06-0501_MILLENNIUM HOUSING CORPORATION_Indenture of Trust40
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INDENTURE OF TRUST
by and between the
INDEPENDENT CITIES LEASE FINANCE AUTHORITY,
as Authority
and
UNION BANK OF CALIFORNIA, N.A.
as Trustee
Dated as of May 1, 2006
Relating to:
$29,660,000
Independent Cities Lease Finance Authority
Mobile Home Park Revenue Bonds
(San Juan Mobile Estates)
Series 2006A
and
$9,765,000
Independent Cities Lease Finance Authority
Mobile Home Park Subordinate Revenue Bonds
(San Juan Mobile Estates)
Series 2006B
and
$485,000
Independent Cities Lease Finance Authority
Mobile Home Park Subordinate Revenue Bonds
(San Juan Mobile Estates)
Taxable Series 2006C
TABLE OF CONTENTS
• ARTICLE I
DEFINITIONS AND STATUTORY AGENCY
Section1.1 Definitions.......................................................................................
ARTICLE II
AUTHORIZATION AND ISSUANCE OF BONDS
Page
3
Section 2.1 Authorization of Bonds........................................................................................ 16
Section 2.2 Conditions Precedent to the Issuance of the Bonds ............................................. 17
ARTICLE III
GENERAL TERMS AND PROVISIONS OF BONDS
Section 3.1
Medium of Payment; Form and Date...................................................................
18
Section 3.2
Execution and Authentication; Limited Obligation .............................................
19
Section 3.3
Registration, Transfer and Exchange of Bonds; Persons Deemed Owners .........
20
Section 3.4
Regulations With Respect to Exchanges and Transfers .......................................
20
Section 3.5
Record Date; Special Record Date .................................................. :....................
21
Section 3.6
Bonds Mutilated, Destroyed, Stolen or Lost ........................................................
21
Section 3.7
Temporary Bonds.................................................................................................
21
Section3.8
Cancellation.........................................................................................................
22
Section 3.9
Book -Entry System for the Bonds.......................................................................
22
ARTICLE IV
REDEMPTION OF BONDS
Section 4.1 Privilege of Redemption and Redemption Prices ................................................ 24
Section 4.2 Redemption at the Election or Direction of the Authority ................................... 33
Section 4.3 Redemption Other Than at the Authority's or Borrower's Election or
Direction........................................................................................................ 34
Section 4.4 Selection of Bonds to be Redeemed.................................................................... 34
Section 4.5 Notice of Redemption.......................................................................................... 34
Section 4.6 Payment of Redeemed Bonds.............................................................................. 35
Section 4.7 Redeemed Bonds as Satisfaction of Sinking Fund Installments .......................... 35
Section 4.8 Purchase of Bonds................................................................................................ 35
ARTICLE V
PLEDGES; ESTABLISHMENT OF FUNDS AND ACCOUNTS AND APPLICATIONS
THEREOF
Section5.1
Pledges.. ...............................................................................................................
36
Section5.2
Project Fund.........................................................................................................
36
Section 5.3
Establishment of Other Funds..............................................................................
37
Section 5.4
Deposit of Bond Proceeds and Other Moneys .....................................................
37
Section 5.5
Cost of Issuance Fund..........................................................................................
38
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1
ARTICLE VI
SECURITY FOR DEPOSITS AND INVESTMENT OF FUNDS
Section 6.1 Security for Deposits............................................................................................ 49
Section 6.2 Investment and Deposit of Funds......................................................................... 50
Section 6.3 Liability of the Fiduciaries for Investments......................................................... 52
• ' ARTICLE VII
COVENANTS OF THE AUTHORITY
Section 7.1
Section 7.2
Section 7.3
Section 7.4
Section 7.5
Section 7.6
Section 7.7
Section 7.8
Section 7.9
Section 7.10
Section 7.11
Section 7.12
Section 7.13
Section 7.14
Paymentof Bonds.........................................................................................
Offices for Payment and Registration of Bonds ...........................................
Further Assurances........................................................................................
Power to Issue Bonds and Make Pledges ......................................................
Useof Proceeds.............................................................................................
Feesand Charges..........................................................................................
Modification of Deed of Trust Terms...........................................................
Prepayments..................................................................................................
Disposition of Net Proceeds and Prepayments .............................................
Enforcement and Foreclosure of Deed of Trust ............................................
Accounts and Reports.....'..............................................................................
Creationof Liens...........................................................................................
TaxCovenants..............................................................................................
Arbitrage Covenants; Rebate Fund...............................................................
ARTICLE VIII
FIDUCIARIES
. Section 8.1 Trustee Acceptance of Duties .................................................
Section 8.2 Paying Agents; Appointment and Acceptance of Duties........
Section 8.3 Responsibilities of the Fiduciaries ..........................................
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Table of Contents
(cont' d)
Page
�.
Section 5.6
Deposits................................................................................................................
39
Section5.7
Revenue Fund......................................................................................................
39
Section 5.8
Series A Bonds Debt Service Fund......................................................................
41
Section 5.9
Series A Bonds Debt Service Reserve Fund ........................................................
42
Section 5.10
Series A Bonds Redemption Fund.......................................................................
43
Section5.11
Rebate Fund.........................................................................................................
44
Section 5.12
Administration Fund............................................................................................
44
Section 5.13
Repair and Replacement Fund.............................................................................
45
Section 5.14
Subordinate Bonds Debt Service Fund................................................................
45
Section 5.15
Subordinate Bonds Debt Service Reserve Fund ..................................................
47
Section 5.16
Subordinate Bonds Redemption Fund.................................................................
48
Section5.17
Surplus Fund........................................................................................................
48
Section 5.18
Rental Assistance Fund........................................................................................
49
Section 5.19
Operating Reserve Fund.......................................................................................
49
ARTICLE VI
SECURITY FOR DEPOSITS AND INVESTMENT OF FUNDS
Section 6.1 Security for Deposits............................................................................................ 49
Section 6.2 Investment and Deposit of Funds......................................................................... 50
Section 6.3 Liability of the Fiduciaries for Investments......................................................... 52
• ' ARTICLE VII
COVENANTS OF THE AUTHORITY
Section 7.1
Section 7.2
Section 7.3
Section 7.4
Section 7.5
Section 7.6
Section 7.7
Section 7.8
Section 7.9
Section 7.10
Section 7.11
Section 7.12
Section 7.13
Section 7.14
Paymentof Bonds.........................................................................................
Offices for Payment and Registration of Bonds ...........................................
Further Assurances........................................................................................
Power to Issue Bonds and Make Pledges ......................................................
Useof Proceeds.............................................................................................
Feesand Charges..........................................................................................
Modification of Deed of Trust Terms...........................................................
Prepayments..................................................................................................
Disposition of Net Proceeds and Prepayments .............................................
Enforcement and Foreclosure of Deed of Trust ............................................
Accounts and Reports.....'..............................................................................
Creationof Liens...........................................................................................
TaxCovenants..............................................................................................
Arbitrage Covenants; Rebate Fund...............................................................
ARTICLE VIII
FIDUCIARIES
. Section 8.1 Trustee Acceptance of Duties .................................................
Section 8.2 Paying Agents; Appointment and Acceptance of Duties........
Section 8.3 Responsibilities of the Fiduciaries ..........................................
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Section 8.4
Section 8.5
Section 8.6
Section 8.7
Section 8.8
Section 8.9
Section 8.10
Section 8.11
Section 8.12
Section 8.13
Table of Contents
(cont'd)
Page
Evidence on Which Fiduciaries May Act............................................................ 61
Compensation...................................................................................................... 62
Permitted Acts and Functions.............................................................................. 63
Replacementof Trustee....................................................................................... 63
Successor Trustee or Agent by Merger................................................................ 63
SeveralCapacities................................................................................................ 63
Resignation or Removal of Paying Agents and Appointment of Successors ...... 64
Co-Trustees.......................................................................................................... 64
ContinuingDisclosure......................................................................................... 65
Representations of Trustee in Connection With Bond Closing ........................... 65
ARTICLE IX
SUPPLEMENTAL INDENTURE
Section 9.1 Supplemental Indentures Effective Without Consent of Bondowners ................ 66
Section 9.2 Supplemental Indenture Effective with Consent of Bondowners ........................ 67
Section 9.3 General Provisions Relating to Indenture and Supplemental Indentures ............. 67
ARTICLE X
AMENDMENTS OF INDENTURE
Section 10.1
Powers of Amendment.........................................................................................
67
Section 10.2
Consent of Bondowners.......................................................................................
68
Section 10.3
Modifications by Unanimous Consent.................................................................
69
Section10.4
Mailing.................................................................................................................
69
Section 10.5
Exclusion of Bonds..............................................................................................69
Section 10.6
Notation on Bonds...............................................................................................
69
C
ARTICLE XI
DEFAULTS AND REMEDIES
Section 11.1
Events of Default.................................................................................................
70
Section11.2
Remedies..............................................................................................................
71
Section 11.3
Priority of Payments after Series A Bonds Event of Default ...............................
72
Section 11.4
Priority of Payments after Subordinate Bonds Event of Default .........................
73
Section 11.5
Termination of Proceedings.................................................................................74
Section 11.6
Bondowners' Direction of Proceedings...............................................................
74
Section 11.7
Limitations on Rights of Bondowners.................................................................
75
Section 11.8
Possession of Bonds by Trustee Not Required ....................................................
75
Section 11.9
Remedies Not Exclusive......................................................................................
76
Section 11.10
No Waiver of Default...........................................................................................
76
Section 11.11
Notice of Event of Default...................................................................................
76
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El
Table of Contents
(cont'd)
Page
ARTICLE XII
EXECUTION OF INSTRUMENTS BY BONDOWNERS AND PROOF OF OWNERSHIP OF
BONDS
Section 12.1 Evidence of Signatures of Bondowners and Ownership of Bonds ...................... 76
ARTICLE XIII
DEFEASANCE
Section 13.1 Defeasance........................................................................................................... 77
Section 13.2 Additional Defeasance Requirements.................................................................. 78
ARTICLE XIV
MISCELLANEOUS
Section 14.1
Preservation and Inspection of Documents..........................................................
79
Section 14.2
Parties in Interest..................................................................................................
79
Section 14.3
Limited Liability..................................................................................................
79
Section 14.4
No Recourse Under Indenture or on Bonds.........................................................
80
Section14.5
Severability..........................................................................................................
80
Section14.6
Headings..............................................................................................................
81
Section14.7
Conflict................................................................................................................
81
Section14.8
Notices.................................................................................................................
81
Section 14.9
All Obligations Due on Business Days................................................................
81
Section14.10
Governing Law....................................................................................................
81
Section 14.11
Execution in Counterparts....................................................................................
81
Exhibit A
Form of Series A Bond.......................................................................................
A-1
Exhibit B
Form of Series B Bond.........................................................................................B-1
Exhibit C
Form of Taxable Series C Bond...........................................................................0-1
R VPUB\PBAUM\709416.1
iv
INDENTURE OF TRUST
THIS INDENTURE OF TRUST, dated as ofMay 1, 2006, is by and between the Independent
Cities Lease Finance Authority, a joint powers authority organized and existing under the laws ofthe
State of California (the "Authority') and Union Bank of California, N.A., a national banking
association duly authorized to accept and execute trusts of the character herein set forth, as trustee
(the "Trustee").
RECITALS:
WHEREAS, the Authority is authorized pursuant to Chapter 8 of Part 5 of Division 31 of the
Health and Safety Code of the State of California (the "Act") to issue bonds for the purpose of
making a loan to a nonprofit organization exempt from federal income taxation under Section
501(c)(3) of the Internal Revenue Code of 1986, as amended (the "Code") for use by such
organization to finance the acquisition of, among other things, mobile home parks to provide housing
within the territorial jurisdiction of the Authority; and
WHEREAS, the Authority desires to make a loan (the "Loan") to Millennium Housing
Corporation, a California nonprofit public benefit corporation (the "Borrower"), to enable the
Borrower to finance the acquisition of the San Juan Mobile Estates mobile home park (the
"Project"), located in the City of San Juan Capistrano, California (the "City"); and
WHEREAS, the City is an associate member of the Authority and has authorized the
Authority's financing of the Project; and
WHEREAS, the Authority has expressly determined and hereby confirms that the issuance of
the Bonds (described below) and the making of the Loan will accomplish a valid public purpose of
the Authority by assisting persons of very low income in the City in obtaining decent, safe and
sanitary housing; and
WHEREAS, the Authority desires to issue, sell and deliver its Mobile Home Park Revenue
Bonds (San Juan Mobile Estates) Series 2006A in the initial principal amount of $29,660,000 (the
"Series A Bonds"); and its Mobile Home Park Subordinate Revenue Bonds (San Juan Mobile
Estates) Series 2006B in the initial principal amount of $9,765,000 (the "Series B Bonds") and its
Mobile Home Park Subordinate Revenue Bonds (San Juan Mobile Estates) Taxable Series 2006C in
the initial principal amount of $485,000 (the "Series C Bonds", and together with the Series B Bonds
referred to as the "Subordinate Bonds", and the Subordinate Bonds and the Series A Bonds referred
to herein as the "Bonds") in the respective forms hereinafter set forth to finance the acquisition of the
Project, to fund the Series A Bonds Debt Service Reserve Fund securing the Series A Bonds, to fund
the Subordinate Bonds Debt Service Fund securing the Subordinate Bonds, and to pay the costs of
issuing the Bonds, all under and in accordance with the Constitution and laws of the State of
California; and
WHEREAS, in order to implement the making of the Loan, the Authority has concurrently
herewith entered into the Loan Agreement with the Borrower and the Trustee pursuant to which the
Authority has agreed to make, and the Borrower has agreed to accept, a loan to enable the Borrower
to finance the Project; and
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WHEREAS, the execution and delivery of this Indenture and the issuance and sale of the
Bonds have been in all respects duly and validly authorized by a written resolution duly adopted by
the Authority; and
WHEREAS, the Bonds, the Trustee's certificate of authentication to be endorsed thereon and
the form of assignment to be endorsed on such Bonds are to be in substantially the forms attached
hereto as Exhibits A and B, as applicable, with necessary and appropriate variations, omissions and
insertions as permitted or required by this Indenture; and
WHEREAS, the Authority has determined that the execution and delivery of the Bonds and
of this Indenture have been duly authorized and all things necessary to make the Bonds, when
executed by the Authority and authenticated by the Trustee, valid and binding limited obligations of
the Authority and to make this Indenture a valid and binding instrument for the security of the
Bonds, have been done.
NOW, THEREFORE, THIS INDENTURE OF TRUST WITNESSETH:
That the Authority, in consideration of the premises, the acceptance by the Trustee of the
trusts hereby created, the purchase and acceptance of the Bonds by the purchasers thereof, and of
other good and valuable consideration the receipt and sufficiency of which is hereby acknowledged,
and in order to secure the payment of the principal of, premium, if any, and interest on all Bonds
Outstanding hereunder from time to time, according to their tenor and effect, and to secure the
observance and performance by the Authority of all the covenants expressed or implied herein and in
the Bonds, does hereby convey, pledge and assign unto the Trustee, and unto its successors and
assigns forever and does hereby grant to it and them a security interest, together with all right, title
and interest of the Authority, in:
GRANTING CLAUSE FIRST
For the benefit of the Series A Bonds, the Series A Bonds Trust Estate and for the benefit of
the Subordinate Bonds, the Subordinate Bonds Trust Estate (as such terms are defined herein), if any,
together with all right, title and interest of the Authority therein including, but without limiting the
generality of the foregoing, the present and continuing right to receive, receipt for, collect or make
claim for any of the moneys, income, revenues, issues, profits and other amounts payable or
receivable thereunder, to bring actions and proceedings thereunder or for the enforcement thereof,
and to do any and all things which the Authority or any other person is or may become entitled to do
under said documents;
GRANTING CLAUSE SECOND
Any and all other property of each name and nature from time to time hereafter by delivery or
by writing of any kind pledged or assigned as and for additional security for the Series A Bonds and
the Subordinate Bonds, hereunder, by anyone, to the Trustee, which is hereby authorized to receive
any and all such property at any and all times and to hold and apply the same subject to the terms
hereof. _
TO HAVE AND TO HOLD all and singular the Trust Estate, whether now owned or
hereafter acquired, unto the Trustee and its respective successors in said trusts and assigns forever.
R V P U BAF BAUNI V 09416.1
IN TRUST NEVERTHELESS, upon the terms and trusts herein set forth for the equal and
proportionate benefit, security and protection of all present and future Owners of the Series A Bonds,
as to the Series A Bonds Trust Estate, from time to time issued under and secured by this Indenture
without privilege, priority or distinction as to the lien or otherwise of any of the Series A Bonds over
any of the other Series A Bonds.
IN TRUST NEVERTHELESS, upon the terns and trusts herein set forth for the equal and
proportionate benefit, security and protection of all present and future Owners of the Subordinate
Bonds, as to the Subordinate Bonds Trust Estate, from time to time issued under and secured by this
Indenture without privilege, priority or distinction as to the lien or otherwise of any of the
Subordinate Bonds over any of the other Subordinate Bonds.
PROVIDED, HOWEVER, that if the Authority, its successors or assigns, shall well and truly
pay, or cause to be paid, the principal of the Bonds and the interest and premium, if any, due or to
become due thereon, at the times and in the manner mentioned in the Bonds, according to the true
intent and meaning thereof, and shall cause the payments to be made into the Funds and Accounts as
required hereunder or shall provide, as permitted by Article XIII hereof, for the generality of the
foregoing, the present and continuing right to receive, receipt for, collect or make claim for any of
the moneys, income, revenues, issues, profits and other amounts payable or receivable thereunder, to
bring actions and proceedings thereunder or for the enforcement thereof, and to do any and all things
which the Authority or any other person is or may become entitled to do under said documents;
THIS INDENTURE OF TRUST FURTHER WITNESSETH, and it is expressly declared,
that all Bonds issued and secured hereunder are to be issued, authenticated and delivered and the
Revenues and the Residual Revenues hereby assigned and pledged are to be dealt with and disposed
of under, upon and subject to the terms, conditions, stipulations, covenants, agreements, trusts, uses
and purposes as hereinafter expressed, and the Authority has agreed and covenanted, and does hereby
agree and covenant, with the Trustee and with the respective Owners from time to time of the Bonds,
as follows:
ARTICLE I
DEFINITIONS AND STATUTORY AGENCY
Section 1.1 Definitions. The following terms shall, for all purposes of the Indenture, have
the following meanings. In addition, the capitalized terms used but not defined in this Indenture
shall have the meanings specified in the Loan Agreement and the Regulatory Agreement, as they
may from time to time be supplemented or amended as provided herein.
"Account" shall mean an Account created and established by Article V of this Indenture.
"Accountant's Certificate" shall mean a certificate or opinion signed by an independent
certified public accountant of recognized national standing or a firm of accountants of recognized
national standing, selected by the Authority upon consultation with the Borrower, who may be the
accountant or firm of accountants who regularly audit the books of the Authority.
"Act" shall mean Chapter 8 of Part 5 of Division 31 of the Health and Safety Code of the
State of California (commencing with Section 52100), as amended and supplemented from time to
time.
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"Administration Agreement" shall mean the Administration and Oversight Agreement, dated
as of May 1, 2006, among the Authority, the City, the Borrower and the Oversight Agent.
"Administration Fund" shall mean the Administration Fund created and established by
Section 5.3.
"Authority" shall mean the Independent Cities Lease Finance Authority, a joint powers
authority organized and existing under the laws of the State.
"Authority Annual Fee" shall have the meaning set forth in the Regulatory Agreement.
"Authorized Denominations" shall mean $5,000 or any integral multiple thereof with respect
to the Bonds.
"Authorized Officer" shall mean the Program Administrator or any person designated in
writing by the Program Administrator of the Authority to act as an Authorized Officer hereunder.
"Bond" or "Bonds" shall mean any bond or bonds including the Series A Bonds and the
Subordinate Bonds, authorized and issued pursuant to this Indenture.
"Bond Counsel" shall mean (i) Best Best & Krieger LLP, or (ii) any nationally recognized
law firm specializing in the area of tax-exempt municipal finance acceptable to the Authority.
"Bondowner" or "Owner" or "Owner of Bonds" or any similar term (when used with respect
to Bonds) shall mean the registered owner of any Outstanding Bond or Bonds.
"Bond Register" shall mean the registration books of the Trustee with respect to the Bonds.
"Bond Year" shall mean a twelve-month period ending on May 15, except that the first Bond
Year shall begin on the date on which the Bonds are initially delivered and end on the next
succeeding May 15.
"Borrower" shall mean Millennium Housing Corporation, a California nonprofit public
benefit corporation, and permitted successors and assigns.
"Borrower Administration Fee" shall mean an amount equal to $10,920 per month, such
amount to be increased at the start of Borrower's fiscal year, commencing July 1, 2007, to reflect
100% of any increase in the Consumer Price Index All Urban Consumers for the California CMSA
in which the Project is located (base year 1982-1984=100), published by the United States
Department of Labor, Bureau of Labor Statistics ("BLS"). If the base is changed, the CPI used shall
be converted according to the conversion factor provided by the BLS.
"Borrower Representative" shall mean the person or persons at the time designated by the
Borrower to act on the behalf of the Borrower by written certificate furnished to the Authority
Oversight Agent, Program Administrator and the Trustee containing the specimen signatures of such
person or persons and signed by the Borrower Representative. Such certificate may designate an
alternate or alternates.
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"Business Day" shall mean a day, other than a Saturday, Sunday, legal holiday or day on
which the New York Stock Exchange is closed, on which banking institutions are not closed in the
le,.,. State of California, or in any state in which the Principal Office of the Trustee is located.
"City" shall mean the City of San Juan Capistrano, California.
"Closing Date" shall mean June 1, 2006, being the date when the Bonds were delivered to the
Original Purchaser.
"Code" shall mean the Internal Revenue Code of 1986, as amended, and the regulations in
effect thereunder.
"Continuing Disclosure Agreement" shall mean that certain Continuing Disclosure
Agreement between the Borrower and the Dissemination Agent named therein dated the Closing
Date as originally executed and as it may be amended from time to time in accordance with the terms
thereof.
"Cost of Issuance" shall mean items of expense payable or reimbursable directly or indirectly
by the Authority and related to the authorization, issuance and sale of Bonds, which expenses shall
include, but not be limited to, printing costs, costs of reproducing documents, filing and recording
fees, initial fees and charges of the Trustee and other Fiduciaries, legal fees and disbursements,
professional consultants fees and disbursements, reimbursements to the Authority and its agents for
administrative, travel and overhead expenses, bond discount, underwriting fees and other financing
costs (if not otherwise provided for), fees and charges for execution, transportation and safekeeping
of Bonds and all other costs, charges, fees and expenses in connection with the foregoing.
"Cost of Issuance Fund" shall mean the Cost of Issuance Fund established pursuant to
Section 5.3.
"Cost of Project" shall mean, to the extent authorized by the Code, the Regulations and the
Act, any and all costs incurred by the Borrower with respect to the acquisition of the Project,
including, without limitation, costs for the acquisition of property and all costs of financing,
including, without limitation, the cost of consultant, accounting and legal services, other expenses
necessary or incident to determining the feasibility of the Project, contractors' and developers'
overhead and supervisors' fees and costs directly allocable to the Project, administrative and other
expenses necessary or incident to the Project and the financing thereof.
"Coverage Ratio" shall mean, for any period of time, (i) with respect to the Series A Bonds,
the ratio derived by dividing the sum of the Net Operating Revenues received by the Borrower plus
the earnings accruing to the Series A Bonds Debt Service Reserve Fund by the annual debt service
payable on the Series A Bonds in the applicable fiscal year; and (ii) with respect to the Subordinate
Bonds, the ratio derived by dividing the Net Operating Revenues received by the Borrower (after
provision for Series A Bonds debt service) plus the earnings accruing to the Series A Bonds Debt
Service Reserve Fund and the Subordinate Bonds Debt Service Reserve Fund, by the annual debt
service payable on the Subordinate Bonds plus the fees of the Trustee and the fees of the Oversight
• Agent in the applicable fiscal year; and (iii) with respect to the Series A Bonds and the Subordinate
Bonds, the ratio derived by dividing the Net Operating Revenues received by the Borrower plus the
earnings accruing to the Series A Bonds Debt Service Reserve Fund and the Subordinate Bonds Debt
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Service Reserve Fund by the annual debt service payable on the Series A Bond and the Subordinate
Bonds in the applicable fiscal year.
"Coverage Requirement Certificate" shall have the meaning set forth in the Loan Agreement.
"Counsel's Opinion" shall mean an opinion signed by an attorney or firm of attorneys
acceptable to the Authority. Any such attorney may be in the regular employment of the Authority.
