its full faith and credit are pledged for the full and timely
payment thereof, (b) obligations of a person controlled or supervised by and
acting as an agency or instrumentality of the United States, the payment of
which is unconditionally guaranteed as a full faith and credit obligation of the
United States for the full and timely payment thereof, or (c) securities or
receipts evidencing ownership interests in obligations or specified portions
(such as principal or interest) of obligations described in (a) or (b).
"Variable Rate" means any interest rate to be borne on the Bonds other
than the Fixed Interest Rate.
"Weekly Interest Rate" means (a) the rate of interest per annum
determined by the Remarketing Agent on the Interest Rate Determination Date
immediately preceding the applicable Interest Rate Adjustment Date, to be the
lowest interest rate for the Interest Rate Period of one week (or less in the
case of any such Interest Rate Period commencing on an Interest Period Reset
Date that is not a Thursday) commencing on the applicable Interest Rate
Adjustment Date, in the judgment of the Remarketing Agent (taking into
consideration current transactions and comparable securities with which the
Remarketing Agent is involved or of which it is aware and prevailing financial
market conditions) at which, as of such Interest Rate Determination Date, the
Bonds could be remarketed at par, plus the accrued interest (if any) on the
Interest Rate Adjustment Date for that Interest Rate Period or (b) in the event
that the Remarketing Agent has been removed or has resigned and no successor has
been appointed, or the Remarketing Agent has failed to determine the Weekly
Interest Rate for whatever reason, or the Weekly Interest Rate cannot be
determined pursuant to clause (a) for whatever reason, the interest rate then in
effect with respect to the Bonds, without adjustment; provided that in no event
shall the Weekly Interest Rate exceed the Maximum Rate.
Section 1.02. RULES OF CONSTRUCTION. Unless the context otherwise
requires,
(a) an accounting term not otherwise defined has the meaning assigned to
it in accordance with generally accepted accounting principles applied on a
consistent basis;
(b) references to Articles and Sections are to the Articles and Sections
of this Indenture;
(c) terms defined elsewhere in this Indenture shall have the meanings
ascribed to them therein;
(d) words of the masculine gender shall be deemed and construed to
include correlative words of the feminine and neuter genders;
(e) headings used in this Indenture are for convenience of reference only
and shall not define or limit the provisions hereof;
(f) each reference herein or in the Bonds to a percentage of Bonds
required for notices, consents or for any other reason shall be deemed to refer
to Bonds then Outstanding; and
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(g) all references herein to time shall be Eastern Time unless otherwise
expressly stated.
ARTICLE II: THE BONDS
Section 2.01. ISSUANCE OF BONDS; FORM; DATING.
(a) Authorization. The Issuer hereby authorizes and creates under this
Indenture a series of Bonds, entitled to the benefit, security and protection of
this Indenture, to be designated "Gulf Coast Waste Disposal Authority
Environmental Facilities Revenue Bonds (Waste Corporation of Texas, L.P.
Project) Series 2002." The total principal amount of Bonds that may be issued
and Outstanding hereunder shall not exceed $25,000,000. The Bonds shall be
issuable only as fully registered bonds without coupons in Authorized
Denominations only, and in substantially the form of Exhibit A to this
Indenture, with appropriate variations, omissions, insertions, notations,
legends or endorsements required by law or usage or permitted or required by
this Indenture. The Bonds may be in printed or typewritten form. No Bonds may be
issued under the provisions of this Indenture except in accordance with this
Article.
The Bonds shall be payable in lawful money of the United States but only
from the sources pledged to such purpose. The Bonds are limited obligations of
the Issuer payable solely from the revenues and receipts derived from payments
made by the Company in accordance with the Agreement or by the Bank under the
Letter of Credit, which revenues and receipts and security have been pledged and
assigned to the Trustee to secure payment of the Bonds in the manner and to the
extent provided herein. NEITHER THE STATE NOR ANY POLITICAL SUBDIVISION THEREOF,
INCLUDING THE ISSUER, SHALL BE OBLIGATED TO PAY THE PRINCIPAL OR PREMIUM, IF
ANY, OR INTEREST ON OR THE PURCHASE PRICE OF THE BONDS OR OTHER COSTS INCIDENT
THERETO EXCEPT FROM THE REVENUES AND RECEIPTS PLEDGED THEREFOR, AND NEITHER THE
FAITH AND CREDIT NOR THE TAXING POWER OF THE STATE OR ANY POLITICAL SUBDIVISION
THEREOF, INCLUDING THE ISSUER, IS PLEDGED TO THE PAYMENT OF THE PRINCIPAL OR
PREMIUM, IF ANY, OR INTEREST ON OR THE PURCHASE PRICE OF THE BONDS OR OTHER
COSTS INCIDENT THERETO. THE BONDS AND THE INTEREST THEREON SHALL NOT BE DEEMED
TO CONSTITUTE A DEBT OR PLEDGE OF THE FAITH AND CREDIT OF THE STATE, OR ANY
POLITICAL SUBDIVISION THEREOF, INCLUDING THE ISSUER. THE ISSUER HAS NO TAXING
POWER. NO PRESENT OR FUTURE OFFICER, MEMBER, DIRECTOR, EMPLOYEE OR AGENT OF THE
ISSUER OR THE STATE OF TEXAS SHALL BE PERSONALLY LIABLE ON THE BONDS; AND NO
COVENANT, AGREEMENT OR OBLIGATION CONTAINED HEREIN SHALL BE DEEMED TO BE A
COVENANT, AGREEMENT OR OBLIGATION OF ANY PRESENT OR FUTURE OFFICER, MEMBER,
DIRECTOR, EMPLOYEE OR AGENT OF THE ISSUER IN HIS INDIVIDUAL CAPACITY.
(b) Details of Bonds. Each of the Bonds shall be dated August 1, 2002,
but shall accrue interest from the Closing Date (which shall be shown on the
Bonds as the "Date of Initial Delivery") and shall mature, subject to prior
redemption, on the Maturity Date. The principal of and Purchase Price or
redemption price and premium, if any, on the Bonds shall be payable at the
Operations
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Office of the Trustee upon presentation and surrender of the Bonds. Payments of
interest on the Bonds will be mailed to the persons in whose names the Bonds are
registered on the register of the Trustee at the close of business on the Record
Date immediately preceding each Interest Payment Date; provided that, any Holder
of a Bond or Bonds in an aggregate principal amount of not less than $1,000,000
may, by prior written instructions filed with the Trustee not later than three
(3) Business Days prior to a Record Date (which instructions shall remain in
effect until revoked by subsequent written instructions), instruct that interest
payments for any period be made by wire transfer to an account in the
continental United States or other means acceptable to the Trustee at the
expense of the Company. The Bonds shall be numbered from 1 upward as determined
by the Trustee and will contain the designation "R" except that temporary Bonds
permitted by Section 2.08 hereof shall contain the designation "TR."
(c) Delivery. Upon the execution and delivery of this Indenture and
receipt by the Trustee of the following items, the Trustee shall deliver the
Bonds in accordance with the authorization described in (iv) below:
(i) a copy of the resolution of the Issuer authorizing the
issuance of the Bonds, certified by the Issuer's Secretary;
(ii) original executed counterparts of the Agreement, this
Indenture, the Remarketing Agreement, the Purchase Agreement and the
Reimbursement Agreement;
(iii) the original, executed Letter of Credit from the Bank;
(iv) an authorization and request from the Issuer to the Trustee
to deliver $25,000,000 in aggregate principal amount of the Bonds to the
initial purchaser or purchasers upon receipt by the Trustee, for the
account of the Issuer, of the purchase price for such principal amount of
Bonds;
(v) an Opinion of Bond Counsel to the effect that the Bonds so
specified have been validly authorized, executed and issued under the
laws of the State of Texas and are not subject to registration under the
Securities Act of 1933, as amended (the "Securities Act"), and this
Indenture has been duly authorized, executed and delivered by, and is
enforceable against, the Issuer and is exempt from qualification under
the Trust Indenture Act of 1939, as amended;
(vi) an Opinion of Counsel to the Bank addressed to the Trustee,
or upon which the Trustee may rely, to the effect that the Letter of
Credit is a valid, binding and enforceable obligation of the Bank and is
not subject to registration under the Securities Act; and
(vii) the approving opinion of the Attorney General of the State
of Texas.
Section 2.02. INTEREST ON THE BONDS. (a) General; Initial Interest Rate.
The Bonds shall mature on the Maturity Date, subject to prior redemption as set
forth herein. Interest on the Bonds shall be computed from the Interest Payment
Date next preceding the date of authentication thereof, unless such
authentication date (i) is prior to the first Interest Payment Date following
the Closing Date, in which case interest shall be computed from the Closing
Date, (ii) is after a Record Date and
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before the subsequent Interest Payment Date, in which case interest shall be
computed from the subsequent Interest Payment Date, or (iii) is an Interest
Payment Date, in which case interest shall be computed from such authentication
date; provided, that if interest on the Bonds is in default, the Bonds shall
bear interest from the last date to which interest has been paid. Interest on
the Bonds shall be payable on the initial Interest Payment Date specified in the
Approval Certificate and on each Interest Payment Date thereafter. The Bonds
shall bear interest at a Variable Rate or the Fixed Interest Rate, all as more
specifically set forth hereinafter. The Bonds shall initially bear interest at
the Weekly Interest Rate. The initial Interest Rate Period shall be in effect
from the Closing Date through and including the date specified in the Approval
Certificate.
(b) Conversion to Different Variable Rate Interest Rate Mode. On any
Interest Period Reset Date on or after the first Interest Payment Date, Bonds
bearing interest at a Variable Rate may be converted to a different Variable
Rate Interest Rate Mode upon receipt by the Trustee and the Remarketing Agent of
a written direction from the Authorized Company Representative, not less than
forty-five (45) days prior to such Interest Period Reset Date, to convert the
Variable Rate on the Bonds to a different Variable Rate other than the Interest
Rate Mode then in effect. Such direction to convert the interest rate on the
Bonds to a different Interest Rate Mode shall be accompanied by (i) in the case
of a conversion from an Interest Rate Mode of one year or longer to an Interest
Rate Mode of less than one year, or in the case of a conversion from an Interest
Rate Mode of less than one year to an Interest Rate Mode of one year or longer,
an Opinion of Bond Counsel delivered to the Issuer, the Trustee, the Bank and
the Remarketing Agent, stating that such conversion to the specified Interest
Rate Mode will not adversely affect the exclusion of the interest on the Bonds
from gross income for federal income tax purposes; and (ii) evidence reasonably
satisfactory to the Trustee that the interest component of the Letter of Credit
is equal to the amounts set forth below and that the Letter of Credit
Termination Date is no earlier than fifteen (15) days after the end of the new
Interest Rate Period. If the Bonds bear interest at the Daily Interest Rate, the
Weekly Interest Rate, the Monthly Interest Rate, or the Quarterly Interest Rate,
the interest coverage period for the Letter of Credit shall be at least 45 days
of interest at the Maximum Rate. If the Bonds bear interest at the the
Semiannual Interest Rate, the Annual Interest Rate, or the Five-Year Interest
Rate, then the interest coverage period for the Letter of Credit shall be at
least 211 days of interest at the Maximum Rate. The Company shall be required to
provide a Letter of Credit or a Substitute Letter of Credit that will provide
the required interest coverage. Notwithstanding any provision of this paragraph,
no conversion shall be effective (A) if the proposed conversion is to the Annual
Interest Rate, or the Five-Year Interest Rate and the Company makes an election
on or prior to the day immediately succeeding any Interest Rate Determination
Date not to proceed with the proposed conversion or (B) the Trustee has not
received on the effective date of such conversion an Opinion of Bond Counsel to
the same effect as described in clause (i) of this paragraph above, if any such
opinion is so required. In either such event, the Interest Rate Mode for the
Bonds will remain as the Interest Rate Mode then in effect for the Bonds without
regard to any proposed conversion. The Bonds will continue to be subject to
tender for purchase on the scheduled effective date of the proposed conversion
without regard to the failure of such proposed conversion. If the Trustee shall
have sent any notice to Holders regarding the proposed conversion then in the
event of a failure of such conversion, as specified above, the Trustee shall
promptly notify all Holders of such failure, of the reason for such failure, and
of the continuation of the Interest Rate Mode then in effect.
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(c) Conversion to Fixed Interest Rate. On any Interest Period Reset Date
on or after the first Interest Payment Date, Bonds bearing interest at a
Variable Rate may be converted to a Fixed Interest Rate upon receipt by the
Trustee and the Remarketing Agent of a written direction from the Authorized
Company Representative, not less than sixty (60) days prior to such Interest
Period Reset Date, to convert the interest rate on the Bonds to a Fixed Interest
Rate. In such case, the Bonds shall continue to mature on the Maturity Date, but
shall be subject to mandatory sinking fund redemption pursuant to Section
3.01(a) hereof. Mandatory sinking fund redemption shall occur on September 1 of
each year following the Fixed Interest Rate Conversion Date, and the principal
amount subject to sinking fund redemption in each such year, which amount shall
be calculated by the Trustee at the time of the conversion and provided by the
Trustee to each Rating Agency, the Issuer, and the Company, shall result in
substantially level debt service for each year ending on the Maturity Date,
rounded to the nearest $5,000 in principal amount; provided, however, upon the
written direction of the Company, accompanied by the written consent of the Bank
provided to the Trustee and an opinion of Bond Counsel to the effect that the
exclusion of interest on the Bonds from gross income will not be adversely
affected thereby, the Trustee shall use such alternate mandatory redemption
schedule as is provided by the Company. Such direction to convert the interest
rate on the Bonds to a Fixed Interest Rate shall be accompanied by (i) in the
case that the conversion is from an Interest Rate Mode of less than one year to
a Fixed Interest Rate, an Opinion of Bond Counsel delivered to the Issuer, the
Trustee, the Bank and the Remarketing Agent, stating that such conversion to the
specified Interest Rate Mode will not adversely affect the exclusion of the
interest on the Bonds from gross income for federal income tax purposes; and
(ii) either (a) evidence that the Bonds have an Investment Grade Rating from
each Rating Agency immediately after the conversion or (b) an investment letter
from each purchaser of Bonds addressing the points set forth in Exhibit B
hereto. Notwithstanding any provision of this paragraph, no conversion shall be
effective (A) if the Company makes an election on or prior to the day
immediately succeeding any Interest Rate Determination Date not to proceed with
the proposed conversion or (B) the Trustee has not received on the effective
date of such conversion an Opinion of Bond Counsel to the same effect as
described in clause (i) of this paragraph above, if required. In either such
event, the Interest Rate Mode for the Bonds will remain as the Interest Rate
Mode then in effect for the Bonds without regard to any proposed conversion. The
Bonds will continue to be subject to tender for purchase on the scheduled
effective date of the proposed conversion without regard to the failure of such
proposed conversion. If the Trustee shall have sent any notice to Holders
regarding the proposed conversion then in the event of a failure of such
conversion, as specified above, the Trustee shall promptly notify all Holders of
such failure, of the reason for such failure, and of the continuation of the
Interest Rate Mode then in effect. The Company may, but is not required to,
provide for the delivery of a Substitute Letter of Credit pursuant to Section
5.03(c) hereof to be in effect after conversion to the Fixed Interest Rate.
(d) Determination of Rates Conclusive. The determination of the Variable
Rates or the Fixed Interest Rate for the Bonds shall be conclusive and binding
upon the Company, the Trustee, the Bank and the respective Holders of the Bonds.
(e) Notice of Interest Rate Determinations and Conversions to Different
Modes; Issuer Veto Right. On each Interest Rate Determination Date, the
Remarketing Agent shall give the Trustee and the Company telephonic notice
(immediately confirmed in writing) of the interest rate to be borne by
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the Bonds for the following Interest Rate Period; provided that if the interest
rate is determined pursuant to clause (b) of the definition of the applicable
Interest Rate Mode, on the Interest Rate Determination Date, the Trustee shall
give notice to the Company and the Bank as provided in this section.
If the interest rate on the Bonds is to be converted to a different
Interest Rate Mode in accordance with the provisions of Section 2.02(b) hereof,
at least thirty (30) days prior to the Interest Period Reset Date the Trustee
shall notify the Bank and the Holders of all outstanding Bonds by first-class
mail, by facsimile or by electronic transmission that upon such Interest Period
Reset Date the Bonds shall be converted to a different Interest Rate Mode and
that all Bonds shall be subject to a mandatory tender pursuant to Section 3.07
hereof. Furthermore, all conversions to a different Interest Rate Mode except
any conversion resulting from the failure to determine or announce, or the
validity of, an Interest Rate are subject to veto by the Issuer, which veto may
not be unreasonably exercised and must be exercised by the Issuer Representative
within one hour after the receipt of notice from the Company of such change in
interest rate determination method by the sending of a telephonic notice to the
Company, the Trustee, and the Remarketing Agent.
(f) Interest Calculations. Interest shall be calculated on the basis of a
360-day year of twelve 30-day months so long as interest is payable at the
Semiannual Interest Rate, the Annual Interest Rate, the Five-Year Interest Rate
or the Fixed Interest Rate. Interest shall be calculated on the basis of a year
of 365 or 366 days, as applicable, for the number of days actually elapsed so
long as interest is payable at the Daily Interest Rate, the Weekly Interest
Rate, the Monthly Interest Rate or the Quarterly Interest Rate. Interest shall
be payable on each Interest Payment Date for the period commencing on the
immediately preceding Interest Payment Date and to and including the day
immediately preceding such payment date. Any calculation of the interest rate to
be borne by the Bonds that is not in an integral multiple of one-eighth of one
percent (0.125%) shall be rounded to the nearest one-hundredth of one percent
(0.01%).
Section 2.03. EXECUTION AND AUTHENTICATION. The Bonds shall be signed on
behalf of the Issuer with the manual or facsimile signature of an Authorized
Officer of the Issuer, attested by the manual or facsimile signature of the
Issuer's Secretary or Assistant Secretary, and the seal of the Issuer shall be
impressed or imprinted on the Bonds by facsimile or otherwise. If any officer of
the Issuer whose signature is on a Bond no longer holds that office at the time
the Bond is authenticated by the Trustee or registered by the Comptroller, the
Bond shall nevertheless be valid. Also, if a person signing a Bond is the proper
officer on the actual date of execution, the Bond shall be valid even if that
person is not the proper officer on the nominal date of action.
A Bond shall not be valid for any purpose under this Indenture until
either (i) the Trustee manually signs the certificate of authentication on the
Bond or (ii) in the case of the Bonds initially delivered hereunder, an executed
Certificate of the Comptroller of Public Accounts of the State of Texas (in
substantially the form attached to the FORM OF BOND in Exhibit A hereof) to such
Bonds. Such signature shall be conclusive evidence that the Bond has been
authenticated or registered under this Indenture.
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Section 2.04. BOND REGISTER. The Trustee shall maintain or cause to be
maintained within the State of Texas a register of Bonds and of their transfer
and exchange. Bonds not held under a book-entry system must be presented at the
Operations Office of the Trustee for registration, transfer and exchange, and
Bonds may be presented at that office for payment. Bonds not held under a
book-entry system and optionally tendered by their holders must be delivered as
specified in Section 3.06.
Section 2.05. REGISTRATION AND EXCHANGE OF BONDS; PERSONS TREATED AS
OWNERS; BOOK-ENTRY SYSTEM.
(a) Bonds may be transferred only on the register maintained by the
Trustee. Upon surrender for transfer of any Bond to the Trustee, duly endorsed
for transfer or accompanied by an assignment duly executed by the holder or the
holder's attorney duly authorized in writing and in either case, with an
appropriate guarantee of signature conforming to the requirements of Exhibit A
hereto, the Trustee shall authenticate a new Bond or Bonds in an equal aggregate
principal amount and registered in the name of the transferee.
Bonds may be exchanged for an equal aggregate principal amount of Bonds
of different Authorized Denominations. The Trustee shall authenticate and
deliver Bonds that the Bondholder making the exchange is entitled to receive,
bearing numbers not then outstanding.
Except in connection with the optional tender of Bonds pursuant to
Section 3.06 and the delivery thereof pursuant to Section 3.10, the Trustee
shall not be required to transfer or exchange any Bond during the period
beginning fifteen (15) days before the mailing of notice calling the Bond or any
portion of the Bond for redemption and ending on the redemption date. Bonds
subject to redemption or mandatory repurchase may be transferred or exchanged
only if the Trustee provides the new holder thereof with a copy of the notice of
redemption or mandatory repurchase, as the case may be.
The holder of a Bond as shown on the register of the Trustee shall be the
absolute owner of the Bond for all purposes, and payment of principal, premium,
if any, interest or the Purchase Price shall be made only to or upon the written
order of such holder or the holder's legal representative; provided that
interest shall be paid to the Person shown on the register as a holder of a Bond
on the applicable Record Date.
(b) The Trustee may require the payment by a Bondholder requesting
exchange or registration of transfer of any tax or other governmental charge
required to be paid in respect of the exchange or registration of transfer but
shall not impose any other charge.
(c) The Trustee or the Remarketing Agent may make appropriate
arrangements for the Bonds to be issued or held by means of a book-entry system
administered by DTC with no physical distribution of Bonds made to the public.
The Bonds will initially be issued by means of a book-entry system administered
by DTC with no physical distribution of Bonds made to the public. References in
this subsection to a Bond or the Bonds shall be construed to mean the Bond or
the Bonds that are held under the book-entry system. In such event, one Bond of
each maturity shall be issued to DTC and immobilized in its custody. A
book-entry system shall be employed, evidencing
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ownership of the Bonds in Authorized Denominations, with transfers of Beneficial
Ownership Interests effected on the records of DTC and the DTC Participants
pursuant to rules and procedures established by DTC.
SO LONG AS CEDE & CO., AS NOMINEE FOR DTC, IS THE REGISTERED OWNER OF THE
BONDS, THE TRUSTEE SHALL TREAT CEDE & CO. AS THE ONLY HOLDER OF THE BONDS FOR
ALL PURPOSES UNDER THIS INDENTURE, INCLUDING RECEIPT OF ALL PRINCIPAL AND
PURCHASE PRICE OF, PREMIUM, IF ANY, AND INTEREST ON THE BONDS, RECEIPT OF
NOTICES, VOTING AND REQUESTING OR DIRECTING THE TRUSTEE TO TAKE OR NOT TO TAKE,
OR CONSENTING TO, CERTAIN ACTIONS UNDER THIS INDENTURE.
Notwithstanding the provisions of the preceding paragraph, so long as
Cede & Co. is the registered owner of the Bonds, optional tender notices
hereunder shall be given by the Beneficial Owner of such Bonds exercising
ownership rights through DTC Participants pursuant to DTC's operating procedures
as in effect from time to time.
Payments of principal, interest, redemption price and redemption premium,
if any, or Purchase Price with respect to the Bonds, so long as DTC or its
nominee, Cede & Co., is the only owner of the Bonds, shall be paid by the
Trustee directly to DTC or its nominee, Cede & Co., as provided in the Blanket
Issuer Letter of Representations from the Issuer to DTC (the "Letter of
Representations"). The Issuer, the Company, the Remarketing Agent and the
Trustee shall not be responsible or liable for payment by DTC or DTC
Participants, for sending transaction statements or for maintaining, supervising
or reviewing records maintained by DTC or DTC Participants.
In the event that (i) DTC determines not to continue to act as securities
depository for the Bonds, or (ii) the Company or the Remarketing Agent
determines that the continuation of the book-entry system of evidence and
transfer of Beneficial Ownership Interests of the Bonds would adversely affect
their interests or the interests of the Beneficial Owners of the Bonds, the
Issuer shall, at the request of the Company or the Remarketing Agent,
discontinue the book-entry system with DTC. If the Remarketing Agent fails to
identify another qualified securities depository to replace DTC, the Issuer
shall execute, and the Remarketing Agent shall cause the Trustee to authenticate
and deliver, replacement Bonds in the form of fully registered Bonds to each
Beneficial Owner.
THE ISSUER, THE COMPANY, THE REMARKETING AGENT AND THE TRUSTEE SHALL NOT
HAVE ANY RESPONSIBILITY OR OBLIGATIONS TO ANY DTC PARTICIPANT OR ANY BENEFICIAL
OWNER WITH RESPECT TO (I) THE BONDS, (II) THE ACCURACY OF ANY RECORDS MAINTAINED
BY DTC OR ANY DTC PARTICIPANT, (III) THE PAYMENT BY DTC OR ANY DTC PARTICIPANT
OF ANY AMOUNT DUE TO ANY BENEFICIAL OWNER IN RESPECT OF THE PRINCIPAL OF AND
PREMIUM, IF ANY, AND INTEREST ON THE BONDS, (IV) THE DELIVERY OR TIMELINESS OF
DELIVERY BY DTC OR ANY DTC PARTICIPANT OF ANY NOTICE DUE TO ANY BENEFICIAL OWNER
THAT IS REQUIRED OR PERMITTED UNDER THE TERMS OF THIS INDENTURE TO BE GIVEN TO
BENEFICIAL OWNERS, (V) THE SELECTION OF BENEFICIAL OWNERS TO
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RECEIVE PAYMENTS IN THE EVENT OF ANY PARTIAL REDEMPTION OF THE BONDS, OR (VI)
ANY CONSENT GIVEN OR OTHER ACTION TAKEN BY DTC, OR ITS NOMINEE, CEDE & CO., AS
OWNER.
(d) The Trustee or the Remarketing Agent shall not be limited to
utilizing a book-entry system maintained by DTC but may enter into a custody
agreement with any bank or trust company serving as custodian (which may be the
Trustee serving in the capacity of custodian) to provide for a book-entry or
similar method for the registration and registration of transfer of all or a
portion of the Bonds.
SO LONG AS A BOOK-ENTRY SYSTEM OF EVIDENCE OF TRANSFER OF OWNERSHIP OF
ALL THE BONDS IS MAINTAINED IN ACCORDANCE HEREWITH, THE PROVISIONS OF THIS
INDENTURE RELATING TO THE DELIVERY OF PHYSICAL BOND CERTIFICATES SHALL BE DEEMED
TO GIVE FULL EFFECT TO SUCH BOOK-ENTRY SYSTEM.
Section 2.06. MUTILATED, LOST, STOLEN, DESTROYED OR UNDELIVERED BONDS.
(a) If any Bond is mutilated, lost, stolen or destroyed, the Trustee
shall authenticate a new Bond of the same denomination for any mutilated, lost,
stolen or destroyed Bond if there shall first be delivered by the Bondholder to
the Trustee at the Operations Office (i) in the case of any mutilated Bond, such
mutilated Bond, and (ii) in the case of any lost, stolen or destroyed Bond,
evidence of such loss, theft or destruction reasonably satisfactory to the
Issuer, the Bank, the Trustee and the Company, together with an indemnity from
the Bondholder or a surety, reasonably satisfactory to the Trustee and the
Company to protect the Issuer, the Company, the Trustee or any agent from any
loss that any of them may suffer if a Bond is replaced. If the Bond has matured
and if the evidence and indemnity described above have been provided by the
Bondholder, instead of issuing a duplicate Bond, the Trustee shall pay the Bond
without requiring surrender of the Bond and make such requirements as the
Trustee and the Company deem fit for their protection, including a lost
instrument bond. The Trustee may charge the Bondholder its reasonable fees and
expenses in this connection.
(b) In the event that any Bond purchased pursuant to an optional tender
or mandatory repurchase is not delivered by the holder thereof on the date such
Bond is deemed purchased, the Issuer shall execute (if necessary) and the
Trustee shall authenticate and deliver a new Bond of like aggregate principal
amount as the Bond deemed purchased, which Bond shall, for all purposes of this
Indenture, be deemed to evidence the same debt as the Bond deemed purchased and
shall be remarketed, delivered and registered in accordance with Section 3.09
and Section 3.10 hereof.
If any Bond is purchased by the Trustee with Available Moneys provided by
the Company and sufficient for such purchase, the Trustee, upon request of the
Company, shall authenticate a new Bond in any Authorized Denomination specified
by the Company, registered as the Company may direct and deliver it to the
Company, or to its order, whether or not such Bond is ever delivered. If any
Bond is purchased with funds obtained by a drawing on the Letter of Credit, the
Trustee shall comply with the provisions of Section 3.10.
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(c) Every new Bond issued pursuant to this Section shall (i) constitute a
substitute contractual obligation of the Issuer regardless of whether, in the
case of (a) above, the mutilated, lost, stolen or destroyed Bond and, in the
case of (b) above, the Bond deemed purchased shall be enforceable at any time by
anyone, and (ii) be entitled to all of the benefits of this Indenture equally
and proportionately with any and all other Bonds issued and Outstanding
hereunder.
