<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarter ended October 3, 1998
Commission File Number 0-6966
ESCALADE, INCORPORATED
----------------------
(Exact name of registrant as specified in its charter)
Indiana 13-2739290
------- ----------
(State of incorporation) (I.R.S. EIN)
817 Maxwell Avenue, Evansville, Indiana 47717
---------------------------------------------
(Address of principal executive office)
812-467-1200
-------------
(Registrant's Telephone Number)
Securities registered pursuant to Section 12(b) of the Act
NONE
-----
Securities registered pursuant to section 12(g) of the Act
Common Stock, No Par Value
--------------------------
(Title of Class)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes X No
--- ---
The number of shares of Registrant's common stock (no par value)
outstanding as of October 22, 1998 : 3,108,358
<PAGE> 2
INDEX
<TABLE>
<CAPTION>
Page No.
<S> <C> <C>
Part I. Financial Information:
Item 1 - Financial Statements:
Consolidated Condensed Balance Sheet (Unaudited)
October 3, 1998, October 4, 1997, and
December 27, 1997 3
Consolidated Condensed Statement of Income (Unaudited)
Three Months and Nine Months Ended
October 3, 1998 and October 4, 1997 4
Consolidated Condensed Statement of Cash Flows (Unaudited)
Nine Months Ended October 3, 1998 and October 4, 1997 5
Notes to Consolidated Condensed Financial Statements 6 - 9
Item 2 - Management's Discussion and Analysis of Financial
Condition and Results of Operations: 10 - 11
Part II. Other Information 12
Signatures 13
Exhibit 10.21
Exhibit 10.32
Exhibit 10.33
</TABLE>
<PAGE> 3
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
ESCALADE, INCORPORATED AND SUBSIDIARIES
CONSOLIDATED CONDENSED BALANCE SHEET (UNAUDITED)
<TABLE>
<CAPTION>
(Dollars in Thousands) October 3, October 4, December 27,
1998 1997 1997
ASSETS -------------------------------------------------
<S> <C> <C> <C>
Current assets:
Cash $ 294 $ 76 $ 1,246
Receivables, less allowances of
$936, $1,002 and $893 17,461 16,687 30,602
Inventories 20,330 22,693 12,637
Prepaid expense 468 402 237
Deferred income tax benefit 1,138 1,311 1,205
------- ------- -------
TOTAL CURRENT ASSETS 39,691 41,169 45,927
Property, plant, and equipment 35,684 37,839 34,995
Accum. depr. and amortization (25,317) (26,939) (23,356)
------- ------- -------
10,367 10,900 11,639
Goodwill 5,721 5,869 6,157
Other assets 2,363 1,818 2,422
Deferred income tax benefit --- 519 ---
------- ------- -------
$58,142 $60,275 $66,145
======= ======= =======
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Notes payable - bank $ 7,000 $ 6,075 $ 8,275
Current portion of long-term debt 2,300 2,300 5,800
Trade accounts payable 4,241 5,291 2,696
Accrued liabilities 8,868 10,867 12,128
Federal income tax payable 540 929 1,550
------- ------- -------
TOTAL CURRENT LIABILITIES 22,949 25,462 30,449
Other Liabilities:
Long-term debt 6,900 12,200 10,700
Deferred compensation 1,142 1,080 1,066
Deferred income tax liability 359 --- 429
------- ------- -------
8,401 13,280 12,195
Stockholders' equity:
Preferred stock:
Authorized 1,000,000 shares;
no par value, none issued
Common stock:
Authorized 10,000,000 shares;
no par value, Issued and
outstanding - 3,107,983,
3,130,613, and 3,050,691 at
10-03-98, 10-04-97, and 12-27-97 6,283 8,472 5,880
Retained earnings 20,369 13,061 17,374
Net unrealized gain on securities
available for sale 140 --- 247
------- ------- -------
26,792 21,533 23,501
------- ------- -------
$58,142 $60,275 $66,145
======= ======= =======
</TABLE>
See notes to Consolidated Condensed Financial Statement.
<PAGE> 4
ESCALADE, INCORPORATED AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENT OF INCOME (UNAUDITED)
(Dollars in Thousands, except per share amounts)
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
Oct. 3, Oct. 4, Oct. 3, Oct. 4,
1998 1997 1998 1997
-----------------------------------------------------------
<S> <C> <C> <C> <C>
Net sales $22,178 $22,716 $57,038 $53,183
Costs, expenses and other income:
Cost of products sold 14,455 14,845 39,104 36,694
Selling, administrative and
general expenses 3,918 4,345 11,704 11,934
Interest 263 378 851 849
Amortization of Goodwill 91 92 308 125
Other income (70) (126) (259) (242)
------- ------- ------- -------
18,657 19,534 51,708 49,360
------- ------- ------- -------
INCOME BEFORE INCOME TAXES 3,521 3,182 5,330 3,823
Provision for income taxes 1,449 1,389 2,335 1,775
------- ------- ------- -------
NET INCOME $ 2,072 $ 1,793 $ 2,995 $ 2,048
======= ======= ======= =======
Per share data:
Basic earnings per share $ .67 $ .57 $ .97 $ .66
Diluted earning per share $ .66 $ .55 $ .96 $ .64
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME (UNAUDITED)
NET INCOME $ 2,072 $ 1,793 $ 2,995 $ 2,048
UNREALIZED GAIN (LOSS)
ON SECURITIES, NET OF TAX (143) --- (107) ---
------- ------- ------- -------
COMPREHENSIVE INCOME $ 1,929 $ 1,793 $ 2,888 $ 2,048
======= ======= ======= =======
</TABLE>
See notes to Consolidated Condensed Financial Statements.
<PAGE> 5
ESCALADE, INCORPORATED AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENT OF CASH FLOWS (UNAUDITED)
(Dollars in Thousands)
<TABLE>
<CAPTION>
Nine Months Ended
Oct. 3, 1998 Oct. 4, 1997
Operating Activities: ----------------------------------------
<S> <C> <C>
Net Income $ 2,995 $ 2,048
Depreciation and amortization 2,282 2,020
Adjustments necessary to reconcile
net income to net cash provided by
operating activities 2,641 3,686
------- -------
Net cash provided by
operating activities 7,918 7,754
------- -------
Investing Activities:
Purchase of 100% of the stock of
Master Product Manufacturing, Inc. --- (9,118)
Purchase of property and equipment (698) (1,459)
------- -------
Net cash (used) by investing activities (698) (10,577)
------- -------
Financing Activities:
Net inc.(dec.) in notes pay.- bank (1,275) 2,200
Net inc.(dec.) in long-term debt (7,300) (800)
Proceeds from exercise of stock options 403 188
Purchase of Common Stock - Dutch Auction
& Open Market --- (8)
------- -------
Net cash provided (used) by
financing activities (8,172) 1,580
------- -------
(Decrease) in cash (952) (1,243)
Cash, beginning of period 1,246 1,319
------- -------
Cash, end of period $ 294 $ 76
======= =======
</TABLE>
See notes to Consolidated Condensed Financial Statements.
<PAGE> 6
ESCALADE, INCORPORATED AND SUBSIDIARIES
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS (UNAUDITED)
Note A - Basis of Presentation
- ------------------------------
In the opinion of the Company, the accompanying unaudited consolidated
condensed financial statements contain all adjustments (consisting of only
normal recurring accruals) necessary to present fairly the financial position of
the company as of October 3, 1998, October 4, 1997, and December 27, 1997 and
the results of operations and changes in financial position for the nine months
ended October 3, 1998 and October 4, 1997. The balance sheet at December 27,
1997 was derived from the audited balance sheet included in the 1997 annual
report to shareholders.
Note B - Seasonal Aspects
- -------------------------
The results of operations for the nine month periods ended October 3,
1998 and October 4, 1997 are not necessarily indicative of the results to be
expected for the full year.
Note C - Inventories (Dollars in Thousands)
- -------------------------------------------
<TABLE>
<CAPTION>
10-3-98 10-4-97 12-27-97
------- ------- --------
<S> <C> <C> <C>
Raw Materials $ 6,711 $ 5,854 $ 3,560
Work In Process 3,946 4,030 3,412
Finished Goods 9 673 12,809 5,665
------- ------- -------
$20,330 $22,693 $12,637
======= ======= =======
</TABLE>
Note D - Income Taxes
- ---------------------
The provision for income taxes was computed based on financial
statement income.
<PAGE> 7
Note E - Earnings Per Share
- -----------------------------
Earnings per share (EPS) were computed as follows:
<TABLE>
<CAPTION>
Three Months Ended
October 3, 1998
------------------------------------------------------
Weighted
Average Per Share
Income Shares Amount
------- --------- ---------
<S> <C> <C> <C>
Net Income $ 2,072
-------
Basic Earnings per Share
Income available to common
stockholders 2,072 3,107 $.67
=======
Effect of Dilutive Securities
Stock options .21
------- --------
Diluted Earnings Per Share
Income available to common
stockholders and assumed
conversions $ 2,072 3,128 $.66
======= ======= =======
</TABLE>
<TABLE>
<CAPTION>
Three Months Ended
October 4, 1997
-------------------------------------------------------
Weighted
Average Per Share
Income Shares Amount
------- --------- ----------
<S> <C> <C> <C>
Net Income $ 1,793
-------
Basic Earnings per Share
Income available to common
stockholders 1,793 3,128 $.57
=====
Effect of Dilutive Securities
Stock options .46
Warrants .65
------- ------
Diluted Earnings Per Share
Income available to common
stockholders and assumed
conversions $ 1,793 3,239 $.55
======= ====== ======
</TABLE>
<PAGE> 8
Note E - Earnings Per Share
- -----------------------------
Earnings per share (EPS) were computed as follows:
<TABLE>
<CAPTION>
Nine Months Ended
October 3, 1998
-------------------------------------------------------
Weighted
Average Per Share
Income Shares Amount
------- --------- ----------
<S> <C> <C> <C>
Net Income $ 2,995
-------
Basic Earnings per Share
Income available to common
stockholders 2,995 3,091 $.97
=======
Effect of Dilutive Securities
Stock options .19
------- --------
Diluted Earnings Per Share
Income available to common
stockholders and assumed
conversions $ 2,995 3,110 $.96
======= ======= =======
</TABLE>
<TABLE>
<CAPTION>
Nine Months Ended
October 4, 1997
--------------------------------------------------------
Weighted
Average Per Share
Income Shares Amount
------- --------- ----------
<S> <C> <C> <C>
Net Income $ 2,048
-------
Basic Earnings per Share
Income available to common
stockholders 2,048 3,104 $.66
=====
Effect of Dilutive Securities
Stock options .46
Warrants .65
------- ------
Diluted Earnings Per Share
Income available to common
stockholders and assumed
conversions $ 2,048 3,215 $.64
======= ====== =====
</TABLE>
<PAGE> 9
Note F - Segment Information
- -----------------------------
<TABLE>
<CAPTION>
As of and for the Nine Months Ended
October 3, 1998
-------------------------------------------------------------
Office and
Sporting Graphic
Goods Arts Corporate Total
------------ ---------- --------- ---------
<S> <C> <C> <C> <C>
Revenues from external customers $33,432 $23,606 $ --- $ 57,038
Net Income 664 2,343 (12) 2,995
Assets $34,928 $19,913 $3,301 $58,142
</TABLE>
<TABLE>
<CAPTION>
As of and for the Nine Months Ended
October 4, 1997
-------------------------------------------------------------
Office and
Sporting Graphic
Goods Arts Corporate Total
------------ ---------- --------- ---------
<S> <C> <C> <C> <C>
Revenues from external customers $35,008 $18,175 $ --- $ 53,183
Net Income 413 1,637 ( 2) 2,048
Assets $36,510 $20,238 $3,527 $60,275
</TABLE>
<PAGE> 10
ESCALADE, INCORPORATED AND SUBSIDIARIES
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
The following is Management's discussion and analysis of certain
significant factors which have affected the Company's earnings during the
periods included in the accompanying consolidated condensed statements of
income.
RESULTS OF OPERATIONS
THIRD QUARTER COMPARISON 1998 vs. 1997
Net sales were $22,178,000 in the third quarter of 1998 as compared to
$22,716,000 in the third quarter of 1997, a decrease of $538,000 or 2.4%. Sales
of sporting goods decreased $278,000, or 1.8% and sales of office and graphic
arts products decreased $260,000 or 3.7%.
The small decreases in both sporting goods and office and graphic arts
products net sales were the result of some small increases being offset by some
small decreases in various product lines.
Cost of sales was $14,455,000 in the third quarter of 1998 as compared
to $14,845,000 in the third quarter of 1997, a decrease of $390,000 or 2.6%.
Cost of sales as a percentage of net sales was 65.2% in the third
quarter of 1998 as compared to 65.4% in the third quarter of 1997.
Selling, general, and administrative expenses were $3,918,000 in the
third quarter of 1998 as compared to $4,345,000 in the third quarter of 1997, a
decrease of $427,000 or 9.8%.
Selling, general and administrative expenses as a percentage of net
sales was 17.7% in the third quarter of 1998 as compared to 19.1% in the third
quarter of 1997. This decrease as a percentage of net sales was mainly due to
lower compensation expenses, sales promotion expenses and bad debt expense.
Interest expense decreased $115,000 or 30.4% from $378,000 last year
to $263,000 this year because of reduced borrowing levels.
Net income for the quarter this year was $2,072,000 as compared to
$1,793,000 last year, an increase of $279,000 or 15.6%. This increase was
basically 50% in sporting goods and 50% in office and graphic arts products.
NINE MONTHS COMPARISON 1998 VS. 1997
Net sales were $57,038,000 in the first nine months of 1998 as
compared to $53,183,000 in the first nine months of 1997, an increase of
$3,855,000 or 7.2%. Sales of sporting goods decreased $1,576,000 or 4.7% and
sales of office and graphic arts products increased $5,431,000 or 29.9%.
The decrease in sporting goods net sales was due mainly to reduced
volume in table tennis tables. The increase in net sales for the office and
graphic arts product segment was mainly due to the Master Products acquisition
in June of 1997.
Cost of sales was $39,104,000 in the first nine months of 1998 as
compared to $36,694,000 in 1997, an increase of $2,410,000 or 6.6%.
Cost of sales as a percentage of net sales was 68.6% in the first nine
months of 1998 as compared to 69.0% in the first nine months of 1997.
<PAGE> 11
Selling, general, and administrative expenses were $11,704,000 in the
first nine months of 1998 as compared to $11,934,000 in the first nine months of
1997, a decrease of $230,000 or 1.9%.
Selling, general, and administrative expenses as a percentage of net
sales were 20.5% in 1998 as compared to 22.4% in 1997. The decrease in these
expenses as a percentage of net sales was mainly due to reduced compensation
expenses, sales promotion expenses, and bad debt expense.
Interest expense was $851,000 in the first nine months of 1998 as
compared to $849,000 in the first nine months of 1997.
The net income in the first nine months of 1998 was $2,995,000 as
compared to $2,048,000 in the first nine months of 1997. This is a $947,000
increase with sporting goods being about 25% and office and graphic arts
products 75% of the increase.
LIQUIDITY AND CAPITAL RESOURCES
The Company's net cash provided by operating activities was $7,918,000
in the first nine months of 1998 as compared to $7,754,000 in the first nine
months of 1997. Most of the cash provided by operating activities in 1998 was
from collection of the year end accounts receivable. The net accounts receivable
balance at the end of the year in 1997 was $30,602,000 and at the end of the
first nine months of 1998, the net accounts receivable balance was $17,461,000.
The Company's net cash used for investing activities was $698,000 in the first
nine months of 1998 as compared to $10,577,000 in the first nine months of 1997.
This decrease of $9,879,000 was due to the acquisition of Master Products in
1997. The Company's net cash used by financing activities was $8,172,000 in the
first nine months of 1998 as compared to $1,580,000 net cash provided by
financing in the first nine months of 1997. The cash used in 1998 was mainly to
pay down long term debt.
The Company's working capital requirements are currently funded by
cash flow from operations, a domestic line of credit in the amount of
$12,000,000, which includes a letter of credit facility in the amount of
$2,000,000.
Inventories at the end of the first nine months of 1998 were
$20,330,000 as compared to $22,693,000 at the end of the first nine months of
1997, a decrease of $2,363.000.
<PAGE> 12
PART II. OTHER INFORMATION
Item 1, 2, and 3. Not Required.
Item 4. Submission of Matters to a Vote of Securities Holders.
The Registrant convened a special meeting of its stockholders on September 15,
1998 at the Registrant's principal executive offices in Evansville, Indiana.
Proxy materials for the special meeting had been mailed to all stockholders
commencing on September 4, 1998 relating to the proposed sale of the
Registrant's sporting goods assets to a subsidiary of Sportcraft, Ltd. (the
"Asset Sale") and the related name change of the Registrant to Martin Yale
Group, Inc.
As reported in the Registrant's recent Form 8-K, as amended, upon the
recommendation of the Registrant's management, the stockholders voted to adjourn
the Special Meeting until September 29 in light of uncertainty regarding the
Asset Sale. When the special meeting was reconvened on September 29, the
Registrant's management again recommended that the special meeting be adjourned,
this time until December 18, 1998 at 9:00 a.m. Central Time at the Registrant's
principal executive offices in Evansville, Indiana, pending the outcome of
ongoing discussions with Sportcraft regarding possible revisions to the terms of
the Asset Sale. Accordingly, the stockholders have not yet voted on either of
the two matters to be voted upon at the special meeting. If discussions with
Sportcraft result in mutually acceptable revised terms upon which the Asset Sale
could proceed, the Registrant expects that these matters will be voted upon when
the special meeting is reconvened on December 18.
Item 5. Not Required.
Item 6. Exhibits and Reports on Form 8-K.
(a) Exhibit 10.21 - Fifth Amendment to amended and restated credit agreement
dated as of September 30, 1998 with Bank One, Indiana.
Exhibit 10.32 - Loan Agreement between City of Wabash, Indiana and
Martin Yale Industries, Inc. Dated September 1, 1998.
Exhibit 10.33 - Trust Indenture between City of Wabash, Indiana and
Bank One Trust Company, NA dated September 1, 1998.
(b) Reports on Form 8-K - There was a report on Form 8-K filed on July 8, 1998
reporting that on June 26, 1998 Escalade announced the signing of a definitive
agreement providing for the Asset Sale. This Form 8-K has subsequently been
amended on August 25, 1998, September 23, 1998 and October 2, 1998 to reflect
ongoing developments relating to the Asset Sale and the special meeting of
stockholders (as discussed in Item 4 above).
<PAGE> 13
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
ESCALADE, INCORPORATED
Date: October 23, 1998 Robert E. Griffin
-------------- ----------------------------
Robert E. Griffin
Chairman and Chief
Executive Officer
Date: October 23, 1998 John R. Wilson
-------------- ----------------------------
John R. Wilson
Vice President and
Chief Financial Officer
<PAGE> 1
Exhibit 10.21
FIFTH AMENDMENT TO
AMENDED AND RESTATED CREDIT AGREEMENT
ESCALADE, INCORPORATED, an Indiana corporation (the "Company"), and
BANK ONE, INDIANA, National Association, a national banking association (the
"Bank") being parties to that certain Amended and Restated Credit Agreement
dated as of May 31, 1996 as amended from time to time (collectively the
"Agreement"), hereby agree to amend the Agreement by this Fifth Amendment to
Amended and Restated Credit Agreement (the "Fifth Amendment"), on the terms and
subject to the conditions set forth as follows:
1. DEFINITIONS. Terms used in this Fifth Amendment with their initial letter
capitalized which are not defined herein shall have the meanings ascribed to
them in the Agreement.
2. REVOLVING LOAN. Section 2.a(i) is hereby amended to change the amount of
Advances which can be made under the Revolving Loan to amounts not exceeding
Twelve Million and no/100 Dollars ($12,000,000.00) in the aggregate at any time
outstanding. The obligation to repay the Revolving Loan shall be evidenced by a
promissory note in the form of Exhibit A.
3. REPRESENTATIONS AND WARRANTIES. In order to induce the Bank to enter into
this Fifth Amendment, the Company represents and warrants to the Bank that:
a. The execution and delivery of this Fifth Amendment, the execution
and delivery of all of the other documents executed in connection
herewith, and the performance by the Company and the Guarantors of
their obligations under this Fifth Amendment and all of the documents
executed in connection herewith are within the corporate power of the
Company and each Guarantor, have been duly authorized by all necessary
corporate action, have received any required governmental or
regulatory agency approvals and do not and will not contravene or
conflict with any provision of law or of the Articles of Incorporation
or Bylaws of the Company or any Guarantor or of any agreement binding
upon the Company or any Guarantor or any of its property.
b. This Fifth Amendment and all of the documents executed by the
Company and the Guarantors in connection herewith are the legal, valid
and binding obligations of the Company and the Guarantors, enforceable
against the Company and the Guarantors in accordance with their
respective terms, except to the extent that enforcement thereof may be
limited by bankruptcy, insolvency, reorganization, moratorium and
other laws enacted for the relief of debtors generally and other
similar laws affecting the enforcement of creditors' rights generally
or by equitable principles which may affect the availability of
specific performance and other equitable remedies.
c. The representations and warranties contained in Section 3 of the
Agreement are true an correct as of the date hereof except that the
representations contained in Section 3.d. of the Agreement shall be
<PAGE> 2
deemed to refer to the latest financial statements furnished by the
company to the bank.
d. No Event of Default or Unmatured Event of Default has occurred and
is continuing as of the date of this Fifth Amendment.
4. CONDITIONS PRECEDENT. This Fifth Amendment shall become effective upon the
Bank's receipt of the following, contemporaneously with the execution of this
Fifth Amendment, each duly executed, dated and in form and substance
satisfactory to the Bank:
a. This Fifth Amendment;
b. The replacement Revolving Loan Note;
c. Receipt of payment of the reasonable legal fees and expenses of
Bank's counsel at closing or immediately upon receipt by Borrower of
an invoice therefor, and
d. Such other documents as the Bank may reasonably request.
5. PRIOR AGREEMENTS. The Agreement, as amended by this Fifth Amendment,
supersedes all previous agreements and commitments made or issued by the Bank,
related to all of the subjects of the Agreement, as amended by this Fifth
Amendment, and any oral or written proposals or commitments made or issued by
the Bank.
6. AFFIRMATION. Except as expressly amended by this Fifth Amendment, all of the
terms and conditions of the Agreement and each of the Loan Documents remains in
full force and effect.
Executed and delivered on this 30th day of September, 1998.
ESCALADE, INCORPORATED
By: John R. Wilson
Chief Financial Officer
BANK ONE, INDIANA, NATIONAL ASSOCIATION
By: D. Kelly Queisser
Vice President and Senior Relationship
Manager
<PAGE> 1
LOAN AGREEMENT
between
CITY OF WABASH, INDIANA
and
MARTIN YALE INDUSTRIES, INC.
--------------------------------------
RELATING TO
$2,700,000
CITY OF WABASH, INDIANA
ADJUSTABLE RATE ECONOMIC DEVELOPMENT
REVENUE REFUNDING BONDS, SERIES 1998
(MARTIN YALE INDUSTRIES, INC. PROJECT)
DATED
AS OF
September 1, 1998
--------------------------------------
Certain rights hereunder, excepting the Unassigned Issuer Rights
specified herein, have been assigned to Bank One Trust Company, NA, as Trustee.
Ice Miller Donadio & Ryan
Bond Counsel
<PAGE> 2
<TABLE>
<CAPTION>
TABLE OF CONTENTS
Page
----
<S> <C> <C>
ARTICLE I. DEFINITIONS 2
Section 1.1. Use of Defined Terms 2
Section 1.2. Definitions 2
Section 1.3. Interpretation 4
Section 1.4. Captions and Headings 5
ARTICLE II. REPRESENTATIONS, WARRANTIES AND COVENANTS 6
Section 2.1. Representations, Warranties and Covenants of the Issuer 6
Section 2.2. Representations, Warranties and Covenants of the Borrower 7
Section 2.3. Entire Agreement with Bank 9
ARTICLE III. ISSUANCE OF THE PROJECT BONDS 10
Section 3.1. Refunding of the Prior Bonds 10
Section 3.2. [RESERVED] 10
Section 3.3. Issuance of the Project Bonds; Application of Proceeds 10
Section 3.4. Disbursements from the Refunding Fund 10
Section 3.5. Investment of Fund Moneys 10
Section 3.6. Borrower Required to Pay Issuance Costs and Accrued
Interest due on the Project Bonds 11
ARTICLE IV. LOAN BY ISSUER; REPAYMENT OF THE LOAN;
LOAN PAYMENTS AND ADDITIONAL PAYMENTS 12
Section 4.1. Loan Repayment; Delivery of Notes and Letter of Credit 12
Section 4.2. Additional Payments 13
Section 4.3. Place of Payments 13
Section 4.4. Obligations Unconditional 13
Section 4.5. Assignment of Agreement and Revenues 14
Section 4.6. Letter of Credit 14
ARTICLE V. ADDITIONAL AGREEMENTS AND COVENANTS 15
Section 5.1. Right of Inspection 15
Section 5.2. Sale, Lease or Grant of Use by Borrower 15
Section 5.3. Indemnification 15
Section 5.4. Borrower Not to Adversely Affect Exclusion from
Gross Income of Interest on Project Bonds 16
Section 5.5. Assignment by Issuer 16
</TABLE>
<PAGE> 3
<TABLE>
<S> <C> <C>
Section 5.6. Borrower's Performance Under Indenture 17
Section 5.7. Compliance with Laws 17
Section 5.8. Taxes, Permits, Utility and Other Charges 17
Section 5.9. Continued Existence 17
Section 5.10. Removal of Portions of the Project 17
ARTICLE VI. REDEMPTION OF PROJECT BONDS 19
Section 6.1. Optional Redemption 19
Section 6.2. Extraordinary Optional Redemption 19
Section 6.3. Mandatory Redemption of Project Bonds 20
Section 6.4. Actions by Issuer 20
Section 6.5. Required Deposits for Optional Redemption 21
ARTICLE VII. EVENTS OF DEFAULT AND REMEDIES 22
Section 7.1. Events of Default 22
Section 7.2. Remedies on Default 23
Section 7.3. No Remedy Exclusive 24
Section 7.4. Agreement to Pay Attorneys' Fees and Expenses 24
Section 7.5. No Waiver 24
Section 7.6. Notice of Default 24
Section 7.7. Remedies Subject to Bank's Direction 25
ARTICLE VIII. MISCELLANEOUS 26
Section 8.1. Term of Agreement 26
Section 8.2. Notices 26
Section 8.3. Extent of Covenants of the Issuer; No Personal Liability 26
Section 8.4. Binding Effect 26
Section 8.5. Amendments and Supplements 26
Section 8.6. Execution Counterparts 27
Section 8.7. Severability 27
Section 8.8. Governing Law 27
Section 8.9. Amounts Remaining in Funds 27
Exhibit A The Project A-1
Exhibit B Project Note B-1
</TABLE>
<PAGE> 4
THIS LOAN AGREEMENT is made and entered into as of September 1, 1998
between the City of Wabash, Indiana, a municipal corporation organized and
existing under the laws of the State of Indiana (the "Issuer"), and Martin Yale
Industries, Inc., an Indiana corporation (the "Borrower"), under the
circumstances summarized in the following recitals (the capitalized terms not
defined above or in the recitals being used therein as defined in or pursuant to
Article I hereof):
A. Pursuant to the provisions of Indiana Code 36-7-11.9 and 12 and
Indiana Code 5-1-5, as amended (collectively, the "Act"), in order to create or
preserve jobs and employment opportunities and improve the economic welfare of
the citizens of the City of Wabash, Indiana, the Issuer may issue economic
development revenue bonds to provide funds to refund the Prior Bonds, as defined
herein.
B. The Borrower and the Issuer have full right and lawful authority to
enter into this Agreement and to perform and observe the provisions hereof on
their respective parts to be performed and observed.
NOW, THEREFORE, in consideration of the premises and the mutual
covenants herein contained, the parties hereto covenant, agree and bind
themselves as follows (provided that any obligation of the Issuer created by or
arising out of this Agreement shall not be a general debt on its part but shall
be payable solely out of the Revenues):
<PAGE> 5
ARTICLE I.
DEFINITIONS
Section 1.1. USE OF DEFINED TERMS. Words and terms defined in the
Indenture shall have the same meanings when used herein, unless the context or
use clearly indicates another meaning or intent. In addition, the words and
terms set forth in Section 1.2 hereof shall have the meanings set forth therein
unless the context or use clearly indicates another meaning or intent.
Section 1.2. DEFINITIONS. As used herein:
"Additional Payments" means the amounts required to be paid by the
Borrower pursuant to the provisions of Section 4.2 hereof.
"Agreement" means this Loan Agreement, as amended or supplemented from
time to time.
"Bank" means Bank One, Indiana, NA, and its successors and assigns.
"Commission" means the Wabash Economic Development Commission.
"Credit Agreement" means the Amended and Restated Credit and Guaranty
Agreement dated as of the Closing Date among the Bank, the Borrower and the
Guarantor as amended and supplemented from time to time.
"Event of Default" means any of the events described as an Event of
Default in Section 7.1 hereof.
"Force Majeure" means any of the causes, circumstances or events
described as constituting Force Majeure in Section 7.1 hereof.
"Guarantor" means Escalade, Incorporated, an Indiana corporation and
its successors and assigns.
"Indenture" means the Trust Indenture, dated as of even date herewith,
between the Issuer and the Trustee, as amended or supplemented from time to
time.
"Loan" means the loan by the Issuer to the Borrower of the proceeds
received from the sale of the Project Bonds.
"Loan Payment Date" means any date on which any of the Loan Payments
are due and payable, whether at maturity, upon acceleration, call for redemption
or prepayment, or otherwise.
"Loan Payments" means the amounts required to be paid by the Borrower
in repayment of the Loan pursuant to the provisions of the Notes and of Section
4.1 hereof.
<PAGE> 6
"Notes" means the Project Note and any Additional Notes.
"Notice Address" means:
<TABLE>
<S> <C>
(a) As to the Issuer: City of Wabash, Indiana
City Hall, 202 S. Wabash St.
Wabash, Indiana 46992-3159
Attention: Clerk-Treasurer
(b) As to the Borrower: Martin Yale Industries, Inc.
251 Wedcor Avenue
Wabash, Indiana 46992
Attention: President
with a copy to: Escalade, Incorporated
817 Maxwell Avenue
P.O. Box 889
Evansville, Indiana 47706-0889
Attention: Chief Financial Officer
(c) As to the Trustee: Bank One Trust Company, NA
Bank One Center/Tower
111 Monument Circle, IN1-0160
P.O. Box 7700
Indianapolis, Indiana 46277
Attention: Corporate Trust Department
(d) As to the Bank: Bank One, Indiana, NA
Bank One Center/Tower
111 Monument Circle, Suite 1921
P.O. Box 7700
Indianapolis, Indiana 46277-0119
Attention: Manager, Indiana Commercial Services
(e) As to the
Remarketing Agent: Banc One Capital Markets, Inc.
150 East Gay Street
Columbus, Ohio 43215
Attention: Municipal Trading Desk
</TABLE>
or such additional or different address, notice of which is given under Section
8.2 hereof.
"Prior Bonds" means the City of Wabash, Indiana Economic Development
Revenue Bonds, Series 1990 (Martin Yale Industries, Inc. Project), dated May 31,
1990, issued in the original principal amount of $4,500,000.
<PAGE> 7
"Project" means the real and personal property, including undivided
interests or other interests therein, identified in Exhibit A attached hereto as
a part hereof, or acquired or installed as a replacement or substitution
therefor or an addition thereto, or as may result from any revisions thereof in
accordance with the provisions of this Agreement, which property was financed
from the proceeds of the Prior Bonds.
"Project Bonds" means the City of Wabash, Indiana Adjustable Rate
Economic Development Revenue Refunding Bonds, Series 1998 (Martin Yale
Industries, Inc. Project) authorized in the Indenture in the original principal
amount of $2,700,000.
"Project Note" means the promissory note of the Borrower, dated as of
even date with the Project Bonds, in the form attached hereto as Exhibit B and
in the principal amount of $2,7000,000 evidencing the obligation of the Borrower
to make Loan Payments.
"Remarketing Agreement" means the Remarketing Agreement between the
Borrower and the Remarketing Agent dated as of even date herewith.
"Refunding Fund" means the Refunding Fund created pursuant to Section
5.01 of the Indenture.
"Tax Certificate" means the Tax Representation Certificate of the
Borrower delivered in connection with the initial issuance and delivery of the
Project Bonds.
"Trustee" means the Trustee at the time acting as such under the
Indenture, originally Bank One Trust Company, NA, as Trustee, and any successor
Trustee as determined or designated under or pursuant to the Indenture.
"Unassigned Issuer's Rights" means all of the rights of the Issuer to
receive Additional Payments under Section 4.2 hereof, to be held harmless and
indemnified under Section 5.3 hereof, to be reimbursed for attorney's fees and
expenses under Section 7.4 hereof, and to give or withhold consent to
amendments, changes, modifications, alterations and termination of this
Agreement under Section 8.5 hereof.
Section 1.3. INTERPRETATION. Any reference herein to the Issuer or to
any member or officer of thereof includes entities or officials succeeding to
their respective functions, duties or responsibilities pursuant to or by
operation of law or lawfully performing their respective functions.
Any reference to a section or provision of the constitution of the
State or the Act, or to a section, provision or chapter of the Indiana Code or
to any statute of the United States of America, includes that section,
provision, chapter or statute as amended, modified, revised, supplemented or
superseded from time to time; provided, that no amendment, modification,
revision, supplement or superseding section, provision, chapter or statute shall
be applicable solely by reason of this provision if it constitutes in any way an
impairment of the rights or obligations of
<PAGE> 8
the Issuer, the Holders, the Trustee, the Bank or the Borrower under this
Agreement.
Unless the context indicates otherwise, words importing the singular
number include the plural number, and vice versa; the terms "hereof," "hereby,"
"herein," "hereto," "hereunder" and similar terms refer to this Agreement; and
the term "hereafter" means after, and the term "heretofore" means before, the
date of delivery of the Project Bonds. Words of any gender include the
correlative words of the other genders, unless the sense indicates otherwise.
Section 1.4. CAPTIONS AND HEADINGS. The captions and headings in this
Agreement are solely for convenience of reference and in no way define, limit or
describe the scope or intent of any Articles, Sections, subsections, paragraphs,
subparagraphs or clauses hereof.
(End of Article I)
<PAGE> 9
ARTICLE II.
REPRESENTATIONS, WARRANTIES AND COVENANTS
Section 2.1. REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE ISSUER.
The Issuer represents and warrants that:
(a) It is a municipal corporation duly organized and validly
existing under the laws of the State.
(b) It has full legal right, power and authority pursuant to
the Act to refund the Prior Bonds through the issuance of the Project
Bonds; has made the necessary findings of public purpose, has given any
necessary notices and has taken all other steps and followed all
procedures required by the Constitution and laws of the State
(including the Act) in connection therewith; and has full legal right,
power and authority to (i) enter into this Agreement, the Bond
Placement Agreement, the Letter of Representations and the Indenture,
(ii) issue, sell and deliver the Project Bonds and (iii) carry out and
consummate all other transactions contemplated by this Agreement, the
Bond Placement Agreement, the Letter of Representations and the
Indenture.
(c) It has duly authorized (i) the execution, delivery and
performance of this Agreement, the Project Bonds, the Bond Placement
Agreement, the Letter of Representations and the Indenture, and (ii)
the taking of any and all such actions as may be required on the part
of the Issuer to carry out, give effect to and consummate the
transactions contemplated by such instruments.
(d) This Agreement, the Bond Placement Agreement, the Letter
of Representations and the Indenture constitute legal, valid and
binding obligations of the Issuer, enforceable in accordance with their
respective terms; this Agreement, the Bond Placement Agreement, the
Letter of Representations and the Indenture have been duly authorized
and executed by the Issuer; and, when authenticated by the Trustee in
accordance with the provisions of the Indenture, the Project Bonds will
have been duly authorized, executed, issued and delivered and will
constitute legal, valid and binding special obligations of the Issuer
in conformity with the provisions of the Act and the Constitution of
the State.
(e) There is no action, suit, proceeding, inquiry, or
investigation at law or in equity or before or by any court, public
board or body, pending or, to the best of the knowledge of the Issuer,
threatened against the Issuer, nor to the best of the knowledge of the
Issuer is there any basis therefor, which in any manner questions the
validity of the Act, the powers of the Issuer referred to in paragraph
(b) above or the validity of any proceedings taken by the Issuer in
connection with the issuance of the Project Bonds or wherein any
unfavorable decision, ruling or finding could materially adversely
affect the transactions contemplated by this Agreement or which, in any
way, would adversely affect the validity or enforceability of the
Project Bonds, the Letter of Representations, the
<PAGE> 10
Indenture, the Bond Placement Agreement or this Agreement (or of any
other instrument required or contemplated for use in consummating the
transactions contemplated thereby and hereby).
(f) The execution and delivery by the Issuer of this
Agreement, the Project Bonds, the Bond Placement Agreement, the Letter
of Representations and the Indenture in compliance with the provisions
of each of such instruments will not conflict with or constitute a
breach of, or default under, any material commitment, agreement or
other instrument to which the Issuer is a party or by which it is
bound, or under any provision of the Act, the Constitution of the State
or any existing law, rule, regulation, ordinance, judgment, order or
decree to which the Issuer is subject.
(g) The Issuer will do or cause to be done all things
necessary, so far as lawful, to preserve and keep in full force and
effect its existence or to assure the assumption of its obligations
under this Agreement, the Indenture, the Letter of Representations and
the Project Bonds by any successor municipal corporation.
(h) The Project constitutes economic development facilities
within the meaning of the Act.
Section 2.2. REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE BORROWER.
The Borrower represents, warrants and covenants that:
(a) The Borrower is an Indiana corporation duly formed,
validly existing in full force and effect and qualified to transact
business under the laws of the State of Indiana, and has full power and
authority to execute, deliver and perform this Agreement, the Bond
Placement Agreement, the Credit Agreement, the Remarketing Agreement
and the Project Note and to enter into and carry out the transactions
contemplated by those documents. The execution, delivery and
performance do not, and will not, violate any provision of law
applicable to the Borrower or its Articles of Incorporation or By-laws
and will not conflict with or result in a default under any agreement
or instrument to which the Borrower is a party or by which the Borrower
is bound. This Agreement, the Bond Placement Agreement, the Credit
Agreement, the Remarketing Agreement and the Project Note, by proper
action, have been duly authorized, executed and delivered by the
Borrower and are valid and binding obligations of the Borrower.
(b) This Agreement, the Bond Placement Agreement, the
Remarketing Agreement, the Credit Agreement and the Project Note, by
proper action, have been duly authorized, executed and delivered by the
Borrower and are valid and binding obligations of the Borrower.
(c) The Project has created and preserved jobs and employment
opportunities in the City of Wabash, thereby improving the economic
welfare of the City of Wabash.
(d) The Project is owned by the Borrower and the acquisition,
installation and
<PAGE> 11
operation of the property comprising the Project by the Borrower
complies with all applicable zoning, planning, building, environmental
and other regulations of the governmental authorities having
jurisdiction over the Project, and all necessary permits, licenses,
consents and permissions necessary for the Project have been obtained.
(e) The representations contained in the Tax Certificate
(which is incorporated herein by this reference thereto) are true and
correct and the Borrower will observe the covenants contained therein
as fully as if set forth herein.
(f) The Borrower is not in default in the payment of principal
of, or interest on, any of the Borrower's indebtedness for borrowed
money, or in default under any instrument under which, or subject to
which, any indebtedness has been incurred, and no event has occurred
and is continuing under the provisions of any agreement involving the
Borrower that, with the lapse of time or the giving of notice, or both,
would constitute an event of default thereunder.
(g) No litigation at law or in equity nor any proceeding
before any governmental agency or other tribunal involving the Borrower
is pending or, to the knowledge of the Borrower, threatened, in which
any liability of the Borrower is not adequately covered by insurance or
in which any judgment or order would have a material and adverse effect
upon the business or assets of the Borrower or would materially and
adversely affect the Project, the validity of this Agreement, the Bond
Placement Agreement, the Credit Agreement, the Remarketing Agreement
and the Project Note or the performance of the Borrower's obligations
thereunder or the transactions contemplated hereby.
(h) The Borrower has not made and will not make any changes to
the Project or to the operation thereof which would affect the
qualification of the Project under the Act or impair the exclusion from
gross income for federal income tax purposes of the interest on the
Project Bonds.
(i) The Bank does not control, either directly or indirectly
through one or more intermediaries, the Borrower. Likewise, the
Borrower does not control, either directly or indirectly through one or
more intermediaries, the Bank. "Control" for this purpose has the
meaning given to such term in Section 2(a)(9) of the Investment Company
Act of 1940. The Borrower has covenanted in the Agreement to provide
written notice to the Trustee, the Remarketing Agent, and the
Bondholders thirty (30) days prior to consummation of any transaction
that would result in the Borrower controlling or being controlled by
the Bank or any provider of an Alternate Letter of Credit or
Supplemental Credit Facility, as defined in the Indenture.
Section 2.3. ENTIRE AGREEMENT WITH BANK.
(a) The Borrower hereby represents to the Issuer that the
Credit Agreement and any other loan documents relating to the Credit
Agreement constitute the entire agreement between the Borrower and the
Bank respecting the loan of any funds to the
<PAGE> 12
Borrower. The Borrower represents that there is no other agreement,
either oral or written, between the Borrower, on the one hand, or the
Bank on the other hand respecting the loan of any funds to the
Borrower.
(b) The Borrower hereby covenants to the Issuer that it will
not take any action, directly or indirectly (including, but not limited
to, any amendment to Section 12 of the Credit Agreement), nor fail to
take any action, directly or indirectly, which would cause any payment
under the Letter of Credit from the Bank to the Trustee to be a
voidable preference under Section 547 of Title 11 of the United States
Code, 11 U.S.C. ss. 101 et seq. (the "Bankruptcy Code") which is
recoverable under Section 550(a) of the Bankruptcy Code in the event of
the filing of a petition in bankruptcy by or against the Borrower or
the Issuer.
(End of Article II)
<PAGE> 13
ARTICLE III.