"Debt Service Requirement" shall mean, as of any date of calculation with respect to the
Bonds, the sum of (i) all interest due or to become due on such date on all Outstanding Series A
Bonds and Subordinate Bonds plus (ii) all Principal Installments due or to become due on such date
on all Outstanding Series A Bonds and Subordinate Bonds or, if no Principal Installment is due and
payable on such date on any Outstanding Series A Bonds and Subordinate Bonds, one-half of the
Principal Installments, if any, due and payable on all Outstanding Series A Bonds and Subordinate
Bonds on the next succeeding Interest Payment Date.
"Deed of Trust" shall mean the Deed of Trust with Absolute Assignment of Leases and
Rents, Security Agreement and Fixture Filing, executed as of the Closing Date, by the Borrower,
which secures the Borrower's obligation to repay the Loan and constitutes a lien on real property.
"Depository" shall mean (a) initially, DTC, and (b) any other Securities Depository acting as
Depository under this Indenture.
"Depository System Participant" shall mean any participant in the Depository's book -entry
system.
"DTC" shall mean The Depository Trust Company, New York, New York, and its successors
and assigns.
"Event of Default" shall mean a Series A Bonds Event of Default or a Subordinate Bonds
Event of Default, as set forth in Section 11.1.
"Fees and Charges" shall mean all fees and charges authorized to be received by the
Authority from the Borrower pursuant to the terms and provisions of the Loan Agreement for the
purpose of paying the Authority Annual Fee and the fees and expense of the Fiduciaries.
"Fiduciary" shall mean the Trustee, each Paying Agent, the Rebate Analyst, the Program
Administrator and the Oversight Agent.
"Fiscal Year" or "fiscal year" shall mean (a) with respect to the Authority, each twelve-month
period ending June 30 or such other fiscal year of the Authority which maybe adopted and (b) with
respect to the Borrower, each twelve-month period ending June 30 or such other fiscal year of the
Borrower which may be adopted.
"Fund" shall mean a fund created and established by Article 5 hereof.
"Generally Accepted Accounting Principles" or "GAAP" shall mean the uniform accounting
and reporting procedures set forth in publications of the American Institute of Certified Public
Accountants or its successor and the Governmental Accounting Standards Board or its successor, or
R V P UB\F BAUM\709416.1
by any other generally accepted authority on such procedures, and includes, as applicable, the
standards set forth by the Financial Accounting Standards Board or its successor.
"Government Obligations" shall mean bonds or other obligations which as to principal and
interest constitute direct obligations of the United States of America and which are not subject to
redemption prior to their maturity at the option of any person other than the holder thereof.
"Improvements" shall mean, as of the Closing Date or at any time thereafter, any structures
(other than mobile homes not owned by the Borrower), site improvements, facilities and fixtures
located on the Property.
"Indenture" shall mean this Indenture of Trust as from time to time amended or supplemented
by Supplemental Indentures in accordance with the terms and provisions hereof.
"Information Services" shall mean Financial Information, Incorporated's "Daily Called Bond
Service," 30 Montgomery Street, I& Floor, Jersey City, New Jersey 07302, Attention: Editor,
MergenVWS," 5250 77 Center Drive, Suite 150, Charlotte, NC 28217, Attention: Called Bonds
Department; and Kenny S&P, 55 Water Street, 451i Floor, New York, New York 10041, Attention:
Notification Department; or in accordance with then -current guidelines of the Securities and
Exchange Commission, such other services providing information with respect to called bonds, or no
such services, as the Authority may indicate in a certificate of the Authority delivered to the Trustee.
"Interest Payment Date" shall mean May 15 and November 15 of each year, commencing
• November 15, 2006, on which interest on any Bonds is due and payable.
"Loan" shall mean the loan made by the Authority, pursuant to the Loan Agreement, to the
Borrower to finance the Project.
"Loan Agreement" shall mean the Loan Agreement dated as of May 1, 2006, by and among
the Borrower, the Authority and the Trustee.
"Loan Documents" shall mean the Loan Agreement, the Note and the Deed of Trust, as each
item may be amended and supplemented from time to time.
"Maximum Annual Debt Service" shall mean at any point in time, with respect to the
applicable Series A Bonds or Subordinate Bonds then Outstanding, the maximum amount of
principal (assuming sinking fund payments) and interest becoming due in the then current or any
future Bond Year on such Series A Bonds or Subordinate Bonds, respectively.
"Net Operating Revenues" shall have the meaning attributable to such term in the Loan
Agreement.
"Net Proceeds" shall mean any proceeds resulting from the Authority's enforcement of its
rights under the Deed of Trust, insurance or condemnation proceeds paid with respect to the Project
which are available after payment therefrom of all expenses incurred in the collection thereof.
• "Note" shall mean the promissory note executed by the Borrower in accordance with the
Loan Agreement.
RVPUB\FBAUW709416.1
"Officer's Certificate" shall mean a certificate executed by an Authorized Officer.
"Operating Reserve Fund" shall mean the Operating Reserve Fund established and created by
Section 5.3.
"Operating Revenues" shall have the meaning attributable to such term in the Loan
Agreement.
"Original Purchaser" shall mean Kinsell, Newcomb & De Dios, Inc.
"Outstanding" when used with reference to an applicable series of Bonds, shall mean, as of
any date, Bonds of such series theretofore or then being delivered under the provisions of this
Indenture, except: (i) any Bonds of such series cancelled by the Trustee or any Paying Agent at or
prior to such date, (ii) Bonds of such series for the payment or redemption of which moneys equal to
the Principal Amount or Redemption Price thereof, as the case may be, with interest to the date of
maturity or redemption date, shall be held by the Trustee or the Paying Agent in trust (whether at or
prior to the date of maturity or redemption date), provided that if such Bonds are to be redeemed,
notice of such redemption shall have been given as in Article IV provided or provision satisfactory to
the Trustee shall have been made for the giving of such notice, (iii) Bonds of such series in lieu of or
in substitution for which other Bonds shall have been delivered pursuant to Article III or Section 4.6,
and (iv) Bonds deemed to have been paid as provided in Section 13.1.
"Oversight Agent" shall mean Wolf & Company hic., and any successor thereto appointed by
the Authority, which entity shall act as the initial Oversight Agent under the Administration
Agreement.
"Oversight Agent Fee" shall mean an amount equal to $6,000 per year.
"Participants" shall mean those broker-dealers, banks and other financial institutions from
time to time for which DTC holds Bonds as securities depository.
"Participating Underwriter" shall have the meaning ascribed thereto in the Continuing
Disclosure Agreement.
"Paying Agent" shall mean the Trustee, acting as paying agent, or any other bank, trust
company or national banking association designated or appointed pursuant to Sections 7.2 and 8.2 to
act as a paying agent for the Bonds, and each successor or successors and any other bank, trust
company or national banking association at any time substituted in its place pursuant to this
hidenture.
"Permitted Encumbrances" shall mean, as of any particular time: (i) liens for general ad
valorem taxes and assessments, if any, not then delinquent;(ii) the Regulatory Agreement; (iii) the
Deed of Trust; (iv) the Supplemental Regulatory Agreement; (v) any right or claim of any mechanic,
laborer, materialman, supplier or vendor filed or perfected in the manner prescribed by law after the
Closing Date; (vi) easements, rights of way, mineral rights, drilling rights and other rights,
reservations, covenants, conditions or restrictions which exist of record as of the Closing Date and
which, in the opinion of the Oversight Agent, will not materially impair the use of the Project as
contemplated in the Regulatory Agreement and the Supplemental Regulatory Agreement; and
R V PUB\FBAUM\709416.1
.:S (vii) easements, rights of way, mineral rights, drilling rights and other rights, reservations, covenants,
conditions or restrictions established following the date of recordation of the Deed of Trust and to
which the Authority and the Trustee consent in writing.
"Pledged Revenues" shall mean the Revenues but excluding therefrom, amounts on deposit
in the Repair and Replacement Fund, the Administration Fund, the Rebate Fund and the Rental
Assistance Fund.
"Prepayment" shall mean any moneys received or recovered by the Authority representing
any voluntary payment of principal of or interest (including any penalty, fee, premium, or other
additional charge for Prepayment which may be provided by the terms of the Deed of Trust) on the
Loan prior to the scheduled payments of principal and interest called for by such Loan.
"Principal Amount" shall mean, with respect to any Bond and at any date of computation, the
stated principal amount thereof.
"Principal Installment shall mean, as of any date of computation, the amount payable in any
Bond Year on account of: (i) the Principal Amount of Bonds of a particular series maturing in such
Bond Year net of the aggregate of Sinking Fund Installments, if any, established and paid for in the
prior Bond Years with respect to the Bonds of such series; plus (ii) the amount of any Sinking Fund
Installments due in such Bond Year with respect to Bonds of such series.
"Principal Office" shall mean with respect to the Trustee, its corporate trust office in San
• Francisco, California, provided that for purposes of exchange, transfer, redemption, surrender or
payment of Bonds, such term shall mean the corporate trust office of the Trustee in Los Angeles,
California, or such other office hereafter so designated by the Trustee.
"Principal Payment Date" shall mean May 15 and November 15 in each year, commencing
November 15, 2006.
"Project" shall consist of the Property and the Improvements.
"Project Fund" shall mean the Project Fund established pursuant to Section 5.2 hereunder and
administered under and pursuant to the Loan Agreement.
"Property" shall mean the real property commonly known as the San Juan Mobile Estates
mobile home park located in the City of San Juan Capistrano, California, all as more particularly
described in the Regulatory Agreement.
"Qualified Investments" shall mean and include any of the following (including any funds
comprised of the following, which may be funds maintained or managed by the Trustee and its
affiliates):
(a) Cash deposits (insured at all times by the Federal Deposit Insurance
Corporation or otherwise collateralized with obligations described in the next paragraph).
. (b) Direct obligations of (including obligations issued or held in book entry form
on the books of the Department of Treasury) the United States of America. hi the event these
securities are used for defeasance, they shall be non -callable and non -prepayable.
R V PUB\FBAUM\709416.1
(c) Obligations of the following federal agencies so long as such obligations are
backed by the full faith and credit of the United States of America:
(i) U.S. Export -Import Bank (Eximbank).
(ii) Rural Economic Community Development Administration.
(iii) Federal Financing Bank.
(iv) General Services Administration.
(v) U.S. Maritime Administration.
(vi) U.S. Department of Housing and Urban Development (PHAs).
(vii) Small Business Administration.
(viii) Government National Mortgage Association (GNMA).
(ix) Federal Housing Administration.
(x) Farm Credit System Financial Assistance Corporation.
(d) Direct obligations of any of the following federal agencies which obligations
are not fully guaranteed by the full faith and credit of the United States of America:
(i) Senior debt obligations rated in the highest long-term rating category
by at least two nationally recognized rating agencies issued by the Federal National
Mortgage Association (FNMA) or Federal Home Loan Mortgage Corporation
(FHLMC).
(ii) Senior debt obligations of the Federal Home Loan Bank System.
(iii) Senior debt obligations of other Government Sponsored Agencies.
(e) U.S. dollar denominated deposit accounts, federal funds and bankers'
acceptances with domestic commercial banks which either (i) have a rating on their
short-term certificates of deposit on the date of purchase in the highest short-term rating
category of at least two nationally recognized rating agencies, (ii) are insured at all times by
the Federal Deposit Insurance Corporation, or (iii) are collateralized with direct obligations
of the United States of America at 102% valued daily. All such certificates must mature no
more than 360 days after the date of purchase. (Ratings on holding companies are not
considered as the rating of the bank).
(f) Commercial paper which is rated at the time of purchase in the highest
short-term rating category of at least two nationally recognized rating agencies and which
matures not more than 270 days after the date of purchase.
(g) Investments in (i) money market funds rated in the highest short-term rating
category of at least one nationally recognized rating agencies (including any such funds for
which the Trustee or an affiliate may be acting as an investment advisor or providing other
services) and (ii) public sector investment pools operated pursuant to SEC Rule 2a-7 in
which the issuer's deposit shall not exceed 5% of the aggregate pool balance at any time and
such pool is rated in one of the two highest short-term rating categories of at least two
nationally recognized rating agencies.
(h) Pre -refunded municipal obligations defined as follows: Any bonds or other
obligations of any state of the United States of America or of any agency, instrumentality or
local governmental unit of any such state which are not callable at the option of the obligor
RVPUB\FBAUW709416. 1 10
prior to maturity or as to which irrevocable instructions have been given by the obligor to call
on the date specified in the notice; and,
(i) which are rated, based on an irrevocable escrow account or fund (the
"escrow"), in the highest long-term rating category of at least two nationally
recognized rating agencies; or
(ii) (A) which are fully secured as to principal and interest and
redemption premium, if any, by an escrow consisting only of cash or direct
obligations of the United States of America, which escrow may be applied only to the
payment of such principal of and interest and redemption premium, if any, on such
bonds or other obligations on the maturity date or dates thereof or the specified
redemption date or dates pursuant to such irrevocable instructions, as appropriate,
and
(B) which escrow is sufficient, as verified by a nationally recognized
independent certified public accountant, to pay principal of and interest and
redemption premium, if any, on the bonds or other obligations described in
this paragraph on the maturity date or dates specified in the irrevocable
instructions referred to above, as appropriate.
(i) General obligations of states with a short-term rating in one of the two highest
rating categories and a long-term rating in one of the two highest rating categories of at least
? two nationally recognized rating agencies. In the event such obligations are variable rate
obligations, the interest rate on such obligations must be reset not less frequently than
annually.
0) Investment agreements with a domestic or foreign bank or corporation or
insurance company the long-term debt of which, or claims paying ability, or, in the case of a
guaranteed corporation the long-term debt, or, in the case of monoline financial guaranty
insurance company, claims paying ability, of the guarantor is rated at least "A" by S&P.
(k) Repurchase agreements with financial institutions, banks or broker dealers the
long-term debt of which, or, in the case of a guaranteed corporation the long-term debt, or, in
the case of a monoline financial guaranty insurance company, claims paying ability, of the
guarantor is rated at least "A" by S&P; provided, that (a) the over -collateralization is at least
one hundred two percent (102%), computed weekly, consisting of such securities as
described in this section, items (a) through (d); (b) a third -party custodian, the Trustee or the
Federal Reserve Bank shall have possession of such obligations; (c) the Trustee shall have
perfected a first priority security interest in such obligations; and (d) failure to maintain the
requisite collateral percentage will require the Trustee to liquidate the collateral.
(1) Forward delivery or forward purchase agreements, provided by financial
institutions, banks or broker dealers the long-term debt of which, or, in the case of a
guaranteed corporation the long-term debt, or, in the case of a monoline financial guaranty
insurance company, claims paying ability, of the guarantor is rated at least "A" by S&P, with
underlying securities of the types outlined in (a), (b), (c), (d0 and (f) above.
RVPUB\FBAUM\709416.1 11
"Rating Agencies" shall mean any of Fitch, Inc., Standard & Poor's Ratings Services, a
division of McGraw-Hill Companies, Inc. or Moody's Investors Service, Inc., and such others as may
be designated by the Authority from time to time.
"Rebatable Arbitrage" shall mean the amount (determinable as of the last day of each fifth
Bond Year and upon retirement of the last Bond Outstanding) of arbitrage profits payable to the
United States at all times and in the amounts specified in Section 148(f) of the Code and any
applicable Regulations.
"Rebate Analyst" shall mean the entity engaged by the Borrower or the Authority to compute
the Rebatable Arbitrage annually pursuant to Section 7.14 hereof.
"Rebate Fund" shall mean the Rebate Fund created and established by Section 5.3.
"Rebate Regulations" shall mean those final, temporary, and proposed Treasury Regulations
promulgated under Section 148(f) of the Code.
"Record Date" shall have the meaning set forth in Section 3.5 hereof.
"Redemption Price" shall have the meaning attributable to such term in Article N of this
Indenture.
"Regulations" shall mean the Income Tax Regulations promulgated or proposed under the
Code by the Department of the Treasury, as the same may hereafter be amended, including
regulations promulgated by the Department ofthe Treasury to implement the requirements of Section
148 of the Code.
"Regulatory Agreement" shall mean the Regulatory Agreement and Declaration of
Restrictive Covenants, dated as of May 1, 2006, by and among the Authority, the Trustee and the
Borrower.
"Repair and Replacement Fund" shall mean the Repair and Replacement Fund established
pursuant to Section 5.3 hereunder.
"Rental Assistance Fund" shall mean the Rental Assistance Fund created and established by
Section 5.3.
"Representation Letter" shall mean the representation letter from the Authority to DTC.
"Required Rebate Deposit" shall mean an amount determinable as of the end of each fifth
Bond Year and as of the date of retirement of the last Bond, which when added to amounts then on
deposit in the Rebate Fund, if any, equals the aggregate amount of Rebatable Arbitrage for the Bonds
less the amount of Rebatable Arbitrage theretofore paid to the United States with respect to the
Bonds, if any.
"Revenue Fund" shall mean the Revenue Fund created and established by Section 5.3
"Revenues" shall mean (i) Operating Revenues; (ii) Prepayments; (iii) the proceeds of any
insurance, including the proceeds of any self-insurance covering the loss relating to the Project;
RVPUB\FBAUM\709416.1 12
provided, however, that the Net Proceeds of any public liability insurance, casualty insurance or title
insurance required to be maintained pursuant to the Loan Agreement shall be applied as specified in
the Loan Agreement and this Indenture; (iv) all amounts on hand from time to time in the funds and
accounts established by the Trustee under this Indenture; (v) all proceeds of rental interruption
insurance policies, if any, carried with respect to the Project pursuant to the Loan Agreement; (vi)
any proceeds derived from the exercise of remedies under the Deed of Trust; and (vii) any additional
property that may from time to time, by delivery or by writing of any kind, be subjected to the lien of
this Indenture by the Authority or by anyone on its behalf, subject only to the provisions of the
Indenture.
"S&P" shall mean Standard & Poor's Rating Service, a division ofMcGraw-Hill Companies,
Inc.
"Securities Depositories" shall mean The Depository Trust Company, 711 Stewart Avenue,
Garden City, New York 11530, Fax -(516) 227-4039 or 4190; Midwest Securities Trust Company,
Capital Structures -Call Notification, 440 South LaSalle Street, Chicago, Illinois 60605, Fax -(312)
663-2343; Philadelphia Depository Trust Company, Reorganization Division, 1900 Market Street,
Philadelphia, Pennsylvania 19103, Attention: Bond Department, Fax -(215) 496-5058; and, in
accordance with then current guidelines of the Securities and Exchange Commission, such other
addresses and/or such other securities depositories as the Authority may designate in a written
request of the Authority delivered to the Trustee.
"Serial Bonds" shall mean all Bonds not constituting Term Bonds.
"Series A Bonds" shall mean the Independent Cities Lease Finance Authority Mobile Home
Park Revenue Bonds (San Juan Mobile Estates) Series 2006A, originally issued in the principal
amount of $29,660,000.
"Series A Bonds Debt Service Fund" shall mean the Series A Bonds Debt Service Fund
created and established by Section 5.3.
"Series A Bonds Debt Service Reserve Fund" shall mean the Series A Bonds Debt Service
Reserve Fund created and established by Section 5.3.
"Series A Bonds Debt Service Reserve Fund Requirement" shall mean, as of any date of
determination, an amount equal to the least of: (a) Maximum Annual Debt Service with respect to
the Series A Bonds, (b) ten percent (10%) of the initial principal amount of the Series A Bonds, or
(c) one hundred twenty-five percent (125%) of the average annual debt service on the Series A
Bonds in each remaining Bond Year. As of the Closing Date, the Series A Bonds Debt Service
Reserve Fund Requirement is $1,812,420.
"Series A Bonds Event of Default" shall have the meaning set forth in Section 11.1.
"Series A Bonds Redemption Fund" shall mean the Series A Bonds Redemption Fund
created and established by Section 5.3.
0 "Series A Bonds Trust Estate" shall mean all proceeds, Funds, Accounts, Revenues,
Prepayments, the Loan, the Loan Agreement (other than the rights of the Authority under Sections
RVPUB\FBAUM\709416.1 13
6.6, 6.8 and 7.4 thereof, which are reserved by the Authority asset forth in Section 5.1(c)), the Deed
of Trust, rights, interests, collections, and other property pledged to the payment of any Series A
Bonds pursuant to Section 5.1(a) hereof and in the granting clauses hereof.
"Series B Bonds" shall mean the Independent Cities Lease Finance Authority Mobilchome
Park Subordinate Revenue Bonds (San Juan Mobile Estates) Series 2006B, issued in the principal
amount of $9,765,000.
"Series B Reserve Account" means the account by that name created in the Subordinate
Bonds Debt Service Reserve Fund pursuant to Section 5.3.
"Series C Bonds" shall mean the Independent Cities Lease Finance Authority Mobilehome
Park Subordinate Revenue Bonds (San Juan Mobile Estates) Taxable Series 2006C issued in the
principal amount of $485,000.
"Series C Reserve Account" means the account by the name create in the Subordinate Bonds
Debt Service Reserve Fund pursuant to Section 5.3.
"Sinking Fund histalhnent" shall mean the amount required to be applied by the Authority to
the payment of the principal portion of the Redemption Price of Term Bonds (other than at the option
or election of the Authority) on any one date as specified herein.
"State" shall mean the State of California.
"Subordinate Bonds" shall mean the Series B Bonds and the Series C Bonds, all ofwhich are
equally secured and repayable from the Subordinate Bonds Trust Estate.
"Subordinate Bonds Debt Service Reserve Fund" shall mean the Subordinate Bonds Debt
Service Reserve Fund created and established in Section 5.3 within which Fund, there shall be
created separate subaccounts funded with proceeds of the Series B Bonds and the Series C Bonds,
being the "Series B Reserve Account" and the "Series C Reserve Account.
"Subordinate Bonds Debt Service Reserve Fund Requirement" shall mean, as of any date of
determination, an amount equal to the least of: (a) Maximum Annual Debt Service with respect to
the Subordinate Bonds, (b) ten percent (101/6) of the initial principal amount of the Subordinate
Bonds, or (c) one hundred twenty-five percent (125%) of the average annual debt service on the
Subordinate Bonds in each remaining Bond Year. As of the Closing Date, the Subordinate Bonds
Debt Service Reserve Fund Requirement is $717,687.50.
"Subordinate Bonds Debt Service Fund" shall mean the Subordinate Bonds Debt Service
Fund created and established by Section 5.3.
"Subordinate Bonds Event of Default" shall have the meaning set forth in Section 11.1.
"Subordinate Bonds Redemption Fund" shall mean the Subordinate Bonds Redemption Fund
created and established by Section 5.3.
"Subordinate Bonds Trust Estate" shall mean all proceeds, the Funds and Accounts created or
established pursuant to this Indenture for the benefit of the Subordinate Bonds, Subordinate Residual
RVPUB\PBAUM\709416.1 14
Revenues, Subordinate Residual Net Proceeds, Subordinate Residual Prepayments, rights, interests,
collections, and other property pledged to the payment of any Subordinate Bond pursuant to Section
5.1(b) -A hereof and in the granting clauses hereof; expressly excluding, however, the rights reserved
to the Authority under Section 5.1(c).
"Subordinate Residual Net Proceeds" shall mean, on and after the date on which the Series A
Bonds are no longer Outstanding, all Net Proceeds that would have been available for the redemption
of Series A Bonds.
"Subordinate Residual Prepayments" shall mean, on and after the date on which the Series A
Bonds are no longer Outstanding; all Prepayments which would have been available for the
redemption of Series A Bonds.
"Subordinate Residual Revenues" shall mean (i) so long as the Series A Bonds shall remain
Outstanding, such Pledged Revenues as are deposited in the Subordinate Bonds Debt Service Fund;
and (ii) on and after the date the Series A Bonds are no longer Outstanding, all Pledged Revenues
which would have been available for the payment of principal of and interest on the Series A Bonds.
"Supplemental Indenture" shall mean an indenture supplemental to or amendatory of this
Indenture adopted by the Authority in accordance with Article 10.
"Supplemental Regulatory Agreement" shall mean that certain Supplemental Regulatory
Agreement and Declaration of Restrictive Covenants by and between the City and the Borrower and
dated as of May 1, 2006, which Supplemental Regulatory Agreement is recorded and subordinate to
the Regulatory Agreement and the Deed of Trust.
"Surplus Fund" shall mean the Surplus Fund created and established by Section 5.3.
"Tax Certificate" shall mean that certain Tax Certificate executed on the Closing Date with
respect to the Bonds.