(d) All Bonds shall be held and owned on the express condition that the
foregoing provisions of this Section are exclusive with respect to the
replacement or payment of mutilated, lost, stolen or destroyed Bonds and the
replacement of any Bond deemed purchased pursuant to an optional tender or
mandatory repurchase and, to the extent permitted by law, and shall preclude any
and all other rights and remedies with respect to the replacement or payment of
negotiable instruments or other investment securities without their surrender,
notwithstanding any law or statute to the contrary now existing or enacted
hereafter.
Section 2.07. CANCELLATION OF BONDS. All Bonds paid, redeemed or
purchased, either at or before maturity, shall be delivered to the Trustee when
such payment, redemption or purchase is made, and except as otherwise provided
herein shall be canceled. Whenever a Bond is delivered to the Trustee for
cancellation (upon payment, redemption, defeasance or otherwise), or for
transfer, exchange or replacement pursuant to Section 2.05 or 2.06, the Trustee
shall safeguard such Bond for such period of time as may be required by
applicable governmental regulations and shall thereafter promptly cancel and
destroy the Bond and supply evidence or certification of such cancellation and
destruction to any party so requesting.
Section 2.08. TEMPORARY BONDS. Until definitive Bonds are ready for
delivery, the Issuer may execute and the Trustee shall authenticate temporary
Bonds substantially in the form of the definitive Bonds, with appropriate
variations. The Issuer, at the sole expense of the Company, shall, without
unreasonable delay, prepare and the Trustee shall authenticate definitive Bonds
in exchange for the temporary Bonds. Such exchange shall be made by the Trustee
without charge to the Bondholders. Temporary Bonds shall not otherwise be
eligible for transfer or exchange under Section 2.05.
ARTICLE III: REDEMPTION, PURCHASE AND REMARKETING
Section 3.01. TERMS OF REDEMPTION OF BONDS. The Bonds are subject to
redemption prior to stated maturity as follows:
(a) Mandatory Sinking Fund Redemption Following Conversion to a Fixed
Interest Rate. If the Bonds are converted to a Fixed Interest Rate, the Bonds
shall be subject to mandatory redemption pursuant to mandatory sinking fund
requirements, at a redemption price of 100% of the principal amount redeemed
plus accrued interest, if any, thereon to the redemption date, on September 1 of
each year following such conversion in the amounts determined as set forth in
Section 2.02(c) hereof.
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(b) Optional Redemption. Unless previously redeemed, the Bonds are
subject to redemption (from funds other than those deposited in accordance with
the mandatory sinking fund requirements of this Section), at the option of the
Issuer upon direction of the Company (subject to compliance with Section 3.03
hereof), (i) if the Bonds do not bear interest at the Fixed Interest Rate, in
whole or in part (in integral multiples of $5,000, provided that the unredeemed
portion of any Bond redeemed in part shall be $100,000 or more) on any Interest
Rate Adjustment Date (except in the case of Bonds bearing interest at the Daily
Interest Rate or the Weekly Interest Rate, only on the first Business Day of
each month) at a redemption price of 100% of the principal amount redeemed plus
accrued interest, if any, thereon to the redemption date, and (ii) after the
Fixed Interest Rate Conversion Date and on or after the First Optional
Redemption Date, in whole or in part (in integral multiples of $5,000, provided
that, in the case that the Authorized Denominations are required to be $100,000
or greater, the unredeemed portion of any Bond redeemed in part shall be
$100,000 or more) at any time at a redemption price equal to the following
percentages of the principal amount redeemed, plus in each case accrued interest
to the date fixed for redemption (if the Maturity Date of the Bonds is prior to
the First Optional Redemption Date, then the Bonds bearing interest at a Fixed
Interest Rate shall not be subject to optional redemption prior to maturity).
Redemption Date Optional Redemption Price
--------------- -------------------------
First Optional Redemption Date, through the
following last day of August 102%
First Anniversary of the First Optional
Redemption Date, through the
following last day of August 101%
Second Anniversary of the First Optional
Redemption Date, through the
following last day of August 100%
(c) Extraordinary Optional Redemption Upon the Occurrence of Certain
Events Affecting the Facilities. The Bonds are subject to redemption, in whole
or in part, at a redemption price equal to the principal amount thereof plus
accrued interest to, but not including, the redemption date, without premium, on
the earliest date for which notice of redemption can be given to the extent the
Company has exercised its option to make prepayments pursuant to Section 5.04(b)
of the Agreement. When a Letter of Credit is in effect, the redemption price of
the Bonds to be redeemed pursuant to this subsection (c) shall be paid from
moneys drawn under such Letter of Credit as provided in Sections 4.01(c) and
5.02.
(d) Mandatory Redemption of Bonds on Determination of Taxability. The
Bonds are also subject to mandatory redemption at a redemption price equal to
the principal amount thereof plus accrued interest to, but not including, the
redemption date in whole (or in part as provided below), without premium (except
as provided below with respect to Bonds that bear interest at a Fixed
26
Interest Rate), on the first day of a month within 180 days after the Company
receives written notice from a Bondholder or former Bondholder or the Trustee of
a final determination by the Internal Revenue Service, or a court of competent
jurisdiction, from which no appeal is taken that the interest paid or to be paid
on any Bond is or was includable in the gross income of the Bond's owner for
federal income tax purposes (a "Determination of Taxability"), or if such date
is not a Business Day, on the next succeeding Business Day; provided that with
respect to any Bonds that bear interest at a Fixed Interest Rate, the redemption
price in the event of a redemption pursuant to this Section shall be the same as
if the Bonds had been optionally redeemed on such date pursuant to (b) above. No
such determination will be considered final unless the Bondholder or former
Bondholder involved in the determination gives the Company, the Trustee, the
Remarketing Agent and the Bank, if any, prompt written notice of the
commencement of the proceedings resulting in the determination and offers the
Company, subject to the Company's agreeing to pay all expenses of the proceeding
and to indemnify the holder against all liabilities that might result from it,
the opportunity to control the defense of the proceeding and either the Company
does not agree within thirty (30) days to pay the expenses, indemnify the holder
and control the defense or the Company exhausts or chooses not to exhaust
available procedures to contest or obtain review of the result of the
proceedings. If the redemption of fewer than all of the Bonds would, in the
Opinion of Bond Counsel, result in the interest on the Bonds outstanding
following such redemption not being includable in the gross income for federal
income tax purposes of the holders of such Bonds Outstanding, then fewer than
all of the Bonds may be redeemed in the amount specified in such opinion. If
fewer than all Bonds are redeemed, the Trustee shall select the Bonds to be
redeemed by lot as provided in Section 3.02 or by such other method acceptable
to the Trustee. Only holders of Bonds on the date of redemption shall be
entitled to the redemption premium, if applicable. No premium shall be due to
former Bondholders or with respect to any Bonds that were not Outstanding as of
the date of the Determination of Taxability. If Bonds mature after a
Determination of Taxability, but before redemption pursuant to this subsection,
the applicable premium for such Bonds, if any, shall be paid at their maturity.
(e) Use of Certain Funds to Redeem Bonds. Except as provided in Section
7.01 hereof, the Trustee shall pay the redemption price on all Bonds redeemed
under this Section in the same manner and from the same sources as provided in
Section 4.01 (b) and (c) hereof for the payment of regularly scheduled debt
service (i.e., first from Available Moneys on deposit in the Bond Fund, and
second from drawings on the Letter of Credit) and from sources provided in
Section 4.01(d) and (e) (i.e. from Available Moneys in the Construction Fund and
from any other moneys available to the Trustee).
Section 3.02. PARTIAL REDEMPTION. If fewer than all of the outstanding
Bonds are called for redemption at one time, the selection of Bonds to be
redeemed, or portions thereof, in amounts equal to $5,000 or any integral
multiple thereof shall be made by lot by the Trustee in any manner that the
Trustee may determine; provided that the Trustee shall select Bonds for
redemption so as to assure that after such redemption no Holder shall retain
Bonds in an aggregate amount less than $100,000 if the Bonds then bear interest
at a Variable Rate, or, at a Fixed Interest Rate, if the Authorized
Denominations of the Bonds are required to be $100,000 or greater; and provided
further that, if less than all of an outstanding Bond in a book-entry system is
to be called for redemption, the Trustee shall give notice to the Depository or
the nominee of the Depository that is the Holder of such Bond,
27
and the selection of the Beneficial Ownership Interests in that Bond to be
redeemed shall be at the sole discretion of the Depository and its participants.
In the case of a partial redemption of Bonds by lot, each unit of face value of
principal thereof equal to $5,000 (each such $5,000 unit is hereinafter referred
to as a "Unit") shall be treated as though it were a separate Bond in the amount
of such Unit. If it is determined that one or more, but not all of the Units
represented by a Bond are to be called for redemption, then upon notice of
redemption of a Unit or Units of Bonds, the Holder of that Bond shall surrender
the Bond to the Trustee (a) for payment of the redemption price of the Unit or
Units of Bonds called for redemption (including without limitation, the interest
accrued to the date fixed for redemption and any premium), and (b) for issuance,
without charge to the Holder thereof, of a new Bond or Bonds of the same series,
of $100,000 if Bonds bear interest at a Variable Rate or, at a Fixed Interest
Rate, if the Authorized Denominations of the Bonds are required to be $100,000
or greater, or of $5,000, in all other cases, or amounts in excess thereof in
such integrals as are permitted hereunder, aggregating a principal amount equal
to the unmatured and unredeemed portion of, and bearing interest at the same
rate and maturing on the same date as, the Bond surrendered.
Notwithstanding anything in this Section to the contrary, any Pledged
Bonds (or book entry interests therein) pledged to the Bank pursuant to the
Reimbursement Agreement shall be selected for redemption pursuant to this
Section prior to the selection of any other Bonds.
Section 3.03. ELECTION TO REDEEM. Except in the case of redemption
pursuant to any mandatory sinking fund requirements or pursuant to other
mandatory redemption provisions hereof, Bonds shall be redeemed only by written
notice from the Company to the Issuer, the Trustee and the Bank directing such
redemption. That notice shall specify the redemption date and the principal
amount of each maturity of Bonds to be redeemed, and shall be given at least
forty-five (45) days prior to the redemption date or such shorter period as
shall be reasonably acceptable to the Trustee. Except with the prior written
consent of the Bank, in the case of any optional redemption of Bonds pursuant to
Section 3.01(b) or (c) hereof, either (i) there shall be Available Moneys on
deposit with the Trustee prior to the giving of the notice required by Section
3.04 hereof in an amount that will be sufficient (either without reinvestment or
with reinvestment only in U.S. Government Obligations maturing on or before the
redemption date) to redeem at the redemption price thereof and interest accrued
to the redemption date, all of the Bonds for which notice of redemption is to be
given or (ii) if at the time of mailing of notice of any optional redemption
pursuant to Section 3.01(b) or (c) hereof, the Company shall not have deposited
with the Trustee Available Moneys sufficient to redeem all of the Bonds called
for redemption, such notice may state that it is conditional in that it is
subject to the deposit of such Available Moneys with the Trustee not later than
10:00 a.m., on the redemption date, and such notice shall be of no effect unless
such moneys are so deposited and failure to deposit such Available Moneys shall
not constitute an Event of Default hereunder..
Section 3.04. NOTICE OF REDEMPTION. Unless waived by any Holder of Bonds
to be redeemed, official notice of any such redemption shall be given by the
Trustee on behalf of the Issuer by mailing a copy of an official redemption
notice by first class mail at least thirty (30) days and not more than sixty
(60) days prior to the date fixed for redemption (except in the case of a
Section 3.01(b) redemption of Bonds bearing interest at a Variable Rate, in
which case such notice shall be given at least five (5) days and not more than
fifteen (15) days prior to the date fixed for redemption) to the registered
owner of the Bond or Bonds to be redeemed at the address shown on
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the Register or at such other address as is furnished in writing by such
registered owner to the Trustee.
All official notices of redemption shall be dated and shall state:
the redemption date,
the redemption price,
if less than all outstanding Bonds are to be redeemed, the
identification by designation, letters, numbers or other distinguishing marks
(and, in the case of partial redemption, the respective principal amounts) of
the Bonds to be redeemed,
that on the redemption date the redemption price will become due
and payable upon each such Bond or portion thereof called for redemption, and
that interest thereon shall cease to accrue from and after said date, and
the place where such Bonds are to be surrendered for payment of
the redemption price, which place of payment shall be the Operations Office of
the Trustee.
In addition to the foregoing notice, further notice shall be given by the
Trustee as set out below, but no defect in said further notice nor any failure
to give all or any portion of such further notice shall in any manner defeat the
effectiveness of a call for redemption if notice thereof is given as above
prescribed.
Each further notice of redemption given hereunder shall contain the
information required above for an official notice of redemption plus (i) the
CUSIP numbers of all Bonds being redeemed; (ii) the date of issue of the Bonds
as originally issued; (iii) the rate of interest or Interest Rate Mode borne by
each Bond being redeemed; (iv) the maturity date of each Bond being redeemed;
and (v) any other descriptive information needed to identify accurately the
Bonds being redeemed.
Each notice of redemption shall be sent at least thirty (30) days before
the redemption date by registered or certified mail or overnight delivery
service to all registered securities depositories then in the business of
holding substantial amounts of obligations of types comprising the Bonds (such
depositories now being The Depository Trust Company, New York, New York; the
Mid-West Securities Trust Company, Chicago, Illinois; the Pacific Securities
Depository Trust Company, San Francisco, California; and the Philadelphia
Depository Trust Company, Philadelphia, Pennsylvania) and to one or more
national information services that disseminate notices of redemption of
obligations such as the Bonds.
Upon the payment of the redemption price of Bonds being redeemed, each
check or other transfer of funds issued for such purpose shall bear the CUSIP
number (if any) identifying, by issue and maturity, the Bonds being redeemed
with the proceeds of such check or other transfer.
29
Failure to receive notice by mailing or any defect in that notice
regarding any Bond, however, shall not affect the validity of the proceedings
for the redemption of any other Bond.
Notice of any redemption hereunder with respect to Bonds held under a
book-entry system shall be given by the Trustee only to the Depository, or its
nominee, as the Holder of such Bonds. Selection of book entry interests in the
Bonds called for redemption is the responsibility of the Depository and any
failure of any Direct Participant, Indirect Participant or Beneficial Owner to
notify the book entry interest owners of any such notice and its contents or
effect will not affect the validity of such notice of any proceedings for the
redemption of such Bonds.
Notwithstanding the foregoing provisions of Section 3.04, (i) no notice
of redemption under this Section 3.04 shall be required with respect to any Bond
which is subject to mandatory tender on the date fixed for redemption and (ii)
if all of the outstanding Bonds to be redeemed are subject to mandatory tender
on the date fixed for redemption, the Company shall be required to direct the
redemption of such Bonds by the Issuer and give to the Trustee written notice of
such direction not less than five (5) days prior to the date fixed for
redemption of said Bonds.
Section 3.05. PAYMENT OF REDEEMED BONDS. Notice having been mailed to the
registered owner of the Bond or Bonds to be redeemed in the manner provided in
Section 3.04 hereof, and, in the event of optional redemption pursuant to
Section 3.01 (b) or (c) hereof, upon money being deposited as and if required by
Section 3.03 hereof, the Bonds and portions thereof called for redemption shall
become due and payable on the redemption date, and upon presentation and
surrender thereof at the place or places specified in that notice, shall be paid
at the redemption price, including interest accrued to the redemption date.
Except with respect to an optional redemption pursuant to Section 3.01(b) or (c)
in which Available Moneys have been deposited as required by Section 3.03
hereof, the Trustee shall make a drawing under the Letter of Credit to pay the
redemption price of the Bonds being redeemed (including accrued and unpaid
interest to the date of redemption). Any moneys received by the Trustee from the
Company that are available to be applied toward the payment of such redemption
price shall be paid to the Bank on the date of redemption to reimburse the Bank
for any drawing made under the Letter of Credit to pay such redemption price.
If money for the redemption of all of the Bonds and portions thereof to
be redeemed, together with interest accrued thereon to the redemption date, is
held by the Trustee on the redemption date, so as to be available therefor on
that date and if notice of redemption has been deposited in the mail to the
Holder of the Bond or Bonds to be redeemed as aforesaid, then from and after the
redemption date those Bonds and portions thereof called for redemption shall
cease to bear interest and no longer shall be considered to be outstanding
hereunder and shall cease to be entitled to any lien, benefit or security under
this Indenture, and the Holders shall have no rights in respect thereof except
for the payment of the redemption price thereof. If those moneys shall not be so
available on the redemption date, or that notice shall not have been deposited
in the mail as aforesaid, those Bonds and portions thereof shall continue to
bear interest, until they are paid, at the same rate or rates as they would have
borne had they not been called for redemption.
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All moneys deposited in the Bond Fund and held by the Trustee for the
redemption of particular Bonds shall be held in trust for the account of the
Holders thereof and shall be paid to them, respectively, upon presentation and
surrender of those Bonds, except as provided in Section 3.6 hereof.
Section 3.06. TENDER OPTIONS.
(a) Optional Tender While Bonds Bear Interest at the Monthly Interest
Rate, the Quarterly Interest Rate, the Semiannual Interest Rate, the Annual
Interest Rate or the Five-Year Interest Rate. While the Bonds bear interest at
the Monthly Interest Rate, the Quarterly Interest Rate, the Semiannual Interest
Rate, the Annual Interest Rate or the Five-Year Interest Rate, on each Interest
Rate Adjustment Date (each a "Bond Purchase Date") each Holder shall have the
option to tender for purchase at the Purchase Price (a "Bond Purchase Date"),
all of the Bonds owned by such Holder or such lesser principal amount thereof
(in denominations of $100,000 or integral multiples of $5,000 in excess thereof,
provided that the untendered portion of any Bond shall be $100,000 or more in
principal amount) as such Holder may specify in accordance with the terms,
conditions and limitations hereinafter set forth. The Purchase Price for each
such Bond or portion thereof shall be payable in lawful money of the United
States of America by check or draft, shall equal the principal amount, or such
portion thereof, to be purchased and shall be paid in full on the applicable
Bond Purchase Date.
(b) Optional Tender While Bonds Bear Interest at Daily Interest Rate or
Weekly Interest Rate. While the Bonds bear interest at the Daily Interest Rate
or the Weekly Interest Rate, on each Interest Rate Adjustment Date (each a "Bond
Purchase Date") each Holder shall have the option to tender for purchase, at the
Purchase Price (a "Bond Purchase Date"), all of the Bonds owned by such Holder
or such lesser principal amount thereof (in denominations of $100,000 or
integral multiples of $5,000 in excess thereof, provided that the untendered
portion of any Bond shall be $100,000 or more in principal amount) as such
Holder may specify in accordance with the terms, conditions and limitations
hereafter set forth. The Purchase Price of each such Bond shall be payable in
lawful money of the United States of America, and shall be paid in full on the
applicable Bond Purchase Date.
(c) Notification of Optional Tender. To exercise the option granted in
Section 3.06(a) hereof, the Holder shall (i) no earlier than fifteen (15) days
before the Bond Purchase Date and no later than 11:00 a.m. according to the
local time at the Operations Office of the Trustee on the eighth Business Day
prior to the Bond Purchase Date, or in the event the Bonds bear interest at the
Monthly Interest Rate, the fifth Business Day prior to the Bond Purchase Date,
give notice to the Remarketing Agent and the Trustee by telecopy or in writing
that states (A) the name and address of the Holder (B) the principal amount and,
if the Bonds are not held pursuant to a book-entry system, the CUSIP number and
Bond numbers of the Bonds to be purchased, (C) that such Bonds are to be
purchased on such Bond Purchase Date pursuant to the terms hereof, and (D) that
such notice is irrevocable; (ii) if the Bonds are not held pursuant to a
book-entry system, no later than 10:00 a.m. according to the local time at the
Operations Office of the Trustee on the seventh day preceding such Bond Purchase
Date (or the next preceding Business Day if such seventh day is not a Business
Day), or in the event the Bonds bear interest at the Monthly Interest Rate, the
fourth
31
day preceding such Bond Purchase Date (or the next preceding Business Day if
such fourth day is not a Business Day), deliver to the Operations Office of the
Trustee the Bonds to be purchased in proper form, accompanied by fully completed
and executed Instructions to Sell, the form of which shall be printed on the
Bonds; and (iii) in the case of a Beneficial Owner, no later than 10:00 a.m.
(according to the local time at the Operations Office of the Trustee) on the
Bond Purchase Date, cause the transfer of the Beneficial Owner's Beneficial
Ownership Interest on the records of the Depository. In the case of a Bond or
portion thereof to be purchased prior to an Interest Payment Date and after the
Record Date in respect thereof, the Holder shall deliver a due-ββββ check, in
form satisfactory to the Trustee, for interest due on such Interest Payment
Date.
To exercise the option granted in Section 3.06(b) hereof, the Holder
shall (i) no later than 8:00 a.m. according to the local time at the Operations
Office of the Trustee on the second Business Day prior to the Bond Purchase Date
(or, while the Bonds bear interest at the Daily Interest Rate, not later than
11:00 a.m., according to the local time at the Operations Office of the Trustee,
on the Bond Purchase Date) give notice to the Remarketing Agent and the Trustee
by telecopy or in writing that states (A) the name and address of the Holder,
(B) the principal amount and, if the Bonds are not held pursuant to a book-entry
system, the CUSIP number and Bond numbers of the Bonds to be purchased, (C) that
such Bonds are to be purchased on the Bond Purchase Date, and (D) that such
notice is irrevocable; (ii) if the Bonds are not held pursuant to a book-entry
system, no later than 10:00 a.m. according to the local time at the Operations
Office of the Trustee on such Bond Purchase Date, deliver to the Operations
Office of the Trustee the Bonds to be purchased in proper form, accompanied by
fully completed and executed Instructions to Sell, the form of which shall be
printed on the Bonds; and (iii) in the case of a Beneficial Owner, no later than
10:00 a.m. (according to the local time at the Operations Office of the Trustee)
on such Bond Purchase Date, cause the transfer of the Beneficial Owner's
Beneficial Ownership Interest on the records of the Depository. In the case of a
Bond or portion thereof to be purchased prior to an Interest Payment Date and
after the Record Date in respect thereof, the Holder shall deliver a due-ββββ
check, in form satisfactory to the Trustee, for interest due on such Interest
Payment Date.
(d) Bonds Deemed Tendered. Any Bonds for which a notice of tender has
been given by the Holder shall be deemed to be tendered for remarketing
notwithstanding any failure of delivery of such Bonds to the Trustee. Subject to
the right of such non-delivering Holders to receive the Purchase Price of such
Bonds, including interest accrued thereon to the day preceding the applicable
Bond Purchase Date, such Bonds shall be null and void and, if the Bonds are not
held pursuant to a book-entry system, the Trustee shall authenticate and deliver
new Bonds in replacement thereof pursuant to the remarketing of such Bonds or
the pledge of such Bonds to the Bank in lieu of remarketing such Bonds as
described in Section 3.10 hereof. Any Beneficial Owners who have elected to
tender Beneficial Ownership Interests shall be obligated to transfer such
Beneficial Ownership Interests on the record of the Depository.
Upon the giving of the notice pursuant to Section 3.06(c) hereof with
respect to Bonds or portions of Bonds, the Holder's tender of such Bonds or
portions thereof shall be irrevocable. Upon receipt of the Bonds, if the Bonds
are not held in a book-entry system, the Trustee shall determine whether
Instructions to Sell have been properly submitted and its determination shall be
binding. If the Bonds are not held in a book-entry system and if less than all
of a Bond so delivered or deemed
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tendered is to be purchased, the Trustee shall, pursuant to this Indenture
authenticate one or more Bonds in exchange therefor, registered in the name of
such Holder, having the aggregate principal amount being retained by such
Holder, and shall deliver such authenticated Bond or Bonds to such Holder.
While tendered Bonds are in the custody of the Trustee pending purchase
pursuant hereto, the tendering Holders thereof shall be deemed the owners
thereof for all purposes, and interest accruing on tendered Bonds through the
day preceding the applicable Bond Purchase Date is to be paid from the Bond Fund
as if such Bonds had not been tendered for purchase.
Notwithstanding anything herein to the contrary, any Bond or portion
thereof tendered under this Section or Section 3.07 or Section 3.08 hereof will
not be purchased if such Bond or portion thereof matures or is redeemed on or
prior to the applicable Bond Purchase Date.
(e) Notwithstanding any provisions to the contrary set forth above in
this Section 3.06, so long as CEDE & Co. is the registered owner of the Bonds,
optional tender notices hereunder shall be given by the Beneficial Owner of such
Bonds exercising ownership rights through DTC Participants pursuant to DTC's
operating procedures as in effect from time to time.
Section 3.07. MANDATORY TENDER UPON CONVERSION TO A NEW INTEREST RATE
MODE. If at any time the Issuer at the direction of the Company shall convert
the interest rate on the Bonds to a different Interest Rate Mode in accordance
with the provisions of Section 2.02 hereof, on the Interest Period Reset Date
upon which such conversion is effective, all Bonds shall be subject to mandatory
tender by the Holders thereof for purchase on the Interest Period Reset Date (a
"Bond Purchase Date") at the Purchase Price. Notice of such mandatory tender
shall be delivered in accordance with Section 2.02(e) above.
Bonds not tendered for purchase as required by this Section shall be
deemed to have been tendered without further notice or action by the Holders,
subject to the right of the Holders of such Bonds to receive the Purchase Price
of such Bonds, including interest accrued thereto, to the Bond Purchase Date.
Such Bonds shall be null and void and the Trustee shall authenticate and deliver
new Bonds in replacement thereof pursuant to the remarketing of such Bonds or
the pledge of such Bonds to the Bank in lieu of remarketing such Bonds as
described in Section 3.10 hereof.
Section 3.08. MANDATORY TENDER UPON EXPIRATION OF LETTER OF CREDIT. The
Bonds are subject to mandatory tender in whole on the Interest Payment Date that
next precedes the Letter of Credit Termination Date (a "Bond Purchase Date"), at
the Purchase Price unless, at least forty-five (45) days prior to any such Bond
Purchase Date, the Bank shall have extended or further extended the Letter of
Credit Termination Date to a date not earlier than one year from the Letter of
Credit Termination Date being extended.
At least thirty (30) days prior to such Interest Payment Date pursuant to
this Section, the Trustee shall notify the Holders of all outstanding Bonds by
first-class mail, facsimile or electronic transmission of the Letter of Credit
Termination Date and advise the Holders that all Bonds shall be subject to
mandatory tender on such Interest Payment Date.
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Bonds not tendered for purchase as required by this Section shall be
deemed to have been tendered without further notice or action by the Holders
thereof, subject to the right of the Holders of such Bonds to receive the
Purchase Price of such Bonds, including interest accrued thereto to the Bond
Purchase Date. Such Bonds shall be null and void and, in the event the
book-entry system is no longer in effect with respect to the Bonds, the Trustee
shall authenticate and deliver new Bonds in replacement thereof pursuant to the
remarketing of such Bonds or the pledge of such Bonds to the Bank in lieu of
remarketing such Bonds as described in Section 3.10 hereof.
Section 3.09. REMARKETING OF BONDS. On (a) the eighth Business Day prior
to each Bond Purchase Date while the Bonds bear interest at the Quarterly
Interest Rate, the Semiannual Interest Rate, the Annual Interest Rate or the
Five-Year Interest Rate, or (b) the fifth Business Day prior to each Bond
Purchase Date while the Bonds bear interest at the Monthly Interest Rate, or (c)
the seventh calendar day prior to each Bond Purchase Date or the next succeeding
Business Day if such seventh day is not a Business Day while the Bonds bear
interest at the Weekly Interest Rate, or (d) on each Business Day while the
Bonds bear interest at the Daily Interest Rate, the Trustee shall give notice to
the Remarketing Agent by telephone or telecopy, confirmed on the same day in
writing, that states (i) the name and address of each Holder that has given
notice of exercise of an option with respect to such Bond Purchase Date as
provided in paragraph (c) of Section 3.06 hereof, and the principal amount of
Bonds to be tendered by such Holder or deemed tendered by such Holder, and (ii)
the aggregate principal amount of Bonds that are deemed to be tendered pursuant
to Sections 3.07 and 3.08 hereof.
The Remarketing Agent shall use its best efforts to sell all Bonds
tendered pursuant to Sections 3.06 and 3.07 hereof for settlement on the
applicable Bond Purchase Date at par.