ISSUANCE OF THE PROJECT BONDS
Section 3.1. REFUNDING OF THE PRIOR BONDS. The Borrower agrees: (a) to
cause the Prior Bonds to be redeemed within ninety (90) days of delivery of the
Project Bonds; and (b) to pay all fees, costs and expenses incurred in refunding
the Prior Bonds from Funds of the Borrower.
Section 3.2. [RESERVED].
Section 3.3. ISSUANCE OF THE PROJECT BONDS; APPLICATION OF PROCEEDS. To
provide funds to make the Loan for purposes of assisting the Borrower in the
refunding of the Prior Bonds, the Issuer will issue, sell and deliver the
Project Bonds upon the order of the Placement Agent as provided in the Bond
Placement Agreement. The Project Bonds will be issued pursuant to the Indenture
in the aggregate principal amount, will bear interest, will mature and will be
subject to redemption as set forth therein. The Borrower hereby approves the
terms and conditions of the Indenture and the Project Bonds, and the terms and
conditions under which the Project Bonds will be issued, sold and delivered.
The proceeds from the sale of the Project Bonds shall be loaned to the
Borrower and paid over to the Trustee for the benefit of the Borrower and the
Holders of the Project Bonds and deposited as provided in Sections 5.01 and 5.03
of the Indenture.
At the request of the Borrower, and for the purposes and upon
fulfillment of the conditions specified in the Indenture, the Issuer may provide
for the issuance, sale and delivery of Additional Bonds and loan the proceeds
from the sale thereof to the Borrower.
Section 3.4. DISBURSEMENTS FROM THE REFUNDING FUND. Disbursements from
the proceeds of the sale of the Project Bonds which are deposited in the
Refunding Fund shall be used to effect the redemption of the Prior Bonds within
90 days of the delivery of the Project Bonds at the written direction of the
Borrower.
Section 3.5. INVESTMENT OF FUND MONEYS. At the written request of the
Authorized Borrower Representative, any moneys held as part of the Bond Fund
(except moneys held in the Bond Fund from draws on the Letter of Credit for
purposes of defeasing the Project Bonds pursuant to Article IX of the
Indenture), the Refunding Fund or the Rebate Fund shall be invested or
reinvested by the Trustee in Eligible Investments. The Issuer and the Borrower
each hereby covenants that it will restrict that investment and reinvestment and
the use of the proceeds of the Project Bonds in such manner and to such extent,
if any, as may be necessary, after taking into account reasonable expectations
at the time of delivery of and payment for the Project Bonds, so that the
Project Bonds will not constitute arbitrage bonds under Section 148 of the Code.
The Borrower shall provide the Issuer with, and the Issuer may base its
certifications as
<PAGE> 14
authorized by the Bond Resolution on, a certificate of the Borrower for
inclusion in the transcript of proceedings for the Project Bonds, setting forth
the reasonable expectations of the Borrower on the date of delivery of and
payment for the Project Bonds regarding the amount and use of the proceeds of
the Project Bonds and the facts, estimates and circumstances on which those
expectations are based.
Section 3.6. BORROWER REQUIRED TO PAY ISSUANCE COSTS AND ACCRUED
INTEREST DUE ON THE PROJECT BONDS. The Borrower agrees to pay all costs of
issuance for the Project Bonds from funds other than the proceeds of the Project
Bonds or the Prior Bonds, including but not limited to various counsel fees,
trustee fees, underwriting fees, accounting fees, printing fees, etc. The
Borrower further agrees to pay all interest accrued and unpaid on the Project
Bonds through the date of redemption of the Prior Bonds.
(End of Article III)
<PAGE> 15
ARTICLE IV.
LOAN BY ISSUER; REPAYMENT OF THE LOAN;
LOAN PAYMENTS AND ADDITIONAL PAYMENTS
Section 4.1. LOAN REPAYMENT; DELIVERY OF NOTES AND LETTER OF CREDIT.
Upon the terms and conditions of this Agreement, the Issuer will make the Loan
to the Borrower. In consideration of and in repayment of the Loan, the Borrower
shall make, as Loan Payments, payments sufficient in time and amount to pay when
due all Bond Service Charges, all as more particularly provided in the Project
Note and any Additional Note. The Project Note shall be executed and delivered
by the Borrower concurrently with the execution and delivery of this Agreement.
All Loan Payments shall be paid to the Trustee in accordance with the terms of
the Notes for the account of the Issuer and shall be held and applied in
accordance with the provisions of the Indenture and this Agreement. To the
extent of payments made with respect to Bond Service Charges pursuant to draws
upon the Letter of Credit, the Borrower shall receive a credit against its
obligation to make Loan Payments under this Agreement and the Project Note, and
shall deliver Loan Payments to the Bank as reimbursement to the Bank for draws
made under the Letter of Credit for the purpose of paying Bond Service Charges.
In connection with the issuance of any Additional Bonds permitted by
the Bank, the Borrower shall execute and deliver to the Trustee one or more
Additional Notes in a form substantially similar to the form of the Project
Note. All such Additional Notes shall:
(a) provide for payments of interest equal to the payments of
interest on the corresponding Additional Bonds;
(b) require payments of principal and prepayments and any
premium equal to the payments of principal, redemption payments and
sinking fund payments and any premium on the corresponding Additional
Bonds;
(c) require all payments on any such Additional Notes to be
made no later than the due dates for the corresponding payments to be
made on the corresponding Additional Bonds; and
(d) contain by reference or otherwise optional and mandatory
prepayment provisions and provisions in respect of the optional and
mandatory acceleration or prepayment of principal and any premium
corresponding with the redemption and acceleration provisions of the
corresponding Additional Bonds.
All Notes shall secure equally and ratably all outstanding Bonds,
except that, so long as no Event of Default described in paragraph (a), (b), (f)
or (g) of Section 7.01 of the Indenture has occurred and is continuing, payments
by the Borrower on the Project Note shall be used by the Trustee to reimburse
the Bank for payments made in connection with drawings on the Letter of Credit
used to pay Bond Service Charges on the Project Bonds.
<PAGE> 16
Upon payment in full, in accordance with the Indenture, of the Bond
Service Charges on any series of Bonds, whether at maturity or by redemption or
otherwise, or upon provision for the payment thereof having been made in
accordance with the provisions of the Indenture, (i) the Notes issued
concurrently with those corresponding Bonds, of the same maturity, bearing the
same interest rate and in an amount equal to the aggregate principal amount of
the Bonds so surrendered and canceled or for the payment of which provision has
been made, shall be deemed fully paid, the obligations of the Borrower
thereunder shall be terminated, and any such Notes shall be surrendered by the
Trustee to the Borrower, and shall be canceled by the Borrower, or (ii) in the
event there is only one of those Notes, an appropriate notation shall be
endorsed thereon evidencing the date and amount of the principal payment or
prepayment equal to the Bonds so paid, or with respect to which provision for
payment has been made, and that Note shall be surrendered by the Trustee to the
Borrower for cancellation if all Bonds shall have been paid (or provision made
therefor) and canceled as aforesaid. Unless the Borrower is entitled to a credit
under express terms of this Agreement or the Notes, all payments on each of the
Notes shall be in the full amount required thereunder.
Except for such interest of the Borrower and the Bank as may hereafter
arise pursuant to Section 5.07 or 5.08 of the Indenture, the Borrower and the
Issuer each acknowledge that neither the Borrower nor the Issuer has any
interest in the Bond Fund and any moneys deposited therein shall be in the
custody of and held by the Trustee in trust for the benefit of the Holders and,
to the extent of amounts due under the Credit Agreement, the Bank.
Section 4.2. ADDITIONAL PAYMENTS. The Borrower shall pay to the Issuer,
as Additional Payments hereunder, any and all costs and expenses incurred or to
be paid by the Issuer in connection with the issuance and delivery of the
Project Bonds and Additional Bonds or otherwise related to actions taken by the
Issuer under this Agreement or the Indenture.
The Borrower shall pay to the Trustee, the Registrar and any Paying
Agent or Authenticating Agent, their reasonable fees, charges and expenses,
including counsel fees and expenses, for acting as such under the Indenture.
Section 4.3. PLACE OF PAYMENTS. The Borrower shall make all Loan
Payments directly to the Trustee at its principal corporate trust office in
Indianapolis, Indiana. Additional Payments shall be made directly to the person
or entity to whom or to which they are due.
Section 4.4. OBLIGATIONS UNCONDITIONAL. The obligations of the Borrower
to make Loan Payments, Additional Payments and any payments required of the
Borrower under Section 6.03 of the Indenture shall be absolute and
unconditional, and the Borrower shall make such payments without abatement,
diminution or deduction regardless of any cause or circumstances whatsoever
including, without limitation, any defense, set-off, recoupment or counterclaim
which the Borrower may have or assert against the Issuer, the Trustee, any
Paying Agent or Authenticating Agent, the Remarketing Agent, the Bank or any
other Person; provided that the Borrower may contest or dispute the amount of
any such obligation (other than Loan Payments) so long as such contest or
dispute does not result in an Event of Default under the Indenture.
<PAGE> 17
Section 4.5. ASSIGNMENT OF AGREEMENT AND REVENUES. To secure the
payment of Bond Service Charges, the Issuer shall assign to the Trustee, by the
Indenture, all its right, title and interest in and to the Revenues, the
Agreement (except for Unassigned Issuer's Rights) and the Project Note.
The Borrower hereby agrees and consents to that assignment.
Section 4.6. LETTER OF CREDIT. Simultaneously with the initial delivery
of the Project Bonds pursuant to the Indenture and the Bond Placement Agreement,
the Borrower shall cause the Bank to issue and deliver the Letter of Credit to
the Trustee. The Letter of Credit may be replaced by an Alternate Letter of
Credit complying with the provisions of Section 5.09 of the Indenture and shall
be in substantially the form attached to the Credit Agreement and made a part
thereof. The Borrower shall take whatever action may be necessary to maintain
the Letter of Credit or an Alternate Letter of Credit in full force and effect
during the period required by the Indenture, including the payment to the Bank
of all amounts due and payable under the Credit Agreement.
(End of Article IV)
<PAGE> 18
ARTICLE V.
ADDITIONAL AGREEMENTS AND COVENANTS
Section 5.1. RIGHT OF INSPECTION. Subject to reasonable security and
safety regulations and upon reasonable notice, the Issuer, the Bank and the
Trustee, and their respective agents, shall have the right during normal
business hours to inspect the Project.
Section 5.2. SALE, LEASE OR GRANT OF USE BY BORROWER. With the written
consent of the Bank and subject to any other agreement to which the Borrower is
a party or by which it is bound, the Borrower may sell, lease or grant the right
to occupy and use the Project, in whole or in part, to others, provided that:
(a) No such sale, lease or grant shall relieve the Borrower
from the Borrower's obligations under this Agreement or the Notes;
(b) In connection with any such sale, lease or grant the
Borrower shall retain such rights and interests as will permit the
Borrower to comply with the Borrower's obligations under this Agreement
and the Notes;
(c) No such sale, lease or grant shall impair materially the
purposes of the Act to be accomplished by operation of the Project as
herein provided or adversely affect the exclusion from gross income for
federal income tax purposes of the interest on the Bonds.
Section 5.3. INDEMNIFICATION. The Borrower releases the Issuer and the
State from, agrees that the Issuer and the State shall not be liable for, and
shall indemnify the Issuer and the State against, all liabilities, claims, costs
and expenses, including attorneys fees and expenses, imposed upon, incurred or
asserted against the Issuer or the State on account of: (a) any loss or damage
to property or injury to or death of or loss by any person that may be
occasioned by any cause whatsoever pertaining to the acquisition, construction,
equipping, installation, maintenance, operation or use of the Project; (b) any
breach or default on the part of the Borrower in the performance of any covenant
or agreement of the Borrower under this Agreement, the Credit Agreement, the
Project Note or any related document, or arising from any act or failure to act
by the Borrower, or any of the Borrower's agents, contractors, servants,
employees or licensees; (c) the authorization, issuance, failure to issue, sale,
trading, redemption or servicing of the Project Bonds, and the provision of any
information or certification furnished in connection therewith concerning the
Project Bonds, the Project or the Borrower including, without limitation, the
Preliminary Offering Memorandum and the Offering Memorandum (each as defined in
the Bond Placement Agreement), any information furnished by the Borrower for,
and included in, or used as a basis for preparation of, any certifications,
information statements or reports furnished by the Issuer, and any other
information or certification obtained from the Borrower to assure the exclusion
of the interest on the Project Bonds from gross income of the Holders thereof
for federal income tax purposes; (d) the Borrower's failure to comply with any
requirement of this Agreement or the Code pertaining to
<PAGE> 19
such exclusion of that interest, including the covenants in Section 5.4 hereof;
and (e) any claim, action or proceeding brought with respect to the matters set
forth in (a), (b), (c) or (d) above.
The Borrower agrees to indemnify the Trustee for, and to hold it
harmless against, all liabilities, claims, costs and expenses, including counsel
fees and expenses, incurred without negligence or willful misconduct on the part
of the Trustee on account of any action taken or omitted to be taken by the
Trustee in accordance with the terms of this Agreement, the Bonds, the Credit
Agreement, the Letter of Credit, the Notes or the Indenture, or any action taken
at the request of or with the consent of the Borrower, including the costs and
expenses of the Trustee in defending itself against any such claim, action or
proceeding brought in connection with the exercise or performance of any of its
powers or duties under this Agreement, the Bonds, the Indenture, the Credit
Agreement, the Letter of Credit or the Notes.
In case any action or proceeding is brought against the Issuer, the
State or the Trustee in respect of which indemnity may be sought hereunder, the
party seeking indemnity promptly shall give notice of that action or proceeding
to the Borrower, and the Borrower upon receipt of that notice shall have the
obligation and the right to assume the defense of the action or proceeding;
provided, that failure of a party to give that notice shall not relieve the
Borrower from any of the Borrower's obligations under this Section unless that
failure materially prejudices the defense of the action or proceeding by the
Borrower. An indemnified party at its own expense may employ separate counsel
and participate in the defense. The Borrower shall not be liable for any
settlement made without the Borrower's consent.
The indemnification set forth above is intended to and shall include
the indemnification of all affected officials, directors, members, officers and
employees of the Issuer, the State and the Trustee, respectively. That
indemnification is intended to and shall be enforceable by the Issuer and the
Trustee, respectively, to the full extent permitted by law.
Section 5.4. BORROWER NOT TO ADVERSELY AFFECT EXCLUSION FROM GROSS
INCOME OF INTEREST ON PROJECT BONDS. The Borrower hereby represents that the
Borrower has taken and caused to be taken, and covenants that the Borrower will
take and cause to be taken, all actions that may be required of the Borrower,
alone or in conjunction with the Issuer, for the interest on the Project Bonds
to be and remain excluded from gross income for federal income tax purposes, and
represents that the Borrower has not taken or permitted to be taken on the
Borrower's behalf, and covenants that the Borrower will not take or permit to be
taken on the Borrower's behalf, any actions that would adversely affect such
exclusion under the provisions of the Code.
Section 5.5. ASSIGNMENT BY ISSUER. Except for the assignment of this
Agreement to the Trustee, the Issuer shall not attempt to further assign,
transfer or convey its interest in the Revenues or this Agreement or create any
pledge or lien of any form or nature with respect to the Revenues or the
payments hereunder.
Section 5.6. BORROWER'S PERFORMANCE UNDER INDENTURE. The Borrower has
examined the Indenture and approves the form and substance of, and agrees to be
bound by, its terms.
<PAGE> 20
The Borrower, for the benefit of the Issuer and each Bondholder, shall do and
perform all acts and things required or contemplated in the Indenture to be done
or performed by the Borrower. The Borrower is a third party beneficiary of
certain provisions of the Indenture, and Section 8.05 of the Indenture is hereby
incorporated herein by reference.
Section 5.7. COMPLIANCE WITH LAWS. The Borrower shall, throughout the
term of this Agreement, promptly comply or cause compliance in all material
respects with all laws, ordinances, orders, rules, regulations and requirements
of duly constituted public authorities which may be applicable to the Project or
to the repair and alteration thereof, or to the use or manner of use of the
Project or to the Borrower's and any lessee's operations on the Project Site.
Notwithstanding the foregoing, the Borrower shall have the right to contest or
cause to be contested the legality or the applicability of any such law,
ordinance, order, rule, regulation or requirement so long as, in the opinion of
counsel satisfactory to the Trustee and the Bank, such contest shall not in any
way materially adversely affect or impair the obligations of the Borrower
hereunder or any right or interest of the Trustee or the Bank in, to and under
the Indenture, the Credit Agreement or this Agreement.
Section 5.8. TAXES, PERMITS, UTILITY AND OTHER CHARGES. The Borrower
shall pay and discharge or cause to be paid and discharged, promptly as and when
the same shall become due and payable, all taxes and governmental charges of any
kind whatsoever that may be lawfully assessed against the Issuer, the Trustee,
the Bank or the Borrower with respect to the Project or any portion thereof. The
Borrower may in good faith contest or cause to be contested any such tax or
governmental charge, and in such event may permit such tax or governmental
charge to remain unsatisfied during the period of such contest and may appeal
therefrom unless in the opinion of counsel satisfactory to the Trustee and the
Bank, by such action any right or interest of the Trustee or the Bank in, to and
under the Indenture, the Credit Agreement or this Agreement shall be materially
endangered or the Project or any part thereof, shall become subject to imminent
loss or forfeiture, in which event such tax or governmental charge shall be paid
prior to any such loss or forfeiture. The Borrower shall procure or cause to be
procured any and all necessary building permits, other permits, licenses and
other authorizations required for the lawful and proper acquisition and
installation of the property comprising the Project and for the lawful and
proper use and operation of the Project.
Section 5.9. CONTINUED EXISTENCE. Except as otherwise provided in or
permitted pursuant to the Credit Agreement, or unless otherwise provided by law,
the Borrower shall maintain its existence and continue to be a corporation duly
formed and validly existing and in full force and effect under the laws of the
State of Indiana and duly authorized to transact business in the State.
Section 5.10. REMOVAL OF PORTIONS OF THE PROJECT. Upon the written
consent of the Bank, the Borrower shall have the right, from time to time, to
remove, substitute or modify any portion of the Project, provided that such
removal, substitution or modification shall not impair the character of the
Project as a "project" within the meaning of the Act. Any such substituted or
modified property shall be included under the terms of this Agreement as part of
the Project.
<PAGE> 21
(End of Article V)
<PAGE> 22
ARTICLE VI.
REDEMPTION OF PROJECT BONDS
Section 6.1. OPTIONAL REDEMPTION. Provided no Event of Default shall
have occurred and be continuing at any time and from time to time, the Borrower
may deliver moneys to the Trustee in addition to Loan Payments or Additional
Payments required to be made and direct the Trustee to use the moneys so
delivered for the purpose of purchasing Project Bonds or of reimbursing the Bank
for drawings on the Letter of Credit used to redeem Project Bonds called for
optional redemption in accordance with the applicable provisions of the
Indenture.
Section 6.2. EXTRAORDINARY OPTIONAL REDEMPTION. The Borrower, with the
prior written consent of the Bank, shall have, subject to the conditions
hereinafter imposed, the option to direct the redemption of the entire unpaid
principal balance of the Project Bonds in accordance with the applicable
provisions of the Indenture upon the occurrence of any of the following events:
(a) The Project shall have been damaged or destroyed to such
an extent that (1) it cannot reasonably be expected to be restored,
within a period of three months, to the condition thereof immediately
preceding such damage or destruction or (2) its normal use and
operation is reasonably expected to be prevented for a period of three
consecutive months;
(b) Title to, or the temporary use of, all or a significant
part of the Project shall have been taken under the exercise of the
power of eminent domain (1) to such extent that the Project cannot
reasonably be expected to be restored within a period of three months
to a condition of usefulness comparable to that existing prior to the
taking or (2) as a result of the taking, normal use and operation of
the Project is reasonably expected to be prevented for a period of
three consecutive months;
(c) As a result of any changes in the Constitution of the
State, the Constitution of the United States of America, or state or
federal laws, or as a result of legislative or administrative action
(whether state or federal) or by final decree, judgment or order of any
court or administrative body (whether state or federal) entered after
the contest thereof by the Issuer, the Trustee or the Borrower in good
faith, this Agreement shall have become void or unenforceable or
impossible of performance in accordance with the intent and purpose of
the parties as expressed in this Agreement, or if unreasonable burdens
or excessive liabilities shall have been imposed with respect to the
Project or the operation thereof, including, without limitation,
federal, state or other ad valorem, property, income or other taxes not
being imposed on the date of this Agreement other than ad valorem taxes
presently levied upon privately owned property used for the same
general purpose as the Project; or
(d) Changes in the economic availability of raw materials,
operating supplies, energy
<PAGE> 23
sources or supplies, or facilities (including, but not limited to,
facilities in connection with the disposal of industrial wastes)
necessary for the operation of the Project shall have occurred or
technological or other changes shall have occurred which the Borrower
cannot reasonably overcome or control and which in the Borrower's
reasonable judgment render the operation of the Project uneconomic.
With the prior written consent of the Bank, the Borrower also shall
have the option, in the event that title to or the temporary use of a portion of
the Project shall be taken under the exercise of the power of eminent domain,
even if the taking is not of such nature as to permit the exercise of the
redemption option upon an event specified in clause (b) above, to direct the
redemption, at a redemption price of 100% of the principal amount thereof
prepaid, plus accrued interest to the redemption date, of that part of the
outstanding principal balance of the Project Bonds as may be payable from the
proceeds received by the Borrower (after the payment of costs and expenses
incurred in the collection thereof) in the eminent domain proceeding, provided
that the Borrower shall furnish to the Issuer and the Trustee a certificate of
an Engineer stating that (1) the property comprising the part of the Project
taken is not essential to continued operations of the Project in the manner
existing prior to that taking, (2) the Project has been restored to a condition
substantially equivalent to that existing prior to the taking, or (3) other
improvements have been acquired or made which are suitable for the continued
operation of the Project.
To exercise any option under this Section, the Borrower within 90 days
following the event authorizing the exercise of that option, or at any time
during the continuation of the condition referred to in clause (d) of the first
paragraph of this Section, shall give notice to the Issuer and to the Trustee
specifying the date of redemption, which date shall be not more than ninety days
from the date that notice is mailed, and shall make arrangements satisfactory to
the Trustee for the giving of the required notice of redemption.
The rights and options granted to the Borrower in this Section may be
exercised whether or not the Borrower is in default hereunder; provided, that
such default will not relieve the Borrower from performing those actions which
are necessary to exercise any such right or option granted hereunder.
Section 6.3. MANDATORY REDEMPTION OF PROJECT BONDS. If, as provided in
the Project Bonds and the Indenture, the Project Bonds become subject to
mandatory redemption as a result of a Determination of Taxability, the Borrower
shall deliver to the Trustee, upon the date requested by the Trustee, moneys
sufficient to pay in full the Project Bonds, as appropriate, in accordance with
the mandatory redemption provisions relating thereto set forth in the Indenture.
Section 6.4. ACTIONS BY ISSUER. At the request of the Borrower or the
Trustee, the Issuer shall take all steps required of it under the applicable
provisions of the Indenture or the Bonds to effect the redemption of all or a
portion of the Bonds pursuant to this Article VI.
Section 6.5. REQUIRED DEPOSITS FOR OPTIONAL REDEMPTION. Except with the
prior written consent of the Bank, the Trustee shall not give notice of call to
the Holders pursuant to
<PAGE> 24
the optional redemption provisions of Section 4.01 of the Indenture and Sections
6.1 and 6.2 hereof unless, prior to the date by which the call notice is to be
given there shall be on deposit with the Trustee, Eligible Funds sufficient to
redeem at the redemption price thereof, including premium (if any) and interest
accrued to the redemption date, all Project Bonds for which notice of redemption
is to be given.
All amounts paid by the Borrower pursuant to this Article which are
used to pay principal of, premium, if any, or interest on the Bonds, or to
reimburse the Bank for moneys drawn under the Letter of Credit and used for such
purposes, shall constitute prepaid Loan Payments.
(End of Article VI)
<PAGE> 25
ARTICLE VII.
EVENTS OF DEFAULT AND REMEDIES
Section 7.1. EVENTS OF DEFAULT. Each of the following shall be an Event
of Default:
(a) The Borrower shall fail to pay when due any Loan Payment;
(b) Any representation or warranty by the Borrower contained
in this Agreement or in any certificate or instrument delivered by the
Borrower pursuant to this Agreement or in connection with the issuance
of the Project Bonds or any Additional Bonds is false or misleading in
any material respect;
(c) The Borrower shall fail to observe and perform any
agreement, term or condition contained in this Agreement, and the
continuation of such failure for a period of 30 days after notice
thereof shall have been given to the Borrower by the Issuer or the
Trustee, or for such longer period as the Issuer and the Trustee may
agree to in writing; provided, that if the failure is other than the
payment of money and is of such nature that it can be corrected but not
within the applicable period, that failure shall not constitute an
Event of Default so long as the Borrower institutes curative action
within the applicable period and diligently pursues that action to
completion;
(d) The Borrower shall: (i) admit in writing its inability to
pay its debts generally as they become due; (ii) have an order for
relief entered in any case commenced by or against it under the federal
bankruptcy laws, as now or hereafter in effect; (iii) commence a
proceeding under any other federal or state bankruptcy, insolvency,
reorganization or similar law, or have such a proceeding commenced
against it and either have an order of insolvency or reorganization
entered against it or have the proceeding remain undismissed and
unstayed for 90 days; (iv) make an assignment for the benefit of
creditors; or (v) have a receiver or trustee appointed for it or for
the whole or any substantial part of its property;
(e) There shall occur an "Event of Default" as defined in the
Indenture.
Notwithstanding the foregoing, if, by reason of Force Majeure, the
Borrower is unable to perform or observe any agreement, term or condition which
would give rise to an Event of Default under paragraph (c) above (other than the
payment of moneys), the Borrower shall not be deemed in default during the
continuance of such inability. However, the Borrower shall promptly give notice
to the Trustee and the Issuer of the existence of an event of Force Majeure and
shall use its best efforts to remove the effects thereof; provided that the
settlement of strikes or other industrial disturbances shall be entirely within
the Borrower's discretion.
The term Force Majeure shall mean, without limitation, the following:
<PAGE> 26
(i) acts of God; strikes; lockouts or other
industrial disturbances; acts of public enemies; orders or
restraints of any kind of the government of the United States
of America or of the State or any of their departments,
agencies, political subdivisions or officials, or any civil or
military authority; insurrections; civil disturbances; riots;
epidemics; landslides; lightning; earthquakes; fires;
hurricanes; tornados; storms; droughts; floods; arrests;
restraint of government and people; explosions; breakage,
malfunction or accident to facilities, machinery, transmission
pipes or canals; partial or entire failure of utilities;
shortages of labor, materials, supplies or transportation; or
(ii) any cause, circumstance or event not reasonably
within the control of the Borrower.
The provisions of paragraph (d) above are subject to the condition that
the declaration of an Event of Default due to any of the facts or circumstances
specified therein, and the exercise of remedies upon any such declaration, shall
be subject to any applicable limitations of the United States Bankruptcy Code
affecting or precluding such declaration or exercise during the pendency of or
immediately following any bankruptcy, liquidation or reorganization proceedings.
Section 7.2. REMEDIES ON DEFAULT. Whenever an Event of Default shall
have happened and be continuing, any one or more of the following remedial steps
may be taken:
(a) If and only if acceleration of the principal amount of the
Bonds has been declared pursuant to Section 7.03 of the Indenture, the
Trustee shall declare all Loan Payments and Notes to be immediately due
and payable, whereupon the same shall become immediately due and
payable;
(b) The Bank or the Trustee may have access to, inspect,
examine and make copies of the books, records, accounts and financial
data of the Borrower pertaining to the Project; and
(c) The Issuer or the Trustee may pursue all remedies now or
hereafter existing at law or in equity to collect all amounts then due
and thereafter to become due under this Agreement, the Letter of Credit
or the Notes or to enforce the performance and observance of any other
obligation or agreement of the Borrower under those instruments.
Notwithstanding the foregoing, the Issuer shall not be obligated to
take any step which in its opinion will or might cause it to expend time or
money or otherwise incur liability unless and until a satisfactory indemnity
bond has been furnished to the Issuer at no cost or expense to the Issuer. Any
amounts collected as Loan Payments or applicable to Loan Payments and any other
amounts which would be applicable to payment of Bond Service Charges collected
pursuant to action taken under this Section shall be paid into the Bond Fund and
applied in accordance with the provisions of the Indenture or, if the
outstanding Bonds have been paid and discharged in accordance with the
provisions of the Indenture, shall be paid as provided in
<PAGE> 27
Section 5.08 of the Indenture for transfers of remaining amounts in the Bond
Fund.
The provisions of this section are subject to the further limitation
that the rescission by the Trustee of its declaration that all of the Bonds are
immediately due and payable also shall constitute an annulment of any
corresponding declaration made pursuant to paragraph (a) of this Section and
a waiver and rescission of the consequences of that declaration and of the Event
of Default with respect to which that declaration has been made, provided that
no such waiver or rescission shall extend to or affect any subsequent or other
default or impair any right consequent thereon.
Section 7.3. NO REMEDY EXCLUSIVE. No remedy conferred upon or reserved
to the Issuer or the Trustee by this Agreement is intended to be exclusive of
any other available remedy or remedies but each and every such remedy shall be
cumulative and shall be in addition to every other remedy given under this
Agreement, the Letter of Credit or any Note, or now or hereafter existing at
law, in equity or by statute. No delay or omission to exercise any right or
power accruing upon any default shall impair that right or power or shall be
construed to be a waiver thereof, but any such right and power may be exercised
from time to time and as often as may be deemed expedient. In order to entitle
the Issuer or the Trustee to exercise any remedy reserved to it in this Article,
it shall not be necessary to give any notice, other than any notice required by
law or for which express provision is made herein.
Section 7.4. AGREEMENT TO PAY ATTORNEYS' FEES AND EXPENSES. If an Event
of Default should occur and the Issuer or the Trustee should incur expenses,
including attorneys' fees, in connection with the enforcement of this Agreement,
the Letter of Credit or any Note or the collection of sums due thereunder, the
Borrower shall reimburse the Issuer and the Trustee, as applicable, for the
reasonable expenses so incurred upon demand.
Section 7.5. NO WAIVER. No failure by the Issuer or the Trustee to
insist upon the strict performance by the Borrower of any provision hereof shall
constitute a waiver of their right to strict performance and no express waiver
shall be deemed to apply to any other existing or subsequent right to remedy the
failure by the Borrower to observe or comply with any provision hereof.
The Issuer and the Trustee may waive any Event of Default hereunder
only with the prior written consent of the Bank.
Section 7.6. NOTICE OF DEFAULT. The Borrower or the Issuer shall notify
the Trustee and the Bank immediately if it becomes aware of the occurrence of
any Event of Default hereunder or of any fact, condition or event which, with
the giving of notice or passage of time or both, would become an Event of
Default.
Section 7.7. REMEDIES SUBJECT TO BANK'S DIRECTION. Except in the case
of an Event of Default pursuant to Section 7.01(g) or (h) of the Indenture, the
Bank shall have the right to direct the remedies to be exercised by the Trustee,
whether under Article VII of this Agreement or under Article VII of the
Indenture.
<PAGE> 28
(End of Article VII)
<PAGE> 29
ARTICLE VIII.
MISCELLANEOUS
Section 8.1. TERM OF AGREEMENT. This Agreement shall be and remain in
full force and effect from the date of initial delivery of the Project Bonds
until such time as all of the Bonds shall have been fully paid (or provision
made for such payment) pursuant to the Indenture and all other sums payable by
the Borrower under this Agreement and the Notes shall have been paid, except for
obligations of the Borrower under Sections 4.2 and 5.3 hereof, which shall
survive any termination of this Agreement.
Section 8.2. NOTICES. All notices, certificates, requests or other
communications hereunder shall be in writing and shall be deemed to be
sufficiently given when mailed by first class mail, postage prepaid, and
addressed to the appropriate Notice Address. A duplicate copy of each notice,
certificate, request or other communication given hereunder to the Issuer, the
Borrower, the Bank or the Trustee shall also be given to the others. The
Borrower, the Issuer, the Bank and the Trustee, by notice given hereunder, may
designate any further or different addresses to which subsequent notices,
certificates, requests or other communications shall be sent.
Section 8.3. EXTENT OF COVENANTS OF THE ISSUER; NO PERSONAL LIABILITY.
All covenants, obligations and agreements of the Issuer contained in this
Agreement or the Indenture shall be effective to the extent authorized and
permitted by applicable law. No such covenant, obligation or agreement shall be
deemed to be a covenant, obligation or agreement of any present or future
member, officer, agent or employee of the Issuer or the Commission in other than
his official capacity, and neither the members of the Issuer and the Commission
nor any official executing the Bonds shall be liable personally on the Bonds or
be subject to any personal liability or accountability by reason of the issuance
(or failure to issue) thereof or by reason of the covenants, obligations or
agreements of the Issuer contained in this Agreement or in the Indenture.
Section 8.4. BINDING EFFECT. This Agreement shall inure to the benefit
of and shall be binding in accordance with its terms upon the Issuer, the
Borrower and their respective successors and assigns; provided that this
Agreement may not be assigned by the Borrower (except in connection with a sale,
lease or grant of use pursuant to Section 5.2 hereof) and may not be assigned by
the Issuer except to the Trustee pursuant to the Indenture or as otherwise may
be necessary to enforce or secure payment of Bond Service Charges. This
Agreement may be enforced only by the parties, their assignees and others who
may, by law, stand in their respective places.
Section 8.5. AMENDMENTS AND SUPPLEMENTS. Except as otherwise expressly
provided in this Agreement, any Note or the Indenture, subsequent to the
issuance of the Project Bonds and prior to all conditions provided for in the
Indenture for release of the Indenture having been met, this Agreement or any
Note may not be effectively amended, changed, modified, altered or
<PAGE> 30
terminated except in accordance with the applicable provisions of Article XI of
the Indenture.
Section 8.6. EXECUTION COUNTERPARTS. This Agreement may be executed in
any number of counterparts, each of which shall be regarded as an original and
all of which shall constitute but one and the same instrument.
Section 8.7. SEVERABILITY. If any provision of this Agreement, or any
covenant, obligation or agreement contained herein, is determined by a court of
competent jurisdiction to be invalid or unenforceable, that determination shall
not affect any other provision, covenant, obligation or agreement, each of which
shall be construed and enforced as if the invalid or unenforceable portion were
not contained herein. That invalidity or unenforceability shall not affect any
valid and enforceable application thereof, and each such provision, covenant,
obligation or agreement shall be deemed to be effective, operative, made,
entered into or taken in the manner and to the full extent permitted by law.
Section 8.8. GOVERNING LAW. This Agreement shall be deemed to be a
contract made under the laws of the State and for all purposes shall be governed
by and construed in accordance with the laws of the State.
Section 8.9. AMOUNTS REMAINING IN FUNDS. Any amounts in the Bond Fund
remaining unclaimed by the Holders of Bonds for four years after the due date
thereof (whether at stated maturity, by redemption or pursuant to any mandatory
sinking fund requirements or otherwise), shall be paid to the Borrower provided
that if the Trustee shall have drawn on the Letter of Credit, and the Bank is
owed any amount by the Borrower pursuant to the Credit Agreement, such amounts
remaining in the Bond Fund shall belong to and be paid first to the Bank to the
extent of such unpaid amounts. With respect to that principal of and any premium
and interest on the Bonds to be paid from moneys paid to the Borrower or the
Bank pursuant to the preceding sentence, the Holders of the Bonds entitled to
those moneys shall look solely to the Borrower for the payment of those moneys.
Further, any amounts remaining in the Bond Fund (subject to any
limitations in the Indenture) and any other special funds or accounts (other
than the Project Fund and the Rebate Fund) created under this Agreement or the
Indenture after all of the outstanding Bonds shall be deemed to have been paid
and discharged under the provisions of the Indenture and all other amounts
required to be paid under this Agreement, the Notes and the Indenture have been
paid, shall be paid (to the extent that those moneys are in excess of the
amounts necessary to effect the payment and discharge of the outstanding Bonds)
first to the Bank to the extent that any amount is owed by the Borrower to the
Bank under the terms of the Letter of Credit or Credit Agreement, and then to
the Borrower.
(End of Article VIII)
<PAGE> 31
IN WITNESS WHEREOF, the Issuer and the Borrower have executed this Loan
Agreement, all as of the date first above written.
CITY OF WABASH, INDIANA
By:
---------------------
Robert R. McCallen, Mayor
(Seal)
ATTEST:
- ----------------------------------
Meredith Brown, Clerk-Treasurer
<PAGE> 32
MARTIN YALE INDUSTRIES, INC.
By
----------------------
<PAGE> 33
EXHIBIT A
PROJECT
The Project consists of the acquisition, construction, rehabilitation
and equipping of a manufacturing facility located at 251 Wedcor Avenue near the
City of Wabash, Indiana, for use in the Borrower's business of manufacturing
office and graphic arts equipment
<PAGE> 34
EXHIBIT B
PROJECT NOTE
$2,700,000 September 30, 1998
Martin Yale Industries, Inc., an Indiana corporation (the "Borrower"),
for value received, promises to pay to Bank One Trust Company, NA, as trustee
(the "Trustee") under the Indenture hereinafter referred to, the principal sum
of
TWO MILLION SEVEN HUNDRED THOUSAND DOLLARS
($2,700,000)
and to pay (i) interest on the unpaid balance of such principal sum from and
after the date of this Note at the interest rate or interest rates borne by the
Project Bonds and (ii) interest on overdue principal, and to the extent
permitted by law, on overdue interest, at the interest rate provided under the
terms of the Project Bonds.
This Note has been executed and delivered by the Borrower pursuant to a
certain Loan Agreement (the "Agreement"), dated as of September 1, 1998, between
the City of Wabash, Indiana (the "Issuer") and the Borrower. Terms used but not
defined herein shall have the meanings ascribed to such terms in the Agreement
and the Indenture, as defined below.
Under the Agreement, the Issuer will loan the Borrower the proceeds
received from the sale of the $2,700,000 aggregate principal amount of City of
Wabash, Indiana Adjustable Rate Economic Development Revenue Refunding Bonds,
Series 1998 (Martin Yale Industries, Inc. Project), dated as of the date of
their issuance (the "Project Bonds"), to be applied to assist in the refunding
of the Prior Bonds (as defined in the Agreement). The Borrower has agreed to
repay such loans by making Loan Payments at the times and in the amounts set
forth in this Note. The Project Bonds will be issued, concurrently with the
execution and delivery of this Note, pursuant to, and are secured by, the Trust
Indenture (the "Indenture"), dated as of September 1, 1998, between the Issuer
and the Trustee.
To provide funds to pay the Bond Service Charges on the Project Bonds
as and when due, or to reimburse the Bank for draws under the Letter of Credit
to make such payments, the Borrower hereby agrees to and shall make Loan
Payments as follows: on each Interest Payment Date the amount equal to interest
due on the Project Bonds on such Interest Payment Date, and on any date upon
which principal of the Project Bonds is due, either pursuant to redemption or
maturity, the amount equal to the principal due and payable on the Project Bonds
on such date and on any redemption date, the amount equal to the principal due
and payable on the Project Bonds pursuant to any redemption provisions of
Section 4.01 of the Indenture or upon maturity of the Project Bonds (each such
day being a "Loan Payment Date"). In addition, to provide
<PAGE> 35
funds to pay the Bond Service Charges on the Project Bonds as and when due at
any other time, the Borrower hereby agrees to and shall make Loan Payments on
any other date on which any Bond Service Charges on the Project Bonds shall be
due and payable, whether at maturity, upon acceleration, call for redemption or
otherwise.
If payment or provision for payment in accordance with the Indenture is
made in respect of the Bond Service Charges on the Project Bonds from moneys
other than Loan Payments, this Note shall be deemed paid to the extent such
payments or provision for payment of Bond Service Charges has been made. The
Borrower shall receive a credit against its obligation to make Loan Payments
hereunder to the extent of the moneys delivered to the Trustee under and
pursuant to the Letter of Credit and any other amounts on deposit in the Bond
Fund and available to pay Bond Service Charges on the Project Bonds pursuant to
the Indenture. Subject to the foregoing, all Loan Payments shall be in the full
amount required hereunder.
All Loan Payments shall be payable in lawful money of the United States
of America and shall be made to the Trustee at its corporate trust office for
the account of the Issuer, deposited in the Bond Fund and used as provided in
the Indenture.
Subject to the next to last paragraph hereof, the obligation of the
Borrower to make the payments required hereunder shall be absolute and
unconditional and the Borrower shall make such payments without abatement,
diminution or deduction regardless of any cause or circumstances whatsoever
including, without limitation, any defense, set-off, recoupment or counterclaim
which the Borrower may have or assert against the Issuer, the Trustee, the Bank
or any other person.
This Note is subject to optional, extraordinary optional and mandatory
prepayment, in whole or in part, upon the same terms and conditions, on the same
dates and at the same prepayment prices, as the Project Bonds are subject to
optional, extraordinary optional and mandatory redemption. Any optional or
extraordinary optional prepayment is also subject to satisfaction of any
applicable notice, deposit or other requirements set forth in the Agreement or
the Indenture.
Whenever an Event of Default under Section 7.01 of the Indenture shall
have occurred and, as a result thereof, the principal of and any premium on all
Bonds then outstanding, and interest accrued thereon shall have been declared to
be immediately due and payable pursuant to Section 7.03 of the Indenture, the
unpaid principal amount of and any premium and accrued interest on this Note
also shall be due and payable on the date on which the principal of and premium
and interest on the Project Bonds shall have been declared due and payable;
provided that the annulment of a declaration of acceleration with respect to the
Bonds shall also constitute an annulment of any corresponding declaration with
respect to this Note.
IN WITNESS WHEREOF, the Borrower has signed this Note as of the date
first above written.
<PAGE> 36
MARTIN YALE INDUSTRIES, INC.
By
-------------------------
<PAGE> 37
ENDORSEMENT
Pay, without recourse, to Bank One Trust Company, NA, as Trustee under
the Trust Indenture dated as of September 1, 1998, from the undersigned.