"Term Bonds" shall mean the Series A Bonds maturing on November 15, 2012,
November 15, 2016, May 15, 2019, May 15,202 1, May 15, 2026, May 15, 2031 and May 15, 2041,
the Series B Bonds maturing on May 15, 2008, May 15, 2012, May 15, 2016, May 15, 2021, May 15,
2026, May 15, 2031 and May 15, 2041, and the Series C Bonds maturing on May 15, 2016.
"Trustee" shall mean the bank or trust company or national banking association appointed
pursuant to Section 8.1 to act as trustee hereunder, and its successor or successors and any other bank
or trust company or national banking association at any time substituted in its place pursuant to this
Indenture.
"Trustee Fee" shall mean, initially, an amount equal to $5,000 per annum payable to the
Trustee or such other amount as may be approved by the Authority.
"Trust Estate" shall mean, collectively, the Series A Bonds Trust Estate and the Subordinate
Bonds Trust Estate.
• Words of the masculine gender shall be deemed and construed to include correlative words of
the feminine and neuter genders. Unless the context shall otherwise indicate, words importing the
RVPUB\FBAUM\709416.1 15
singular number shall include the plural number and vice versa, and words importing persons shall
include corporations and associations, including public bodies, as well as natural persons.
Unless the context shall clearly indicate otherwise, the words "moneys," "funds," "amounts,"
"proceeds," and any other words of like import, when used in relation to any Fund or Account
created or maintained under this Indenture, shall be deemed to include both cash and any
investments, securities or other obligations, and the earnings thereon, held as a part of the Fund or
Account to which such words relate.
Unless the context shall clearly indicate otherwise, references to Articles, Sections and other
subdivisions, whether by letter, number or otherwise, are to the respective Articles, Sections and
subdivisions of this Indenture.
ARTICLE 11
AUTHORIZATION AND ISSUANCE OF BONDS
Section 2.1 Authorization of Bonds.
(a) In order to provide funds for the Loan, Bonds of the Authority in the series designated
(i) "Independent Cities Lease Finance Authority Mobile Home Park Revenue Bonds (San Juan
Mobile Estates), Series 2006A" to be issued in the initial principal amount of $29,660,000 (the
"Series A Bonds"); and (ii) "Independent Cities Lease Finance Authority Mobile Home Park
Subordinate Revenue Bonds (San Juan Mobile Estates), Series 200613" to be issued in the initial
principal amount of $9,765,000 (the "Series B Bonds"); and (iii) "Independent Cities Lease Finance
Authority Mobile Home Park Subordinate Revenue Bonds (San Juan Mobile Estates) Taxable Series
2006C to be issued in the initial principal amount of $485,000 (the "Series C Bonds", and together
with the Series B Bonds, referred to as the "Subordinate Bonds"), are hereby authorized. The
Subordinate Bonds are issued on a subordinate basis to the Series A Bonds but on a paritybasis as to
each series of the Subordinate Bonds and are equally secured and repayable from the Subordinate
Bonds Trust Estate without distinction, preference or priority as to series of the Subordinate Bonds.
There is hereby created by this Indenture, in the manner and to the extent provided herein, a
continuing pledge and lien to secure the full and final payment of the principal and Redemption Price
of and interest on all of the Bonds issued pursuant to this Indenture. The Bonds shall be special
obligations of the Authority payable solely from the Series A Bonds Trust Estate as to the Series A
Bonds and the Subordinate Bonds Trust Estate as to the Subordinate Bonds. No additional Bonds
either on a senior, a parity or subordinate basis to either series of the Bonds shall be issued under this
Indenture.
(b)(i) The Bonds shall be dated as of the Closing Date. The Bonds shall bear
interest at the rates set forth herein, shall be numbered in such manner as the Trustee may
deem appropriate so long as each Bond of each series receives a distinctive number and shall
mature, subject to the right of prior redemption as described herein, and become payable as
provided herein.
(ii) Interest on the Bonds shall be computed on the basis of a 360 -day year
consisting of twelve 30 -day months, payable on May 15 and November 15 of each year,
commencing November 15, 2006.
RVPUB\FBAUM\709416.1 16
The Series A Bonds shall be payable as to principal on May and November 15 in the
following years and in the amounts and shall bear interest at the rates per annum, indicated as
follows:
Principal
Maturity
Interest
Amount
Date
Rate
$2,535,000.00
11/15/2012
5.000%
225,000.00
05/15/2013
4.350%
230,000.00
11/15/2013
4.350%
235,000.00
05/15/2014
4.400%
1,255,000.00
11/15/2016
5.000%
1,415,000.00
05/15/2019
4.750%
1,260,000.00
05/15/2021
4.750%
2,230,000.00
05/15/2026
4.875%
1,500,000.00
05/15/2026
5.000%
4,765,000.00
05/15/2031
5.000%
14,010,000.00
05/15/2041
5.125%
The Series B Bonds shall be payable as to principal on May 15 in the following years and in
the amounts and shall bear interest at the rates per annum, indicated as follows:
Principal
Maturity
Interest
Amount
Date
Rate
$230,000.00
05/15/2008
4.250%
475,000.00
05/15/2012
4.850%
580,000.00
05/15/2016
5.125%
905,000.00
05/15/2021
5.350%
1,190,000.00
05/15/2026
5.450%
1,560,000.00
05/15/2031
5.550%
4,825,000.00
05/15/2041
5.850%
The Series C Bonds shall be payable as to principal on May 15 in the following year and in
the amount and shall bear interest at the rate per annum, indicated as follows:
Principal Maturity Interest
Amount Date Rate
$485,000 05/15/2016 7.750%
The Subordinate Bonds shall be subject to prior redemption by reason of targeted mandatory
sinking fund installments, all as provided in Section 4.1(a)(iii) hereof. Subject to Section 4.1(a)(iii)
hereof, and subject to the rights of the Series A Bonds, all principal of and interest and any deferred
interest and deferred targeted mandatory sinking fund redemption amount shall be due and payable in
May 15, 2041.
• Section 2.2 Conditions Precedent to the Issuance of the Bonds. The Bonds shall be
executed on behalf of the Authority, authenticated by the Trustee, and delivered to the purchasers
thereof, but only upon and subject to the following further conditions:
RVPUB\FBAUM\709416.1 17
(a) A copy of this Indenture executed by an Authorized Officer;
(b) A written order of the Authority as to the authentication and delivery of the
Bonds signed by an Authorized Officer describing the Bonds to be authenticated and
delivered, designating the purchaser or purchasers to whom the Bonds are to be delivered,
and stating the purchase price of the Bonds;
(c) A Counsel's Opinion to the effect that this Indenture has been duly executed
and delivered by the Authority; that this Indenture is valid and binding upon the Authority
and enforceable in accordance with its terms, except as to enforcement of remedies which
may be limited by bankruptcy, insolvency, fraudulent conveyance or other laws or equitable
principles affecting the enforcement of creditors' rights generally, and that the interest on the
Series A Bonds and the Series B Bonds is excludable from gross income for federal tax
purposes subject to customary exceptions and qualifications; and
(d) Evidence of a policy of title insurance as required by Section 6.20 of the Loan
Agreement.
ARTICLE III
GENERAL TERMS AND PROVISIONS OF BONDS
Section 3.1 Medium of Payment; Form and Date. The Bonds shall be issuable only as
fully registered Bonds without coupons in Authorized Denominations. Unless the Authority shall
otherwise direct, the Bonds shall be numbered as determined by the Trustee.
The Series A Bonds, the Series B Bonds and the Series C Bonds, the designation of such
Bonds, the forms of Bonds, the certificate of authentication to be endorsed on the Bonds and the
form of assignment to be endorsed on the Bonds are to be in substantially the form set forth in
Exhibits A, B and C, respectively, attached hereto and hereby made a part of this Indenture, with
necessary and appropriate variations, omissions and insertions as permitted or required by this
Indenture.
The Bonds shall initially be dated as of the Closing Date. Regularly scheduled interest on the
Bonds shall be payable on the applicable Interest Payment Date. Each Bond will bear interest from
the Interest Payment Date next preceding the date of authentication thereofto which interest has been
duly paid or provided for, unless a Bond is authenticated on or before the first Record Date, in which
case interest will accrue from the Closing Date, or unless authenticated as of a date during the period
from the Record Date to and including the next Interest Payment Date, in which case it shall bear
interest from such Interest Payment Date. The Trustee shall insert the date of authentication of each
Bond in the place provided for such purpose in the form of certificate of authentication to be printed
on each Bond. Each Bond shall bear interest on overdue principal at the rate then in effect on such
Bond.
The principal of, premium, if any, and interest on the Bonds shall be payable in lawful money
of the United States of America, being any coin or currency of the United States of America which,
at the respective dates of payment thereof, is legal tender for the payment of public and private debts.
Interest on each Bond shall be paid on each Interest Payment Date to the Bondowner of such Bond
at the close of business on the Record Date with respect to such interest payment and shall be paid by
RVPUB\FBAUM\709416.1 18
check or draft mailed on such Interest Payment Date to such Bondowner at his address as it appears
on the registration books of the Trustee or, upon the written request of a Bondowner of at least
$1,000,000 in principal amount of Bonds received by the Trustee not later than fifteen days prior to
the Record Date for such payment, by wire transfer to an account in the United States designated by
such Bondowner, irrespective of the cancellation of such Bond upon any transfer or exchange thereof
subsequent to such Record Date and prior to such Interest Payment Date, unless the Authority shall
default in the payment of interest due on such Interest Payment Date. Payment of principal and
premium, if any, due on any Bond shall be paid only upon surrender of such Bond at the office
designated by the Trustee in writing, or its successor in interest. In the event of any default in the
payment of interest, such defaulted interest shall be payable to the Bondowner of such Bond on a
special Record Date for the payment of such defaulted interest, which date shall be established by the
Trustee by notice mailed by or on behalf of the Authority to the Owners of Bonds not less than
fifteen (15) days preceding such special Record Date.
Section 3.2 Execution and Authentication: Limited Obligation. The Bonds shall be
executed in the name of the Authority by the manual or facsimile signature of the President thereunto
affixed, imprinted, engraved or otherwise reproduced, and attested by the manual or facsimile
signature of an Authorized Officer or the Secretary of the Authority. In case any one or more of the
officers or employees who shall have signed or sealed any of the Bonds shall cease to be such officer
or employee before the Bonds so signed and sealed shall have been authenticated and delivered, such
Bonds may, nevertheless, be authenticated and delivered as herein provided, and may be issued as if
the persons who signed or sealed such Bonds had not ceased to hold such offices or be so employed.
Any Bond may be signed and sealed on behalf of the Authority by such persons as at the actual time
of the execution of such Bond shall be duly authorized or hold the proper office in or employment by
the Authority although at the date of the Bonds such persons may not have been so authorized or
have held such office or employment.
Each of the Bonds shall bear thereon a certificate of authentication, in the forms set forth in
the forms of Bonds set forth in Exhibits A, B and C, hereto, executed manually by the Trustee. Only
such Bonds as shall bear thereon such certificate of authentication shall be entitled to any right or
benefit under this Indenture and no Bond shall be valid or obligatory for any purpose until such
certificate of authentication shall have been duly executed by the Trustee. Such certificate of the
Trustee upon any Bond executed on behalf of the Authority shall be conclusive evidence that the
Bond so authenticated has been duly authenticated and delivered under this Indenture and that the
Owner thereof is entitled to the benefits of this Indenture.
The Bonds, together with interest thereon, shall be limited obligations of the Authority,
giving rise to no pecuniary liability of the Authority, the State of California or any political
subdivision thereof, nor any charge against its general credit, shall be payable solely from and shall
be a valid claim of the respective Owners thereof only against the Trust Estate. The Bonds shall not
constitute an indebtedness or loan of the credit of the Authority or the State of California or any
political subdivision thereof within the meaning of any constitutional or statutory provisions.
Neither the faith and credit nor the taxing power of the Authority or the State or any political
subdivision thereof is pledged to the payment of the principal of, premium, if any, or interest on the
• Bonds or any other costs incident thereto.
RVPUB\FBAUM\709416.1 19
No recourse shall be had for the payment of the principal of, or premium, if any, or interest
on any of the Bonds or for any claim based thereon or upon any obligation, covenant or agreement
contained herein, against any past, present or future member of the Board of Directors of the
Authority, officer, employee or agent of the Authority, any member of the Authority or any officer,
employee or agent of any member of the Authority, under any rule of law or equity, or statutory or
constitutional provision or by the enforcement of any assessment or penalty or otherwise, and all
such liability of any such member of the Board of Directors of the Authority, officer, employee,
agent, member or officer, employee or agent of any member of the Authority, as such is hereby
expressly waived and released as a condition of and in consideration for the execution of this
Indenture and the issuance of the Bonds.
Section 3.3 Registration Transfer and Exchange of Bonds; Persons Deemed Owners.
The Trustee shall cause to be maintained and kept, at the Principal Office of the Trustee,
books for the registration and transfer of Bonds; and, upon presentation thereof for such purpose at
such office, the Trustee shall register or cause to be registered therein, and permit to be transferred
thereon, under such reasonable regulations as it or the Trustee may prescribe, any Bond entitled to
registration of transfer.
Each Bond shall be transferable only upon the books of the Trustee, at the request of the
Owner thereof in person or by his attorney duly authorized in writing, upon surrender thereof
together with a written instrument of transfer satisfactory to the Trustee duly executed by the Owner
or his duly authorized attorney. Upon the transfer of any such Bond, the Trustee shall issue in the
name of the transferee a new registered Bond or Bonds of the same series, aggregate Principal
Amount and maturity as the surrendered Bond.
Bonds may be exchanged at the Principal Office of the Trustee for an equal aggregate
Principal Amount of Bonds of the same series and maturity of other authorized denominations. In
each case in which Bonds are transferred or exchanged, the Authority shall execute and the Trustee
shall authenticate, as required, and deliver Bonds to the transferee or the Bondowner making the
exchange. The Authority and the Trustee may deem and treat the person in whose name any
outstanding Bond shall be registered upon the books of the Trustee as the absolute Owner of such
Bond, whether such Bonds shall be overdue or not, for the purpose of receiving payment of, or on
account of, the principal or premium, if any, and interest on such Bond and for all other purposes,
and all such payments so made to any such Owner or upon his written order or to his legal
representative shall be valid and effectual to satisfy and discharge the liability upon such Bond to the
extent of the sum or sums so paid, and neither the Authority nor the Trustee shall be affected by any
notice to the contrary.
Section 3.4 Regulations With Resoect to Exchanges and Transfers. hi all cases in which
the privilege of exchanging Bonds or transferring Bonds is exercised, the Authority shall execute and
the Trustee shall deliver Bonds in accordance with the provisions of this Indenture. All Bonds
surrendered in any such exchanges or transfers shall forthwith be cancelled and destroyed by the
Trustee. For every such exchange or transfer of Bonds, whether temporary or definitive, the
Authority or the Trustee may make a charge sufficient to reimburse it for any tax, fee or other
governmental charge, other than one imposed by the Authority, required to be paid with respect to
such exchange or transfer, which sum or sums shall be paid by the person requesting such exchange
or transfer as a condition precedent to the exercise of the privilege of making such exchange or
RVPUBTEIAUM\709416.1 20
• transfer. The cost of printing the Bonds required for any such exchange or transfer shall be paid by
the Authority subject to reimbursement from the Administration Fund or the Surplus Fund.
Section 3.5 Record Date; Special Record Date. Interest on each Bond shall be payable to
the Owner in whose name such Bond is registered at the close of business on the first (1st) day
(whether or not a business day) of the calendar month in which such Interest Payment Date occurs
(the "Record Date'), without regard to any transfer or exchange of such Bond after such day, unless
the Authority shall default in the payment of interest due on such Bond on such Interest Payment
Date. If the Authority shall default in the payment of interest due on any Series A Bond, such
defaulted interest shall be payable to the Owner in whose name such Series A Bond is registered at
the close of business on a special record date for the payment of such defaulted interest established
by notice mailed by the Trustee to the Owners of such Series A Bonds not less than fifteen (15) days
preceding such special record date. Such notice shall be mailed to the Owners in whose names such
Series A Bonds are registered at the close of business on the fifth day (whether or not a business day)
preceding the date of mailing.
If the Authority shall fail to pay the interest due on a Subordinate Bond on an Interest
Payment Date or the principal of a Subordinate Bond on a Principal Payment Date from the
Subordinate Bonds Trust Estate, such principal and interest shall continue to accrue at the stated rate
of interest with respect to the Subordinate Bonds and shall, to the extent Subordinate Residual
Revenues are payable, be paid to the Owner in whose name such Subordinate Bond is registered at
the close of business on the next succeeding Interest Payment Date from Subordinate Residual
Revenues. However, no interest will be paid on overdue interest. Any interest or deferred principal
• ,, not paid on an Interest Payment Date or Principal Payment Date, respectively, shall continue to
accrue, and shall continue to bear interest at the stated rate of interest with respect to the Subordinate
Bonds, respectively, from such Interest Payment Date or Principal Payment Date until such Interest
Payment Date on which such amounts are paid from Subordinate Residual Revenues. The payment
of interest on and principal of the Subordinate Bonds is secured solely to the extent of Subordinate
Residual Revenues and the failure to make any payments on the Subordinate Bonds because of
insufficient Subordinate Residual Revenues shall not constitute a Subordinate Bonds Event of
Default under Section 11.1 hereof, except as provided in Section 11.1(b)(iv).
Section 3.6 Bonds Mutilated, Destroyed, Stolen or Lost. In case any Bond shall become
mutilated or be destroyed, stolen or lost, the Authority shall execute, and the Trustee shall
authenticate and deliver, a new Bond of like series, maturity and Principal Amount as the Bonds so
mutilated, destroyed, stolen or lost, in exchange and substitution for such mutilated Bond, upon
surrender and cancellation of such mutilated Bond or in lieu of and substitution for the Bond
destroyed, stolen or lost, upon filing with the Trustee evidence satisfactory to the Trustee that such
Bond has been destroyed, stolen or lost and proof of ownership thereof, and upon furnishing the
Trustee with indemnity for the Authority and the Trustee satisfactory to the Trustee and complying
with such other reasonable regulations as the Trustee may prescribe and paying such expenses as the
Authority and the Trustee may incur and any expenses related to any such indemnification required
to be provided herein.
• Section 3.7 Temporary Bonds. Until the definitive Bonds are prepared, the Authority may
execute, in the same manner as is provided in Section 3.2 and, upon the request of the Authority, the
Trustee shall authenticate and deliver, in lieu of definitive Bonds, but subject to the same provisions,
RVPUB\FBAUW709416.1 21
limitations and conditions as the definitive Bonds, except as to the denominations thereof and as to
exchangeability for Bonds, one or more temporary Bonds which shall be registered as to principal
and interest. Such temporary Bonds shall be substantially of the tenor of the definitive Bonds in lieu
of which such temporary Bond or Bonds are issued, in Authorized Denominations, and with such
omissions, insertions and variations as may be appropriate to temporary Bonds. The installments of
interest payable on such temporary Bonds shall be payable only upon presentation of such temporary
Bonds for notation thereon of the payment of such interest. The Authority at its own expense shall
prepare and execute and, upon the surrender of such temporary Bonds, for exchange and
cancellation, the Trustee shall authenticate and, without charge to the Owner thereof, deliver in
exchange therefor, at the principal or corporate trust office of the Trustee, definitive Bonds, of the
same aggregate Principal Amount, series and maturity as the temporary Bonds surrendered. Until so
exchanged, the temporary Bonds shall in all respects be entitled to the same benefits and security as
definitive Bonds authenticated and issued pursuant to this Indenture.
All temporary Bonds surrendered in exchange for a definitive Bond or Bonds shall be
forthwith canceled and destroyed by the Trustee.
Section 3.8 Cancellation. All Bonds surrendered for redemption, payment, replacement or
exchange, if surrendered to the Trustee, shall be promptly canceled by it, and, if surrendered to any
person other than the Trustee, shall be delivered to the Trustee and, if not already canceled, shall be
promptly canceled by it. The Authority may at any time deliver to the Trustee for cancellation any
Bonds previously authenticated and delivered hereunder, which Bonds so delivered shall be promptly
canceled by the Trustee. All canceled Bonds held by the Trustee shall be destroyed by a method
selected by the Trustee. The Trustee shall execute a certificate of destruction in duplicate by the
signature of one of its authorized officers describing the Bonds so destroyed and, if so requested by
the Authority, one such executed certificate shall be filed with the Authority and the other such
executed certificate shall be retained by the Trustee.
Section 3.9 Book -Entry System for the Bonds.
(a) The Bonds shall be initially issued in the form of a separate single certificate fully
registered Bond for each maturity of each series of the Bonds. Upon initial issuance, the ownership
of the Bonds shall be registered in the Bond Register in the name of Cede & Co., as nominee of
DTC. Except as provided in Section 3.9(d) hereof, all Outstanding Bonds shall be registered in the
Bond Register in the name of Cede & Co., as nominee of DTC.
(b) With respect to Bonds registered in the Bond Register in the name of Cede & Co., as
nominee of DTC, the Authority and the Trustee shall have no responsibility or obligation with
respect to (i) the accuracy of the records of DTC, Cede & Co. or any Participant with respect to any
ownership interest in the Bonds, (ii) the delivery to any Participant or any other person, other than a
Owner, as shown in the Bond Register, of any notice with respect to the Bonds, including any notice
of redemption, (iii) the payment to any Participant or any other person, other than an Owner, as
shown in the Bond Register, of any amount with respect to principal of and interest on the Bonds, or
(iv) any consent given or other action taken by DTC as Bondholder. The Authority and the Trustee
may treat and consider the person in whose name each Bond is registered in the Bond Register as the
holder and absolute owner of such Bond for the purpose of payment of principal of and interest on
such Bond, for the purpose of giving notices of redemption and other matters with respect to such
Bond, for the purpose of registering transfers with respect to such Bond, and for all other purposes
RVPUB\FBAUM\709416.1 22
whatsoever. The Trustee shall pay all principal of and interest on the Bonds only to or upon the
order of the respective Owners, as shown in the Bond Register, as provided in Section 3.3 hereof, or
their respective attorneys duly authorized in writing, and all such payments shall be valid and
effective to fully satisfy and discharge the Authority's obligations with respect to payment of
principal of and interest on the Bonds to the extent of the sum or sums so paid. No person other than
an Owner, as shown in the Bond Register, shall receive a certificated Bond evidencing the obligation
of the Authority to make payments of principal of and interest on the Bonds, pursuant to this
Indenture. Upon delivery by DTC to the Trustee of written notice to the effect that DTC has
determined to substitute a new nominee in place of Cede & Co., and subject to the provisions herein
with respect to record dates, the word "Cede & Co." in this Indenture shall refer to such new
nominee of DTC.
(c) The delivery of the Representation Letter by the Authority shall not in any way limit
the provisions of Section 3.9(b) hereof or in any other way impose upon the Authority or the Trustee
any obligation whatsoever with respect to persons having interests in the Bonds other than the
Owners, as shown on the Bond Register. The Trustee shall take all action necessary for all
representations in the Representation Letter with respect to the Trustee to at all times be complied
with.
(d) (i) DTC may determine to discontinue providing its services with respect to the
Bonds at any time by giving written notice to the Authority and the Trustee and discharging its
responsibilities with respect thereto under applicable law.
`{ (ii) The Authority, in its sole discretion and without the consent of any other
person, may terminate the services of DTC with respect to the Bonds if the Authority
determines that:
(A) DTC is unable to discharge its responsibilities with respect to the
Bonds, or
(B) a continuation of the requirement that all Outstanding Bonds be
registered in the Bond Register in the name of Cede & Co., or any other nominee of
DTC, is not in the best interest of the beneficial owners of such Series A Bonds.
(C) Upon the termination of the services of DTC with respect to the Bonds
pursuant to subsection 3.9(d)(ii)(B) hereof, or upon the discontinuance or termination
of the services of DTC with respect to the Bonds pursuant to subsection 3.9(d)(i) or
subsection 3.9(d)(ii)(A) hereof after which no substitute securities depository willing
to undertake the functions of DTC hereunder can be found which, in the opinion of
the Authority, is willing and able to undertake such functions upon reasonable and
customary terms, the Authority is obligated to deliver Bond certificates, as described
in this Indenture and the Bonds shall no longer be restricted to being registered in the
Bond Register in the name of Cede & Co. as nominee of DTC, but may be registered
in whatever name or names Owners transferring or exchanging Bonds shall designate
to the Trustee in writing, in accordance with the provisions of this Indenture.
RVPUB\FBAUM\709416.1 23
(e) Notwithstanding any other provisions of this Indenture to the contrary, as long as any a
Bond is registered in the name of Cede & Co., as nominee of DTC, all payments with respect to
principal of and interest on such Bond and all notices with respect to such Bond shall be made and
given, respectively, in the manner provided in the Representation Letter.