The Remarketing Agent shall have the right to remarket any Bond (or
portion thereof) tendered pursuant to Sections 3.06 and 3.07 hereof; provided,
however, that no such Bond shall be remarketed at a price less than 100% of the
principal amount thereof plus accrued interest (if any) without the prior
written consent of the Company and the Bank. The Remarketing Agent shall have
the right to purchase any Bond tendered or deemed tendered pursuant to Sections
3.06 or 3.07 hereof at 100% of the principal amount thereof plus accrued
interest (if any) and to thereafter sell such Bond. Any such purchase shall
constitute a remarketing hereunder.
The Remarketing Agent shall not remarket any Bond to the Issuer, the
Company, any guarantor of the Bonds (excluding the Bank) or any person that is
an "insider" of the Company or any such guarantor within the meaning of the
United States Bankruptcy Code.
No later than 10:00 a.m. according to the local time at the Operations
Office of the Trustee on each Bond Purchase Date, the Remarketing Agent shall
(i) pay to the Trustee, in immediately available funds, the proceeds theretofore
received by the Remarketing Agent from the remarketing of Bonds tendered for
purchase on such Bond Purchase Date, or (ii) cause the purchasers of the
remarketed Bonds to pay the Purchase Price directly to the Trustee in
immediately available funds. The proceeds from the remarketing of the Bonds
shall be segregated from any funds of the Company or the Issuer and shall in no
case be considered to be or be assets of the Company or the Issuer.
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In compliance with the provisions of Section 4.09(a), there shall be
deposited into an account with the Trustee, separate and segregated from the
Bond Fund (herein referred to as the "Remarketing Account"), on each Bond
Purchase Date, the remarketing proceeds received by the Trustee pursuant to this
Section plus, if necessary, any moneys from a draw on the Letter of Credit to be
used to pay the Purchase Price of tendered Bonds. The Trustee shall use the
amounts deposited in the Remarketing Account to pay the Purchase Price of
tendered Bonds. If the Trustee fails to receive moneys pursuant to a draw
properly made on the Letter of Credit to pay the Purchase Price of tendered
Bonds, (a) any amount paid by the Bank on such draw shall be deposited in the
Bond Fund and (b) pursuant to Section 8.02 hereof, the Trustee shall declare the
Bonds to be due and payable.
Section 3.10. DELIVERY OF PURCHASED BONDS AND REMARKETING OF PLEDGED
BONDS. On or before 11:30 a.m. on the Business Day next preceding each Bond
Purchase Date (or, while the Bonds bear interest at the Daily Interest Rate, by
11:30 a.m. on the Bond Purchase Date), the Remarketing Agent, by telephonic
advice, shall notify the Trustee, and the Bank of (i) the principal amount of to
be sold by the Remarketing Agent pursuant to Section 3.09 hereof and the
Purchase Price, names, addresses and social security numbers or other tax
identification numbers of the proposed purchasers thereof, (ii) the amount of
remarketing proceeds the Remarketing Agent has available to purchase Bonds on
the Bond Purchase Date, and (iii) the principal amount of Bonds tendered for
purchase on such Bond Purchase Date that will not be sold by the Remarketing
Agent pursuant to Section 3.09 hereof. Such telephonic advice shall be confirmed
by written notice delivered or mailed on the same date as the telephonic advice.
Bonds purchased on a Bond Purchase Date shall be delivered as follows:
Bonds sold by the Remarketing Agent pursuant to Section 3.09 hereof shall
be delivered to the purchasers thereof. With respect to Beneficial Ownership
Interests sold by the Remarketing Agent pursuant to Section 3.09 hereof, the
Remarketing Agent shall take such actions as may be necessary to reflect the
transfer of such Beneficial Ownership Interests to the purchasers thereof in the
book-entry system maintained by the Depository.
Bonds not sold by the Remarketing Agent pursuant to Section 3.09 hereof
and that are purchased with a draw on the Letter of Credit shall be held as
Pledged Bonds, by the Trustee, as agent for the Bank, subject to (i) any
instructions from the Bank to deliver the Pledged Bonds to the Bank and (ii) the
pledge in favor of the Bank created pursuant to the provisions of the "Bond
Pledge Agreement" executed pursuant to the Reimbursement Agreement. Any Pledged
Bonds held by the Trustee shall not be released or transferred except to the
Bank or to the Remarketing Agent at the written direction of the Bank as
provided in the last paragraph of this Section. Bonds not sold by the
Remarketing Agent shall be deemed purchased by the Company, as Pledged Bonds,
upon application of the proceeds of a draw on the Letter of Credit to pay the
Purchase Price thereof.
Bonds (other than Pledged Bonds) delivered as provided in this Section
shall be registered (or recorded through the Depository) in the manner directed
by the recipient thereof. Pledged Bonds shall be registered (or recorded through
the Depository) in the name of the Bank or its designee, as
35
requested by the Bank. In addition to the delivery of the Bonds to the
recipients thereof as herein provided, the Trustee shall deliver the due-ββββ
checks, if any, received pursuant to Article II hereof, to the recipients of the
Bonds.
The Remarketing Agent shall use its best efforts to remarket Pledged
Bonds; provided, however, the Remarketing Agent shall not remarket Pledged Bonds
held as a result of a mandatory tender pursuant to Section 3.08 hereof prior to
receiving written notice from the Trustee that the Letter of Credit or any
Substitute Letter of Credit has been replaced with a letter of credit that
satisfies Section 5.03 hereof. Upon the remarketing of the Pledged Bonds, the
Remarketing Agent shall notify the Bank, the Trustee and the Company of such
remarketing, the name, address and social security or other tax identification
number of the purchaser, and the date (the "Placement Date") that the purchaser
shall deliver the purchase price to the Trustee or the Remarketing Agent by
11:00 a.m. local time at the Operations Office of the Trustee. The Placement
Date shall be at least two (2) Business Days after the date the notice of the
purchase is given by the Remarketing Agent.
No later than 11:00 a.m. according to the local time at the Operations
Office of the Trustee on each Placement Date, the Remarketing Agent shall pay to
the Trustee, in immediately available funds, the proceeds theretofore received
by the Remarketing Agent from the remarketing of Pledged Bonds on such Placement
Date; provided, that the Remarketing Agent may use its best efforts to cause the
purchasers of the remarketed Pledged Bonds to pay the Purchase Price directly to
the Trustee in immediately available funds. The proceeds from the remarketing of
the Pledged Bonds shall be segregated from any funds of the Company or the
Issuer and shall in no case be considered to be or be assets of the Issuer. The
Trustee shall deposit such funds in the Remarketing Account and shall pay the
Bank such funds by wire transfer on the Placement Date. The Bank shall deliver
any Pledged Bonds held by the Bank (or evidence of book entry interests in such
Pledged Bonds) that have been so remarketed to the Trustee against payment on
the Placement Date. With respect to any Pledged Bonds not so held by the Bank,
the Bank shall direct the Trustee to release such Pledged Bonds that have been
so remarketed to the Remarketing Agent against payment therefor on the Placement
Date. Notwithstanding the foregoing, no Pledged Bonds shall be released until
the Trustee shall have received written evidence that the Bank has reinstated
amounts available to be drawn on the Letter of Credit to the levels required by
Section 2.02(b) hereof. On the Placement Date, the Trustee shall authenticate
and deliver, if applicable, new Bonds in replacement of the remarketed Pledged
Bonds to the purchasers thereof.
ARTICLE IV: PAYMENT OF BONDS AND CREATION OF FUNDS
Section 4.01. PAYMENT OF BONDS. When a Letter of Credit is in effect, the
Trustee shall make payments when due of principal of, premium, if any, and
interest on Bonds, and the Trustee or the Remarketing Agent, as applicable,
shall make payments of the Purchase Price of Bonds purchased pursuant to an
optional tender or a mandatory repurchase:
(a) first, (but only with respect to payments of Purchase Price) from
remarketing proceeds under Section 3.09 and Section 3.10, excluding any
remarketing to the Issuer, the Company or any subsidiary or affiliate of either
thereof unless the proceeds thereof constitute Available Moneys;
36
(b) second, from any moneys held by the Trustee in the Bond Fund that
constitute Available Moneys;
(c) third, from moneys drawn by the Trustee under the Letter of Credit;
(d) fourth, subject to the provisions of Section 4.04(b), from any moneys
that constitute Available Moneys in the Construction Fund directed to be paid
into the Bond Fund in accordance with the provisions of Section 4.08; and
(e) last, from any other moneys available to the Trustee including,
without limitation, moneys paid by the Company pursuant to Section 5.04(a) of
the Agreement.
Notwithstanding the foregoing, however, payments of Purchase Price, principal,
premium, if any, and interest on Pledged Bonds or Company Bonds shall be paid
only from the first and last categories of moneys. The proceeds of investments
of any moneys in any of these categories may be used to the same extent as the
moneys invested could be used.
If a Letter of Credit is not in effect, the Trustee or the Remarketing
Agent, as applicable, shall make payments of principal and Purchase Price of,
premium, if any, and interest on the Bonds, first (with respect to Purchase
Price), from remarketing proceeds under Section 3.09 and Section 3.10, and,
second, from any other moneys available to the Trustee for such purpose.
Section 4.02. CREATION OF BOND FUND. There is hereby created by the
Issuer and ordered established with the Trustee a trust fund to be designated
"Bond Fund, Series 2002 Bonds, Waste Corporation of Texas, L.P. Project". The
money and securities in such fund shall be held in trust by the Trustee and
applied as herein provided and, until such application, the money and securities
in such Fund shall be subject to a lien and charge in favor of the Bondholders.
Section 4.03. PAYMENTS INTO BOND FUND.
(a) There shall be deposited into the Bond Fund, as and when received:
(i) all Installment Sale Payments under the Agreement;
(ii) all moneys received from a drawing under the Letter of
Credit;
(iii) all other moneys received by the Trustee under and pursuant
to any of the provisions of the Agreement (other than Sections 5.05, 6.01
and 6.02 thereof) that are required, or that are accompanied by
directions that such moneys are, to be paid into the Bond Fund;
(iv) any amount in the Construction Fund directed to be paid into
the Bond Fund in accordance with the provisions of Section 4.08.
To the extent that moneys described in (i), (ii) or (iii) above would not
constitute Available Moneys at the time of such deposit, the Trustee shall
create separate subaccounts in the Bond Fund in which
37
moneys described in each of (i), (ii) and (iii) above shall be held until such
moneys constitute Available Moneys. The Trustee shall create a separate
subaccount in the Bond Fund for and shall not commingle moneys described in
Section 4.01(c) with any other moneys hereunder. The Trustee shall create a
separate subaccount in the Bond Fund for and shall not commingle moneys
described in Section 4.01(d) with any other moneys hereunder.
(b) The Trustee shall apply all amounts received in accordance with
subsection (a)(i) above (if any) on each Interest Payment Date in the following
order:
(i) first, to the payment of the principal of and interest payable
on the Bonds on such Interest Payment Date; provided, however, to the
extent any such principal and interest is paid pursuant to a draw under
the Letter of Credit, an amount equal to such draw shall be paid by the
Trustee to the Bank; and
(ii) second, all remaining funds shall be deposited in the Bond
Fund.
(c) So long as any of the Bonds issued hereunder are Outstanding, the
Issuer shall deposit, or cause to be paid to the Trustee for deposit in the Bond
Fund for its account, sufficient sums from the amounts derived from the
Agreement promptly to pay when due the principal of all Bonds (whether at
maturity, upon redemption or acceleration or otherwise), premium, if any, on all
Bonds, and interest on the Bonds as the same become due and payable. The Issuer
makes no representation or warranty that the amount deposited shall be adequate
to make all payments when due.
Section 4.04. USE OF MONEYS IN BOND FUND.
(a) Except as provided in subsection (b) of this Section and in Sections
4.10 and 4.12 hereof, moneys in the Bond Fund shall be used solely for the
payment of the principal of, premium, if any, and interest on the Bonds as the
same shall become due and payable whether at maturity, upon redemption or
otherwise and for the Purchase Price of the Bonds as the same shall become due;
provided, however, that to the extent such principal, premium (to the extent
permitted by the Letter of Credit), interest or Purchase Price is paid with
proceeds of a drawing under the Letter of Credit and the Company does not
reimburse the Bank directly, the Trustee shall promptly reimburse the Bank from
funds on deposit in the Bond Fund (other than remarketing proceeds or proceeds
from a drawing on the Letter of Credit) in accordance with written instructions
given from time to time to the Trustee by the Bank.
(b) Moneys deposited pursuant to Section 4.08 into the Bond Fund, and any
income or other gain from the investment thereof, shall be applied by the
Trustee in whole or in part at the direction of the Company (i) to pay the
principal upon any optional redemption of Bonds pursuant to Section 3.01 or to
reimburse the Bank for any draws under the Letter of Credit in connection with
such redemption, or (ii) in any other manner for the payment of principal and/or
interest on the Bonds that, as clearly stated in an Opinion of Bond Counsel
furnished by the Company to the Issuer, the Bank and the Trustee, will not
impair the validity under the Act of the Bonds or the exclusion of the interest
on the Bonds from gross income of the owners thereof for federal income tax
purposes.
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Pending the application of moneys deposited into the Bond Fund pursuant to
Section 4.08, such moneys shall be held in a separate segregated account and may
be invested in Eligible Investments in the manner indicated in an Opinion of
Bond Counsel furnished by the Company to the Issuer and the Trustee or in the
absence of such an Opinion of Bond Counsel, such moneys shall be promptly
invested at a yield not in excess of the yield on the Bonds or invested in
Eligible Investments other than "specified private activity bonds" within the
meaning of Section 57(a)(5) of the Code, the interest on which is excludable
from gross income of the owners thereof under Section 103 of the Code. Any Bonds
purchased or redeemed by the Trustee in accordance with this subsection shall be
canceled, and the Company shall receive a credit corresponding to such Bonds and
to any deposit in the Bond Fund as contemplated by this Section, against its
obligations to make payments under the Agreement.
Section 4.05. CUSTODY OF BOND FUND. The Bond Fund shall be held in the
custody of the Trustee but in the name of the Issuer. The Issuer hereby
authorizes and directs the Trustee to withdraw sufficient funds from the Bond
Fund to pay the principal of, premium, if any, interest on and the Purchase
Price of the Bonds as the same become due and payable, and to withdraw from the
Bond Fund funds sufficient to pay any other amounts payable therefrom as the
same become due and payable, which authorization and direction the Trustee
hereby accepts; provided, however, that to the extent such principal, premium,
if any, interest or Purchase Price is paid with proceeds of a drawing under the
Letter of Credit and the Bank certifies to the Trustee that amounts are due and
owing under the Reimbursement Agreement , the Trustee shall promptly pay such
amounts to the Bank from (i) funds on deposit in the Bond Fund, (ii) remarketing
proceeds to be paid to former holders in the case of Bonds that were purchased
with the proceeds from a draw on the Letter of Credit, or (iii) proceeds from a
drawing on the Letter of Credit that were not required in order to pay the
principal, interest or Purchase Price of the Bonds, in accordance with written
instructions given from time to time to the Trustee by the Bank.
Section 4.06. CREATION OF CONSTRUCTION FUND. There is hereby created by
the Issuer and ordered established with the Trustee a trust fund designated
"Construction Fund, Series 2002 Bonds, Waste Corporation of Texas, L.P.
Project". The Construction Fund shall be held in the custody of the Trustee but
in the name of the Issuer for the benefit of the Company and for use pursuant to
this Indenture and the Agreement. The money and securities in the Construction
Fund shall be held in trust by the Trustee and applied as provided herein and in
the Agreement.
Section 4.07. PAYMENTS INTO THE CONSTRUCTION FUND; DISBURSEMENTS. The
proceeds of the issuance and sale of the Bonds shall be deposited in the
Construction Fund. The Trustee is hereby authorized and directed to make each
disbursement required by the provisions of the Agreement and to issue its checks
therefor or otherwise pay upon receipt of a Company requisition in accordance
with Section 4.02 of the Agreement. The Trustee shall keep and maintain adequate
records pertaining to the Construction Fund and all disbursements therefrom.
39
Section 4.08. COMPLETION OF FACILITIES AND DISPOSITION OF CONSTRUCTION
FUND BALANCE. The completion of the Facilities and payment or provision made for
payment of the Cost of Construction shall be evidenced by notification of the
Issuer as required by Section 3.06(a) of the Agreement. As soon as practicable
and in any event not later than the earlier of sixty (60) days from the date of
the certificate referred to in the preceding sentence or the third anniversary
of the date of closing of the issuance and sale of the Bonds, any balance
remaining in the Construction Fund (except amounts the Company shall have
directed the Trustee to retain for any Cost of Construction not then due and
payable or otherwise required to be deposited to the Rebate Fund in the manner
provided in Section 4.12 hereof) shall without further authorization be
transferred by the Trustee from the Construction Fund for deposit in the Bond
Fund and used in the manner provided in Section 4.04(b).
Section 4.09. MONEYS TO BE HELD IN TRUST.
(a) All money that the Trustee shall have withdrawn from the Bond Fund or
shall have received from any other source and set aside for the purpose of
paying any of the Bonds, either at the maturity thereof or by purchase (other
than as provided in Sections 3.09 and 3.10) or call for redemption or for the
purpose of paying any interest on the Bonds, shall be held in trust for the
respective Holders. Moneys received by the Remarketing Agent or the Trustee from
the sale of a Bond under Sections 3.09 and 3.10 or from the purchase of any Bond
shall be held segregated from other funds held by the Remarketing Agent or the
Trustee in trust for the benefit of the Person from whom such Bond was purchased
and shall not be invested while so held.
(b) Any moneys so deposited and not so applied to the payment of Bonds
for at least two years after the date on which the same shall have become due
shall then be paid by the Trustee to the Bank, if at such time the Bank shall
have notified the Trustee in writing that amounts are due and owing the Bank
under the Reimbursement Agreement, or if no such notice has then been given by
the Bank, to the Company upon the written direction of the Company. Thereafter,
Bondholders shall be entitled to look only to the Company for payment, the
Company shall not be liable for any interest thereon and shall not be regarded
as a trustee of such moneys and the Trustee shall have no further
responsibilities with respect to such moneys. The obligation of the Trustee
under this Section to pay any such funds to the Bank or the Company shall be
subject, however, to any provisions of law applicable to the Trustee or to such
funds providing other requirements for disposition of unclaimed property,
including Title 6 of the Texas Property Code.
Section 4.10. PAYMENT TO COMPANY FROM BOND FUND OR CONSTRUCTION FUND. Any
amounts remaining in the Bond Fund or Construction Fund after payment in full of
the principal of, premium, if any, and interest on the Outstanding Bonds, the
fees, charges and expenses of the Issuer, the Trustee, the Remarketing Agent and
the Bank (including without limitation the fees and expenses of their respective
counsel) and all other amounts required to be paid hereunder and under the
Reimbursement Agreement, including payments of rebatable arbitrage, shall be
paid immediately to the Company.
Section 4.11. INVESTMENT OF MONEYS. To the extent permitted by law and if
directed in writing by the Authorized Company Representative and except as
otherwise provided herein, the
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Trustee shall invest and reinvest moneys held by it representing proceeds of
drawings under the Letter of Credit and moneys on deposit in the Bond Fund only
in U.S. Government Obligations (or in a mutual fund composed solely of U.S.
Government Obligations or repurchase agreements that are secured by U.S.
Government Obligations, that at the time of any such investment has a securities
rating from each Rating Agency equal to or higher than the then current rating
on the Bonds), maturing at such times as such amounts shall be needed for the
purposes thereof, or, if during a Fixed Rate Period, in such other investment
provided below in this Section, with a term of the lesser of thirty (30) days or
such earlier date as needed for payment in accordance with this Indenture, and
as directed in writing by an Authorized Company Representative. Unclaimed moneys
held by the Trustee or the Remarketing Agent under Section 4.09 shall be held
uninvested by the Trustee or the Remarketing Agent, as the case may be. Moneys
held by the Trustee representing proceeds of the initial sale of Bonds (except
for any proceeds described in the preceding sentence) shall be invested and
reinvested by the Trustee, to the extent permitted by law, in any Eligible
Investments on which neither the Company nor any of its subsidiaries is the
obligor, as directed by an Authorized Company Representative.
To the extent that the Trustee has not received written directions from
the Company regarding investment of moneys, the Trustee shall, until such
directions are received, invest such moneys in the First America Funds Treasury
Obligations Fund Class S.
The Trustee may make investments permitted by this Article through or
from its own bond department or the department of any bank, trust company or
affiliate under common control with the Trustee. Investments will be made so as
to mature or be subject to redemption at the option of the holder on or before
the date or dates that the Trustee or the Company, as appropriate, anticipates
that moneys from the investments will be required. Investments shall be
registered in the name of the Trustee or its nominee and held by or under the
control of the Trustee. The Trustee shall sell and reduce to cash a sufficient
amount of investments whenever the cash held by the Trustee is insufficient for
its purposes, regardless of the loss on liquidation. The Issuer certifies to the
Trustee for the benefit of the Bondholders that moneys held by the Trustee in
connection with the Bonds, whether or not such moneys were derived from the
proceeds of the sale of the Bonds, shall not be used in a manner that shall
cause the Bonds to be classified as "arbitrage bonds" within the meaning of
Section 148 of the Code.
All such investments shall be held by or under the control of the Trustee
and while so held shall be deemed a part of the particular fund in which held.
The interest accruing thereon and any profit realized from such investments
shall be credited to such fund, and any loss resulting from such investments
shall be charged to such fund. The Trustee shall not be responsible for any
losses on investments made in accordance with this section or the tax
consequences thereof.
Notwithstanding the foregoing, during any Fixed Rate Period while the
Letter of Credit is outstanding, the Bank may notify the Trustee in writing of
any additional restrictions as to the investment of funds hereunder and the
Trustee shall abide by such restrictions.
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Section 4.12. CREATION OF REBATE FUND.
(a) A special Rebate Fund is hereby established by the Issuer. The Rebate
Fund shall be for the sole benefit of the United States of America and shall not
be subject to the claim of any other person, including without limitation the
Bondholders. The Rebate Fund is established for the purpose of complying with
Section 148 of the Code and the Treasury Regulations promulgated pursuant
thereto. The money deposited in the Rebate Fund, together with all investments
thereof (as permitted in Section 4.12(h) hereof) and investment income
therefrom, shall be held in trust and applied solely as provided in this
section. The Rebate Fund is not a portion of the Trust Estate and is not subject
to the lien of this Indenture. Notwithstanding the foregoing, the Trustee with
respect to the Rebate Fund is afforded all the rights, protections and
immunities otherwise accorded to it hereunder.
(b) Within ten days after the close of each fifth anniversary date of the
issuance of the Bonds, the Trustee shall receive from the Company a computation
in the form of a certificate of an authorized officer of the Company of the
amount of "Excess Earnings," if any, for the period beginning on the date of
delivery of the Bonds and ending at the close of such immediately preceding
"Bond Year" and the Company shall pay to the Trustee for deposit into the Rebate
Fund an amount equal to the difference, if any, between the amount then in the
Rebate Fund and the Excess Earnings so computed. The term "Bond Year" means with
respect to the Bonds each one-year period ending on the anniversary of the date
of delivery of the Bonds or such other period as may be elected by the Issuer in
accordance with the Regulations and notice of which election has been given to
the Trustee. If, at the close of any Bond Year, the amount in the Rebate Fund
exceeds the amount that would be required to be paid to the United States of
America under paragraph (d) below if the Bonds had been paid in full, such
excess may be transferred from the Rebate Fund and paid to the Company at the
written instructions of the Company, and the Company shall use such excess for
such purposes for which, or to be redeposited to such fund from which, such
amounts were originally derived.
(c) In general, "Excess Earnings" for any period of time means the sum of
(i) the excess of -
(A) the aggregate amount earned during such period of time
on all "Nonpurpose Investments" (including gains on the
disposition of such Obligations) in which "Gross Proceeds" of the
issue are invested (other than amounts attributable to an excess
described in this subparagraph (c)(i), over
(B) the amount that would have been earned during such
period of time if the "Yield" on such Nonpurpose Investments
(other than amounts attributable to an excess described in this
subparagraph (c)(i)) had been equal to the yield on the issue,
plus
(ii) any income during such period of time attributable to the
excess described in subparagraph (c)(i) above.
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The term Nonpurpose Investments, Gross Proceeds, and Yield shall have the
meanings given to such terms in Section 148 of the Code and the Regulations
promulgated pursuant to such Section.
(d) The Trustee shall pay to the United States of America at least once
every five years, to the extent that funds are available in the Rebate Fund or
otherwise provided by the Company, an amount that ensures that at least 90
percent of the Excess Earnings from the date of delivery of the Bonds to the
close of the period for which the payment is being made will have been paid. The
Trustee shall pay to the United States of America not later than 60 days after
the Bonds have been paid in full, to the extent that funds are available in the
Rebate Fund or otherwise provided by the Company, 100 percent of the amount then
required to be paid under Section 148(f) of the Code as a result of Excess
Earnings.
(e) The amounts to be computed, paid, deposited or disbursed under this
section shall be determined by the Company acting on behalf of the Issuer within
ten days after each fifth anniversary of the issuance of the Bonds. By such
date, the Company shall also notify, in writing, the Trustee and the Issuer of
the determinations the Company has made and the payment to be made pursuant to
the provisions of this section. Upon written request of any registered owner of
Bonds, the Company shall furnish to such registered owner of Bonds a certificate
(supported by reasonable documentation, which may include calculation by counsel
having special expertise in federal tax law or by some other service
organization) showing compliance with this section and other applicable
provisions of Section 148 of the Code.
(f) The Trustee shall maintain a record of the periodic determinations by
the Company of the Excess Earnings for a period beginning on the fifth
anniversary date of the issuance of the Bonds and ending on the date six years
after the final retirement of the Bonds. Such records shall state each such
anniversary date and summarize the manner in which the Excess Earnings, if any,
was determined.
(g) If the Trustee shall declare the principal of the Bonds and the
interest accrued thereon immediately due and payable as the result of an Event
of Default specified in the Indenture, or if the Bonds are optionally or
mandatorily prepaid or redeemed prior to maturity as a whole in accordance with
their terms, any amount remaining in any of the funds established under this
Indenture shall be transferred to the Rebate Fund at the written instructions of
the Company, to the extent that the amount in the Rebate Fund is less than the
Excess Earnings computed by the Company as of the date of such acceleration or
redemption, and the balance of such amount shall be used immediately by the
Trustee for the purpose of paying principal of, redemption premium, if any, and
interest on the Bonds when due. In furtherance of such intention, the Issuer
hereby authorizes and directs its General Manager to execute any documents,
certificates or reports required by the Code and to make such elections, on
behalf of the Issuer, that may be permitted by the Code as are consistent with
the purpose for the issuance of the Bonds.
(h) To the extent permitted by law and if directed in writing by the
Authorized Company Representative and except as otherwise provided herein, the
Trustee shall invest and reinvest moneys held in the Rebate Fund only in U.S.
Government Obligations (or in a mutual fund
43
composed solely of U.S. Government Obligations that at the time of any such
investment has a securities rating from each Rating Agency equal to or higher
than the then current rating on the Bonds), maturing at such times as such
amounts shall be needed for the purposes thereof. To the extent that the Trustee
has not received written directions from the Company regarding investment of
moneys on deposit in the Rebate Fund, the Trustee shall, until such directions
are received, invest such moneys in the βββββ Fargo 100% Treasury Money Market
Fund.
Section 4.13. LIMITATION ON TRUSTEE'S AND ISSUER'S RESPONSIBILITIES
RESPECTING ARBITRAGE. Notwithstanding any provision of this Indenture to the
contrary, the Trustee and the Issuer shall not be liable or responsible for any
calculation or determination that may be required in connection with or for the
purpose of complying with Section 148 of the Code or any applicable Treasury
regulations, including, without limitation, the calculation of amounts required
to be paid to the United States under the provisions of Section 148 of the Code
and the applicable Treasury regulations, the maximum amount that may be invested
in "nonpurpose obligations" as defined in the Code and the fair market value of
any investments made hereunder, and the sole obligation of the Trustee with
respect to investments of funds hereunder shall be to invest the moneys received
by the Trustee in obligations listed in Section 4.11 pursuant to the
instructions of the Authorized Company Representative. The Trustee shall have no
responsibility for determining whether or not the investments made pursuant to
the direction of the Authorized Company Representative comply with the
requirements of Section 5.06 of the Agreement.