CITY OF WABASH, INDIANA
By
----------------------
Robert R. McCallen, Mayor
(SEAL)
Attest:
- ---------------------------------
Meredith Brown, Clerk-Treasurer
<PAGE> 1
Exhibit 10.33
TRUST INDENTURE
between
CITY OF WABASH, INDIANA
and
BANK ONE TRUST COMPANY, NA
as Trustee
-----------------------------------------------------
Securing:
$2,700,000
CITY OF WABASH, INDIANA
ADJUSTABLE RATE ECONOMIC DEVELOPMENT REVENUE REFUNDING BONDS,
SERIES 1998
(MARTIN YALE INDUSTRIES, INC. PROJECT)
-----------------------------------------------------
Dated as of September 1, 1998
-----------------------------------------------------
-----------------------------------------------------
Ice Miller Donadio & Ryan
Bond Counsel
<PAGE> 2
TABLE OF CONTENTS
-----------------
Page
----
ARTICLE I. DEFINITIONS 4
Section 1.01. Definitions 4
Section 1.02. Interpretation 17
Section 1.03. Captions and Headings 17
ARTICLE II. AUTHORIZATION AND TERMS OF PROJECT
BONDS; ADDITIONAL BONDS 18
Section 2.01. Authorized Amount of Bonds 18
Section 2.02. Issuance of Project Bonds 18
Section 2.03. Maturity and Interest 19
Section 2.04. Tender Options 21
Section 2.05. Mandatory Tender Upon Conversion to a New
Interest Rate Mode 24
Section 2.06. Mandatory Tender Upon Delivery of an Alternate
Letter of Credit 25
Section 2.07. Mandatory Tender Upon Expiration of the Letter
of Credit . 25
Section 2.08. Delivery of the Project Bonds 26
Section 2.09. Issuance and Delivery of Additional Bonds 26
ARTICLE III. TERMS OF BONDS GENERALLY 29
Section 3.01. Form of Bonds 29
Section 3.02. Variable Terms 29
Section 3.03. Execution and Authentication of Bonds 30
Section 3.04. Source of Payment of Bonds 30
Section 3.05. Payment and Ownership of Bonds 30
Section 3.06. Transfer and Exchange of Bonds 31
Section 3.07. Mutilated, Lost, Wrongfully Taken, Undelivered or
Destroyed Bonds 33
Section 3.08. Cancellation of Bonds 34
ARTICLE IV. REDEMPTION OF BONDS 35
Section 4.01. Terms of Redemption of Project Bonds 35
Section 4.02. Partial Redemption 36
Section 4.03. Issuer's Election to Redeem 37
Section 4.04. Notice of Redemption 37
Section 4.05. Payment of Redeemed Bonds 38
<PAGE> 3
Section 4.06. Variation of Redemption Provisions 39
ARTICLE V. PROVISIONS AS TO FUNDS, PAYMENTS AND
AGREEMENT 40
Section 5.01. Creation of Refunding Fund 40
Section 5.02. Disbursements From and Records of
Refunding Fund 40
Section 5.03. Creation of Bond Fund; Letter of Credit 40
Section 5.04. Creation of Remarketing Reimbursement Fund 43
Section 5.05. Investment of Bond Fund, Refunding Fund and Rebate Fund 44
Section 5.06. Moneys to be Held in Trust 44
Section 5.07. Nonpresentment of Bonds 45
Section 5.08. Repayment to the Bank or the Borrower from the Bond Fund 45
Section 5.09. Alternate Letter of Credit 46
Section 5.10. Compliance with Section 148 of the Code 46
Section 5.11. Rebate Fund 47
ARTICLE VI. THE TRUSTEE, REGISTRAR, PAYING AGENT,
AUTHENTICATING AGENT AND
REMARKETING AGENT 48
Section 6.01. Trustee's Acceptance and Responsibilities 48
Section 6.02. Certain Rights and Obligations of the Trustee 49
Section 6.03. Fees, Charges and Expenses of Trustee, Registrar,
Paying Agent and Authenticating Agents 52
Section 6.04. Intervention by Trustee 53
Section 6.05. Successor Trustee 53
Section 6.06. Appointment of Co-Trustee 53
Section 6.07. Resignation by the Trustee 54
Section 6.08. Removal of the Trustee 54
Section 6.09. Appointment of Successor Trustee 54
Section 6.10. Adoption of Authentication 56
Section 6.11. Registrars 56
Section 6.12. Designation and Succession of Paying Agents 57
Section 6.13. Designation and Succession of Authenticating Agents 58
Section 6.14. Dealing in Bonds 59
Section 6.15. Representations, Agreements and Covenants of Trustee 59
Section 6.16. [RESERVED] 59
Section 6.17. Concerning the Remarketing Agent 59
Section 6.18. Qualifications of Remarketing Agent 60
Section 6.19. Remarketing of Project Bonds 61
Section 6.20. Delivery of Purchased Project Bonds and Remarketing
of Pledged Bonds 62
<PAGE> 4
ARTICLE VII. DEFAULT PROVISIONS AND REMEDIES OF
TRUSTEE AND HOLDERS 65
Section 7.01. Defaults; Events of Default 65
Section 7.02. Notice of Default 66
Section 7.03. Acceleration 66
Section 7.04. Other Remedies; Rights of Holders 67
Section 7.05. Right of Holders to Direct Proceedings 68
Section 7.06. Application of Moneys 68
Section 7.07. Remedies Vested in Trustee 69
Section 7.08. Rights and Remedies of Holders 70
Section 7.09. Termination of Proceedings 70
Section 7.10. Waivers of Events of Default 71
ARTICLE VIII. SUPPLEMENTAL INDENTURES 72
Section 8.01. Supplemental Indentures Generally 72
Section 8.02. Supplemental Indentures Not Requiring Consent of Holders 72
Section 8.03. Supplemental Indentures Requiring Consent of Holders 73
Section 8.04. Acceptance of Supplemental Credit Facility 75
Section 8.05. Consent of Borrower 75
Section 8.06. Authorization to Trustee; Effect of Supplement 75
Section 8.07. Opinion of Counsel 76
Section 8.08. Modification by Unanimous Consent 76
ARTICLE IX. DEFEASANCE 77
Section 9.01. Release of Indenture 77
Section 9.02. Payment and Discharge of Bonds 77
Section 9.03. Survival of Certain Provisions 78
ARTICLE X. COVENANTS AND AGREEMENTS OF THE ISSUER 80
Section 10.01. Covenants and Agreements of the Issuer 80
Section 10.02. Observance and Performance of Covenants, Agreements,
Authority and Actions 81
ARTICLE XI. AMENDMENTS TO THE AGREEMENT, THE NOTES
AND THE LETTER OF CREDIT 83
Section 11.01. Amendments Not Requiring Consent of Holders 83
Section 11.02. Amendments Requiring Consent of Holders 83
ARTICLE XII. MEETINGS OF HOLDERS 85
<PAGE> 5
Section 12.01. Purposes of Meetings 85
Section 12.02. Call of Meetings 85
Section 12.03. Voting 85
Section 12.04. Meetings 86
Section 12.05. Miscellaneous 86
ARTICLE XIII. MISCELLANEOUS 87
Section 13.01. Limitation of Rights 87
Section 13.02. Severability 87
Section 13.03. Notices 87
Section 13.04. Suspension of Mail 89
Section 13.05. Payments Due on Saturdays, Sundays and Holidays 89
Section 13.06. Instruments of Holders 89
Section 13.07. Priority of this Indenture 90
Section 13.08. Extent of Covenants; No Personal Liability 90
Section 13.09. Rating Categories 90
Section 13.10. Binding Effect 90
Section 13.11. Counterparts 91
Section 13.12. Governing Law 91
Exhibit A Form of Bond A-1
<PAGE> 6
TRUST INDENTURE
THIS TRUST INDENTURE (the "Indenture") dated as of September 1, 1998,
by and between the CITY OF WABASH, INDIANA, a municipal corporation organized
and existing under the laws of the State of Indiana (the "Issuer"), and BANK ONE
TRUST COMPANY, NA, as trustee (the "Trustee"), a national banking association
having its principal Indiana corporate trust office located in Indianapolis,
Indiana, under the circumstances summarized in the following recitals (the
capitalized terms not defined above or in the recitals hereto shall have the
meanings set forth in Article I hereof unless the context or use clearly
indicates another meaning or intent).
WITNESSETH:
WHEREAS, the Indiana Code, Title 36, Article 7, Chapters 11.9 and 12
and Indiana Code, Title 5, Article 1, Chapter 5, as supplemented and amended
(collectively the "Act"), authorizes and empowers the Issuer to issue revenue
bonds and lend the proceeds therefrom to an individual or entity for the purpose
of currently refunding the Prior Bonds, the proceeds of which were used to
finance economic development facilities and vests the Issuer with powers that
may be necessary to enable it to accomplish such purposes; and
WHEREAS, the Act declares that the financing of economic development
facilities constitutes a public purpose; and
WHEREAS, the Act provides that such bonds may be secured by a trust
indenture between the Issuer and a corporate trustee; and
WHEREAS, the Issuer proposes to issue its Adjustable Rate Economic
Development Revenue Refunding Bonds, Series 1998 (Martin Yale Industries, Inc.
Project) (the "Project Bonds") in the aggregate principal amount of Two Million
Seven Hundred Thousand Dollars ($2,700,000) for the purpose of currently
refunding the Prior Bonds, the proceeds of which were used to finance economic
development facilities in Wabash, Indiana;
WHEREAS, the Trustee has accepted the trust created by this Indenture,
and in evidence thereof has joined in the execution hereof;
NOW, THEREFORE, THIS INDENTURE WITNESSETH, that to secure the payment
of Bond Service Charges on the Bonds according to their true intent and meaning,
to secure the performance and observance of all of the covenants, agreements,
obligations and conditions contained therein and herein, and to declare the
terms and conditions upon and subject to which the Bonds are and are intended to
be issued, held, secured and enforced, and in consideration of the premises and
the acceptance by the Trustee of the trusts created herein and of the purchase
and acceptance of the Project Bonds by the Holders, and for other good and
valuable consideration, the receipt of which is acknowledged, the Issuer has
executed and delivered this Indenture and absolutely assigns hereby to the
Trustee, and to its successors in trust, and its
<PAGE> 7
and their assigns, all right, title and interest of the Issuer in and to (a) the
Revenues, including, without limitation, all Loan Paymentsand other amounts
receivable by or on behalf of the Issuer under the Agreement in respect of
repayment of the Loan (but excluding any amounts in the Rebate Fund); (b) the
Agreement, except for the Unassigned Issuer's Rights; and (c) the Project Note.
TO HAVE AND TO HOLD unto the Trustee and its successors in that trust
and its and their assigns forever;
BUT IN TRUST, NEVERTHELESS, and subject to the provisions hereof,
(a) except as provided otherwise herein, for the equal and
proportionate benefit, security and protection of all present and future Holders
of the Bonds issued or to be issued under and secured by this Indenture,
(b) for the enforcement of the payment of the principal of and interest
and any premium on the Bonds, when payable, according to the true intent and
meaning thereof and of this Indenture, and
(c) to secure the performance and observance of and compliance with the
covenants, agreements, obligations, terms and conditions of this Indenture;
in each case, without preference, priority or distinction, as to lien or
otherwise, of any one Bond over any other by reason of designation, number, date
of the Bonds or of authorization, issuance, sale, execution, authentication,
delivery or maturity thereof, or otherwise, so that each Bond and all Bonds
shall have the same right, lien and privilege under this Indenture and shall be
secured equally and ratably hereby, it being intended that the lien and security
of this Indenture shall take effect from the date hereof, without regard to the
date of the actual issue, sale or disposition of the Bonds, as though upon that
date all of the Bonds were actually issued, sold and delivered to purchasers for
value; provided, however, that moneys drawn under the Letter of Credit shall be
applied only to the payment of the purchase price of or the principal of and
interest on the Project Bonds or Beneficial Ownership Interests; and provided
further however, that
(i) if the principal of the Bonds and the interest due or to
become due thereon together with any premium required by redemption of
any of the Bonds prior to maturity shall be well and truly paid, at the
times and in the manner to which reference is made in the Bonds,
according to the true intent and meaning thereof, or the outstanding
Bonds shall have been paid and discharged in accordance with Article IX
hereof, and
(ii) if all of the covenants, agreements, obligations, terms and
conditions of the Issuer under this Indenture shall have been kept,
performed and observed and there shall have been paid (or provided for)
to the Trustee, the Bank, the Registrar, the Paying Agent and the
Authenticating Agent all sums of money due or to become due to them in
accordance with the terms and provisions hereof,
<PAGE> 8
this Indenture and the rights assigned hereby shall cease, determine and
be void, except as provided in Section 9.03 hereof with respect to the
survival of certain provisions hereof; otherwise, this Indenture shall
be and remain in full force and effect.
It is declared that all Bonds issued hereunder and secured
hereby are to be issued, authenticated and delivered, and that all
Revenues assigned hereby are to be dealt with and disposed of under,
upon and subject to, the terms, conditions, stipulations, covenants,
agreements, obligations, trusts, uses and purposes provided in this
Indenture. The Issuer has agreed and covenanted, and agrees and
covenants with the Trustee and with each and all Holders, as follows:
<PAGE> 9
ARTICLE I.
----------
DEFINITIONS
-----------
Section 1.01. DEFINITIONS. In addition to the words and terms defined
elsewhere in this Indenture, the words and terms defined in this Section shall
have the meanings herein specified unless the context or use clearly indicates
another or different meaning or intent. Those words and terms not expressly
defined herein and used herein with initial capitalization where rules of
grammar do not otherwise require capitalization, or which are otherwise defined
terms under the Agreement, as hereinafter defined, shall have the meanings
assigned to them in the Agreement.
"Act" means, collectively, the Indiana Code, Title 36, Article 7,
Chapters 11.9 and 12 and Indiana Code, Title 5, Article 1, Chapter 5, as
supplemented and amended.
"Additional Bonds" means Bonds which may be issued under Section 2.09 of
this Indenture.
"Additional Notes" means any non-negotiable promissory note or notes, in
addition to the Project Note, delivered by the Borrower to the Trustee in
connection with the issuance of Additional Bonds, as provided in the Agreement.
"Adjustable Rate" means any interest rate to be borne by the Project
Bonds other than the Fixed Interest Rate.
"Agreement" means the Loan Agreement dated as of even date with this
Indenture, between the Issuer and the Borrower, as amended or supplemented from
time to time.
"Alternate Letter of Credit" means an irrevocable letter of credit
authorizing drawings thereunder by the Trustee issued by a bank, a trust company
or other financial institution and meeting the requirements of Section 5.09
hereof, which Alternate Letter of Credit shall be the same in all material
respects (except as to expiration date) as the Letter of Credit.
"Authenticating Agent" means the Trustee and the Registrar for the Bonds
and any bank, trust company or other Person designated as an Authenticating
Agent for the Bonds by or in accordance with Section 6.13 of this Indenture,
each of which shall be a transfer agent registered in accordance with Section
17(A) of the Securities Exchange Act of 1934, as amended.
"Authorized Borrower Representative" means the person designated at the
time pursuant to the Agreement to act on behalf of the Borrower by written
instrument furnished to the Issuer and the Trustee, containing the specimen
signature of such person and signed by any officer of the Borrower.
Such instrument may designate an alternate or alternates.
"Bank" means Bank One, Indiana, NA, a national banking association, and
its successors
<PAGE> 10
and assigns. Upon issuance and effectiveness of any Alternate Letter of Credit,
"Bank" shall mean the issuer thereof and its successors and assigns.
"Beneficial Owner" means, with respect to the Project 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 Project Bonds which are held by the
Depository under a book entry system.
"Bond Counsel" means an attorney-at-law or firm of attorneys (other than
an employee of the Borrower but including any law firm serving as counsel to the
Borrower) satisfactory to the Trustee, the Bank and the Issuer and nationally
recognized as experienced in matters relating to the tax exemption of interest
on bonds of states and political subdivisions.
"Bond Fund" means the Bond Fund created in Section 5.03 hereof.
"Bond Legislation" or "Bond Ordinance" means (a) when used with
reference to the Project Bonds, the ordinance providing for their issuance and
approving the Agreement, this Indenture, the Bond Placement Agreement, the
Letter of Representations and related matters; (b) when used with reference to
an issue of Additional Bonds, the ordinance providing for the issuance of the
Project Bonds, to the extent applicable, and the ordinance providing for the
issuance of the Additional Bonds and approving any amendment or supplement to
the Agreement, any Supplemental Indenture and related matters; and (c) when used
with reference to Bonds when Additional Bonds are outstanding, the ordinance
providing for the issuance of the Project Bonds and the ordinance providing for
the issuance of the then outstanding and the then to be issued Additional Bonds;
in each case as amended or supplemented from time to time. The Bond Legislation
is incorporated herein by reference.
"Bond Placement Agreement" means, as to the Project Bonds, the Bond
Placement Agreement dated as of the date hereof among the Issuer, the Placement
Agent and the Borrower and, as to any Additional Bonds, the bond placement
agreement provided for in the Bond Legislation providing for the issuance of the
Additional Bonds.
"Bond Purchase Date" means any Bond Purchase Date as defined and
provided for in Sections 2.04, 2.05 or 2.06 hereof.
"Bond Service Charges" means, for any series of Bonds, the principal of,
premium, if any, and interest on such Bonds for any period or payable at any
time, whether due on an Interest Payment Date, at maturity or upon acceleration
or redemption.
"Bonds" means the Project Bonds and any Additional Bonds.
"Book entry form" or "book entry system" means, with respect to the
Project Bonds, a form or system, as applicable, under which (a) the Beneficial
Ownership Interests may be
<PAGE> 11
transferred only through a book entry and (b) physical Project Bond certificates
in fully registered form are registered only in the name of a Depository or its
nominee as Holder, with the physical Project 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 book entry interests in the Project
Bonds.
"Borrower" means Martin Yale Industries, Inc., an Indiana corporation,
and its successors and assigns.
"Business Day" means a day of the year, other than a Saturday or Sunday,
on which commercial banks located in the city or cities in which the principal
corporate trust office of the Trustee, the principal office of the Remarketing
Agent, the Bank's LOC Processing Office (as defined in the Letter of Credit) and
the principal office of the Bank are located, are not required or authorized to
remain closed, and on which the New York Stock Exchange is not closed.
"Closing Date" means the date of delivery of and payment for the Project
Bonds.
"Code" means the Internal Revenue Code of 1986, as amended from time to
time. References to the Code and Sections of the Code include relevant
applicable regulations and proposed regulations thereunder (and under the
related provisions of the Internal Revenue Code of 1954, as amended) and any
successor provisions to those Sections, regulations or proposed regulations.
"Credit Agreement" means the Amended and Restated Credit and Guaranty
Agreement dated as of the Closing Date, among the Bank, the Borrower and the
Guarantor. Upon the issuance of any Alternate Letter of Credit, "Credit
Agreement" shall mean the reimbursement or similar agreement relating to such
Alternate Letter of Credit, entered into among the Borrower, the issuer of such
Letter of Credit and the Guarantor.
"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 The Depository Trust Company (a limited purpose
trust company), New York, New York.
"Determination of Taxability" with respect to the Project Bonds shall
occur when, (a) the Trustee receives written notice from the Borrower, supported
by an opinion of Bond Counsel, that interest on the Project Bonds is includable
in the gross income of Holders of the Project Bonds for federal income tax
purposes or (b) the Internal Revenue Service shall claim in writing that
interest on the Project Bonds is includable in the gross income of Holders of
the Project Bonds, for federal income tax purposes; provided, that such a claim
shall not be deemed a Determination of Taxability unless the Borrower is
afforded reasonable opportunity (at the Borrower's sole expense and for a period
not to exceed 2 years) to pursue any judicial or administrative remedy available
to the Borrower with respect to such claim.
<PAGE> 12
"Direct Participant" means a Participant as defined in the Letter of
Representations.
"Eligible Funds" means (i) amounts on deposit in the Bond Fund (other
than funds derived from a draw on the Letter of Credit) for a continuous period
of 91 consecutive days during which there shall not have occurred the filing of
a voluntary or involuntary petition in bankruptcy under the United States
Bankruptcy Code, 11 U.S.C. Section 101 ET. SEQ. (as it may be amended from time
to time), or the commencement of a proceeding under any other applicable laws
concerning insolvency, reorganization or bankruptcy, by or against the Borrower
or the Issuer, unless such petition or proceeding shall have been dismissed and
such dismissal shall be final and not subject to appeal, or (ii) any other funds
that, in the opinion of bankruptcy counsel acceptable to the Trustee and the
Letter of Credit Bank, are not subject to avoidance under insolvency or
bankruptcy laws.
"Eligible Investments" means:
(a) Government Obligations;
(b) Federal Home Loan Mortgage Corporation (FHLMC) and Farm Credit Banks
(Federal Land Banks, Federal Intermediate Credit Banks and Banks for
Cooperatives) participation certificates and senior debt obligations which bear
interest at a fixed rate and are fully amortizing;
(c) Federal National Mortgage Association's (FNMA) mortgage backed
securities and senior debt obligations which bear interest at a fixed rate and
are fully amortizing;
(d) Student Loan Marketing Association (Sallie Mae) letter of credit
backed issues and senior debt obligations;
(e) Federal funds, certificates of deposits, time deposits and bankers'
acceptances (having original maturities of not more than 365 days) of any bank
(including the Bank or an affiliate of the Bank) the unsecured, uninsured and
unguaranteed debt obligations of which (or, in the case of a bank subsidiary in
a bank holding company, debt obligations of the bank holding company) have been
rated "AA" or "A-l" or its equivalent by either Rating Service at the time of
purchase;
(f) commercial paper (having original maturities of not more than 270
days) rated "A-1" or its equivalent by either Rating Service at the time of
purchase;
(g) obligations rated "AA" or "A-1" or its equivalent by either Rating
Service, or unrated general obligations of any Person which has outstanding
other unsecured, uninsured and unguaranteed obligations which are so rated by
either Rating Service at the time of purchase;
(h) repurchase agreements with any institution the unsecured, uninsured
and
<PAGE> 13
unguaranteed debt obligations of which (or, in the case of a bank subsidiary in
a bank holding company, debt obligations of the bank holding company) are rated
"AA" or its equivalent by either Rating Service at the time of purchase;
(i) tax-exempt obligations of any state of the United States of America
or any political subdivision or other instrumentality of any such state and such
obligations are rated in either of the two highest rating categories (i.e., "AA"
or higher) of either Rating Service and are not "specified private activity
bonds" as defined in Section 57(a)(5)(C) of the Code at the time of purchase;
(j) tax-exempt money market funds which are "qualified regulated
investment companies" within the meaning of IRS Notice 87-22, dated October 25,
1987, and which meet the other requirements of IRS Notice 87-22 and any
subsequent regulations necessary to exempt investments in such funds from the
definition of "investment property" under Section 148 of the Code whose assets
are solely invested in obligations rated in either of the two highest rating
categories by either Rating Service at the time of purchase;
(k) money market funds the assets of which are obligations of or
guaranteed by the United States of America and which funds are rated "Am" or
"Am-G" or higher by S&P at the time of purchase; and
(l) obligations approved in writing by the Bank.
"Event of Default" means an Event of Default hereunder as described in
Section 7.01 hereof.
"Executive" means the Mayor of the Issuer.
"Extraordinary Services" and "Extraordinary Expenses" means all services
rendered and all reasonable expenses properly incurred by the Trustee under this
Indenture, other than Ordinary Services and Ordinary Expenses.
"First Optional Redemption Date" means the September 1 occurring in the
year which is a number of years after the Fixed Interest Rate Commencement Date
equal to the number of full years between the Fixed Interest Rate Commencement
Date and the maturity date of the Bonds, multiplied by 1/2 and rounded up to the
nearest whole number.
"Fiscal Officer" means the Clerk-Treasurer of the Issuer.
"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 the last day of February or August
nearest to but not later than the date which is five years from the Interest
Rate Adjustment Date, in the judgment of the Remarketing Agent (taking into
consideration
<PAGE> 14
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 Project Bonds could
be remarketed at par, plus 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 Project Bonds, without adjustment; provided that in
no event shall the Five Year Interest Rate exceed the Maximum Rate.
"Fixed Interest Rate" means (a) the fixed rate of interest per annum
determined by the Remarketing Agent, on the Interest Rate Determination Date
immediately preceding the applicable Interest Period Reset Date, to be the
lowest interest rate, for the period from the Interest Period Reset Date to the
final maturity date of the Project 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 Project Bonds could be remarketed at par, plus accrued
interest (if any), on the Interest Period Reset Date 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 Fixed Interest
Rate for whatever reason, or the Fixed Interest Rate cannot be determined
pursuant to clause (a) for whatever reason, the interest rate then in effect
with respect to the Project Bonds, without adjustment; provided that in no event
shall the Fixed Interest Rate exceed the Maximum Rate.
"Fixed Interest Rate Commencement Date" means the Interest Period Reset
Date from and after which the Project Bonds shall bear interest at the Fixed
Interest Rate, as that date shall be established as provided in Section 2.03
hereof.
"Government Obligations" means (a) direct obligations of the United
States of America for the payment of which the full faith and credit of the
United States of America is pledged, (b) obligations issued by a person
controlled or supervised by and acting as an instrumentality of the United
States of America, the payment of the principal of, premium, if any, and
interest on which is fully guaranteed as a full faith and credit obligation of
the United States of America (including any securities described in (a) or (b)
issued or held in book-entry form on the books of the Department of Treasury of
the United States of America or Federal Reserve Bank), and (c) securities which
represent an interest in the obligations described in (a) and (b) above.
"Guarantor" means Escalade, Incorporated, an Indiana corporation and its
successors and assigns.
"Holder" or "Holder of a Bond" or "Bondholder" means the Person in whose
name a Bond is registered on the Register.
<PAGE> 15
"Indirect Participant" means a Person utilizing the book entry system of
the Depository by, directly or indirectly, clearing through or maintaining a
custodial relationship with a Direct Participant.
"Indenture" means this Trust Indenture, as amended or supplemented from
time to time.
"Interest Payment Date" or "Interest Payment Dates" means, (a) as to the
Project Bonds, (i) while the Project Bonds bear interest at the Six Month
Interest Rate, the One Year Interest Rate, the Five Year Interest Rate or the
Fixed Interest Rate, the first day of each March and September, and (ii) while
the Project Bonds bear interest at the Weekly Interest Rate, the One Month
Interest Rate, or the Three Month Interest Rate, the first Business Day of each
month commencing November 1, 1998, and (b) as to Additional Bonds, each date or
dates designated as an Interest Payment Date or Dates in the applicable
Supplemental Indenture or Bond Ordinance.
"Interest Period Reset Date" means the date on which the interest rate
on the Project Bonds converts from the Interest Rate Mode applicable to the
Project Bonds prior to such date to a new Interest Rate Mode. An Interest Period
Reset Date shall be the first Business Day of a month; provided that upon
conversion from a Six Month, One Year or Five Year Interest Rate Mode, an
Interest Period Reset Date shall be the first day of a month; and provided
further, that except when converting from a Weekly Interest Rate Mode, an
Interest Period Reset Date may not occur prior to the end of the preceding
Interest Rate Period and shall be the first day or Business Day after the end of
such preceding Interest Rate Period.
"Interest Rate Adjustment Date" means any date on which the interest
rate on the Project Bonds may be adjusted, either as the result of the
conversion of the interest rate on the Project Bonds to a different Interest
Rate Mode, or by adjustment of the interest rate on the Project Bonds within the
applicable Interest Rate Mode. Except as otherwise provided with respect to an
Interest Rate Adjustment Date which is also an Interest Period Reset Date, an
Interest Rate Adjustment Date shall be the first day of the first month of the
Interest Rate Period if the Project Bonds bear interest at the Six Month, One
Year or Five Year Interest Rates; the first Business Day of a month if the
Project Bonds bear interest at the One Month or Three Month Interest Rates; and
if the Project Bonds bear interest at the Weekly Interest Rate, then the
Interest Rate Adjustment Date shall be Thursday of each week.
"Interest Rate Determination Date" means (a) with respect to the Three
Month Interest Rate, the Six Month Interest Rate, the One Year 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 One Month
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 principal Indiana corporate trust 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 principal Indiana corporate trust office of the Trustee on
<PAGE> 16
the Business Day preceding the Interest Period Reset Date.
"Interest Rate for Advances" means a rate per annum which is equal to
the Prime Rate.
"Interest Rate Mode" means any of those modes of interest with respect
to the Project Bonds permitted by this Indenture, specifically, the Weekly
Interest Rate, the One Month Interest Rate, the Three Month Interest Rate, the
Six Month Interest Rate, the One Year 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 Project 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.
"Issuer" means the City of Wabash, Indiana, a municipal corporation
organized and existing under the laws of the State of Indiana.
"Letter of Credit" means (a) the irrevocable letter of credit to be
issued by the Bank and delivered to the Trustee on the same date as the initial
delivery of the Project Bonds and being an irrevocable obligation to make
payment to the Trustee of up to the amounts therein specified with respect to
(i) the principal amount of the Project Bonds then outstanding to enable the
Trustee to pay (A) the principal amount of the Project Bonds then outstanding
when due at maturity or upon redemption or acceleration, and (B) an amount equal
to the principal portion of the purchase price of any Project Bonds then
outstanding or Beneficial Ownership Interests tendered for purchase by the
Holders or Beneficial Owners thereof, plus (ii) the amount of interest due on
the Project Bonds then outstanding but not to exceed 45 days' accrued interest
(or 195 days interest if the Project Bonds then outstanding bear interest at the
Six Month Interest Rate, the One Year Interest Rate, the Five Year Interest Rate
or the Fixed Interest Rate) at the Maximum Rate to enable the Trustee to pay (A)
interest on the Project Bonds then outstanding when due and (B) an amount equal
to the interest portion, if any, of the purchase price of any Project Bonds then
outstanding or Beneficial Ownership Interests tendered for purchase by the
Holders or Beneficial Owners thereof; as the same may be transferred, reissued,
extended, amended to change the interest coverage period as contemplated in
Section 2.03 hereof, or replaced in accordance with this Indenture, the Credit
Agreement, and the Letter of Credit and (b) upon the issuance and effectiveness
thereof, any Alternate Letter of Credit.
"Letter of Credit Termination Date" means the expiration date of the
Letter of Credit (presently September 15, 2003) or of any Alternate Letter of
Credit.
"Letter of Representations" means the Letter of Representations dated
the Closing Date by and among the Issuer, the Trustee, the Remarketing Agent and
the Depository.
"Loan" means the loan by the Issuer to the Borrower of the proceeds
received from the sale of the Bonds.
<PAGE> 17
"Loan Payments" means the amounts required to be paid by the Borrower in
repayment of the Loan pursuant to the provisions of the Notes and Article IV of
the Agreement.
"Mandatory Bond Purchase Date" means a Mandatory Bond Purchase Date as
defined in Section 2.07 hereof.
"Maximum Rate" means ten percent (10%) per annum.
"Moody's" means Moody's Investors Service, Inc., a Delaware corporation,
and its successors and assigns.
"Notes" means the Project Note and any Additional Notes.
"One Month 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
Project Bonds could be remarketed at par, plus 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 One Month
Interest Rate for whatever reason, or the One Month Interest Rate cannot be
determined pursuant to clause (a) for whatever reason, the interest rate then in
effect with respect to the Project Bonds, without adjustment; provided that in
no event shall the One Month Interest Rate exceed the Maximum Rate.
"One 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 the last day of February or August
nearest to but not later than the date which 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
Project Bonds could be remarketed at par, plus 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 One Year
Interest Rate for whatever reason, or the One Year Interest Rate cannot be
determined pursuant to clause (a) for whatever reason, the interest rate then in
effect with respect to the Project Bonds, without adjustment; provided that in
no event shall the One Year Interest Rate exceed the Maximum Rate.
<PAGE> 18
"Ordinary Services" and "Ordinary Expenses" means those services
normally rendered, and those expenses normally and reasonably incurred, by a
trustee under instruments similar to this Indenture.
"Outstanding Bonds" or "Bonds outstanding" means, as of the applicable
date, all Bonds which have been authenticated and delivered, or which are being
delivered by the Trustee under this Indenture, except:
(a) Bonds canceled upon surrender, exchange or transfer, or canceled
because of payment or redemption on or prior to that date;
(b) Bonds, or the portion thereof, the payment, redemption or purchase
for cancellation of which sufficient money has been deposited and credited with
the Trustee or any Paying Agents pursuant to this Indenture on or prior to that
date for that purpose (whether upon or prior to the maturity or redemption date
of those Bonds); provided, that if any of those Bonds are to be redeemed prior
to their maturity, notice of that redemption shall have been given or
arrangements satisfactory to the Trustee shall have been made for giving notice
of that redemption, or waiver by the affected Holders of that notice
satisfactory in form to the Trustee shall have been filed with the Trustee;
(c) Bonds, or the portion thereof, which are deemed to have been paid
and discharged or caused to have been paid and discharged pursuant to the
provisions of this Indenture; and
(d) Bonds in lieu of which others have been authenticated under Section
3.07 of this Indenture; provided that, in determining whether the Holders of the
requisite percentage of Bonds have concurred in any demand, direction, request,
notice, consent, waiver or other action under this Indenture, Bonds that are
owned by the Borrower or any Person directly or indirectly controlling or
controlled by or under direct or indirect common control with the Borrower shall
be regarded and deemed not to be outstanding for the purpose of any such
determination; provided that for the purposes of determining whether the Trustee
shall be protected in relying on any such direction, consent or waiver, only
such Bonds which the Trustee knows are so owned shall be disregarded. Bonds so
owned that have been pledged in good faith may be regarded as Outstanding for
such purpose, if the pledgee shall establish to the satisfaction of the Trustee
the pledgee's right to vote such Bonds and the pledgee is not a Person directly
or indirectly controlling or controlled by or under direct or indirect common
control with the Borrower. In case of a dispute as to such right, any decision
by the Trustee taken upon the advice of counsel shall be full protection to the
Trustee.
"Paying Agent" means any bank or trust company designated as a Paying
Agent by or in accordance with Section 6.12 of this Indenture.
"Person" or words importing persons means firms, associations,
corporations, partnerships (including without limitation, general and limited
partnerships), joint ventures, societies, estates, trusts, corporations, public
or governmental bodies, other legal entities and
<PAGE> 19
natural persons.
"Placement Agent" means Banc One Capital Markets, Inc.
"Pledged Bonds" means Project Bonds or Beneficial Ownership Interests
registered or recorded in the name of the Bank and securing obligations of the
Borrower under the Credit Agreement as provided in Section 6.20 hereof.
"Predecessor Bond" of any particular Bond means every previous Bond
evidencing all or a portion of the same debt as that evidenced by the particular
Bond. For the purposes of this definition, any Bond authenticated and delivered
under Section 3.07 of this Indenture in lieu of a lost, stolen or destroyed Bond
shall, except as otherwise provided in Section 3.07, be deemed to evidence the
same debt as the lost, stolen or destroyed Bond.
"Prime Rate" means a variable per annum rate of interest equal at all
times to the rate of interest established and quoted by the Bank as its "Prime
Rate," such rate to change contemporaneously with each change in such
established and quoted rate, provided that it is understood that the Prime Rate
shall not necessarily be representative of the rate of interest actually charged
by the Bank on any loan or class of loans.
"Prior Bonds" means the City of Wabash, Indiana Economic Development
Revenue Bonds, Series 1990 (Martin Yale Industries, Inc. Project) dated May 31,
1990, originally issued in the amount of $4,500,000 and currently outstanding in
the amount of $2,700,000.
"Project Bonds" shall mean the City of Wabash, Indiana Adjustable Rate
Economic Development Revenue Refunding Bonds, Series 1998 (Martin Yale
Industries, Inc. Project), in the original principal amount of $2,700,000
authorized in the Bond Legislation and Section 2.02 hereof.
"Project Note" means the promissory note of the Borrower, dated as of
even date with the Project Bonds, in the form attached to the Agreement as
EXHIBIT C and in the principal amount of $2,700,000. The Note evidences the
obligation of the Borrower to make Loan Payments.
"Rating Service" means either Moody's or S & P.
"Rebate Fund" means the Rebate Fund created pursuant to Section 5.11
hereof.
"Refunding Fund" means the Refunding Fund created pursuant to Section
5.01 hereof.
"Register" means the books kept and maintained by the Registrar for
registration and transfer of Bonds pursuant to Section 3.06 hereof.
"Registrar" means the Trustee until a successor Registrar shall have
become such pursuant to applicable provisions of this Indenture.
<PAGE> 20
"Regular Record Date" means, with respect to any Bond, the Business Day
next preceding an Interest Payment Date applicable to that Bond.
"Remarketing Agent" means, initially, Banc One Capital Markets, Inc.,
and any Person meeting the qualifications of Section 6.18 hereof and designated
from time to time to act as Remarketing Agent under Section 6.17 hereof.
"Remarketing Reimbursement Fund" means the Remarketing Reimbursement
Fund created in Section 5.04 hereof.
"Revenues" means (a) the Loan Payments, (b) all of the moneys received
or to be received by the Issuer or the Trustee in respect of repayment of the
Loan, (c) all moneys and investments in the Bond Fund, including without
limitation moneys received by the Trustee under or pursuant to the Letter of
Credit, (d) any moneys and investments in the Refunding Fund, and (e) all income
and profit from the investment of the foregoing moneys.
"S&P" means Standard & Poor's Ratings Group and its successors and
assigns.
"Six Month 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 which 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
Project Bonds could be remarketed at par, plus 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 Six Month
Interest Rate for whatever reason, or the Six Month Interest Rate cannot be
determined pursuant to clause (a) for whatever reason, the interest rate then in
effect with respect to the Project Bonds, without adjustment; provided that in
no event shall the Six Month Interest Rate exceed the Maximum Rate.
"Special Record Date" means, with respect to any Bond, the date
established by the Trustee in connection with the payment of overdue interest on
that Bond pursuant to Section 3.05 hereof.
"State" means the State of Indiana.
"Supplemental Credit Facility" means a credit facility, agreement or
arrangement in addition to the Letter of Credit, including, without limitation,
a bond insurance policy, collateral arrangement, surety bond, standby placement
agreement or similar arrangement the purpose of which is to enhance the credit
of the Project Bonds in order to obtain or maintain a rating on
<PAGE> 21
the Project Bonds.
"Supplemental Indenture" means any indenture supplemental to this
Indenture entered into between the Issuer and the Trustee in accordance with
Article VIII hereof.
"Three Month 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 which 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 Project Bonds could be
remarketed at par, plus 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 Three Month
Interest Rate for whatever reason, or the Three Month Interest Rate cannot be
determined pursuant to clause (a) for whatever reason, the interest rate then in
effect with respect to the Project Bonds, without adjustment; provided that in
no event shall the Three Month Interest Rate exceed the Maximum Rate.
"Trustee" means the Trustee at the time acting as such under this
Indenture, originally Bank One Trust Company, NA, as Trustee, and any successor
Trustee as determined or designated under or pursuant to this Indenture.
"Unassigned Issuer's Rights" means the Unassigned Issuer's Rights as
defined in the Agreement.
"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 which 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 Project Bonds could be
remarketed at par, plus 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 Project Bonds, without adjustment; provided that in no event
shall the Weekly Interest Rate exceed the Maximum Rate.
<PAGE> 22
Section 1.02. INTERPRETATION. Any reference herein to the Issuer or to
any officer, employee or official thereof includes entities, officers, employees
or officials succeeding to their respective functions, duties or
responsibilities pursuant to or by operation of law or who are lawfully
performing their functions.
Any reference to a section or provision of the Indiana Constitution or
the Act, or to a section, provision or chapter of the Indiana Revised Code, or
to any statute of the United States of America, includes that section, provision
or chapter as amended, modified, revised, supplemented or superseded from time
to time; provided, that no amendment, modification, revision, supplement or
superseding section, provision or chapter shall be applicable solely by reason
of this paragraph, if it constitutes in any way an impairment of rights or
obligations of the Issuer, the Holders, the Trustee, the Registrar, the Bank,
the Remarketing Agent, any Paying Agent, any Authenticating Agent or the
Borrower under this Indenture, the Bond Ordinance, the Bonds, the Letter of
Credit, the Credit Agreement, the Bond Placement Agreement, the Notes or any
other instrument or document entered into in connection with any of the
foregoing, including without limitation, any alteration of the obligation to pay
Bond Service Charges in the amount and manner, at the times, and from the
sources provided in the Bond Ordinance and this Indenture, except as permitted
herein.
Unless the context indicates otherwise, words importing the singular
number include the plural number, and vice versa. The terms "hereof", "hereby",
"herein", "hereto", "hereunder", "hereinafter" and similar terms refer to this
Indenture; and the term "hereafter" means after, and the term "heretofore" means
before, the date of delivery of this Indenture. Words of any gender include the
correlative words of the other genders, unless the sense indicates otherwise.
Section 1.03. CAPTIONS AND HEADINGS. The captions and headings in this
Indenture are solely for convenience of reference and in no way define, limit or
describe the scope or intent of any Articles, Sections, subsections, paragraphs,
subparagraphs or clauses hereof.
END OF ARTICLE I
<PAGE> 23
ARTICLE II.
AUTHORIZATION AND TERMS OF
PROJECT BONDS; ADDITIONAL BONDS
Section 2.01. AUTHORIZED AMOUNT OF BONDS. No Bonds may be issued under
the provisions of this Indenture except in accordance with this Article. The
total authorized principal amount of Project Bonds which shall be issued under
the provisions of this Indenture is $2,700,000. The Issuer may issue, sell and
deliver one or more series of Additional Bonds for the purposes, upon
satisfaction of the conditions and in the manner provided herein.
Section 2.02. ISSUANCE OF PROJECT BONDS. It is determined to be
necessary to, and the Issuer shall, issue, sell and deliver $2,700,000 principal
amount of Project Bonds to provide funds to refund the Prior Bonds. The Project
Bonds shall be designated "City of Wabash, Indiana Adjustable Rate Economic
Development Revenue Refunding Bonds, Series 1998 (Martin Yale Industries, Inc.
Project)"; shall be issuable, unless a Supplemental Indenture shall have been
executed and delivered pursuant to Section 8.02(g) hereof, only in fully
registered form, substantially as set forth in EXHIBIT A to this Indenture;
shall be numbered in such manner as determined by the Trustee in order to
distinguish each Project Bond from any other Project Bond; shall be in the
denominations of $100,000 and any integral multiple of $5,000 in excess thereof;
shall be subject to optional and mandatory redemption in the amounts, upon the
conditions, and at the times and prices set forth herein; and shall be dated as
of the date of their initial delivery. Upon any exchange or transfer and
surrender of any Project Bond in accordance with the provisions hereof, the
Issuer shall execute and the Trustee shall authenticate and deliver one or more
new Project Bonds in exchange therefor as provided herein.