ARTICLE IV
REDEMPTION OF BONDS
Section 4.1 Privilege of Redemption and Redemption Prices. Bonds subject to
redemption prior to maturity pursuant to the provisions of this Section shall be redeemable, upon
notice as provided in this Article IV, at such times, at such Redemption Prices and upon such terms
as are specified herein.
(a) Mandatory Sinking Fund Redemption. (i) Series A Bonds. The Series A
Bonds maturing on November 15, 2012, November 15, 2016, May 15, 2019, May 15, 2021,
May 15, 2026, May 15, 2031 and May 15, 2041 are subject to mandatory sinking fund
redemption by application of the Sinking Fund Installments as provided herein on each
May 15 and November 15 (unless otherwise indicated below), commencing on the respective
dates set forth below, at a Redemption Price equal to 100% of the Principal Amount of each
such Series A Bond or portion thereof to be redeemed, plus accrued interest to the date of
redemption thereof, without premium, on the respective dates and in the amounts set forth in
the following tables:
Series A Bonds Maturing on November 15, 2012
Sinking Fund Redemption Date
(May 15 and November 15)
11/15/2006
05/15/2007
11/15/2007
05/15/2008
11/15/2008
05/15/2009
11/15/2009
05/15/2010
11/15/2010
05/15/2011
11/15/2011
05/15/2012
11/15/2012 (maturity)
RVPUBTBAUM\709416.1 24
Principal Amount
To Be Redeemed
$225,000.00
165,000.00
170,000.00
175,000.00
180,000.00
185,000.00
190,000.00
195,000.00
200,000.00
205,000.00
210,000.00
215,000.00
220,000.00
0
Series A Bonds Maturing on November 15, 2016
Sinking Fund Redemption Date
(May 15 and November 15)
11/15/2014
05/15/2015
11/15/2015
05/15/2016
11/15/2016 (maturity)
Principal Amount
To Be Redeemed
$240,000.00
245,000.00
250,000.00
255,000.00
265,000.00
Series A Bonds Maturing on May 15, 2019
Sinking Fund Redemption Date
(May 15 and November 15)
05/15/2017
11/15/2017
05/15/2018
11/15/2018
05/15/2019 (maturity)
Principal Amount
To Be Redeemed
$270,000.00
275,000.00
285,000.00
290,000.00
295,000.00
Series A Bonds Maturing on May 15, 2021
Sinking Fund Redemption Date
(May 15 and November 15)
11/15/2019
05/15/2020
11/15/2020
05/15/2021 (maturity)
Principal Amount
To Be Redeemed
$305,000.00
310,000.00
320,000.00
325,000.00
4.875% Series A Bonds Maturing on May 15, 2026
Sinking Fund Redemption Date
May 15 and November 15)
11/15/2021
05/15/2022
11/15/2022
05/15/2023
11/15/2023
05/15/2024
11/15/2024
05/15/2025
11/15/2025
05/15/2026 (maturity)
RVPUB\FBAU \709416.1
25
Principal Amount
To Be Redeemed
$200,000.00
205,000.00
210,000.00
215,000.00
220,000.00
225,000.00
230,000.00
235,000.00
245,000.00
245,000.00
5.000% Series A Bonds Maturing on May 15, 2026
Sinking Fund Redemption Date
Principal Amount
(May 15 and November 15)
To Be Redeemed
11/15/2021
$135,000.00
05/15/2022
135,000.00
11/15/2022
140,000.00
05/15/2023
145,000.00
11/15/2023
150,000.00
05/15/2024
150,000.00
11/15/2024
155,000.00
05/15/2025
160,000.00
11/15/2025
160,000.00
05/15/2026 (maturity)
170,000.00
Series A Bonds Maturing on May 15, 2031
Sinking Fund Redemption Date
(Mav 15 and November 15)
11/15/2026
05/15/2027
11/15/2027
05/15/2028
11/15/2028
05/15/2029
11/15/2029
05/15/2030
11/15/2030
05/15/2031 (maturity)
RVPUB\FBAUM\709416.1 26
Principal Amount
To Be Redeemed
$425,000.00
435,000.00
445,000.00
460,000.00
470,000.00
480,000.00
495,000.00
505,000.00
520,000.00
530,000.00
(ii) Subordinate Bonds Redemption.
(a) The Series B Bonds maturing on May 15, 2008, May 15, 2012,
May 15, 2016, May 15, 2021, May 15, 2026, May 15, 2031 and May 15, 2041, are
subject to targeted mandatory sinking fund redemption by application of the targeted
Sinking Fund Installments as provided herein on each May 15 and November 15,
commencing on the respective dates set forth below at a Redemption Price equal to
100% of the Principal Amount of each Series B Bond or portion thereof to be
redeemed, plus accrued interest to the date of redemption thereof, without premium,
but only to the extent of Subordinate Residual Revenues on deposit in the
Subordinate Bonds Redemption Fund and available for such purpose, on the
respective dates and in the targeted mandatory sinking fund amounts set forth in the
following tables:
Series B Term Bonds May 15, 2008
Date Targeted Sinking
(May 15 and November 15) Fund Amount
11/15/2006 $75,000.00
05/15/2007 50,000.00
011/15/2007 50,000.00
05/15/2008 (maturity) 55,000.00
RVPUB\FBAUM\709416.1 27
Series A Bonds Maturing
on May 15, 2041
Sinking Fund Redemption Date
Principal Amount
(May 15 and November 15)
To Be Redeemed
11/15/2031
$545,000.00
05/15/2032
560,000.00
11/15/2032
575,000.00
05/15/2033
590,000.00
11/15/2033
605,000.00
05/15/2034
620,000.00
11/15/2034
635,000.00
05/15/2035
650,000.00
11/15/2035
665,000.00
05/15/2036
685,000.00
11/15/2036
700,000.00
05/15/2037
720,000.00
11/15/2037
740,000.00
05/15/2038
755,000.00
11/15/2038
775,000.00
05/15/2039
795,000.00
11/15/2039
815,000.00
05/15/2040
840,000.00
11/15/2040
860,000.00
05/15/2041 (maturity)
880,000.00
(ii) Subordinate Bonds Redemption.
(a) The Series B Bonds maturing on May 15, 2008, May 15, 2012,
May 15, 2016, May 15, 2021, May 15, 2026, May 15, 2031 and May 15, 2041, are
subject to targeted mandatory sinking fund redemption by application of the targeted
Sinking Fund Installments as provided herein on each May 15 and November 15,
commencing on the respective dates set forth below at a Redemption Price equal to
100% of the Principal Amount of each Series B Bond or portion thereof to be
redeemed, plus accrued interest to the date of redemption thereof, without premium,
but only to the extent of Subordinate Residual Revenues on deposit in the
Subordinate Bonds Redemption Fund and available for such purpose, on the
respective dates and in the targeted mandatory sinking fund amounts set forth in the
following tables:
Series B Term Bonds May 15, 2008
Date Targeted Sinking
(May 15 and November 15) Fund Amount
11/15/2006 $75,000.00
05/15/2007 50,000.00
011/15/2007 50,000.00
05/15/2008 (maturity) 55,000.00
RVPUB\FBAUM\709416.1 27
Series B Term Bonds Maturing
May 15, 2012
Date
Targeted Sinking
(May 15 and November 15)
Fund Amount
11/15/2008
$55,000.00
05/15/2009
55,000.00
11/15/2009
55,000.00
05/15/2010
60,000.00
11/15/2010
60,000.00
05/15/2011
60,000.00
11/15/2011
65,000.00
05/15/2012 (maturity)
65,000.00
Series B Term Bonds Maturing May 15, 2016
Date
Targeted Sinking
(May 15 and November 15)
Fund Amount
11/15/2012
$65,000.00
05/15/2013
70,000.00
11/15/2013
70,000.00
05/15/2014
70,000.00
11/15/2014
75,000.00
05/15/2015
75,000.00
11/15/2015
75,000.00
05/15/2016 (maturity)
80,000.00
Series B Term Bonds Maturing May 15, 2021
Date
(Mav 15 and November 15)
11/15/2016
05/15/2017
11/15/2017
05/15/2018
11/15/2018
05/15/2019
11/15/2019
05/15/2020
11/15/2020
05/15/2021 (maturity)
RVPUB\FBAUM\709416.1 28
Targeted Sinking
Fund Amount
$80,000.00
85,000.00
85,000.00
85,000.00
90,000.00
90,000.00
95,000.00
95,000.00
100,000.00
100,000.00
Ul
Series B Term Bonds Maturing May 15, 2026
Date
Targeted Sinking
(May 15 and November 15)
Fund Amount
11/15/2021
$105,000.00
05/15/2022
110,000.00
11/15/2022
110,000.00
05/15/2023
115,000.00
11/15/2023
115,000.00
05/15/2024
120,000.00
11/15/2024
125,000.00
05/15/2025
125,000.00
11/15/2025
130,000.00
05/15/2026 (maturity)
135,000.00
Series B Term Bonds Maturing May 15, 2031
Date
(Mav 15 and November 15)
11/15/2026
05/15/2027
11/15/2027
05/15/2028
11/15/2028
05/15/2029
11/15/2029
05/15/2030
11/15/2030
05/15/2031 (maturity)
R V PUB\FBAUM\709416.1
29
Targeted Sinking
Fund Amount
$140,000.00
140,000.00
145,000.00
150,000.00
155,000.00
160,000.00
160,000.00
165,000.00
170,000.00
175,000.00
Series B Term Bonds Maturing May 15, 2041 a
Date
Targeted Sinking
(May 15 and November 15)
Fund Amount
11/15/2031
$180,000.00
05/15/2032
185,000.00
11/15/2032
190,000.00
05/15/2033
195,000.00
11/15/2033
205,000.00
05/15/2034
210,000.00
11/15/2034
215,000.00
05/15/2035
220,000.00
11/15/2035
230,000.00
05/15/2036
235,000.00
11/15/2036
240,000.00
05/15/2037
250,000.00
11/15/2037
255,000.00
05/15/2038
265,000.00
11/15/2038
270,000.00
05/15/2039
280,000.00
11/15/2039
285,000.00
05/15/2040
295,000.00
11/15/2040
305,000.00
05/15/2041 (maturity)
315,000.00
(b) Series C Bonds. The Series C Bonds maturing on May 15, 2016 are
subject to targeted mandatory sinking fund redemption by application of the targeted
Sinking Fund Installments as provided herein on each May 15 and November 15,
commencing on the respective dates set forth below at a Redemption Price equal to
100% of the Principal Amount of each Series C Bond or portion thereof to be
redeemed, plus accrued interest to the date of redemption thereof, without premium,
but only to the extent of Subordinate Residual Revenues on deposit in the
Subordinate Bonds Redemption Fund and available for such purpose, on the
respective dates and in the targeted mandatory sinking fund amounts set forth in the
following table:
RVPUB\FBAUM\709416.1 30
(iii) Insufficient Subordinate Residual Revenues. In the event that the
Subordinate Residual Revenues are not sufficient to pay the targeted mandatory
sinking fund redemption amount set forth in Sections 4.1(a)(ii) above, any unpaid
Subordinate Bonds targeted mandatory sinking fund redemption amount shall be
deferred for payment on the following mandatory sinking fund payment date and
interest shall continue to accrue at the stated rate of interest on such Subordinate
Bonds on the amount so deferred until paid. Non-payment of a Subordinate Bonds
targeted mandatory sinking fund redemption amount due to insufficient Subordinate
Residual Revenues shall not be an Event of Default under this Indenture. On
May 15, 2041, all such Subordinate Bonds deferred targeted mandatory sinking fund
redemption amount, together with any deferred interest, if any, shall be due and
payable and the non-payment of such amount on May 15, 2041 shall be an Event of
Default, all as set forth in Section 11.1(b)(iv) of this Indenture.
(b) Optional Redemption.
(i) Series A Bonds. The Series A Bonds maturing on or after May 15,
2017 are subject to optional redemption at the option of the Authority at the request
of the Borrower, prior to the stated maturities thereof as may be directed by the
. Authority, at the request of the Borrower, in whole or in part, on any date on or after
May 15, 2016, at a Redemption Price equal to the Principal Amount of each Series A
Bond or portion thereof to be redeemed subject to the availability of funds for such
RVPUB\FBAUM\709416.1 31
Series C Term Bonds Maturing May 15, 2016
Date Targeted Sinking
(May 15 and November 15)
Fund Amount
11/15/2006
$20,000.00
05/15/2007
15,000.00
11/15/2007
20,000.00
05/15/2008
20,000.00
11/15/2008
20,000.00
05/15/2009
20,000.00
11/15/2009
20,000.00
05/15/2010
20,000.00
11/15/2010
20,000.00
05/15/2011
25,000.00
11/15/2011
25,000.00
05/15/2012
25,000.00
11/15/2012
25,000.00
05/15/2013
25,000.00
11/15/2013
30,000.00
05/15/2014
30,000.00
11/15/2014
30,000.00
05/15/2015
30,000.00
11/15/2015
30,000.00
• �l
05/15/2016 (maturity)
35,000.00
(iii) Insufficient Subordinate Residual Revenues. In the event that the
Subordinate Residual Revenues are not sufficient to pay the targeted mandatory
sinking fund redemption amount set forth in Sections 4.1(a)(ii) above, any unpaid
Subordinate Bonds targeted mandatory sinking fund redemption amount shall be
deferred for payment on the following mandatory sinking fund payment date and
interest shall continue to accrue at the stated rate of interest on such Subordinate
Bonds on the amount so deferred until paid. Non-payment of a Subordinate Bonds
targeted mandatory sinking fund redemption amount due to insufficient Subordinate
Residual Revenues shall not be an Event of Default under this Indenture. On
May 15, 2041, all such Subordinate Bonds deferred targeted mandatory sinking fund
redemption amount, together with any deferred interest, if any, shall be due and
payable and the non-payment of such amount on May 15, 2041 shall be an Event of
Default, all as set forth in Section 11.1(b)(iv) of this Indenture.
(b) Optional Redemption.
(i) Series A Bonds. The Series A Bonds maturing on or after May 15,
2017 are subject to optional redemption at the option of the Authority at the request
of the Borrower, prior to the stated maturities thereof as may be directed by the
. Authority, at the request of the Borrower, in whole or in part, on any date on or after
May 15, 2016, at a Redemption Price equal to the Principal Amount of each Series A
Bond or portion thereof to be redeemed subject to the availability of funds for such
RVPUB\FBAUM\709416.1 31
purpose on the redemption date, plus accrued interest thereon to the date fixed for
redemption without premium.
(ii) Series B Bonds. The Series B Bonds maturing on or after May 15,
2017 are subject to optional redemption at the option of the Authority at the request
of the Borrower, prior to the stated maturity thereof as may be directed by the
Authority, at the request of the Borrower, in whole or in part, on any date on or after
May 15, 2016, at a Redemption Price equal to the Principal Amount of each Series B
Bond or portion thereof to be redeemed), subject to the availability of funds for such
purpose on the redemption date, plus accrued interest thereon to the date of
redemption without premium.
(iii) Series C Bonds. The Series C Bonds are not subject to optional
redemption prior to maturity.
(iv) Series A Redemption Premium. In the event of an optional
redemption of Series A Bonds, the Series A Bonds shall not be redeemed unless the
Trustee shall have either (i)(A) had in its possession, for a period of at least ninety-
one (91) days prior to the redemption date, an amount equal to the redemption
premium, if any, on the Series A Bonds, if any, and (B) received a certificate of an
Authorized Borrower Representative to the effect that the Borrower has neither
commenced a voluntary case under Title 11 of the United States Code as from time to
time in effect nor authorized by appropriate proceedings of its board of directors the
commencement of such a voluntary case, or (ii) received an opinion of Bond Counsel
or bankruptcy counsel acceptable to S&P has been delivered to the Trustee prior to
such payment to the effect that the sums to be utilized to pay the redemption
premium on the Series A Bonds are not subject to the provisions of Sections 262(a),
547 and 550 of the United States Bankruptcy Code ("Available Moneys"). In the
event Series A Bonds are redeemed from the proceeds of refunding bonds, the
Borrower shall have obtained an opinion of Bond Counsel or bankruptcy counsel as
described in Section (ii) of the preceding sentence. Notwithstanding the foregoing,
pursuant to (b)(ii) above, no premium is due in connection with the optional
redemption of the Series A Bonds.
(c) Redemption of Bonds Based on the Occurrence of Certain Events.
(i) Special Redemption Generallv. In accordance with and for the purpose of
Section 7.9 hereof, the Bonds shall be subject to redemption, at the option of the Authority,
at the request of the Borrower, prior to the stated maturities thereof on a pro rata basis, in
whole or in part at any time, on the earliest practicable date for which notice of redemption
can be given as provided in Section 4.5 hereof at a Redemption Price equal to 100% of the
Principal Amount of such Bonds or portions thereof to be redeemed, together with accrued
interest thereon to the date of redemption, without premium, in a Principal Amount having an
aggregate Redemption Price equal to the amount of moneys which are deposited in or
transferred to the Redemption Fund, (i) as to the Series A Bonds (x) from any Net Proceeds
or any Prepayment made by the Borrower in order to fully retire the Loan in connection with
a condemnation or casualty loss which results in Net Proceeds, and (y) from excess amounts
in the Series A Bonds Debt Service Reserve Fund resulting from a reduction in the Series A
RVPUB\FBAUM\709416.1 32
Bonds Debt Service Reserve Fund Requirement after giving effect to any special redemption
under this subsection (c); and (ii) as to the Subordinate Bonds, to the extent of any moneys in
the Subordinate Bonds Redemption Fund constituting Subordinate Residual Net Proceeds or
Subordinate Residual Prepayments. The Trustee shall apply any such amounts described
above in accordance with applicable provisions hereof from time to time as directed by a
certificate of a Borrower's Representative, with notice to the Authority; provided, however,
that (i) such amount to be applied to such redemption shall be rounded to the next lower
Authorized Denomination, and (ii) unless otherwise directed by a certificate of a Borrower's
Representative, with notice to the Authority, no such redemption of Series A Bonds shall be
effected unless the total amount to be applied to redeem Series A Bonds on such date shall be
at least $25,000. Bonds to be redeemed pursuant to this Section 4.1 shall be redeemed or
purchased in accordance with Section 7.8 hereof.
(ii) Selection of Bonds to be Redeemed. The Bonds to be redeemed in
accordance with subsection (b) of this Section shall be selected by the Borrower, with notice
to the Authority and the Trustee pursuant to a certificate of a Borrower's Representative,
with a copy to the Authority and the Trustee, in accordance with applicable provisions of the
Indenture, including subsection (iii) of this Section 4.1(c).
(iii) Mandatory Application of Certain Amounts in Redemption Fund to
Redemption of Bonds. In accordance with and for purposes of subsection (ii) of this Section
4.1(c), if and to the extent that Series A Bonds are redeemed pursuant to subsection (c)(i)
t hereof, the Series A Bonds to be redeemed shall be selected from all maturities, including
01 Sinking Fund Installments on the Term Bonds, on a pro rata basis.
(d) Deemed Redemption of Subordinate Bonds. The Subordinate Bonds are subject to
deemed mandatory redemption upon the occurrence of a Series A Bonds Event of Default, resulting
in a foreclosure or other sale of the Project pursuant to the Deed of Trust and application of such
proceeds and other moneys under this Indenture as provided in Section 11.2 hereof, such deemed
redemption to be in the amount of any principal of and interest remaining unpaid on the Subordinate
Bonds following such foreclosure or other sale of the Project pursuant to the Deed of Trust. In such
event, Subordinate Bonds remaining unpaid shall be surrendered to the Trustee for cancellation
without any further payment being made on such Subordinate Bonds. Notice of such deemed
redemption of the Subordinate Bonds shall be promptly sent by the Trustee to the Owners of
Outstanding Subordinate Bonds upon the occurrence of the deemed redemption of Subordinate
Bonds pursuant to this Section 4.1(d). By purchase and acceptance of the Subordinate Bonds, the
Owners thereof consent to the provisions of this Section 4.1(d).
Section 4.2 Redemption at the Election or Direction of the Authority. In the case of any
redemption of Bonds other than as provided in Section 4.3, the Authority, at the request of the
Borrower, shall give written notice to the Trustee of its election or direction so to redeem, of the
redemption date, of the Principal Amounts of the Bonds of each maturity and series to be redeemed
(which maturities, Principal Amounts thereof to be redeemed shall be determined by the Authority in
its sole discretion, at the request of the Borrower, subject to any limitation with respect thereto
. contained in this Indenture) and of the moneys to be applied to the payment of the Redemption Price.
Such notice shall be given at least forty-five (45) days prior to the redemption date or such shorter
period as shall be acceptable to the Trustee. In the event notice of redemption shall have been given
RVPUB\FBAUM\709416.1 33
as provided in Section 4.5, such redemption shall be effective only if, on the date of redemption, the
Trustee shall hold an amount in immediately available funds which, in addition to other moneys, if
any, available therefor held by the Trustee, will be sufficient to redeem all of the Bonds to be
redeemed and to pay the accrued interest on such Bonds to the redemption date.
Section 4.3 Redemption Other Than at the Authority's or Borrower's Election or
Direction. Whenever by the terms of this Indenture the Trustee is required to redeem Bonds other
than at the election or direction of the Authority or the Borrower, the Trustee shall select the Bonds
to be redeemed and give the notice of such redemption in accordance with the terms of this Article 4
and, to the extent applicable, Sections 5.7 and 5.14.
Section 4.4 Selection of Bonds to be Redeemed.
(a) Series A Bonds. Except as may be otherwise provided in this Indenture, in the event
of redemption of less than all of the Outstanding Series A Bonds of a like maturity, the Trustee shall
assign to each such Outstanding registered Series A Bond of the maturity to be redeemed a
distinctive number for each $5,000 of the Principal Amount of such Series A Bond and shall select
by lot, using such method of selection as it shall deem proper in its discretion, from the numbers
assigned to such Series A Bonds as many numbers as, at $5,000 for each number, shall equal the
Principal Amount of such Series A Bonds to be redeemed. The Series A Bonds to be redeemed shall
be the Series A Bonds to which were assigned numbers so selected; provided, however, that only so
much of the Principal Amount of each such registered Series A Bond of a denomination of more than
$5,000 shall be redeemed as shall equal $5,000 for each number assigned to it and so selected. For
purposes of this Section, Series A Bonds which have theretofore been selected by lot for redemption
shall not be deemed Outstanding.
(b) Subordinate Bonds. In the event of redemption of less than all of the Outstanding
Subordinate Bonds, Outstanding Subordinate Bonds shall be redeemed pro rata among all such
Outstanding Subordinate Bonds; provided that following any redemption, the outstanding principal
amount of any Subordinate Bonds shall be an integral multiple of $5,000. For purposes of this
Section, Subordinate Bonds, or portions thereof, which have theretofore been selected for
redemption shall not be deemed Outstanding.
Section 4.5 Notice of Redemption. When the Trustee shall receive notice from the
Authority of its election or direction to redeem Bonds pursuant to Section 4.2, and when redemption
of Bonds is required pursuant to Section 4.3, the Trustee shall give notice, which notice shall specify
the series and maturities of the Bonds to be redeemed, the redemption date and the place or places
where amounts due upon such redemption will be payable, whether such redemption is conditioned
upon the availability of funds for such purpose on the redemption date (in the case of redemption
pursuant to Section 4.1(b) and 4.1(c)(i)) and, if less than all of the Bonds of any maturity are to be
redeemed, the letters and numbers or other distinguishing marks of such Bonds so to be redeemed,
and, in the case of Bonds to be redeemed in part only, such notice shall also specify the respective
portions of the Principal Amount thereof to be redeemed. Such notice shall further state that on such
date there shall become due and payable upon each Bond to be redeemed the Redemption Price
thereof, or the Redemption Price of the specified portions of the Principal Amount thereof in the case
of Bonds to be redeemed in part only, together with interest accrued on such Bonds to the
redemption date, and that from and after such date interest on such Bonds shall cease to accrue and
be payable; provided that, if the redemption is conditioned upon funds being available therefor no
RVPUB\FBAUM709416.1 34
later than the opening of business on the Business Day prior to the redemption date, the notice shall
so state. The Trustee shall mail a copy of such notice, by first class mail, postage prepaid, not less
than thirty (30) days (provided, however, in the case of special redemption as described above, such
notice shall be given not less than ten (10) days) nor more than forty-five (45) days before the
redemption date, to the Owners of any Bonds or portions of Bonds which are to be redeemed, at their
last addresses, if any, appearing upon the registration book. Failure to give such notice with respect
to any Bonds, or any defect therein, shall not affect the validity of the proceedings for redemption of
any other Bonds.