ARTICLE V: LETTER OF CREDIT
Section 5.01. REQUIREMENTS FOR LETTER OF CREDIT. In order to secure its
obligations under the Agreement, pursuant to Section 5.07 of the Agreement, the
Company has agreed (a) upon the initial authentication and delivery of the
Bonds, to deliver to the Trustee, the Letter of Credit, issued by the Bank in
favor of the Trustee and for the benefit of the holders of the Bonds (other than
Pledged Bonds and Company Bonds), (b) to ensure that so long as any Bonds that
bear interest at a Variable Rate remain Outstanding, a Letter of Credit shall be
in effect with respect to such Bonds with terms substantially conforming to
those of the original Letter of Credit and (c) upon remarketing of the Bonds at
a Fixed Rate without an Investment Grade Rating, a Letter of Credit shall be in
effect with respect to such Bonds with terms otherwise conforming to those of
the Original Letter of Credit, except that the term thereof shall extent to the
Maturity Date.
Section 5.02. DRAWS ON LETTER OF CREDIT; EXTENSIONS.
(a) If the Letter of Credit is in effect, the Trustee shall make timely
draws in accordance with the Letter of Credit such that timely payment under
Section 4.01 is made without resort to the sources of payment described in
Subsections (d) and (e) of Section 4.01. Such draws shall be in amounts equal to
(i) the Purchase Price payable with respect to the Bonds (excluding Pledged
Bonds and Company Bonds, which are not entitled to any benefit of the Letter of
Credit), less the amounts, if any, available under Section 4.01(a) and (b), or
(ii) the total principal, premium, if any (to the extent permitted therefor in
the Letter of Credit), and interest due on the Bonds (excluding Pledged
44
Bonds and Company Bonds, which are not entitled to any benefit of the Letter of
Credit). In the event the Trustee uses Available Moneys (other than Available
Moneys arising from a draw under the Letter of Credit) for the payment of
principal of, premium, if any, or interest on the Bonds as the same become due
and payable whether at maturity, upon redemption or otherwise or for Purchase
Price of the Bonds when due, the Trustee shall, within 10 days after such
payment, give notice thereof to the Bank in accordance with the terms of the
Letter of Credit. The notice from the Trustee to the Bank shall be in the form
attached to the Letter of Credit. The Trustee agrees to make such draws so as to
be able to obtain from the Bank by 1:45 p.m. Eastern Time such funds to the
extent necessary to permit the Trustee to make such payment when due in
accordance with this Indenture and the Bonds, but the Trustee agrees that in no
event shall such draw be made any sooner than is reasonably necessary to ensure
funds will be delivered by such time.
(b) In drawing on the Letter of Credit, the Trustee shall be acting on
behalf of the Bondholders by facilitating payment of the Bonds and not on behalf
of the Issuer or the Company and shall not be subject to the control of either.
Proceeds of draws on the Letter of Credit shall be segregated from, and not
commingled with, other moneys held by the Trustee. Such moneys shall be held in
the Bond Fund.
(c) The Trustee shall advise the Company by telecopy or telex on the date
of each draw on the Letter of Credit of the amount and date of such draw and of
the reason for such draw.
(d) For extensions of the term of the Letter of Credit, the Trustee
shall, at the direction of an Authorized Company Representative, but only if
required to evidence an extension of the term of the Letter of Credit, surrender
the Letter of Credit to the Bank in exchange for a new letter of credit of the
Bank or the Letter of Credit with notations thereon, as the Bank may so elect,
conforming in all material respects to the Letter of Credit except that the
expiration date shall be extended. Any such extension shall be for a period of
at least 364 days or, if less, until the fifteenth day following the maturity
date of the Bonds.
(e) No draws shall be made by the Trustee under the Letter of Credit for
such Company Bonds or Pledged Bonds.
Section 5.03. SUBSTITUTE LETTER OF CREDIT.
(a) Except when a Letter of Credit is in effect during the Fixed Rate
Period, at any time while a Letter of Credit is in effect with respect to the
Bonds, upon at least sixty (60) days' prior written notice to the Trustee and
the Remarketing Agent, the Company may, subject to the approval of the
Remarketing Agent, provide for the delivery to the Trustee of a substitute
Letter of Credit complying with the provisions of this Indenture (the
"Substitute Letter of Credit"), which shall be effective upon acceptance by the
Trustee.
(b) Not later than 20 days prior to the effective date of any Substitute
Letter of Credit delivered to the Trustee, as a condition to the acceptance by
the Trustee of such Substitute Letter of Credit, the Company shall furnish to
the Trustee:
45
(i) An Opinion of Counsel addressed to the Trustee to the effect
that (A) on the effective date of any Substitute Letter of Credit, such
Substitute Letter of Credit will be the valid and binding obligation of
the issuer thereof enforceable against such issuer in accordance with its
terms except insofar as its enforceability may be limited by any
insolvency or similar proceedings applicable to the issuer or by
proceedings affecting generally the rights of the issuer's creditors or
by general equitable principles, and (B) the Substitute Letter of Credit,
on the date it becomes effective, would not constitute a separate
security requiring registration under any applicable federal or state
securities laws or, alternatively, that such registration has been filed
and is effective. In the case of a Substitute Letter of Credit, issued by
a branch or agency of a foreign commercial bank, there shall also be
delivered an Opinion of Counsel from a firm licensed to practice law in
the jurisdiction in which the head office of such bank is located,
addressed to the Trustee to the effect that the Substitute Letter of
Credit is the valid and binding obligation of such bank, enforceable
against such bank in accordance with its terms, subject to the
limitations referred to in Section 5.03(b)(i)(A) above;
(ii) written evidence satisfactory to the Trustee that the issuer
of the Substitute Letter of Credit meets the requirements for an issuer
of a Letter of Credit set forth in the definition of Letter of Credit in
Article I hereof;
(iii) an Opinion of Bond Counsel addressed to the Trustee to the
effect that the delivery and acceptance of such Substitute Letter of
Credit is authorized under this Indenture and will not adversely affect
the exclusion from gross income of the interest on the Bonds for federal
income tax purposes;
(iv) written confirmation from the Remarketing Agent that it has
agreed to remarket the Bonds on or after the date of the delivery of the
Substitute Letter of Credit; and
(v) if the Bonds will be rated following the acceptance by the
Trustee of such Substitute Letter of Credit, a letter from each Rating
Agency rating such Bonds setting forth such rating.
The Trustee shall accept any such Substitute Letter of Credit only in accordance
with the terms, and upon satisfaction of the conditions, contained in this
Section and any other applicable provisions of this Indenture. Notwithstanding
anything to the contrary herein, any Substitute Letter of Credit shall become
effective on a Business Day.
(c) If after the Fixed Rate Conversion Date the Bonds will be secured by
a Letter of Credit, the Company shall deliver to the Trustee not later than
twenty (20) days prior to the Fixed Rate Conversion Date a Substitute Letter of
Credit with an expiration date at least fifteen (15) days following the stated
maturity date for the Bonds and covering the principal of the Bonds after the
Fixed Rate Conversion Date plus at least 190 days of interest at the Fixed
Interest Rate (or such greater number of days coverage as may be required by a
Rating Agency then rating the Bonds).
46
Such Substitute Letter of Credit may or may not cover any premium, as determined
by the Company, the Remarketing Agent and the Bank.
Section 5.04. ENFORCEMENT OF THE LETTER OF CREDIT. The Trustee shall hold
and maintain the Letter of Credit for the benefit of the Owners of the Bonds
until the Letter of Credit terminates or expires in accordance with its terms.
When the Letter of Credit terminates or expires in accordance with its terms,
the Trustee shall immediately surrender it to the Bank. The Trustee hereby
agrees that, except in the case of a redemption in part pursuant to Article III
hereof or any other reduction in the principal amount of Bonds Outstanding, it
will not under any circumstances request that the Bank reduce the amount of the
Letter of Credit, but the Trustee hereby agrees promptly to request that the
Bank reduce the amount of the Letter of Credit following a redemption in part
pursuant to Article III hereof or any other reduction in the principal amount of
the Bonds by the principal amount of Bonds so redeemed or reduced plus a
corresponding amount of interest related thereto. If at any time all Bonds shall
cease to be outstanding, the Trustee shall surrender the Letter of Credit to the
Bank in accordance with the terms thereof. If at any time, Bank fails to honor a
draft presented under the Letter of Credit, in conformity with the terms
thereof, the Trustee shall give immediate telephonic notice thereof to the
Remarketing Agent and the Company.
ARTICLE VI: COVENANTS
Section 6.01. PAYMENT OF BONDS; LIMITED OBLIGATIONS. The Issuer shall
promptly pay, or cause to be paid, the principal of (whether at maturity, by
acceleration, call for redemption or otherwise), premium, if any, and interest
on and Purchase Price of every Bond issued under this Indenture to the Trustee
for payment to the owners of the Bonds, on the dates and in the manner provided
herein according to the true intent and meaning thereof, subject to the
limitations set forth in Section 2.01(a).
Notwithstanding anything contained in this Indenture to the contrary, the
Bonds shall be limited obligations of the Issuer, payable solely from the
Receipts and Revenues of the Issuer from the Agreement, including amounts drawn
under the Letter of Credit. The Bonds and the interest thereon shall not
constitute a debt of the State of Texas, and the State shall not be liable
thereon. In no event shall the Bonds be payable out of any funds or properties
other than those acquired for the purpose of the Act, and the Bonds shall not
constitute an indebtedness within the meaning of any constitutional or statutory
debt limitation or restriction.
No recourse shall be had by any Bondholder for the payment of the
principal of, redemption or purchase premium, if any, and interest or Purchase
Price of the Bonds or for any claim based thereon or upon any obligation,
covenant or agreement contained in this Indenture or the Agreement against any
past, present or future member, officer, agent, director, commissioner or
employee of the Issuer or the State of Texas, or any incorporator, member,
officer, employee, director, commissioner or trustee of any successor entity, as
such, either directly or through the Issuer or the State of Texas, under any
rule of law or equity, statute or constitution or by the enforcement of any
assessment or penalty or otherwise, and all such liability of any such
incorporator, member, officer, employee, director, agent, commissioner or
trustee as such is hereby expressly waived and released as a
47
condition of an consideration for the execution of this Indenture and the
Agreement and the issuance of the Bonds.
Section 6.02. FURTHER COVENANTS AND REPRESENTATIONS OF ISSUER. The Issuer
shall observe and perform all covenants, conditions and agreements required on
its part in this Indenture, in each Bond executed, authenticated and delivered
hereunder, in all other documents related hereto, and under any laws or
regulations related to the issuance of the Bonds; provided, however, that the
liability of the Issuer for a breach of any such covenant, condition or
agreement shall be limited solely to the Receipts and Revenues of the Issuer
from the Agreement. The Issuer represents that it is duly authorized under the
Constitution and the laws of the State (including without limitation the Act) to
issue the Bonds authorized by this Indenture, to make the assignment described
in Section 3.05 of the Agreement, and to pledge the Receipts and Revenues of the
Issuer from the Agreement in the manner and to the extent herein set forth; that
all action required on its part with respect to the issuance of the Bonds and
the execution and delivery of this Indenture has been taken; and that the Bonds
when issued will be valid limited obligations of the Issuer.
Section 6.03. FURTHER ASSURANCES. The Issuer shall execute and deliver
such supplemental indentures and such further instruments and do such further
acts, as the Trustee may reasonably require for the better assuring, assigning
and confirming to the Trustee the amounts assigned under this Indenture for the
payment of the Bonds; provided, that the Issuer shall not be obligated to incur
any expense or liability in the performance of its obligations described in this
Section.
Section 6.04. TAX COVENANT. The Issuer covenants and agrees that it has
not knowingly engaged and will not knowingly engage in any activities and that
it has not knowingly taken and will not knowingly take any action that might
result in its income becoming taxable to it or any interest on the Bonds
becoming includable in the gross income of the owners thereof under the federal
income tax law.
ARTICLE VII: DISCHARGE OF INDENTURE
Section 7.01. BONDS DEEMED PAID; DISCHARGE OF INDENTURE. All Bonds shall
be deemed paid for all purposes of this Indenture when payment of the greater of
the principal of and the maximum amount of interest that may become due on the
Bonds to the due date of such principal and interest (whether at maturity, upon
redemption, acceleration or otherwise) and the payment of the Purchase Price of
any Bond that may be optionally tendered by the owner either (i) has been made
in accordance with the terms of Section 3.05 or Section 3.09, or (ii) has been
provided for by depositing with the Trustee (A) moneys sufficient to make such
payment, which moneys must constitute Available Moneys, and/or (B) noncallable
U.S. Government Obligations maturing as to principal and interest in such
amounts and at such times as will ensure the availability of sufficient moneys
to make such payment without regard to the reinvestment thereof, provided that
(i) such U.S. Government Obligations must be purchased from Available Moneys and
(ii) unless the Bonds bear interest at a Fixed Interest Rate, the Trustee shall
have received written evidence from each Rating Agency that as a result of such
action, their rating on the Bonds will not be lowered or eliminated. When a Bond
is deemed paid, it shall no longer be secured by or entitled to the benefits
48
of this Indenture, except for payment from moneys or U.S. Government Obligations
under the preceding sentence and except that it may be optionally tendered if
and as provided in Section 3.06(a) and Section 3.06(b) and it may be
transferred, exchanged, registered, discharged from registration or replaced as
provided in Article II.
Notwithstanding the foregoing, no deposit under the first paragraph of
this Section made for the purpose of paying the redemption price of a Bond (as
opposed to the final payment thereof upon maturity) will be deemed a payment of
a Bond as aforesaid until (x) notice of redemption of the Bond is given in
accordance with Section 3.04 or, if the Bond is not to be redeemed within the
next sixty (60) days, until the Company has given the Trustee, in form
satisfactory to the Trustee, irrevocable instructions to notify, as soon as
practicable, the holder of the Bond, in accordance with Section 3.04, that the
deposit required by the first paragraph of this Section has been made with the
Trustee and that the Bond is deemed to be paid under this Article and stating
the redemption date upon which moneys are to be available for the payment of the
principal of the Bond or (y) the maturity of the Bond. Additionally, and while
the deposit under the first paragraph of this Section made for the purpose of
paying the final payment of a Bond upon its maturity shall be deemed a payment
of such Bond as aforesaid, the Trustee shall mail notice to the Owner of such
Bond, as soon as practicable stating that the deposit required by the first
paragraph of this Section has been made with the Trustee and that the Bond is
deemed to be paid under this Article.
When all Outstanding Bonds are deemed paid under the foregoing provisions
of this Section and other sums due hereunder and under the Agreement and the
Reimbursement Agreement are paid, the Trustee shall, upon request, acknowledge
the discharge of the Issuer's obligations under this Indenture except for
obligations relating to optional tender as provided in Section 3.06(a) and
Section 3.06(b), obligations under Section 2.04, 2.05 and 2.06 hereof in respect
of the transfer, exchange, registration, discharge from registration and
replacement of Bonds, and obligations under Section 9.06 hereof with respect to
the Trustee's compensation and indemnification, and the Trustee without further
direction shall surrender the Letter of Credit to the Bank, in accordance with
the terms of the Letter of Credit. Bonds delivered to the Trustee for payment
shall be canceled by the Trustee pursuant to Section 2.05.
An Authorized Company Representative shall direct the deposit, investment
and use of the moneys and securities described in this Section such that no
deposit will be made and no use made of any such deposit that would cause any
Bonds to be treated as "arbitrage bonds" within the meaning of Section 148 of
the Code. Before accepting or using any such deposit, the Trustee may request an
Opinion of Bond Counsel as to whether such use or acceptance would cause the
Bonds to be so treated and, that all conditions hereunder have been satisfied,
and the Trustee may conclusively rely on such Opinion with regard thereto.
The Trustee may request and shall be fully protected in relying upon a
certificate of an independent certified public accountant, obtained at the
expense of the Company, to the effect that a deposit will be sufficient to
defease the Bonds as provided in this Section.
Upon receipt of any amount pursuant to this Article VII, the Trustee
shall give written notice thereof, which notice shall include, without
limitation, the amount of such deposit and any
49
instructions given to the Trustee pursuant thereto and to the Remarketing Agent
by first-class mail, postage prepaid.
Section 7.02. APPLICATION OF TRUST MONEY. The Trustee shall hold in trust
money or U.S. Government Obligations deposited with them pursuant to the
preceding Section and shall apply the deposited money and the money from the
U.S. Government Obligations in accordance with this Indenture only to the
payment of principal of, and premium, if any, and interest on, or Purchase Price
of, the Bonds.
ARTICLE VIII: DEFAULTS AND REMEDIES
Section 8.01. EVENTS OF DEFAULT. Each of the following events shall be an
Event of Default:
(a) Default in the due and punctual payment of any interest on any Bond;
(b) Default in the due and punctual payment of the principal or Purchase
Price of or premium, if any, on any Bond (whether at maturity, by acceleration
or redemption, upon purchase or otherwise);
(c) In the event no Letter of Credit is in effect, and subject to the
provisions of Section 8.11, default in the observance or performance of any
other covenants, conditions or agreements required on the part of the Issuer
under this Indenture or in the Bonds;
(d) Receipt by the Trustee of written notice from the Bank that the Bank
has determined (i) not to reinstate the Letter of Credit, or (ii) that an "Event
of Default" has occurred under the Reimbursement Agreement and that the Bank has
instructed the Trustee to accelerate the maturity of the Bonds in accordance
with the Reimbursement Agreement;
(e) In the event (i) no Letter of Credit is in effect, or (ii) the Bank
has failed to honor a proper draw under the Letter of Credit strictly complying
with the terms thereof, the occurrence of an Event of Default under the
Agreement.
For purposes of this Section, the Trustee shall not be deemed to have
knowledge of an Event of Default hereunder unless a Responsible Officer of the
Trustee has actual knowledge thereof or unless written notice of any event that
is an Event of Default is received by the Trustee from Holders of 25% or more of
the Outstanding Bonds and such notice references the Bonds or this Indenture.
Section 8.02. ACCELERATION AND DUTY TO DRAW ON LETTER OF CREDIT.
(a) Upon the occurrence of an Event of Default under Section 8.01(a), (b)
or (d) hereof, the Trustee shall, by notice to the Issuer, the Holders, the
Bank, the Remarketing Agent and the Company, declare the entire unpaid principal
of and premium, if any, and interest on the Bonds immediately due and payable
and, thereupon, the entire unpaid principal of and premium, if any, and interest
on the Bonds shall forthwith become immediately due and payable. Upon the
occurrence and continuance of any other Event of Default, the Trustee may, and
if requested by the holders of
50
not less than 25% in aggregate principal amount of Bonds then Outstanding shall,
by notice to the Issuer, the Holders, the Bank, the Remarketing Agent and the
Company, declare the entire unpaid principal of and premium, if any, and
interest on the Bonds immediately due and payable and, thereupon, the entire
unpaid principal of and premium, if any, and interest on the Bonds shall
forthwith become due and payable. Upon any such declaration, the Issuer shall
forthwith pay to the holders of the Bonds the entire unpaid principal of and
premium, if any, and accrued interest on the Bonds, but only from the revenues
and receipts herein specifically pledged for such purpose. Upon the occurrence
of an Event of Default specified in Section 8.01 and a declaration of
acceleration hereunder, the Trustee as assignee of the Issuer shall immediately
exercise its right under Section 5.04(b) of the Agreement to declare all
Installment Sale Payments under the Agreement to be immediately due and payable.
In the event the Trustee fails to accelerate as required by this subsection, the
owners of a majority in aggregate principal amount of Bonds Outstanding shall
have the right to take such actions.
(b) Upon the acceleration of the maturity of the Bonds, by declaration or
otherwise, the Trustee shall immediately draw upon the Letter of Credit an
amount equal to the difference between (i) the aggregate unpaid principal amount
of the Bonds and all premiums, if any (but only to the extent permitted therefor
in the Letter of Credit), and interest accrued thereon, and (ii) the amount of
Available Moneys on deposit in the Bond Fund and that have not otherwise been
designated for another use, and such amount drawn shall be applied immediately
as set forth in Section 8.03. Upon such acceleration, interest on the Bonds
(other than Pledged Bonds) shall cease to accrue as of the date of declaration
of such acceleration.
Section 8.03. DISPOSITION OF AMOUNTS DRAWN ON LETTER OF CREDIT;
ASSIGNMENT OF RIGHTS TO CONTEST.
(a) All amounts drawn on the Letter of Credit by the Trustee in
accordance with Section 8.02(b) shall be first deposited in the Bond Fund (and
may be invested in accordance with Section 4.11), shall be applied immediately
to the payment of principal of and premium, if any, and interest accrued on the
Bonds unless, prior to or with the proceeds of the draw on the Letter of Credit,
the Trustee receives written instructions from the Bank to use such proceeds to
purchase all Bonds. If such instructions are received by the Trustee, such draw
proceeds shall be immediately applied to the purchase of the Bonds, the
acceleration of the Bonds shall be canceled, the Bonds shall become Pledged
Bonds and the Bonds shall be registered in the name of the Bank or its designee
and pledged under the "Bond Pledge Agreement" executed by the Company in
connection with the Reimbursement Agreement as additional security for repayment
of the Company's obligations under the Reimbursement Agreement. Thereafter, such
Bonds shall not be remarketed by the Remarketing Agent unless the Letter of
Credit is reinstated or a Substitute Letter of Credit is delivered pursuant to
Section 5.03 or the Bonds are remarketed at a Fixed Interest Rate in accordance
with the terms hereof.
(b) The Trustee hereby assigns to the Bank all its rights to contest or
otherwise dispute in the Trustee's name, place and stead and at the Bank's sole
election and cost any claim of preferential transfer made by a bankruptcy
trustee, debtor-in-possession or other similar official with respect to any
amount paid to the Trustee by or on behalf of the Company or the Issuer to be
applied to
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principal of and premium, if any, or interest on or Purchase Price of the Bonds,
to the extent of payments made to the Trustee pursuant to a drawing under the
Letter of Credit. The Trustee shall cooperate with and assist the Bank in any
such contest or dispute as the Bank may reasonably request; provided, however,
that the Bank shall reimburse the Trustee for its reasonable costs incurred in
connection with providing such cooperation and assistance. The Trustee shall
give the Bank prompt notice of any claim of preferential transfer of which the
Trustee has actual knowledge. The foregoing assignment shall not be deemed to
confer upon the Bank any right to contest or otherwise dispute any claim of
preferential transfer with respect to any amount as to which there has been no
drawing under the Letter of Credit. The assignment set forth above shall in no
event be effective until the Bank shall have first furnished to the Trustee an
agreement to indemnify the Trustee and the holders of the Bonds against any
claim, liability or damage that they might suffer by reason of any such contest
or dispute.
Section 8.04. OTHER REMEDIES; RIGHTS OF BONDHOLDERS. Upon the occurrence
of an Event of Default, the Trustee, subject to the terms of this Indenture, may
proceed to protect and enforce its rights and the rights of the Bondholders by
mandamus or other suit, action or proceeding, at law or in equity, including but
not limited to an action for specific performance of any agreement herein
contained or making a demand for payment from the Company and taking action
pursuant to any other document to which the Trustee is a party.
Upon the occurrence of an Event of Default, if requested to do so by the
holders of not less than 25% in aggregate principal amount of Bonds Outstanding
and if indemnified as provided in Section 9.01(d), the Trustee, subject to the
terms of this Indenture, shall exercise such one or more of the rights and
powers conferred by this Article as the Trustee, upon being advised by counsel,
shall deem most expedient in the interests of the Bondholders.
No remedy conferred by this Indenture upon or reserved to the Trustee or
to the Bondholders is intended to be exclusive of any other remedy, but each
such remedy shall be cumulative and shall be in addition to any other remedy
given to the Trustee or to the Bondholders hereunder or now or hereafter
existing at law or in equity. No delay or failure to exercise any right or power
accruing upon any default or Event of Default shall impair any such right or
power or shall be construed to be a waiver of any such default or Event of
Default or acquiescence therein, and every such right and power may be exercised
from time to time and as often as may be deemed necessary. No waiver of any
default or Event of Default hereunder, whether by the Trustee pursuant to
Section 8.10 or by the Bondholders, shall extend to or shall affect any
subsequent default or Event of Default or shall impair any rights or remedies
consequent thereon.
Section 8.05. RIGHT OF BONDHOLDERS TO DIRECT PROCEEDINGS. Notwithstanding
anything in this Indenture to the contrary, but subject to Section 8.14, the
holders of a majority in aggregate principal amount of Bonds Outstanding shall
have the right, at any time, by an instrument or instruments in writing executed
and delivered to the Trustee, to direct the method and place of conducting all
proceedings to be taken in connection with the enforcement of the terms and
conditions of this Indenture or for the appointment of a receiver or any other
proceedings hereunder; provided, however, that such direction shall not be
otherwise than in accordance with the provisions of law and of this Indenture.
52
Section 8.06. APPLICATION OF MONEYS. All moneys received by the Trustee
pursuant to any right given or action taken under the provisions of this Article
shall, after payment of the reasonable cost and expenses of the proceedings
resulting in the collection of such moneys and of the reasonable expenses,
liabilities and advances incurred or made by the Trustee and the reasonable fees
and expenses, if any, of the Issuer in carrying out this Indenture or the
Agreement, be deposited in the Bond Fund; provided, however, that no proceeds
from any draw on the Letter of Credit shall be used for any purpose other than
payment of the principal of and premium, if any (to the extent permitted
therefor in the Letter of Credit), and interest on the Bonds or the purchase
price thereof. All moneys in the Bond Fund shall be applied as follows:
(a) Unless the principal of all Bonds shall have become or shall have
been declared due and payable:
First, to the payment to the persons entitled thereto of all
installments of interest then due on the Bonds, in the order of the
maturity of the installments of such interest and, if the amount
available shall not be sufficient to pay in full any particular
installment, then to the payment ratably, according to the amounts due on
such installment, to the persons entitled thereto, without any
discrimination or preference except as provided in Section 8.13, and as
to any difference in the respective rates of interest specified in the
Bonds;
Second, to the payment to the persons entitled thereto of the
unpaid principal of and premium, if any, on any of the Bonds that shall
have become due (other than Bonds called for redemption for the payment
of which moneys are held pursuant to the provisions of this Indenture),
in the order of their due dates, with interest on such Bonds at the
respective rates specified therein from the respective dates upon which
they become due and, if the amount available shall not be sufficient to
pay in full Bonds due on any particular date, together with such
interest, then first to the payment of such interest ratably, according
to the amount of such interest due on such date, and then to the amount
of such principal and premium, if any, ratably, according to the amount
of such principal and premium, if any, due on such date, to the persons
entitled thereto, without any discrimination or preference, except as
provided in Section 8.13, and as to any difference in the respective
rates of interest specified in the Bonds; and
Third, to the extent permitted by law, to the payment to the
persons entitled thereto of the unpaid interest on overdue installments
of interest ratably, according to the amounts of such interest due on
such date, without any discrimination or preference, except as provided
in Section 8.13, and as to any difference in the respective rates of
interest specified in the Bonds.
(b) If the principal of all Bonds shall have become due or shall have
been declared due and payable, all such moneys shall be applied to the payment
of the principal and premium, if any, and interest then due and unpaid upon the
Bonds, including to the extent permitted by law, interest on overdue
installments of interest, 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
53
due respectively for principal and premium, if any, and interest, to the persons
entitled thereto, without any discrimination or privilege, except as provided in
Section 8.13.
(c) If the principal of all Bonds shall have been declared due and
payable, and if such declaration shall thereafter have been rescinded and
annulled under the provisions of this Article, then, subject to the provisions
of Section 8.06(b) in the event that the principal of all Bonds shall later
become due or be declared due and payable, the moneys shall be applied in
accordance with the provisions of Section 8.06(a).
(d) All amounts received from a draw upon the Letter of Credit shall be
applied exclusively to the payment of the principal of and premium, if any (to
the extent permitted under the Letter of Credit), and interest on the Bonds or
the purchase price thereof.
Whenever moneys are to be applied pursuant to the provisions of this
Section, such moneys shall be applied at such times and from time to time as the
Trustee shall determine, 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 moneys, it shall fix the date (which shall be an Interest Payment Date
unless it shall deem another date more suitable or as required by Section
8.03(a)) upon which such application is to be made. The Trustee shall give such
notice as it may deem appropriate of the deposit with it of any such moneys and
of the fixing of any such date, and shall not be required to make payment to the
holder of any Bond until such Bond is presented to the Trustee for appropriate
endorsement or for cancellation if fully paid.
Whenever all principal of and premium, if any, and interest on all Bonds
have been paid under the provisions of this Section and all expenses and charges
of the Trustee and the Issuer have been paid, and all obligations of the Company
to the Bank pursuant to the Reimbursement Agreement shall have been paid in full
and all rebatable arbitrage payments have been made, the balance remaining in
the Bond Fund shall be paid to the Company as provided in Section 4.10.