The Project Bonds shall be originally issued only to a Depository to be
held in a book entry system and: (a) the Project 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 for each Bond maturity; and (c) the
Project 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 as set forth in the next succeeding paragraph of this Section. While
the Project Bonds are in book entry only form, Project Bonds in the form of
physical certificates shall only be delivered to the Depository.
So long as a book entry system is in effect for the Project Bonds,
except as hereinafter provided with respect to Beneficial Ownership Interests,
the Issuer and Trustee shall recognize and treat the Depository, or its nominee,
as the Holder of the Project Bonds for all purposes, including payment of Bond
Service Charges, giving of notices, and enforcement of remedies. The crediting
of payments of Bond Service Charges on the Project Bonds and the transmittal of
notices and other communications by the Depository to the Direct Participants in
whose Depository account the Project Bonds are recorded, and such crediting and
transmittal by Direct Participants to Indirect Participants or Beneficial Owners
and by Indirect Participants to
<PAGE> 24
Beneficial Owners, are the respective responsibilities of the Depository and the
Direct Participants and Indirect Participants and are not the responsibility of
the Issuer or the Trustee; provided, however, that the Issuer and the Trustee
understand that neither the Depository or its nominee shall provide any consent
requested of Holders of Project Bonds pursuant to this Indenture, and that the
Depository will mail an omnibus proxy (including a list identifying the Direct
Participants) to the Issuer which assigns the Depository's, or its nominee's,
voting rights to the Direct Participants to whose accounts at the Depository the
Project Bonds are credited as of the record date for mailing of requests for
such consents. Upon receipt of such omnibus proxy, the Issuer shall promptly
provide such omnibus proxy (including the list identifying the Direct
Participants attached thereto) to the Trustee, who shall then treat such Direct
Participants as Holders of the Project Bonds for purposes of obtaining any
consents pursuant to the terms of this Indenture.
As long as the Project Bonds are registered in the name of a Depository,
or its nominee, the Trustee agrees to comply with the terms and provisions of
the Letter of Representations, including the provisions of the Letter of
Representations with respect to any delivery of the Project Bonds to the
Trustee, which provisions shall supersede the provisions of this Indenture with
respect thereto.
If any Depository determines not to continue to act as a Depository for
the Project Bonds held in a book entry system, the Issuer may attempt to have
established a securities depository/book entry system relationship with another
Depository under this 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 of the Beneficial Owners by appropriate notice to the then
Depository, shall permit withdrawal of the Project Bonds from the Depository and
shall authenticate and deliver Project Bonds certificates in fully registered
form to the assignees of the Depository or its nominee or to the Beneficial
Owners. Such withdrawal, authentication and delivery shall be at the cost and
expense (including costs of printing or otherwise preparing and delivering such
replacement Project Bonds) of the Borrower. Such replacement Project Bonds shall
be in the denominations specified in the first and second paragraphs of this
Section 2.02, with a minimum denomination of $100,000.
Section 2.03. MATURITY AND INTEREST. The Project Bonds shall 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 provided for, from their date
of initial delivery, payable on each Interest Payment Date. The Project Bonds
shall bear interest at an Adjustable Rate or the Fixed Rate all as more
specifically set forth hereinafter. The Project Bonds shall mature on September
1, 2028, subject to prior redemption as set forth in Section 4.01 hereof.
From the date of initial delivery of the Project Bonds, the interest
rate on the Project Bonds shall be that rate per annum, not to exceed the
Maximum Rate, as shall be established in or pursuant to the Bond Placement
Agreement. Thereafter, except as provided in this Section 2.03, the Project
Bonds shall bear interest at the Weekly Interest Rate and, for each succeeding
Weekly Interest Rate Period, the interest rate on the Project Bonds shall be the
Weekly Interest Rate for such Weekly Interest Rate Period as established on the
Interest Rate Determination
<PAGE> 25
Date immediately preceding the commencement of such Weekly Interest Rate Period.
On the first Business Day of December 1998, and on any Interest Period
Reset Date thereafter, the interest rate on the Project 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 Borrower, approved in writing
by the Bank, given on behalf of the Issuer, not less than 45 days prior to such
Interest Period Reset Date, to convert the interest rate on the Project Bonds to
an Interest Rate Mode other than the Interest Rate Mode then in effect. Except
when converting from the Weekly Interest Rate Mode, no Interest Period Reset
Date shall be earlier than the day after the end of the last Interest Rate
Period for the Interest Rate Mode in effect on the date of such direction from
the Borrower, the end of such Interest Rate Period to be determined as if such
direction had not been given. Such direction to convert the interest rate on the
Project Bonds to a different Interest Rate Mode shall be accompanied by (a) an
opinion of Bond Counsel selected by the Borrower 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 Project Bonds from gross income for federal income tax purposes,
(b) a written certificate of the Remarketing Agent stating that the interest
coverage period provided by the Letter of Credit is appropriate for the Interest
Rate Mode directed to be in effect and that the Letter of Credit Termination
Date is no earlier than 15 days after the end of the new Interest Rate Period,
or if the conversion is to the Fixed Interest Rate, that the termination date of
the Letter of Credit is no earlier than 15 days after the First Optional
Redemption Date, and (c) a written certificate of the Remarketing Agent stating
that it has received certifications, opinions or other evidence satisfactory to
it that there has been or will be compliance with any applicable state or
federal securities law requirements. If the Project Bonds bear interest at the
Weekly Interest Rate, the One Month Interest Rate or the Three Month 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 Project Bonds bear interest at the
Six Month Interest Rate, the One Year Interest Rate, the Five Year Interest Rate
or the Fixed Interest Rate, then the interest coverage period for the Letter of
Credit shall be at least 195 days of interest at the Maximum Rate. The Borrower
shall be required to provide a Letter of Credit or an Alternate Letter of Credit
which will provide the appropriate interest coverage. Notwithstanding any
provision of this paragraph, no conversion shall be effective (i) if the
proposed conversion is to a One Year Interest Rate, Five Year Interest Rate or
Fixed Interest Rate and the Borrower makes an election on or prior to the day
immediately succeeding any Interest Rate Determination Date not to proceed with
the proposed conversion or (ii) 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 (a) of this paragraph above. In either such event, the
Interest Rate Mode for the Project Bonds will remain as the Interest Rate Mode
then in effect for the Project Bonds without regard to any proposed conversion.
The Project 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.
<PAGE> 26
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 Project 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 Borrower and the Bank
as above provided.
If the interest rate on the Project Bonds is converted to a different
Interest Rate Mode, at least 30 days prior to the Interest Period Reset Date the
Trustee shall confirm, by first class mail to all Holders, that upon such
Interest Period Reset Date the Project Bonds shall be converted to a different
Interest Rate Mode, which Interest Rate Mode shall be specified, and that all
Project Bonds and Beneficial Ownership Interests shall be subject to a mandatory
tender pursuant to Section 2.05 hereof, subject to the right of the Holders or
Beneficial Owners to affirmatively elect to waive the mandatory tender and
retain their Project Bonds or Beneficial Ownership Interests.
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 Six Month Interest Rate, the
One Year 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 Weekly Interest Rate, the One Month Interest Rate or the Three
Month 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 Project Bonds shall be rounded to the
nearest one-hundredth of one percent (0.01%). The computation of the interest
rate on the Project Bonds by the Remarketing Agent or the Trustee, as
applicable, shall be binding and conclusive upon the Borrower, the Bank and the
Holders of the Project Bonds.
Notwithstanding anything to the contrary in this Indenture, nothing in
this Indenture shall require the Bank to extend the expiry date of, or to
increase the interest coverage provided in, the Letter of Credit.
Section 2.04. TENDER OPTIONS.
(a) While the Project Bonds bear interest at the One Month Interest
Rate, the Three Month Interest Rate, the Six Month Interest Rate, the One Year
Interest Rate or the Five Year Interest Rate, on each Interest Rate Adjustment
Date (each a "Bond Purchase Date") each Holder and each Beneficial Owner shall
have the option to tender for purchase at 100% of the principal amount thereof,
all of the Project Bonds owned by such Holder, or all Beneficial Ownership
Interests owned by such Beneficial Owner, as applicable, or (in either case)
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 Project Bond or Beneficial Ownership Interest shall be $100,000 or more in
principal amount) as such Holder or Beneficial Owner, as applicable, may specify
in accordance with the terms, conditions and limitations hereinafter set forth.
The purchase price for each such Project Bond or Beneficial Ownership Interest,
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) While the Project Bonds bear interest at the Weekly Interest Rate,
each Holder and each Beneficial Owner shall have the option to tender for
purchase, at 100% of the principal amount thereof plus accrued interest to the
purchase date (a "Bond Purchase Date"), all of the Project Bonds owned by such
Holder, or all Beneficial Ownership Interests owned by such Beneficial Owner, as
applicable, or (in either case) 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 Project Bond or Beneficial Ownership
Interest shall be $100,000 or more in principal amount) as such Holder of
Beneficial Owner, as applicable, may specify in
<PAGE> 27
accordance with the terms, conditions and limitations hereafter set forth. The
purchase price of each such Project Bond or Beneficial Ownership Interest 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) To exercise the option granted in Section 2.04(a) hereof, the Holder
or Beneficial Owner, as applicable, shall (i) no earlier than fifteen days
before the Bond Purchase Date and no later than 11:00 a.m. according to the
local time at the principal Indiana corporate trust office of the Trustee on the
eighth Business Day prior to the Bond Purchase Date, or in the event the Project
Bonds bear interest at the One Month Interest Rate, the fifth Business Day prior
to the Bond Purchase Date, give notice to the Trustee by telecopy or in writing
which states (A) the name and address of the Holder or Beneficial Owner, as
applicable, (B) the principal amount, CUSIP number and Bond numbers of the
Project Bonds or Beneficial Ownership Interests to be purchased, (C) that such
Project Bonds or Beneficial Ownership Interests are to be purchased on such Bond
Purchase Date pursuant to the terms hereof, and (D) that such notice is
irrevocable; (ii) in the case of a Beneficial Owner, provide the Trustee with
evidence satisfactory to the Trustee of such Beneficial Owner's Beneficial
Ownership Interest; (iii) in the case of a Holder, no later than 10:00 a.m.
according to the local time at the principal Indiana corporate trust 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 Project Bonds bear interest at the One Month 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 principal Indiana
corporate trust office of the Trustee the Project 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 Project Bonds; and (iv) in the case of
a Beneficial Owner, no later than 10:00 a.m. (according to the local time at the
principal Indiana corporate trust 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 accordance with the instructions of the
Trustee.
To exercise the option granted in Section 2.04(b) hereof, the Holder or
Beneficial Owner, as applicable shall (i) give notice to the Trustee by telecopy
or in writing which states (A) the name and address of the Holder or Beneficial
Owner, as applicable, (B) the principal amount, CUSIP number and Bond numbers of
the Project Bonds or Beneficial Ownership Interests to be purchased, (C) the
date on which such Project Bonds or Beneficial Ownership are to be purchased,
which Bond Purchase Date shall be a Business Day not prior to the seventh (7th)
day and not later than the fifteenth (15th) day next succeeding the date of
giving of such notice to the Trustee and, if the interest rate on the Project
Bonds is to be converted from the Weekly Interest Rate to a new Interest Rate
Mode, is a date prior to the Interest Period Reset Date with respect to the new
Interest Rate Mode, and (D) that such notice is irrevocable; (ii) in the case of
a Beneficial Owner, provide the Trustee with evidence satisfactory to the
Trustee of such Beneficial Owner's Beneficial Ownership Interest; (iii) in the
case of a Holder, no later than 10:00 a.m. according to the local time at the
principal Indiana corporate trust office of the Trustee on the second Business
Day immediately preceding the applicable Bond Purchase Date, deliver to the
principal Indiana corporate trust office of the Trustee the Project Bonds to be
purchased in proper form, accompanied by fully completed and executed
Instructions to Sell,
<PAGE> 28
the form of which shall be printed on the Project Bonds; and (iv) in the case of
a Beneficial Owner, no later than 10:00 a.m. (according to the local time at the
principal Indiana corporate trust 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 accordance with the instructions of the
Trustee.
Any Project 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 Project Bonds to the Trustee. Subject to the right
of such Holders to receive the purchase price of such Project Bonds (and subject
to the conditions set forth in Section 3.07 hereof), such Project Bonds shall be
null and void and the Trustee shall authenticate and deliver new Project Bonds
in replacement thereof pursuant to the remarketing of such Project Bonds or the
pledge of such Project Bonds to the Bank in lieu of remarketing such Project
Bonds as described in Section 6.20 hereof. Any Beneficial Owners who have
elected to tender Beneficial Ownership Interests shall be obligated to transfer
such Beneficial Ownership Interests on the records of the Depository.
(d) Upon the giving of the notice pursuant to Section 2.04(c) hereof
with respect to Project Bonds or Beneficial Ownership Interests or portions of
either, the Holder's tender of such Project Bonds or portions thereof or the
Beneficial Owner's tender of Beneficial Ownership Interests or portions thereof
shall be irrevocable. Upon receipt of the Project Bonds, the Trustee shall
determine whether Instructions to Sell have been properly submitted and its
determination shall be binding. If less than all of a Project Bond so delivered
or deemed tendered is to be purchased, the Trustee shall, pursuant to this
Indenture authenticate one or more Project 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 Project Bond
or Project Bonds to such Holder.
(e) While tendered Project 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 Project
Bonds through the day preceding the applicable Bond Purchase Date is to be paid
from the Bond Fund as if such Project Bonds had not been tendered for purchase.
(f) Notwithstanding anything herein to the contrary, any Project Bond or
Beneficial Ownership Interest or portion thereof tendered under Sections 2.04,
2.05, 2.06 or 2.07 hereof will not be purchased if such Project Bond or portion
thereof matures or is redeemed on or prior to the applicable Bond Purchase Date.
Section 2.05. MANDATORY TENDER UPON CONVERSION TO A NEW INTEREST RATE
MODE. If at any time the Issuer at the direction of the Borrower shall convert
the interest rate on the Project Bonds to a different Interest Rate Mode in
accordance with the provisions of Section 2.03 hereof, on the Interest Period
Reset Date upon which such conversion is effective, all Project Bonds and
Beneficial Ownership Interests shall be subject to mandatory tender by the
Holders or Beneficial Owners thereof for purchase on the Interest Period Reset
Date (a "Bond Purchase
<PAGE> 29
Date") at a price of 100% of the principal amount thereof plus accrued interest
to such Bond Purchase Date. Notwithstanding such mandatory tender, any Holder or
Beneficial Owner may elect to retain its Project Bonds or Beneficial Ownership
Interests by delivering to the Trustee a written notice no later than 11:00 a.m.
according to the local time at the principal Indiana corporate trust office of
the Trustee on the eighth Business Day prior to such Interest Period Reset Date
or by 11:00 a.m. according to the local time at the principal Indiana corporate
trust office of the Trustee on the fifth Business Day prior to such Interest
Period Reset Date if the Interest Rate Mode is to be converted to the One Month
Interest Rate, which notice shall state that (a) such Holder or Beneficial Owner
realizes that the Project Bonds are being converted to bear interest at the
applicable Interest Rate Mode, (b) unless the interest rate on the Project Bonds
is being converted to the Weekly Interest Rate, such Holder or Beneficial Owner
realizes that the next Bond Purchase Date upon which the Project Bonds or
Beneficial Ownership Interests may be tendered for purchase is the next Interest
Rate Adjustment Date or, if such Project Bonds are being converted to the Fixed
Interest Rate, that such Project Bonds or Beneficial Ownership Interests may no
longer be tendered for purchase, (c) such Holder or Beneficial Owner realizes
that any securities rating on the Bonds may be withdrawn or lowered, and (d)
such Holder or Beneficial Owner affirmatively elects to hold its Project Bonds
or Beneficial Ownership Interests and receive interest at the applicable
Interest Rate Mode.
Project Bonds or Beneficial Ownership Interests with respect to which
the Trustee shall not have received the election required by the preceding
paragraph shall be deemed to have been tendered for purposes of this Section
2.05 whether or not the Holders or Beneficial Owners shall have delivered such
Project Bonds or Beneficial Ownership Interests to the Trustee and without
further action by the Beneficial Owners with regard to Beneficial Ownership
Interests. Subject to the right of the Holders or Beneficial Owners of such
Project Bonds or Beneficial Ownership Interests to receive the purchase price of
such Project Bonds or Beneficial Ownership Interests (and subject to the
conditions set forth in Section 3.07 hereof), such Project Bonds or Beneficial
Ownership Interests shall be null and void and the Trustee shall authenticate
and deliver new Project Bonds in replacement thereof or new Beneficial Ownership
Interests shall be recorded on the records of the Depository pursuant to the
remarketing of such Project Bonds or Beneficial Ownership Interests or the
pledge of such Project Bonds or Beneficial Ownership Interests to the Bank in
lieu of remarketing such Project Bonds or Beneficial Ownership Interests as
described in Section 6.20 hereof.
Section 2.06. MANDATORY TENDER UPON DELIVERY OF AN ALTERNATE LETTER OF
CREDIT. If at any time the Borrower shall provide for the delivery to the
Trustee of an Alternate Letter of Credit in accordance with the provisions of
Section 5.09 hereof, on a date selected by the Borrower, with the consent of the
Trustee, which date shall precede the Replacement Date, as defined in Section
5.09 hereof, by at least five (5) Business Days (a "Bond Purchase Date"), all
Project Bonds and Beneficial Ownership Interests shall be subject to mandatory
tender by the Holders or Beneficial Owners, as applicable, for purchase at a
price of 100% of the principal amount thereof plus accrued interest to such Bond
Purchase Date. At least 30 days prior to the Bond Purchase Date the Trustee
shall confirm, by first class mail to all Holders, that an Alternate Letter of
Credit is to be delivered by the Borrower to the Trustee. Such notice shall
advise the Holders of the Bond Purchase Date, that the requirements of the
Indenture and the
<PAGE> 30
Project Bonds relating to Alternate Letter of Credit have been met, the name of
the financial institution issuing the Alternate Letter of Credit, the rating, if
any, on the Project Bonds upon the provision of the Alternate Letter of Credit
and that all Project Bonds and Beneficial Ownership Interests shall be subject
to mandatory purchase from the Holders and Beneficial Owners thereof, subject to
the right of each Holder or Beneficial Owner to affirmatively elect to waive the
mandatory tender for purchase and retain its Project Bonds or Beneficial
Ownership Interests.
Notwithstanding such mandatory tender, any Holder or Beneficial Owner
may elect to retain its Project Bonds or Beneficial Ownership Interests by
delivering to the Trustee a written notice no later than 11:00 a.m. according to
the local time at the principal Indiana corporate trust office of the Trustee on
the eighth Business Day prior to such Bond Purchase Date, which notice shall
state that (a) such Holder or Beneficial Owner has received notice of and
realizes that the Borrower is delivering an Alternate Letter of Credit to the
Trustee pursuant to Section 5.09 and (b) such Holder or Beneficial Owner
affirmatively elects to retain its Project Bonds or Beneficial Ownership
Interests.
Project Bonds or Beneficial Ownership Interests with respect to which
the Trustee shall not have received the election required by the preceding
paragraph shall be deemed to have been tendered for purposes of this Section
2.06 whether or not the Holders shall have delivered such Project Bonds to the
Trustee and without further action by the Beneficial Owners with regard to
Beneficial Ownership Interests. Subject to the right of the Holders or
Beneficial Owners of such Project Bonds or Beneficial Ownership Interests to
receive the purchase price of such Project Bonds or Beneficial Ownership
Interests (and subject to the conditions set forth in Section 3.07 hereof), such
Project Bonds or Beneficial Ownership Interests shall be null and void and the
Trustee shall authenticate and deliver new Project Bonds in replacement thereof,
or new Beneficial Ownership Interests shall be recorded on the records of the
Depository, pursuant to the remarketing of such Project Bonds or Beneficial
Ownership Interests or the pledge of such Project Bonds or Beneficial Ownership
Interests to the Bank in lieu of remarketing such Project Bonds or Beneficial
Ownership Interests as described in Section 6.20 hereof.
Section 2.07. MANDATORY TENDER UPON EXPIRATION OF THE LETTER OF CREDIT.
The Bonds and Beneficial Ownership Interests are subject to mandatory tender in
whole on the Interest Payment Date which next precedes the Letter of Credit
Termination Date (the "Mandatory Bond Purchase Date"), at a price of 100% of the
outstanding principal amount thereof plus accrued interest to such Mandatory
Bond Purchase Date unless, at least 45 days prior to any such Mandatory Bond
Purchase Date, (a) 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, or (b)
pursuant to Section 5.09 hereof, the Borrower shall have obtained and delivered
to the Trustee an Alternate Letter of Credit with a termination date not earlier
than one year from the Letter of Credit Termination Date of the Letter of Credit
being replaced. The mandatory tender of Bonds or Beneficial Ownership Interests
on a Mandatory Bond Purchase Date may not be waived by the Holders or Beneficial
Owners thereof.
<PAGE> 31
At least 30 days, but not more than 45 days, prior to such Mandatory
Bond Purchase Date pursuant to this Section 2.07, the Trustee shall confirm, by
first class mail to all Holders or Beneficial Owners, the Mandatory Bond
Purchase Date of the Project Bonds and advise the Holders or Beneficial Owners
that all Bonds and Beneficial Ownership Interests shall be subject to mandatory
tender on such Mandatory Bond Purchase Date and that such mandatory tender may
not be waived.
Bonds or Beneficial Ownership Interests not tendered for purchase as
required by the preceding paragraph shall be deemed to have been tendered
without further action by the Holders or Beneficial Owners thereof, subject to
the right of the Holders or Beneficial Owners of such Bonds or Beneficial
Ownership Interests to receive the purchase price of such Bonds or Beneficial
Ownership Interests.
Not less than 200 days prior to any Letter of Credit Termination Date,
the Trustee shall provide written notice to the Borrower, the Bank and the
Remarketing Agent of the Letter of Credit Termination Date.
Section 2.08. DELIVERY OF THE PROJECT BONDS. Upon the execution and
delivery of this Indenture, and satisfaction of the conditions established by
the Issuer in the Bond Legislation and in the Bond Placement Agreement for
delivery of the Project Bonds, the Issuer shall execute the Project Bonds and
deliver them to the Trustee. Thereupon, the Trustee shall authenticate the
Project Bonds and deliver them to the Depository, as directed by the Issuer in
accordance with this Section 2.08.
Before the Trustee delivers any Project Bonds, the Trustee shall have
received a request and authorization to the Trustee on behalf of the Issuer,
signed by an Executive, to authenticate and deliver the Project Bonds to the
Depository, upon payment to the Trustee of the amount specified therein, which
amount shall be deposited as provided in Sections 5.01 and 5.03 hereof.
Section 2.09. ISSUANCE AND DELIVERY OF ADDITIONAL BONDS. At the request
of the Borrower, but subject to the written consent of the Bank, the Issuer may
issue Additional Bonds from time to time for any purpose permitted by the Act.
Any Additional Bonds shall be on a parity with the Project Bonds (except
with respect to any moneys drawn by the Trustee on the Letter of Credit) and any
Additional Bonds theretofore or thereafter issued and outstanding as to the
assignment to the Trustee of the Issuer's right, title and interest in the
Revenues, the Agreement and the Project Note and the Borrower's right, title and
interest in any Revenues comprised of undisbursed Bond proceeds on deposit in
the Refunding Fund to provide for payment of Bond Service Charges on the Bonds;
provided, that nothing herein shall prevent payment of Bond Service Charges on
any series of Additional Bonds from (a) being otherwise secured and protected
from sources or by property or instruments not applicable to the Project Bonds
and any one or more series of Additional Bonds, or (b) not being secured or
protected from sources or by property or
<PAGE> 32
instruments applicable to the Project Bonds or one or more series of Additional
Bonds.
Before the Trustee shall authenticate and deliver any Additional Bonds,
the Trustee shall receive the following items:
(a) Original executed counterparts of any amendments or supplements to
the Agreement and the Indenture entered into in connection with the issuance of
the Additional Bonds, which are necessary or advisable, in the opinion of Bond
Counsel, to provide that the Additional Bonds will be issued in compliance with
the provisions of this Indenture.
(b) One or more Additional Notes, as required by the Agreement, in an
aggregate principal amount equal to the aggregate principal amount of the
Additional Bonds.
(c) A copy of the written request from the Borrower to the Issuer for
issuance of the Additional Bonds.
(d) A copy of the applicable Bond Ordinance, certified by the Fiscal
Officer of the Issuer.
(e) A request and authorization to the Trustee on behalf of the Issuer,
signed by the Executive, to authenticate and deliver the Additional Bonds to, or
on the order of, the purchaser thereof upon payment to the Trustee of the amount
specified therein (including without limitation, any accrued interest), which
amount shall be deposited as provided in the applicable Bond Ordinance or
Supplemental Indenture.
(f) The written opinion of counsel, who may be counsel for the Issuer,
reasonably satisfactory to the Trustee, to the effect that: (i) the documents
submitted to the Trustee in connection with the request then being made comply
with the requirements of this Indenture; (ii) the issuance of the Additional
Bonds has been duly authorized; (iii) all filings required to be made under
Section 10.01 of this Indenture have been made; and (iv) all conditions
precedent to the delivery of the Additional Bonds have been fulfilled.
(g) A written opinion of Bond Counsel (who also may be the counsel to
which reference is made in paragraph f), to the effect that: (i) when executed
for and in the name and on behalf of the Issuer and when authenticated and
delivered by the Trustee, those Additional Bonds will be valid and legal special
obligations of the Issuer in accordance with their terms and will be secured
hereunder equally and on a parity (except with respect to any moneys drawn by
the Trustee under the Letter of Credit) with all other Bonds at the time
outstanding hereunder as to the assignment to the Trustee of the Issuer's right,
title and interest in the Revenues, the Agreement and the Bond Fund (except as
to and any provision made by or pursuant to Sections 4.05, 5.06 or 5.07 hereof)
and the moneys and investments therein to provide for payment of Bond Service
Charges on the Bonds; and (ii) the issuance of the Additional Bonds will not
result in the interest on the Bonds outstanding immediately prior to that
issuance becoming includable in gross income for purposes of federal income
taxation.
<PAGE> 33
(h) A written opinion of counsel to the Borrower, reasonably
satisfactory to the Trustee, to the effect that the amendments or supplements to
each of the Agreement and any Additional Notes have been duly authorized,
executed and delivered by the Borrower, and that the Agreement, as amended or
supplemented, and any Additional Notes constitute legal, valid and binding
obligations of the Borrower, in accordance with their respective terms, subject
to exceptions reasonably satisfactory to the Trustee for bankruptcy, insolvency
and similar laws and the application of equitable principles.
(i) The written approval of the Bank to the issuance and delivery of the
Additional Bonds.
When (a) the documents listed above have been received by the Trustee,
and (b) the Additional Bonds have been executed and authenticated, the Trustee
shall deliver the Additional Bonds to or on the order of the purchaser thereof,
but only upon payment to the Trustee of the specified amount (including without
limitation, any accrued interest) set forth in the request and authorization to
which reference is made in paragraph (e) above.
END OF ARTICLE II
<PAGE> 34
ARTICLE III.
TERMS OF BONDS GENERALLY
Section 3.01. FORM OF BONDS. The Bonds, the certificate of
authentication, the form of assignment and the Instructions to Sell shall be
substantially in the respective forms thereof set forth in EXHIBIT A to this
Indenture with, in the case of Additional Bonds, any omissions, insertions and
variations which may be authorized or permitted by the Bond Ordinance
authorizing, or the Supplemental Indenture entered into in connection with,
those Additional Bonds, all consistent with this Indenture.
All Bonds, unless a Supplemental Indenture shall have been executed and
delivered pursuant to Section 8.02(g) hereof, shall be in fully registered form,
and, except as provided in Section 3.05 hereof and as provided in Sections 2.02,
2.04, 2.05, 2.06, 2.07, 6.19 and 6.20 with respect to Beneficial Ownership
Interests, the Holder of a Bond shall be regarded as the absolute owner thereof
for all purposes of this Indenture.
The Bonds of one series shall bear any designations which may be
necessary or advisable to distinguish them from Bonds of any other series. The
Bonds shall be negotiable instruments in accordance with the Act, and shall
express the purpose for which they are issued and any other statements or
legends which may be required by law. Each Bond of the same series shall be of a
single maturity, unless the Trustee shall approve the authentication and
delivery of a Bond of more than one maturity.
Bonds of any maturity may be initially issued in temporary form
exchangeable for definitive Bonds of the same maturity when ready for delivery.
The temporary Bonds shall be of such denomination or denominations, without
coupons, as may be determined by the Issuer, and may contain such reference to
any of the provisions of this Indenture as may be appropriate. Every temporary
Bond shall be executed by the Issuer and be authenticated by the Trustee upon
the same conditions and in substantially the same manner as the definitive
Bonds. If the Issuer issues temporary Bonds it will execute and furnish
definitive Bonds at the Borrower's expense (and without cost to the owners of
such temporary Bonds), and thereupon the temporary Bonds may be surrendered for
cancellation in exchange therefor at the principal Indiana corporate trust
office of the Trustee, and the Trustee shall authenticate and deliver in
exchange for such temporary Bonds an equal aggregate principal amount of
definitive registered Bonds, without coupons, of the same series and maturity of
authorized denominations. Until so exchanged, the temporary Bonds shall be
entitled to the same benefits under this Indenture as definitive Bonds
authenticated and delivered hereunder.
Section 3.02. VARIABLE TERMS. Subject to the provisions of this
Indenture, each series of Bonds shall be dated, shall mature in the years and
the amounts, shall bear interest at the rate or rates per annum, shall be
payable on the dates, shall have the Registrar, Paying Agent and Authenticating
Agent, shall be of the denominations, shall be subject to redemption on the
terms and conditions and shall have any other terms which are set forth or
provided for in this Indenture in the case of the Project Bonds, and in this
Indenture, the applicable Bond
<PAGE> 35
Ordinance and the Supplemental Indenture, in the case of any issue of Additional
Bonds.
Section 3.03. EXECUTION AND AUTHENTICATION OF BONDS. Unless otherwise
provided in the applicable Bond Ordinance, each Bond shall be signed by the
Mayor and the Clerk-Treasurer of the Issuer (provided that such signature may be
facsimile), and may bear the seal of the Issuer or a facsimile thereof. In case
any officer whose signature or a facsimile of whose signature appears on any
Bond shall cease to be that officer before the issuance of the Bond, the
officer's signature or the facsimile thereof nevertheless shall be valid and
sufficient for all purposes, the same as if he or she had remained in office
until that time. Any Bond may be executed on behalf of the Issuer by an officer
who, on the date of execution is the proper officer, although on the date of the
Bond that person was not the proper officer.
No Bond shall be valid or become obligatory for any purpose or shall be
entitled to any security or benefit under this Indenture unless and until a
certificate of authentication, substantially in the form set forth in EXHIBIT A
to this Indenture, has been signed by the Trustee or by any Authenticating Agent
for that series on behalf of the Trustee. The authentication by the Trustee or
by an Authenticating Agent upon any Bond shall be conclusive evidence that the
Bond so authenticated has been duly authenticated and delivered hereunder and is
entitled to the security and benefit of this Indenture. The certificate of the
Trustee or an Authenticating Agent may be executed by any person authorized by
the Trustee or Authenticating Agent, but it shall not be necessary that the same
authorized person sign the certificates of authentication on all of the Bonds.
Section 3.04. SOURCE OF PAYMENT OF BONDS. To the extent provided in and
except as otherwise permitted by this Indenture, (a) the Bonds shall be special
obligations of the Issuer and the Bond Service Charges thereon shall be payable
equally and ratably solely from the Revenues, (b) the payment of Bond Service
Charges on the Bonds shall be secured by the assignment of Revenues hereunder
and by this Indenture, and (c) payments due on the Bonds also shall be secured
by the Notes, provided, however, that payment of Bond Service Charges on any
series of Additional Bonds may be otherwise secured and protected from sources
or by property or instruments not applicable to the Project Bonds and any one or
more series of Additional Bonds, or not secured and protected from sources or by
property or instruments applicable to the Project Bonds or one or more series of
Additional Bonds. The Bonds and the interest payable thereon do not constitute a
debt or liability of the Issuer, the State or any political subdivision thereof
within the meaning of the provisions of the Constitution or the statutes of the
State, or a pledge of the faith and credit or the taxing power of the Issuer,
the State or any political subdivision thereof, but shall be payable solely from
the funds pledged therefor in accordance with this Indenture.
Section 3.05. PAYMENT AND OWNERSHIP OF BONDS. The principal of and any
premium on any Bond shall be payable when due to a Holder upon presentation and
surrender of such Bond at the principal Indiana corporate trust office of the
Trustee or at the office, designated by the Trustee, of any Paying Agent.
Interest on any Bond shall be paid on each Interest Payment Date by check or
draft which the Trustee shall cause to be mailed on that date to the person in
whose name the Bond (or one or more Predecessor Bonds) is registered at the
close of business on the Regular Record Date applicable to that Interest Payment
Date on the Register at the
<PAGE> 36
address appearing therein. Notwithstanding the foregoing, and while the Bonds
are held by a Depository, interest on any Bond shall be paid by wire transfer in
immediately available funds to the bank account number and address filed with
the Trustee by such Holder. If and to the extent, however, that the Issuer shall
fail to make payment or provision for payment of interest on any Bond on any
Interest Payment Date, that interest shall cease to be payable by the Issuer to
the Person who was the Holder of that Bond (or of one or more Predecessor Bonds)
as of the applicable Regular Record Date; when moneys become available for
payment of the interest, (a) the Trustee shall, pursuant to Section 7.06(d)
hereof, establish a Special Record Date for the payment of that interest which
shall be not more than 15 nor fewer than 10 days prior to the date of the
proposed payment, and (b) the Trustee shall cause notice of the proposed payment
and of the Special Record Date to be mailed by first class mail, postage
prepaid, to such Holder at its address as it appears on the Register no fewer
than 10 days prior to the Special Record Date and, thereafter, the interest
shall be payable to the Persons who are the Holders of such Bonds (or their
respective Predecessor Bonds) at the close of business on the Special Record
Date. Bond Service Charges shall be payable in lawful money of the United States
of America without deduction for the services of the Trustee or any Paying
Agent.
Notwithstanding anything herein to the contrary, when any Bond is
registered in the name of a Depository or its nominee, the principal and
redemption price of and interest on such Bond shall be payable in next day or
federal funds delivered or transmitted to the Depository or its nominee.
Subject to the foregoing, each Bond delivered under this Indenture upon
transfer thereof, or in exchange for or in replacement of any other Bond, shall
carry the rights to interest accrued and unpaid, and to accrue on that Bond, or
which were carried by that Bond.
Except as provided in (a) Sections 2.02, 2.04, 2.05, 2.06, 2.07, 6.19
and 6.20 with respect to Beneficial Ownership Interests, and (b) this Section
3.05 and the first paragraph of Section 3.07 hereof, (x) the Holder of any Bond
shall be deemed and regarded as the absolute owner thereof for all purposes of
this Indenture, (y) payment of or on account of the Bond Service Charges on any
Bond shall be made only to or upon the order of that Holder or its duly
authorized attorney in the manner permitted by this Indenture, and (z) neither
the Issuer, the Trustee, the Registrar nor any Paying Agent or Authenticating
Agent shall, to the extent permitted by law, be affected by notice to the
contrary. All of those payments shall be valid and effective to satisfy and
discharge the liability upon that Bond, including without limitation, the
interest thereon, to the extent of the amount or amounts so paid.
Section 3.06. TRANSFER AND EXCHANGE OF BONDS. So long as any of the
Bonds remain outstanding, the Issuer will cause books for the registration and
transfer of Bonds, as provided in this Indenture, to be maintained and kept at
the designated office of the Registrar.
Subject to the provisions of Section 2.02 hereof, unless otherwise
provided in the applicable Bond Ordinance or Supplemental Indenture, Bonds may
be exchanged, at the option of their Holder, for Bonds of the same series and of
any authorized denomination or denominations in an aggregate principal amount
equal to the unmatured and unredeemed
<PAGE> 37
principal amount of, and bearing interest at the same rate and maturing on the
same date or dates as, the Bonds being exchanged. The exchange shall be made
upon presentation and surrender of the Bonds being exchanged at the designated
office of the Registrar or at the designated office of any Authenticating Agent
for that series of Bonds, together with an assignment duly executed by the
Holder or its duly authorized attorney in any form which shall be satisfactory
to the Registrar or the Authenticating Agent, as the case may be.
Subject to the provisions of Section 2.02 hereof, any Bond may be
transferred upon the Register, upon presentation and surrender thereof at the
designated office of the Registrar or the designated office of any
Authenticating Agent for the series thereof together with an assignment duly
executed by the Holder or its duly authorized attorney in any form which shall
be satisfactory to the Registrar or the Authenticating Agent, as the case may
be. Upon transfer of any Bond and on request of the Registrar or the
Authenticating Agent, the Issuer shall execute in the name of the transferee,
and the Registrar or the Authenticating Agent, as the case may be, shall
authenticate and deliver, a new Bond or Bonds of the same series, of any
authorized denomination or denominations in an aggregate principal amount equal
to the unmatured and unredeemed principal amount of, and bearing interest at the
same rate and maturing on the same date or dates as, the Bonds presented and
surrendered for transfer. The date of such transfer to be recorded upon the
Register shall be the date of authentication of the new Bond or Bonds.
In all cases in which Bonds shall be exchanged or transferred hereunder,
the Registrar or any Authenticating Agent, as the case may be, shall
authenticate and deliver Bonds in accordance with the provisions of this
Indenture. The exchange or transfer shall be made without charge; provided that
the Issuer and the Registrar or the Authenticating Agent, as the case may be,
may make a charge for every exchange or transfer of Bonds sufficient to
reimburse them for any tax or excise required to be paid with respect to the
exchange or transfer. The charge shall be paid before a new Bond is delivered.
All Bonds issued upon any transfer or exchange of Bonds shall be the
valid obligations of the Issuer, evidencing the same debt, and entitled to the
same benefits under this Indenture, as the Bonds surrendered upon transfer or
exchange. None of the Issuer, the Registrar or any Authenticating Agent, as the
case may be, shall be required to make any exchange or transfer of a Bond during
a period beginning at the opening of business 15 days before the day of the
mailing of a notice of redemption of Bonds of such series and ending at the
close of business on the day of such mailing or to transfer or exchange any
Bonds selected for redemption, in whole or in part; PROVIDED, HOWEVER, the
foregoing provisions shall not preclude an exchange or transfer of a Bond in the
case of an optional or mandatory tender under Sections 2.04, 2.05, 2.06 or 2.07
hereof.
In case any Bond is redeemed in part only, on or after the redemption
date and upon presentation and surrender of the Bond, the Issuer shall cause
execution of, and the Registrar or any Authenticating Agent for the series of
that Bond shall authenticate and deliver, a new Bond or Bonds of the same series
in authorized denominations in an aggregate principal amount equal to the
unmatured and unredeemed portion of, and bearing interest at the same rate and
<PAGE> 38
maturing on the same date or dates as, the Bond redeemed in part.
Notwithstanding the foregoing, however, if a Depository is the sole Bondholder,
delivery of a notation of partial redemption of Bonds shall be made in such
manner as is mutually agreed upon by the Trustee and the Depository.
For purposes of this Section the Trustee shall establish the designated
office of the Registrar and the Authenticating Agent. Such office shall be that
of the Trustee so long as the Trustee is the sole Registrar and Authenticating
Agent hereunder.
For purposes of this Indenture, and so long as Bank One Trust Company,
NA shall be the Trustee, all references to the place or location for tendering
Bonds pursuant to the provisions of Sections 2.04, 2.05, 2.06, 2.07 or 3.05,
shall be deemed to mean the principal corporate trust processing facility of the
Trustee located in Columbus, Ohio.
Section 3.07. MUTILATED, LOST, WRONGFULLY TAKEN, UNDELIVERED OR
DESTROYED BONDS. If any Bond is mutilated, lost, wrongfully taken or destroyed,
or any tendered Bond or Bond deemed to have been tendered is not delivered
pursuant to the terms of this Indenture, in the absence of written notice to the
Issuer and the Registrar or the Trustee that a lost, wrongfully taken, destroyed
or undelivered Bond has been acquired by a bona fide purchaser, the Registrar or
the Trustee shall authenticate and deliver a new Bond of like date, maturity and
denomination and of the same series as the Bond mutilated, lost, wrongfully
taken, destroyed or undelivered; provided, that (a) in the case of any mutilated
Bond, the mutilated Bond first shall be surrendered to the Registrar or the
Trustee, (b) in the case of any lost, wrongfully taken or destroyed Bond, there
first shall be furnished to the Issuer and the Registrar evidence of the loss,
wrongful taking or destruction satisfactory to the Issuer and the Registrar,
together with indemnity to the Issuer, the Registrar, the Trustee, the Borrower
and the Bank satisfactory to each of them, and payment of any out of pocket
costs of the Issuer, and (c) in the case of any tendered Bond which is
undelivered there shall be satisfactory loss indemnity furnished to the Issuer,
the Registrar, the Trustee, the Borrower and the Bank by the nondelivering
Holder.
If any lost, wrongfully taken, undelivered or destroyed Bond shall have
matured, instead of issuing a new Bond, the Authorized Borrower Representative
may direct the Trustee to pay that Bond without surrender thereof upon the
furnishing of satisfactory evidence and indemnity as in the case of issuance of
a new Bond. The Issuer, the Registrar and the Trustee may charge the Holder of a
mutilated, lost, wrongfully taken, undelivered or destroyed Bond their
reasonable fees and expenses in connection with their actions pursuant to this
Section.
Every new Bond issued pursuant to this Section by reason of any Bond
being lost, wrongfully taken, undelivered or destroyed (a) shall constitute, to
the extent of the outstanding principal amount of the Bond lost, taken,
undelivered or destroyed, an additional contractual obligation of the Issuer,
regardless of whether the lost, wrongfully taken, undelivered or destroyed Bond
shall be enforceable at any time by anyone and (b) shall be entitled to all of
the benefits of this Indenture equally and proportionately with any and all
other Bonds issued and outstanding hereunder.