Section 4.6 PPrnent of Redeemed Bonds. Notice having been given in the manner
provided in Section 4.5 (and if said notice shall have been conditioned on the availabilityof funds on
the redemption date, then to the extent such funds are so available), the Bonds or portions thereof so
called for redemption shall become due and payable on the redemption date so designated at the
Redemption Price, plus interest accrued and unpaid on such Bonds to the redemption date, and, upon
presentation and surrender thereof at the offices specified in such notice, together with, in the case of
Bonds presented by other than the Owner, a written instrument of transfer duly executed by the
Owner or his attorney duly authorized in writing, such Bonds, or portions thereof, shall be paid at the
Redemption Price plus interest accrued and unpaid on such Bonds to the redemption date. If there
shall be called for redemption less than all of a registered Bond, the Authority shall execute and
deliver, upon the surrender of such Bond, without charge to the Owner thereof, for the unredeemed
balance of the Principal Amount of the registered Bond so surrendered, registered Bonds of like
maturity in any of the authorized denominations. If, on the redemption date, moneys for the
redemption of all the Bonds or portions thereof of any like maturity to be redeemed, together with
interest to the redemption date, shall be held by the Trustee and Paying Agent so as to be available
therefor on said date and if notice of redemption shall have been given as aforesaid, then, from and
after the redemption date, interest on the Bonds or portions thereof of such maturity so called for
redemption shall cease to accrue and become payable. If said moneys shall not be so available on the
redemption date, such Bonds or portions thereof shall continue to bear interest until paid at the same
rate they would have borne had they not been called for redemption.
Section 4.7 Redeemed Bonds as Satisfaction of Sinking Fund Installments. Upon any
purchase or redemption of Term Bonds (other than by application of Sinking Fund Installments) an
amount equal to the applicable Redemption Prices thereof (as specified below) shall be credited
towards a part or all of any one or more of such Sinking Fund Installments, as directed by a
certificate of a Borrower Representative, with a copy to the Authority or, failing such direction by
March 15 of each year, toward such Sinking Fund Installments pro rata. Such applicable
Redemption Prices shall be the respective Redemption Prices which would be applicable upon the
redemption of such Bonds from the respective Sinking Fund Installments on the due dates thereof.
The portion of any such Sinking Fund Installment remaining after the deduction of any such amounts
credited toward the same (or the original amount of any such Sinking Fund Installment if no such
amounts shall have been credited toward the same) shall constitute the unsatisfied balance of such
Sinking Fund Installment for the purpose of the calculation of Principal Installments due on a future
date.
Section 4.8 Purchase of Bonds. In lieu of redemption of Bonds of a series as provided in
the Indenture, amounts held by the Trustee for such redemption will, at the written request of the
Borrower set forth in a certificate of a Borrower Representative, with a copy to the Authority,
RVPUB\FBAUM\709416.1 35
received by the Trustee prior to the selection of Bonds of such series for redemption, be applied by
the Trustee to the purchase of Bonds of such series at public or private sale as and when and at such
prices (including brokerage, accrued interest and other charges) as the Borrower may in its discretion
direct, but not to exceed the redemption price which would be payable if such Bonds of such series
were redeemed. The aggregate principal amount of Bonds of such series of the same maturity
purchased in lieu of redemption may not exceed the aggregate principal amount of Bonds of such
series of such maturity which would otherwise be subject to such redemption.
ARTICLE V
PLEDGES; ESTABLISHMENT OF FUNDS AND ACCOUNTS AND APPLICATIONS
THEREOF
Section 5.1 Pledges.
(a) With respect to the Series A Bonds, (i) the Pledged Revenues and (ii) all the rights,
-title and interest of the Authority in and to the Loan, the Loan Agreement and the Deed of Trust, the
proceeds and collections of the Authority therefrom and all Funds and Accounts created or
established by or maintained pursuant to this Indenture for the benefit of the Series A Bonds and any
other property pledged to the payment of any Series A Bonds in the granting clauses hereof, are
hereby pledged to the payment of the principal, Redemption Price, if any, and interest on the Series
A Bonds in accordance with the terms and provisions of this Indenture, and the Trustee is hereby
granted a security interest therein, subject only to the provisions of this Indenture permitting the
application thereof for the purposes and on the terms and conditions set forth in this Indenture.
(b) With respect to the Subordinate Bonds, without preference, priority or distinction as
to the series of the Subordinate Bonds, in accordance with the further terms and provisions of this
Indenture, (i) Subordinate Residual Revenues, (ii) Subordinate Residual Net Proceeds and
Subordinate Residual Prepayments, and (iii) on a basis expressly subordinate (both in terms of
priority of payment and in terms of rights to exercise the remedies granted hereunder and under the
Loan Agreement) to the Series A Bonds until all such Series A Bonds shall have been retired or such
amounts have been provided to effect redemption of such Series A Bonds, all the rights and interests
of the Authority in and to the Loan, the Loan Agreement and the Deed of Trust, the proceeds and
collections of the Authority therefrom and all Funds and Accounts created or established by or
maintained pursuant to this Indenture for the benefit of the Subordinate Bonds and any other property
pledged to the payment of the Subordinate Bonds in the granting clauses hereof are hereby pledged
to the payment of the principal of and interest on the Subordinate Bonds, and, as further provided in
the Indenture, to the payment of Redemption Price of the Subordinate Bonds, and the Trustee is
hereby granted a security interest herein, subject only to the provisions of this Indenture and the Loan
Agreement permitting the application thereof for the purposes and on the terms and conditions set
forth in this Indenture.
(c) Notwithstanding the foregoing Sections 5.1(a) and (b), there are hereby reserved to
the Authority, and not in any way pledged to the Bondowners, the Authority's rights under Sections
6.6, 6.8 and 7.4 of the Loan Agreement.
Section 5.2 Project Fund. The Authority hereby establishes and creates a special trust
fund designated as the Independent Cities Lease Finance Authority San Juan Mobile Estates Project
Fund (the "Project Fund"), which shall be held by the Trustee. Except as set forth below in this
RVPUB\FBAUW709416.1 36
Section, amounts in the Project Fund shall be expended and applied only for making the Loan. On
the Closing Date, the Trustee shall pay out moneys in the Project Fund for the purpose of making the
Loan, upon receipt by the Trustee of a written direction of the Authority signed by an Authorized
Officer.
Upon receipt of such written direction, the Trustee shall make the payments as directed by
such direction from the Project Fund, including: an amount equal to $31,512,000 directly to the title
company named in such written direction, to be applied to a portion of the purchase price of the
Project (which amount has been deposited by the Underwriter of the Bonds directly with said title
company).
Section 5.3 Establishment of Other Funds.
(a) The Authority hereby establishes and creates with the Trustee a series of special trust
funds to be held as hereinafter set forth in this Article V and designated as follows:
(1) Revenue Fund (and within such Fund, the Bond Proceeds Account therein);
(2) Series A Bonds Debt Service Fund;
(3) Series A Bonds Debt Service Reserve Fund;
(4) Series A Bonds Redemption Fund;
. (5) Rebate Fund;
(6) Administration Fund with the General Account, and Borrower Administration
Fee Account therein;
(7) Repair and Replacement Fund;
(8) Cost of Issuance Fund;
(9) Subordinate Bonds Debt Service Fund;
(10) Subordinate Bonds Debt Service Reserve Fund, within which there shall be a
Series B Reserve Account and a Series C Reserve Account;
(11) Subordinate Bonds Redemption Fund;
(12) Rental Assistance Fund;
(13) Operating Reserve Fund; and
(14) Surplus Fund;
Section 5.4 Deposit of Bond Proceeds and Other Moneys.
(a) Series A Bonds. The proceeds of the sale of the Series A Bonds in the amount of
$29,069,100.35 (representing $29,660,000 in aggregate principal amount plus original issue
RVPUB\FBAUM\709416.1 37
premium of $2,300.35, less an Underwriter's discount of $593,200 shall be deposited with the.
Trustee on the Closing Date and credited to the Project Fund. The proceeds of the Series A Bonds
on deposit in the Project Fund shall be disbursed in accordance with the provisions of Section 5.2
hereof and the terms of the Loan Agreement as follows:
(1) to the Series A Bonds Debt Service Reserve Fund, $1,812,420 being the
amount equal to the initial Series A Bonds Debt Service Reserve Fund Requirement;
(2) to the Repair and Replacement Fund, $1,000,000;
(3) to the Cost of Issuance Fund, $479.22;
(4) to the Rental Assistance Fund, $3,500,000; and
(5) to be held in the Project Fund, $22,756,201.13 until disbursed in accordance
with Section 5.2 hereof and the Loan Agreement.
(b) Series B Bonds. Proceeds of the sale of the Series B Bonds in the amount of
$9,501,942 (representing $9,765,000 in aggregate principal amount, less an Underwriter's discount
of $185,535 and less original issue discount of $77,523) shall be disbursed as follows:
(1) to the Series B Reserve Account of the Subordinate Bonds Debt Service
Reserve Fund, $646,143.13;
(2) to the Borrower for use in its working capital purposes, the amount of
$92,218.67
(3) $7,781.33 to'the Cost of Issuance Fund; and
(4) to the Project Fund, $8,755,798.87 until disbursed in accordance with
Section 5.2 hereof and the Loan Agreement.
(c) Series C Bonds. The proceeds of the Series C Bonds in the amount of $467,055
(representing $485,000 in aggregate principal amount, less an Underwriter's discount of $9,700 and
less original issue discount of $8,245) shall be disbursed as follows:
(1) $395,510.63 to the Cost of Issuance Fund; and
(2) $71,544.37 to the Series C Reserve Account of the Subordinate Bonds Debt
Service Reserve Fund.
Section 5.5 Cost of Issuance Fund. Moneys in the Cost of Issuance Fund shall be applied
to the payment of Costs of Issuance, upon receipt of an Officer's Certificate stating the person to
whom and the purpose for which each payment is to be made, and the amount of such payment.
Upon receipt of an Officer's Certificate stating that the Costs of Issuance have been fully paid and in
any event within six months of the Closing Date, the Trustee shall transfer any remaining balance to
the Project Fund or to the Revenue Fund, as directed by such Officer's Certificate, and such Fund
shall be closed.
RVPUB\FBAUM\709416.1 38
Section 5.6 Deposits. By its execution of the Loan Agreement, the Authority has caused
^yh' the Borrower to collect and deposit or cause to be collected and deposited with the Trustee, on the
date of receipt so far as practicable, all Net Operating Revenues, and to forward promptly to the
Trustee statements of each amount deposited. The Trustee shall notify the Authority and the
Oversight Agent in the event that Net Operating Revenues have not been deposited by the thirteenth
(13th) day of each month. The Trustee shall be accountable only for moneys actually so deposited or
held. All Net Operating Revenues shall be deposited for credit to the Revenue Fund to be held by
the Trustee. All Prepayments and Net Proceeds with respect to the Loan shall be separately
identified by the Borrower to the Trustee, shall be deposited in the Series A Bonds Redemption Fund
for the benefit of the Owners of Series A Bonds and, to the extent permitted to be applied as
Subordinate Bonds Residual Net Proceeds or Subordinate Bonds Residual Prepayments pursuant to
Section 5.18, shall be deposited in the Subordinate Bonds Redemption Fund for the benefit of the
Holders of the Subordinate Bonds.
Section 5.7 Revenue Fund. The Revenue Fund shall be held by the Trustee for the benefit
of the Series A Bonds, except to the extent of the application of Subordinate Residual Revenues for
the benefit of the Subordinate Bonds pursuant to paragraphs (e) and (f) below.
All interest and other income from time to time received from the deposit of moneys in the
Revenue Fund shall be retained in such fund and applied pursuant to this Section 5.7. On or before
the third Business Day preceding the 15th day of each month, the Trustee shall provide a written
notice or electronic notice to the Authority and the Oversight Agent as to the amount deposited in the
Revenue Fund and the deposit requirements for each of the Funds set forth in this Section 5.7. hi the
event that the amount deposited in the Revenue Fund shall be insufficient to satisfy the required
deposit in the Series A Bonds Debt Service Fund and/or the Subordinate Bonds Debt Service Fund,
the Trustee shall include such fact in its notice to the Authority. On the Business Day preceding the
fifteenth day of each month (but only on the 15th day of the last calendar month of each fiscal year in
the case of clauses 0) and (k) below), the Trustee shall withdraw from the Revenue Fund and transfer
to the following funds the amounts indicated in the following tabulation, in the following order of
priority, or so much thereof as remains after first making all prior transfers:
(a) into the Series A Bonds Debt Service Fund, an amount equal to one-sixth of
the interest due on the Series A Bonds on the next Interest Payment Date, an amount equal to
one-sixth of the principal coming due on the Series A Bonds on the next Principal Payment
Date, an amount equal to one-sixth, of the mandatory sinking fund payment due on the Series
A Bonds on the next Principal Payment Date and an amount due on the next redemption date
on the Series A Bonds to be redeemed (other than pursuant to mandatory sinking fund
redemption), provided that such payments may be net of accrued interest on investments of
funds held under this Indenture;
(b) into the Series A Bonds Debt Service Reserve Fund, the amount, if any,
needed to increase the balance therein to the Series A Bonds Debt Service Reserve Fund
Requirement;
(c) into the Rebate Fund, the amount, if any, required to be deposited therein
pursuant to Section 5.13 hereof;
RVPUB\FBAUM\709416.1 39
(d) into the Repair and Replacement Fund an amount equal to one -twelfth of the
required annual deposit thereto, but only if the annual amount of $23,400 has not been
previously deposited thereto;
(e) commencing May 15, 2007, into the General Account of the Administration
Fund, (i) the amount, if any, necessary to pay or provide for one -twelfth of the Trustee Fee,
including expenses in connection with the purchase or redemption of any Bonds, all as
provided and contemplated in the annual budget filed by the Borrower pursuant to the Loan
Agreement and specified by the Borrower in writing to the Trustee, (ii) an amount equal to
one -twelfth of the Oversight Agent Fee, and (iii) an amount equal to one -twelfth of the other
Fees and Charges, if any, all as provided and contemplated in the annual budget filed by the
Borrower pursuant to the Loan Agreement and specified by the Borrower in writing to the
Trustee (any fees and expenses of the Fiduciaries above and beyond the amount
contemplated in the annual budget filed by the Borrower pursuant to the Loan Agreement
shall be paid from the Surplus Fund);
(f) into the Subordinate Bonds Debt Service Fund, an amount equal to one-sixth
of the interest due on the Subordinate Bonds on the next Interest Payment Date, an amount
equal to one-sixth of the principal payment due on the Subordinate Bonds on the next
Principal Payment Date, an amount equal to one-sixth, of the targeted mandatory sinking
fund payment due on the Subordinate Bonds on the next Principal Payment Date, and an
amount due on the next redemption date on the Subordinate Bonds to be redeemed (other
than pursuant to targeted mandatory sinking fund redemption);
(g) into the Subordinate Bonds Debt Service Reserve Fund, the amount, if any, to
increase the balance therein to the Subordinate Bonds Debt Service Reserve Requirement;
(h) commencing May 15, 2007, into the General Account of the Administration
Fund, an amount equal to one -twelfth of the Authority Annual Fee;
(i) into the Borrower Administration Fee Account of the Administration Fund an
amount equal to the Borrower Administration Fee as such amount is set forth in writing from
the Borrower to the Trustee, which Borrower Administration Fee is authorized hereunder,
plus any amounts for previous periods not paid to the Borrower. Any such amounts so
deposited to be paid to the Borrower on the last day of each month;
0) annually, into the Repair and Replacement Fund, the amount, if any, necessary
to bring the amount on deposit therein to $150,000;
(k) only on the 15th day of the last calendar month of each Bond Year, after
making all of the foregoing transfers into the Operating Reserve Fund, one-half (1/2) of any
amounts remaining in the Revenue Fund following the transfers for such month pursuant to
the preceding clauses (a) through and including (h) until the amount on deposit in the
Operating Reserve is equal to $75,000, or alternatively, until such time that no amounts
required to be deposited in the Operating Reserve Fund as further set forth in Section 5.19
hereof.
RVPUB\FBAUM\709416.1 40
v
CJ
(1) only on the 15th day of the last calendar month of each Bond Year, after
making all of the foregoing transfers, into the Surplus Fund, the amount, if any, remaining in
the Revenue Fund.
Notwithstanding the foregoing, so long as the Borrower has monthly Net Operating Revenues
that are at least equal to said month's portion of items (a) through (i) of this Section 5.7, then the
Borrower may retain from Net Operating Revenues for such month the Borrower Administration Fee
for such month and shall notify the Trustee in writing of the amount so retained; provided that an
amount equal to one month of such Borrower Administration Fee shall at all times be retained by the
Trustee under this Indenture in the Borrower Administration Fee Account and available to fund any
shortfalls in the Series A Debt Service Fund.
Section 5.8 Series A Bonds Debt Service Fund.
(a) The Series A Bonds Debt Service Fund shall be held by the Trustee for the benefit of
the Series A Bonds. The Trustee shall withdraw from the Series A Bonds Debt Service Fund, on or
prior to each Interest Payment Date, an amount equal to the unpaid interest due on the Series A
Bonds on that date and shall cause it to be applied to the payment of such interest when due.
(b) If the withdrawals required under subsection (a) of this Section on the same and every
prior Interest Payment Date have been made, the Trustee shall withdraw from the Series A Bonds
Debt Service Fund, on or prior to each Principal Payment Date, an amount equal to the Principal
Amount of the Outstanding Series A Bonds, if any, maturing on that date and shall cause it to be
applied to the payment of the principal of the Series A Bonds when due.
(c) Each withdrawal from the Series A Bonds Debt Service Fund under subsections (a)
and (b) of this Section shall be made on or immediately prior to the Interest Payment Date or
Principal Payment Date to which it relates, and the amount so withdrawn shall be deemed to be part
of the Series A Bonds Debt Service Fund until such Interest Payment Date or Principal Payment
Date. In the event that amounts on deposit in the Series A Bonds Debt Service Fund are insufficient
to make the transfers under subsections (a) and (b) when required thereunder, the Trustee shall
transfer to the Series A Bonds Debt Service Fund the amount of such insufficiency first, from the
Operating Reserve Fund pursuant to Section 5.19 hereof, then from the Subordinate Bonds Debt
Service Fund pursuant to Section 5.14 hereof and then from the Series A Bonds Debt Service
Reserve Fund.
(d) The Trustee shall apply money in the Series A Bonds Debt Service Fund to the
purchase or the redemption of the Term Bonds in the manner provided in this Section and Article N,
provided that no such Series A Bonds shall be so purchased in lieu of redemption during the period
of 45 days next preceding each Sinking Fund Installment due date established for such Term Bonds.
The price paid by the Trustee (including any brokerage and other charges) for any Term Bond
purchased pursuant to this subsection (d) shall not exceed the Redemption Price applicable on the
next date on which such Term Bond could be redeemed in accordance with its terns as part of a
Sinking Fund Installment. Subject to the limitations set forth and referred to in this Section, the
Trustee shall purchase Term Bonds at such times, for such prices, in such manner (whether after
advertisement for tenders or otherwise) as the Trustee shall be directed by a certificate of a Borrower
Representative, with a copy to the Authority, and as may be possible with the amount of money
available in the Series A Debt Service Fund therefor.
RVPUB\FBAUNR709416.1 41
(e) As soon as practicable after the 450' day but not later than the 300' day prior to the due
date of any Sinking Fund Installment, the Trustee shall proceed pursuant to Section 4.3 to call for
redemption on that date a Principal Amount of Series A Term Bonds subject to such Sinking Fund
Installment in such amount as shall be necessary to complete the retirement of the Principal Amount
of the Series A Tenn Bonds of such maturity specified for such Sinking Fund Installment. The
Trustee shall withdraw from the Series A Bonds Debt Service Fund, on or prior to the due date of the
next Sinking Fund Installment, an amount equal to the Principal Amount of the Series A Term
Bonds called for redemption on such date pursuant to this subsection; and shall cause it to be applied
to the payment of the Redemption Price thereof on such date.
If, by application of moneys in the Series A Bonds Debt Service Fund, the Trustee shall
purchase in any Bond Year Series A Term Bonds subject to redemption from moneys in the Series A
Bonds Debt Service Fund in excess of the aggregate Sinking Fund Installment in respect of such
Series A Term Bonds for such Bond Year, the Trustee shall file with the Authority and the Borrower
not later than the 20th day preceding the close of such Bond Year, a statement identifying such Series
A Term Bonds purchased and called for redemption during such Bond Year. The Borrower shall
thereafter cause a certificate of a Borrower Representative, with a copy to the Authority, to be filed
with the Trustee not later than the 10th day preceding the close of such Bond Year setting forth with
respect to the amount of such excess the years in which Sinking Fund Installments are to be reduced
and the respective amounts by which such Sinking Fund Installments are to be reduced; provided that
such reduction shall be as nearly as practicable pro rata among remaining Sinking Fund Installments
so as to be in increments of $5,000.
Upon the retirement of any Series A Term Bonds by purchase or redemption pursuant to this
Section, the Trustee shall file with the Authority and the Borrower a statement identifying such
Bonds and setting forth the date of their purchase or redemption, the amount of the purchase price or
the Redemption Price of such Series A Term Bonds and the amount paid as interest thereon.
(f) All interest and other income from time to time received from the deposit and
investment of moneys in the Series A Bonds Debt Service Fund shall be transferred upon receipt to
the Revenue Fund.
(g) No amount shall be withdrawn or transferred from or paid out of the Series A Bonds
Debt Service Fund except as provided in this Section.
Section 5.9 Series A Bonds Debt Service Reserve Fund.
(a) The Series A Bonds Debt Service Reserve Fund shall be held by the Trustee for the
benefit of the Series A Bonds. If available moneys in the Series A Bonds Debt Service Fund shall be
insufficient to pay in full the interest on and principal of any Series A Bonds becoming due on any
Interest Payment Date, Principal Payment Date or any date on which Series A Bonds have been
called for redemption, the Trustee shall transfer an amount equal to the deficiency (following any
withdrawal and transfer from the Operating Reserve Fund pursuant to Section 5.19 hereof and any
withdrawal and transfer from the Subordinate Bonds Debt Service Fund pursuant to Section 5.14
hereof), from the Series A Bonds Debt Service Reserve Fund to the Series A Bonds Debt Service
Fund for such purpose unless the Authority shall, by an Officer's Certificate delivered to the Trustee
prior to the Interest Payment Date, designate one or more Funds or Accounts from which an amount
RVPUB\FBAUW709416.1 42
equal to the deficiency in the Series A Bonds Debt Service Fund is required to be transferred to the
Series A Bonds Debt Service Fund.
(b) All interest and other income from time to time received from the deposit and
investment of moneys in the Series A Bonds Debt Service Reserve Fund shall be transferred upon
receipt to the Revenue Fund.
(c) If, on or before an Interest Payment Date, the amount in the Series A Bonds Debt
Service Reserve Fund exceeds the Series A Bonds Debt Service Reserve Fund Requirement, the
Trustee shall withdraw the amount therein in excess of the Series A Bonds Debt Service Reserve
Fund Requirement and transfer such amount to the Revenue Fund.
(d) Whenever the Authority shall receive a Prepayment or Net Proceeds and shall transfer
the proceeds thereof to the Series A Bonds Redemption Fund, which in any such case would result in
the reduction of the Series A Bonds Debt Service Reserve Fund Requirement upon application of the
moneys so transferred to the purchase or redemption of Series A Bonds, the Trustee shall,
immediately prior to and in connection with each such purchase or redemption, withdraw from the
Series A Bonds Debt Service Reserve Fund and deposit in the Series A Bonds Redemption Fund an
amount of moneys equal to the reduction of the Series A Bonds Debt Service Reserve Fund
Requirement which would result upon the purchase or redemption of such Series A Bonds (including
the purchase or redemption of such Series A Bonds utilizing the moneys being transferred from the
Series A Bonds Debt Service Reserve Fund and deposited in the Series A Bonds Redemption Fund
pursuant to the provisions of this paragraph), but only to the extent that any such withdrawal would
. not reduce the amount of the Series A Bonds Debt Service Reserve Fund below the Series A Bonds
Debt Service Reserve Fund Requirement. The amount of moneys to be withdrawn from the Series A
Bonds Debt Service Reserve Fund in each instance pursuant to the provisions of this paragraph shall
be as determined by a certificate of a Borrower Representative filed with the Trustee, with a copy to
the Authority.
Section 5.10 Series A Bonds Redemption Fund.