Section 8.07. REMEDIES VESTED IN TRUSTEE. All rights of action (including
the right to file proof of claims) under this Indenture or under any of the
Bonds may be enforced by the Trustee without the possession of any of the Bonds
or the production thereof in any trial or other proceeding relating thereto and
any such suit or proceeding instituted by the Trustee may be brought in its
name, as Trustee, without the necessity of joining as plaintiffs or defendants
any holders of the Bonds, and any recovery of judgment shall be for the equal
benefit of the holders of the Outstanding Bonds.
Section 8.08. LIMITATIONS ON SUITS. Except to enforce the rights given
under Sections 8.02(a), 8.05 and 8.12, no holder of any Bond shall have any
right to institute any suit, action or proceeding in equity or at law for the
enforcement of this Indenture or for the execution of any trust thereof or any
other remedy hereunder, unless (a) a default has occurred of which the Trustee
has been notified as provided in Section 9.05, or of which by such Section it is
deemed to have notice, (b) such default shall have become an Event of Default
and the holders of at least 25% in aggregate principal amount of Bonds
Outstanding shall have made written request to the Trustee and shall have
offered it reasonable opportunity either to proceed to exercise the powers
hereinbefore granted or to institute
54
such action, suit or proceeding in its own name, (c) such holders have provided
to the Trustee indemnity as provided in Section 9.01(d), (d) the Trustee for
sixty (60) days after such notice shall fail or refuse to exercise the powers
hereinbefore granted, or to institute such action, suit or proceeding in its own
name or in the name of such holders, (e) no direction inconsistent with such
request has been given to the Trustee during such 60 day period by the holders
of a majority in aggregate principal amount of Bonds Outstanding, and (f) notice
of such action, suit or proceeding is given to the Trustee; it being understood
and intended that no one or more holders of the Bonds shall have any right in
any manner whatsoever to affect, disturb or prejudice this Indenture by its, his
or their action or to enforce any right hereunder except in the manner herein
provided, and that all proceedings at law or in equity shall be instituted and
maintained in the manner herein provided and for the equal benefit of the
holders of all Bonds Outstanding.
The notification, request and offer of indemnity set forth in the
preceding paragraph, at the option of the Trustee, shall be conditions precedent
to the execution of the powers and trusts in this Indenture and to any action or
cause of action for the enforcement of this Indenture or for any other remedy
hereunder.
Section 8.09. TERMINATION OF PROCEEDINGS. In case the Trustee shall have
proceeded to enforce any right under this Indenture by the appointment of a
receiver, by entry or otherwise, and such proceedings shall have been
discontinued or abandoned for any reason, or shall have been determined
adversely, then and in every such case the Issuer, the Company, the Bondholders,
the Bank and the Trustee shall be restored to their former positions and rights
hereunder, and all rights, remedies and powers of the Trustee shall continue as
if no such proceedings had been taken.
Section 8.10. WAIVERS OF EVENTS OF DEFAULT. The Trustee, with the written
consent of the Bank (if there is a Letter of Credit in effect), may waive any
Event of Default hereunder and its consequences and rescind any declaration of
maturity of principal of and premium, if any, and interest on the Bonds and the
Installment Sale Payments, and shall do so, with the written consent of the Bank
(if there is a Letter of Credit in effect), upon the written request of the
holders of (a) a majority in aggregate principal amount of Bonds Outstanding in
respect of which default in the payment of principal and/or premium, if any,
and/or interest exists, or (b) a majority in aggregate principal amount of Bonds
Outstanding in the case of any other default; provided, however, that:
(i) there shall not be waived without the consent of the holders
of all Bonds then Outstanding: (A) any default in the payment of the
principal of or premium, if any, on any Outstanding Bonds when due
(whether at maturity or by mandatory or optional redemption); or (B) any
default in the payment when due of the interest on any such Bonds unless,
in either case, prior to such waiver or rescission (1) there shall have
been paid or provided for all arrears of interest at the rate borne by
the Bonds on overdue installments of principal, all arrears of payments
of principal and premium, if any, when due and all reasonable expenses of
the Trustee in connection with such default, and (2) in case of any such
waiver or rescission, or in case of the discontinuance, abandonment or
adverse determination of any proceeding taken by the Trustee on account
of any such default, the Trustee and the Bondholders shall be restored to
their respective former positions and rights hereunder;
55
(ii) no declaration of maturity under Section 8.02 made at the
request of the holders of not less than 25% in aggregate principal amount
of Bonds Outstanding shall be rescinded unless requested by the holders
of a majority in aggregate principal amount of Bonds Outstanding; and
(iii) unless the Trustee has been notified by the Bank in writing
that the Letter of Credit is reinstated in full as to principal, interest
and premium, if any (if the Letter of Credit covers payment of premium)
and that the Bank has rescinded or withdrawn the written notice referred
to in Section 8.01(d), there shall be no waiver or rescission so long as
the Letter of Credit is in effect.
No such waiver or rescission shall extend to any subsequent or other
default or impair any right consequent thereon.
Section 8.11. NOTICE OF DEFAULTS; OPPORTUNITY OF COMPANY TO CURE
DEFAULTS. Notwithstanding anything in this Indenture to the contrary, no default
specified in Section 8.01(c) on the part of the Issuer shall constitute an Event
of Default until (a) notice of such default shall be given (i) by the Trustee to
the Issuer and the Company, or (ii) by the holders of not less than 25% in
aggregate principal amount of Bonds Outstanding to the Trustee, the Issuer and
the Company, and (b) the Issuer and the Company shall have had thirty (30) days
after such notice to correct such default or cause such default to be corrected,
and shall not have corrected such default or caused such default to be corrected
within such period; provided, however, if any default specified in Section
8.01(c) shall be such that it cannot be corrected within such period, it shall
not constitute an Event of Default if corrective action is instituted by the
Issuer or the Company within such period and diligently pursued until such
default is corrected; provided, further, that the period for corrective action
shall not in any event extend more than 180 days after such notice to correct
such default.
With regard to any alleged default concerning which notice is given to
the Company or the Bank, the Company or the Bank may, but is under no obligation
to, perform any covenant, condition or agreement the nonperformance of which is
alleged in such notice to constitute a default, in the name and stead of the
Issuer with full power to do any and all things and acts to the same extent that
the Issuer could do and perform any such things and acts with power of
substitution.
Section 8.12. UNCONDITIONAL RIGHT TO RECEIVE PRINCIPAL, PREMIUM AND
INTEREST. Nothing in this Indenture shall affect or impair the right of any
Bondholder to enforce, by action at law, payment of the principal of and
premium, if any, and interest on or Purchase Price of any Bond at and after the
maturity thereof, or on the date fixed for redemption or purchase or (subject to
the provisions of Section 8.02) on the same being declared due prior to maturity
as herein provided, or the obligation of the Issuer to pay the principal of,
premium, if any, and interest on or Purchase Price of each of the Bonds issued
hereunder to the respective holders thereof at the time, place, from the source
and in the manner herein and in the Bonds expressed.
Section 8.13. BONDS OUTSTANDING. Notwithstanding anything else in this
Article to the contrary, but subject to Section 8.14, Company Bonds shall not be
deemed to be Outstanding for purposes of this Article and the Company as holder
thereof shall not be entitled to any rights or payments therefor pursuant to
Sections 8.05, 8.06, 8.08 and 8.10.
56
Section 8.14. BANK DEEMED OWNER. For all purposes of this Article VIII
(other than receipt of payments), the Bank shall, so long as the Letter of
Credit shall be in effect and the Bank shall not have dishonored any draw under
the Letter of Credit strictly complying with the terms thereof, be deemed the
holder and registered owner of all Bonds. As such, the Bank may take all actions
permitted by this Article VIII to be taken by the holders or registered owners
of the Bonds, to the exclusion of the actual holders and registered owners of
the Bonds; the purpose of this Section being to permit the Bank to direct the
taking of actions and enforcement of remedies permitted by this Article VIII so
long as the Letter of Credit shall be in effect and the Bank shall not have
dishonored any draw under the Letter of Credit complying with the terms thereof.
Section 8.15. SUBROGATION RIGHTS OF THE BANK.
(a) Notwithstanding anything else contained herein, whenever the Trustee
shall make any payment to any Bondholder with funds drawn under Letter of Credit
pursuant hereto, the Trustee shall make such payments as agent for the Bank and
not as agent for the Issuer, and the Bank and its assigns shall thereafter, to
the extent of the amount so paid, be subrogated to the rights thereon of the
Bondholders to whom such payment was made, and the Trustee shall, in the event
of the payment of principal, keep a written record of such payments. When a
Bondholder has been paid the entire principal of and interest on his Bond in
connection with a mandatory or optional tender of such Bond with funds drawn on
the Letter of Credit, such Bond shall be surrendered to the Trustee and become a
Pledged Bond.
(b) In the event the Bank makes any payment with respect to the payment
of the principal or interest on or Purchase Price of any Bond to the Trustee
under the Letter of Credit, the Bank shall be subrogated to the rights possessed
under the Indenture and in and to the Trust Estate by the Trustee, the Issuer
and the owners of such Bonds so paid, and the Bank shall be subrogated to the
rights of the Issuer and the Trustee under any other document, instrument or
agreement securing repayment of the principal and interest on or Purchase Price
of the Bonds. For purposes of the Bank's subrogation rights hereunder, (i) any
reference in the Indenture to the Bondholders shall include the Bank, which
shall be entitled to be treated as if the Bank were a registered owner of Bonds
in the principal amount of any principal payment made by the Bank under the
Letter of Credit, (ii) any portion of any Bond as to which the purchase price is
paid with money collected pursuant to the Letter of Credit shall be deemed to be
a Pledged Bond, and (iii) the Bank may exercise any and all rights and benefits
it would have under this Indenture as a Holder of Bonds to the extent of the
principal amount of Bonds owned or deemed to be owned by the Bank and any and
all interest so due and unpaid thereon; provided that such Pledged Bonds (A)
shall not be taken into account in determining any deficiency for which a claim
or draw is to be made under the Letter of Credit, and (B) shall be subordinated
in right of payment as of any Interest Payment Date or upon the redemption or
acceleration of the Bonds. Subrogation rights granted to the Bank hereunder are
not intended to be exclusive of any other rights or remedies available to the
Bank, 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 Bank pursuant to
the Letter of Credit, and every other right or remedy now or hereafter existing
at law or in equity or by statute.
57
Section 8.16. RIGHTS AND DUTIES OF THE ISSUER.
(a) Remedies of the Issuer. Notwithstanding any contrary provision in
this Indenture, the Issuer shall have the right to take any action or make any
decision with respect to proceedings for indemnity against the liability of the
Issuer and for collection or reimbursement from sources other than moneys or
property held under this Indenture or subject to the lien hereof. The Issuer may
enforce its rights under this Indenture which have not been assigned to the
Trustee by legal proceedings for the specific performance of any obligation
contained herein or for the enforcement of any other appropriate legal or
equitable remedy, and may recover damages caused by any breach by the Company of
their respective obligations to the Issuer under this Indenture, including court
costs, reasonable attorney's fees and other costs and expenses incurred in
enforcing such obligations.
(b) Limitations on Actions. The Issuer shall not be required to monitor
the financial condition of the Company or the physical condition of the
Facilities and, unless otherwise expressly provided, shall not have any
responsibility with respect to notices, certificates or other documents filed
with it hereunder. The Issuer shall not be required to take notice of any breach
or default except when given notice thereof by the Trustee or the Bank. The
Issuer shall not be required to take any action unless indemnity reasonably
satisfactory to it is furnished for expenses or liability to be incurred thereby
(other than the giving of notice). The Issuer, upon written request of the
Bondholders, the Bank, or the Trustee, and upon receipt of reasonable indemnity
for expenses or liability, shall cooperate to the extent reasonably necessary to
enable the Trustee to exercise any power granted to the Trustee by this
Indenture. The Issuer shall be entitled to reimbursement pursuant to Section
8.17 hereof to the extent that it acts without previously obtaining full
indemnity.
(c) Responsibility. The Issuer shall be entitled to the advice of counsel
(who may be counsel for any party, for the Paying Agent or the Remarketing
Agent, or for any Bondholder) and shall be wholly protected as to any action
taken or omitted to be taken in good faith in reliance on such advice. The
Issuer may rely conclusively on any notice, certificate or other document
furnished to it under this Indenture and reasonably believed by it to be
genuine. The Issuer shall not be liable for any action taken by it in good faith
and reasonably believed by it to be within the discretion or power conferred
upon it, or in good faith omitted to be taken by it and reasonably believed to
be beyond such discretion or power, or taken by it pursuant to any direction or
instruction by which it is governed under this Indenture or omitted to be taken
by it by reason of the lack of direction or instruction required for such action
under this Indenture, unless such actions were taken or omitted to be taken as a
result of the Issuer's willful misconduct or gross negligence, and the Issuer
shall not be responsible for the consequences of any error of judgment
reasonably made by it. When any consent or other action by the Issuer is called
for by this Indenture, the Issuer may defer such action pending such
investigation or inquiry or receipt of such evidence, if any, as it may require
in support thereof. A permissive right or power to act shall not be construed as
a requirement to act, and no delay in the exercise of a right or power shall
affect the subsequent exercise thereof. The Issuer shall in no event be liable
for the application or misapplication of funds, or for other acts or defaults by
any person or entity except by its own directors, officers and employees. No
recourse shall be had by the Company, the Trustee or any Bondholder for any
claim based on this Indenture or the Bonds against any director, officer,
employee or agent of the Issuer unless such claim is based upon the wilful
misconduct, bad faith, fraud or deceit of such person. No covenant, obligation
or agreement of the Issuer contained in this Indenture shall be deemed to be a
covenant, obligation or
58
agreement of any present or future director, officer, employee or agent of the
Issuer in his individual capacity, and no person executing a Bond shall be
liable personally thereon or be subject to any personal liability or
accountability by reason of the issuance thereof.
Section 8.17. EXPENSES OF THE ISSUER. In addition to any payments due to
the Issuer under the Agreement, the Company shall pay or reimburse the Issuer
within thirty (30) days after notice for all expenses incurred in the exercise
of the Issuer's rights or their performance of its obligations hereunder. Any
expenses, reimbursements or other charges which the Issuer may be entitled to
receive from the Company hereunder, if not paid when due, shall bear interest at
10% per annum.
Section 8.18. ACTIONS BY ISSUER. Any action that may be taken by the
Issuer hereunder shall be deemed sufficiently taken if taken on its behalf by
its Chairman, its Vice Chair, its General Manager, the Issuer Representative or
by any other director, officer or agent whom it may designate from time to time.
ARTICLE IX: TRUSTEE AND REMARKETING AGENT
Section 9.01. DUTIES OF TRUSTEE.
(a) If an Event of Default has occurred and is continuing, the Trustee
shall exercise its rights and powers and use the same degree of care and skill
in its exercise as a prudent person would exercise or use under the
circumstances in the conduct of such person's own affairs.
(b) Except during the continuance of an Event of Default:
(i) the Trustee need perform only those duties that are
specifically set forth in this Indenture and no others and no implied
covenants or obligations shall be read into this Indenture against the
Trustee, and
(ii) in the absence of bad faith, negligence or willful misconduct
on its part, the Trustee may conclusively rely, as to the truth of the
statements and the correctness of the opinions expressed, upon
certificates or opinions furnished to the Trustee and conforming to the
requirements of this Indenture. However, the Trustee shall examine the
certificates and opinions to determine whether they conform to the
requirements of this Indenture.
(c) The Trustee shall not be relieved from liability for its own
negligent action, its own negligent failure to act or its own willful
misconduct, except that:
(i) this subsection does not limit the effect of (b) above;
(ii) the Trustee shall not be liable for any error of judgment
made in good faith by a Responsible Officer, unless it is proved that the
Trustee or Responsible Officer was negligent in ascertaining the
pertinent facts; and
59
(iii) the Trustee shall not be liable with respect to any action
it takes or omits to take in good faith in accordance with a direction
received by it pursuant to Section 8.05.
(d) The Trustee may refuse to perform any duty or exercise any right or
power unless it receives indemnity reasonably satisfactory to it against any
loss, liability or expense, but (i) the Trustee may not require indemnity as a
condition to declaring the principal of and premium, if any, and interest on the
Bonds to be due immediately under Section 8.02, and (ii) the Trustee may not
require indemnity as a condition to drawing on the Letter of Credit. The Trustee
shall not be required to give any bond or surety in respect of the execution of
the trust created hereby or the powers granted hereunder. The permissive right
of the Trustee to do things enumerated under this Indenture shall not be
construed as a duty of the Trustee.
(e) The Trustee shall not be liable for interest on any cash held by it
except as the Trustee may agree with the Company or with the Issuer with the
consent of the Company.
(f) The Trustee may conclusively rely on an Authorized Company
Representative's certificate as to whether a Bankruptcy Filing has occurred.
(g) The Trustee shall comply with the terms of the Letter of Credit.
(h) The Trustee shall maintain adequate records pertaining to the funds
held by the Trustee, the investment thereof and the disbursement therefrom;
notwithstanding anything to the contrary in this Indenture or the Agreement, the
Trustee shall not be required to advance its own funds or otherwise incur any
financial liability in the performance of any of its duties hereunder.
(i) Every provision of this Indenture that in any way relates to the
Trustee is subject to all the foregoing paragraphs of this Section.
(j) The Trustee shall not in any event be responsible for ensuring that
the rate of interest due and payable on the Bonds under this Indenture does not
exceed the highest legal rate of interest permissible under federal or state law
applicable thereto.
Section 9.02. RIGHTS OF TRUSTEE.
(a) Subject to the foregoing Section, including, but not limited to,
Sections 9.01(b)(ii) and 9.01(c), the Trustee may rely on any document believed
by it to be genuine and to have been signed or presented by the proper person.
The Trustee need not investigate any fact or matter stated in the document. Any
action taken by the Trustee pursuant to this Indenture upon the request or
authority or consent of any person, who at the time of making such request or
authority or consent is the owner of any Bond, shall be conclusive and binding
upon all future owners of any Bond issued in replacement thereof.
(b) Before the Trustee acts or refrains from acting, it may require, with
respect to a particular covenant or condition, a certificate of an appropriate
officer or officers of the Issuer or the Company or an Opinion of Counsel
stating that (i) the person making such certificate or opinion has read such
covenant or condition, (ii) the nature and scope of the examination or
investigation upon which the statements or opinions contained in such
certificate or opinion are based, (iii) in the opinion of such
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person, he has made such examination or investigation as is necessary to enable
him to express an informed opinion as to whether or not such covenant or
condition has been complied with, and (iv) a statement as to whether or not, in
the opinion of such person, such condition or covenant has been complied with.
The Trustee shall not be liable for any loss or damage or action it takes or
omits to take in good faith in reliance on the certificate or Opinion of
Counsel.
(c) The Trustee may execute any of the trusts or powers hereunder and
perform any of its duties through agents, attorneys or co-trustees and shall not
be responsible for the misconduct or negligence of any agent, attorney or
co-trustee appointed with due care.
Section 9.03. INDIVIDUAL RIGHTS OF TRUSTEE, ETC. The Trustee in its
individual or any other capacity may become the owner, custodian or pledgee of
Bonds and may otherwise deal with the Issuer, the Bank or with the Company or
its affiliates with the same rights it would have if it were not Trustee.
Section 9.04. TRUSTEE'S DISCLAIMER. Subject to Sections 9.01(b) and
9.01(c):
(a) the Trustee (i) makes no representation as to the validity or
adequacy of this Indenture or the Bonds, and (ii) shall not be responsible for
any statement in the Bonds or for the perfection of any lien created by this
Indenture or otherwise as security for the Bonds;
(b) the Trustee may construe any of the provisions of this Indenture
insofar as the same may appear to be ambiguous or inconsistent with any other
provision hereof, and any construction of any such provisions hereof by the
Trustee in good faith shall be binding upon the Bondholders, the Issuer, the
Company and the Remarketing Agent;
(c) the Trustee shall not be responsible for the application of any of
the proceeds of the Bonds or any other moneys deposited with it and paid out,
withdrawn or transferred hereunder if such application, payment, withdrawal or
transfer shall be made in accordance with the provisions of this Indenture;
(d) the Trustee shall not be under any obligation to see to the recording
or filing of this Indenture, the Agreement, any financing statements or any
other instrument or otherwise to the giving to any person of notice of the
provisions hereof or thereof;
(e) the Trustee shall not be under any obligation to effect or maintain
insurance or to renew any policies of insurance or to inquire as to the
sufficiency of any policies of insurance carried by the Company, or to report,
or make or file claims or proof of loss for, any loss or damage insured against
or that may occur, or to keep itself informed or advised as to the payment of
any taxes or assessments, or to require any such payment to be made; and
(f) the Trustee shall not be personally liable for any claims by or on
behalf of any person, firm, corporation or other legal entity arising from the
conduct or management of, or from any work or thing done on, the Facilities, and
shall have no affirmative duty with respect to compliance of the Facilities
under state or federal laws pertaining to the transport, storage, treatment or
disposal of
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pollutants, contaminants, waste or hazardous materials, or regulations, permits
or licenses issued under such laws.
Section 9.05. NOTICE OF DEFAULTS. The Trustee shall not have notice, or
be deemed to have notice, of any default or Event of Default under this
Indenture, other than an Event of Default under Section 8.01(a), (b) or (d),
unless specifically notified in writing at such address as set forth in Section
12.01 hereof of such default or Event of Default by Bondholders having, in the
aggregate, not less than 25% in principal amount of the Bonds Outstanding, by
the Bank, by the Remarketing Agent, by the Issuer, or by the Company.
If an event occurs that with the giving of notice or lapse of time or
both would be an Event of Default, and if the Event of Default is continuing and
if the Trustee has notice thereof as herein provided, the Trustee shall mail to
each Bondholder, the Remarketing Agent and the Bank notice of the Event of
Default upon its having notice of such occurrence. Except in the case of a
default in payment or purchase of any Bonds, the Trustee may withhold the notice
if and so long as it determines that withholding the notice is in the interests
of Bondholders; provided, that in any event such notice shall not be withheld
from the Bank or the Remarketing Agent.
Section 9.06. COMPENSATION AND INDEMNIFICATION OF TRUSTEE. For acting as
trustee under this Indenture, the Trustee shall be entitled to compensation
(pursuant to a separate written agreement between the Trustee and the Company)
by the Company (which shall not be limited by any statute regulating the
compensation of a trustee of an express trust) of reasonable fees for the
Trustee's services and reimbursement of advances, counsel fees and other
expenses reasonably and necessarily made or incurred by the Trustee in
connection with its services under this Indenture.
The Company has also agreed in the Agreement to indemnify the Trustee as
provided in Section 7.03 thereof.
To secure the payment or reimbursement to the Trustee provided for in
this Section, the Trustee shall have a senior claim, to which the Bonds are made
subordinate, on all money or property held or collected by the Trustee, except
moneys held under Article VII or otherwise held in trust to pay the principal of
and premium, if any, and interest on or Purchase Price of the Bonds, and except
amounts drawn under the Letter of Credit, and Available Moneys on deposit in the
Bond Fund.
Section 9.07. ELIGIBILITY OF TRUSTEE. This Indenture shall always have a
Trustee that meets the qualifications set forth in this Section. Each Trustee
shall: (i) be a corporation or banking association duly organized under the laws
of the United States of America or any state or territory thereof, doing
business and, during the period when the Bonds are subject to remarketing,
having an office in such location as shall be approved by the Remarketing Agent
(which approval shall not be unreasonably withheld or delayed), (ii) have
together with its affiliates (herein defined) a combined capital and surplus of
at least $100,000,000 as set forth in its most recent published annual report of
condition, (iii) have senior long-term debt securities or outstanding bank
deposit obligations, as appropriate, rated "Baa3/P3" or better by βββββ'β
Investors Service, Inc., "BBB-/A3" or better by Standard & Poor's Credit Market
Services, a Division of The ββββββ-ββββ Companies, Inc. or "BBB-/F3" or better
by Fitch IBCA, Inc., or be a direct or indirect subsidiary of a bank or bank
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holding company that has senior long-term debt securities or outstanding bank
deposit obligations, as appropriate, rated "Baa3/P3" or better by βββββ'β
Investors Service, Inc., "BBB-/A3" or better by Standard & Poor's Credit Market
Services, a Division of The ββββββ-ββββ Companies, Inc. or "BBB-/F3" or better
by Fitch IBCA, Inc., or otherwise be acceptable to any Rating Agency then rating
the Bonds, and (iv) be authorized by law to perform all the duties imposed upon
it by this Indenture. For purposes of this Section, the term "affiliate" of the
Trustee shall mean any corporation or other person that, directly or indirectly,
controls or is controlled by or is under common control with the Trustee.
Section 9.08. REPLACEMENT OF TRUSTEE. The Trustee may resign and be
discharged of the trust created by this Indenture by notifying the Issuer, the
Bank, the Remarketing Agent and the Company; provided, however, that no such
resignation shall become effective until the appointment of a successor Trustee,
as hereinafter provided. The holders of not less than a majority in principal
amount of the Bonds Outstanding may remove the Trustee by notifying the removed
Trustee, the Issuer, the Bank and the Company; provided, however, that no such
removal shall become effective until the appointment of a successor Trustee, as
hereinafter provided. The Issuer shall remove the Trustee if the Trustee is
prohibited from acting by law or by regulation, rule or order of any court or
administrative body having jurisdiction over the Trustee; provided, however,
that no such removal shall become effective until the appointment of a successor
Trustee, as hereinafter provided. The Issuer may remove the Trustee at its
discretion with the prior written consent of the Company and the Bank and the
Issuer shall remove the Trustee upon the written direction of the Company, if
the Company is not in default hereunder, and with the written consent of the
Bank; provided, however, that no such removal shall become effective until the
appointment of a successor Trustee, as hereinafter provided. Upon the removal or
replacement of the Trustee for any reason, the Company shall give written notice
thereof to the Remarketing Agent and the Bank by first-class mail, postage
prepaid.
If the Trustee resigns or is removed or if a vacancy exists in the office
of Trustee for any reason, the Issuer, upon the written direction of the Bank,
if a Letter of Credit is in effect, and, so long as no Event of Default shall
have occurred and be continuing, the Company, shall promptly appoint a successor
Trustee. Notice of such appointment shall be given by the Issuer to the
Remarketing Agent in writing by first-class mail.
A successor Trustee shall deliver a written acceptance of its appointment
to the retiring Trustee and to the Issuer, the Bank, the Company and the
Remarketing Agent. Immediately thereafter, the retiring Trustee shall transfer
all property held by it as Trustee hereunder to the successor Trustee, the
resignation or removal of the retiring Trustee shall then (but only then) become
effective, and the successor Trustee shall have all the rights, powers and
duties of the Trustee under this Indenture. The successor Trustee shall notify
the holders of the Bonds of its acceptance of the trusts hereunder by
first-class mail promptly following such acceptance.
If a successor Trustee does not take office within 60 days after the
retiring Trustee resigns or is removed, the retiring Trustee, the Issuer, the
Bank, the Company or the holders of a majority in principal amount of the Bonds
Outstanding may petition any court of competent jurisdiction for the appointment
of a successor Trustee.
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If the Trustee fails to comply with Section 9.07, any Bondholder may
petition any court of competent jurisdiction for the removal of the Trustee and
the appointment of a successor Trustee.
Section 9.09. CONCERNING THE REMARKETING AGENT. βββββ Fargo Brokerage
Services, LLC has been appointed the Remarketing Agent. Any subsequent
Remarketing Agent shall be appointed by the Company, with the consent of the
Bank (which consent shall not be unreasonably withheld or delayed), and shall
meet the qualifications set forth in this Section and Section 9.10 hereof. The
Company shall notify the Issuer and the Trustee of the appointment of any
subsequent Remarketing Agent. The Remarketing Agent shall designate to the
Trustee its Operations Office and signify its acceptance of the duties and
obligations imposed upon it hereunder by a written instrument of acceptance
delivered to the Issuer, the Bank, the Company and the Trustee. In addition, the
Remarketing Agent will agree particularly to:
(a) compute the Daily Interest Rate, the Weekly Interest Rate, the
Monthly Interest Rate, the Quarterly Interest Rate, the Semiannual
Interest Rate, the Annual Interest Rate, the Five-Year Interest Rate and
the Fixed Interest Rate, as applicable, and give notices of such
computations to the Trustee on each applicable Interest Rate
Determination Date, all in accordance with this Indenture; and
(b) keep such records relating to its computations of interest
rates for the Bonds as shall be consistent with prudent industry practice
and to make such records available for inspection by the Issuer, the
Trustee, the Bank and the Company at all reasonable times.