<PAGE> 39
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, wrongfully taken, undelivered or
destroyed Bonds and, to the extent permitted by law, 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 3.08. CANCELLATION OF BONDS. Except as provided in Section 3.06
hereof, any Bonds surrendered pursuant to this Article for the purpose of
payment or retirement or for exchange, replacement or transfer shall be canceled
upon presentation and surrender thereof to the Registrar, the Trustee or any
Paying Agent or Authenticating Agent. Any Bond canceled by the Trustee or a
Paying Agent or Authenticating Agent shall be transmitted promptly to the
Registrar by the Trustee, Paying Agent, or Authenticating Agent.
The Issuer, or the Borrower on behalf of the Issuer, may deliver at any
time to the Registrar for cancellation any Bonds previously authenticated and
delivered hereunder, which the Issuer or the Borrower may have acquired in any
manner whatsoever. All Bonds so delivered shall be canceled promptly by the
Registrar. Certification of the surrender and cancellation shall be made to the
Issuer, the Bank and the Trustee by the Registrar at least once each calendar
year. Those canceled bonds shall be destroyed by the Registrar by shredding or
incineration. The Registrar shall provide certificates describing the
destruction of canceled Bonds to the Issuer, the Trustee, the Borrower and the
Bank.
END OF ARTICLE III
<PAGE> 40
ARTICLE IV.
REDEMPTION OF BONDS
Section 4.01. TERMS OF REDEMPTION OF PROJECT BONDS. The Project Bonds
are subject to redemption prior to stated maturity as follows:
(a) MANDATORY REDEMPTION UPON A DETERMINATION OF TAXABILITY. Upon the
occurrence of a Determination of Taxability, the Project Bonds are subject to
mandatory redemption in whole at a redemption price equal to 100% of the
outstanding principal amount thereof, plus interest accrued to the redemption
date, at the earliest practicable date selected by the Trustee, after
consultation with the Borrower, but in no event later than 45 days following
receipt by the Trustee of notice of the Determination of Taxability. The
occurrence of a Determination of Taxability with respect to the Project Bonds
will not constitute an Event of Default under this Indenture.
Within five Business Days after receipt by the Trustee of written notice
of a Determination of Taxability, the Trustee shall give written notice thereof
to the Holders of all affected Project Bonds then outstanding, as shown by the
Register, and shall also give written notice to the Borrower, the Issuer and the
Bank.
(b) OPTIONAL REDEMPTION. Unless previously redeemed, the Project Bonds
are subject to redemption (from funds other than those deposited in accordance
with the mandatory sinking fund requirements of this Section 4.01), at the
option of the Issuer, upon the direction of the Borrower (subject to compliance
with Section 4.03 hereof), (i) if the Project 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 Payment Date for Bonds bearing interest at the
Weekly Interest Rate and on any Interest Rate Adjustment Date for Bonds bearing
interest in any other Adjustable Rate, in each case at the redemption price of
100% of the principal amount redeemed plus accrued interest thereon to the
redemption date, and (ii) after the Fixed Interest Rate Commencement Date and on
or after the First Optional Redemption Date, 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) 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.
<TABLE>
<CAPTION>
Redemption Date Optional Redemption Price
--------------- -------------------------
<S> <C>
First Optional Redemption Date, through
the following last day of August 103%
First Anniversary of the First Optional
Redemption Date, through the following
last day of August 102%
</TABLE>
<PAGE> 41
<TABLE>
<S> <C>
Second Anniversary of the First Optional
Redemption Date, through the following
last day of August 101%
Third Anniversary of the First Optional
Redemption Date and thereafter 100%
</TABLE>
(c) EXTRAORDINARY OPTIONAL REDEMPTION. The Project Bonds are also
subject to redemption by the Issuer in the event of the exercise by the Borrower
of its option (subject to compliance with Section 4.03 hereof) to direct that
redemption upon occurrence of any of the events described in Section 6.2 of the
Agreement, (a) at any time in whole, or (b) at any time in part upon the
occurrence of the events permitting such partial redemption, as provided in
Section 6.2 of the Agreement, in each case at a redemption price of 100% of the
principal amount redeemed, plus interest accrued to the redemption date.
(d) USE OF CERTAIN FUNDS TO REDEEM PROJECT BONDS. Except as provided in
Section 9.02 hereof, the Trustee shall pay the redemption price on all Project
Bonds redeemed under this Section 4.01 in the same manner and from the same
sources as provided in Section 5.03 hereof for the payment of Bond Service
Charges.
Section 4.02. PARTIAL REDEMPTION. If fewer than all of the outstanding
Bonds of a series that are stated to mature on different dates are called for
redemption at one time, those Bonds which are called shall be called in inverse
order of the maturities of the Bonds of that series to be redeemed. If fewer
than all of the Bonds of a single maturity are to be redeemed, 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
which the Trustee may determine; provided that the Trustee shall select Project
Bonds for redemption so as to assure that after such redemption no Holder shall
retain Bonds in an aggregate amount less than $100,000; and provided further
that, if less than all of an outstanding Bond of one maturity 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, and
the selection of the beneficial 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 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.
<PAGE> 42
Section 4.03. ISSUER'S 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 Issuer to the Trustee and the Bank, given at the
direction of the Borrower, or by written notice from the Borrower to the Trustee
and the Bank on behalf of the Issuer. 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 45 days prior to the redemption date or such shorter
period as shall be acceptable to the Trustee. Except with the prior written
consent of the Bank, in the case of any optional redemption of Project Bonds
pursuant to Section 4.01(b) or (c) hereof, there shall be Eligible Funds on
deposit with the Trustee prior to the giving of the notice required by Section
4.04 hereof in an amount which will be sufficient to redeem at the redemption
price thereof and interest accrued to the redemption date, all of the Project
Bonds for which notice of redemption is to be given.
Section 4.04. NOTICE OF REDEMPTION. Unless waived by any Holder of
Bonds to be redeemed, official notice of any such redemption shall be given by
the Registrar or the Trustee on behalf of the Issuer by mailing a copy of an
official redemption notice by first class mail at least 30 days and not more
than 60 days prior to the date fixed for redemption (except in the case of a
Section 4.01(a) redemption, in which case such notice shall be given at least 5
days and not more than 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 the
Register or at such other address as is furnished in writing by such registered
owner to the Registrar.
All official notices of redemption shall be dated and shall state:
(a) the redemption date,
(b) the redemption price,
(c) if less than all outstanding Bonds are to be redeemed, the
identification by series designation, letters, numbers or other distinguishing
marks (and, in the case of partial redemption, the respective principal amounts)
of the Bonds to be redeemed,
(d) 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
(e) the place where such Bonds are to be surrendered for payment of the
redemption price, which place of payment shall be the principal Indiana
corporate trust office of the Registrar.
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.
<PAGE> 43
(a) 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 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.
(b) Each further notice of redemption shall be sent at least 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 Depository Trust Company of New York, New York, Midwest
Securities Trust Company of Chicago, Illinois, Pacific Securities Depository
Trust Company of San Francisco, California and Philadelphia Depository Trust
Company of Philadelphia, Pennsylvania) and to one or more national information
services that disseminate notices of redemption of obligations such as the
Bonds.
(c) 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.
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 Registrar or 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 receive such notice and its contents or effect will not
affect the validity of such notice or any proceedings for the redemption of such
Bonds.
Section 4.05. 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 4.04 hereof, and, in the event of optional redemption pursuant to
Section 4.01 (b) or (c) hereof, upon money being deposited as and if required by
Section 4.03 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. The
Trustee shall make a drawing under the Letter of Credit to pay the principal of
and interest due on the Bonds being redeemed. Payment shall be made by check
mailed to the Holder at his address as it appears on the Bond Register on the
fifteenth (15th) day of the month immediately prior to the date set for
redemption. Any moneys received by the Trustee from the Borrower which are
available to be applied toward the payment of such principal and interest, shall
be paid to the Bank to reimburse the Bank for any drawing made under the Letter
of Credit to pay such principal and interest.
<PAGE> 44
Subject to the provisions of Section 13.05 hereof, 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 or
any Paying Agent 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
registered owner 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. 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.
All moneys deposited in the Bond Fund and held by the Trustee or a
Paying Agent 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 3.06
hereof.
Section 4.06. VARIATION OF REDEMPTION PROVISIONS. The provisions of
this Article IV, insofar as they apply to issuance of any series of Additional
Bonds, may be varied by the Supplemental Indenture providing for that series.
END OF ARTICLE IV
<PAGE> 45
ARTICLE V.
PROVISIONS AS TO FUNDS, PAYMENTS AND AGREEMENT
Section 5.01. CREATION OF REFUNDING FUND. There is created by the
Issuer and ordered maintained as a separate deposit account (except when
invested as provided hereinafter) in the custody of the Trustee, a trust fund
designated "City of Wabash Martin Yale Industries, Inc. Refunding Fund." The
proceeds of the Project Bonds shall be deposited therein, and any proceeds
representing accrued interest on the Project Bonds shall remain in the Refunding
Fund.
Unless otherwise set forth in the applicable Bond Ordinance or
Supplemental Indenture relating to the issuance of a series of Additional Bonds,
there shall be deposited in a separate fund the proceeds of the sale of any
Additional Bonds, other than any proceeds representing accrued interest which
shall be deposited in the Bond Fund pursuant to Section 5.03 hereof.
Pending disbursement pursuant to the Agreement, the moneys and Eligible
Investments to the credit of the Refunding Fund shall constitute a part of the
Revenues assigned to the Trustee as security for the payment of the Bond Service
Charges.
Section 5.02. DISBURSEMENTS FROM AND RECORDS OF REFUNDING FUND. Moneys
held in the Refunding Fund representing proceeds of the sale of the Project
Bonds shall be disbursed by the Trustee at the written direction of the Borrower
in accordance with the provisions of the Agreement to effect the redemption of
the Prior Bonds no later than ninety (90) days after the Closing Date of the
Project Bonds. The Trustee is hereby authorized to make each disbursement
required by the provisions of the Agreement.
The Trustee shall cause to be kept and maintained adequate records
pertaining to the Refunding Fund and all disbursements therefrom. If requested
by the Bank, the Issuer or the Borrower, the Trustee shall file copies of the
records pertaining to the Refunding Fund and all disbursements from such fund
with the Bank, the Issuer and the Borrower.
Upon the occurrence and continuance of an Event of Default hereunder
because of which the principal amount of the Bonds has been declared to be due
and payable immediately pursuant to Section 7.03 hereof, any moneys remaining in
the Refunding Fund shall be promptly transferred by the Trustee to the Bond
Fund.
Section 5.03. CREATION OF BOND FUND; LETTER OF CREDIT. There is created
by the Issuer and ordered maintained as a separate deposit account (except when
invested as hereinafter set forth) in the custody of the Trustee a trust fund to
be designated "City of Wabash Martin Yale Industries, Inc. Bond Fund." Unless
otherwise set forth in the applicable Bond Legislation or Supplemental Indenture
relating to the issuance of a series of Additional Bonds, there shall be
deposited in the Bond Fund (and credited, if required by this Indenture or the
Agreement to appropriate accounts therein), from the proceeds of the sale of the
Bonds, any accrued interest paid by the purchasers of the Bonds.
<PAGE> 46
Except as otherwise provided herein, the Trustee shall deposit in the
Bond Fund upon receipt all Revenues other than Bond proceeds deposited in the
Refunding Fund, including all moneys received upon drawings made under the
Letter of Credit (except as otherwise provided in Section 6.19 hereof) and any
other amounts which, under the terms of this Indenture, the Notes, the
Agreement, the Credit Agreement, or the Letter of Credit are to be applied to
the payment of Bond Service Charges. Except as provided herein, the Bond Fund
(and accounts therein for which provision is made herein or in the Agreement)
and the moneys and Eligible Investments therein shall be used solely and
exclusively for the payment of Bond Service Charges as they fall due at stated
maturity, or by redemption or pursuant to any mandatory sinking fund
requirements or upon acceleration, all as provided herein and in the Agreement.
The Trustee shall establish separate accounts within the Bond Fund for
each source of deposit (including any investment income thereon) made into the
Bond Fund so that the Trustee may at all times ascertain the date of deposit,
the amounts, and the source of the funds in each account. Moneys received from
drawings on the Letter of Credit shall be deposited in a separate account and
shall never be commingled with moneys from any other source.
Moneys in the Bond Fund shall be used to pay Bond Service Charges with
respect to the Project Bonds and for the redemption of Project Bonds prior to
maturity and as otherwise provided in this Indenture only in the following
order:
FIRST: Amounts drawn by the Trustee under the Letter of Credit and
deposited into a separate account in the Bond Fund;
SECOND: Any Eligible Funds on deposit in the Bond Fund;
THIRD: Any other amounts available in the Bond Fund.
The Issuer hereby authorizes and directs the Trustee to draw on the
Letter of Credit pursuant to its terms, in the amounts and at the times
necessary to pay Bond Service Charges on the Project Bonds (excluding any
premium) pursuant to this Section 5.03.
The Trustee shall draw upon the Letter of Credit in accordance with the
terms thereof under the following circumstances:
(a) On or before 11:00 a.m., Indianapolis, Indiana time, on the
Business Day prior to any Interest Payment Date (or the maturity date or any
date set for a redemption of Project Bonds which is not an Interest Payment
Date) or any Mandatory Bond Purchase Date, and on or before 10:30 a.m.
Indianapolis, Indiana time, on each Bond Purchase Date, the Trustee shall
determine the amount necessary to make all required payments of principal and
interest on the Project Bonds or purchase price payments on the next succeeding
Interest Payment Date, maturity date, other redemption date or such Bond
Purchase Date or Mandatory Bond Purchase Date, and shall present to the Bank the
required certificates under the Letter of Credit in such amount, so as to permit
the timely transfer of funds from the Bank to the Trustee for
<PAGE> 47
payment of interest on the Bonds on each Interest Payment Date, for payment of
the principal of and interest on the Project Bonds when due, whether at maturity
or upon prior redemption, or the payment of the purchase price of Project Bonds
or Beneficial Ownership Interests when due on the applicable Bond Purchase Date
or Mandatory Bond Purchase Date.
(b) Upon acceleration of the Project Bonds upon the occurrence of an
Event of Default under Section 7.01 hereof, the Trustee, on or before 11:00
a.m., Indianapolis, Indiana time, on the Business Day prior to the date on which
principal and interest shall be due and payable pursuant to the declaration of
the acceleration of the Project Bonds pursuant to Section 7.03 hereof, shall
present to the Bank the required certificates under the Letter of Credit for
payment of the entire amount due pursuant to Section 7.03 hereof with respect to
the Project Bonds.
In no circumstances shall the Trustee use moneys drawn on the Letter of
Credit to pay Bond Service Charges on any Additional Bonds, or to pay premium,
if any, on the Project Bonds.
The Trustee shall promptly notify the Borrower by oral or telephonic
communication confirmed in writing if the Bank has not transferred funds in
accordance with the Letter of Credit upon the presentment of any such drawing
certificate.
In calculating the amount to be drawn on the Letter of Credit for the
payment of the purchase price of Project Bonds or Beneficial Ownership Interests
on a Mandatory Bond Purchase Date or for the payment of principal of and
interest on the Project Bonds, whether on an Interest Payment Date, at maturity
or upon redemption or acceleration, the Trustee shall not take into account the
receipt or potential receipt of funds from the Borrower under the Agreement, or
the existence of any other moneys in the Refunding Fund or Bond Fund (other than
accrued interest, if any received at the time of the issuance and delivery of
the Project Bonds), but shall draw on the Letter of Credit for the full amount
of such purchase price or the full amount of the principal and interest coming
due on the Project Bonds. If sufficient moneys are available in the Remarketing
Reimbursement Fund to pay the purchase price of the Project Bonds or Beneficial
Ownership Interests tendered for purchase on a Bond Purchase Date, the Trustee
shall not draw on the Letter of Credit but shall forward such amounts directly
to the tendering Holder or Beneficial Owner. The Trustee shall draw on the
Letter of Credit to pay the purchase price of Project Bonds or Beneficial
Ownership Interests tendered for purchase on a Bond Purchase Date only to the
extent that moneys in the Remarketing Reimbursement Fund are insufficient to
purchase the Project Bonds or Beneficial Ownership Interests so tendered. In
calculating the amount, if any, to be drawn on the Letter of Credit for the
purchase of Project Bonds or Beneficial Ownership Interests on a Bond Purchase
Date, the Trustee shall take into account funds received from the purchasers of
tendered Project Bonds or Beneficial Ownership Interests or from the Remarketing
Agent by 10:00 a.m. Indianapolis, Indiana time on such Bond Purchase Date with
respect to the remarketing of such Project Bonds or Beneficial Ownership
Interests or otherwise, and by 11:00 a.m. Indianapolis, Indiana time on the
applicable Bond Purchase Date shall draw on the Letter of Credit only such
amounts as may be necessary to purchase such Project Bonds or Beneficial
Ownership Interests on a Bond
<PAGE> 48
Purchase Date after taking into account all funds received by 10:00 a.m.
Indianapolis, Indiana time on such date which are attributable to the
remarketing of such Project Bonds or Beneficial Ownership Interests. Upon
receipt of such moneys from the Bank, the Trustee shall deposit the amount
representing a draw on the Letter of Credit for the payment of principal and
interest on the Project Bonds in a separate account in the Bond Fund, which
accounts shall hold no other moneys, and apply the same only to the payment of
such principal and interest when due on the Project Bonds, shall deposit the
amount representing a draw on the Letter of Credit for the purchase of Project
Bonds or Beneficial Ownership Interests in the Remarketing Reimbursement Fund,
which accounts shall hold no other moneys, and disburse said amount only to the
tendering Holders or Beneficial Owners of Project Bonds or Beneficial Ownership
Interests being purchased and, so long as there does not exist an Event of
Default described in Section 7.01(g) herein, and subject to the prior
satisfaction of all Bond Service Charges and purchase price payments then due or
on account of which funds shall have been paid to the Trustee by the Borrower or
shall have been obtained by the Trustee by a drawing or drawings on the Letter
of Credit, by wire transfer shall pay, on behalf of the Borrower, but only from
and to the extent of Loan Payments or any other moneys available in the
Refunding Fund, the Bond Fund or the Remarketing Reimbursement Fund any amounts
due and payable to the Bank under the Credit Agreement for any drawing made on
the Letter of Credit.
The Trustee shall transmit to any Paying Agent, as appropriate, from
moneys in the Bond Fund applicable thereto, amounts sufficient to make timely
payments of interest, principal of and any premium on the Project Bonds to be
made by the Paying Agent then due and payable. To the extent that the amount
needed by any Paying Agent is not sufficiently predictable, the Trustee may make
any credit arrangements with that Paying Agent which will permit those payments
to be made. The Issuer authorizes and directs the Trustee to cause withdrawal of
moneys from the Bond Fund which are available for the purpose of paying, and are
sufficient to pay, the interest, principal of and any premium on the Project
Bonds as they become due and payable (whether on an Interest Payment Date, at
stated maturity, by redemption or pursuant to any mandatory sinking fund
requirements), for the purposes of paying or transferring moneys to the Paying
Agent which are necessary to pay such interest, principal and premium.
The provisions of this Section are subject to the provisions of Section
9.02 hereof.
Section 5.04. CREATION OF REMARKETING REIMBURSEMENT FUND. There is
created by the Issuer and ordered maintained as a separate deposit account in
the custody of the Trustee a trust fund to be designated "City of Wabash,
Indiana Martin Yale Industries, Inc. Remarketing Reimbursement Fund." The
Remarketing Reimbursement Fund shall not be considered a part of the Revenues
but shall be used solely in connection with the remarketing of Project Bonds and
Beneficial Ownership Interests as set forth in Section 6.19 hereof. Certain
provisions regarding the Remarketing Reimbursement fund are set forth in Section
5.03.
Section 5.05. INVESTMENT OF BOND FUND, REFUNDING FUND AND REBATE FUND.
Except as hereinafter provided, moneys in the Bond Fund, the Refunding Fund and
the Rebate Fund shall be invested and reinvested by the Trustee in Eligible
Investments at the written direction of the Authorized Borrower Representative.
Investment of moneys in the Bond Fund shall mature or be redeemable without
penalty at the option of the Trustee at the times and in the amounts necessary
to provide moneys to pay Bond Service Charges as they become due at stated
maturity, by redemption or pursuant to any mandatory sinking fund requirements.
Each investment of moneys in the Refunding Fund, the Bond Fund and the Rebate
Fund shall mature or be redeemable without penalty at such time as may be
necessary to make payments when necessary from such fund.
Subject to any directions from the Authorized Borrower Representative
with respect thereto, and
<PAGE> 49
any restrictions contained in Section 5.11 hereof relating to the Rebate Fund,
from time to time, the Trustee may sell Refunding Fund, Rebate Fund and Bond
Fund investments and reinvest the proceeds therefrom in Eligible Investments
maturing or redeemable as aforesaid. Any of those investments may be purchased
from or sold to the Trustee, the Registrar, an Authenticating Agent, a Paying
Agent, a Remarketing Agent or any bank, trust company or savings and loan
association affiliated with any of the foregoing. The Trustee shall sell or
redeem investments credited to the Bond Fund at the best price reasonably
obtainable to and at the times required for the purposes of paying Bond Service
Charges when due as aforesaid, and shall do so without necessity for any order
on behalf of the Issuer and without restriction by reason of any order. An
investment made from moneys credited to the Bond Fund, the Refunding Fund or the
Rebate Fund shall constitute part of that respective fund, and each respective
fund shall be credited with all proceeds of sale and income from investment of
moneys credited thereto.
Moneys drawn on the Letter of Credit and deposited in the Bond Fund
shall be deposited in a separate account in the Bond Fund, shall be held in cash
and not be invested and shall be held in such account pending application
pursuant to the terms of Section 5.03 or Section 6.19 hereof. Notwithstanding
any inconsistent or contrary provision hereof, such funds shall be applied only
to the satisfaction of the specific Bond Service Charges for which they were
drawn and any funds not so applied shall be paid to the Bank, subject to the
provisions of Section 5.08 hereof.
Moneys deposited in the Remarketing Reimbursement Fund shall be held in
cash and not invested. Moneys drawn on the Letter of Credit and deposited in the
Remarketing Reimbursement Fund shall be deposited in a separate account therein
and shall be held in such account pending application pursuant to the terms of
Section 5.03 and 6.19 hereof.
Section 5.06. MONEYS TO BE HELD IN TRUST. Except where moneys have been
deposited with or paid to the Trustee pursuant to an instrument restricting
their application to particular Bonds, all moneys required or permitted to be
deposited with or paid to the Trustee or any Paying Agent under any provision of
this Indenture, the Agreement or the Letter of Credit, and to be used to pay
Bond Service Charges, or the Notes, and any investments thereof, shall be held
by the Trustee or that Paying Agent in trust. Except (a) for moneys deposited
with or paid to the Trustee or any Paying Agent for the redemption of Bonds,
notice of the redemption of which shall have been duly given and (b) for moneys
held by the Trustee pursuant to Section 5.07 hereof, and (c) for moneys in the
Remarketing Reimbursement Fund, and (d) for moneys held in the Rebate Fund, all
moneys described in the preceding sentence held by the Trustee or any Paying
Agent shall be subject to the lien hereof while so held. Neither the Issuer nor
the Borrower shall have any interest in the Bond Fund, the Remarketing
Reimbursement Fund or the moneys and Eligible Investments therein, all of which
shall be held in trust by the Trustee for the sole benefit of the Holders and,
to the extent of amounts due under the Credit Agreement, the Bank.
Section 5.07. NONPRESENTMENT OF BONDS. In the event that any Bond shall
not be presented for payment when the principal thereof becomes due in whole or
in part, either at stated maturity, by redemption or pursuant to any mandatory
sinking fund requirements, or a check or draft for interest is uncashed, if
moneys sufficient to pay the principal and premium, if any, then due on that
Bond or to pay such check or draft shall have been made available to the Trustee
for the benefit of its Holder, all liability of the Issuer to that Holder for
such payment of
<PAGE> 50
the principal and premium, if any, then due on the Bond or interest on such Bond
represented by such check or draft thereupon shall cease and be discharged
completely. Thereupon, it shall be the duty of the Trustee to hold those moneys,
without liability for interest thereon, in a separate account in the Bond Fund
for the exclusive benefit of the Holder, who shall be restricted thereafter
exclusively to those moneys for any claim of whatever nature on its part under
this Indenture or on, or with respect to, the principal and premium, if any,
then due on that Bond or interest on such Bond represented by such check or
draft.
Any of those moneys which shall be so held by the Trustee, and which
remain unclaimed by the Holder of a Bond not presented for payment or check or
draft not cashed for a period of four years after the due date thereof, shall be
paid to the Bank free of any trust or lien unless the Bank shall have confirmed
to the Trustee in writing that no moneys are then due under the Credit Agreement
in which case such moneys shall be paid to the Borrower. Thereafter, the Holder
of that Bond shall look only to the Borrower for payment and then only to the
amounts so received by the Borrower or paid to or on behalf of the Borrower
(including to the Bank pursuant to this paragraph), without any interest
thereon, and the Trustee shall not have any responsibility with respect to those
moneys.
Section 5.08. REPAYMENT TO THE BANK OR THE BORROWER FROM THE BOND FUND.
Except as provided in Section 5.07 hereof, any amounts remaining in the Bond
Fund (a) after all of the outstanding Bonds shall be deemed paid and discharged
under the provision of this Indenture, and (b) after payment of all fees,
charges and expenses of the Trustee, the Registrar and any Paying Agent or
Authenticating Agent and of all other amounts required to be paid under this
Indenture, the Agreement and the Notes, shall be paid to the Bank unless the
Bank shall have confirmed to the Trustee in writing that no moneys are then due
under the Credit Agreement in which case such moneys shall be paid to the
Borrower, to the extent that those amounts are in excess of those necessary to
effect the payment and discharge of the outstanding Bonds.
Section 5.09. ALTERNATE LETTER OF CREDIT. The Letter of Credit
initially expires September 15, 2003, or earlier as provided therein.
The Borrower may, at its option, provide for the delivery to the
Trustee of an Alternate Letter of Credit to take effect on a date selected by
the Borrower (the "Replacement Date"). If the Project Bonds are bearing interest
at the Weekly Interest Rate or the Fixed Interest Rate, the Replacement Date may
be any date selected by the Borrower, provided, however, that such date allows
the Trustee reasonable time to comply with the notice provisions of Section 2.06
hereof. If the Project Bonds are bearing interest at the One Month Interest
Rate, the Three Month Interest Rate, the Six Month Interest Rate, the One Year
Interest Rate or the Five Year Interest Rate, the Replacement Date shall be (a)
an Interest Rate Adjustment Date selected by the Borrower or (b) the Fixed
Interest Rate Commencement Date if the Bonds are to bear interest at the Fixed
Interest Rate (provided, however, that such date allows the Trustee reasonable
time to comply with the notice provisions of Section 2.06 hereof). The
expiration date of the Alternate Letter of Credit shall not be earlier than the
later of the expiration date of the Letter of Credit being replaced and the date
which is fifteen (15) days after the end of the Interest Rate Period applicable
or to be applicable to the Project Bonds, or if the Project Bonds
<PAGE> 51
bear or are to bear interest at the Fixed Interest Rate, the expiration date of
the Alternate Letter of Credit shall be not earlier than fifteen (15) days after
the First Optional Redemption Date. Prior to the replacement of a Letter of
Credit with an Alternate Letter of Credit, the Trustee shall give notice to the
Holders and, if the Project Bonds are then rated by a Rating Service, to each
Rating Service which then has a rating on the Project Bonds of such event and
shall have received the following not less than forty-five (45) days prior to
the Replacement Date:
(i) an opinion of counsel for the issuer of the Alternate
Letter of Credit that it constitutes a legal, valid and binding
obligation of the issuer in accordance with its terms;
(ii) an opinion of counsel acceptable to the Trustee to the
effect that payments under the Alternate Letter of Credit will not
constitute voidable preferences in the event of a bankruptcy of the
Borrower;
(iii) an opinion of Bond Counsel that such replacement will
not cause interest on the Project Bonds to become includable in gross
income for federal income tax purposes; and
(iv) the Alternate Letter of Credit.
Section 5.10. COMPLIANCE WITH SECTION 148 OF THE CODE. The Trustee
shall cause to be kept and maintained adequate records pertaining to investment
of all proceeds of the Bonds sufficient to permit the Borrower, on behalf of the
Issuer, to determine the amount of rebate, if any, required to be paid to the
United States of America pursuant to Section 148 of the Code.
Section 5.11. REBATE FUND.
(a) There is hereby created by the Issuer and ordered maintained as a
separate deposit account in the custody of the Trustee so long as any Bonds are
Outstanding and are subject to a requirement of the Code that arbitrage profits
be rebated to the United States of America, a Rebate Fund. The Rebate Fund shall
be administered in accordance with the terms and provisions of this Section 5.11
and the Tax Certificate. Except as provided herein and in the Tax Certificate,
neither the Issuer, the Borrower nor any Holder of the Bonds shall have any
rights in or claim to moneys on deposit in the Rebate Fund.
(b) The Trustee (i) shall make deposits and disbursements from the
Rebate Fund in accordance with the Rebate Instructions (as defined in the Tax
Certificate), (ii) shall invest the amounts held in the Rebate Fund in Eligible
Investments in accordance with the written instructions of the Borrower,
subject, however, to any written instructions provided by the Rebate Analyst (as
defined in the Tax Certificate) and (iii) shall deposit income from such
investments immediately upon receipt thereof in the Rebate Fund. The Trustee
shall make information relating to the receipt, investment, disbursement,
allocation and application of money in the Funds and Accounts under this
Indenture available to the Borrower and the
<PAGE> 52
Rebate Analyst.
(c) The Trustee shall remit part or all of the balances in the Rebate
Fund to the United States Treasury in accordance with the Rebate Instructions
provided to the Trustee by the Rebate Analyst. The Trustee shall have no
obligation to rebate any amounts required to be rebated pursuant to this Section
5.11, other than from moneys held in the Rebate Fund. Any balances remaining in
the Rebate Fund after redemption and payment of all of the Bonds and payment and
satisfaction of any required rebate as specified in the Rebate Instructions,
shall be remitted to the Borrower.
END OF ARTICLE V
<PAGE> 53
ARTICLE VI.
THE TRUSTEE, REGISTRAR, PAYING AGENT,
AUTHENTICATING AGENT AND REMARKETING AGENT
Section 6.01. TRUSTEE'S ACCEPTANCE AND RESPONSIBILITIES. The Trustee
accepts the trusts imposed upon it by this Indenture, and agrees to observe and
perform those trusts, but only upon and subject to the terms and conditions set
forth in this Article, to all of which the parties hereto and the Holders agree:
(a) Prior to the occurrence of a default or an Event of Default (as
defined in section 7.01 hereof) of which the Trustee has been notified, as
provided in paragraph (f) of Section 6.02 hereof, or of which by that paragraph
the Trustee is deemed to have notice, and after the cure or waiver of all
defaults or Events of Default which may have occurred,
(i) the Trustee undertakes to perform only those duties and
obligations which are set forth specifically in this Indenture, and no
duties or obligations shall be implied to the Trustee;
(ii) in the absence of bad faith on its part, the Trustee may
rely conclusively, as to the truth of the statements and the
correctness of the opinions expressed therein, upon certificates or
opinions furnished to the Trustee and conforming to the requirements of
this Indenture; but in the case of any such certificates or opinions
which by any provision hereof are required specifically to be furnished
to the Trustee, the Trustee shall be under a duty to examine the same
to determine whether or not they conform to the requirements of this
Indenture.
(b) In case a default or an Event of Default has occurred and is
continuing hereunder (of which the Trustee has been notified, or is deemed to
have notice), the Trustee shall exercise those rights and powers vested in it by
this Indenture and shall use the same degree of care and skill in their
exercise, as a prudent man acting as a fiduciary would exercise or use under the
circumstances.
(c) No provisions of this Indenture shall be construed to relieve the
Trustee from liability for its own gross negligent action, willful or
intentional misconduct or recklessness, its own gross negligent failure to act,
or its own willful misconduct, except that:
(i) this subsection shall not be construed to affect the
limitation of the Trustee's duties and obligations provided in
subparagraph (a)(i) of this Section or the Trustee's right to rely on
the truth of statements and the correctness of opinions as provided in
subparagraph (a)(ii) of this Section;
(ii) the Trustee shall not be liable for any error of judgment
made in good faith by any one of its officers, unless it shall be
established that the Trustee was negligent in ascertaining the pertinent
facts;
<PAGE> 54
(iii) the Trustee shall not be liable with respect to any action
taken or omitted to be taken by it in good faith in accordance with the
direction of the Bank or the Holders of at least a majority in aggregate
principal amount of the Bonds then outstanding relating to the time,
method and place of conducting any proceeding for any remedy available
to the Trustee, or exercising any trust or power conferred upon the
Trustee, under this Indenture, as provided in Sections 7.04 and 7.05
hereof; and
(iv) no provision of this Indenture shall require the Trustee to
expend or risk its own funds or otherwise incur any financial liability
in the performance of any of its duties hereunder, or in the exercise of
any of its rights or powers if it shall have reasonable grounds for
believing that payment of such funds or adequate indemnity against such
risk or liability is not reasonably assured to it.
(d) Whether or not therein expressly so provided, every provision of
this Indenture relating to the conduct or affecting the liability of or
affording protection to the Trustee shall be subject to the provisions of this
Section 6.01.
Section 6.02. CERTAIN RIGHTS AND OBLIGATIONS OF THE TRUSTEE. Except as
otherwise provided in Section 6.01 hereof:
(a) The Trustee (i) may execute any of the trusts or powers hereof and
perform any of its duties by or through attorneys, agents, receivers or
employees (but shall be answerable therefor only in accordance with the standard
specified above), (ii) shall be entitled to the advice of counsel concerning all
matters of trusts hereof and duties hereunder, and (iii) may pay reasonable
compensation in all cases to all of those attorneys, agents, receivers and
employees reasonably employed by it in connection with the trusts hereof. The
Trustee may act upon the opinion or advice of any attorney (who may be the
attorney or attorneys for the Issuer or the Borrower) approved by the Trustee in
the exercise of reasonable care. The Trustee shall not be responsible for any
loss or damage resulting from any action taken or omitted to be taken in good
faith in reliance upon that opinion or advice.
(b) Except for its certificate of authentication on the Bonds, the
Trustee shall not be responsible for:
(i) any recital in this Indenture or in the Bonds,
(ii) the validity, priority, recording, rerecording, filing or re-filing
of this Indenture or any Supplemental Indenture,
(iii) any instrument or document of further assurance or collateral
assignment,
(iv) any financing statements or amendments thereto,
(v) insurance of the Project or collection of insurance moneys,
<PAGE> 55
(vi) the validity of the execution by the Issuer of this Indenture, any
Supplemental Indenture or instruments or documents of further assurance,
(vii) the sufficiency of the security for the Bonds issued hereunder or
intended to be secured hereby,
(viii) the value of or title to the Project, or
(ix) the maintenance of the security hereof,
except that, in the event that the Trustee enters into possession of any
property pursuant to any provision of any instrument or document, the Trustee
shall use due diligence in preserving that property. The Trustee shall not be
bound to ascertain or inquire as to the observance or performance of any
covenants, agreements, or obligations on the part of the Issuer or the Borrower
under the Agreement except as set forth herein; but the Trustee may require of
the Issuer or the Borrower full information and advice as to the observance or
performance of those covenants, agreements and obligations. Except as otherwise
provided in Section 7.04 hereof, the Trustee shall have no obligation to observe
or perform any of the duties of the Issuer under the Agreement.
(c) The Trustee shall not be accountable for the application by the
Borrower or any other Person of the proceeds of any Bonds authenticated or
delivered hereunder.
(d) The Trustee shall be protected, in the absence of bad faith on its
part, in acting upon any notice, request, consent, certificate, order,
affidavit, letter, telegram, or other paper or document reasonably believed by
it to be genuine and correct and to have been signed or sent by the proper
Person or Persons. Any action taken by the Trustee pursuant to this Indenture
upon the request or authority or consent of any Person who is the Holder of any
Bonds at the time of making the request or giving the authority or consent,
shall be conclusive and binding upon all future Holders of the same Bond and of
Bonds issued in exchange therefor or in place thereof.
(e) As to the existence or nonexistence of any fact for which the
Issuer, the Borrower or the Bank may be responsible or as to the sufficiency or
validity of any instrument, document, report, paper or proceeding, the Trustee,
in the absence of bad faith on its part, shall be entitled to rely upon a
certificate signed on behalf of the Issuer, the Bank or the Borrower by an
authorized officer or representative thereof as sufficient evidence of the facts
recited therein. Prior to the occurrence of a default or Event of Default
hereunder of which the Trustee has been notified, as provided in paragraph (f)
of this Section, or of which by that paragraph the Trustee is deemed to have
notice, the Trustee may accept a similar certificate to the effect that any
particular dealing, transaction or action is necessary or expedient; provided,
that the Trustee in its discretion may require and obtain any further evidence
which it deems to be necessary or advisable; and, provided further, that the
Trustee shall not be bound to secure any further evidence. The Trustee may
accept a certificate of the officer, or an assistant thereto,
<PAGE> 56
having charge of the appropriate records, to the effect that legislation has
been enacted or adopted by the Issuer in the form recited in that certificate,
as conclusive evidence that the legislation has been duly enacted or adopted and
is in full force and effect.
(f) The Trustee shall not be required to take notice, and shall not be
deemed to have notice, of any default or Event of Default hereunder, except
Events of Default described in paragraphs (a), (b), (c) and (g) of Section 7.01
hereof, unless the Trustee shall be notified specifically of the default or
Event of Default in a written instrument or document delivered to it by the
Issuer, the Bank, or by the Holders of at least ten percent (10%) of the
aggregate principal amount of the Bonds then outstanding. In the absence of
delivery of a notice satisfying those requirements, the Trustee may assume
conclusively that there is no default or Event of Default, except as noted
above.
(g) At any reasonable time, the Trustee and its duly authorized agents,
attorneys, experts, engineers, accountants and representatives (i) may inspect
and copy fully all books, papers and records of the Issuer pertaining to the
Project, the Letter of Credit and the Bonds, and (ii) may take any memoranda
from and in regard thereto as the Trustee may desire.
(h) The Trustee shall not be required to give any bond or surety with
respect to the execution of these trusts and powers or otherwise in respect of
the premises.
(i) Notwithstanding anything contained elsewhere in this Indenture, the
Trustee may demand any showings, certificates, reports, opinions, appraisals and
other information, and any corporate or partnership action and evidence thereof,
in addition to that required by the terms hereof, as a condition to the
authentication of any Bonds or the taking of any action whatsoever within the
purview of this Indenture, if the Trustee deems it to be desirable for the
purpose of establishing the right of the Issuer to the authentication of any
Bonds or the right of any Person to the taking of any other action by the
Trustee; provided, that the Trustee shall not be required to make that demand.
(j) Before taking action hereunder pursuant to Section 6.04 or Article
VII hereof (with the exception of any action required to be taken under Sections
7.02 or 7.03 hereof and except with respect to drawings made under the Letter of
Credit), the Trustee may require that a satisfactory indemnity bond be furnished
to it for the reimbursement of all expenses which it may incur and to protect it
against all liability by reason of any action so taken, except liability which
is adjudicated to have resulted from its negligence or willful misconduct. The
Trustee may take action without that indemnity, and in that case, the Borrower
shall reimburse the Trustee for all of the Trustee's expenses pursuant to
Section 6.03 hereof.
(k) Unless otherwise provided herein, all moneys received by the Trustee
under this Indenture shall be held in trust for the purpose for which those
moneys were received, until those moneys are used, applied or invested as
provided herein; provided, that those moneys need not be segregated from other
moneys, except to the extent required by this Indenture or by law. The Trustee
shall not have any liability for interest on any moneys received hereunder,
except to the extent expressly provided herein.
<PAGE> 57
(l) Any legislation enacted or adopted by the Issuer, and any opinions,
certificates and other instruments and documents for which provision is made in
this Indenture, may be accepted by the Trustee, in the absence of bad faith on
its part, as conclusive evidence of the facts and conclusions stated therein and
shall be full warrant, protection and authority to the Trustee for its actions
taken hereunder.
(m) The Trustee shall be entitled conclusively to rely upon the
determination of the interest rates made and delivered to the Trustee by the
Remarketing Agent.
Section 6.03. FEES, CHARGES AND EXPENSES OF TRUSTEE, REGISTRAR, PAYING
AGENT AND AUTHENTICATING AGENTS. The Trustee, the Registrar and any Paying Agent
or Authenticating Agent shall be entitled to payment or reimbursement by the
Borrower, as provided in the Agreement, for reasonable fees for their respective
Ordinary Services rendered hereunder and for all advances, counsel fees and
other Ordinary Expenses reasonably and necessarily paid or incurred by them in
connection with the provision of Ordinary Services. For purposes hereof, fees
for Ordinary Services provided for by their respective standard fee schedules
shall be considered reasonable. In the event that it should become necessary for
any of them to perform Extraordinary Services, they shall be entitled to
reasonable extra compensation therefor and to reimbursement for reasonable and
necessary Extraordinary Expenses incurred in connection therewith.
Without creating a default or an Event of Default hereunder, however,
the Borrower may contest in good faith the necessity for any Extraordinary
Service and Extraordinary Expense and the reasonableness of any fee, charge or
expense.
The Trustee, the Registrar and any Paying Agent or Authenticating Agent
shall not be entitled to compensation or reimbursement for Extraordinary
Services or Extraordinary Expenses occasioned by their neglect or willful
misconduct. The payment to which the Trustee, the Registrar and any Paying Agent
and Authenticating Agent are entitled hereunder shall be made only from (i) the
Additional Payments made by the Borrower pursuant to the Agreement, or (ii) from
other moneys available therefor. Any amounts payable to the Trustee, the
Registrar or any Paying Agent or Authenticating Agent pursuant to this Section
6.03 shall be payable upon demand and shall bear interest from the date of
demand therefor at the Interest Rate for Advances.