(a) The Series A Bonds Redemption Fund shall be held by the Trustee for the benefit of
the Series A Bonds. The Trustee shall deposit into the Series A Bonds Redemption Fund any
Prepayments or Net Proceeds pursuant to Section 5.6. Any moneys on deposit in the Series A Bonds
Redemption Fund shall be used and applied, as soon as practicable following the receipt thereof, but
not later than twelve months after such receipt, for either or both of the following purposes:
(1) to the redemption of Series A Bonds as may be designated in an Officer's
Certificate; or
(2) to the purchase of Series A Bonds at the price specified by the Borrower, but
only upon receipt of a certificate of a Borrower Representative, with a copy to the Authority,
stating the Principal Amounts and maturities of the Series A Bonds to be purchased;
provided that no such purchase shall be made at a price in excess of the Redemption Price
applicable on the next ensuing redemption date, and that no such purchase shall be made
• during the period of 45 days next preceding a redemption date from moneys to be applied
pursuant to paragraph (1) above to the redemption of Series A Bonds on such date.
RVPUB\FBAUM\709416.1 43
(b) Accrued interest on purchased Series A Bonds shall be paid from the Series A Bonds
Debt Service Fund.
(c) All interest and other income from time to time received from the deposit and
investment of moneys in the Series A Bonds Redemption Fund shall be transferred upon receipt to
the Revenue Fund.
(d) To the extent Prepayment or Net Proceeds remain after giving effect to the
redemption or purchase of all Outstanding Series A Bonds pursuant to (a) above, such amounts shall
be transferred to the Subordinate Bonds Redemption Fund for application thereunder.
(e) No amount shall be withdrawn or transferred from or paid out of the Series A Bonds
Redemption Fund except as provided in this Section.
Section 5.11 Rebate Fund.
(a) The Rebate Fund shall be administered in accordance with the provision of Section
7.14 hereof. The Rebate Fund shall not be subject to the lien or encumbrance of this Indenture and
shall be held in trust by the Trustee for the benefit of the United States of America. The amounts
deposited in the Rebate Fund shall be subject to the claim of no other person, including that of the
Trustee and Bondowners. Moneys transferred to the Rebate Fund pursuant to Section 5.17 and
Section 7.14 hereof shall be used for no other purpose than to make payments to the United States
Treasury, at the time and manner and in the amount and as more fully provided in Section 7.14
hereof.
(b) The Trustee shall be deemed conclusively to have complied with the provisions of
this Indenture and the Tax Certificate with respect to Rebatable Arbitrage if it follows the directions
of the Borrower, and the Trustee shall have no independent responsibility to, or liability resulting
from its failure to, enforce compliance by the Borrower or the Authority with the Tax Certificate or
the provisions of this Indenture and the Tax Certificate with respect to Rebatable Arbitrage.
Section 5.12 Administration Fund.
(a) The Trustee shall establish the Administration Fund and establish therein the General
Account and the Borrower Administration Fee Account to be administered as provided in this
Indenture. Moneys deposited in the Accounts of the Administration Fund pursuant to Section 5.7(d),
shall be held therein in segregated Accounts until disbursed for the purposes hereafter provided.
(b) $0 shall be deposited into the General Account of the Administration Fund on the
Closing Date. Moneys deposited in the General Account of the Administration Fund shall be applied
by the Trustee to the Authority Annual Fee (payable on a monthly basis to the Authority) and the
Administration Fee and, from time to time as directed by a certificate of a Borrower Representative,
with a copy to the Authority, to the payment of ordinary fees and expenses of Fiduciaries, including
expenses of purchase or redemption of Bonds. Any fees and expenses of the Fiduciaries and
amounts payable to the Authority above and beyond the amount contemplated in the final annual
budget prepared by the Borrower shall be paid from the Surplus Fund, or if the Surplus Fund is
insufficient, shall be paid by the Borrower.
RVPUB\FBAUM\709416.1 44
0 , (c) Moneys deposited in the Borrower Administration Fee Account of the Administration
Fund shall be applied by the Trustee, on a monthly basis, to the payment of the Borrower
Administration Fee.
(d) All interest and other income from time to time received from the deposit and
investment of moneys in the Accounts of the Administration Fund shall be transferred upon receipt
to the Revenue Fund.
(e) No amount shall be withdrawn or transferred from or paid out of the Administration
Fund except as provided in this Section 5.12.
Section 5.13 Repair and Replacement Fund. The Trustee shall establish and hold the
Repair and Replacement Fund for the financial benefit of the Project and shall deposit therein such
amounts specified in Section 5.4(a)(2) on the Closing Date and thereafter the amounts specified in
Section 5.7(h) hereof. Moneys deposited in the Repair and Replacement Fund shall be held therein
segregated from other funds held by the Trustee until disbursed for the purposes hereafter provided.
Expenditures from the Repair and Replacement Fund which are not included in the annual budget
and Exhibit C of the Loan Agreement shall be subject to the Oversight Agent's approval.
Disbursements from the Repair and Replacement Fund shall be made upon the written request of the
Borrower and approved in writing by the Oversight Agent for the purpose of funding initial
improvements to the Project and effecting the items set forth in Exhibit C to the Loan Agreement or
for any other purpose for the benefit of the Proj ect in accordance with the annual budget filed by the
• Borrower pursuant to the Loan Agreement or for such other similar purposes which the Oversight
Agent shall reasonably direct, including maintenance costs, replacement of machinery and appliances
and including, if necessary, making payments for debt service on the Bonds, provided that such
moneys shall be used for debt service on the Series A Bonds only if such moneys are "Available
Moneys," as defined in Section 4.01(b)(iv) hereof. Moneys in the Repair and Replacement Fund
shall be disbursed upon the written request of the Borrower and the Oversight Agent in accordance
with the provisions of Section 6.22 of the Loan Agreement. Interest earnings on moneys in the
Repair and Replacement Fund will be deposited to the Revenue Fund. The Trustee shall also accept
for deposit into the Repair and Replacement Fund, any other moneys delivered from time to time by
the Borrower with directions for deposit to the Repair and Replacement Fund.
Section 5.14 Subordinate Bonds Debt Service Fund.
(1) Subject to subsection (8) of this Section 5.14, the Subordinate Bonds Debt Service
Fund shall be held by the Trustee for the benefit of the Subordinate Bonds. The Trustee shall
withdraw from the Subordinate Bonds Debt Service Fund, on or prior to each Interest Payment Date,
an amount equal to the unpaid interest due on the Subordinate Bonds on that date and shall cause it
to be applied to the payment of such interest when due.
(2) If the withdrawals required under subsection (1) of this Section on the same and every
prior Interest Payment Date have been made, the Trustee shall withdraw from the Subordinate Bonds
Debt Service Fund, on or prior to each Principal Payment Date, an amount equal to the Principal
Amount of the Outstanding Subordinate Bonds, if any, maturing on that date and shall cause it to be
• applied to the payment of the principal of the Subordinate Bonds when due.
RVPU13\FBAUvi\709416.1 45
(3) Each withdrawal from the Subordinate Bonds Debt Service Fund under subsection (1)
and (2) of this Section shall be made on or immediately prior to the Interest Payment Date or
Principal Payment Date to which it relates, and the amount so withdrawn shall be deemed to be part
of the Subordinate Bonds Debt Service Fund until such Interest Payment Date or Principal Payment
Date.
(4) The Trustee shall apply money in the Subordinate Bonds Debt Service Fund to the
purchase or the redemption of the Subordinate Bonds in the manner provided in this Section and
Article N, provided that no such Subordinate Bonds shall be purchased in lieu of redemption during
the period of 45 days next preceding each targeted Sinking Fund Installment due date established for
such Subordinate Bonds. The price paid by the Trustee (excluding accrued interest on Subordinate
Bonds but including any brokerage and other charges) for any Subordinate Bonds purchased pursuant
to this subsection (4) shall not exceed the Redemption Price applicable on the next date on which
such Subordinate Bonds could be redeemed in accordance with its terms as part of a targeted Sinking
Fund Installment. Subject to the limitations set forth and referred to in this Section, the Trustee shall
purchase Subordinate Bonds at such times, for such prices, in such manner (whether after
advertisement for tenders or otherwise) as the Trustee shall be directed by a certificate of a Borrower
Representative, with a copy to the Authority, and as may be possible with the amount of money
available in the Subordinate Bonds Debt Service Fund. Accrued interest on and principal of the
Subordinate Bonds shall be paid from the Subordinate Bonds Debt Service Fund.
(5) As soon as practicable after the 45th day but no later than the 3e day prior to the due
date of any Targeted Sinking Fund Installment, the Trustee shall proceed pursuant to Section 4.3 to
call for redemption on that date a Principal Amount of Subordinate Bonds subject to such targeted
Sinking Fund Installment in such amounts shall be necessary to complete the retirement of the
Principal Amount of the Subordinate Bonds of such maturity specified for such targeted Sinking
Fund Installment. The Trustee shall withdraw from the Subordinate Bonds Debt Service Fund, on or
prior to the due date of the next targeted Sinking Fund Installment, an amount equal to the Principal
Amount of the Subordinate Bonds called for redemption on such date pursuant to this subsection,
and shall cause it and funds withdrawn from the Subordinate Bonds Debt Service Fund for the
payment of the accrued interest thereon to be applied to the payment of the Redemption Price thereof
on such date. If on any date there shall be moneys on deposit in such Subordinate Bonds Debt
Service Fund and no Subordinate Bonds subj ect to redemption therefrom shall then be Outstanding,
such money shall be transferred to the Revenue Fund.
If, by application of moneys in the Subordinate Bonds Debt Service Fund, the Trustee shall
purchase in any Bond Year Subordinate Bonds subject to redemption from moneys in the
Subordinate Bonds Debt Service Fund in excess of the aggregate targeted Sinking Fund Installment
in respect of such Bonds for such Bond Year, the Trustee shall file with the Borrower and the
Authority not later than the 20`h day preceding the close of such Bond Year, a statement identifying
such Subordinate Bonds purchased and called for redemption during such Bond Year. The Borrower
shall thereafter cause a certificate or a Borrower Representative to be filed with the Trustee, with a
copy to the Authority, not later than the 10th day preceding the close of such Bond Year setting forth
with respect to the amount of such excess the years in which targeted Sinking Fund Installments are
to be reduced and the respective amounts by which such targeted Sinking Fund Installments are to be
reduced; provided that such reduction shall be as nearly as practicable allocated pro rata between
remaining Targeted Sinking Fund Installments remaining with respect to the Subordinate Bonds.
RVPUB\FBAUM\709416.1 46
0
Upon retirement of any Subordinate Bonds by purchase or redemption pursuant to this
Section, the Trustee shall file with the Borrower and the Authority a statement identifying such
Subordinate Bonds and setting forth the date of their purchase or redemption, the amount of the
purchase price or the Redemption Price of such Subordinate Bonds and the amount paid as interest
thereon.
(6) All interest and other income from time to time received from the deposit and
investment of moneys in the Subordinate Bonds Debt Service Fund shall be transferred to the
Revenue Fund.
(7) All moneys in the Subordinate Bonds Debt Service Fund applied pursuant to this
Section 5.14 shall be applied pro rata among the Subordinate Bonds, without distinction as to series,
in the event there are insufficient moneys to pay in full any interest or principal on the Subordinate
Bonds under this Indenture.
(8) Notwithstanding any other provisions of this Section 5.14 or this Indenture to the
contrary, in the event that on the 15'h day of any month there are insufficient moneys in the Revenue
Fund to make the deposit to the Series A Bonds Debt Service Fund required to be made pursuant to
Section 5.7(a) hereof, then the Trustee shall transfer an amount equal to any remaining shortfall first
from the Operating Reserve Fund pursuant to Section 5.19 hereof and then from the Subordinate
Bonds Debt Service Fund to the Series A Bonds Debt Service Fund.
Section 5.15 Subordinate Bonds Debt Service Reserve Fund.
(a) The Subordinate Bonds Debt Service Reserve Fund shall be held by the Trustee for
the benefit of the Subordinate Bonds. If available moneys in the Subordinate Bonds Debt Service
Fund shall be insufficient to pay in full the interest on and principal due at maturity of any
Subordinate Bonds becoming due on any Interest Payment Date, the Principal Payment Date or any
date on which Subordinate Bonds have been called for redemption, the Trustee shall transfer an
amount equal to the deficiency from the Subordinate Bonds Debt Service Reserve Fund to the
Subordinate Bonds Debt Service Fund for such purpose after first having transferred an amount
equal to any such shortfall from the Operating Reserve Fund pursuant to Section 5.19 hereof.
(b) All interest and other income from time to time received from the deposit and
investment of moneys in the Subordinate Bonds Debt Service Reserve Fund shall be transferred upon
receipt to the Revenue Fund.
(c) If, at any time, the amount in the Subordinate Bonds Debt Service Reserve Fund
exceeds the Subordinate Bonds Debt Service Reserve Fund Requirement, the Trustee shall withdraw
the amount therein in excess of the Subordinate Bonds Debt Service Reserve Fund Requirement and
transfer such amount to the Revenue Fund.
(d) If on any Interest Payment Date the balance in the Subordinate Bonds Debt Service
Reserve Fund should be less than the Subordinate Bonds Service Reserve Fund Requirement, the
Trustee shall notify the Authority and the Borrower.
RVPUB\FBAUM\709416.1 47
Section 5.16 Subordinate Bonds Redemption Fund.
(a) The Subordinate Bonds Redemption Fund shall be held by the Trustee for the benefit
of the Subordinate Bonds. The Trustee shall deposit into the Subordinate Bonds Redemption Fund
any Subordinate Residual Prepayments or Subordinate Residual Net Proceeds pursuant to Section
5.6. Any moneys on deposit in the Subordinate Bonds Redemption Fund shall be used and applied,
as soon as practicable following the receipt thereof, but not later than twelve months after such
receipt, for either or both of the following purposes:
(1) to the redemption of Subordinate Bonds as maybe designated in a certificate
of a Borrower Representative, with a copy to the Authority; or
(2) to the purchase of Subordinate Bonds at the price specified by the Borrower,
but only upon receipt of a certificate of a Borrower Representative, with a copy to the
Authority, stating the Principal Amounts of the Subordinate Bonds to be purchased; provided
that no such purchase shall be made at a price in excess of the Redemption Price applicable
on the next ensuing redemption date.
(b) Accrued interest on purchased Subordinate Bonds shall be paid from the Subordinate
Bonds Debt Service Fund.
(c) All interest and other income from time to time received from the deposit and
investment of moneys in the Subordinate Bonds Redemption Fund shall be transferred upon receipt
to the Revenue Fund.
(d) To the extent Subordinate Residual Prepayments or Residual Net Proceeds remain
after giving effect to the redemption or purpose of all Outstanding Subordinate Bonds pursuant to (a)
above, such amounts shall be transferred to the Revenue Fund for application thereunder.
(e) All moneys in the Subordinate Bonds Redemption Fund applied pursuant to this
Section 5.16 shall be applied pro rata, without distinction as to series, among the Subordinate Bonds
in the event there are insufficient moneys to pay in full any interest or principal then due on the
Subordinate Bonds, under this Indenture.
Section 5.17 Surplus Fund.
(a) The Surplus Fund shall be held by the Trustee. Annually, following computation and
deposit of the Rebatable Arbitrage for the preceding Bond Year (if required for such Bond Year by
Section 7.14 hereof) in the Rebate Fund in accordance with Section 7.14 hereof and provided there is
no deficiency in the Series A Bonds Debt Service Fund, the Series A Bonds Debt Service Reserve
Fund, the Rebate Fund, the Administration Fund, the Subordinate Bonds Debt Service Fund, or the
Subordinate Bonds Debt Service Reserve Fund or the Repair and Replacement Fund, any moneys in
the Surplus Fund shall be released from the lien hereof, not less frequently than annually, upon
delivery to the Trustee of the semi-annual Coverage Requirement Certificate and provided no Event
of Default has been declared hereunder or pursuant to the Loan Agreement, the amounts on deposit
in the Surplus Fund as of the conclusion of the immediately preceding Bond Year shall be transferred
to the Borrower for use for any lawful purpose relating to the Project.
RVPUB\FBAUW709416.1 48
>>9 (b) If at any time there is a deficiency in the Series A Bonds Debt Service Fund, the
Series A Bonds Debt Service Reserve Fund, the Rebate Fund, the Administration Fund, the Repair
and Replacement Fund, the Subordinate Bonds Debt Service Fund or the Subordinate Bonds Debt
Service Reserve Fund, the Trustee shall withdraw from the Surplus Fund, to the extent there are any
moneys therein and deposit in such Fund in the order described in Section 5.7 hereof, the amount
necessary to remedy such deficiency and shall give written notice to the Authority of such
withdrawal.
(c) All interest and other income from time to time received from the deposit and
investment of moneys in the Surplus Fund shall be transferred upon receipt to the Revenue Fund.
Section 5.18 Rental Assistance Fund. The Trustee shall establish the Rental Assistance
Fund into which there shall be deposited on the Closing Date the amount of $3,500,000 from a
portion of Bond proceeds, all as set forth in Section 5.4 hereof. The Rental Assistance Fund shall be
administered as provided in Section 6.29 of the Loan Agreement. Moneys in the Rental Assistance
Fund are not pledged to repayment of the Bonds. Moneys in the Rental Assistance Fund shall be
invested at a yield not in excess of the yield on the Bonds.
Section 5.19 Operating Reserve Fund, There is hereby established with the Trustee a
separate trust fund designated as the Operating Reserve Fund. Moneys in the Operating Reserve
Fund will be disbursed by the Trustee upon receipt of a written request from the Borrower and shall
be expended and used by the Borrower from time to time to pay operating and related expenses with
respect to the Project, to make debt service payments with respect to the Bonds to provide rental
assistance, and to pay the costs of capital improvements to the Project as set forth herein. Amounts
in the Operating Reserve Fund shall also be used to make deposits to (i) the Series A Debt Service
Fund pursuant to Section 5.8(c); (ii) the Series A Debt Service Reserve Fund pursuant to Section
5.9(a); (iii) the Subordinate Bonds Debt Service Fund pursuant to Section 5.14(8); and (iv) the
Subordinate Bonds Debt Service Reserve Fund pursuant to Section 5.15(d).
At such time that (i) the balance in the Operating Reserve Fund is $75,000; or (ii) the
Borrower shall have delivered a Coverage Requirement Certificate for two successive years showing
that the Coverage Ratio for the Bonds has been at least 1.20% for each of such years, no further
moneys shall be required to be deposited in the Operating Reserve Fund and the Borrower may
requisition and withdraw all moneys then on deposit in the Operating and Reserve Fund, to be used
for expenditures relating to the Project.
ARTICLE VI
SECURITY FOR DEPOSITS AND INVESTMENT OF FUNDS
Section 6.1 Security for Deposits. All moneys held hereunder by any Fiduciary shall be
held in trust and continuously and fully secured for the benefit of the Authority and the Owners of
the Bonds in the manner required by this Article; provided, however, that it shall not be necessary for
any Fiduciary to give security for the deposit of any moneys with them held in trust for the payment
of the principal or Redemption Price of or interest on the Bonds, or for the Fiduciaries to give
security for any moneys which shall be represented by obligations purchased under the provisions of
this Indenture as an investment of such moneys.
R V PUB\FBAUM\709416.1 49
Section 6.2 Investment and Deposit of Funds.
(a) The Trustee shall keep all money held by it, as continuously as reasonably possible,
invested and reinvested in Qualified Investments maturing at the times and in the amounts specified
below for the Fund or Account to which it pertains, all as instructed in writing by a Borrower
Representative. In determining the appropriate Qualified Investments, the Borrower Representative,
with a copy to the Authority of any written directions given to the Trustee, shall review and comply
with the following investment restrictions with respect to each Fund:
(1) for the Project Fund, at the times and in the amounts necessary to provide
funds for the making or acquiring of the Loan and for the other purposes described in Section
5.2 pursuant. to a certificate of a Borrower Representative, with a copy to the Authority;
(2) for the Revenue Fund, at the times and in the amounts necessary to provide
funds for the disbursements therefrom pursuant to a certificate of a Borrower Representative,
with a copy to the Authority;
(3) for the Series A Bonds Debt Service Fund and the Subordinate Bonds Debt
Service Fund, at the times and in the amounts necessary to provide funds for payment when
due of Interest and Principal Installments on the appropriate series of Bonds pursuant to a
certificate of a Borrower Representative, with a copy to the Authority;
(4) for the Series A Bonds Redemption Fund and the Subordinate Bonds
Redemption Fund, at the times and in the amounts necessary to provide funds for the
purposes described in Section 5.10 and 5.15, respectively, pursuant to a certificate of a
Borrower Representative, with a copy to the Authority;
(5) for the Series A Bonds Debt Service Reserve Fund and the Subordinate Bonds
Debt Service Reserve Fund, at the times and in the amounts necessary to provide funds for
the disbursements therefrom pursuant to a certificate of a Borrower Representative, with a
copy to the Authority, provided that such Qualified Investments shall mature, or shall be
subject to redemption by the holder thereof at the option of such holder, not later than the
final scheduled maturity date of any Bonds Outstanding at the date of calculation;
(6) for the Rebate Fund, at the times and in the amounts necessary to provide
funds for disbursements therefrom in accordance with the Indenture, pursuant to a certificate
of a Borrower Representative, with a copy to the Authority;
(7) for the Administration Fund, at the times and in the amounts necessary to
provide funds for the purposes described in Section 5.12 pursuant to a certificate of a
Borrower Representative, with a copy to the Authority;
(8) for the Surplus Fund, at the times and in the amounts necessary to provide
funds for the purposes described in Section 5.17, pursuant to a certificate of a Borrower
Representative, with a copy to the Authority;
(9) for the Cost of Issuance Fund, at the times and in the manner specified in a
certificate of a Borrower Representative, with a copy to the Authority;
RVPUB\FBAUM\709416.1 50
(10) for the Repair and Replacement Fund, at the tunes and in the manner specified
in a certificate of a Borrower Representative, with a copy to the Authority;
(11) for the Rental Assistance Fund, at the times and in the manner specified in a
Certificate of a Borrower Representative, with a copy to the Authority; and
(12) for the Operating Reserve Fund, at the times and in the manner specified in a
Certificate of a Borrower Representative, with a copy to the Authority.
Investment of moneys in the Subordinate Bonds Debt Service Reserve Fund shall be
allocated to the respective accounts in said Fund in a manner consistent with the deposit of moneys
into said accounts.
In the event that written instructions of a Borrower Representative are not received by the
Trustee in a timely manner, the Trustee shall invest the amounts deposited in the Funds and
Accounts in those investments defined in clause (g) of the definition of "Qualified Investments."
Except for Qualified Investments described in clauses 0), (k) and (1) of the definition of"Qualified
Investments," all investments made by the Trustee shall provide for payment of principal and interest
which will be payable no later than the earlier to occur of six (6) months from the date of investment
or the date on which it is estimated that such moneys will be required by the Trustee.
(b) Moneys in any Fund or Account created and established by, or maintained pursuant
to, this Indenture and held by a Fiduciary maybe invested in common with moneys held in any other
such Fund or Account; provided, however, that the common investments with such other moneys
constitute Qualified Investments and provided, further, that such investments are held by the same
Fiduciary acting in the same capacity.
(c) Obligations purchased as an investment of moneys in any Fund or Account held by a
Fiduciary hereunder shall be deemed at all times to be a part of such Fund or Account and the
income or interest earned by, or incremented to, any such Fund or Account due to the investment and
reinvestment thereof shall be retained in such Fund or Account as part thereof, except as otherwise
provided in this Indenture and subject to the required transfer thereof from such Fund or Account
pursuant to this Section. A Fiduciary shall sell in any commercially reasonable name, or present for
redemption, any obligation purchased by it as an investment whenever it shall be necessary in order
to provide moneys to meet any payment or transfer from the Fund or Account for which such
investment was made; provided, however, that in lieu of liquidating any such investment obligations
and transferring the proceeds thereof, the Trustee may transfer investment obligations which will
mature and the proceeds of which will be available on or before the date such proceeds are required
for the purposes of this Indenturp. The Authority and the Borrower acknowledge that to the extent
that regulations of the Comptroller of the Currency or other applicable regulatory agency grant the
Authority or the Borrower the right to receive brokerage confirmations of security transactions, the
Authority and the Borrower waive receipt of such confirmations. The Trustee shall furnish to the
Authority and the Borrower periodic statements which include detail of all investment transactions
made by the Trustee. Each Fiduciary shall advise the Authority and the Borrower in writing, on or
before the fifteenth (15"') day of each calendar month, of the details of all investments held for the
credit of each Account in its custody under the provisions of this Indenture as of the end of the
preceding month. The Trustee or an affiliate may act as principal or agent in the acquisition or
RVPUB\FBAUM709416.1 51
disposition of investments and purchase and sell investments through its investment department or
that of its affiliates, each of which shall be entitled to its customary fee therefor.