The Remarketing Agent shall be entitled to advice of legal counsel on any
matter relating to the Remarketing Agent's obligations hereunder and shall be
entitled to act upon the opinion of such counsel in the exercise of reasonable
care in fulfilling such obligations.
Section 9.10. QUALIFICATIONS OF REMARKETING AGENT. The Remarketing Agent
shall have a capitalization of at least $25,000,000, or have a line of credit
with a commercial bank in the amount of at least $25,000,000 and shall be
authorized by law to perform all the duties imposed upon it by this Indenture.
The Remarketing Agent may at any time resign and be discharged of the duties and
obligations created by this Indenture by giving at least thirty (30) days'
notice of such resignation to the Issuer, the Company, the Bank and the Trustee.
Notwithstanding the foregoing, the Remarketing Agent shall remain the
Remarketing Agent hereunder until a successor is named, so long as the Company
is not in default in the payment of any fees or expenses of the Remarketing
Agent under the Remarketing Agreement, or the Remarketing Agent is not
prohibited by law or regulation from performing the duties of Remarketing Agent
hereunder. The Remarketing Agent may be removed at any time by the Company, with
the written consent of the Bank which consent shall not be unreasonably
withheld. To effect such removal, the Authorized Company Representative shall
give at least thirty (30) days' notice of such removal to the Remarketing Agent,
the Issuer, the Bank and the Trustee.
Upon any resignation of the Remarketing Agent, the departing Remarketing
Agent shall pay over, assign and deliver any moneys and Bonds held by it in such
capacity to its successor or, if there be no successor, to the Trustee.
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In the event that the Remarketing Agent shall resign, or be removed or
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 bankruptcy or insolvency, or for any other reason, and the Company shall not
have appointed a successor Remarketing Agent, the Trustee, notwithstanding the
provisions of the first paragraph of this Section, shall ipso facto be deemed to
be the Remarketing Agent until the appointment by the Company of a successor
Remarketing Agent; provided, however, that the Trustee shall not remarket Bonds
or fix the interest rate for the Bonds, but shall be required only to implement
the purchase of Bonds pursuant to a draw on the Letter of Credit as provided for
in Section 5.02 hereof.
The Trustee, within thirty (30) days of the resignation or removal of the
Remarketing Agent or the appointment of a successor Remarketing Agent, shall
give notice thereof by registered or certified mail to the applicable Rating
Service (if the Bonds have been rated), to the Issuer and to the registered
Holders of the Bonds.
Section 9.11. SUCCESSOR TRUSTEE OR AGENT BY MERGER. If the Trustee or the
Remarketing Agent consolidates with, merges or converts into, or transfers all
or substantially all its assets (or, in the case of a bank or trust company, its
corporate trust assets) to, another corporation or national banking association,
the resulting, surviving or transferee corporation or national banking
association without any further act shall be the successor Trustee or
Remarketing Agent, provided that such corporation or national banking
association shall otherwise be eligible to serve in such capacity under this
Indenture.
Section 9.12. APPOINTMENT OF CO-TRUSTEE. It is the purpose of this
Indenture that there shall be no violation of any law of any jurisdiction
(including particularly the law of the State) denying or restricting the right
of banking corporations or associations to transact business as trustee in such
jurisdiction. It is recognized that in case of litigation under this Indenture
or the Agreement, and in particular in case of the enforcement thereof upon a
default or an Event of Default, or in case the Trustee deems that by reason of
any present or future law of any jurisdiction it may not exercise any of the
powers, rights or remedies herein granted to the Trustee or hold title to the
properties, in trust, as herein granted, or take any action that may be
desirable or necessary in connection therewith, it may be necessary that the
Trustee appoint an additional individual or institution as a separate or
co-trustee. The following provisions of this Section are adapted to these ends.
Each separate or co-trustee shall: (i) be a corporation or banking
association duly organized under the laws of the United States of America or any
state or territory thereof, doing business and having an office in such location
as shall be approved by the Trustee, (ii) have together with its affiliates
(herein defined) a combined capital and surplus of at least $100,000,000 as set
forth in its most recent published annual report of condition, and (iii) be
authorized by law to perform all the duties imposed upon it by this Indenture.
For purposes of this Section, the term "affiliate" of the separate or co-trustee
shall mean any corporation or other person that, directly or indirectly,
controls or is controlled by or is under common control with the separate or
co-trustee.
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In the event that the Trustee appoints an additional individual or
institution as a separate or co-trustee, each and every remedy, power, right,
claim, demand, cause of action, immunity, estate, title, interest and lien
expressed or intended by this Indenture to be exercised by or vested in or
conveyed to the Trustee with respect thereto shall be exercisable by and vest in
such separate or co-trustee but only to the extent necessary to enable such
separate or co-trustee to exercise such powers, rights and remedies, and every
covenant and obligation necessary to the exercise thereof by such separate or
co-trustee shall run to and be enforceable by either of them; provided, however,
that no co-trustee shall be liable by reason of any act or omission of any other
such co-trustee.
Should any instrument in writing from the Issuer be required by the
separate or co-trustee so appointed by the Trustee for more fully and certainly
vesting in and confirming to him or it such properties, rights, powers, trusts,
duties and obligations, any and all such instruments in writing shall, on
request, be executed, acknowledged and delivered by the Issuer. In case any
separate or co-trustee or a successor to either shall die, become incapable of
acting, resign or be removed, all the estates, properties, rights, powers,
trusts, duties and obligations of such separate or co-trustee, so far as
permitted by law, shall vest in and be exercised by the Trustee until the
appointment of a new co-trustee or successor to such separate or co-trustee.
Section 9.13. SEVERAL CAPACITIES. Anything in this Indenture to the
contrary notwithstanding, but subject to the provisions of Section 9.14 hereof,
the same entity may serve hereunder as the Trustee, the Bank, and the
Remarketing Agent and in any other combination of such capacities, to the extent
permitted by law.
Section 9.14. NO CONFLICT. It is the purpose of this provision to provide
for the resolution of any potential conflict of interest when the same banking
association is acting as the Trustee and the Bank. Accordingly, notwithstanding
anything to the contrary in this Indenture, in the event (i) the Trustee (or any
affiliate thereof) refuses or willfully fails to draw on the Letter of Credit at
the times and in the amounts required under the terms of this Indenture, or (ii)
that the Bank refuses or willfully fails to honor its payment obligations
thereunder, the Trustee, but only if the Trustee is an affiliate of the Bank,
shall resign, such resignation to be effective automatically upon the date of
receipt by the Trustee of notice from the successor Trustee evidencing its
assumption of the duties of the Trustee hereunder because of such failure or
refusal, without notice and without prior approval of any party. Any successor
appointed pursuant to the provisions of Section 9.08 hereof shall automatically
become the successor Trustee hereunder for all purposes on such effective date
if at the time of such succession the successor Trustee is not the Bank or a
subsidiary or an affiliate of the Bank or the resigning Trustee. The resigning
Trustee will give notice in writing to the Issuer, the Company, the successor
Trustee and the Owners of the Bonds of its resignation as soon as possible but
in any event not less than ten (10) calendar days after such resignation;
provided that, failure to give such notice shall not affect the effectiveness of
such resignation.
Section 9.15. NOTICE TO SUCCESSOR TRUSTEE. In order to induce the
successor Trustee to accept its appointment hereunder, the Trustee agrees that
it will promptly provide the successor Trustee any notice received by it or
given by it pursuant to Article VIII hereof.
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ARTICLE X: AMENDMENTS OF AND SUPPLEMENTS TO INDENTURE
Section 10.01. WITHOUT CONSENT OF BONDHOLDERS. The Issuer and the Trustee
may amend or supplement this Indenture or the Bonds without prior notice to or
consent of any Bondholder:
(a) to cure any ambiguity, inconsistency or formal defect or omission;
(b) to grant to the Trustee for the benefit of the Bondholders additional
rights, remedies, powers or authority;
(c) to subject to this Indenture additional collateral or to add other
agreements of the Issuer;
(d) to modify this Indenture or the Bonds to permit qualification under
the Trust Indenture Act of 1939, as amended, or any similar federal statute at
the time in effect; to permit the qualification of the Bonds for sale under the
securities laws of any state of the United States; or to prevent the application
of the Investment Company Act of 1940, as amended, to any of the transactions
contemplated by, or any of the parties to this Indenture, the Agreement or the
Bonds;
(e) to provide for uncertificated Bonds or to make any change necessary
to give effect to a custody agreement pursuant to Section 2.05(d);
(f) to evidence the succession of a new Trustee or the appointment by the
Trustee of a co-trustee;
(g) to make any change to reflect any provision in the Code or the
interpretations thereof by the Internal Revenue Service provided that the
Trustee first receives an Opinion of Bond Counsel to the effect that such change
will not have an adverse impact on the exclusion of interest on the Bonds from
the gross income of the owners thereof for purposes of federal income taxation;
(h) to make any change not materially adversely affecting any
Bondholder's rights requested by the Rating Agency in order to maintain any
rating on the Bonds;
(i) to make any change not materially adversely affecting any
Bondholder's rights to provide for or to implement the provisions of a Letter of
Credit;
(j) to make any other change to provide for or to implement the
provisions of a Letter of Credit only if such Letter of Credit and the changes
to this Indenture become effective on a Bond Purchase Date in connection with
the mandatory tender of the Bonds pursuant to Section 3.08;
(k) to make any change to be effective on any Bond Purchase Date in
connection with the mandatory tender of Bonds pursuant to Sections 3.07 and
3.08, provided that such change has been disclosed to all owners of Bonds who
purchase on such date;
(l) to make any change that does not materially adversely affect the
rights of any Bondholder; or
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(m) to add to this Indenture the obligation of the Trustee, the Issuer or
the Company to disclose such information regarding the Bonds, the Facilities,
the Issuer, the Trustee, the Company, or the Bank as shall be required or
recommended to be disclosed in accordance with applicable regulations or
guidelines established by, among others, the American Bankers Association
Corporate Trust Committee or the Securities and Exchange Commission.
Section 10.02. WITH CONSENT OF BONDHOLDERS. If an amendment of or
supplement to this Indenture or the Bonds without any consent of Bondholders is
not permitted by the preceding Section, the Issuer and the Trustee may enter
into such amendment or supplement without prior notice to any Bondholders but
with the consent of the holders of at least a majority in principal amount of
the Bonds Outstanding. However, without the consent of all Bondholders affected,
no amendment or supplement may (a) extend the maturity of the principal of, or
interest on, any Bond, (b) reduce the principal amount of, or rate of interest
on, any Bond or change the terms of any redemption (except as otherwise provided
in Section 3.01), (c) effect a privilege or priority of any Bond or Bonds over
any other Bond or Bonds (except as provided herein), (d) reduce the percentage
of the principal amount of the Bonds required for consent to such amendment or
supplement, (e) impair the exclusion of interest on any Bond from gross income
of the owner thereof for federal income tax purposes, (f) eliminate the holders'
rights to optionally tender the Bonds, (g) extend the due date for the purchase
of Bonds optionally tendered by the holders thereof or reduce the purchase price
of such Bonds, (h) create a lien ranking prior to or on a parity with the lien
of this Indenture on the property described in the Granting Clause of this
Indenture, or (i) deprive any Bondholder of the lien created by this Indenture
on such property. In addition, if moneys or U.S. Government Obligations have
been deposited or set aside with the Trustee for the payment of Bonds pursuant
to Article VII and those Bonds shall not have in fact been actually paid in
full, no amendment to the provisions of that Article shall be made without the
consent of the holder of each of those Bonds affected.
Section 10.03. EFFECT OF CONSENTS. After an amendment or supplement
becomes effective, it shall bind every Bondholder unless it makes a change
described in any of the lettered clauses of the preceding Section. In such case,
the amendment or supplement shall bind each Bondholder who consented to it and
each subsequent holder of a Bond or portion of a Bond evidencing the same debt
as the consenting holder's Bond.
Section 10.04. NOTATION ON OR EXCHANGE OF BONDS. If an amendment or
supplement changes the terms of a Bond, the Trustee may require the holder to
deliver it to the Trustee. The Trustee may place an appropriate notation on the
Bond regarding the changed terms and return it to the holder. Alternatively, if
the Trustee, the Issuer and the Company determine, the Issuer in exchange for
the Bond shall issue and the Trustee shall authenticate a new Bond that reflects
the changed terms. In either event, the cost of placing such notation on the
Bond(s) shall be borne by the Company.
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Section 10.05. SIGNING BY TRUSTEE OF AMENDMENTS AND SUPPLEMENTS. The
Trustee shall sign any amendment or supplement to this Indenture or the Bonds
authorized by this Article if the amendment or supplement, in the judgment of
the Trustee, does not adversely affect the rights, duties, liabilities or
immunities of the Trustee. If it does, the Trustee may, but need not, sign it.
In signing an amendment or supplement, the Trustee shall be entitled to receive
and (subject to Section 9.01) shall be fully protected in relying on an Opinion
of Counsel stating that such amendment or supplement is authorized by this
Indenture and is duly authorized, executed and delivered and enforceable in
accordance with its terms.
Section 10.06. COMPANY, BANK, AND REMARKETING AGENT CONSENTS REQUIRED. An
amendment or supplement to this Indenture or the Bonds shall not become
effective unless the Company, the Remarketing Agent (but only to the extent that
such amendment or supplement affects the rights, duties or obligations of the
Remarketing Agent hereunder), and the Bank deliver to the Trustee their written
consents to the amendment or supplement. In any event, no amendment or
supplement hereto shall become effective until the Remarketing Agent
acknowledges receipt of a copy of such supplement or amendment.
Section 10.07. NOTICE TO BONDHOLDERS. The Trustee shall cause notice of
the execution of a supplemental indenture to be mailed promptly by first-class
mail to each Bondholder at the holder's registered address. The notice shall
state briefly the nature of the supplemental indenture and that copies thereof
are on file with the Trustee for inspection by all Bondholders.
Section 10.08. OPINION OF BOND COUNSEL REQUIRED. An amendment or
supplement to this Indenture shall not become effective unless the Trustee has
received (i) an Opinion of Counsel addressed to the Trustee, the Bank, the
Company and the Remarketing Agent to the effect that such amendment or
supplement is authorized by this Indenture and does not violate the Act, and
(ii) an Opinion of Bond Counsel addressed to the Trustee, the Bank, the Company
and the Remarketing Agent to the effect that such amendment or supplement will
not impair the exclusion of interest on the Bonds from the gross income of the
owners thereof for purposes of federal income taxation.
ARTICLE XI: AMENDMENTS OF AND SUPPLEMENTS TO OTHER
DOCUMENTS
Section 11.01. WITHOUT CONSENT OF BONDHOLDERS. The Issuer, with the
consent of the Company, may enter into, and the Trustee may consent to, any
amendment of or supplement to the Agreement, without prior notice to or consent
of any Bondholder, if the amendment or supplement is required (a) by the
provisions of the Agreement or this Indenture, (b) to cure any ambiguity,
inconsistency or formal defect or omission, (c) to identify more precisely the
Facilities or, to the extent not in violation of the Act or the Code, to modify
the description of the Facilities, (d) in connection with any authorized
amendment of or supplement to this Indenture, or (e) to make any change
comparable to those described in Section 10.01.
Section 11.02. WITH CONSENT OF BONDHOLDERS. If an amendment of or
supplement to the Agreement without any consent of Bondholders is not permitted
by Section 11.01, the Issuer may enter into, and the Trustee may consent to,
such amendment or supplement without prior notice to any Bondholder but with the
consent of the holders of at least a majority in principal amount of the
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Bonds Outstanding. However, without the consent of each Bondholder affected, no
amendment or supplement may result in a change comparable to those described in
the lettered clauses of Section 10.02.
Section 11.03. CONSENTS BY TRUSTEE TO AMENDMENTS OR SUPPLEMENTS. The
Trustee shall consent to any amendment or supplement to the Agreement authorized
by this Article if the amendment or supplement does not adversely affect the
rights, duties, liabilities or immunities of the Trustee. If it does, the
Trustee may, but need not, consent to such an amendment or supplement. In
consenting to an amendment or supplement, the Trustee shall be entitled to
receive and (subject to Section 9.01) shall be fully protected in relying on an
Opinion of Counsel stating that such amendment or supplement is authorized by
this Indenture and has been duly authorized, executed and delivered and is
enforceable in accordance with its terms. An amendment or supplement to the
Agreement that affects the rights, duties or obligations of the Trustee shall
not become effective without the Trustee's consent, which consent shall not be
unreasonably withheld, and no amendment or supplement to the Agreement shall
become effective until the Trustee acknowledges receipt of a copy of such
supplement or amendment.
Section 11.04. NOTICE TO BONDHOLDERS. The Trustee shall cause notice of
the execution of an amendment or supplement to the Agreement to be mailed
promptly by first-class mail to each Bondholder at the holder's registered
address. The notice shall state briefly the nature of the amendment or
supplement and that copies thereof are on file with the Trustee for inspection
by all Bondholders.
Section 11.05. BANK AND REMARKETING AGENT CONSENT REQUIRED. An amendment
or supplement to the Agreement shall not become effective unless the Company,
the Remarketing Agent (but only to the extent that such amendment or supplement
affects the rights, duties or obligations of the Remarketing Agent hereunder or
thereunder) and, when a Letter of Credit is in effect, the Bank, deliver to the
Trustee their written consents to the amendment or supplement. In any event, no
such amendment or supplement shall become effective until the Remarketing Agent
acknowledges receipt of a copy of such amendment or supplement.
ARTICLE XII: MISCELLANEOUS
Section 12.01. NOTICES.
(a) Any notice, request, direction, designation, consent, acknowledgment,
certification, appointment, waiver or other communication required or permitted
by this Indenture or the Bonds must be in writing except as expressly provided
otherwise in this Indenture or the Bonds.
70
(b) Except as otherwise provided herein, any notice or other
communication shall be sufficiently given and deemed given when (i) delivered by
hand, (ii) sent by a nationally recognized overnight courier, (iii) mailed by
first-class mail, postage prepaid, or (iv) unless specifically prohibited under
the terms of the Indenture, by telecopy under the provisions of this Indenture,
addressed as follows:
(1) If to the Issuer:
Gulf Coast Waste Disposal Authority
βββ βββ ββββ βββββββββ
βββββββ, βββββ βββββ
Attention: General Manager
Telephone (βββ) βββ-ββββ
Facsimile (βββ) βββ-ββββ;
(2) If to the Company:
Waste Corporation of Texas, L.P.
βββ ββββββββ, βββββ ββββ
βββββββ, βββββ βββββ
Attention: General Counsel
Telephone (βββ) βββ-ββββ
Facsimile (βββ) βββ-ββββ;
(3) If to the Trustee:
U.S Bank National Association
βββ β.β. ββββ βββββ, ββ-ββ-ββββ
ββ. βββββ, ββββββββ βββββ
Attention: Corporate Trust Department
Telecopy: (βββ) βββ-ββββ
(4) If to the Remarketing Agent:
βββββ Fargo Public Finance
βββ ββββββ ββββββ, βββ βββββ
βββββ-βββ
βββββββββββ, βββββββββ βββββ
Attention: ββββββ Mount
Telecopy: (βββ) βββ-ββββ
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(5) If to the Bank:
βββββ Fargo Bank Texas, National Association
ββββ ββββ ββββββ, βββ βββββ
ββββββ, βββββ βββββ
Attention: ββββββ β. βββββ, Vice President
Telecopy: (βββ) βββ-ββββ
(6) If to the Rating Agency:
Standard & Poor's Credit Market Services,
a division of McGraw Hill Companies, Inc.
ββ βββββ ββββββ, ββββ βββββ
βββ ββββ, βββ ββββ βββββ
Attention: Structured Municipal Surveillance
Telecopy: (βββ) βββ-ββββ
Notice to the Trustee and other information necessary to draw on the
Letter of Credit shall be sent by telephone (promptly confirmed by telecopy),
telecopy or as may be otherwise designated in writing by the Trustee. Any
addressee may designate additional or different addresses or telecopy numbers
for purposes of this Section.
A copy of any notice to any party given hereunder (with the exception of
notices required for drawings under any Letter of Credit) shall be provided to
the Remarketing Agent and the Trustee in the manner such notice is otherwise
given.
The Beneficial Owner of $1,000,000 or more of Bonds may, by written
notice to the Trustee, request that all notices given with respect to such Bonds
be given to the registered owner thereof and to a second address provided in
such written notice to the Trustee. Upon receipt of such notice described in the
preceding sentence, the Trustee shall send all notices relating to the relevant
Bonds to the registered owner and the second address so designated.
Section 12.02. BONDHOLDERS' CONSENTS. Any consent or other instrument
required by this Indenture to be signed by Bondholders may be in any number of
concurrent documents and may be signed by a Bondholder or by the holder's agent
appointed in writing. Proof of the execution of such instrument or of the
instrument appointing an agent and of the ownership of Bonds, if made in the
following manner, shall be conclusive for any purposes of this Indenture with
regard to any action taken by the Trustee under the instrument:
(a) The fact and date of a person's signing an instrument may be proved
by the certificate of any officer in any jurisdiction who by law has power to
take acknowledgments within that jurisdiction that the person signing the
writing acknowledged before the officer the execution of the writing, or by an
affidavit of any witness to the signing.
72
(b) The fact of ownership of Bonds, the amount or amounts, numbers and
other identification of such Bonds and the date of holding shall be proved by
the registration books kept pursuant to this Indenture.
In determining whether the holders of the required principal amount of
Bonds Outstanding have taken any action under this Indenture, Bonds owned by the
Issuer, the Company or any subsidiary or affiliate of either thereof shall be
disregarded and deemed not to be Outstanding; provided, however, that Pledged
Bonds will not be disregarded and shall be deemed to be Outstanding for such
purpose. In determining whether the Trustee shall be protected in relying on any
such action, only Bonds that the Trustee knows to be so owned shall be
disregarded.
Section 12.03. NOTICES TO RATING AGENCY. In the event the Bonds are rated
by a Rating Agency, the Trustee shall notify each Rating Agency then rating the
Bonds in writing of the occurrence of any of the following events prior to the
occurrence thereof: (a) any change in the identity of the Trustee or the
Remarketing Agent, (b) any amendment or modification of or change to this
Indenture, the Agreement, the Reimbursement Agreement (to the extent the Trustee
has notice thereof) or the Letter of Credit, (c) any change in the Interest Rate
determination method, (d) the expiration, substitution or termination of the
Letter of Credit, or any extension thereof, (e) the payment in full of the
principal of and interest on the Bonds, and (f) the delivery of any written
opinion of Bankruptcy Counsel required to be delivered under the terms of this
Indenture.
Section 12.04. LIMITATION OF RIGHTS. Nothing expressed or implied in this
Indenture or the Bonds shall give any person other than the Trustee, the Issuer,
the Bank, the Company, the Remarketing Agent and the Bondholders any right,
remedy or claim under or with respect to this Indenture.
Section 12.05. SEVERABILITY. If any provision of this Indenture shall be
determined to be unenforceable by a court of law, such holding shall not affect
any other provision of this Indenture; provided, no holding or invalidity shall
require the Trustee to make any payment from any source except those pledged
hereunder.
Section 12.06. PAYMENTS DUE ON NON-BUSINESS DAYS. If a payment date is
not a Business Day at the place of payment, then payment shall be made at that
place on the next succeeding Business Day, with the same force and effect as if
made on the payment date, and, in the case of any such payment, no interest
shall accrue for the intervening period.
Section 12.07. GOVERNING LAW. THIS INDENTURE AND THE AUTHORITY OF THE
ISSUER TO ISSUE THE BONDS SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH
THE LAWS OF THE STATE OF TEXAS; PROVIDED, HOWEVER, THAT THE RIGHTS, DUTIES,
IMMUNITIES AND STANDARDS OF CARE RELATING TO THE TRUSTEE SHALL BE GOVERNED BY
THE LAW OF JURISDICTION IN WHICH THE OPERATIONS OFFICE OF THE TRUSTEE IS
LOCATED.
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Section 12.08. NO PERSONAL LIABILITY OF ISSUER OFFICIALS. No provision,
covenant or agreement contained in this Indenture or the Bonds shall be deemed
to be the covenant or agreement of any member, or any breach thereof, shall
constitute or give rise to or impose upon the Issuer or the State of Texas a
pecuniary liability or charge upon its general credit or taxing power. No
current or former director, officer, agent, employee or member of the Issuer or
the State of Texas shall be personally liable on the Indenture or the Bonds, in
his individual capacity, nor shall such persons executing this Indenture or the
Bonds be liable personally on the Indenture or the Bonds or be subject to any
personal liability or accountability by reason of the issuance of the Bonds.
Section 12.09. COUNTERPARTS. This Indenture may be signed in several
counterparts, each of which shall be an original and all of which together shall
constitute the same instrument.
Section 12.10. REFERENCES TO THE BANK. The Bank shall have no rights to
enforce any provision of this Indenture during any period in which the Bank has
dishonored a draw under any Letter of Credit presented in strict compliance with
the terms thereof.
[Remainder of page intentionally left blank.]
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IN WITNESS WHEREOF, the Issuer and the Trustee have caused this Indenture
to be executed in their respective names and the Issuer has caused its official
seal to be hereunto affixed and attested by their respective duly authorized
officers, all as of the date first above written.
GULF COAST WASTE DISPOSAL AUTHORITY
By: /s/ β.β. βββββββ
-------------------------------
Title: Chairman
ATTEST:
By: /s/ βββ Dell Olio
--------------------------
Title: Secretary
U.S. BANK, NATIONAL ASSOCIATION,
as Trustee
By: /s/ βββββ ββββ
-------------------------------
Title: Vice President
EXHIBIT A: FORM OF BOND
THE FOLLOWING TWO PARAGRAPHS ARE TO BE DELETED IF BOND IS NOT BOOK-ENTRY
ONLY.
[UNLESS THIS BOND IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE ISSUER OR ITS
AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY BOND ISSUED IS
REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO
SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY
TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON
IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST
HEREIN.
AS PROVIDED IN THE INDENTURE REFERRED TO HEREIN, UNTIL THE TERMINATION OF
THE SYSTEM OF BOOK-ENTRY-ONLY TRANSFERS THROUGH DTC, AND NOTWITHSTANDING ANY
OTHER PROVISION OF THE INDENTURE TO THE CONTRARY, THIS BOND MAY BE TRANSFERRED,
IN WHOLE BUT NOT IN PART, ONLY TO A NOMINEE OF DTC, OR BY A NOMINEE OF DTC TO
DTC OR A NOMINEE OF DTC, OR BY DTC OR A NOMINEE OF DTC TO ANY SUCCESSOR
SECURITIES DEPOSITORY OR ANY NOMINEE THEREOF.]
THIS BOND IS SUBJECT TO MANDATORY TENDER FOR PURCHASE AT THE TIME AND IN
THE MANNER HEREINAFTER DESCRIBED AND MUST BE SO TENDERED OR WILL BE DEEMED TO
HAVE BEEN SO TENDERED UNDER CERTAIN CIRCUMSTANCES AS DESCRIBED HEREIN.
GULF COAST WASTE DISPOSAL AUTHORITY
ENVIRONMENTAL FACILITIES REVENUE BOND
(WASTE CORPORATION OF TEXAS, L.P. PROJECT)
SERIES 2002
No. R- $
MATURITY DATE DATE OF INITIAL DELIVERY CUSIP
------------- ------------------------ -----
______, 2002 _______, 2002
REGISTERED OWNER: CEDE & CO.