When the Trustee incurs reasonable expenses or renders services after
the occurrence of an Act of Bankruptcy with respect to the Issuer or the
Company, the expenses and the compensation for the services are intended to
constitute expenses of administration under any federal or state bankruptcy,
insolvency, arrangement, moratorium, reorganization or other debtor relief law.
Section 6.04. INTERVENTION BY TRUSTEE. The Trustee may intervene on
behalf of the Holders, and shall intervene if requested to do so in writing by
the Holders of at least twenty-five percent (25%) of the aggregate principal
amount of Bonds then outstanding, in any judicial proceeding to which the
Issuer, the Bank or the Borrower is a party and which in the
<PAGE> 58
opinion of the Trustee and its counsel has a substantial bearing on the
interests of Holders of the Bonds. The rights and obligations of the Trustee
under this Section are subject to the approval of that intervention by a court
of competent jurisdiction. The Trustee may require that a satisfactory indemnity
bond be provided to it in accordance with Sections 6.01 and 6.02 hereof before
it takes action under this Section.
Section 6.05. SUCCESSOR TRUSTEE. Anything herein to the contrary
notwithstanding,
(a) any corporation or association (i) into which the Trustee may be
converted or merged, (ii) with which the Trustee or any successor to it may be
consolidated or (iii) to which it may sell or transfer its assets and trust
business as a whole or substantially as a whole, or any corporation or
association resulting from any such conversion, merger, consolidation, sale or
transfer, IPSO FACTO, shall be and become successor Trustee hereunder and shall
be vested with all of the title to the whole property or trust estate hereunder;
and
(b) that corporation or association shall be vested further, as was its
predecessor, with each and every trust, property, remedy, power, right, duty,
obligation, discretion, privilege, claim, demand, cause of action, immunity,
estate, title, interest and lien expressed or intended by this Indenture to be
exercised by, vested in or conveyed to the Trustee, without the execution or
filing of any instrument or document or any further act on the part of any of
the parties hereto.
Any successor Trustee, however, shall be a trust company or a commercial bank
having the powers of a trust company, authorized to exercise trust powers in the
State, and shall have a reported capital and surplus of not less than
$50,000,000.
Section 6.06. APPOINTMENT OF CO-TRUSTEE. It is the purpose of this
Indenture that there shall be no violation of any law of any jurisdiction
(including without limitation, the laws of the State) denying or restricting the
right of banks or trust companies to transact business as trustees in that
jurisdiction. It is recognized that, (a) if there is litigation under this
Indenture or other instruments or documents relating to the Bonds and the
Project, and in particular, in case of the enforcement hereof or thereof upon a
default or an Event of Default, or (b) if the Trustee should deem that, by
reason of any present or future law of any jurisdiction, it may not (i) exercise
any of the powers, rights or remedies granted herein to the Trustee, (ii) hold
title to the properties, in trust, as granted herein, or (iii) take any action
which may be desirable or necessary in connection therewith, it may be necessary
that the Trustee appoint an individual or additional institution as a
co-Trustee. The following provisions of this Section are adopted to these ends.
In the event that the Trustee appoints an individual or additional
institution as a co-Trustee, each and every trust, property, remedy, power,
right, duty, obligation, discretion, privilege, claim, demand, cause of action,
immunity, estate, title, interest and lien expressed or intended by this
Indenture to be exercised by, vested in or conveyed to the Trustee shall be
exercisable by, vest in and be conveyed to that co-Trustee, but only to the
extent necessary for it to be so vested and conveyed and to enable that
co-Trustee to exercise it. Every covenant,
<PAGE> 59
agreement and obligation necessary to the exercise thereof by that co-Trustee
shall run to and be enforceable by it.
Should any instrument or document in writing from the Issuer reasonably
be required by the co-Trustee so appointed by the Trustee for vesting and
conveying more fully and certainly in and to that co-Trustee those trusts,
properties, remedies, powers, rights, duties, obligations, discretions,
privileges, claims, demands, causes of action, immunities, estates, titles,
interests and liens, that instrument or document shall be executed, acknowledged
and delivered, but not prepared, by the Issuer. In case any co-Trustee or a
successor to it shall die, become incapable of acting, resign or be removed, all
of the trusts, properties, remedies, powers, rights, duties, obligations,
discretions, privileges, claims, demands, causes of action, immunities, estates,
titles, interests and liens of the co- Trustee shall be exercised by, vest in
and be conveyed to the Trustee, to the extent permitted by law, until the
appointment of a successor to the co-Trustee.
Section 6.07. RESIGNATION BY THE TRUSTEE. The Trustee may resign at any
time from the trusts created hereby by giving written notice of the resignation
to the Issuer, the Borrower, the Bank, the Remarketing Agent, the Registrar, any
Paying Agent and any Authenticating Agent and the Placement Agent of the Bonds
then outstanding and by mailing written notice of the resignation to the Holders
as their names and addresses appear on the Register at the close of business
fifteen (15) days prior to the mailing. The resignation shall take effect upon
the appointment of a successor Trustee.
Section 6.08. REMOVAL OF THE TRUSTEE. The Trustee may be removed at any
time by an instrument or document or concurrent instruments or documents in
writing delivered to the Trustee, with copies thereof mailed to the Issuer, the
Registrar, the Bank, the Remarketing Agent, any Paying Agent, any Authenticating
Agent and the Borrower, and signed by or on behalf of the Holders of at least a
majority in aggregate principal amount of the Bonds then outstanding.
The Trustee also may be removed at any time for any breach of trust or
for acting or proceeding in violation of, or for failing to act or proceed in
accordance with, any provision of this Indenture with respect to the duties and
obligations of the Trustee by any court of competent jurisdiction upon the
application of the Issuer, the Bank or the Holders of not less than twenty
percent (20%) in aggregate principal amount of the Bonds then outstanding under
this Indenture.
Any removal of the Trustee shall take effect upon the appointment of a
successor Trustee.
Section 6.09. APPOINTMENT OF SUCCESSOR TRUSTEE. If (a) the Trustee shall
resign, shall be removed, shall be dissolved, or shall become otherwise
incapable of acting hereunder, (b) the Trustee shall be taken under the control
of any public officer or officers, or (c) a receiver shall be appointed for the
Trustee by a court, then a successor Trustee shall be appointed by the Issuer,
with the written consent of the Borrower; provided, that if a successor Trustee
is not so appointed within ten (10) days after (i) a notice of resignation or an
instrument or document of removal is received by the Issuer, as provided in
Section 6.07 and 6.08 hereof, respectively, or
<PAGE> 60
(ii) the Trustee is dissolved, taken under control, becomes otherwise incapable
of acting or a receiver is appointed, in each case, as provided above, then, so
long as the Issuer shall not have appointed a successor Trustee, the Holders of
at least a majority in aggregate principal amount of Bonds then outstanding may
designate a successor Trustee by an instrument or document or concurrent
instrument or documents in writing signed by or on behalf of those Holders. If
no appointment of a successor Trustee shall be made pursuant to the foregoing
provisions of this Section, the Holder of any Bond outstanding hereunder, the
Bank or any retiring Trustee may apply to any court of competent jurisdiction to
appoint a successor Trustee. Such court may thereupon, after such notice, if
any, as such court may deem proper and prescribe, appoint a successor Trustee.
Every successor Trustee appointed pursuant to this Section shall be a
trust company or a bank having the powers of a trust company and shall have a
reported capital and surplus of not less than $50,000,000 and shall be willing
to accept the trusteeship under the terms and conditions of this Indenture.
Every successor Trustee appointed hereunder shall execute and
acknowledge, and shall deliver to its predecessor, the Issuer, the Bank, the
Remarketing Agent and the Borrower, an instrument or document in writing
accepting the appointment. Thereupon, without any further act, the successor
shall become vested with all of the trusts, properties, remedies, powers,
rights, duties, obligations, discretions, privileges, claims, demands, causes of
action, immunities, estates, titles, interests and liens of its predecessor.
Upon the written request of its successor, the Issuer, the Bank or the Borrower,
the predecessor Trustee (a) shall execute and deliver an instrument or document
transferring to its successor all of the trusts, properties, remedies, powers,
rights, duties, obligations, discretions, privileges, claims, demands, causes of
action, immunities, estates, titles, interests and liens of the predecessor
Trustee hereunder, and (b) shall take any other action necessary to duly assign,
transfer and deliver to its successor all property (including without
limitation, all securities and moneys and after first deducting any fees and
expenses owed to the Trustee) held by it as Trustee. Should any instrument or
document in writing from the Issuer be requested by any successor Trustee for
vesting and conveying more fully and certainly in and to that successor the
trusts, properties, remedies, powers, rights, duties, obligations, discretions,
privileges, claims, demands, causes of action, immunities, estates, titles,
interests and liens vested or conveyed or intended to be vested or conveyed
hereby in or to the predecessor Trustee, the Issuer shall execute, acknowledge
and deliver that instrument or document.
In the event of a change in the Trustee, the predecessor Trustee shall
cease to be custodian of any moneys which it may hold pursuant to this Indenture
and shall cease to be Registrar, Authenticating Agent and a Paying Agent for any
of the Bonds, to the extent it served in any of those capacities. The successor
Trustee shall become custodian and, if applicable, Registrar, Authenticating
Agent and a Paying Agent.
Section 6.10. ADOPTION OF AUTHENTICATION. In case any of the Bonds shall
have been authenticated, but shall not have been delivered, any successor
Trustee, Registrar or Authenticating Agent may adopt the certificate of
authentication of any predecessor Trustee,
<PAGE> 61
Registrar or Authenticating Agent and may deliver those Bonds so authenticated
as provided herein. In case any Bonds shall not have been authenticated, any
successor Trustee, Registrar or Authenticating Agent may authenticate those
Bonds either in the name of any predecessor or in its own name. In all cases,
the certificate of authentication shall have the same force and effect as
provided in the Bonds or in this Indenture with respect to the certificate of
authentication of the predecessor Trustee, Registrar or Authenticating Agent.
Section 6.11. REGISTRARS.
(a) SUCCESSION. Anything herein to the contrary notwithstanding, any
corporation or association (i) into which a Registrar may be converted or
merged, (ii) with which a Registrar or any successor to it may be consolidated,
or (iii) to which it may sell or transfer its assets as a whole or substantially
as a whole, or any corporation or association resulting from any such
conversion, merger, consolidation, sale or transfer, IPSO FACTO, shall be and
become successor Registrar to that Registrar hereunder and shall be vested with
each and every power, right, duty, obligation, discretion and privilege
expressed or intended by this Indenture to be exercised by or vested in the
predecessor Registrar, without the execution or filing of any instrument or
document or any further act on the part of any of the parties hereto.
(b) RESIGNATION. A Registrar may resign at any time by giving written
notice of its resignation to the Issuer, the Borrower, the Trustee, the Bank,
the Remarketing Agent, and to each Paying Agent and Authenticating Agent for
those series of Bonds for which it is Registrar, at least sixty (60) days before
the resignation is to take effect. The resignation shall take effect
immediately, however, upon the appointment of a successor Registrar, if the
successor Registrar is appointed and accepts that appointment before the time
stated in the notice.
(c) REMOVAL. The Registrar may be removed at any time by the Trustee or
by an instrument or document or concurrent instruments or documents in writing
delivered to the Registrar, with copies thereof mailed to the Issuer, the
Trustee, the Bank, the Remarketing Agent, and the Borrower, and signed by or on
behalf of the Holders of at least a majority in aggregate principal amount of
the Bonds then outstanding for which it is Registrar.
(d) APPOINTMENT OF SUCCESSORS. If (i) a Registrar shall resign, shall be
removed, shall be dissolved, or shall become otherwise incapable of acting
hereunder, (ii) a Registrar shall be taken under the control of any public
officer or officers, (iii) a receiver shall be appointed for a Registrar by a
court, or (iv) a Registrar shall have an order for relief entered in any case
commenced by or against it under the federal bankruptcy laws or commence a
proceeding under any federal or state bankruptcy, insolvency, reorganization or
similar law, or have such a proceeding commenced against it and either have an
order of insolvency or reorganization entered against it or have the proceeding
remain undismissed and unstayed for ninety (90) days, then a successor Registrar
shall be appointed by the Executive with the written consent of the Borrower and
the Trustee; provided, that if a successor Registrar is not so appointed within
ten (10) days after (a) a notice of resignation or an instrument or document of
removal is received by the Issuer, as provided above, or (b) the Registrar is
dissolved, taken under control, becomes incapable of acting or a receiver is
appointed, in each case, as provided above, then, if
<PAGE> 62
the Executive shall not have appointed a successor Registrar, the Trustee or the
Holders of at least a majority in aggregate principal amount of the Bonds then
outstanding for which it is Registrar may designate a successor Registrar by an
instrument or document or concurrent instruments or documents in writing signed
by the Trustee, or in the case of the Holders, by or on behalf of those Holders.
Every successor Registrar appointed hereunder shall execute and
acknowledge and shall deliver to its predecessor, the Issuer, the Bank, the
Trustee, the Remarketing Agent, any Authenticating Agents, any Paying Agents and
the Borrower, an instrument or document in writing accepting the appointment.
Thereupon, without any further act, the successor shall become vested with all
of the properties, remedies, powers, rights, duties, obligations, discretions,
privileges, claims, demands, causes of action, immunities, titles and interests
of its predecessor. Upon the written request of its successor, the Issuer, the
Bank or the Borrower, a predecessor Registrar (i) shall execute and deliver an
instrument or document transferring to its successor all of the properties,
remedies, powers, rights, duties, obligations, provisions, privileges, claims,
demands, causes of action, immunities, titles and interests of it as predecessor
Registrar hereunder, and (ii) shall take any other action necessary to duly
assign, transfer and deliver to its successor all property and records
(including without limitation, the Register and any canceled Bonds) held by it
as Registrar. Should any instrument or document in writing from the Issuer be
requested by any successor Registrar for vesting and conveying more fully and
certainly in and to that successor the properties, remedies, powers, rights,
duties, obligations, discretions, privileges, claims, demands, causes of action,
immunities, titles and interests vested or conveyed or intended to be vested or
conveyed hereby in or to a predecessor Registrar, the Issuer shall execute,
acknowledge and deliver that instrument or document.
The Trustee shall pay to any Registrar from time to time reasonable
compensation as authorized in Section 6.03 hereof for its services, and the
Trustee shall be entitled to be reimbursed for such payments, subject to Section
6.03 hereof.
The provisions of Section 3.05 and Subsection 6.02(d) hereof shall be
applicable to any Registrar.
Section 6.12. DESIGNATION AND SUCCESSION OF PAYING AGENTS. The Trustee
shall be a Paying Agent for the Bonds, and, with the consent of the Issuer, the
Trustee may appoint an additional Paying Agent or Agents with power to act on
its behalf and subject to its direction in the payment of Bond Service Charges
on the Bonds. It is the responsibility of the Trustee to establish the duties
and responsibilities of any Paying Agent for the purposes of this Indenture, to
the extent not specified herein.
Any corporation or association with or into which any Paying Agent may
be merged or converted or with which it may be consolidated, or any corporation
or association resulting from any merger, consolidation or conversion to which
any Paying Agent shall be a party, or any corporation or association succeeding
to the trust business of any Paying Agent, shall be the successor of that Paying
Agent hereunder, if that successor corporation or association is
<PAGE> 63
otherwise eligible hereunder, without the execution or filing of any paper or
any further act on the part of the parties hereto or the Paying Agent or that
successor corporation or association.
Any Paying Agent may at any time resign by giving written notice of
resignation to the Trustee, to the Registrar, to the Bank and to the Borrower.
The Trustee may at any time terminate the agency of any Paying Agent by giving
written notice of termination to such Paying Agent, to the Registrar, to the
Bank and to the Borrower. Upon receiving such a notice of resignation or upon
such termination, or in case at any time any Paying Agent shall cease to be
eligible under this Section, the Trustee may appoint a successor Paying Agent.
The Trustee shall give written notice of appointment of a successor Paying Agent
to the Borrower, the Issuer, the Bank and the Registrar and shall mail, within
ten (10) days after that appointment, notice thereof to the Holders of such
Bonds for which such successor is Paying Agent as their names and addresses
appear on the Register on the date of that appointment.
The Trustee shall pay to any Paying Agent from time to time reasonable
compensation as authorized in Section 6.03 hereof for its services, and the
Trustee shall be entitled to be reimbursed for such payments, subject to Section
6.03 hereof.
The provisions of Section 3.05 and 3.06 and Subsection 6.02(d) hereof
shall be applicable to any Paying Agent.
Section 6.13. DESIGNATION AND SUCCESSION OF AUTHENTICATING AGENTS. With
the consent of the Issuer, the Trustee may appoint an Authenticating Agent or
Agents, in addition to the Registrar, with power to act on its behalf and
subject to its direction in the authentication and delivery of Bonds in
connection with transfers and exchanges under Sections 3.06 and 4.02 hereof. For
all purposes of this Indenture, the authentication and delivery of Bonds by an
Authenticating Agent pursuant to this Section shall be deemed to be
authentication and delivery of those Bonds by the Trustee.
Any corporation or association with or into which any Authenticating
Agent may be merged or converted or with which it may be consolidated, or any
corporation or association resulting from any merger, consolidation or
conversion to which any Authenticating Agent shall be a party, or any
corporation or association succeeding to the trust business of any
Authenticating Agent, shall be the successor of that Authenticating Agent
hereunder, if that successor corporation or association is otherwise eligible
hereunder, without the execution or filing of any paper or any further act on
the part of the parties hereto or the Authenticating Agent or such successor
corporation or association.
Any Authenticating Agent may at any time resign by giving written notice
of resignation to the Trustee, to the Registrar, to the Bank, to the Issuer and
to the Borrower. The Trustee may at any time terminate the agency of any
Authenticating Agent, by giving written notice of termination to such
Authenticating Agent, to the Issuer, to the Registrar, to the Bank and to the
Borrower. Upon receiving such a notice of resignation or upon such a
termination, or in case at any time any Authenticating Agent shall cease to be
eligible under this Section, the Trustee may appoint a successor Authenticating
Agent. The Trustee shall give written notice of
<PAGE> 64
appointment of a successor Authenticating Agent to the Borrower, the Issuer, the
Bank and the Registrar and shall mail, within ten (10) days after that
appointment, notice thereof to the Holders of such Bonds for which such
successor is Authenticating Agent as their names and addresses appear on the
Register on the date of that appointment.
The Trustee shall pay to any Authenticating Agent from time to time
reasonable compensation for its services, and the Trustee shall be entitled to
be reimbursed for such payments, subject to Section 6.03 hereof.
The provisions of Section 3.05 and 3.06 and Subsections 6.02(b), (c),
(d), (h) and (i) hereof shall be applicable to any Authenticating Agent.
Section 6.14. DEALING IN BONDS. The Trustee, the Bank, a Registrar, a
Paying Agent and an Authenticating Agent, their affiliates, and any directors,
officers, partners, employees or agents thereof, in good faith, may become the
owners of Bonds secured hereby with the same rights which it or they would have
hereunder if the Trustee, the Registrar, the Bank, a Paying Agent or an
Authenticating Agent did not serve in those capacities.
Section 6.15. REPRESENTATIONS, AGREEMENTS AND COVENANTS OF TRUSTEE. The
Trustee hereby represents that it is a national banking association duly
organized and validly existing under the laws of the United States and duly
authorized to exercise corporate trust powers in the State, and that it has an
unimpaired reported capital and surplus of not less than $50,000,000. The
Trustee covenants that it will take such action, if any, as is necessary to
remain duly authorized to exercise corporate trust powers and that it will
maintain an unimpaired reported capital and surplus of not less than
$50,000,000. The Trustee accepts and agrees to observe and perform the duties
and obligations of the Trustee to which reference is made in any instrument or
document providing security for any of the Bonds.
Section 6.16. [RESERVED].
Section 6.17. CONCERNING THE REMARKETING AGENT. Banc One Capital
Markets, Inc. has been appointed the Remarketing Agent to act as agent of the
Issuer. Any subsequent Remarketing Agent shall be appointed by the Issuer with
the approval of Borrower and the Bank and shall meet the qualifications set
forth in this Section and Section 6.18 hereof. The Remarketing Agent shall
designate to the Trustee its principal remarketing 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 Borrower and the
Trustee. In addition, the Remarketing Agent will agree particularly to:
(a) compute the Weekly Interest Rate, the One Month Interest Rate, the
Three Month Interest Rate, the Six Month Interest Rate, the One Year 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
<PAGE> 65
(b) keep such records relating to its computations of interest rates for
the Project 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 Borrower 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.
The Remarketing Agent shall be entitled to appoint additional
co-Remarketing Agents to assist in the performance of the Remarketing Agent's
obligations under this Indenture, and any such appointment shall be effective
without any action by the Issuer, the Borrower or the Bank being necessary;
provided that any such co-Remarketing Agent, shall have a capitalization of at
least $5,000,000, or shall have a line of credit with a commercial bank in the
amount of at least $5,000,000, shall be in conformity with all standards and
requirements of the Municipal Securities Rulemaking Board and the Securities and
Exchange Commission, and shall be authorized by law to perform all the duties
imposed upon it by this Indenture.
Section 6.18. QUALIFICATIONS OF REMARKETING AGENT. The Remarketing Agent
shall have a capitalization of at least $5,000,000, or have a line of credit
with a commercial bank in the amount of at least $5,000,000 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 Borrower, the Bank and the
Trustee. The Remarketing Agent may be removed at any time by the Issuer, with
the written consent of the Bank. To effect such removal, the Issuer shall give
at least thirty (30) days' notice of such removal to the Remarketing Agent, the
Borrower, 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 Project Bonds and
Beneficial Ownership Interests held by it in such capacity to its successor or,
if there be no successor, to the Trustee.
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 Issuer 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 Issuer of a successor
Remarketing Agent; provided, however, that the Trustee shall not remarket
Project Bonds or Beneficial Ownership Interest or fix the interest rate for the
Project Bonds, but shall be required only to implement the purchase of Project
Bonds and Beneficial Ownership Interests pursuant to a draw on the Letter of
Credit as provided for in Section 5.03 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 Project Bonds have been
<PAGE> 66
rated) and to the registered Holders of the Project Bonds.
Section 6.19. REMARKETING OF PROJECT BONDS. No later than 3:00 p.m.
local time at the principal Indiana corporate trust office of the Trustee (a) on
the eighth Business Day prior to each Bond Purchase Date while the Project Bonds
bear interest at the Three Month Interest Rate, the Six Month Interest Rate, the
One Year Interest Rate or the Five Year Interest Rate, or (b) the sixth calendar
day prior to each Bond Purchase Date or the next succeeding Business Day if such
sixth day is not a Business Day while the Project Bonds bear interest at the
Weekly Interest Rate, or (c) the fifth Business Day prior to each Bond Purchase
Date while the Project Bonds bear interest at the One Month Interest Rate, the
Trustee shall give notice to the Remarketing Agent by telephone or telecopy,
confirmed on the same day in writing, which states (i) the name and address of
each Holder or Beneficial Owner which has given notice of exercise of an option
with respect to such Bond Purchase Date as provided in paragraph (c) of Section
2.04 hereof, and the principal amount of Project Bonds or Beneficial Ownership
Interests to be tendered by such Holder or Beneficial Owner or deemed tendered
by such Holder, and (ii) the aggregate principal amount of Project Bonds or
Beneficial Ownership Interests which are deemed to be tendered pursuant to
Sections 2.05 or 2.06 hereof. Additionally, no later than 1:00 p.m. local time
at the principal Indiana corporate trust office of the Trustee on the eighth
Business Day or the fifth Business Day, whichever is applicable, prior to each
Bond Purchase Date upon which there is a mandatory tender of Project Bonds or
Beneficial Ownership Interests pursuant to Sections 2.05 or 2.06 hereof, the
Trustee shall give notice to the Remarketing Agent by telephone, telecopy or in
writing, which states the aggregate principal amount of Project Bonds with
respect to which the Trustee has not received an election to retain pursuant to
Sections 2.05 or 2.06 hereof.
Based upon such notices from the Trustee, the Remarketing Agent shall
use its best efforts to sell all Project Bonds or Beneficial Ownership
Interests, as applicable, tendered pursuant to Sections 2.04, 2.05 and 2.06
hereof for settlement on the applicable Bond Purchase Date; provided, however,
that in no event shall Bonds or Beneficial Ownership Interests be remarketed by
the Remarketing Agent to the Borrower, the Issuer, or any guarantor of the Bonds
(excluding the Bank) or to any person who is an "insider" of the Borrower, the
Issuer or any such guarantor within the meaning of the United States Bankruptcy
Code. Except as hereinafter provided, any such sale shall be at such rate of
discount or premium as, in the judgment of the Remarketing Agent, having due
regard to prevailing financial market conditions, shall be necessary.
The Remarketing Agent shall have the right to remarket any Project Bonds
or Beneficial Ownership Interests (or portion thereof) tendered pursuant to
Sections 2.04, 2.05 or 2.06 hereof; provided, however, that no such Bond or
Beneficial Ownership Interest 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 Borrower and the Bank. The Remarketing Agent shall have
the right to purchase any Project Bond and Beneficial Ownership Interest
tendered or deemed tendered pursuant to Sections 2.04, 2.05 or 2.06 hereof at
100% of the principal amount thereof, and to thereafter sell such Project Bond
or Beneficial Ownership Interest. Any such purchase shall constitute a
remarketing hereunder.
<PAGE> 67
No later than 10:00 a.m. according to the local time at the principal
office of the Bank on each Bond Purchase 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 Project Bonds and
Beneficial Ownership Interests tendered for purchase on such Bond Purchase Date;
provided, that the Remarketing Agent may use its best efforts to cause the
purchasers of the remarketed Project Bonds and the Beneficial Ownership Interest
to pay the purchase price plus accrued interest (if any) to the Trustee in
immediately available funds. The proceeds from the remarketing of the Project
Bonds and Beneficial Ownership Interests shall be segregated from any funds of
the Borrower or the Issuer and shall in no case be considered to be or be assets
of the Borrower or the Issuer.
There shall be deposited in the Remarketing Reimbursement Fund, 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 Project Bonds and Beneficial
Ownership Interests. The Trustee shall use the amounts deposited in the
Remarketing Reimbursement Fund to pay the purchase price of tendered Project
Bonds and Beneficial Ownership Interests. 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 Project Bonds or Beneficial Ownership Interests, (a) any
amount paid by the Bank on such draw shall be deposited in the Bond Fund and (b)
pursuant to Section 7.03 hereof, the Trustee shall declare the Bonds to be due
and payable.
Section 6.20. DELIVERY OF PURCHASED PROJECT BONDS AND REMARKETING OF
PLEDGED BONDS. On or before the Business Day next preceding each Bond Purchase
Date, the Remarketing Agent, by telephonic advice, shall notify the Trustee and
the Bank of (a) the principal amount of Project Bonds or Beneficial Ownership
Interests to be sold by the Remarketing Agent pursuant to Section 6.19 hereof
and the purchase price, names, addresses and social security numbers or other
tax identification numbers of the proposed purchasers thereof and (b) the
principal amount of Project Bonds or Beneficial Ownership Interests tendered for
purchase on such Bond Purchase Date which will not be sold by the Remarketing
Agent pursuant to Section 6.19 hereof. Such telephonic advice shall be confirmed
by written notice delivered or mailed on the same date as the telephonic advice.
Project Bonds and Beneficial Ownership Interests purchased by the
Trustee on a Bond Purchase Date shall be delivered as follows:
(a) Project Bonds sold by the Remarketing Agent pursuant to Section 6.19
hereof shall be delivered to the purchasers thereof. With respect to Beneficial
Ownership Interests sold by the Remarketing Agent pursuant to Section 6.19
hereof, the Remarketing Agent and the Trustee 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.
(b) Project Bonds and Beneficial Ownership Interests not sold by the
Remarketing
<PAGE> 68
Agent pursuant to Section 6.19 hereof shall be held as Pledged Bonds, by the
Trustee, as agent for the Bank (provided that if the Project Bonds are then held
in book entry form, the interest of the Trustee in the Pledged Bonds, as agent
for the Bank, shall be recorded through the Depository and no physical delivery
of the Pledged Bonds shall be required), subject to any instructions from the
Bank to deliver the Pledged Bonds to the Bank (or to record evidence of the
Bank's book entry interest therein) and to the pledge in favor of the Bank
created pursuant to the provisions of the Credit 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.
Project Bonds or Beneficial Ownership Interests (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 requested by the Bank.
The Remarketing Agent shall use its best efforts to remarket Pledged
Bonds, provided, however, that the Remarketing Agent shall not remarket Pledged
Bonds tendered as a result of a mandatory tender pursuant to Section 2.07 hereof
prior to receiving written notice from the Trustee that the Letter of Credit or
any Alternate Letter of Credit has been replaced with an Alternate Letter of
Credit which satisfies the requirements of Section 5.09 hereof. Upon the
remarketing of the Pledged Bonds, the Remarketing Agent shall notify the Bank,
the Trustee and the Borrower 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 principal
office of the Trustee. The Placement Date shall be at least two 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 principal
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 plus
accrued interest (if any) to the Trustee in immediately available funds. The
proceeds from the remarketing of the Pledged Bonds shall be segregated from any
funds of the Borrower or the Issuer and shall in no case be considered to be or
be assets of the Borrower or the Issuer. The Trustee shall deposit such funds in
the Remarketing Reimbursement Fund 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) which 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 which have been so remarketed to the
Remarketing Agent against payment therefor on the Placement Date. 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.
<PAGE> 69
END OF ARTICLE VI
<PAGE> 70
ARTICLE VII.
------------
DEFAULT PROVISIONS AND REMEDIES OF TRUSTEE AND HOLDERS
------------------------------------------------------
Section 7.01. DEFAULTS; EVENTS OF DEFAULT. The occurrence of any of the
following events is defined as and declared to be and to constitute an Event of
Default hereunder:
(a) Failure to pay when due any interest on any Bond;
(b) Payment of the principal of or any premium on any Bond shall not be
made when and as that principal or premium shall become due and payable, whether
at stated maturity, by redemption, pursuant to any mandatory sinking fund
requirements, by acceleration or otherwise;
(c) Failure to pay on a Bond Purchase Date or Mandatory Bond Purchase
Date amounts due to the Holder of any Project Bonds or the Beneficial Owner of
any Beneficial Ownership Interests tendered or deemed tendered to the Trustee
pursuant to Section 2.04, 2.05, 2.06 or 2.07 hereof;
(d) Failure by the Issuer to observe or perform any other covenant,
agreement or obligation on its part to be observed or performed contained in
this Indenture or in the Bonds, which failure shall have continued for a period
of 30 days after written notice, either by registered or certified mail, to the
Issuer, the Bank and the Borrower specifying the failure and requiring that it
be remedied, which notice may be given by the Trustee in its discretion and
shall be given by the Trustee at the written request of the Bank or the Holders
of not less than 25 percent in aggregate principal amount of Bonds then
outstanding;
(e) The occurrence and continuation of an Event of Default as defined in
Section 7.1 of the Agreement;
(f) Receipt by the Trustee of a written notice from the Bank that an
Event of Default has occurred and is continuing under the Credit Agreement and
directing the Trustee to accelerate the maturity of the Project Bonds;
(g) Failure of the Bank to honor any drawing properly made in accordance
with the terms of the Letter of Credit;
(h) The Bank shall: (i) commence a proceeding under any Federal or state
insolvency, reorganization or similar law, or have such a proceeding commenced
against it and either have an order of insolvency or reorganization entered
against it or have the proceeding remain undismissed and unstayed for 90 days;
or (ii) have a receiver, conservator, liquidator or trustee appointed for it or
for the whole or any substantial part of its property; and
(i) Receipt by the Trustee of written notice from the Bank by the fifth
Business Day following the honoring of an interest drawing on the Letter of
Credit that the amount available
<PAGE> 71
to be drawn by the Trustee under the Letter of Credit has not been reinstated to
an amount not less than 100% of the outstanding principal of, plus 45 days'
interest on the Project Bonds (or 195 days' interest on the Project Bonds if the
Interest Rate Mode on the Project Bonds is six months or longer) computed at the
Maximum Rate.
The term "default" or "failure" as used in this Article means (a) a
default or failure by the Issuer in the observance or performance of any of the
covenants, agreements or obligations on its part to be observed or performed
contained in this Indenture or in the Bonds, or (b) a default or failure by the
Borrower under the Agreement, in either case, exclusive of any period of grace
or notice required to constitute a default or failure an Event of Default, as
provided above or in the Agreement.
The provisions of paragraph (h) above are subject to the conditions that
(l) none of the acts or circumstances specified therein shall constitute an
Event of Default if the Borrower, within sixty (60) days thereafter, provides an
Alternate Letter of Credit meeting the requirements of Section 5.09 hereof and
the Trustee shall have complied with the requirements of clause (iii) in the
last paragraph of Section 5.09 hereof) and (2) the declaration of an Event of
Default due to any of the acts or circumstances specified therein, and the
exercise of remedies upon any such declaration, shall be subject to any
applicable limitations of bankruptcy, insolvency or receivership laws applicable
to the Bank affecting or precluding such declaration or exercise during the
pendency of or immediately following any bankruptcy, insolvency, receivership,
liquidation or reorganization proceedings.
Section 7.02. NOTICE OF DEFAULT. If an Event of Default shall occur,
within five (5) days of obtaining knowledge of such Event of Default, the
Trustee shall give written notice of the Event of Default, by registered or
certified mail, to the Issuer, the Borrower, the Bank, the Registrar, any Paying
Agent and Authenticating Agent and the Remarketing Agent for the Bonds.
Section 7.03. ACCELERATION. Upon the occurrence of an Event of Default
as specified in paragraphs (a), (b), (c), (f), (g), or (i) of Section 7.01
hereof, the Trustee shall declare, by a notice in writing delivered to the
Issuer and the Borrower, the principal of all Bonds then outstanding (if not
then due and payable), together with interest accrued thereon, to be due and
payable immediately. Upon the occurrence of any other Event of Default (except
an Event of Default as specified in paragraph (h) of Section 7.01 hereof), the
Trustee shall, upon the written direction of the Bank, declare by a notice in
writing delivered to the Issuer and the Borrower the principal of all Bonds then
outstanding (if not then due and payable), together with interest accrued
thereon, to be due and payable immediately. Upon the occurrence of an Event of
Default described in paragraph (h) of Section 7.01 hereof, if there is not then
existing an Event of Default described in paragraphs (a), (b), (c), (f), (g) or
(i) of Section 7.01 hereof, then the Trustee, without the consent of the Bank,
may, and upon the written request of the Holders of not less than 25% in
aggregate principal amount of Bonds then outstanding shall, declare the
principal of all Bonds then outstanding, together with the interest accrued
thereon, to be due and payable immediately.
<PAGE> 72
Any such declaration shall be by notice in writing to the Issuer, the
Holders , the Bank, the Remarketing Agent and the Borrower, and, upon said
declaration, principal and interest on all Bonds shall become and be immediately
due and payable. The Trustee immediately upon such declaration shall give notice
thereof in the same manner as provided in Section 4.04 hereof with respect to
the redemption of the Bonds. Such notice shall specify the date on which payment
of principal and interest shall be tendered to the Holders of the Bonds.
Interest shall accrue to the payment date determined by the Trustee (which date
shall be within the period for which principal and interest on the Bonds is
covered by the amounts available under the Letter of Credit) pursuant to such
declaration or the actual payment date, if later. Upon any declaration of
acceleration hereunder, the Trustee shall immediately exercise such rights as it
may have under the Agreement and the Notes to declare all payments thereunder to
be immediately due and payable and, pursuant to paragraph (b) in Section 5.03
hereof, shall draw upon the Letter of Credit to the full extent permitted by the
terms thereof.
Section 7.04. OTHER REMEDIES; RIGHTS OF HOLDERS. With or without taking
action under Section 7.03 hereof, upon the occurrence and continuance of an
Event of Default, the Trustee may pursue any other available remedy to enforce
the payment of Bond Service Charges or the observance and performance of any
other covenant, agreement or obligation under this Indenture, the Agreement, the
Notes or any other instrument providing security, directly or indirectly, for
the Bonds, provided that the Trustee shall not pursue any such remedy without
the prior written consent of the Bank so long as no Event of Default described
in Section 7.01(g) or (h) has occurred and is continuing.
If, upon the occurrence and continuance of an Event of Default, the
Trustee is required so to do by the Holders of at least a majority in aggregate
principal amount of Bonds outstanding or by the Bank (if no Event of Default
under Section 7.01(g) or (h) has occurred and is continuing), the Trustee
(subject to the provisions of Sections 6.01 and 6.02 hereof and particularly
subparagraph 6.01(c)(iv) and Subsection 6.02(j) of those Sections) shall
exercise any rights and powers conferred by this Section and by Section 7.03
hereof. Anything in this or the next succeeding paragraph to the contrary
notwithstanding, so long as no Event of Default under Section 7.01(g) or (h)
hereof has occurred and is continuing, the Bank shall have the exclusive right
to give any such directions to the Trustee.
No remedy conferred upon or reserved to the Trustee (or to the Holders)
by this Indenture is intended to be exclusive of any other remedy. Each remedy
shall be cumulative and shall be in addition to every other remedy given
hereunder or otherwise to the Trustee or to the Holders now or hereafter
existing.
No delay in exercising or omission to exercise any remedy, right or
power accruing upon any default or Event of Default shall impair that remedy,
right or power or shall be construed to be a waiver of any default or Event of
Default or acquiescence therein. Every remedy, right and power may be exercised
from time to time and as often as may be deemed to be expedient.
No waiver of any default or Event of Default hereunder, whether by the
Trustee or by the Holders, shall extend to or shall affect any subsequent
default or Event of Default or shall
<PAGE> 73
impair any remedy, right or power consequent thereon.
As the assignee of all right, title and interest of the Issuer in and to
the Agreement (except for the Unassigned Issuer's Rights), the Trustee is
empowered to enforce each remedy, right and power granted to the Issuer under
the Agreement.
Section 7.05. RIGHT OF HOLDERS TO DIRECT PROCEEDINGS. Anything to the
contrary in this Indenture notwithstanding, the Holders of at least a majority
in aggregate principal amount of Bonds then outstanding shall have the right at
any time to direct, by an instrument or document or instruments or documents in
writing executed and delivered to the Trustee, 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 any other proceedings hereunder;
provided, that (i) any direction shall not be other than in accordance with the
provisions of law and of this Indenture, (ii) the Trustee shall be indemnified
as provided in Sections 6.01 and 6.02 hereof, (iii) the Trustee may take any
other action which it deems to be proper and which is not inconsistent with the
direction, and (iv) anything in the foregoing to the contrary notwithstanding,
so long as no Event of Default under Section 7.01(g) or (h) hereof has occurred
and is continuing, the Bank shall have the exclusive right to give any such
directions to the Trustee.
Section 7.06. APPLICATION OF MONEYS. All moneys received by the Trustee
after acceleration of the maturity of the Bonds and derived from any drawing
made upon the Letter of Credit shall be applied by the Trustee to and only to
the payment of principal of or interest on the Project Bonds. Subject to the
foregoing, after payment of any costs, expenses, liabilities and advances paid,
incurred or made by the Trustee in the collection of moneys pursuant to any
right given or action taken under the provisions of this Article or the
provision of the Agreement or the Notes (including without limitation,
reasonable attorneys' fees and expenses, except as limited by law or judicial
order or decision entered in any action taken under this Article VII) and all
fees owing to the Trustee for Ordinary or Extraordinary Services and Expenses,
and all amounts owed to the Issuer pursuant to the Unassigned Issuer's Rights,
all moneys received by the Trustee, shall be applied as follows, subject to any
provision made pursuant to Sections 4.05, 5.06 or 5.07 hereof:
(a) Unless the principal of all of the Bonds shall have become, or shall
have been declared to be, due and payable, all of those moneys shall be
deposited in the Bond Fund and shall be applied;
First -- To the payment to the Holders entitled thereto of all
installments of interest then due on the Bonds, in the order of the dates of
maturity of the installments of that interest, beginning with the earliest date
of maturity and if the amount available is not sufficient to pay in full any
particular installment, then to the payment thereof ratably, according to the
amounts due on that installment, to the Holders entitled thereto, without any
discrimination or privilege, except as to any difference in the respective rates
of interest specified in the Bonds; and
Second -- To the payment to the Holders entitled thereto of the unpaid
principal of any of the Bonds which shall have become due (other than Bonds
previously called for redemption for
<PAGE> 74
the payment of which moneys are held pursuant to the provisions of this
Indenture), whether pursuant to any mandatory sinking fund requirements, in the
order of their due dates, beginning with the earliest due date, with interest on
those Bonds from the respective dates upon which they become due at the rates
specified in those Bonds, and if the amount available is not sufficient to pay
in full all Bonds due on any particular date, together with that interest, then
to the payment thereof ratably, according to the amounts of principal due on
that date, to the Holders entitled thereto, without any discrimination or
privilege, except as to any difference in the respective rates of interest
specified in the Bonds.
(b) If the principal of all of the Bonds shall have become due or shall
have been declared to be due and payable pursuant to this Article, all of those
moneys shall be deposited into the Bond Fund and shall be applied to the payment
of the principal and interest then due and unpaid upon the Bonds, without
preference or priority of principal over interest, of interest over principal,
of any installment of interest over any other installment of interest, or of any
Bond over any other Bond, ratably, according to the amounts due respectively for
principal and interest, to the Holders entitled thereto, without any
discrimination or privilege, except as to any difference in the respective rates
of interest specified in the Bonds.
(c) If the principal of all of the Bonds shall have been declared to be
due and payable pursuant to this Article, and if that declaration thereafter
shall have been rescinded and annulled under the provisions of Section 7.10
hereof, subject to the provisions of paragraph (b) of this Section in the event
that the principal of all of the Bonds shall become due and payable later, the
moneys shall be deposited in the Bond Fund and shall be applied in accordance
with the provisions of Article V hereof.