(d) hi computing the amount in any Fund or Account held by a Fiduciary or the Trustee
under the provisions of this Indenture, the Trustee shall value (or cause to be valued at the
Borrower's expense) obligations purchased as an investment of moneys therein as of the end of each
month, calculated as follows: (a) as to investments the bid and asked prices of which are published
on a regular basis in The Wall Street Journal (or, if not there, then in The New York Times), the
average of the bid and asked prices for such investments so published on or most recently prior to
such time of determination; (b) as to investments the bid and asked prices ofwhich are not published
on a regular basis in The Wall Street Journal or The New York Times, the average bid price at such
price at such time of determination for such investments by any two nationally recognized
government securities dealers (selected by the Trustee in its absolute discretion) at the time making a
market in such investments or the bid price published by a nationally recognized pricing service;
(c) as to certificates of deposit and bankers acceptances, the face amount thereof, plus accrued
interest; and (d) as to any investment not specified above, the value thereof established by prior
agreement among the Borrower and Trustee. As an alternative to any of the foregoing, the value of
any investment may be determined as of the end of each month by the manner currently employed by
the Trustee or any other manner consistent with industry standard, including, without limitation, use
of any computer pricing serve selected by the Trustee. Notwithstanding the foregoing, the Trustee
shall determine the value of the Series A Bonds Debt Service Reserve Fund investments no less
frequently than semiannually (and monthly from the date of any deficiency until such deficiency is
cured).
Section 6.3 Liability of the Fiduciaries for Investments. No Fiduciary shall be liable or
responsible for making or failing to make any investment authorized by the provisions of this Article,
in the manner provided in this Article, or for any loss resulting from any such investment so made or
failure to so make, except for its own negligence. The Trustee may deem investments directed by a
Borrower Representative as Qualified Investments without independent investigation thereof.
ARTICLE VII
COVENANTS OF THE AUTHORITY
The Authority covenants and agrees with the Owners of the Bonds as follows:
Section 7.1 Payment of Bonds. The Authority shall duly and punctually pay or cause to be
paid, but solely from the Series A Bonds Trust Estate, as to the Series A Bonds and from the
Subordinate Bonds Trust Estate, as to the Subordinate Bonds, the principal or Redemption Price, if
any, of every Bond and the interest thereon, at the dates and places and in the manner provided in the
Bonds according to the true intent and meaning thereof.
Section 7.2 Offices for Payment and Registration of Bonds. The Authority may designate
an additional Paying Agent located within or without the State where Bonds may be presented for
payment.
Section 7.3 Further Assurances. At any and all times the Authority shall, so far as it may
be authorized or permitted by law, pass, make, do, execute, acknowledge and deliver, all and every
such further resolution, acts, deeds, conveyances, assignments, transfers and assurances as may be
RVPUB\FBAUM\709416.1 52
necessary or desirable for the better assuring, conveying, granting, assigning, confirming and
r effecting all and singular the proceeds, moneys, rights, interests and collections hereby pledged or
assigned or intended so to be, or which the Authority may hereafter become bound to pledge or
assign.
Section 7.4 Power to Issue Bonds and Make Pledges. The Authority is duly authorized
pursuant to law to authorize and issue the Bonds and to adopt this Indenture and to pledge the Series
A Bonds Trust Estate and the Subordinate Bonds Trust Estate in the manner and to the extent
provided in this Indenture. The Series A Bonds Trust Estate and the Subordinate Bonds Trust Estate
are and will remain free and clear of any pledge, lien, charge or encumbrance thereon or with respect
thereto prior to, or of equal rank with, the pledge created by Section 5.1 hereof. The Bonds and the
provisions of this Indenture are and will be the valid and legally enforceable obligations of the
Authority in accordance with their terms and the terms of this Indenture. The Authority shall at all
times, to the extent permitted by law, defend, preserve and protect the pledge of the Series A Bonds
Trust Estate and the Subordinate Bonds Trust Estate, and all the rights of the Bondowners under this
Indenture against all claims and demands of all persons whomsoever.
Section 7.5 Use of Proceeds.
(a) The Authority shall use and apply the proceeds of Bonds, to the extent not otherwise
required by this Indenture to make the Loan for the purposes specified in the Act and pursuant to this
Indenture, and shall do all such acts and things necessary to receive and collect when due all
Revenues, and shall diligently enforce, and take all steps, actions and proceedings reasonably
• ` necessary in the judgment of the Authority for the enforcement of all terms, covenants and
conditions of the Loan.
(b) The Loan shall be made by the Authority from the proceeds of the Bonds concurrently
with the issuance of the Bonds and the Deed of Trust securing the Loan shall have been executed and
recorded either concurrently or prior to the issuance and delivery of the Bonds; provided that:
(1) the Deed of Trust shall constitute and create a mortgage lien on the Project
subject only to Permitted Encumbrances, which further provides a valid security interest in
the personal property acquired with proceeds of the Loan and attached to or used or to be
used in connection with the operation of the Project, and in all rents, revenues, receipts,
income and other moneys received by or payable to the Borrower; and
(2) the Borrower shall have marketable title in fee simple to the Property, free and
clear of all liens and encumbrances, other than Permitted Encumbrances, which would
materially affect the value or usefulness of such Property, as set forth in the policy of title
insurance delivered in connection therewith and in a form which is satisfactory to the
Authority,
Section 7.6 Fees and Charges. The Authority shall review and approve such Fees and
Charges as it shall deem appropriate to pay each Fiduciary acting in connection with this Indenture
and the Bonds. Subject to prior review by the Authority or its Oversight Agent on the Authority's
behalf, the Borrower shall provide the Trustee with a schedule of the Fees and Charges to be paid by
the Borrower and of each revision of such schedule, and shall require the Borrower to make payment
of such Fees and Charges directly to the Trustee. The Trustee shall promptly deposit all such Fees
RVPUBNBAUW709416.1 53
and Charges so collected in the Administration Fund. The Trustee shall promptly advise the
Authority of each and every failure of the Borrower to make payment of Fees and Charges when due.
Section 7.7 Modification of Deed of Trust Terms. The Authority shall not consent to the
modification of, or modify, the rate or rates of interest of, or the amount or time of payment of any
installment of principal of or interest on the Loan on the Project, or the amount or time ofpayment of
any Fees and Charges payable with respect to such Loan, or the security for or any terms or
provisions of the Loan on the Project or the Deed of Trust securing the same in a manner detrimental
to the Trustee or the Bondowners.
Section 7.8 Prepayments. The Authority shall not accept, nor permit the Trustee to accept
a Prepayment from the Borrower, unless a Coverage Requirement Certificate is provided to the
Trustee which, in addition to containing the requirements of Section 6.16 of the Loan Agreement
also shows that the proceeds of such prepayment received by the Authority shall be in an amount not
less than the aggregate of (i) the amount to be prepaid; (ii) any interest and Fees and Charges on the
Loan accrued through the date of receipt of the proceeds of the Prepayment remaining unpaid; (iii) to
the extent not otherwise paid by the Borrower, the interest that would accrue on the Bonds of such
maturity or maturities as are to be designated by the Authority pursuant to subparagraph (a) or (b) of
Section 7.9 to be purchased or redeemed with the proceeds of such sale or Prepayment from the date
of receipt thereof by the Authority until the applicable optional redemption date of the Bonds so to be
purchased or redeemed; (iv) the redemption premium payable on the next applicable optional
redemption date on the Bonds so to be purchased or redeemed, if any; and (v) the costs and expenses
of the Authority in effecting the purchase or redemption of such Bonds, less the sum of (A) the
amount of applicable moneys available for withdrawal from the Series A Bonds Debt Service
Reserve Fund and the Series A Bonds Debt Service Fund with respect to the application to the
purchase or redemption of the Series A Bonds and the Subordinate Bonds Debt Service Fund and the
Subordinate Bonds Debt Serve Reserve Fund with respect to the application to the purchase or
redemption of the Subordinate Bonds in accordance with the terms and provisions of this Indenture,
as determined by the Authority, and (B) the amount of any other legally available funds of the
Authority transferred or directed by the Authority to be transferred to the Series A Bonds
Redemption Fund or the Subordinate Bonds Redemption Fund, as may be appropriate, in connection
with such purchase or redemption. If a prepayment is thus accepted, the Trustee shall notify S&P, if
S&P is then rating the Series A Bonds, of the date and the amount of such Prepayment.
Section 7.9 Disposition of Net Proceeds and Prepayments.
(a) Net Proceeds. Net Proceeds constituting proceeds of a condemnation award, sale of
land, or casualty insurance claim with respect to the Project shall be deposited in a special restoration
account to be established and held by the Trustee for the Project and the Trustee upon receipt ofNet
Proceeds shall give written notice to the Authority of such event. Such amounts shall either be
applied to the redemption of Bonds or the repair, replacement, restoration or rebuilding of the Project
or part thereof as determined in accordance with this Section. Prior to the receipt ofNet Proceeds by
the Trustee, the Trustee shall first receive a written direction from the Borrower as to whether such
proceeds shall be used to redeem the Bonds or to rebuild the Project as set forth in Section 5.4 of the
Loan Agreement. Upon receipt of such written direction from the Borrower that such Net Proceeds
will be used to redeem the Bonds, the Trustee shall notify the Authority and the Borrower shall cause
RVPUB\FBAUM709416.1 54
the Net Proceeds to be paid to the Trustee no more than 30 days from the date that such Net Proceeds
will be used to redeem the Bonds.
(b) Repair or Replacement. Amounts in the special restoration account described in (a)
above shall be applied to the repair, replacement, restoration or rebuilding of the Project if the
Borrower shall deliver or cause to be delivered to the Trustee within ninety (90) days or such longer
period as approved by the Authority of the event giving rise to the Net Proceeds written notice of its
determination that such proceeds may be applied to the repair, replacement, restoration or rebuilding
of the Project or part thereof in an economical manner, and that such proceeds shall be sufficient,
together with any other moneys deposited into such special restoration account for such purpose
together with (1) evidence of the Authority's written consent thereto, and (2) a report of a
management consultant to the effect that following such repair or restoration, the tests set forth in
Section 6.16 of the Loan Agreement with respect to coverage levels in the Coverage Requirement
Certificate will be met. Upon compliance with these conditions, the Trustee shall disburse the
moneys so deposited for such repair, replacement, restoration or rebuilding, but not in an aggregate
amount exceeding the cost thereof, upon receipt of a certificate of a Borrower Representative
approved by the Oversight Agent, with copies to the Authority stating (i) the amount to be paid, (ii)
the name of the person to which payment is to be made, and (iii) that such amount, together with all
prior payments from such account, do not exceed the cost of such repair, replacement, restoration or
rebuilding; provided that prior to making any such payments, the Trustee shall first have received a
certificate of a Borrower Representative approved by the Oversight Agent with copies to the
Authority stating (i) the estimated cost of such repair, replacement, restoration or rebuilding, (ii) that
. such repair, replacement, restoration or rebuilding is, in the signer's opinion, economically
practicable with the proceeds of such condemnation award, sale of land or hazard insurance claim,
and other moneys, if any, deposited in such account, and (iii) that the plans and specifications, if any,
prepared for such repair, replacement, restoration and rebuilding have been approved by the
Authority. All disbursements made by the Trustee pursuant to such Borrower's Certificates shall be
presumed to be made properly, and the Trustee shall not be required to see to the application of any
payments so made or inquire into the purposes for which such disbursements are made.
•
(c) Redemption. Any amounts remaining in a special restoration account and not
required for the repair, replacement, restoration or rebuilding of the Project for which such special
restoration account was established, all other Net Proceeds and Prepayments, less the cost and
expenses of the Authority incurred in collecting the same and in effecting the purchase or redemption
of the Bonds to be purchased or redeemed, shall be deposited in the Series A Bonds Redemption
Fund or the Subordinate Bonds Redemption Fund, as appropriate, as specified in writing to the
Trustee by the Authority and shall be applied to the purchase, payment, retirement or redemption of
Bonds in accordance with the provisions of this Indenture, provided, however, that any portion of
such Net Proceeds or Prepayment which represents due and unpaid principal of, or interest on, or
Fees and Charges with respect to, the Loan in each case as determined by the Authority in an
Officer's Certificate delivered to the Trustee, shall be deposited in the Revenue Fund in such
amount, if any, as shall be set forth in such Certificate.
RVPUB\FBAUM\709416.1 55
Section 7.10 Enforcement and Foreclosure of Deed of Trust.
(a) The Authority shall cooperate with the Trustee in connection with the enforcement,
and take all reasonable action necessary for the enforcement of all terms, covenants and conditions of
the Deed of Trust securing the Loan, including the prompt payment of Revenues.
(b) Whenever it shall be necessary in order to protect and enforce the rights of the
Authority under the Deed of Trust securing the Loan and to protect and enforce the rights and
interest of Bondowners under this Indenture, the Trustee shall commence foreclosure proceedings or
pursue other appropriate remedies against the Borrower in default under the provisions of the Deed
of Trust and, in protection and enforcement of its rights under the Deed of Trust, may bid for and
purchase the Project at any foreclosure or other sale thereof and pursuant thereto or otherwise acquire
and take possession of such Project.
(c) The Authority (and the Trustee, if acting in enforcing the Deed of Trust) shall be
entitled to payment of all of its costs incurred in connection with enforcement of the Deed of Trust,
including, but not limited to, legal fees and expenses, from Revenues prior to the use of Revenues for
any other purpose under this Indenture.
(d) The covenant set forth in this Section 7.10 shall be for the benefit of the Series A
Bonds so long as any Series A Bonds remain Outstanding. After the Series A Bonds have been paid
in full, the covenant set forth in this Section 7.10 shall then benefit the Subordinate Bonds. The
Trustee and all owners of Subordinate Bonds shall be deemed to have expressly accepted this
limitation with respect to being beneficiaries under the Deed of Trust as set forth in this Section
7.10(d) and the interests of the Subordinate Bonds Owners therein have been expressly subordinated
to the rights of the Series A Bonds, all as further described in Section 5.1(b) hereof.
(e) It is expressly understood and acknowledged that, since the Note and Deed of Trust
(while in the Authority's name as beneficiary) is assigned to the Trustee under this Indenture, it is not
intended that the Authority have any responsibility for foreclosure proceedings. Rather, foreclosure
proceedings will be conducted by the Trustee. Any and all liability of the Authority under this
Indenture, including any actions (or inaction) under this Section 7.10, is expressly subject to the
provisions of Section 14.3 of this Indenture.
Section 7.11 Accounts and Reports.
(a) The Trustee shall keep, or cause to be kept, proper books of record and account in
which complete and correct entries shall be made of its transactions and all Funds and Accounts
established by or maintained pursuant to this Indenture, which shall at all times during normal
business hours and upon reasonable notice, be subject to inspection by the Authority, the Trustee, the
Borrower and the Owners of an aggregate of not less than five percent (5%) in Principal Amount of
the Bonds then Outstanding or their agents or representatives duly authorized in writing.
(b) The Authority or the Oversight Agent on behalf of the Authority, shall, upon receipt
from the Borrower of sufficient moneys to pay the costs to provide the same, fiunish, without charge,
upon written request of any Bondowner to such Bondowner, (i) a report showing, for the Fiscal Year,
with respect to the Bonds, outstanding balances by maturity, redemption history including
redemption dates, amount, source of funds, and distribution of the call to the maturities, (ii) a report
RVPUB\FBAUM\709416.1 56
• showing the current status of insurance coverages with respect to the Project, and (iii) the most
currently available annual report submitted by the Borrower. For the purposes of this Section,
"Bondowner" shall mean, in addition to the registered owner of any Bond, any person or entity that
claims in writing to the reasonable satisfaction of the Authority to be a beneficial holder of Bonds
and specifically requests that reports be sent to it.
Section 7.12 Creation of Liens. The Authority shall not issue any bonds or other evidences
of indebtedness, other than the Bonds, secured by a pledge of the proceeds, moneys, rights, interests
and collections pledged or held aside by the Authority or by a Fiduciary under this Indenture and,
except as expressly provided in this Indenture and as maybe otherwise provided in a Supplemental
Indenture with respect to any supplemental security, shall not create or cause to be created any lien or
charge on proceeds, moneys, rights, interests and collections or such moneys on a subordinate, panty
or senior basis to the lien created by Section 5.1 for the benefit of the Series A Bonds; provided,
however, that nothing in this Indenture shall prevent the Authority from issuing evidences of
indebtedness secured by a pledge of such proceeds, moneys, rights, interests and collections to be
derived on and after such date as the Series A Bonds Trust Estate and the Subordinate Bonds Trust
Estate shall be discharged and satisfied as provided in Section 13. 1, or from issuing notes or bonds of
the Authority secured by assets and revenues of the Authority other than the Trust Estate.
Section 7.13 Tax Covenants. The Authority covenants that it shall at all times do and
perform all acts and things permitted by law and necessary or desirable in order to assure that interest
paid on the Bonds (other than the Series C Bonds) be and remain excluded from gross income for
federal income tax purposes.
• .f The Authority covenants and agrees that it will not make or permit any use of the proceeds of
the Bonds or other funds of the Authority which would cause the Bonds to be "arbitrage bonds"
within the meaning of Section 148(a) of the Code, and further covenants that it will observe and not
violate the requirements of Sections 145 and 148 of the Code. The Trustee shall be entitled to
receive and to rely upon a Counsel's Opinion as to the conformity of any use or proposed use of the
proceeds of the Bonds with the requirements of said Sections 145 and 148 of the Code.
Neither the Borrower nor any related person (as defined in Section 147(a) of the Code) of the
Borrower shall, pursuant to an arrangement, formal or informal, purchase any Bonds in an amount
related to the amount of the Loan to be made to or acquired from such Borrower by the Authority.
The Authority shall assure that, from the aggregate proceeds of the Bonds (other than the
Series C Bonds) received from the Original Purchaser thereof on the Closing Date and investment
earnings thereon, an amount not in excess of two percent (2%) of the aggregate face amount of the
shall be used to pay for, or provide for the payment of Cost of Issuance. For this purpose, if the fees
of such Original Purchaser are retained as a discount on the purchase of the Bonds, such retention
shall be deemed to be an expenditure of proceeds of the Bonds for said fees.
The Authority shall take no action nor permit nor suffer any action to be taken if the result of
the same would be to cause the Bonds to be "federally guaranteed" within the meaning of section
149(b) of the Code.
No portion of the proceeds of the Bonds shall be used to provide any airplane, skybox or
other private luxury box, health club facility, facility primarily used for gambling, or store the
RVPUB\FBAUM\709416.1 57
principal business of which is the sale of alcoholic beverages for consumption off premises. No
portion of the proceeds of the Bonds shall be used for an office unless the office is located on the
premises of the facilities constituting the Project and unless not more than a de minimis amount of
the functions to be performed at such office is not related to the day-to-day operations of the Project.
Section 7.14 Arbitrage Covenants; Rebate Fund.
(a) Moneys and securities held by the Trustee in the Rebate Fund are not pledged or
otherwise subject to any security interest in favor of the Trustee to secure the Bonds or any other
payments required to be made hereunder or any other document executed and delivered in
connection with the issuance of the Bonds.
(b) Moneys in the Rebate Fund shall be held separate and apart from all other Funds and
Accounts established under this Indenture and shall be separately invested and reinvested by the
Trustee, solely at the written direction of the Borrower, in Qualified Investments. The interest
accruing thereon and any profit realized therefrom shall be credited to the Rebate Fund, and any loss
resulting therefrom shall be charged to the Rebate Fund. The Trustee shall sell and reduce to cash a
sufficient amount of such Qualified Investments whenever the cash balance in the Rebate Fund is
insufficient for its purposes.
(c) Absent a Counsel's Opinion that the exclusion from gross income for federal income
tax purposes of interest on the Bonds will not be adversely affected, the Authority shall cause the
Borrower to deposit in the Rebate Fund such amounts as are required to be deposited therein
pursuant to this Section and the Tax Certificate. All money at any time deposited in the Rebate Fund
shall be held by the Trustee in trust for payment to the United States Treasury.
(i) Annual Computation. Within 55 days of the end of each Bond Year (or such
other frequency approved by the Authority but in any event at least every fifth Bond Year),
the Authority shall cause the Borrower to calculate or cause to be calculated the amount of
Rebatable Arbitrage, in accordance with Section 148(f)(2) of the Code and Section 1.148-3
of the Rebate Regulations (taking into account any applicable exceptions with respect to the
computation of the rebatable arbitrage, described, if applicable, in the Tax Certificate (e.g.,
the temporary investments exceptions of Section 148(f)(4)(B) and (C) of the Code), and
taking into account whether the election pursuant to Section 148(f)(4)(C)(vii) of the Code has
been made), for this purpose treating the last day of the applicable Bond Year as a
computation date, within the meaning of Section 1.148-1(b) of the Rebate Regulations.
(ii) Transfer. Within 55 days of the end of each fifth Bond Year, the Authority
shall cause the Borrower to transfer to the Trustee for deposit an amount in the Rebate Fund,
if and to the extent required so that the balance in the Rebate Fund equals the amount of
Rebatable Arbitrage so calculated in accordance with (i) of this Subsection (c). In the event
that immediately following the transfer required by the previous sentence, the amount then
on deposit to the credit of the Rebate Fund exceeds the amount required to be on deposit
therein, the Borrower may direct the Trustee to withdraw the excess from the Rebate Fund
and credit the excess to the Revenue Fund.
(iii) Payment to the Treasury. The Trustee shall pay, as directed by the Borrower,
to the United States Treasury, out of amounts in the Rebate Fund,
RVPUB\FBAUM\709416.1 58
(X) Not later than 60 days after the end of (A) the fifth Bond Year, and (B)
each applicable fifth Bond Year thereafter, an amount equal to at least 90% of the
Rebatable Arbitrage calculated as of the end of such Bond Year; and
(Y) Not later than 60 days after the payment of all the Bonds, an amount
equal to 100% of the Rebatable Arbitrage calculated as of the end of such applicable
Bond Year, and any income attributable to the Rebatable Arbitrage, computed in
accordance with Section 148(f) of the Code.
(iv) Deficiencies. In the event that, prior to the time of any payment required to be
made from the Rebate Fund, the amount in the Rebate Fund is not sufficient to make such
payment when such payment is due, the Authority shall direct the Borrower to calculate or
cause to be calculated the amount of such deficiency and transfer to the Trustee for deposit
an amount received from any legally available source equal to such deficiency prior to the
time such payment is due. Each payment required to be made pursuant to this Subsection
(iv) shall be made to the Internal Revenue Service Center, Philadelphia, Pennsylvania 19255
on or before the date on which such payment is due, and shall be accompanied by Internal
Revenue Service Form 8038-T, or shall be made in such other manner as provided under the
Code.
(v) Excess Moneys. Any funds remaining in the Rebate Fund after redemption
and payment of the Bonds, and the payments described in Subsection (c)(iii), may be
withdrawn by the Borrower and utilized in any manner by the Borrower.
(vi) Survival of Defeasance. Notwithstanding anything in this Section 7.14 or this
Indenture to the contrary, the obligation to comply with the requirements of this Section 7.14
shall survive the defeasance of the Bonds.
(d) In order to provide for the administration of this Section, the Borrower shall provide
for the employment of independent attorneys, accountants and consultants (the "Rebate Analyst")
compensated on such reasonable basis as the Borrower may deem appropriate and in addition and
without limitation of the provisions of Section 8.1, the Trustee and the Authority may rely
conclusively upon and be fully protected from all liability in relying upon the opinions,
determinations, calculations and advice of such Rebate Analyst employed hereunder.
(e) As set forth in the Loan Agreement, the Borrower shall be responsible for any fees
and expenses incurred by the Authority, the Trustee, and the Rebate Analyst under or pursuant to this
Section.
(f) The provisions of this Section maybe amended or deleted from this Indenture upon
receipt by the Authority and the Trustee of a Counsel's Opinion that such amendment or deletion
will not adversely affect the exclusion of the interest on the Bonds (other than the Series C Bonds)
from gross income for federal income tax purposes. Any moneys on deposit in the Rebate Fund may
be applied by the Trustee as permitted in such opinion. As set forth in the Loan Agreement, fees and
expenses incurred in connection with the determination of Rebatable Arbitrage shall be paid by the
Borrower pursuant to the provisions of the Loan Agreement.