PRINCIPAL AMOUNT:
The Gulf Coast Waste Disposal Authority (the "Issuer"), a governmental
agency and body politic and corporate created and operating as a conservation
and reclamation district and political
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subdivision of the State of Texas pursuant to Article XVI, Section 59 of the
Texas Constitution and the laws of the State of Texas, particularly Chapter 409,
Acts of the 61st Legislature of the State of Texas, Regular Session, 1969, as
amended (originally codified as Article 7621d-2 Vernon's Texas Civil Statutes)
(the "Issuer Act"), for value received, promises to pay to the registered owner
specified above or registered assigns, but solely from the sources and in the
manner referred to herein, the principal amount specified above on the aforesaid
Maturity Date, unless this Bond is called for earlier redemption, and to pay
from those sources interest thereon at the rate per annum determined as
described herein. This Bond may be redeemed prior to the Maturity Date on the
dates and at the prices herein set forth. Initial interest on this Bond shall
accrue from the Date of Initial Delivery as shown above. Interest on this Bond
is payable on the first Business Day, as hereinafter defined, of each month, as
long as the interest rate hereon is calculated pursuant to the Daily Interest
Rate, the Weekly Interest Rate, the Monthly Interest Rate or the Quarterly
Interest Rate (as such terms are hereinafter defined), commencing the first
Business Day of October, 2002, until the principal amount is paid or duly
provided for. For any period of time during which this Bond bears interest at
the Semiannual Interest Rate, the Annual Interest Rate, the Five-Year Interest
Rate or the Fixed Interest Rate (as such terms are hereinafter defined) interest
hereon shall be payable on the first day of each May and November. Any date
established for the payment of interest as described above is hereinafter
referred to as an "Interest Payment Date." The interest payable hereon on each
Interest Payment Date shall be for the period commencing on the next preceding
Interest Payment Date to and including the day immediately preceding the
Interest Payment Date on which payment is made. Interest shall be calculated on
the basis of a year of 365 days or 366 days, as applicable, for the number of
days actually elapsed, while the interest hereon is payable at the Daily
Interest Rate, the Weekly Interest Rate, the Monthly Interest Rate or the
Quarterly Interest Rate. Otherwise, interest shall be calculated on the basis of
a 360-day year consisting of twelve 30-day months. The term "Business Day," as
used herein, means any day of the year, other than a Saturday or Sunday, a day
on which commercial banks located in the city or cities in which the Operations
Office of the Trustee or the principal office of the Remarketing Agent or the
principal office of the Bank, as hereinafter defined, are located are required
or authorized to remain closed or a day on which The New York Stock Exchange is
closed. This Bond will bear interest from the most recent date to which interest
has been paid or duly provided for or, if no interest has been paid or duly
provided for, from its date of initial delivery.
If any Interest Payment Date, date of maturity of this Bond, Bond Purchase
Date (as hereinafter defined) or date fixed for redemption of this Bond, is not
a Business Day, then payment of the applicable interest, principal, redemption
price or Purchase Price may be made on the next succeeding Business Day with the
same force and effect as if such payment were made on such Interest Payment
Date, date of maturity, Bond Purchase Date or date fixed for redemption and no
interest shall accrue for the period after such date; provided, however, if this
Bond bears interest at any of the Daily Interest Rate, the Weekly Interest Rate,
the Monthly Interest Rate or the Quarterly Interest Rate, interest shall accrue
from the scheduled date of any maturity or redemption due date of this Bond
until the Business Day on which such payment is made.
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U.S Bank National Association has been appointed as trustee (together with
any successors, the "Trustee") under the hereinafter defined Indenture. The
principal of and premium, if any, on this Bond is payable upon presentation and
surrender hereof at the Operations Office of the Trustee (which is currently
located in St. ββββ, Minnesota). Interest is payable on each Interest Payment
Date by check or draft mailed to the person in whose name this Bond (or one or
more predecessor bonds) is registered (the "Holder") at the close of business on
the fifth Business Day preceding such Interest Payment Date while Bonds bear
interest at the Variable Rate or on the April 15 or October 15 preceding such
Interest Payment Date if Bonds bear interest at a Fixed Interest Rate (the
"Record Date") on the registration books for this issue maintained by the
Trustee at the address appearing therein. Notwithstanding the foregoing,
interest on any Bond, at the request of a Depository (as defined in the
Indenture) or its nominee, shall be paid by wire transfer in immediately
available funds to the bank account number and address filed with the Trustee by
the Depository. Any interest that is not timely paid or duly provided for shall
cease to be payable to the Holder hereof (or of one or more predecessor bonds)
as of the Record Date, and shall be payable to the Holder hereof (or of one or
more predecessor bonds) at the close of business on a Special Record Date to be
fixed by the Trustee for the payment of that overdue interest. Notice of the
Special Record Date shall be mailed to Holders not less than ten (10) days prior
thereto. The principal and redemption price of and interest on this Bond are
payable in lawful money of the United States of America, without deduction for
the services of the Trustee. Notwithstanding anything herein to the contrary,
when this Bond is registered in the name of a Depository or its nominee, the
principal and redemption price of and interest on this Bond shall be payable in
next day or federal funds delivered or transmitted to the Depository or its
nominee.
NEITHER THE STATE OF TEXAS, NOR ANY OTHER POLITICAL CORPORATION,
SUBDIVISION, OR AGENCY OF THE STATE OF TEXAS, NOR THE BOARD OF DIRECTORS OF THE
ISSUER, EITHER INDIVIDUALLY OR COLLECTIVELY, SHALL BE OBLIGATED TO PAY THE
PRINCIPAL OF THIS BOND, ANY PREMIUM OR PAYMENT WITH RESPECT TO THIS BOND, OR THE
INTEREST HEREON; AND NEITHER THE FAITH AND CREDIT, NOR THE TAXING POWER, OF THE
STATE OF TEXAS, OR ANY OTHER POLITICAL CORPORATION, SUBDIVISION, OR AGENCY OF
THE STATE OF TEXAS, IS PLEDGED TO THE PAYMENT OF THE PRINCIPAL OF THIS BOND, ANY
PREMIUM OR PAYMENT WITH RESPECT TO THIS BOND, OR THE INTEREST HEREON.
This Bond shall not constitute the personal obligation, either jointly or
severally, of the Issuer or of any director, officer, employee or official of
the Issuer.
This Bond shall not be entitled to any security or benefit under the
Indenture or be valid or become obligatory for any purpose until the Certificate
of Authentication hereon shall have been signed by the Trustee or the
Comptroller's Registration Certificate (in the form provided in the Indenture)
shall have been executed by the Comptroller of Public Accounts of the State of
Texas.
GENERAL PROVISIONS
This Bond is one of a duly authorized issue of Gulf Coast Waste Disposal
Authority Environmental Facilities Revenue Bonds (Waste Corporation of Texas,
L.P. Facilities) Series 2002 (the "Bonds"), dated as of August 1, 2002,
aggregating in the principal amount of $25,000,000. The
A-3
Bonds are being issued for the purpose of paying the cost of the acquisition,
construction and improvement of certain solid waste collection and disposal
facilities (the "Facilities") to be sold by the Issuer to Waste Corporation of
Texas, L.P. (the "Company"),which are located in ββββββ County, Texas and ββββββ
County, Texas. The Bonds are issued pursuant to an Installment Sale Agreement,
dated as August 1, 2002 (the "Agreement"), between the Issuer and the Company
and a Trust Indenture, dated as of August 1, 2002 (the "Indenture"), between the
Issuer and the Trustee. The Bonds are special obligations of the Issuer, issued
or to be issued under and are to be secured and entitled equally and ratably to
the protection given by the Indenture. The Bonds are issued pursuant to Chapter
1371, Texas Government Code, as amended, and Chapter 30, Texas Water Code, as
amended (collectively, the "Act") and pursuant to a resolution duly adopted by
the Issuer.
Reference is made to the Indenture and the Agreement for a more complete
description of the Facilities, the provisions, among others, with respect to the
nature and extent of the security for the Bonds, the rights, duties and
obligations of the Issuer, the Trustee and the Holders of the Bonds and the
terms and conditions upon which the Bonds are issued and secure. Terms used
herein with initial capitalization where the rules of grammar or context do not
otherwise require shall have the meanings as set forth in the Indenture. Each
Holder assents, by its acceptance hereof, to all of the provisions of the
Indenture.
Pursuant to the Agreement, the Company is required to make payments to the
Trustee in amounts and at times necessary to pay the principal of and premium
(if any) and interest on the Bonds. In the Indenture, the Issuer has assigned to
the Trustee, to provide for the payment of the Bonds, the Issuer's right, title
and interest in and to the Agreement, except for certain reserved rights.
Pursuant to the Agreement, the Company has caused to be issued and
delivered to the Trustee by βββββ Fargo Bank Texas, National Association (the
"Bank"), an irrevocable letter of credit (the "Letter of Credit"), pursuant to
which the Trustee is entitled to draw up to (a) the principal amount of the
Bonds outstanding to enable the Trustee to pay (i) the principal amount of the
Bonds when due at maturity or upon redemption or acceleration on the occurrence
of an event of default, and (ii) an amount equal to the principal portion of the
Purchase Price of any Bonds duly tendered by the Holders thereof for purchase
pursuant to the Indenture, plus (b) the amount of interest accruing on the
Bonds, but not to exceed 45 days' accrued interest at the maximum rate of 10%
per annum, or such higher rate covered by a Letter of Credit or Substitute
Letter of Credit (the "Maximum Rate"), provided that the Maximum Rate shall be
limited to an amount that shall not exceed the maximum nonusurious rate of
interest allowed by the applicable laws of the State of Texas, or any applicable
law of the United States permitting a higher maximum nonusurious rate that
preempts such applicable Texas laws, that could lawfully be contracted for,
charged or received, to enable the Trustee to pay interest when due on the Bonds
and the interest portion (if any) of the Purchase Price of any Bonds duly
tendered by the Holders thereof for purchase pursuant to the Indenture. To
provide for the issuance of the Letter of Credit, the Company and WCA Waste
Systems, Inc. has entered into a Reimbursement Agreement dated of even date with
the Indenture (the "Reimbursement Agreement"), with the Bank. The Letter of
Credit shall expire, subject to provisions for earlier termination or extension,
on September 30, 2005.
Copies of the Indenture, the Agreement, the Letter of Credit and the
Reimbursement Agreement are on file in the Operations Office of the Trustee.
A-4
The Bonds are payable solely from the Trust Estate, as defined and as
provided for in the Indenture (being, generally, the Installment Sale Payments
payable under the Agreement, any unexpended proceeds of the Bonds and amounts
deposited in the Bond Fund as defined and provided for in the Indenture,
including amounts drawn pursuant to the Letter of Credit), and are an obligation
of the Issuer only to the extent of the Trust Estate. The Bonds are not secured
by a pledge of the faith and credit or the taxing power of the Issuer, the State
of Texas or any political subdivision thereof.
The Bonds are special, limited obligations of the Issuer and shall be
payable solely from and secured by a pledge of certain of the rights of the
Issuer under the Agreement, including Installment Sale Payments required to be
made by the Company in amounts and at times intended to be sufficient to pay the
principal of and interest on the Bonds when due.
No recourse under or upon any obligation, covenant, acceptance or
agreement contained in the Indenture, or in any of the Bonds, or under any
judgment obtained against the Issuer or by the enforcement of any assessment or
by any legal or equitable proceeding by virtue of any constitution or statute or
otherwise, or under any circumstances, shall be had against any member or
officer, as such, past, present, or future, of the Issuer, for the payment for
or to the Issuer or any receiver thereof, or for or to any Holder of any Bond,
or otherwise, of any sum that may be due and unpaid by the Issuer upon any of
the Bonds. Any and all personal liability of every nature, whether at common law
or in equity, or by statute or by constitution or otherwise, of any such member
or officer, as such, to respond by reason of any act or omission on his or her
part, or otherwise, for, directly or indirectly, the payment for or to the
Issuer or any receiver thereof, or for or to the owner or any Holder of any
Bond, or otherwise, of any sum that may remain due and unpaid upon any Bond,
shall be deemed to be and is hereby expressly waived and released as a condition
of and consideration for the execution and delivery of the Indenture and the
issuance of the Bonds.
The Bonds are issuable only as fully registered bonds in the denominations
of $100,000 or any integral multiple of $5,000 in excess thereof while Bonds
bear interest at a Variable Rate or a Fixed Rate, provided that while bonds bear
interest at a Fixed Rate they may be issued in denominations of any integral
multiple of $5,000 if, immediately following the conversion, the Bonds will have
an Investment Grade Rating. The Bonds shall be originally issued only to a
Depository to be held in a book-entry system and: (a) the Bonds shall be
registered in the name of the Depository or its nominee, as Bondholder, and
immobilized in the custody of the Depository; (b) unless otherwise requested by
the Depository, there shall be a single Bond certificate; and (c) the Bonds
shall not be transferable or exchangeable, except for transfer to another
Depository or another nominee of a Depository, without further action by the
Issuer. The Beneficial Owners of Beneficial Ownership Interests in the Bonds
shall not have any right to receive Bonds in the form of physical certificates.
If any Depository determines not to continue to act as a Depository for the
Bonds for use in a book-entry system, the Issuer may attempt to have established
a securities depository/book-entry system relationship with another qualified
Depository under the Indenture. If the Issuer does not or is unable to do so,
the Issuer and the Trustee, after the Trustee has made provision for
notification to the owners of book entry interests by the then Depository, shall
permit withdrawal of the Bonds from the Depository, and authenticate and deliver
Bond certificates in fully registered form (in authorized denominations) to the
assignees of the Depository or its nominee.
A-5
While a Depository is the sole holder of the Bonds, delivery or notation
of partial redemption or tender for purchase of Bonds shall be effected in
accordance with the provisions of the Letter of Representations, as defined in
the Indenture.
In addition to the words and terms defined elsewhere in this Bond, the
following terms shall have the following meanings:
"Beneficial Owner" means, with respect to the Bonds, a Person owning a
Beneficial Ownership Interest therein, as evidenced to the satisfaction of the
Trustee.
"Beneficial Ownership Interest" means the beneficial right to receive
payments and notices with respect to the Bonds that are held by the Depository
under a book-entry system.
"Book-entry form" or "book-entry system" means, with respect to the Bonds,
a form or system, as applicable, under which (a) the Beneficial Ownership
Interests may be transferred only through a book entry and (b) physical Bond
certificates in fully registered form are registered only in the name of a
Depository or its nominee as Holder, with the physical Bond certificates
"immobilized" in the custody of the Depository. The book-entry system maintained
by and the responsibility of the Depository and not maintained by or the
responsibility of the Issuer or the Trustee is the record that identifies, and
records the transfer of the interests of, the owners of beneficial (book entry)
interests in the Bonds.
"Depository" means any securities depository that is a clearing agency
under federal law operating and maintaining, with its participants or otherwise,
a book-entry system to record ownership of book entry interests in Bonds, and to
effect transfers of book entry interests in Bonds, and includes and means
initially The Depository Trust Company (a limited purpose trust company), New
York, New York.
"Direct Participant" means a Participant as defined in the Letter of
Representations.
The Indenture permits certain amendments or supplements to the Agreement
and the Indenture not prejudicial to the Holders to be made without the consent
of or notice to the Holders, and other amendments or supplements thereto to be
made with the consent of the Bank and the Holders of at least a majority in
aggregate principal amount of the Bonds outstanding.
DETERMINATION OF INTEREST RATE
The initial interest rate on this Bond shall be the Weekly Interest Rate
as provided in the Indenture.
On any Interest Period Reset Date on or after the first Interest Payment
Date, subject to the conditions set forth in the Indenture, including being
subject to veto by the Issuer (which veto may not be unreasonably exercised),
the interest rate on the Bonds may be converted to a different Interest Rate
Mode upon receipt by the Trustee and the Remarketing Agent of a written
direction from the Authorized Company Representative, to convert the interest
rate on the Bonds to an Interest Rate Mode other than the Interest Rate Mode
then in effect.
A-6
On each Interest Rate Determination Date, the Remarketing Agent shall give
the Trustee telephonic notice (immediately confirmed in writing) of the interest
rate to be borne by the Bonds for the following Interest Rate Period; provided
that if the interest rate is determined pursuant to clause (b) of the definition
of the applicable Interest Rate Mode, on the Interest Rate Determination Date,
the Trustee shall give notice to the Company and the Bank as above provided.
If the interest rate on the Bonds is converted to a different Interest
Rate Mode, at least thirty (30) days prior to the Interest Period Reset Date the
Trustee shall notify the Bank and the Holders of all outstanding Bonds by
first-class mail to all Holders, that upon such Interest Period Reset Date the
Bonds shall be converted to a different Interest Rate Mode and that all Bonds
shall be subject to a mandatory tender.
Any calculation of the interest rate to be borne by the Bonds that is not
in an integral multiple of one-eighth of one percent (0.125%) shall be rounded
to the nearest one-hundredth of one percent (0.01%). The computation of the
interest rate on the Bonds by the Remarketing Agent or the Trustee, as
applicable, shall be binding and conclusive upon the Holders of the Bonds.
"Annual Interest Rate" means (a) the rate of interest per annum determined
by the Remarketing Agent, on the Interest Rate Determination Date immediately
preceding the applicable Interest Rate Adjustment Date, to be the lowest
interest rate for the Interest Rate Period commencing on the applicable Interest
Rate Adjustment Date, and ending on and including the last day of February or
August nearest to but not later than the date that is one year from the Interest
Rate Adjustment Date, in the judgment of the Remarketing Agent (taking into
consideration current transactions and comparable securities with which the
Remarketing Agent is involved or of which it is aware and prevailing financial
market conditions) at which, as of such Interest Rate Determination Date, the
Bonds could be remarketed at par, plus the accrued interest (if any) on the
Interest Rate Adjustment Date for that Interest Rate Period or (b) in the event
that the Remarketing Agent has been removed or has resigned and no successor has
been appointed, or the Remarketing Agent has failed to determine the Annual
Interest Rate for whatever reason, or the Annual Interest Rate cannot be
determined pursuant to clause (a) for whatever reason, the interest rate then in
effect with respect to the Bonds, without adjustment; provided that in no event
shall the Annual Interest Rate exceed the Maximum Rate.
"Daily Interest Rate" means (a) the rate of interest per annum determined
by the Remarketing Agent on the Interest Rate Adjustment Date, to be the lowest
interest rate for the Interest Rate Period commencing on the applicable Interest
Rate Adjustment Date, and remaining in effect to, but not including, the next
succeeding Business Day, in the judgment of the Remarketing Agent (taking into
consideration current transactions and comparable securities with which the
Remarketing Agent is involved or of which it is aware and prevailing financial
market conditions) at which rate, as of such Interest Rate Determination Date,
the Bonds could be remarketed at par, plus the accrued interest (if any) on the
Interest Rate Adjustment Date for that Interest Rate Period or (b) in the event
that the Remarketing Agent has been removed or has resigned and no successor has
been appointed, or the Remarketing Agent has failed to determine the Daily
Interest Rate for whatever reason, or the Daily Interest Rate cannot be
determined pursuant to clause (a) for whatever reason, the interest rate then in
effect with respect to the Bonds, without adjustment; provided that in no event
shall the Daily Interest Rate exceed the Maximum Rate.
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"Five-Year Interest Rate" (a) the rate of interest per annum determined by
the Remarketing Agent, on the Interest Rate Determination Date immediately
preceding the applicable Interest Rate Adjustment Date, to be the lowest
interest rate for the Interest Rate Period commencing on the applicable Interest
Rate Adjustment Date and ending on and including the last day of February or
August nearest to but not later than the date that is five years from the
Interest Rate Adjustment Date, in the judgment of the Remarketing Agent (taking
into consideration current transactions and comparable securities with which the
Remarketing Agent is involved or of which it is aware and prevailing financial
market conditions) at which, as of such Interest Rate Determination Date, the
Bonds could be remarketed at par, plus the accrued interest (if any) on the
Interest Rate Adjustment Date for that Interest Rate Period or (b) in the event
that the Remarketing Agent has been removed or has resigned and no successor has
been appointed or the Remarketing Agent has failed to determine the Five-Year
Interest Rate for whatever reason, or the Five-Year Interest Rate cannot be
determined pursuant to clause (a) for whatever reason, the interest rate then in
effect with respect to the Bonds, without adjustment; provided that in no event
shall the Five-Year Interest Rate exceed the Maximum Rate.
"Fixed Interest Rate" means the fixed rate of interest per annum
determined by the Remarketing Agent, on the Interest Rate Determination Date
immediately preceding the Fixed Interest Rate Conversion Date, to be the lowest
interest rate from the Fixed Interest Rate Conversion Date to the final maturity
date of the Bonds, in the judgment of the Remarketing Agent (taking into
consideration current transactions and comparable securities with which the
Remarketing Agent is involved or of which it is aware and prevailing financial
market conditions) at which, as of such Interest Rate Determination Date, the
Bonds could be remarketed at par, plus the accrued interest (if any) on the
Fixed Interest Rate Conversion Date without credit enhancement.
"Interest Payment Date" or "Interest Payment Dates" means (a) while the
Bonds bear interest at the Semiannual Interest Rate, the Annual Interest Rate,
the Five-Year Interest Rate or the Fixed Interest Rate, the first day of each
May and October, and (b) while the Bonds bear interest at the Daily Interest
Rate, the Weekly Interest Rate, the Monthly Interest Rate, or the Quarterly
Interest Rate, the first Business Day of each month, commencing the first
Business Day of October, 2002.
"Interest Period Reset Date" means the date on which the interest rate on
the Bonds converts from the Interest Rate Mode applicable to the Bonds prior to
such date to a new Interest Rate Mode. An Interest Period Reset Date shall be an
Interest Rate Adjustment Date for the Interest Rate Mode in effect prior to such
conversion.
"Interest Rate Adjustment Date" means any date on which the interest rate
on the Bonds is adjusted, either as the result of (i) the conversion of the
interest rate on the Bonds to a different Interest Rate Mode, or (ii) the
adjustment of the interest rate on the Bonds within the applicable Interest Rate
Mode. For the initial Interest Rate Period of an Interest Rate Mode, the initial
Interest Rate Adjustment Date shall be the Interest Period Reset Date and
thereafter, for each succeeding Interest Rate Period, the first day of the first
month of the next Interest Rate Period if the Bonds bear interest at the
Semiannual, Annual or Five-Year Interest Rate, the first Business Day of the
first month of the next Interest Rate Period if the Bonds bear interest at the
Quarterly Interest Rate; the first Business Day of a month if the Bonds bear
interest at the Monthly Rate; Thursday of each week
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if the Bonds bear interest at the Weekly Interest Rate; and on each Business Day
if the Bonds bear interest at the Daily Interest Rate.
"Interest Rate Determination Date" means (a) with respect to the Quarterly
Interest Rate, the Semiannual Interest Rate, the Annual Interest Rate, the
Five-Year Interest Rate and the Fixed Interest Rate, the tenth Business Day
preceding an Interest Rate Adjustment Date, (b) with respect to the Monthly
Interest Rate, the seventh Business Day preceding an Interest Rate Adjustment
Date, and (c) with respect to the Weekly Interest Rate, not later than 2:00 p.m.
according to local time at the Operations Office of the Trustee on Wednesday of
each week, or the next preceding Business Day if such Wednesday is not a
Business Day; provided that upon any conversion to the Weekly Interest Rate from
a different Interest Rate Mode, the first Interest Rate Determination Date shall
mean not later than 2:00 p.m. according to the local time at the Operations
Office of the Trustee on the Business Day preceding the Interest Period Reset
Date; and (d) with respect to the Daily Interest Rate, not later than 10:30
a.m., New York City time, and provided to the Trustee by the Remarketing Agent
by electronic notice by 12:00 noon, New York City time, on that same day;
provided that no notice need be given if the Daily Rate then in effect is to be
the Daily Rate for the next Daily Rate Period.
"Interest Rate Mode" means any of those modes of interest with respect to
the Bonds permitted by the Indenture, specifically, the Daily Interest Rate, the
Weekly Interest Rate, the Monthly Interest Rate, the Quarterly Interest Rate,
the Semiannual Interest Rate, the Annual Interest Rate, the Five-Year Interest
Rate and the Fixed Interest Rate.
"Interest Rate Period" means that period of time during which the interest
rate with respect to the Bonds has been determined by the Remarketing Agent or
otherwise as provided in the definition of the applicable Interest Rate Mode,
commencing on the applicable Interest Rate Adjustment Date, and terminating on
the day immediately preceding the following Interest Rate Adjustment Date, if
any.
"Monthly Interest Rate" (a) the rate of interest per annum determined by
the Remarketing Agent, on the Interest Rate Determination Date immediately
preceding the applicable Interest Rate Adjustment Date, to be the lowest
interest rate for the Interest Rate Period commencing on the applicable Interest
Rate Adjustment Date to and including the day preceding the first Business Day
of the next month, in the judgment of the Remarketing Agent (taking into
consideration current transactions and comparable securities with which the
Remarketing Agent is involved or of which it is aware and prevailing financial
market conditions) at which, as of such Interest Rate Determination Date, the
Bonds could be remarketed at par, plus the accrued interest (if any) on the
Interest Rate Adjustment Date for that Interest Rate Period or (b) in the event
that the Remarketing Agent has been removed or has resigned and no successor has
been appointed, or the Remarketing Agent has failed to determine the Monthly
Interest Rate for whatever reason, or the Monthly Interest Rate cannot be
determined pursuant to clause (a) for whatever reason, the interest rate then in
effect with respect to the Bonds, without adjustment; provided that in no event
shall the Monthly Interest Rate exceed the Maximum Rate.
"Quarterly Interest Rate" means (a) the rate of interest per annum
determined by the Remarketing Agent, on the Interest Rate Determination Date
immediately preceding the applicable
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Interest Rate Adjustment Date, to be the lowest interest rate for the Interest
Rate Period commencing on the applicable Interest Rate Adjustment Date to and
including the day preceding the first Business Day of March, June, September or
December nearest to but not later than the date that is three months from the
Interest Rate Adjustment Date, in the judgment of the Remarketing Agent (taking
into consideration current transactions and comparable securities with which the
Remarketing Agent is involved or of which it is aware and prevailing financial
market conditions) at which, as of such Interest Rate Determination Date, the
Bonds could be remarketed at par, plus the accrued interest (if any) on the
Interest Rate Determination Date for that Interest Rate Period or (b) in the
event that the Remarketing Agent has been removed or has resigned and no
successor has been appointed, or the Remarketing Agent has failed to determine
the Quarterly Interest Rate for whatever reason, or the Quarterly Interest Rate
cannot be determined pursuant to clause (a) for whatever reason, the interest
rate then in effect with respect to the Bonds, without adjustment; provided that
in no event shall the Quarterly Interest Rate exceed the Maximum Rate.
"Remarketing Agent" means, initially, βββββ Fargo Brokerage Services, LLC
and any successor Remarketing Agent appointed pursuant to the Indenture.
"Semiannual Interest Rate" means (a) the rate of interest per annum
determined by the Remarketing Agent, on the Interest Rate Determination Date
immediately preceding the applicable Interest Rate Adjustment Date, to be the
interest rate necessary during the Interest Rate Period commencing on the
applicable Interest Rate Adjustment Date and ending on and including the last
day of February or August nearest to but not later than the date that is six
months from the Interest Rate Adjustment Date, in the judgment of the
Remarketing Agent (taking into consideration current transactions and comparable
securities with which the Remarketing Agent is involved or of which it is aware
and prevailing financial market conditions) at which, as of such Interest Rate
Determination Date, the Bonds could be remarketed at par, plus the accrued
interest (if any) on the Interest Rate Determination Date for that Interest Rate
Period or or (b) in the event that the Remarketing Agent has been removed or has
resigned and no successor has been appointed, or the Remarketing Agent has
failed to determine the Semiannual Interest Rate for whatever reason, or the
Semiannual Interest Rate cannot be determined pursuant to clause (a) for
whatever reason, the interest rate then in effect with respect to the Bonds,
without adjustment; provided that in no event shall the Semiannual Interest Rate
exceed the Maximum Rate.
"Weekly Interest Rate" means (a) the rate of interest per annum determined
by the Remarketing Agent, on the Interest Rate Determination Date immediately
preceding the applicable Interest Rate Adjustment Date, to be the interest rate
necessary during the Interest Rate Period of one week (or less in the case of
any such Interest Rate Period commencing on an Interest Period Reset Date that
is not a Thursday, or ending on the day preceding an Interest Period Reset Date)
commencing on the applicable Interest Rate Adjustment Date, in the judgment of
the Remarketing Agent (taking into consideration current transactions and
comparable securities with which the Remarketing Agent is involved or of which
it is aware and prevailing financial market conditions) at which, as of such
Interest Rate Determination Date, the Bonds could be remarketed at par, plus the
accrued interest (if any) on the Interest Rate Determination Date for that
Interest Rate Period or (b) in the event that the Remarketing Agent has been
removed or has resigned and no successor has been appointed, or the Remarketing
Agent has failed to determine the Weekly Interest
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Rate for whatever reason, or the Weekly Interest Rate cannot be determined
pursuant to clause (a) for whatever reason, the interest rate then in effect
with respect to the Bonds, without adjustment; provided that in no event shall
the Weekly Interest Rate exceed the Maximum Rate.