(d) Whenever moneys are to be applied pursuant to the provisions of this
Section, those moneys shall be applied at such times, and from time to time, as
the Trustee shall determine, having due regard to the amount of moneys available
for application and the likelihood of additional moneys becoming available for
application in the future. Whenever the Trustee shall direct the application of
those moneys, it shall fix the date upon which the application is to be made,
and upon that date, interest shall cease to accrue on the amounts of principal,
if any, to be paid on that date, provided the moneys are available therefor. The
Trustee shall give notice of the deposit with it of any moneys and of the fixing
of that date, all consistent with the requirements of Section 3.05 hereof for
the establishment of, and for giving notice with respect to, a Special Record
Date for the payment of overdue interest. The Trustee shall not be required to
make payment of principal of and any premium on a Bond to the Holder thereof,
until the Bond shall be presented to the Trustee for appropriate endorsement or
for cancellation if it is paid fully, subject to the provisions of Section 3.06
hereof.
Section 7.07. REMEDIES VESTED IN TRUSTEE. All rights of action
(including without limitation, 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. Any suit or proceeding instituted by the Trustee
shall be brought in its name as Trustee without the necessity of joining any
Holders as plaintiffs or defendants. Any recovery of judgment shall be for the
benefit of the Holders of
<PAGE> 75
the outstanding Bonds, subject to the provisions of this Indenture.
Section 7.08. RIGHTS AND REMEDIES OF HOLDERS. A Holder shall not have
any right to institute any suit, action or proceeding for the enforcement of
this Indenture, for the execution of any trust hereof, or for the exercise of
any other remedy hereunder, unless:
(a) there has occurred and be continuing an Event of Default of which
the Trustee has been notified, as provided in paragraph (f) of Section 6.02
hereof, or of which it is deemed to have notice under that paragraph,
(b) the Holders of at least twenty-five percent (25%) in aggregate
principal amount of Bonds then outstanding shall have made written request to
the Trustee and shall have afforded the Trustee reasonable opportunity to
proceed to exercise the remedies, rights and powers granted herein or to
institute the suit, action or proceeding in its own name, and shall have offered
indemnity to the Trustee as provided in Sections 6.01 and 6.02 hereof, and
(c) the Trustee thereafter shall have failed or refused to exercise the
remedies, rights and powers granted herein or to institute the suit, action or
proceeding in its own name.
At the option of the Trustee, that notification (or notice), request,
opportunity and offer of indemnity are conditions precedent in every case, to
the institution of any suit, action or proceeding described above. Anything in
the foregoing to the contrary notwithstanding, no Holder of any Bond shall have
any right to institute any suit, action or proceeding at law or in equity for
the enforcement of this Indenture or for the execution of any trust hereof or
for the appointment of a receiver or any other remedy hereunder unless an Event
of Default under Section 7.01(g) or (h) hereof shall have occurred and be
continuing.
No one or more Holders of the Bonds shall have any right to affect,
disturb or prejudice in any manner whatsoever the security or benefit of this
Indenture by its or their action, or to enforce, except in the manner provided
herein, any remedy, right or power hereunder. Any suit, action or proceedings
shall be instituted, had and maintained in the manner provided herein for the
benefit of the Holders of all Bonds then outstanding. Nothing in this Indenture
shall affect or impair, however, the right of any Holder to enforce the payment
of the Bond Service Charges on any Bond owned by that Holder at and after the
maturity thereof, at the place, from the sources and in the manner expressed in
that Bond.
Section 7.09. TERMINATION OF PROCEEDINGS. In case the Trustee shall have
proceeded to enforce any remedy, right or power under this Indenture in any
suit, action or proceedings, and the suit, action or proceedings shall have been
discontinued or abandoned for any reason, or shall have been determined
adversely to the Trustee, the Issuer, the Trustee, the Bank and the Holders
shall be restored to their former positions and rights hereunder, respectively,
and all rights, remedies and powers of the Trustee shall continue as if no suit,
action or proceedings had been taken.
Section 7.10. WAIVERS OF EVENTS OF DEFAULT. Except as hereinafter
provided, at any time,
<PAGE> 76
in its discretion, the Trustee, but only with the express written consent of the
Bank, other than in the case of an Event of Default described in Section 7.01
(a), (b), (c), (g) or (h) hereof, may waive any Event of Default hereunder and
its consequences and may rescind and annul any declaration of maturity of
principal of the Bonds. The Trustee shall do so upon the written request of the
Bank (other than in the case of an Event of Default described in Section 7.01
(a), (b), (c), (g) or (h) hereof). Notwithstanding the foregoing, prior to
waiving any Event of Default described in Section 7.01(f) or (i) hereof, the
Trustee shall have received written confirmation from the Bank that the Letter
of Credit has been reinstated to an amount not less than 100% of the outstanding
principal of, plus 45 days interest (or 195 days interest if the Interest Rate
Mode on the Project Bonds is six months or longer) on, the Project Bonds
computed at the Maximum Rate.
There shall not be so waived, however, any Event of Default described in
paragraphs (a), (b), (c), (g) or (h) of Section 7.01 hereof or any declaration
of acceleration in connection therewith rescinded or annulled except with the
written consent of the Holders of all Bonds then outstanding and of the Bank. In
the case of the waiver or rescission and annulment, or in case any suit, action
or proceedings taken by the Trustee on account of any Event of Default shall
have been discontinued, abandoned or determined adversely to it; the Issuer, the
Trustee, the Bank and the Holders shall be restored to their former positions
and rights hereunder, respectively. No waiver or rescission shall extend to any
subsequent or other Event of Default or impair any right consequent thereon.
END OF ARTICLE VII
<PAGE> 77
ARTICLE VIII.
-------------
SUPPLEMENTAL INDENTURES
-----------------------
Section 8.01. SUPPLEMENTAL INDENTURES GENERALLY. The Issuer and the
Trustee may enter into indentures supplemental to this Indenture, as provided in
this Article and pursuant to the other provisions therefor in this Indenture.
Section 8.02. SUPPLEMENTAL INDENTURES NOT REQUIRING CONSENT OF HOLDERS.
Without the consent of, or (except as otherwise provided in Section 8.04 hereof)
notice to, any of the Holders, the Issuer and the Trustee, but with the prior
consent of the Bank and the Borrower, may enter into indentures supplemental to
this Indenture which shall not, in the opinion of the Issuer and the Trustee, be
inconsistent with the terms and provisions hereof for any one or more of the
following purposes:
(a) To cure any ambiguity, inconsistency or formal defect or omission in
this Indenture;
(b) To grant to or confer upon the Trustee for the benefit of the
Holders any additional rights, remedies, powers or authority that lawfully may
be granted to or conferred upon the Holders or the Trustee, but only with the
Trustee's written consent;
(c) To assign additional revenues under this Indenture;
(d) To accept additional security and instruments and documents of
further assurance with respect to the Project;
(e) To add to the covenants, agreements and obligations of the Issuer
under this Indenture, other covenants, agreements and obligations to be observed
for the protection of the Holders, or to surrender or limit any right, power or
authority reserved to or conferred upon the Issuer in this Indenture including,
without limitation, the limitation of rights of redemption so that in certain
instances Bonds of different series will be redeemed in some prescribed
relationship to one another for the protection of the Holders of a particular
series of Bonds;
(f) To evidence any succession to the Issuer and the assumption by its
successor of the covenants, agreements and obligations of the Issuer under this
Indenture, the Agreement and the Bonds;
(g) To permit the exchange of Bonds, at the option of the Holder or
Holders thereof, for coupon Bonds of the same series payable to bearer, in an
aggregate principal amount not exceeding the unmatured and unredeemed principal
amount of the Predecessor Bonds, bearing interest at the same rate or rates and
maturing on the same date or dates, with coupons attached representing all
unpaid interest due or to become due thereon if, in the opinion of Bond Counsel
selected by the Borrower and acceptable to the Trustee, that exchange would not
result in the interest on any of the Bonds outstanding becoming subject to
federal income taxation;
<PAGE> 78
(h) To permit the Trustee to comply with any obligations imposed upon it
by law;
(i) To specify further the duties and responsibilities of, and to define
further the relationship among, the Trustee, the Registrar, the Remarketing
Agent and any Authenticating Agent or Paying Agent;
(j) To achieve compliance of this Indenture with any applicable federal
securities or tax law;
(k) To evidence the appointment of a new Remarketing Agent;
(l) To make necessary or advisable amendments or additions in connection
with the issuance of Additional Bonds in accordance with Section 2.09 hereof as
do not adversely affect the Holders of outstanding Bonds;
(m) To permit any other amendment which, in the judgment of the Trustee,
is not to the prejudice of the Trustee or the Holders including, but not limited
to, changes required in order to obtain or maintain a rating on any series of
Bonds from a Rating Service; and
(n) To accept a Supplemental Credit Facility as provided in Section 8.04
hereof.
The Trustee may also accept, without the consent of or notice to any of
the Holders, an Alternate Letter of Credit or any amendments to the Letter of
Credit necessary to continue the effectiveness of the Letter of Credit as
originally intended or which in the judgment of the Trustee are not to the
prejudice of the Holders.
The provisions of Subsections 8.02(h) and (j) hereof shall not be deemed
to constitute a waiver by the Trustee, the Registrar, the Issuer or any Holder
of any right which it may have in the absence of those provisions to contest the
application of any change in law to this Indenture or the Bonds.
Section 8.03. SUPPLEMENTAL INDENTURES REQUIRING CONSENT OF HOLDERS.
Exclusive of Supplemental Indentures to which reference is made in Section 8.02
hereof and subject to the terms, provisions and limitations contained in this
Section, and not otherwise, with the consent of the Holders of not less than a
majority in aggregate principal amount of the Bonds at the time outstanding,
evidenced as provided in this Indenture, with the consent of the Borrower and
the Bank, the Issuer and the Trustee may execute and deliver Supplemental
Indentures adding any provisions to, changing in any manner or eliminating any
of the provisions of this Indenture or any Supplemental Indenture or restricting
in any manner the rights of the Holders. Nothing in this Section or Section 8.02
hereof shall permit, or be construed as permitting:
(a) without the consent of the Holder of each Bond so affected and the
Bank, (i) an extension of the maturity of the principal of or the interest on
any Bond, (ii) a reduction in the principal amount of any Bond or the rate of
interest or premium thereon, or (iii) a reduction in the amount or extension of
the time of paying of any mandatory sinking fund requirements, or
<PAGE> 79
(b) without the consent of the Holders of all Bonds then outstanding and
the Bank, (i) the creation of a privilege or priority of any Bond or Bonds over
any other Bond or Bonds, or (ii) a reduction in the aggregate principal amount
of the Bonds required for consent to a Supplemental Indenture.
If the Issuer shall request that the Trustee execute and deliver any
Supplemental Indenture for any of the purposes of this Section, upon (a) being
satisfactorily indemnified with respect to its expenses in connection therewith,
and (b) receipt of the Borrower's and Bank's consent to the proposed execution
and delivery of the Supplemental Indenture, the Trustee shall cause notice of
the proposed execution and delivery of the Supplemental Indenture to be mailed
by first class mail, postage prepaid, to all Holders of Bonds then outstanding
at their addresses as they appear on the Register at the close of business on
the fifteenth day preceding that mailing.
The Trustee shall not be subject to any liability to any Holder by
reason of the Trustee's failure to mail, or the failure of any Holder to
receive, the notice required by this Section. Any failure of that nature shall
not affect the validity of the Supplemental Indenture when there has been
consent thereto as provided in this Section. The notice shall set forth briefly
the nature of the proposed Supplemental Indenture and shall state that copies
thereof are on file at the principal Indiana corporate trust office of the
Trustee for inspection by all Holders.
If the Trustee shall receive, within a period prescribed by the Issuer,
of not less than sixty (60) days, but not exceeding one year, following the
mailing of the notice, an instrument or document or instruments or documents, in
form to which the Trustee does not reasonably object, purporting to be executed
by the Holders of at least a majority in aggregate principal amount of the Bonds
then outstanding (which instrument or document or instruments or documents shall
refer to the proposed Supplemental Indenture in the form described in the notice
and specifically shall consent to the Supplemental Indenture in substantially
that form), the Trustee shall, but shall not otherwise, execute and deliver the
Supplemental Indenture in substantially the form to which reference is made in
the notice as being on file with the Trustee, without liability or
responsibility to any Holder, regardless of whether that Holder shall have
consented thereto.
Any consent shall be binding upon the Holder of the Bond giving the
consent and, anything herein to the contrary notwithstanding, upon any
subsequent Holder of that Bond and of any Bond issued in exchange therefor
(regardless of whether the subsequent Holder has notice of the consent to the
Supplemental Indenture). A consent may be revoked in writing, however, by the
Holder who gave the consent or by a subsequent Holder of the Bond by a
revocation of such consent received by the Trustee prior to the execution and
delivery by the Trustee of the Supplemental Indenture. At any time after the
Holders of the required percentage of Bonds shall have filed their consents to
the Supplemental Indenture, the Trustee shall make and file with the Issuer a
written statement that the Holders of the required percentage of Bonds have
filed those consents. That written statement shall be conclusive evidence that
the consents have been so filed.
<PAGE> 80
If the Holders of the required percentage in aggregate principal amount
of Bonds outstanding shall have consented to the Supplemental Indenture, as
provided in this Section, no Holder shall have any right (a) to object to (i)
the execution or delivery of the Supplemental Indenture, (ii) any of the terms
and provisions contained therein, or (iii) the operation thereof, (b) to
question the propriety of the execution and delivery thereof, or (c) to enjoin
or restrain the Trustee or the Issuer from that execution or delivery or from
taking any action pursuant to the provisions thereof.
Section 8.04. ACCEPTANCE OF SUPPLEMENTAL CREDIT FACILITY. Upon the
request of the Borrower, the Trustee will accept a Supplemental Credit Facility
presented by the Borrower in order to obtain or maintain a rating on the Bonds,
provided the Trustee is provided with the following:
(a) An opinion of Bond Counsel selected by the Borrower and acceptable
to the Trustee to the effect that acceptance of the proposed Supplemental Credit
Facility will not impair the exemption of interest on the Bonds from Federal
income taxation;
(b) Written evidence reasonably satisfactory to the Trustee, that upon
issuance and delivery of the Supplemental Credit Facility, the Bonds will be
rated by a Rating Agency in one of its three highest rating categories; and
(c) The written consent of the entity which will be the Bank after the
acceptance of such Supplemental Credit Facility.
Notice of the proposed delivery of any Supplemental Credit Facility
shall be given by the Trustee to the Bondholders at least 30 days prior to the
effectiveness of such Supplemental Credit Facility. Such notice shall specify
the issuer of the Supplemental Credit Facility and the proposed effective date.
Upon the effectiveness of the Supplemental Credit Facility, the Trustee shall
mail notice to each Bondholder confirming that the Supplemental Credit Facility
has been delivered and is effective.
Section 8.05. CONSENT OF BORROWER. Anything contained herein to the
contrary notwithstanding, a Supplemental Indenture executed and delivered in
accordance with this Article VIII shall not become effective unless and until
the Borrower shall consent in writing to the execution and delivery of that
Supplemental Indenture.
Section 8.06. AUTHORIZATION TO TRUSTEE; EFFECT OF SUPPLEMENT. The
Trustee is authorized to join with the Issuer in the execution and delivery of
any Supplemental Indenture in accordance with this Article and to make the
further agreements and stipulations which may be contained therein.
Thereafter,
(a) that Supplemental Indenture shall form a part of this Indenture;
(b) all terms and conditions contained in that Supplemental Indenture as
to any
<PAGE> 81
provision authorized to be contained therein shall be deemed to be a part
of the terms and conditions of this Indenture for any and all purposes;
(c) this Indenture shall be deemed to be modified and amended in
accordance with the Supplemental Indenture; and
(d) the respective rights, duties and obligations under this Indenture
of the Issuer, the Borrower, the Trustee, the Bank, the Registrar, any Paying
Agent, any Authenticating Agent, the Remarketing Agent and all Holders of Bonds
then outstanding shall be determined, exercised and enforced hereunder in a
manner which is subject in all respects to those modifications and amendments
made by the Supplemental Indenture.
Express reference to any executed and delivered Supplemental Indenture
may be made in the text of any Bonds issued thereafter, if that reference is
deemed necessary or desirable by the Trustee or the Issuer. A copy of any
Supplemental Indenture for which provision is made in this Article, shall be
mailed by the Trustee to the Registrar, the Remarketing Agent, each
Authenticating Agent and Paying Agent. The Trustee shall not be required to
execute any Supplemental Indenture containing provisions adverse to the Trustee.
Section 8.07. OPINION OF COUNSEL. The Trustee shall be entitled to
receive, and shall be fully protected in relying upon, the opinion of any
counsel approved by it as conclusive evidence that (a) any proposed Supplemental
Indenture complies with the provisions of this Indenture and does not adversely
affect the Bondholders, and (b) it is proper for the Trustee to join in the
execution of that Supplemental Indenture under the provisions of this Article.
That counsel may be counsel for the Issuer or the Borrower.
Section 8.08. MODIFICATION BY UNANIMOUS CONSENT. Notwithstanding
anything contained elsewhere in this Indenture, the rights and obligations of
the Issuer and of the Holders, and the terms and provisions of the Bonds and
this Indenture or any Supplemental Indenture, may be modified or altered in any
respect with the consent of (a) the Issuer, (b) the Holders of all of the Bonds
then outstanding, (c) the Bank, (d) the Borrower, and (e) if such modifications
or alterations contain provisions adverse to the Trustee, the Trustee.
END OF ARTICLE VIII
<PAGE> 82
ARTICLE IX.
-----------
DEFEASANCE
----------
Section 9.01. RELEASE OF INDENTURE. If (a) the Issuer shall pay all of
the outstanding Bonds, or shall cause them to be paid and discharged, or if
there otherwise shall be paid to the Holders of the outstanding Bonds all Bond
Service Charges due or to become due thereon, and (b) provision also shall be
made for the payment of all other sums payable hereunder or under the Agreement
and the Notes, then this Indenture shall cease, determine and become null and
void (except for those provisions surviving by reason of Section 9.03 hereof on
the event the Bonds are deemed paid and discharged pursuant to Section 9.02
hereof), and the covenants, agreements and obligations of the Issuer hereunder
shall be released, discharged and satisfied.
Thereupon, and subject to the provisions of Section 9.03 hereof, if
applicable,
(a) the Trustee shall release this Indenture (except for those
provisions surviving by reason of Section 9.03 hereof), and shall execute and
deliver to the Issuer any instruments or documents in writing as shall be
requisite to evidence that release and discharge or as reasonably may be
requested by the Issuer, and
(b) the Trustee and any other Paying Agents shall assign and deliver to
the Issuer any property subject at the time to the lien of this Indenture which
then may be in their possession, except amounts in the Bond Fund required (i) to
be paid to the Bank under Section 5.08 hereof, or (ii) to be held by the Trustee
and the Paying Agents under Section 5.07 hereof or otherwise for the payment of
Bond Service Charges.
Section 9.02. PAYMENT AND DISCHARGE OF BONDS. All or any part of the
Bonds shall be deemed to have been paid and discharged within the meaning of
this Indenture, including without limitation, Section 9.01 hereof, if:
(a) the Trustee as paying agent and any Paying Agents shall have
received, in trust for and irrevocably committed thereto, sufficient moneys
which are Eligible Funds or the proceeds of drawings under the Letter of Credit
used to make such payment, or other moneys if accompanied by an opinion of
bankruptcy counsel in a form acceptable to the Trustee and the Rating Service
(if any) for the Bonds, or
(b) the Trustee shall have received, in trust for and irrevocably
committed thereto, noncallable Government Obligations (purchased with Eligible
Funds or the proceeds of drawings under the Letter of Credit, or other moneys if
accompanied by an opinion of bankruptcy counsel in a form acceptable to the
Trustee and the Rating Service (if any) for the Bonds) which are certified by an
independent public accounting firm of national reputation to be of such
maturities or redemption dates and interest payment dates, and to bear such
interest, as will be sufficient together with any moneys to which reference is
made in subparagraph (a) above, without further investment or reinvestment of
either the principal amount thereof or the interest earnings therefrom (which
earnings are to be held likewise in trust and so committed,
<PAGE> 83
except as provided herein), for the payment of all Bond Service Charges on those
Bonds, on and to the next Interest Rate Adjustment Date, or prior redemption
date, as the case may be; provided, if any of those Bonds are to be redeemed
prior to the maturity thereof, notice of that redemption shall have been duly
given or irrevocable provision satisfactory to the Trustee shall have been duly
made for the giving of that notice; and further provided that no Bonds, or any
part thereof, shall be deemed to have been paid and discharged within the
meaning of this Section 9.02 (i) if the Interest Rate Mode of such Bonds is
other than the Fixed Interest Rate, unless such Bonds are to be redeemed on or
prior to the next Interest Rate Adjustment Date for such Bonds and notice of
that redemption shall have been duly given or irrevocable provision satisfactory
to the Trustee shall have been duly made for the giving of that notice, or (ii)
if the Interest Rate Mode of such Bonds is a Weekly Interest Rate.
Notwithstanding anything herein to the contrary, if any Bonds are then
rated by a Rating Service, no such Bonds shall be deemed to have been paid and
discharged by reason of any deposit pursuant to paragraphs (a) and/or (b) above
(other than any deposit of moneys, or Government Obligations purchased with
moneys, which are the proceeds of drawings under the Letter of Credit) unless
each such Rating Service shall have confirmed in writing to the Trustee that its
rating will not be withdrawn or lowered as the result of any such deposit.
Any moneys held by the Trustee in accordance with the provisions of this
Section may be invested by the Trustee only in noncallable Government
Obligations having maturity dates, or having redemption dates which, at the
option of the Holder of those obligations, shall be not later than the date or
dates at which moneys will be required for the purposes described above. To the
extent that any income or interest earned by, or increment to, the investments
held under this Section is determined from time to time by the Trustee (or at
the Trustee's election, a firm of certified public accountants selected by the
Borrower) to be in excess of the amount required to be held by the Trustee for
the purposes of this Section, that income, interest or increment shall be
transferred at the time of that determination in the manner provided in Section
5.08 hereof for transfers of amounts remaining in the Bond Fund.
If any Bonds shall be deemed paid and discharged pursuant to this
Section 9.02, then within fifteen (15) days after such Bonds are so deemed paid
and discharged the Trustee shall cause a written notice to be given to each
Holder thereof as shown on the Register on the date on which such Bonds are
deemed paid and discharged. Such notice shall state the numbers of the Bonds
deemed paid and discharged or state that all Bonds of a particular series are
deemed paid and discharged, set forth a description of the obligations held
pursuant to subparagraph (b) of the first paragraph of this Section 9.02 and
specify any date or dates on which any of the Bonds are to be called for
redemption pursuant to notice of redemption given or irrevocable provisions made
for such notice pursuant to the first paragraph of this Section 9.02.
Section 9.03. SURVIVAL OF CERTAIN PROVISIONS. Notwithstanding the
foregoing, any provisions of the Bond Legislation and this Indenture which
relate to the maturity of Bonds, interest payments and dates thereof, optional
and mandatory redemption provisions, credit against mandatory sinking fund
requirements, exchange, transfer and registration of Bonds, replacement of
mutilated, destroyed, lost or stolen Bonds, the safekeeping and cancellation of
<PAGE> 84
Bonds, non-presentment of Bonds, the holding of moneys in trust, the Rebate
Fund, and repayments to the Bank from the Bond Fund, and the duties of the
Trustee, the Remarketing Agent, the Registrar, any Authenticating Agent and any
Paying Agents, in connection with all of the foregoing, shall remain in effect
and be binding upon the Trustee, the Remarketing Agent, the Registrar, the
Authenticating Agents, any Paying Agents and the Holders notwithstanding the
release and discharge of this Indenture. The provisions of this Article and
Section 6.03 hereof and Section 5.3 of the Agreement shall survive the release,
discharge and satisfaction of this Indenture for a period of 4 years.
END OF ARTICLE IX
<PAGE> 85
ARTICLE X.
----------
COVENANTS AND AGREEMENTS OF THE ISSUER
--------------------------------------
Section 10.01. COVENANTS AND AGREEMENTS OF THE ISSUER. In addition to
any other covenants and agreements of the Issuer contained in this Indenture or
the Bond Ordinance, the Issuer further covenants and agrees with the Holders and
the Trustee as follows:
(a) PAYMENT OF BOND SERVICE CHARGES. The Issuer will pay all Bond
Service Charges, or cause them to be paid, solely from the sources provided
herein, on the dates, at the places and in the manner provided in this
Indenture.
(b) REVENUES AND ASSIGNMENT OF REVENUES. The Issuer will not assign the
Revenues or create or authorize to be created any debt, lien or charge thereon,
other than the assignment thereof under this Indenture.
(c) RECORDINGS AND FILINGS. At the direction and expense of the
Borrower, the Issuer will cause this Indenture, and any related instrument or
documents relating to the assignment made by it under this Indenture to secure
the Bonds, to be recorded and filed in the manner and in the places (if any)
which may be required by law in order to preserve and protect fully the security
of the Holders and the rights of the Trustee hereunder.
Not more than once every five (5) years the Trustee may reasonably
request at Borrower's expense an opinion of counsel, addressed to the Issuer and
the Trustee stating that based upon the law in effect on the date of such
opinion no filing, registration or recording and no refiling, reregistration or
rerecording of any agreement or instrument, including any financing statement or
amendments thereto, or any continuation statements or instruments of a similar
character relating to the pledges and assignments made by the Issuer or the
Borrower to secure the Bonds, is required by law, in order to fully preserve and
protect the security of the Trustee and the rights of the Trustee under the
Indenture, or if such filing, registration, recording, refiling, reregistration
or rerecording is necessary, setting forth the requirements in respect thereto.
The Borrower, with such assistance and cooperation from the Issuer as the
Borrower may reasonably request, shall take or cause to be taken all actions
necessary to satisfy any such requirements. Promptly after any filing,
registration, recording, refiling, reregistration or rerecording of any such
agreement or instrument, the Trustee may request at Borrower's expense an
opinion of counsel on behalf of the Issuer and the Trustee to the effect that
such filing, registration, recording, refiling, reregistration or rerecording
has been duly accomplished and setting forth the particulars thereof. The
Trustee shall be reimbursed by the Borrower for the reasonable fees paid in
connection with such opinions of counsel.
(d) INSPECTION OF BOOKS. All books, instruments and documents in the
Issuer's possession relating to the Project and the Revenues shall be open to
inspection and copying (at the expense of the Person making such copies) at all
times during the Issuer's regular business hours by any accountants or other
agents of the Trustee, the Borrower or the Bank which the Trustee, the Borrower
or the Bank may designate from time to time.
<PAGE> 86
(e) REGISTER. At reasonable times and under reasonable regulations
established by the Registrar, the Register may be inspected and copied (at the
expense of the Person making such copies) by the Borrower, the Bank, the
Trustee, by Holders of twenty-five percent (25%) or more in aggregate principal
amount of the Bonds then outstanding, or a designated representative thereof.
(f) RIGHTS AND ENFORCEMENT OF THE AGREEMENT. The Trustee may enforce, in
its name or in the name of the Issuer, all rights for and on behalf of the
Holders, except for Unassigned Issuer's Rights, and may enforce all covenants,
agreements and obligations of the Borrower under and pursuant to the Agreement,
regardless of whether the Issuer is in default in the pursuit or enforcement of
those rights, covenants, agreements or obligations. The Issuer, however, will do
all things and take all actions on its part necessary to comply with covenants,
agreements, obligations, duties and responsibilities on its part to be observed
or performed under the Agreement, and will take all actions within its authority
to keep the Agreement in effect in accordance with the terms thereof.
(g) FEDERAL TAX EXEMPTION. The Issuer covenants that it (i) will take,
or require to be taken, all actions that may be required of the Issuer for the
interest on the Bonds to be and remain excluded from gross income for federal
income tax purposes and (ii) will not take or authorize to be taken any actions
that would adversely affect that exclusion under the provisions of the Code.
Section 10.02. OBSERVANCE AND PERFORMANCE OF COVENANTS, AGREEMENTS,
AUTHORITY AND ACTIONS. The Issuer will observe and perform faithfully at all
times all covenants, agreements, authority, actions, undertakings, stipulations
and provisions to be observed or performed on its part under the Agreement, the
Indenture, the Bond Ordinance and the Bonds which are executed, authenticated
and delivered under this Indenture, and under all proceedings of the Issuer
pertaining thereto.
The Issuer represents and warrants that:
(a) It is duly authorized by the laws of the State of Indiana,
particularly and without limitation the Act, to issue the Project Bonds, to
execute and deliver this Indenture, the Agreement and the Bond Placement
Agreement and to provide the security for payment of the Bond Service Charges in
the manner and to the extent set forth in this Indenture.
(b) All actions required on its part to be performed for the issuance,
sale and delivery of the Project Bonds and for the execution and delivery by the
Issuer of this Indenture, the Agreement and the Bond Placement Agreement have
been or will be taken duly and effectively.
(c) The Project Bonds will be valid and enforceable special limited
obligations of the Issuer according to their terms.
END OF ARTICLE X
<PAGE> 87
ARTICLE XI.
-----------
AMENDMENTS TO THE AGREEMENT, THE NOTES AND THE LETTER OF CREDIT
---------------------------------------------------------------
Section 11.01. AMENDMENTS NOT REQUIRING CONSENT OF HOLDERS. Without the
consent of or notice to the Holders, the Issuer and the Trustee, with the
written consent of the Bank, may consent to any amendment, change or
modification of the Agreement, a Note, or the Letter of Credit as may be
required (a) by the provisions of the Agreement, a Note, the Letter of Credit or
this Indenture, (b) in connection with the issuance of any Additional Bonds
under this Indenture, (c) for the purpose of curing any ambiguity, inconsistency
or formal defect or omission in the Agreement, a Note, the Letter of Credit or
the Indenture, (d) in connection with an amendment or to effect any purpose for
which there could be an amendment of this Indenture pursuant to Section 8.02
hereof, or (e) in connection with any other change therein which is not to the
prejudice of the Trustee or the Holders of the Bonds, in the judgment of the
Trustee; provided that if the Bonds of any series are then rated by a Rating
Service, no amendment, change or modification of the Letter of Credit shall be
consented to by the Issuer or the Trustee unless such Rating Service shall have
confirmed in writing that such rating will not be reduced or withdrawn if such
amendment, change or modification is made.
Section 11.02. AMENDMENTS REQUIRING CONSENT OF HOLDERS. Except for the
amendments, changes or modifications contemplated by Section 11.01 hereof,
neither the Issuer nor the Trustee shall consent to:
(a) any amendment, change or modification of the Agreement, a Note, or
the Letter of Credit which would change the amount or times as of which Loan
Payments or drawings on the Letter of Credit are required to be paid, without
the giving of notice as provided in this Section of the proposed amendment,
change or modification and receipt of the written consent thereto of the Bank
and the Holders of all of the then outstanding Bonds affected by such amendment,
change or modification, or
(b) any other amendment, change or modification of the Agreement, a Note
or the Letter of Credit without the giving of notice as provided in this Section
of the proposed amendment, change or modification and receipt or the written
consent thereto of the Bank and the Holders of at least a majority in aggregate
principal amount of Bonds then outstanding affected by such amendment, change or
modification.
The consent of such Holders shall be obtained as provided in Section
8.03 hereof with respect to Supplemental Indentures.
If the Issuer and the Borrower shall request at any time the consent of
the Trustee to any proposed amendment, change or modification of the Agreement,
a Note or the Letter of Credit contemplated in subparagraph (a) or (b), upon
receipt of the written consent of the Bank thereto and upon being indemnified
satisfactorily by the Borrower with respect to expenses, the Trustee shall cause
notice of the proposed amendment, change or modification to be provided
<PAGE> 88
in the manner which is required by Section 8.03 hereof with respect to notice of
Supplemental Indentures. This notice shall set forth briefly the nature of the
proposed amendment, change or modification and shall state that copies of the
instrument or document embodying it are on file at the principal Indiana
corporate trust office of the Trustee for inspection by all Holders.
END OF ARTICLE XI
<PAGE> 89
ARTICLE XII.
------------
MEETINGS OF HOLDERS
-------------------
Section 12.01. PURPOSES OF MEETINGS. A meeting of the Holders of Bonds
may be called at any time and from time to time pursuant to the provisions of
this Article XII, to the extent relevant to the Holders of all of the Bonds or
of Bonds of that series, as the case may be, to take any action (a) authorized
to be taken by or on behalf of the Holders of any specified aggregate principal
amount of the Bonds, or of that series, (b) under any provision of this
Indenture or (c) authorized or permitted by law.
Section 12.02. CALL OF MEETINGS. The Trustee may call at any time a
meeting of Holders pursuant to Section 12.01 hereof to be held at any reasonable
time and place the Trustee shall determine. Notice of such meeting, setting
forth the time, place and generally the subject thereof, shall be mailed by
first class mail, postage prepaid, not fewer than fifteen (15) nor more than
ninety (90) days prior to the date of the meeting to the Holders at their
addresses as they appear on the Register on the fifteenth day preceding such
mailing, which fifteenth day preceding the mailing shall be the record date for
the meeting.
If at any time the Issuer, the Borrower, the Bank or the Holders of at
least twenty-five percent (25%) in aggregate principal amount of the Bonds, or
if applicable, the affected series of Bonds, then outstanding, shall have
requested the Trustee to call a meeting of Holders, by written request setting
forth the purpose of the meeting, and the Trustee shall not have mailed the
notice of the meeting within twenty (20) days after receipt of the request, then
the Issuer, the Borrower, the Bank or the Holders of Bonds in the amount above
specified may determine the time and the place of the meeting and may call the
meeting to take any action authorized in Section 12.01 hereof by mailing notice
thereof as provided above.
Any meetings of Holders of Bonds affected by a particular matter shall
be valid without notice if the Holders of all Bonds, or if applicable, the
affected series of Bonds, then outstanding are present in person or by proxy, or
if notice is waived before or after the meeting by the Holders of all Bonds, or
if applicable, the affected series of Bonds, outstanding who were not so present
at the meeting, and if the Issuer, the Borrower, the Bank and the Trustee are
either present by duly authorized representatives or have waived notice, before
or after the meeting.
Section 12.03. VOTING. To be entitled to vote at any meeting of Holders,
a Person shall (a) be a Holder of one or more outstanding Bonds, or if
applicable, of the affected series of Bonds, as of the record date for the
meeting as determined above, or (b) be a person appointed by an instrument or
document in writing as proxy by a person who is a Holder as of the record date
for the meeting, of one or more outstanding Bonds, or, if applicable, of the
affected series of Bonds. Each Holder or proxy shall be entitled to one vote for
each $100,000 principal amount of Bonds held or represented by it.
The vote upon any resolution submitted to any meeting of Holders shall
be by written
<PAGE> 90
ballots on which shall be subscribed the signatures of the Holders of Bonds or
of their representatives by proxy and the identifying number or numbers of the
Bonds held or represented by them.
Section 12.04. MEETINGS. Notwithstanding any other provision of this
Indenture, the Trustee may make any reasonable regulations which it may deem to
be advisable for meetings of Holders, with regard to:
(a) proof of the holding of Bonds and of the appointment of proxies,
(b) the appointment and duties of inspectors of votes,
(c) recordation of the proceedings of those meetings,
(d) the execution, submission and examination of proxies and other
evidence of the right to vote, and
(e) any other matters concerning the conduct, adjournment or
reconvening of meetings which it may think fit.
The Trustee shall appoint a temporary chair of the meeting by an
instrument or document in writing, unless the meeting shall have been called by
the Issuer, the Borrower, the Bank or by the Holders, as provided in Section
12.02 hereof, in which case the Issuer, the Bank, the Borrower or the Holders
calling the meeting, as the case may be, shall appoint a temporary chair in like
manner. A permanent chair and a permanent secretary of the meeting shall be
elected by vote of the Holders of at least a majority in principal amount of the
Bonds represented at the meeting and entitled to vote.
The only Persons who shall be entitled to be present or to speak at any
meeting of Holders shall be the Persons entitled to vote at the meeting and
their counsel, any representatives of the Trustee or Registrar and their
counsel, any representatives of the Issuer and its counsel, any representatives
of the Borrower and its counsel, any representatives of the Bank and its counsel
and any representatives of the Remarketing Agent and their counsel.
Section 12.05. MISCELLANEOUS. Nothing contained in this Article XII
shall be deemed or construed to authorize or permit any hindrance or delay in
the exercise of any right or rights conferred upon or reserved to the Trustee or
to the Holders under any of the provisions of this Indenture or of the Bonds by
reason of any call of a meeting of Holders or any right conferred expressly or
impliedly hereunder to make a call.
END OF ARTICLE XII
<PAGE> 91
ARTICLE XIII.
-------------
MISCELLANEOUS
-------------
Section 13.01. LIMITATION OF RIGHTS. With the exception of rights
conferred expressly in this Indenture, nothing expressed or mentioned in or to
be implied from this Indenture or the Bonds is intended or shall be construed to
give to any Person other than the parties hereto, the Registrar, the
Authenticating Agents, the Paying Agents, the Borrower, the Remarketing Agent,
the Bank and the Holders of the Bonds any legal or equitable right, remedy,
power or claim under or with respect to this Indenture or any covenants,
agreements, conditions and provisions contained herein. This Indenture and all
of those covenants, agreements, conditions and provisions are intended to be,
and are, for the sole and exclusive benefit of the parties hereto, the Borrower,
the Bank, the Remarketing Agent, the Registrar, the Authenticating Agents, the
Paying Agents, the Beneficial Owners and the Holders of the Bonds, as provided
herein. Notwithstanding any provisions hereof to the contrary, the Bank shall
not have any rights hereunder, including, without any limitation, any right to
give any direction or to give or withhold consent, unless (a) the Letter of
Credit is in full force and effect and no Event of Default has occurred and is
continuing under paragraphs (g) or (h) of Section 7.01 hereof or (b) amounts are
owed to the Bank for reimbursement of drawings under the Letter of Credit.
Section 13.02. SEVERABILITY. In case any section or provision of this
Indenture, or any covenant, agreement, stipulation, obligation, act or action,
or part thereof, made, assumed, entered into or taken under this Indenture, or
any application thereof, is held to be illegal or invalid for any reason, or is
inoperable at any time, that illegality, invalidity or inoperability shall not
affect the remainder thereof or any other section or provision of this Indenture
or any other covenant, agreement stipulation, obligation, act or action, or part
thereof, made, assumed, entered into or taken under this Indenture, all of which
shall be construed and enforced at the time as if the illegal, invalid or
inoperable portion were not contained therein.
Any illegality, invalidity or inoperability shall not affect any legal,
valid or operable section, provision, covenant, agreement, stipulation,
obligation, act, action, part or application, all of which shall be deemed to be
effective, operative, made, assumed, entered into or taken in the manner and to
the full extent permitted by law from time to time.
Section 13.03. NOTICES. Except as provided in Section 7.02 hereof or
elsewhere herein, it shall be sufficient service or giving of any notice,
request, complaint, demand or other instrument or document, if it is duly mailed
by first class mail or delivered. Notices to the Issuer, the Bank, the Borrower,
the Remarketing Agent and the Trustee shall be addressed as follows:
(a) If to the Issuer, at:
City of Wabash, Indiana
City Hall
220 S. Wabash Street
Wabash, Indiana 46992-3159
<PAGE> 92
(b) If to the Borrower, at:
Martin Yale Industries, Inc.
251 Wedcor Avenue
Wabash, Indiana 46992
With a copy to:
Escalade, Incorporated
817 Maxwell Avenue
P.O. Box 889
Evansville, Indiana 47706-0889
Attention: Chief Financial Officer
(c) If to the Trustee, at:
Bank One Trust Company, NA
111 Monument Circle, IN1-0160
Indianapolis, Indiana 46277
Attention: Corporate Trust Department
(d) If to the Bank, at:
Bank One, Indiana, NA
111 Monument Circle, Suite 1901
P.O. Box 7700
Indianapolis, Indiana 46277
(e) If to the Remarketing Agent, at:
Banc One Capital Markets, Inc.
150 East Gay Street, 24th Floor
Columbus, Ohio 43215
Attention: Municipal Trading Desk
Duplicate copies of each notice, request, complaint, demand or other instrument
or document given hereunder to any of such parties also shall be given to the
others. The foregoing parties may designate, by written notice given hereunder,
any further or different addresses to which any subsequent notice, request,
complaint, demand or other instrument or document shall be sent. The Trustee
shall designate, by notice to the Issuer, the Borrower, the Remarketing Agent
and the Bank the addresses to which notices or copies thereof shall be sent to
the Registrar, the Authenticating Agents and the Paying Agents.
In connection with any notice mailed pursuant to the provisions of this
Indenture, a certificate of the Trustee, the Issuer, the Registrar, the
Authenticating Agents, the Paying Agents, the Bank, the Borrower, the
Remarketing Agent or the Holders of the Bonds, whichever or whoever mailed that
notice, that the notice was so mailed shall be conclusive evidence of the proper
mailing of the notice.
<PAGE> 93
Section 13.04. SUSPENSION OF MAIL. If because of the suspension of
delivery of first class mail, or for any other reason, the Trustee or any other
Person shall be unable to mail by the required class of mail any notice required
to be mailed by the provisions of this Indenture, the Trustee or any other
Person shall give such notice in such other manner as in the judgment of the
Trustee or such Person shall most effectively approximate mailing thereof, and
the giving of the notice in that manner for all purposes of this Indenture shall
be deemed to be in compliance with the requirement for the mailing thereof.
Except as otherwise provided herein, the mailing of any notice shall be deemed
complete upon deposit of that notice in the mail and giving of any notice by any
other means of delivery shall be deemed complete upon receipt of the notice by
the delivery service.
Section 13.05. PAYMENTS DUE ON SATURDAYS, SUNDAYS AND HOLIDAYS. If any
Interest Payment Date, Bond Purchase Date, Mandatory Bond Purchase Date, date of
maturity of the principal of any Bonds, or date fixed for the redemption of any
Bonds is not a Business Day, then payment of interest, principal and any
redemption premium or any purchase price payment need not be made by the Trustee
or any Paying Agent on that date, but that payment may be made on the next
succeeding Business Day with the same force and effect as if that payment were
made on the Interest Payment Date, Bond Purchase Date, Mandatory Bond Purchase
Date, date of maturity or date fixed for redemption, and no interest shall
accrue for the period after that date; provided, however, if the Project Bonds
bear interest at any of the Weekly Interest Rate, the One Month Interest Rate or
the Three Month Interest Rate, interest shall accrue from the scheduled date of
purchase of Project Bonds or Beneficial Ownership Interests or from the
scheduled date of any maturity or redemption due date of the Project Bonds until
the Business Day on which such payment is made.