TENDER OPTION
(a) Tender Option While Bonds Bear Interest at a Variable Rate Other
Than the Daily Interest Rate or the Weekly Interest Rate. While the Bonds bear
interest at the Monthly Interest Rate, the Quarterly Interest Rate, the
Semiannual Interest Rate, the Annual Interest Rate or the Five-Year Interest
Rate, on each Interest Rate Adjustment Date (each a "Bond Purchase Date"), each
Holder shall have the option to tender for purchase, at the Purchase Price (a
"Bond Purchase Date"), all of the Bonds owned by such Holder, or such lesser
principal amount thereof (in denominations of $100,000 or integral multiples of
$5,000 in excess thereof, provided that the untendered portion of any Bond shall
be $100,000 or more in principal amount) as such Holder may specify in
accordance with the terms, conditions and limitations hereinafter set forth. The
Purchase Price for each such Bond shall be payable in lawful money of the United
States of America and shall be paid in full on the applicable Bond Purchase
Date.
(b) Tender Option While Bonds Bear Interest at the Daily Interest Rate
or the Weekly Interest Rate. While the Bonds bear interest at the Daily Interest
Rate or the Weekly Interest Rate, on each Interest Rate Adjustment Date (each a
"Bond Purchase Date"), each Holder has the option to tender for purchase, at the
Purchase Price (a "Bond Purchase Date"), all of the Bonds owned by such Holder,
or such lesser principal amount thereof (in denominations of $100,000 or
integral multiples of $5,000 in excess thereof, provided that the untendered
portion of any Bond shall be $100,000 or more in principal amount) as such
Holder may specify in accordance with the terms, conditions and limitations
hereafter set forth. The Purchase Price for each such shall be payable in lawful
money of the United States of America and shall be paid in full on the
applicable Bond Purchase Date.
To exercise the option granted in paragraph (a) above, the Holder shall
(i) no earlier than fifteen (15) days before the Bond Purchase Date and no later
than 11:00 a.m. according to the local time at the Operations Office of the
Trustee on the eighth Business Day prior to the Bond Purchase Date, or in the
event the Bonds bear interest at the Monthly Interest Rate, the fifth Business
Day prior to the Bond Purchase Date, give notice to the Remarketing Agent and
the Trustee by telecopy or in writing, that states (A) the name and address of
the Holder, (B) the principal amount and, if the Bonds are not held pursuant to
a book-entry system, the CUSIP number and Bond numbers of the Bonds to be
purchased, (C) the Bond Purchase Date on which such Bonds are to be purchased
pursuant to the terms of the Indenture, and (D) that such notice is irrevocable,
and (ii) if the Bonds are not held pursuant to a book-entry system, no later
than 10:00 a.m. according to the local time at the Operations Office of the
Trustee on the seventh day immediately preceding the applicable Bond Purchase
Date (or the next preceding Business Day if such seventh day is not a Business
Day), or in the event the Bonds bear interest at the Monthly Interest Rate, the
fourth day preceding such Bond Purchase Date (or the next preceding Business Day
if such fourth day is not a Business Day), deliver to the Operations Office of
the Trustee the Bonds to be purchased in proper form, accompanied by fully
completed and executed Instructions to Sell; and (iii) in the case of a
Beneficial Owner, no later than 10:00 a.m. (according to the local time at the
principal time at the Operations Office of the
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Trustee) on the Bond Purchase Date, cause the transfer of the Beneficial Owner's
Beneficial Ownership on the records of the Depository. In the case of a Bond or
portion thereof to be purchased prior to an Interest Payment Date and after the
Record Date in respect thereof, the Holder shall deliver a due-ββββ check, in
form satisfactory to the Trustee, for interest due on such Interest Payment
Date.
To exercise the option granted in paragraph (b) above, the Holder shall
(i) no later than 8:00 a.m. according to the local time at the Operations Office
of the Trustee on the second Business Day prior to the Bond Purchase Date (or,
when the Bonds bear interest at the Daily Interest Rate, by 12:00 noon according
to the local time at the Operations Office of the Trustee on the Bond Purchase
Date) give notice to the Trustee and the Remarketing Agent by telecopy or in
writing that states (A) the name and address of the Holder, (B) the principal
amount, CUSIP number and Bond numbers of the Bonds to be purchased, (C) that
such Bonds are to be purchased on such Bond Purchase Date and, if the Bonds are
not held pursuant to a book-entry system, the CUSIP number and Bond numbers of
the Bonds to be purchased, (D) that such notice is irrevocable; (ii) if the
Bonds are not held pursuant to a book-entry system, no later than 10:00 a.m.
according to the local time at the Operations Office of the Trustee on such Bond
Purchase Date, deliver to the Operations Office of the Trustee the Bonds to be
purchased in proper form, accompanied by fully completed and executed
Instructions to Sell, the form of which shall be printed on the Bonds; and (iii)
in the case of a Beneficial Owner, no later than 10:00 a.m. (according to the
local time at the Operations Office of the Trustee) on such Business Day, cause
the transfer of the Beneficial Owner's Beneficial Ownership Interest on the
records of the Depository. In the case of a Bond or portion thereof to be
purchased prior to an Interest Payment Date and after the Regular Record Date in
respect thereof, the Holder shall deliver a due-ββββ check, in form satisfactory
to the Trustee, for interest due on such Interest Payment Date.
If the Bonds are not held pursuant to a book-entry system, and if less
than all of a Bond so delivered is to be purchased, the Trustee shall
authenticate one or more Bonds in exchange therefor, registered in the name of
such Holder, having the aggregate principal amount being retained by such
Holder, and shall deliver such authenticated Bond or Bonds to such Holder.
Any Bonds not delivered by Holders who have elected to tender their Bonds
pursuant to the foregoing tender options shall be deemed tendered for
remarketing. Subject to the right of such nondelivering Holders to receive the
Purchase Price of such Bonds, such Bonds shall be null and void, and the Trustee
shall authenticate and deliver new Bonds in replacement thereof pursuant to the
remarketing of such Bonds. After the giving of a notice of tender, Beneficial
Owners shall be obligated to transfer the Beneficial Ownership Interests or the
records of the Depository.
The tender options granted to the Holders and all mandatory Bond tenders
are subject to the additional condition that any tendered Bonds (or the
applicable portions thereof) will not be purchased if such Bonds (or applicable
portions thereof) mature or are redeemed on or prior to the applicable Bond
Purchase Date.
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MANDATORY TENDER
(a) If at any time the Issuer at the direction of the Company shall
convert the interest rate on the Bonds to a different Interest Rate Mode, on the
Interest Period Reset Date upon which such conversion is effective, all Bonds
shall be subject to mandatory tender for purchase on the Interest Period Reset
Date (a "Bond Purchase Date") at the Purchase Price.
(b) The Bonds are subject to mandatory tender in whole on the Interest
Payment Date that next precedes the Letter of Credit Termination Date (a "Bond
Purchase Date"), at the Purchase Price unless, at least forty-five (45) days
prior to any such Bond Purchase Date, the Bank shall have agreed to an extension
or further extension of the Letter of Credit Termination Date to a date not
earlier than one year from the Letter of Credit Termination Date being extended.
At least thirty (30) days prior to such respective Bond Purchase Date
described, the Trustee shall notify the Holders of all outstanding Bonds by
first-class mail of the occurrence of the event causing such mandatory tender
and shall and advise the Holders that all Bonds shall be subject to mandatory
tender on such Bond Purchase Date.
Bonds not tendered for purchase as required by the preceding paragraph
shall be deemed to have been tendered without further notice or action by the
Holders, subject to the right of the Holders of such Bonds to receive the
Purchase Price of such Bonds, including interest accrued thereon to the Bond
Purchase Date.
REDEMPTION
The Bonds are subject to redemption prior to stated maturity pursuant to
first class mailed notice thereof by the Trustee at least thirty (30) days prior
to the redemption date (except in the case of a redemption of Variable Rate
Bonds described in paragraph (b) below, in which case notice shall be given at
least five (5) days prior to the redemption date), as follows:
(a) Mandatory Sinking Fund Redemption Upon Conversion to a Fixed
Interest Rate. If the Bonds are converted to a Fixed Interest Rate, the
Bonds are subject to mandatory redemption pursuant to mandatory sinking
fund requirements, at a redemption price of 100% of the principal amount
redeemed plus accrued interest, if any, thereon to the redemption date, on
each September 1, in the amounts and years as determined pursuant to the
Indenture.
(b) Optional Redemption. Unless previously redeemed, the Bonds are
subject to redemption (from funds other than those deposited in accordance
with the mandatory sinking fund requirements of Section 3.01(a) of the
Indenture), at the option of the Issuer upon the direction of the Company,
(subject to compliance with Section 3.03 of the Indenture), (i) if the
Bonds do not bear interest at the Fixed Interest Rate, in whole or in part
(in integral multiples of $5,000, provided that the unredeemed portion of
any Bond redeemed in part shall be $100,000 or more) on any Interest Rate
Adjustment Date (except in the case of Bonds bearing interest at the Daily
Interest Rate or the Weekly Interest Rate, only on the first Business Day
of each month) at the redemption price of 100% of the principal amount
redeemed plus accrued
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interest, if any, thereon to the redemption date, and (ii) after the Fixed
Interest Rate Conversion Date and on or after the First Optional
Redemption Date, in whole or in part (in integral multiples of $5,000) at
any time at a redemption price equal to the following percentages of the
principal amount redeemed, plus in each case accrued interest to the date
fixed for redemption (if the maturity date of the Bonds is prior to the
First Optional Redemption Date, then the Bonds bearing interest at a Fixed
Interest Rate shall not be subject to optional redemption prior to
maturity).
Redemption Date Optional Redemption Price
--------------- -------------------------
First Optional Redemption Date, through 102%
the following last day of August
First Anniversary of the First Optional 101
Redemption Date, through the following
last day of August
Second Anniversary of the First Optional 100
Redemption Date, through the following
last day of August
"First Optional Redemption Date" means the first Interest Payment
Date that is at least thirty (30) days after the date that is the midpoint
of the Fixed Rate Period; provided however, that in no event shall the
First Optional Redemption Date be less than five years or greater than ten
years after the commencement of the Fixed Interest Rate Period (and which
date may be modified in accordance with the terms of the Indenture).
"Fixed Interest Rate Conversion Date" means the Interest Period
Reset Date from and after which the Bonds shall bear interest at the Fixed
Interest Rate, as that date shall be established as provided in the
Indenture.
(c) Extraordinary Optional Redemption Upon the Occurrence of
Certain Events Affecting the Facilities. The Bonds are subject to
redemption, in whole or in part, at a redemption price equal to the
principal amount thereof plus accrued interest to, but not including, the
redemption date, without premium, on the earliest date for which notice of
redemption can be given to the extent the Company has exercised its option
to make prepayments pursuant to Section 5.04(b) of the Agreement.
(d) Mandatory Redemption of Bonds on Determination of Taxability.
The Bonds are also subject to mandatory redemption at a redemption price
equal to the principal amount thereof plus accrued interest to, but not
including, the redemption date in whole (or in part as provided below),
without premium (except as provided below with respect to Bonds that bear
interest at a Fixed Interest Rate), on the first day of a month within 180
days after the Company receives written notice from a Bondholder or former
Bondholder or the Trustee that a Determination of Taxability (as defined
in Section 3.01(d) of the Indenture) has occurred, or if such date is not
a Business Day, on the next succeeding Business Day;
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provided that with respect to any Bonds that bear interest at a Fixed
Interest Rate, the redemption price in the event of a redemption pursuant
to this Section shall be the same as if the Bonds had been optionally
redeemed on such date pursuant to (b) above. If the redemption of fewer
than all of the Bonds would, in the Opinion of Bond Counsel, result in the
interest on the Bonds outstanding following such redemption not being
includable in the gross income for federal income tax purposes of the
holders of such Bonds Outstanding, then fewer than all of the Bonds may be
redeemed in the amount specified in such opinion.
If fewer than all Bonds are to be redeemed at one time, the selection of
Bonds, or portions thereof (in integral multiples of $5,000, provided that the
unredeemed portion of any Bond bearing interest at a Variable Rate redeemed in
part shall be $100,000 or more) to be redeemed shall be made by lot by the
Trustee; provided, however, Bonds (or book entry interests in Bonds) pledged to
the Bank pursuant to the Reimbursement Agreement shall be selected for
redemption prior to the selection of any other Bonds. If Bonds or portions
thereof are called for redemption and if on the redemption date moneys for the
redemption thereof are held by the Trustee, thereafter those Bonds or portions
thereof to be redeemed shall cease to bear interest, and shall cease to be
secured by, and shall not be deemed to be outstanding under, the Indenture.
It is certified and recited that there have been performed and have
happened in regular and due form, as required by law, all acts and conditions
necessary to be done or performed by the Issuer or to have happened (i)
precedent to and in the issuing of the Bonds in order to make them legal, valid
and binding special obligations of the Issuer, and (ii) precedent to and in the
execution and delivery of the Indenture; that payment in full for the Bonds has
been received; and that the Bonds do not exceed or violate any constitutional or
statutory limitation.
NEITHER THE ISSUER, THE COMPANY, THE BANK, NOR THE TRUSTEE WILL HAVE ANY
RESPONSIBILITY OR OBLIGATION TO ANY DIRECT PARTICIPANT, INDIRECT PARTICIPANT OR
ANY BENEFICIAL OWNER OR ANY OTHER PERSON NOT SHOWN ON THE REGISTRATION BOOKS OF
THE TRUSTEE AS BEING A HOLDER WITH RESPECT TO: (I) THE BONDS; (II) THE ACCURACY
OF ANY RECORDS MAINTAINED BY DTC OR ANY DIRECT PARTICIPANT OR INDIRECT
PARTICIPANT; (III) THE TIMELY EXERCISE BY DTC OR ANY DIRECT PARTICIPANT OR
INDIRECT PARTICIPANT OF ANY DIRECTION BY A BENEFICIAL OWNER IN RESPECT OF ITS
ELECTION TO TENDER ITS INTEREST IN THE BONDS; (IV) THE TIMELY OR ULTIMATE
PAYMENT BY DTC OR ANY DIRECT PARTICIPANT OR INDIRECT PARTICIPANT OF ANY AMOUNT
DUE TO ANY BENEFICIAL OWNER IN RESPECT OF THE PURCHASE PRICE OF TENDERED BONDS
OR THE PRINCIPAL OR REDEMPTION PRICE OF OR INTEREST ON THE BONDS; (V) THE
DELIVERY BY ANY DIRECT PARTICIPANT OR INDIRECT PARTICIPANT OF ANY NOTICE TO ANY
BENEFICIAL OWNER THAT IS REQUIRED OR PERMITTED UNDER THE TERMS OF THE INDENTURE
TO BE GIVEN TO HOLDERS; (VI) THE SELECTION OF THE BENEFICIAL OWNERS TO RECEIVE
PAYMENT IN THE EVENT OF ANY PARTIAL REDEMPTION OF THE BONDS; OR (VI) ANY CONSENT
GIVEN OR OTHER ACTION TAKEN BY DTC AS HOLDER.
[Remainder of page intentionally left blank.]
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IN WITNESS OF THE ABOVE, the Issuer has caused this Bond to be executed in
the name of the Issuer by the manual or facsimile signature of the Chairman or
Vice Chairman of the Board of Directors, and attested by the manual or facsimile
signature of the Secretary or Assistant Secretary of the Board of Directors, and
the manual or facsimile seal of the Issuer placed thereon, as of the date shown
above.
GULF COAST WASTE DISPOSAL AUTHORITY
By: __________________________________
Chairman
ATTEST:
By: ________________________________
Secretary
[FORM OF CERTIFICATE OF AUTHENTICATION]
CERTIFICATE OF AUTHENTICATION
This Bond is one of the Bonds issued under the provisions of the
within-mentioned Indenture.
U.S. BANK NATIONAL ASSOCIATION,
as Trustee
By: _________________________________
Authorized Representative
Date of Authentication: ____________________
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[FORM OF COMPTROLLER'S REGISTRATION CERTIFICATE]
COMPTROLLER'S REGISTRATION CERTIFICATE REGISTER NO. _____
(To be attached to Initial Bond only)
I hereby certify that this Bond has been examined, certified as to
validity, and approved by the Attorney General of the State of Texas, and that
this Bond has been registered by the Comptroller of Public Accounts of the State
of Texas.
Witness my signature and seal this
___________________________________
Comptroller of Public Accounts
of the State of Texas
[FORM OF ASSIGNMENT]
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers
unto ________
________________________________________________________________(Please print or
type the name and address, including the zip code of the transferee, and the
Federal Taxpayer Identification or Social Security Number) the within Bond and
all rights thereunder, and hereby irrevocably constitutes and appoints
_______________ Attorney to transfer the within Bond on the books kept for
registration and transfer thereof, with full power of substitution in the
premises.
Dated:_________________________________ By:___________________________________
NOTICE: The signature of the Registered Owner above must correspond with the
name of the Registered Owner as it appears on the registration books maintained
by the Trustee.
Signature Guaranteed
By:_____________________________________
NOTICE: Signature(s) must be guaranteed by a
member firm of the STAMP, SEMP or MSP signature
guaranty medallion program.
A-17
[FORM OF NOTICE OF EXERCISE OF TENDER OPTION
INSTRUCTIONS TO SELL]
NOTICE OF EXERCISE OF TENDER OPTION
INSTRUCTIONS TO SELL
To: U.S Bank National Association, as Trustee
ββββ βββββββββ, βββ βββββ
MAC T5001-061
βββββββ, βββββ βββββ
Attention: Corporate Trust and Escrow Services
RE: GULF COAST WASTE DISPOSAL AUTHORITY ENVIRONMENTAL FACILITIES
REVENUE BONDS (WASTE CORPORATION OF TEXAS, L.P.PROJECT) SERIES 2002
Gentlemen:
The undersigned, as the Holder of the Bond referred to below ("Bond"),
hereby elects the option available to the undersigned pursuant to the Trust
Indenture (the "Indenture") relating to the above-captioned bond issue. In
accordance with such option, the undersigned hereby tenders:
[ ] check the
appropriate box: the entire Bond
[ ]
(increments of $5,000 with a
minimum of $100,000)
for purchase on the first Bond Purchase Date (as defined in the Bond) after the
date hereof, pursuant to the referenced Indenture. In accordance with such
tender, the undersigned hereby irrevocably sells, assigns and transfers such
Bond or portion thereof at the Purchase Price set forth in the Indenture, and
does hereby irrevocably constitute and appoint the Trustee as attorney to
transfer such Bond or portion thereof on the books of the Trustee, with full
power of substitution in the premises.
Dated: _____________________ __________________________________________
Signature
Signature Guaranteed:
NOTICE: To exercise the option available to the Holder pursuant to the
referenced Indenture, the Holder must notify the Trustee of such
exercise and deliver this Bond to the Trustee at the times and in the
manner set forth in this Bond. The signature to these Instructions to
Sell must correspond with the name as written upon the face of this
Bond in every particular, without alteration or enlargement, or any
change whatsoever.
A-18
TRUST INDENTURE
Between
GULF COAST WASTE DISPOSAL AUTHORITY
and
U.S. BANK NATIONAL ASSOCIATION
as Trustee
Dated as of August 1, 2002
Securing $25,000,000
in aggregate principal amount of
GULF COAST WASTE DISPOSAL AUTHORITY
ENVIRONMENTAL FACILITIES REVENUE BONDS
(WASTE CORPORATION OF TEXAS, L.P. PROJECT)
SERIES 2002
TABLE OF CONTENTS
ARTICLE I: DEFINITIONS AND RULES OF CONSTRUCTION............................................................... 3
Section 1.01. Definitions............................................................................. 3
Section 1.02. Rules of Construction................................................................... 16
ARTICLE II: THE BONDS.......................................................................................... 17
Section 2.01. Issuance of Bonds; Form; Dating......................................................... 17
(a) Authorization.................................................................. 17
(b) Details of Bonds............................................................... 17
(c) Delivery....................................................................... 18
Section 2.02. Interest on the Bonds................................................................... 18
(a) General; Initial Interest Rate................................................. 19
(b) Conversion to Different Variable Rate Interest Rate Mode....................... 19
(c) Conversion to Fixed Interest Rate............................................. 20
(d) Determination of Rates Conclusive.............................................. 20
(e) Notice of Interest Rate Determinations and Conversions to Different Modes...... 20
(f) Interest Calculations.......................................................... 21
Section 2.03. Execution and Authentication............................................................ 21
Section 2.04. Bond Register........................................................................... 22
Section 2.05. Registration and Exchange of Bonds; Persons Treated as Owners;
Book-Entry System....................................................................... 22
Section 2.06. Mutilated, Lost, Stolen, Destroyed or Undelivered Bonds................................. 24
Section 2.07. Cancellation of Bonds................................................................... 25
Section 2.08. Temporary Bonds......................................................................... 25
ARTICLE III: REDEMPTION, PURCHASE AND REMARKETING.............................................................. 25
Section 3.01. Terms of Redemption of Bonds............................................................ 25
(a) Mandatory Sinking Fund Redemption Following Conversion to a Fixed Interest Rate......... 25
(b) Optional Redemption..................................................................... 26
(c) Extraordinary Optional Redemption Upon the Occurrence of Certain Events
Affecting the Facilities................................................................ 26
(d) Mandatory Redemption of Bonds on Determination of Taxability............................ 26
(e) Use of Certain Funds to Redeem Bonds.................................................... 27
Section 3.02. Partial Redemption...................................................................... 27
Section 3.03. Election to Redeem...................................................................... 28
Section 3.04. Notice of Redemption.................................................................... 28
Section 3.05. Payment of Redeemed Bonds............................................................... 30
Section 3.06. Tender Options.......................................................................... 31
(a) Optional Tender While Bonds Bear Interest at
the Monthly Interest Rate, the Quarterly
Interest Rate, the Semiannual Interest Rate,
the Annual Interest Rate or the Five-Year
Interest Rate..................................................................... 31
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(b) Optional Tender While Bonds Bear Interest at Daily Interest Rate or Weekly
Interest Rate.................................................................... 31
(c) Notification of Optional Tender.................................................. 31
(d) Bonds Deemed Tendered............................................................. 32
Section 3.07. Mandatory Tender Upon Conversion to a New Interest Rate Mode............................ 33
Section 3.08. Mandatory Tender Upon Expiration of Letter of Credit.................................... 33
Section 3.09. Remarketing of Bonds.................................................................... 34
Section 3.10. Delivery of Purchased Bonds and Remarketing of Pledged Bonds............................ 35
ARTICLE IV: PAYMENT OF BONDS AND CREATION OF FUNDS............................................................. 36
Section 4.01. Payment of Bonds........................................................................ 36
Section 4.02. Creation of Bond Fund................................................................... 37
Section 4.03. Payments Into Bond Fund................................................................. 37
Section 4.04. Use of Moneys in Bond Fund.............................................................. 38
Section 4.05. Custody of Bond Fund.................................................................... 39
Section 4.06. Creation of Construction Fund........................................................... 39
Section 4.07. Payments Into the Construction Fund; Disbursements...................................... 39
Section 4.08. Completion of Facilities and Disposition of Construction Fund Balance................... 40
Section 4.09. Moneys To Be Held in Trust.............................................................. 40
Section 4.10. Payment to Company From Bond Fund or Construction Fund.................................. 40
Section 4.11. Investment of Moneys.................................................................... 40
Section 4.12. Creation of Rebate Fund................................................................. 42
Section 4.13. Limitation on Trustee's and Issuer's Responsibilities Respecting Arbitrage.............. 44
ARTICLE V: LETTER OF CREDIT.................................................................................... 44
Section 5.01. Requirements for Letter of Credit....................................................... 44
Section 5.02. Draws on Letter of Credit; Extensions................................................... 44
Section 5.03. Substitute Letter of Credit............................................................. 45
Section 5.04. Enforcement of the Letter of Credit..................................................... 47
ARTICLE VI: COVENANTS.......................................................................................... 47
Section 6.01. Payment of Bonds; Limited Obligations................................................... 47
Section 6.02. Further Covenants and Representations of Issuer......................................... 48
Section 6.03. Further Assurances...................................................................... 48
Section 6.04. Tax Covenant............................................................................ 48
ARTICLE VII: DISCHARGE OF INDENTURE............................................................................ 48
Section 7.01. Bonds Deemed Paid; Discharge of Indenture............................................... 48
Section 7.02. Application of Trust Money.............................................................. 50
ARTICLE VIII: DEFAULTS AND REMEDIES............................................................................ 50
Section 8.01. Events of Default....................................................................... 50
Section 8.02. Acceleration and Duty to Draw on Letter of Credit....................................... 50
Section 8.03. Disposition of Amounts Drawn on Letter of Credit; Assignment of Rights to Contest....... 51
Section 8.04. Other Remedies; Rights of Bondholders................................................... 52
Section 8.05. Right of Bondholders to Direct Proceedings.............................................. 52
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Section 8.06. Application of Moneys................................................................... 53
Section 8.07. Remedies Vested in Trustee.............................................................. 54
Section 8.08. Limitations on Suits.................................................................... 54
Section 8.09. Termination of Proceedings.............................................................. 55
Section 8.10. Waivers of Events of Default............................................................ 55
Section 8.11. Notice of Defaults; Opportunity of Company to Cure Defaults............................. 56
Section 8.12. Unconditional Right to Receive Principal, Premium and Interest ......................... 56
Section 8.13. Bonds Outstanding....................................................................... 56
Section 8.14. Bank Deemed Owner....................................................................... 57
Section 8.15. Subrogation Rights of the Bank.......................................................... 57
Section 8.16. Rights and Duties of the Issuer......................................................... 57
(a) Remedies of the Issuer......................................................... 58
(b) Limitations on Actions......................................................... 58
(c) Responsibility................................................................. 58
Section 8.17. Expenses of the Issuer.................................................................. 59
Section 8.18. Actions by Issuer....................................................................... 59
ARTICLE IX: TRUSTEE AND REMARKETING AGENT...................................................................... 59
Section 9.01. Duties of Trustee....................................................................... 59
Section 9.02. Rights of Trustee....................................................................... 60
Section 9.03. Individual Rights of Trustee, Etc....................................................... 61
Section 9.04. Trustee's Disclaimer.................................................................... 61
Section 9.05. Notice of Defaults...................................................................... 62
Section 9.06. Compensation and Indemnification of Trustee............................................. 62
Section 9.07. Eligibility of Trustee.................................................................. 62
Section 9.08. Replacement of Trustee.................................................................. 63
Section 9.09. Concerning the Remarketing Agent........................................................ 64
Section 9.10. Qualifications of Remarketing Agent..................................................... 64
Section 9.11. Successor Trustee or Agent by Merger.................................................... 65
Section 9.12. Appointment of Co-Trustee............................................................... 65
Section 9.13. Several Capacities...................................................................... 66
Section 9.14. No Conflict............................................................................. 66
Section 9.15. Notice to Successor Trustee............................................................. 66
ARTICLE X: AMENDMENTS OF AND SUPPLEMENTS TO INDENTURE.......................................................... 67
Section 10.01. Without Consent of Bondholders......................................................... 67
Section 10.02. With Consent of Bondholders............................................................ 68
Section 10.03. Effect of Consents..................................................................... 68
Section 10.04. Notation on or Exchange of Bonds....................................................... 68
Section 10.05. Signing by Trustee of Amendments and Supplements....................................... 69
Section 10.06. Company, Bank, and Remarketing Agent Consents Required................................. 69
Section 10.07. Notice to Bondholders.................................................................. 69
Section 10.08. Opinion of Bond Counsel Required....................................................... 69
ARTICLE XI: AMENDMENTS OF AND SUPPLEMENTS TO OTHER DOCUMENT.................................................... 69
Section 11.01. Without Consent of Bondholders......................................................... 69
Section 11.02. With Consent of Bondholders............................................................ 69
Section 11.03. Consents by Trustee to Amendments or Supplements....................................... 70
Section 11.04. Notice to Bondholders.................................................................. 70
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Section 11.05. Bank and Remarketing Agent Consent Required............................................ 70
ARTICLE XII: MISCELLANEOUS..................................................................................... 70
Section 12.01. Notices................................................................................ 70
Section 12.02. Bondholders' Consents.................................................................. 72
Section 12.03. Notices to Rating Agency............................................................... 73
Section 12.04. Limitation of Rights................................................................... 73
Section 12.05. Severability........................................................................... 73
Section 12.06. Payments Due on Non-Business Days...................................................... 73
Section 12.07. Governing Law.......................................................................... 73
Section 12.08. No Personal Liability of Issuer Officials.............................................. 74
Section 12.09. Counterparts........................................................................... 74
Section 12.10. References to the Bank................................................................. 74
EXHIBIT A: FORM OF BOND........................................................................................ A-1
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