Section 13.06. INSTRUMENTS OF HOLDERS. Any writing, including without
limitation, any consent, request, direction, approval, objection or other
instrument or document, required under this Indenture to be executed by any
Holder may be in any number of concurrent writings of similar tenor and may be
executed by that Holder in person or by an agent or attorney appointed in
writing. Proof of (a) the execution of any writing, including without
limitation, any consent, request, direction, approval, objection or other
instrument or document, (b) the execution of any writing appointing any agent or
attorney, and (c) the ownership of Bonds, shall be sufficient for any of the
purposes of this Indenture, if made on the following manner, and if so made,
shall be conclusive in favor of the Trustee with regard to any action taken
thereunder, namely:
(i) The fact and date of the execution by any person of any
writing may be proved by the certificate of any officer in any
jurisdiction, who has power by law to take acknowledgments within the
jurisdiction, that the person signing the writing acknowledged that
execution before that officer, or by affidavit of any witness to that
execution;
(ii) The fact of ownership of Bonds shall be proved by the
Register maintained by the Registrar.
Nothing contained herein shall be construed to limit the Trustee to the
foregoing proof,
<PAGE> 94
and the Trustee may accept any other evidence of the matters stated therein
which it deems to be sufficient. Any writing, including without limitation, any
consent, request, direction, approval, objection or other instrument or
document, of the Holder of any Bond shall bind every further Holder of the same
Bond, with respect to anything done or suffered to be done by the Issuer, the
Trustee, the Bank, the Borrower, the Remarketing Agent, the Registrar or any
Paying Agent or Authenticating Agent pursuant to that writing.
Section 13.07. PRIORITY OF THIS INDENTURE. The Indenture shall be
superior to any liens which may be placed upon the Revenues or any other funds
or accounts created pursuant to this Indenture.
Section 13.08. EXTENT OF COVENANTS; NO PERSONAL LIABILITY. All
covenants, stipulations, obligations and agreements of the Issuer contained in
this Indenture are and shall be deemed to be covenants, obligations and
agreements of the Issuer to the full extent authorized by the Act and permitted
by the Constitution of the State. No covenant, stipulation, obligation or
agreement of any present or future member, officer, agent or employee of the
Issuer shall be enforceable against such member, officer, agent or employee of
the Issuer in anything other than that person's official capacity. Neither the
members nor any official of the Issuer executing the Bonds, this Indenture, the
Agreement or any amendment or supplement hereto or thereto shall be liable
personally on the Bonds or subject to any personal liability or accountability
by reason of the issuance or execution hereof or thereof.
No recourse shall be had for the payment of the principal of or premium
or interest on any of the Bonds or for any claim based thereon or upon any
obligation, covenant or agreement in this Indenture contained against any past,
present or future officer, member, employee or agent of the Issuer, as such,
either directly or through the Issuer, 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 officers, members, employees or
agents as such is hereby expressly waived and released as a condition of and
consideration for the execution of this Indenture and the issuance of such
Bonds.
Section 13.09. RATING CATEGORIES. Except as otherwise expressly provided
herein, any reference herein to a rating category established by a Rating
Service shall mean such category without regard to any modification thereof by
the addition of a plus or minus sign or a number indicating relative standing
within such category.
Section 13.10. BINDING EFFECT. This Indenture shall inure to the benefit
of and shall be binding upon the Issuer and the Trustee and their respective
successors and assigns, subject, however, to the limitations contained herein.
Section 13.11. COUNTERPARTS. This Indenture may be executed in any
number of counterparts, each of which shall be regarded as an original and all
of which shall constitute but one and the same instrument.
Section 13.12. GOVERNING LAW. This Indenture and the Bonds shall be
deemed to be
<PAGE> 95
contracts made under the laws of the State and for all purposes shall be
governed by and construed in accordance with the laws of the State.
END OF ARTICLE XIII
<PAGE> 96
IN WITNESS WHEREOF, the Issuer and the Trustee, as Trustee and
Registrar, have executed this Trust Indenture all as of the date first above
written.
This instrument prepared by Bruce A. Polizotto, Attorney-at-Law, ICE MILLER
DONADIO & RYAN, One American Square, Box 82001, Indianapolis, Indiana 46282.
<PAGE> 97
SIGNATURE PAGE OF ISSUER
TO
TRUST INDENTURE
CITY OF WABASH, INDIANA
By:
------------------------------
Robert R. McCallen, Mayor
(SEAL)
ATTEST:
- -------------------------------------
Meredith Brown, Clerk-Treasurer
<PAGE> 98
SIGNATURE PAGE OF TRUSTEE
TO
TRUST INDENTURE
BANK ONE TRUST COMPANY, NA, as Trustee
By:
---------------------------------
Its:
--------------------------------
<PAGE> 99
EXHIBIT A
---------
FORM OF BOND
Unless this Project 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 certificate
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.
UNITED STATES OF AMERICA
STATE OF INDIANA
CITY OF WABASH, INDIANA
ADJUSTABLE RATE ECONOMIC DEVELOPMENT
REVENUE REFUNDING BONDS, SERIES 1998
(MARTIN YALE INDUSTRIES, INC. PROJECT)
<TABLE>
<CAPTION>
Date of Date of
Maturity Date: Cusip Number: Authentication: Initial Delivery:
<S> <C> <C> <C>
September 1, 2028 September 30, 1998 September 30,1998
Registered Owner: CEDE & CO.
Principal Amount: $2,700,000
</TABLE>
The City of Wabash, Indiana (the "Issuer"), a municipal corporation
validly existing under the laws of the State of Indiana, 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 Project Bond
is called for earlier redemption, and to pay from those sources interest thereon
at the rate per annum determined as described herein. Initial interest on this
Project Bond shall accrue from the Date of Initial Delivery of this Project
Bond. Interest on this Project 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 Weekly Interest Rate, the One Month Interest Rate or
the Three Month Interest Rate (as such terms are hereinafter defined),
commencing the first Business Day of November 1998, until the Principal Amount
is paid or duly provided for. For any period of time during which this Project
Bond bears interest at the Six Month Interest Rate, the One Year 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
March
<PAGE> 100
and September. 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
Weekly Interest Rate, the One Month Interest Rate or the Three Month 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, other than a Saturday or Sunday, on which commercial banks
located in the city or cities in which the principal Indiana corporate trust
office of Bank One Trust Company, NA, Indianapolis, Indiana, as "Trustee," the
principal office of Banc One Capital Markets, Inc., Columbus, Ohio, as
"Remarketing Agent," and the principal office of Bank One, Indiana, NA,
Indianapolis, Indiana, as "Bank," are located, are not required or authorized to
remain closed and on which The New York Stock Exchange is not closed. This
Project 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, Bond Purchase Date (as hereinafter
defined), Mandatory Bond Purchase Date (as hereinafter defined), date of
maturity of this Project Bond or date fixed for redemption of this Project Bond,
is not a Business Day, then payment of the applicable interest, principal,
purchase price or redemption 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, Bond Purchase Date, Mandatory Bond Purchase Date, date of maturity
or date fixed for redemption and no interest shall accrue for the period after
such date; provided, however, if this Project Bond bears interest at any of the
Weekly Interest Rate, the One Month Interest Rate or the Three Month Interest
Rate, interest shall accrue from the scheduled date of any maturity or
redemption due date of this Project Bond until the Business Day on which such
payment is made.
The principal of and premium, if any, or purchase price, of this Project
Bond is payable upon presentation and surrender hereof at the corporate trust
processing facility of the Trustee, presently Bank One Trust Company, NA,
located in Columbus, Ohio, as "Paying Agent." Interest is payable on each
Interest Payment Date by check or draft mailed to the person in whose name this
Project Bond (or one or more predecessor bonds) is registered (the "Holder") at
the close of business on the Business Day preceding such Interest Payment Date
(the "Regular Record Date") on the registration books for this issue maintained
by Bank One Trust Company, NA, Indianapolis, Indiana, as "Registrar," at the
address appearing therein. Notwithstanding the foregoing, interest on any Bond
held by a Depository (as hereinafter defined), shall be paid by wire transfer in
immediately available funds to the bank account number and address filed with
the Trustee by such Holder. Any interest which 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 Regular 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
<PAGE> 101
Date shall be mailed to Holders not less than ten days prior thereto. The
principal and redemption price of and interest on this Project Bond are payable
in lawful money of the United States of America, without deduction for the
services of the Paying Agent. Notwithstanding anything herein to the contrary,
when this Project Bond is registered in the name of the Depository (as defined
in the Indenture hereinafter defined) or its nominee, the principal and
redemption price of and interest on this Project Bond shall be payable in next
day or federal funds delivered or transmitted to the Depository or its nominee.
THIS PROJECT BOND HAS BEEN ISSUED UNDER THE PROVISIONS OF THE
CONSTITUTION OF THE STATE OF INDIANA, INDIANA CODE, TITLE 36, ARTICLE 7,
CHAPTERS 11.9 AND 12 AND INDIANA CODE TITLE 5, ARTICLE 1, CHAPTER 5
(COLLECTIVELY THE "ACT"), AND NEITHER THE FAITH AND CREDIT NOR THE TAXING POWER
OF THE STATE IS PLEDGED TO THE PAYMENT OF THE PRINCIPAL OF OR THE INTEREST ON
THIS PROJECT BOND. THE HOLDERS OR OWNERS OF THIS PROJECT BOND HAVE NO RIGHT TO
HAVE TAXES LEVIED BY THE ISSUER, THE STATE OF INDIANA OR ANY POLITICAL
SUBDIVISION THEREOF FOR THE PAYMENT OF THE PRINCIPAL OF OR PREMIUM (IF ANY) OR
INTEREST ON THIS PROJECT BOND. PRINCIPAL AND REDEMPTION PRICE OF AND INTEREST ON
THIS PROJECT BOND ARE PAYABLE SOLELY FROM THE REVENUES PLEDGED PURSUANT TO THE
INDENTURE (AS HEREINAFTER DEFINED) AND FROM FUNDS DRAWN BY THE TRUSTEE UNDER THE
LETTER OF CREDIT (AS HEREINAFTER DEFINED).
THIS PROJECT BOND SHALL NOT CONSTITUTE THE PERSONAL OBLIGATION,
EITHER JOINTLY OR SEVERALLY, OF THE MEMBERS OF THE ISSUER OR OF ANY
OFFICER, EMPLOYEE OR OFFICIAL OF THE ISSUER.
This Project 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.
GENERAL PROVISIONS
This Project Bond is one of a duly authorized issue of the City of
Wabash, Indiana Adjustable Rate Economic Development Revenue Refunding Bonds,
Series 1998 (Martin Yale Industries, Inc.) (the "Project Bonds"), issuable under
the Trust Indenture, dated as of September 1, 1998 (the "Indenture"), between
the Issuer and Bank One Trust Company, NA, as Trustee, aggregating in the
principal amount of $2,700,000 and issued for the purpose of making a loan (the
"Loan") to Martin Yale Industries, Inc., an Indiana corporation (the
"Borrower"), to refund the Prior Bonds (as defined in the Indenture) originally
issued to finance the costs of economic development facilities of the Borrower.
The Project Bonds, together with any Additional Bonds which may be issued on a
parity therewith under the Indenture, 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 (collectively, the "Bonds").
The Bonds are issued pursuant to the Act and pursuant to an Ordinance duly
enacted by the Issuer.
<PAGE> 102
Reference is made to the Indenture and the Loan Agreement dated as of
September 1, 1998 between the Issuer and the Borrower (the "Agreement") for a
more complete description of the Project, 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 secured. All
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 Borrower has executed and delivered to
the Trustee the Borrower's promissory note dated as of even date with the
Project Bonds (the "Project Note"), in the aggregate principal amount of
$2,700,000. The Borrower is required by the Agreement and the Project Note to
make payments to the Trustee in amounts and at times necessary to pay the
principal of, premium, if any, and interest on the Project Bonds (the "Bond
Service Charges"). In the Indenture, the Issuer has assigned to the Trustee, to
provide for the payment of the Bond Service Charges on the Project Bonds and any
Additional Bonds, the Issuer's right, title and interest in and to the Project
Note and the Agreement, except for Unassigned Issuer's Rights, as defined in the
Agreement.
Pursuant to the Agreement, the Borrower has caused to be issued and
delivered to the Trustee by 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 Project Bonds then outstanding to enable the Trustee
to pay (i) the principal amount of the Project Bonds when due at maturity or
upon redemption or acceleration , and (ii) an amount equal to the principal
portion of the purchase price of any Project Bonds or Beneficial Ownership
Interests duly tendered by the Holders or Beneficial Owners thereof for purchase
pursuant to the Indenture, plus (b) the amount of interest accruing on the
Project Bonds, but not to exceed 45 days' accrued interest (or 195 days'
interest if the Bonds bear interest at the Six Month Interest Rate, the One Year
Interest Rate, the Five Year Interest Rate or the Fixed Interest Rate) at the
maximum rate of 10% per annum (the "Maximum Rate") to enable the Trustee to pay
interest when due on the Bonds and an amount equal to the interest portion (if
any) of the purchase price of any Project Bonds or Beneficial Ownership
Interests duly tendered by the Holders or Beneficial Owners thereof for purchase
pursuant to the Indenture. To provide for the issuance of the Letter of Credit,
the Borrower has entered into a Credit Agreement dated September 30, 1998 (the
"Credit Agreement"), with the Bank pursuant to which the Borrower is obligated
to reimburse the Bank for all drawings made under the Letter of Credit. The
Letter of Credit shall expire, subject to provisions for earlier termination, on
September 15, 2003.
Subject to the provisions of the Indenture and the Agreement, the Letter
of Credit may be replaced from time to time by another letter of credit (an
"Alternate Letter of Credit"), in which case the term "Bank" shall mean the
financial institution issuing the Alternate Letter of Credit and the term
"Letter of Credit" shall mean the Alternate Letter of Credit.
Copies of the Indenture, the Agreement, the Letter of Credit, the Credit
Agreement and
<PAGE> 103
the Project Note are on file in the principal Indiana corporate trust office of
the Trustee.
The Bond Service Charges on the Project Bonds are payable solely from
the Revenues, as defined and as provided for in the Indenture (being, generally,
the amounts payable under the Agreement in repayment of the Loan, any unexpended
proceeds of the Project 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
Revenues. The Bonds are not secured by a pledge of the faith and credit or the
taxing power of the Issuer, the State of Indiana or any political subdivision
thereof.
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, whether directly or
through the Issuer, or otherwise, 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 Project Bonds are issuable only as fully registered bonds in the
denominations of $100,000 or integral multiples of $5,000 in excess thereof and
shall only be originally issued to a Depository to be held in a book entry
system and: (a) the Project 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 Project 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 owners of beneficial
interest in the Project Bonds shall not have any right to receive Project Bonds
in the form of physical certificates. If any Depository determines not to
continue to act as a Depository for the Project 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 Beneficial Owners of book
entry interests by the then Depository, shall permit withdrawal of the Project
Bonds from the Depository, and authenticate and deliver Bond certificates in
fully registered form (in denominations of $100,000 or integral multiples of
$5,000 in excess thereof) to the assignees of the Depository or its nominee.
While a Depository is the sole holder of the Project Bonds, delivery or
notations of partial redemption or tender for purchase of Project Bonds shall be
effected in accordance with
<PAGE> 104
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 Project 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 Project Bonds which are held by the
Depository under a book entry system.
"Book entry form" or "book entry system" means, with respect to the
Project 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 and is not the responsibility of the Issuer or the Trustee, and is the record
that identifies, and records the transfer of the interests of, the owners of
beneficial (book entry) interests in the Project 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 in book entry form, and
includes and means initially The Depository Trust Company (a limited purpose
trust company), New York, New York.
The Indenture permits certain amendments or supplements to the
Agreement, the Indenture, the Letter of Credit and the Project Note not
prejudicial to the Holders to be made with the consent of the Bank but 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 Project Bonds and any Additional
Bonds then outstanding.
DETERMINATION OF INTEREST RATE
The initial interest rate on this Project Bond shall be established and
be in effect through the day preceding the first Interest Rate Adjustment Date.
Thereafter, except as provided below, for each succeeding period the interest
rate on the Bonds shall be the Weekly Interest Rate for such weekly period as
established on the Interest Rate Determination Date immediately preceding the
commencement of such weekly period.
On the first Business Day of December 1998 and on any Interest Period
Reset Date thereafter, subject to the conditions set forth in the Indenture, the
interest rate on the Project Bonds may be converted to a different Interest Rate
Mode upon receipt by the Trustee and the
<PAGE> 105
Remarketing Agent of a written direction from the Borrower, given on behalf of
the Issuer, not less than 45 days prior to the Interest Period Reset Date, to
convert the interest rate on the Project Bonds to an Interest Rate Mode other
than the Interest Rate Mode then in effect.
On each Interest Rate Determination Date, the Remarketing Agent shall
give the Trustee facsimile or telephonic notice (immediately confirmed in
writing) of the interest rate to be borne by the Project 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 Borrower
and the Bank as provided above.
If the interest rate on the Project Bonds is converted to a different
Interest Rate Mode, at least 30 days prior to the Interest Period Reset Date the
Trustee shall confirm, by first class mail to all Holders of the applicable
series, that upon such Interest Period Reset Date such Project Bonds shall be
converted to a different Interest Rate Mode, which Interest Rate Mode shall be
specified, and that all such Bonds and Beneficial Ownership Interests shall be
subject to a mandatory tender, subject to the right of the Holders or Beneficial
Owners to affirmatively elect to waive the mandatory tender and retain their
Bonds or Beneficial Ownership Interests.
Any calculation of the interest rate to be borne by the Project Bonds
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.
In addition to the words and terms defined elsewhere in this Project
Bond, the following terms shall have the following meanings:
"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 the last of February or August
nearest to but not later than the date which 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 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 (a) the fixed rate of interest per annum
determined by the Remarketing Agent, on the Interest Rate Determination Date
immediately preceding the applicable Interest Period Reset Date, to be the
lowest interest rate, for the period from the
<PAGE> 106
Interest Period Reset 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 accrued interest (if any), on the Interest Period Reset
Date 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 Fixed Interest Rate for whatever reason, or the Fixed 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 Fixed Interest Rate exceed the Maximum Rate.
"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
the first Business Day of a month; provided that upon conversion from a Six
Month, One Year or Five Year Interest Rate Mode, an Interest Period Reset Date
shall be the first day of a month; and provided further, that except when
converting from a Weekly Interest Rate Mode, an Interest Period Reset Date may
not occur prior to the end of the preceding Interest Rate Period and shall be
the first day or Business Day after the end of such preceding Interest Rate
Period.
"Interest Rate Adjustment Date" means any date on which the interest
rate on the Bonds is adjusted, either as the result of the conversion of the
interest rate on the Bonds to a different Interest Rate Mode or by adjustment of
the interest rate on the Bonds within the applicable Interest Rate Mode. Except
as otherwise provided with respect to an Interest Rate Adjustment Date which is
also an Interest Period Reset Date, an Interest Rate Adjustment Date shall be
the first day of the first month of the Interest Rate Period if the Bonds bear
interest at the Six Month, One Year or Five Year Interest Rates; the first
Business Day of the month if the Bonds bear interest at the One Month or Three
Month Interest Rate; and if the Bonds bear interest at the Weekly Interest Rate,
then the Interest Rate Adjustment Date shall be Thursday of each week.
"Interest Rate Determination Date" means (a) with respect to the Three
Month Interest Rate, the Six Month Interest Rate, the One Year 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 One Month
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 principal Indiana corporate trust 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 principal Indiana corporate trust office of the Trustee on the
Business Day preceding the Interest Period Reset Date.
"Interest Rate Mode" means any of those modes of interest with respect
to the Bonds permitted by the Indenture, specifically, the Weekly Interest Rate,
the One Month Interest Rate,
<PAGE> 107
the Three Month Interest Rate, the Six Month Interest Rate, the One Year
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.
"One Month 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 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 One Month
Interest Rate for whatever reason, or the One Month 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 One Month Interest Rate exceed the Maximum Rate.
"One 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 the last day of February or August
nearest to but not later than the date which 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 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 One Year
Interest Rate for whatever reason, or the One 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 One Year Interest Rate exceed the Maximum Rate.
"Remarketing Agent" means, initially, Banc One Capital Markets, Inc.,
and any successor Remarketing Agent appointed pursuant to the Indenture.
"Six Month Interest Rate" means (a) the rate of interest per annum
determined by the
<PAGE> 108
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 which 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 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 Six Month
Interest Rate for whatever reason, or the Six Month 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 Six Month Interest Rate exceed the Maximum Rate.
"Three Month 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 which 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 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 Three Month
Interest Rate for whatever reason, or the Three Month 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 Three Month 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
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 which 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 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
<PAGE> 109
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.
TENDER OPTION
A.1. TENDER OPTION WHILE PROJECT BONDS BEAR INTEREST IN AN INTEREST RATE
MODE OTHER THAN THE WEEKLY INTEREST RATE. While the Project Bonds bear interest
at the One Month Interest Rate, the Three Month Interest Rate, the Six Month
Interest Rate, the One Year Interest Rate or the Five Year Interest Rate on each
Interest Rate Adjustment Date (each a "Bond Purchase Date"), each Holder or
Beneficial Owner, as applicable, shall have the option to tender for purchase,
at 100% of the principal amount thereof, all of the Project Bonds owned by such
Holder (or all Beneficial Ownership Interests owned by such Beneficial Owner),
or such lesser principal amount thereof (in denominations of $5,000 or any
integral multiple thereof, provided that such Holder or Beneficial Owners
tenders $100,000 or more in principal amount and provided that the untendered
portion of any Project Bond or Beneficial Ownership Interest shall be $100,000
or more in principal amount) as such Holder or Beneficial Owner may specify in
accordance with the terms, conditions and limitations hereinafter set forth. The
purchase price for each such Project Bond or Beneficial Ownership Interest shall
be payable in lawful money of the United States of America, shall equal the
principal amount, or such portion thereof, to be purchased and shall be paid in
full on the applicable Bond Purchase Date.
A.2. TENDER OPTION WHILE PROJECT BONDS BEAR INTEREST AT THE WEEKLY
INTEREST RATE. While the Project Bonds bear interest at the Weekly Interest
Rate, each Holder or Beneficial Owner, as applicable, has the option to tender
for purchase, at 100% of the principal amount thereof plus accrued interest to
the purchase date (a "Bond Purchase Date"), all of the Project Bonds owned by
such Holder (or all Beneficial Ownership Interests owned by such Beneficial
Owner), or such lesser principal amount thereof (in denominations of $5,000 or
any integral multiple thereof, provided that such Holder or Beneficial Owner
tenders $100,000 or more in principal amount and provided that the untendered
portion of any Bond shall be $100,000 or more in principal amount) as such
Holder or Beneficial Owner may specify in accordance with the terms, conditions
and limitations hereafter set forth. The purchase price for each such Project
Bond or Beneficial Ownership Interest 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.1. above, the Holder or
Beneficial Owner, as applicable, shall (a) no earlier than 15 days prior to the
Bond Purchase Date and no later than 11:00 a.m. according to the local time at
the principal Indiana corporate trust office of the Trustee on the eighth
Business Day prior to the Bond Purchase Date, unless the Project Bonds bear
interest at the One Month Interest Rate, then on the fifth Business Day prior to
the Bond Purchase Date, give notice to the Trustee by telecopy or in writing
which states (i) the name and address of the Holder or Beneficial Owner, as
applicable, (ii) the principal amount, CUSIP number and bond numbers of the
Bonds or Beneficial Ownership Interests to be purchased, (iii) that such Project
Bonds or Beneficial Ownership Interests are to be purchased on such Bond
<PAGE> 110
Purchase Date pursuant to the terms of the Indenture, and (iv) that such notice
is irrevocable; (b) in the case of a Beneficial Owner, provide the Trustee with
evidence satisfactory to the Trustee of such Beneficial Owner's Beneficial
Ownership Interest; (c) in the case of a Holder, no later than 10:00 a.m.
according to the local time at the principal Indiana corporate trust 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, unless the
Project Bonds bear interest at the One Month Interest Rate, then on 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 principal Indiana
corporate trust office of the Trustee the Project Bonds to be purchased in
proper form, accompanied by fully completed and executed Instructions to Sell,
the form of which is printed on the Project Bonds; and (d) in the case of a
Beneficial Owner, no later than 10:00 a.m. (according to the local time at the
principal Indiana corporate trust office of the Trustee) on the Bond Purchase
Date, cause the transfer of the Beneficial Owner's Beneficial Ownership on the
records of the Depository.
To exercise the option granted in paragraph A.2. above, the Holder or
Beneficial Owner, as applicable, shall (a) give notice to the Trustee by
telecopy or in writing, which states (i) the name and address of the Holder or
Beneficial Owner, (ii) the principal amount, CUSIP number and Project Bond
numbers of the Project Bonds or Beneficial Ownership Interests to be purchased,
(iii) the date on which such Project Bonds or Beneficial Ownership Interests are
to be purchased, which Bond Purchase Date shall be a Business Day not prior to
the seventh day and not later than the fifteenth day next succeeding the date of
giving of such notice to the Trustee and, if the interest rate on the Project
Bonds is to be converted from the Weekly Interest Rate to a new Interest Rate
Mode, is a date prior to the Interest Period Reset Date with respect to the new
Interest Rate Mode, and (iv) that such notice is irrevocable; (b) in the case of
a Beneficial Owner, provide the Trustee with evidence satisfactory to the
Trustee of such Beneficial Owner's Beneficial Ownership Interest; (c) in the
case of a Holder, no later than 10:00 a.m. according to the local time at the
principal Indiana corporate trust office of the Trustee on the second Business
Day immediately preceding the applicable Bond Purchase Date, deliver to the
principal Indiana corporate trust office of the Trustee the Project Bonds to be
purchased in proper form, accompanied by fully completed and executed
Instructions to Sell; and (d) in the case of a Beneficial Owner, no later than
10:00 a.m. (according to the local time at the principal Indiana corporate trust
office of the Trustee) on the Bond Purchase Date cause the transfer of the
Beneficial Owner's Beneficial Ownership on the records of the Depository.
<PAGE> 111
If less than all of a Project Bond of a particular series so delivered
is to be purchased, the Trustee shall authenticate one or more Project Bonds of
the same series 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 Project Bond or Bonds of the same series to such
Holder.
Any Project Bonds not delivered by Holders following the giving of
notice of tender shall nevertheless be deemed tendered for remarketing. Subject
to the right of such nondelivering Holders to receive the purchase price of such
Project Bonds such Project Bonds shall be null and void, and the Trustee shall
authenticate and deliver new Project Bonds in replacement thereof pursuant to
the remarketing of such Project Bonds. After the giving of a notice of tender
Beneficial Owners shall be obligated to transfer their Beneficial Ownership
Interests on the records of the Depository in accordance with the instructions
of the Trustee.
The tender options granted to the Holders or Beneficial Owners and all
mandatory tenders of Project Bonds or Beneficial Ownership Interests are subject
to the additional condition that any tendered Project Bonds or Beneficial
Ownership Interests (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.
MANDATORY TENDER
(a) MANDATORY TENDER UPON CONVERSION TO A NEW INTEREST RATE MODE. If at
any time the Issuer at the direction of the Borrower shall convert the interest
rate on the Project Bonds to a different Interest Rate Mode, on the Interest
Period Reset Date upon which such conversion is effective, all Bonds and
Beneficial Ownership Interests shall be subject to mandatory tender by the
Holders or Beneficial Owners thereof for purchase on the Interest Period Reset
Date (a "Bond Purchase Date") at the applicable purchase price provided for
above. Notwithstanding such mandatory tender, any Holder or Beneficial Owner may
elect to retain its Project Bonds or Beneficial Ownership Interests by
delivering to the Trustee a written notice no later than 11:00 a.m. according to
the local time at the principal Indiana corporate trust office of the Trustee on
the eighth Business Day prior to such Interest Period Reset Date or by 11:00
a.m. according to the local time at the principal Indiana corporate trust office
of the Trustee on the fifth Business Day prior to such Interest Period Reset
Date if the Interest Rate Mode is to be converted to the One Month Interest
Rate, which notice shall state that (i) such Holder or Beneficial Owner realizes
that the Project Bonds or Beneficial Ownership Interests are being converted to
bear interest at the applicable Interest Rate Mode, (ii) unless the interest
rate on the Project Bonds is being converted to the Weekly Interest Rate, such
Holder or Beneficial Owner realizes that the next Bond Purchase Date upon which
the Bonds or Beneficial Ownership Interests may be tendered for purchase is the
next Interest Rate Adjustment Date or, if such Project Bonds are being converted
to the Fixed Interest Rate, that such Project Bonds or Beneficial Ownership
Interests may no longer be tendered for purchase, (iii) such Holder or
Beneficial Owner realizes that any securities rating on the Project Bonds may be
withdrawn or lowered, and (iv) such Holder or Beneficial Owner affirmatively
elects to hold its Project Bonds or Beneficial Ownership Interests and receive
interest at the applicable
<PAGE> 112
Interest Rate Mode.
Project Bonds or Beneficial Ownership Interests with respect to which
the Trustee shall not have received the election required by the preceding
paragraph shall be deemed to have been tendered whether or not the Holders
thereof shall have delivered such Bonds to the Trustee and without the need for
further action by the Beneficial Owners. Subject to the right of the Holders or
Beneficial Owners of such Bonds and Beneficial Ownership Interests to receive
the purchase price of such Project Bonds or Beneficial Ownership Interests, such
Project Bonds or Beneficial Ownership Interests shall be null and void and the
Trustee shall authenticate and deliver new Project Bonds in replacement thereof,
or new Beneficial Ownership Interests shall be created, pursuant to the
remarketing of such Project Bonds or Beneficial Ownership Interests.
(b) MANDATORY TENDER UPON DELIVERY OF AN ALTERNATE LETTER OF CREDIT. If
at any time while the Project Bonds bear interest in the Weekly Rate, the One
Month Rate, the Three Month Rate, the Six Month Rate, the One Year Rate, the
Five Year Rate or the Fixed Interest Rate, the Borrower shall provide for the
delivery to the Trustee of an Alternate Letter of Credit in accordance with the
provisions of Section 5.09 of the Indenture, on the Replacement Date (a "Bond
Purchase Date"), as defined in the Indenture, all Project Bonds and Beneficial
Ownership Interests shall be subject to mandatory tender by the Holders or
Beneficial Owners, as the case may be, thereof for purchase at the applicable
purchase price provided for in Section 2.04 of the Indenture. At least 30 days
and no more than 45 days prior to the Replacement Date the Trustee shall
confirm, by first class mail to all Holders, that such an Alternate Letter of
Credit is to be delivered by the Borrower to the Trustee. The notice shall
advise the Holders of the Bond Purchase Date, that the requirements of the
Indenture and the Project Bonds relating to Alternate Letters of Credit have
been met, the name of the financial institution issuing the Alternate Letter of
Credit, the rating, if any, on the Project Bonds upon the provisions of the
Alternate Letter of Credit and that all Project Bonds and Beneficial Ownership
Interests shall be subject to mandatory purchase from the Holders and Beneficial
Owners thereof, subject to the right of each Holder or Beneficial Owner to
affirmatively elect to waive the mandatory tender for purchase and retain its
Project Bonds or Beneficial Ownership Interests.
Notwithstanding such mandatory tender, any Holder or Beneficial Owner,
as applicable, may elect to retain its Project Bonds or Beneficial Ownership
Interests by delivering to the Trustee a written notice no later than 11:00 a.m.
according to the local time at the principal Indiana corporate trust office of
the Trustee on the eighth Business Day prior to such Replacement Date which
notice shall state that (a) such Holder or Beneficial Owner realizes that the
Borrower is delivering an Alternate Letter of Credit to the Trustee pursuant to
Section 5.09 of the Indenture, (b) such Holder or Beneficial Owner has received
the notice required by Section 2.06 of the Indenture, and (c) such Holder or
Beneficial Owner affirmatively elects to hold its Bonds or Beneficial Ownership
Interests.
Project Bonds or Beneficial Ownership Interests with respect to which
the Trustee shall not have received the election required by the preceding
paragraph shall be deemed to have been tendered for purposes of Section 2.06 of
the Indenture whether or not the Holders thereof
<PAGE> 113
shall have delivered such Project Bonds to the Trustee and without the need for
further action by the Beneficial Owners. Subject to the right of the Holders or
Beneficial Owners of such Project Bonds or Beneficial Ownership Interests to
receive the purchase price of such Project Bonds or Beneficial Ownership
Interests, such Project Bonds or Beneficial Ownership Interests shall be null
and void and the Trustee shall authenticate and deliver new Project Bonds in
replacement thereof or new Beneficial Ownership Interests shall be created
pursuant to the remarketing of such Project Bonds or Beneficial Ownership
Interests or the pledge of such Project Bonds or Beneficial Ownership Interests
to the Bank in lieu of remarketing such Project Bonds or Beneficial Ownership
Interests as described in Section 6.20 of the Indenture.
(c) MANDATORY TENDER UPON EXPIRATION OF THE LETTER OF CREDIT. The
Project Bonds and Beneficial Ownership Interests are subject to mandatory tender
in whole on the Interest Payment Date which next precedes the Letter of Credit
Termination Date (the "Mandatory Bond Purchase Date"), at a price of 100% of the
outstanding principal amount thereof plus accrued interest to such Mandatory
Bond Purchase Date unless, at least 45 days prior to any such Mandatory Bond
Purchase Date, (a) 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, or (b)
pursuant to Section 5.09 of the Indenture, the Borrower shall have obtained and
delivered to the Trustee a letter of credit with a termination date not earlier
than one year from the Letter of Credit Termination Date of the Letter of Credit
being replaced. The mandatory tender of Project Bonds or Beneficial Ownership
Interests on a Mandatory Bond Purchase Date may not be waived by the Holders or
Beneficial Owners thereof.
At least 30 days, but not more than 45 days, prior to such Mandatory
Bond Purchase Date pursuant to the Indenture, the Trustee shall confirm, by
first class mail to all Holders or Beneficial Owners of the Mandatory Bond
Purchase Date of the Project Bonds and advise the Holders or Beneficial Owners
that all Project Bonds and Beneficial Ownership Interests shall be subject to
mandatory tender on such Mandatory Bond Purchase Date and that such mandatory
tender may not be waived.
Project Bonds or Beneficial Ownership Interests not tendered for
purchase as required by the preceding paragraph shall be deemed to have been
tendered without further action by the Holders or Beneficial Owners thereof,
subject to the right of the Holders or Beneficial Owners of such Project Bonds
or Beneficial Ownership Interests to receive the purchase price of such Project
Bonds or Beneficial Ownership Interests.
REDEMPTION
The Project Bonds are subject to redemption prior to stated maturity
pursuant to first class mailed notice thereof by the Trustee at least 30 days
prior to the redemption date (except in the case of a redemption described in
paragraph (a) below, in which case notice shall be given at least 5 days prior
to the redemption date), as follows:
(a) MANDATORY REDEMPTION UPON A DETERMINATION OF TAXABILITY. Upon the
occurrence
<PAGE> 114
of a Determination of Taxability, as defined in the Indenture, the Project Bonds
are subject to mandatory redemption in whole at a redemption price equal to 100%
of the outstanding principal amount thereof, plus interest accrued to the
redemption date, at the earliest practicable date selected by the Trustee, after
consultation with the Borrower, but in no event later than 45 days following the
Trustee's notification of the Determination of Taxability. The occurrence of a
Determination of Taxability with respect to the Project Bonds will not
constitute an Event of Default under the Indenture.
(b) OPTIONAL REDEMPTION. Unless previously redeemed, the Project Bonds
are subject to redemption, at the option of the Issuer, upon the direction of
the Borrower (subject to compliance with Section 4.03 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 Payment Date
for Bonds bearing interest at the Weekly Interest Rate and on any Interest Rate
Adjustment Date for Bonds bearing interest in any other Adjustable Rate, in each
case at the redemption price of 100% of the principal amount redeemed plus
accrued interest thereon to the redemption date, and (ii) after the Fixed
Interest Rate Commencement Date and on or after the First Optional Redemption
Date, 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) 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:
<TABLE>
<CAPTION>
REDEMPTION DATE OPTIONAL REDEMPTION PRICE
--------------- -------------------------
<S> <C>
First Optional Redemption Date, through
the following last day of August 103%
First Anniversary of the First Optional
Redemption Date, through the following
last day of August 102%
Second Anniversary of the First Optional
Redemption Date, through the following
last day of August 101%
Third Anniversary of the First Optional
Redemption Date and thereafter 100%
</TABLE>
"First Optional Redemption Date" means the September 1 occurring in the
year which is a number of years after the Fixed Interest Rate Commencement Date
equal to the number of full years between the Fixed Interest Rate Commencement
Date and the maturity date of the Project Bonds, multiplied by 1/2 and rounded
up to the nearest whole number.
"Fixed Interest Rate Commencement Date" means the Interest Period Reset
Date from and after which the Project Bonds shall bear interest at the Fixed
Interest Rate, as that date
<PAGE> 115
shall be established as provided in the Indenture.
(c) EXTRAORDINARY OPTIONAL REDEMPTION. The Project Bonds are also
subject to redemption by the Issuer in the event of the exercise by the Borrower
of its option to direct that redemption upon occurrence of any of the events
described in Section 6.2 of the Agreement (generally, substantial damage to, or
destruction or condemnation of the Project or changes in law causing the
Agreement to become void, unenforceable or impossible of performance or the
imposition of unreasonable burdens or excessive liabilities with respect to the
Project or its operation), (a) at any time in whole, or (b) at any time in part
in the event of condemnation of part of the Project, as provided in Section 6.2
of the Agreement, in each case at a redemption price of 100% of the principal
amount redeemed, plus interest accrued to the redemption date.
If less than all Project Bonds are to be redeemed at one time, the
selection of Project Bonds, or portions thereof (in integral multiples of
$5,000, provided that the unredeemed portion of any Bond redeemed in part shall
be $100,000 or more) to be redeemed shall be made by lot by the Trustee. If
Project 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 Project 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 (a)
precedent to and in the issuing of the Project Bonds in order to make them
legal, valid and binding special obligations of the Issuer, and (b) precedent to
and in the execution and delivery of the Indenture and the Agreement; that
payment in full for the Project Bonds has been received; and that the Project
Bonds do not exceed or violate any constitutional or statutory limitation.
<PAGE> 116
IN WITNESS OF THE ABOVE, the Issuer has caused this Project Bond to be
executed in the name of the Issuer by the manual or facsimile signatures of the
Mayor and Clerk-Treasurer of the Issuer, as of the date shown above.
CITY OF WABASH, INDIANA
By:
-------------------------
Mayor
(SEAL)
ATTEST:
- ----------------------------------
Clerk-Treasurer
Registrable at: Payable by:
BANK ONE TRUST COMPANY, NA, BANK ONE TRUST COMPANY, NA,
Indianapolis, Indiana as Paying Agent
Indianapolis, Indiana
CERTIFICATE OF AUTHENTICATION
-----------------------------
This Project Bond is one of the Project Bonds described in the within
mentioned Indenture.
BANK ONE TRUST COMPANY, NA,
a national banking association,
as Trustee
(Indianapolis, Indiana)
By:
--------------------------------
<PAGE> 117
Its: Authorized Officer
- -------------------------------- ------------------------------
ASSIGNMENT
----------
For value received, the undersigned sells, assigns and transfers unto
____________________ _____________________________________________ the within
Project Bond and irrevocably constitutes and appoints __________________________
attorney to transfer that Project Bond on the books kept for registration
thereof, with full power of substitution in the premises.
Dated:____________________ ____________________________________________
Signature
Signature Guaranteed:
________________________________
SIGNATURE MUST BE GUARANTEED BY AN ELIGIBLE GUARANTOR INSTITUTION
PARTICIPATING IN A SECURITIES TRANSFER ASSOCIATION RECOGNIZED
SIGNATURE GUARANTEE PROGRAM.
NOTICE: The assignor's signature to this assignment must correspond with the
name as it appears upon the face of the within Project Bond in every particular,
without alteration or any change whatever.
NOTICE OF EXERCISE OF TENDER OPTION
INSTRUCTIONS TO SELL
To: Bank One Trust Company, NA
Corporate Trust Operations
P.O. Box 710184
Columbus, Ohio 43271-0184
Re: $2,700,000 City of Wabash, Indiana
Adjustable Rate Economic Development Revenue Refunding Bonds,
Series 1998 (Martin Yale Industries, Inc. Project)
Gentlemen:
The undersigned, as the Holder of the Bond annexed hereto ("Bond"),
hereby elects the option available to the undersigned pursuant to the Trust
Indenture relating to the above-captioned bond issue. In accordance with such
option, the undersigned hereby tenders:
<PAGE> 118
<TABLE>
<S> <C>
check the appropriate box: / / the entire Bond
/ / (increments of $100,000 or integral
multiples of $5,000 in excess thereof
- untendered portion must be at least
$100,000)
</TABLE>
for purchase on the first Bond Purchase Date (as defined in the Bond) after the
date hereof, pursuant to the referenced Trust 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 Trust 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:
_____________________________
SIGNATURE MUST BE GUARANTEED BY AN ELIGIBLE GUARANTOR INSTITUTION
PARTICIPATING IN A SECURITIES TRANSFER ASSOCIATION RECOGNIZED
SIGNATURE GUARANTEE PROGRAM.
NOTICE: To exercise the option available to the Holder pursuant to the
referenced Trust 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.
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM 3RD QUARTER
10-Q AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-26-1998
<PERIOD-START> DEC-28-1997
<PERIOD-END> OCT-03-1998
<CASH> 294
<SECURITIES> 0
<RECEIVABLES> 18,397
<ALLOWANCES> 936
<INVENTORY> 20,330
<CURRENT-ASSETS> 39,691
<PP&E> 35,684
<DEPRECIATION> 25,317
<TOTAL-ASSETS> 58,142
<CURRENT-LIABILITIES> 22,949
<BONDS> 6,900
6,283
0
<COMMON> 0
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 20,509
<SALES> 57,038
<TOTAL-REVENUES> 57,038
<CGS> 39,104
<TOTAL-COSTS> 11,704
<OTHER-EXPENSES> 49
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 851
<INCOME-PRETAX> 5,330
<INCOME-TAX> 2,335
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 2,995
<EPS-PRIMARY> .97
<EPS-DILUTED> .96
</TABLE>