RVPUBTBAUM\709416.1 59
ARTICLE VIII
FIDUCIARIES
Section 8.1 Trustee Acceptance of Duties. The Trustee hereby accepts and agrees to
execute the trusts specifically imposed upon it by this Indenture, but only upon the additional terms
set forth in this Article VIII, and no implied covenants or obligations whatsoever shall be read into
this Indenture against the Trustee. Prior to the occurrence of a Series A Bonds Event of Default or a
Subordinate Bonds Event of Default and after the cure or waiver of any such Event of Default, the
Trustee shall undertake to perform such duties and only such duties as are expressly and specifically
set forth in this Indenture. Upon a Series A Bonds Event of Default or a Subordinate Bonds Event of
Default which has not been cured or waived, the Trustee shall exercise the rights and powers vested
in it by this Indenture and use the same degree of care and skill in its exercise as a prudent person
would use under similar circumstances in the conduct of his or her own affairs. The Trustee shall be
a bank or trust company organized under the laws of any state of the United States or a national
banking association having (together with any affiliates) capital and surplus aggregating at least Fifty
Million Dollars ($50,000,000) and authorized by law to perform all the duties imposed upon it by
this Indenture.
Section 8.2 Paving Agents; ANointment and Acceptance of Duties. The Authority shall,
subject to the requirements of Section 7.2, appoint one or more Paying Agents (so long as any Series
A Bond is Outstanding) for the Bonds. The Trustee shall be the initial Paying Agent,
notwithstanding that it is acting in the capacity of the Trustee.
The Authority will cause each Paying Agent other than the Trustee to execute and deliver to
the Trustee an instrument in which such Paying Agent shall agree with the Trustee, subject to the
provisions of this Section, that such Paying Agent will:
(a) hold all sums held by it for the payment of principal of (and premium, if any) or
interest on the Bonds in trust for the benefit of the persons entitled thereto until such sums shall be
paid to such persons or otherwise disposed of as herein expressly provided; and
(b) at any time during the continuance of any default, upon the written request of the
Trustee, forthwith pay to the Trustee all sums so held in trust by such Paying Agent.
The principal or corporate trust offices of the Paying Agent are hereby designated as the
respective agencies of the Authority for the payment of the principal or Redemption Price of and
interest on the Bonds. Except in the event the Trustee shall be the Paying Agent hereunder, the
Trustee shall not be responsible for the use or application of any money received by any Paying
Agent.
Section 8.3 Responsibilities of the Fiduciaries. The recitals of fact herein and in the
Bonds and the statements and information in any disclosure provided pursuant to sale of the Bonds
shall be taken as the statements of the Authority, the Borrower or other applicable party and no
Fiduciary assumes or shall in any respect is deemed to have assumed any responsibility or liability
for the accuracy, completeness or correctness of the same. No Fiduciary shall be deemed to make
any representations as to the validity or sufficiency of this Indenture or of any Bonds issued
hereunder or in respect of the security afforded by this Indenture, and no Fiduciary shall incur any
responsibility in respect thereof. No Fiduciary shall have any responsibility or duty with respect to
RVPUBWBAUNC709416.1 60
the issuance of the Bonds or the application of the proceeds thereof or the application of any moneys
paid to the Borrower. No Fiduciary shall be under any obligation or duty to perform any act which
would cause the Fiduciary to incur or be subject to any expense or liability or to institute or defend
any suit in respect hereof, or to advance any of its own moneys. No Fiduciary shall be liable in
connection with the performance of its duties hereunder except for its own negligence or willful
default. No Fiduciary shall be under any responsibility or duty with respect to the application of any
moneys paid to anyone of the others. The permissive right of a Fiduciary to do things enumerated in
this Indenture shall not be construed as a duty.
Section 8.4 Evidence on Which Fiduciaries May Act. The Trustee and any Paying Agent
shall be protected in acting upon any Officer's Certificate, notice, resolution, request, consent, order,
certificate, report, opinion, bond, or other paper or document believed by it to be genuine, and to
have been signed or presented by the proper party or parties. Any Fiduciary may consult with
counsel, who may or may not be counsel to the Authority, and the opinion or advice of such counsel
shall be full and complete authorization and protection in respect of any action taken, suffered or
omitted by it under this resolution in good faith and in accordance herewith.
Whenever any Fiduciary shall deem it necessary or desirable that a matter be proved or
established prior to taking, suffering or omitting any action under this Indenture, such matter (unless
other evidence in respect thereof be herein specifically prescribed) may be deemed to be conclusively
proved and established by a certificate of an Officer's Certificate, and such certificate shall be full
warrant for any action taken, suffered or omitted in good faith under the provisions of this Indenture
upon the faith thereof, but in its discretion such Fiduciary may in lieu thereof accept other evidence
of such fact or matter or may require such further or additional evidence as to it may seem
reasonable.
Except as otherwise expressly provided in this Indenture, any request, order, notice or other
direction required or permitted to be furnished pursuant to any provision thereof by the Authority to
any Fiduciary shall be sufficiently executed if executed in the name of the Authority by an
Authorized Officer.
The Trustee shall be under no obligation to exercise any of the rights or powers vested in it
by this Indenture at the request or direction of any of the Bondowners pursuant to this Indenture,
unless such Bondowners shall have offered to the Trustee compensations, reimbursement of its
reasonable attorneys' fees and costs, and security or indemnity satisfactory to it against further costs,
expenses and liabilities which might be incurred by it in compliance with such request or direction.
The Trustee shall not be bound to make any investigation into the facts or matters stated in
any resolution, certificate, statement, instrument, opinion, report, notice, request, direction, consent,
order, bond, debenture or other paper or document, but the Trustee, in its discretion, may make such
further inquiry or investigation into such facts or matters as it may see fit, and, if the Trustee shall
determine to make such further inquiry or investigation, it shall be entitled to examine the books,
records and premises of the Authority, personally or by agent or attorney.
The Trustee shall not be bound to ascertain or inquire as to the validity or genuineness of any
collateral or security interest (or priority thereof) therein given to or held by it. The Trustee shall not
be responsible for the recording or filing of any document relating to this Indenture or the Loan
Agreement or of financing statements or continuation statement (other than continuation statements
RVPU13\FBAUM\709416.1 61
in connection with the UCC -1 delivered at closing from the Borrower in favor of the Trustee) or of
any supplemental instruments or documents of further assurance as maybe required by law in order
to perfect the security interests in any collateral given to or held by it.
The Trustee may execute any of the trusts or powers hereunder or perform any duties
hereunder either directly or by or through agents, attorneys or receivers and the Trustee shall not be
responsible for any misconduct or negligence on the part of any agent or attorney appointed with due
care by it hereunder.
The Trustee shall not be deemed to have knowledge of an Event of Default, or an "event of
default" as defined by the Loan Documents, unless it has actual knowledge thereof at its office where
the funds and accounts established under this Indenture are administered.
The Trustee shall have no responsibility with respect to any information, statement or recital
in any official statement, offering memorandum or any other disclosure material prepared or
distributed with respect to the Bonds.
The Trustee is authorized and directed to execute in its capacity as Trustee the Regulatory
Agreement and the Loan Agreement.
Anything to the contrary notwithstanding, the Trustee shall not be required to enter, take
possession of, or take any other action whatsoever with respect to the Project, and shall not be
required to initiate foreclosure proceedings with respect to the Project and the Deed of Trust unless
the Trustee is satisfied that the Trustee will not be subject to any liability under any local, state or
federal environmental laws or regulations of any kind whatsoever or from any circumstances present
at the Project relating to the presence, use, management, disposal of, or contamination by any
environmentally hazardous materials or substances of any kind whatsoever.
Before taking any action under Article XI hereof, the Trustee may require indemnity
satisfactory to the Trustee be furnished from any expenses and to protect it against any liability it
may incur hereunder.
The immunities extended to the Trustee also extend to its directors, officers, employees and
agents.
The Trustee shall not be liable for any action taken or not taken by it in accordance with the
direction of a majority (or other percentage provided for herein) in aggregate principal amount of
Bonds outstanding relating to the exercise of any right, power or remedy available to the Trustee.
The permissive right of the Trustee to do things enumerated in this Indenture shall not be
construed as a duty.
Section 8.5 Compensation. The Authority shall approve payment to the Trustee and each
Paying Agent from time to time of compensation for all services rendered under this Indenture as set
forth in a written agreement, and also all reasonable expenses, charges, counsel fees and other
disbursements, including those of its attorneys, agents and employees, incurred in and about the
performance of their powers and duties under this Indenture. hi addition, the Authority shall pay the
Trustee's reasonable compensation and reimburse its reasonable expenses, including attorneys' and
RVPUB\FBAUM\709416.1 62
agent's fees, for any extraordinary services performed in the exercise of its powers and duties under
this Indenture. Subject to the provisions of Section 14.3, the Authority further agrees to indemnify
and save the Trustee and each Paying Agent harmless against any claims, liabilities which any of
them may incur in the exercise and performance of its powers and duties hereunder, and which are
not due to the negligence or willful default of such Fiduciary.
Section 8.6 Permitted Acts and Functions. The Trustee and any Paying Agent may buy,
own, hold and sell (including acting as an uliderwriter in respect of) any bonds, coupons or notes of
the Authority, whether heretofore or hereafter issued or created; and may engage or be interested in
any financial or other transaction with the Authority, with like effect and with the same rights it
would have if it were not such Fiduciary. Any Fiduciary may act as depository for, and permit any of
its officers or directors to act as a member of, or in any other capacity with respect to, any committee
formed to protect the rights of Bondowners or to effect or aid in any reorganization growing out of
the enforcement of the Bonds or this Indenture, whether or not any such committee shall represent
the Owners of a majority in Principal Amount of the Bonds then Outstanding.
Section 8.7 RenlacementofTrustee. The Trustee may resign by notifying the Authority in
writing at least 60 days prior to the proposed effective date of the resignation. The Owners of a
majority in Principal Amount of the Bonds may remove the Trustee upon 30 days' prior written
notice to the Trustee and the Authority (with a copy of same to the Borrower).
No resignation or removal of the Trustee under this Section shall be effective until a new
Trustee has taken office.
If the Trustee resigns or is removed or for any reason is unable or unwilling to perform its
duties under this Indenture, the Authority shall promptly appoint a successor Trustee.
A successor Trustee shall deliver a written acceptance of its appointment to the retiring
Trustee and to the Authority. Immediately thereafter, the retiring Trustee shall transfer, in strict
compliance with the terms thereof, all property held by it as Trustee to the successor Trustee and the
resignation or removal of the retiring Trustee shall then (but only then) become effective and the
successor Trustee shall have all the rights, powers and duties of the Trustee under this Indenture.
If a Trustee is not performing its duties hereunder and a successor Trustee does not take
office within 60 days after the retiring Trustee delivers notice of resignation or the Authority delivers
notice of removal, the retiring Trustee, the Authority or the Owners of a majority in Principal
Amount of the Bonds may petition any court of competent jurisdiction for the appointment of a
successor Trustee.
Section 8.8 Successor Trustee or Agent by Merger. If the Trustee or any Paying Agent
consolidates with, merges or converts into, or transfers all or substantially all its assets (or, in the
case of a national association bank or trust company, its corporate trust assets) to, another
corporation, bank, or national association, the resulting, surviving or transferee corporation, bank, or
national association without any further act shall be the successor Trustee or Paying Agent.
Section 8.9 Several Capacities. Anything in this Indenture to the contrary
notwithstanding, the same entity may serve hereunder as the Trustee, the Paying Agent and any other
RVPUB\FBAUW709416.1 63
agent as appointed to perform duties or obligations under this Indenture, under a Supplemental
Indenture, or in any combination of such capacities, to the extent permitted by law.
Section 8.10 Resignation or Removal of Paving Agents and Appointment of Successors.
Any Paying Agent may at any time resign and be discharged of the duties and obligations created by
this Indenture by giving at least sixty (60) days' written notice to the Authority and the Trustee. Any
Paying Agent may be removed at any time by an instrument filed with such Fiduciary and the Trustee
and signed by an Authorized Officer. Any initial or successor Paying Agent shall be appointed by
the Authority and shall be a bank or trust company organized under the laws of any state of the
United States or a national banking association, having capital and surplus aggregating at least Five
Million Dollars ($5,000,000), and willing and able to accept the office of Paying Agent on
reasonable and customary terms and authorized by law to perform all the duties imposed upon it by
this Indenture.
hi the event of the resignation or removal of any Paying Agent, such Paying Agent shall pay
over, assign and deliver any moneys held by it to its successor, or if there be no successor then
appointed, to the Trustee until such successor be appointed.
Section 8.11 Co -Trustees. It is the purpose of this Indenture that there shall be no violation
of any law of any jurisdiction (including particularly the law of the State) denying or restricting the
right of banking corporations or associations to transact business as Trustee in such jurisdiction. It is
recognized that in case of litigation under this Indenture, and in particular in case of the enforcement
thereof on default, or in the case the Trustee deems that by reason of any present or future law of any
jurisdiction it may not exercise any of the powers, rights or remedies herein granted to the Trustee or
take any other action which may be desirable or necessary in connection therewith, it may be
necessary that the Trustee appoint an additional individual or institution as a separate or co -trustee.
The following provisions of this Section shall govern the appointment of separate or co -trustees.
The Trustee may, in its discretion, appoint one or more additional individuals or institutions
as separate or co -trustees by written instrument. The Trustee may from time to time, in writing,
prescribe the powers, duties and rights of each separate or co -trustee and may remove any such
separate or co -trustee. Each and every remedy, power, right, claim, demand, cause of action,
immunity, estate, title, interest and lien expressed or intended by this Indenture to be exercised by or
vested in or conveyed to the Trustee with respect thereto shall, to the extent provided by the Trustee,
be exercisable by and vest in such separate or co -trustee but only to the extent necessary to enable the
separate or co -trustee to exercise the powers, rights and duties so provided by the Trustee, and every
covenant and obligation necessary to the exercise thereof by such separate or co -trustee shall run to
and be enforceable by either the Trustee or such separate or co -trustee.
Should any deed, conveyance or other instrument from the Authority be required by the
separate trustee or co -trustee so appointed by the Trustee for more fully and certainly vesting in and
confirming to him or it such properties, rights, owners, trusts, duties and obligations, any and all such
deeds, conveyances and other instruments shall on request, be executed, acknowledged and delivered
by the Authority. hi case any separate trustee or co -trustee, or successor to either, shall die, become
incapable of acting, resign or be separate trustee or co -trustee, so far as permitted by law, shall vest
in and be exercised by the Trustee until the appointment of a new trustee or successor to such
separate trustee or co -trustee.
RVPUB\FBAUM\709416.1 64
1J
Section 8.12 Continuing Disclosure. Pursuant to Section 6.15 of the Loan Agreement, the
Borrower has undertaken all responsibility for compliance with continuing disclosure requirements,
and the Authority shall have no liability to the Owners of the Bonds or any other person with respect
to such disclosure matters. The Trustee hereby covenants and agrees that it will comply with and
carry out all of the provisions of the Continuing Disclosure Agreement applicable to it as Trustee and
pursuant to Section 6.15 of the Loan Agreement. Notwithstanding any other provision of this
Indenture, failure of the Borrower, the Authority or the Trustee to comply with the Continuing
Disclosure Agreement shall not be considered an Event of Default nor, with respect to the Trustee,
any breach of its duties; however, the Trustee may (and, at the request of any Participating
Underwriter or the Owners of at least 25% in aggregate principal amount of Outstanding Bonds,
upon receipt of compensation and payment of its fees and expenses, including attorneys' fees, shall)
or any Bondowner may, take such actions as may be necessary and appropriate, including seeking
mandate or specific performance by court order, to cause the Borrower and the Authority to comply
with its obligations under Section 6.15 of the Loan Agreement.
Section 8.13 Representations of Trustee in Connection With Bond Closing. In connection
with the execution and delivery of this Indenture, the Trustee represents and warrants that:
(a) The Trustee has full power and authority to carry on its business as now being
conducted and to enter into Indenture, the Loan Agreement and the Regulatory Agreement (the
"Bond Documents") and the transactions contemplated thereby;
(b) The Bond Documents have been duly executed and delivered by the Trustee;
k
(c) The Bond Documents constitute valid, legal, binding, and enforceable obligations of
the Trustee (subject to bankruptcy, insolvency or creditor rights laws generally, and principles of
equity generally) without offset, defense, or counterclaim;
(d) The execution, delivery, and performance of the Bond Documents by the Trustee will
not cause or constitute, including due notice or lapse of time or both, a default under or conflict with
organizational documents of the Trustee or other agreements to which the Trustee is a party or
otherwise materially or adversely affect performance of the Trustee's duties;
(e) The execution, delivery, and performance of the Bond Documents by the Trustee will
not violate any law, regulation, order, or decree of any governmental authority to which the Trustee
is subject;
(f) All consents, approvals, authorizations, orders, or filings of or with any court or
governmental agency or body, if any, required for the execution, delivery, and performance of the
Bond Documents by the Trustee have been obtained or made; and
(g) There is no pending action, suit, or proceeding, arbitration or governmental
investigation against the Trustee, an adverse outcome of which materially affects performance by the
Trustee under the Bond Documents.
RVPUB\FBAUM\709416.1 65
ARTICLE IX
SUPPLEMENTAL INDENTURE
Section 9.1 Sunnlemental Indentures Effective Without Consent of Bondowners. The
Authority may adopt, without the consent of or notice to Bondowners but subject to Section 7.15(a)
hereof, at any time or from time to time Supplemental Indentures for any one or more of the
following purposes, and any such Indenture or Supplemental Indenture shall become effective in
accordance with its terms upon the filing with the Trustee of a copy thereof certified by an
Authorized Officer:
(a) To add additional covenants and agreements of the Authority for the purpose of
further securing the payment of the Bonds, provided such additional covenants and agreements are
not contrary to or inconsistent with the covenants and agreements of the Authority contained in this
Indenture;
(b) To prescribe further limitations and restrictions upon the issuance of Bonds and the
incurring of indebtedness by the Authority;
(c) To surrender any right, power or privilege reserved to or conferred upon the Authority
by the terms of this Indenture, provided that no such surrender is contrary to or inconsistent with the
covenants and agreements of the Authority contained in this Indenture;
(d) To confirm as further assurance any pledge under, and the subjection to any lien,
claim or pledge created or to be created by, the provisions of this Indenture;
(e) To modify any of the provisions of this Indenture or any previously adopted
Supplemental Indenture in any other respects, provided that such modifications shall not be effective
until after all Bonds Outstanding as of the date of adoption of such Indenture or Supplemental
Indenture shall cease to be Outstanding, and all Bonds issued after the date of adoption of such
Indenture shall contain a specific reference to the modifications contained in such Indenture;
(f) To amend this Indenture to add such provisions as may be necessary or advisable in
connection with the substitution of any additional security; provided that any such modification does
not materially adversely affect interests of any Bondholders;
(g) To amend the Indenture in any and all respects as may be necessary or advisable to
implement any amendment of the Code or the provision of any tax legislation enacted in place
thereof,
(h) To make such amendments to add such other provisions in regard to matters or
questions arising out of this Indenture which shall not materially adversely affect the interests of the
Owners of the Bonds affected thereby; or
(i) To cure any ambiguity or defect or inconsistent provision in this Indenture or to insert
such provisions clarifying matters or questions arising under this Indenture as are necessary or
desirable; provided that any such modifications do not materially adversely affect the interests of any
Bondowners.
RVPUB\FBAUW709416.1 66
Section 9.2 Supplemental Indenture Effective with Consent of Bondowners. Subject to
v Section 7.15(a) hereof, the provisions of this Indenture maybe modified at anytime or from time to
time supplemented by a Supplemental Indenture, subject to the consent of Bondowners in
accordance with and subject to the provisions of Article X hereof.
Section 9.3 General Provisions Relating to Indenture and Supplemental Indentures. This
Indenture shall not be modified or amended in any respect except in accordance with and subject to
the provisions of Section 7.15(a), this Article IX and Article X. Nothing contained in this Article IX
or Article X shall affect or limit the right or obligations of the Authority to adopt, make, do, execute
or deliver any resolution, act or other instrument pursuant to the provision of Section 7.4 hereof or
the right or obligation of the Authority to execute and deliver to the Trustee or any Paying Agent any
instrument elsewhere in this Indenture provided or permitted to be delivered to the Trustee or any
Paying Agent.
A copy of every Indenture and Supplemental Indenture adopted by the Authority when filed
with the Trustee shall be accompanied by a Counsel's Opinion stating that such Indenture or
Supplemental Indenture has been duly and lawfully adopted in accordance with the provisions of this
Indenture, is authorized or permitted by this Indenture and is valid and binding upon the Authority
and enforceable in accordance with its terms, except as to enforcement of remedies which may be
limited by bankruptcy, insolvency or other laws or equitable principles affecting the enforcement of
creditors' rights generally, and, if applicable, is not materially adverse to the interests of any
Bondholders.
The Trustee is hereby authorized to accept delivery of a certified copy of any Supplemental
•"`' Indenture permitted or authorized pursuant to the provisions of this Indenture and to make all further
agreements and stipulations which may be contained therein, and, in taking such action, the Trustee
shall be fully protected in relying on Counsel's Opinion that such Supplemental Indenture is
authorized or permitted by the provisions of this Indenture.
No Indenture or Supplemental Indenture changing, amending or modifying any of the rights
or obligations of the Trustee or any Paying Agent may be adopted by the Authority without the
written consent of such Fiduciary affected thereby.
ARTICLE X
AMENDMENTS OF INDENTURE
Section 10.1 Powers of Amendment. Subject to the provisions of Section 10.7 hereof, any
modification or amendments of this Indenture and of the rights and obligations of the Authority and
of the Owners of the Bonds, may be made by a Supplemental Indenture, with, except as provided in
Section 9.1 hereof, the written consent given as hereinafter provided in Section 10.2, of the Owners
of (i) at least two-thirds in Principal Amount of the Bonds outstanding at the time such consent is
given; and (ii) at least two-thirds in Principal Amount of the Series A Bonds Outstanding at the time
such consent is given; provided, however, that if any such modification or amendment will, by its
terms, not take effect so long as any series of Bonds of any maturity remain Outstanding, the consent
of the Owners of such series of Bonds and maturity shall not be required and such series of Bonds
. shall not be deemed to be Outstanding for the purpose of any calculation of the Principal Amount of
Outstanding Bonds under this Section. In the event that the Supplemental Indenture shall contain
provisions which affect the rights and interests of one series of Bonds (but not the others), then the
RVPU13TBAUW709416.1 67
Owners of not less than two-thirds of the Principal Amount of the series of Bonds which are affected
by such changes shall have the right from time to time to consent to and approve the execution by the
Authority of any Supplemental Indenture deemed necessary or desirable by the Authority for the
purposes of modifying, altering, amending, supplementing or rescinding, in any particular, any of the
terns or provisions contained in the Indenture and affecting only the Bonds of such series; provided,
however, unless approved by the Owners of all the Bonds of all the affected series then Outstanding,
nothing herein shall permit or be construed as permitting such items as further provided in this
Section 10.1. No such modification or amendment shall permit a change in the terms of redemption
or maturity of the principal of any Outstanding Bond or of any installment of interest thereon or a
reduction in the Principal Amount or the Redemption Price thereof or in the rate of interest thereon
without the consent of the Owner of such Bond, or shall reduce the percentages ofBonds the consent
of the Owners of which is required to effect any such modification or amendment. The Trustee may
in its discretion determine whether or not in accordance with the foregoing provisions Bonds of any
particular maturity would be affected by any modification or amendment of this Indenture and any
such determination shall be binding and conclusive on the Authority and all Owners of Bonds. The
Trustee may receive an opinion of counsel, including a Counsel's Opinion, as conclusive evidence as
to whether Bonds of any particular maturity of such series would be so affected by any such
modification or amendment of this Indenture.
Section 10.2 Consent of Bondowners. Subject to the provisions of Section 10.7 hereof, the
Authority may at any time adopt a Supplemental Indenture making a modification or amendment
permitted by the provisions of Section 10.1 to take effect when and as provided in this Section. A
copy of such Supplemental Indenture (or brief summary thereof or reference thereto in form
approved by the Trustee) together with a request to Bondowners for their consent thereto in form
satisfactory to the Trustee by the Authority to Bondowners, shall be mailed by the Trustee by first
class mail, postage prepaid to the Owners of all Outstanding Bonds. Such Supplemental Indenture
shall not be effective unless and until (a) there have been filed with the Trustee (i) the written
consents of Owners of the percentages of Outstanding Bonds specified in Section 10.1 and (ii) a
Counsel's Opinion stating that such Supplemental Indenture has been duly and lawfully adopted and
filed by the Authority in accordance with the provisions of this Indenture, is authorized or permitted
by this Indenture, and is valid and binding upon the Authority and enforceable in accordance with its
terms, and (b) a notice shall have been given as hereinafter in this Section 10.2 provided. Each such
consent shall be effective only if accompanied by proof of the holding, at the date of such consent, of
the Bonds with respect to which such consent is given, which proof shall be such as is permitted by
Section 12.1. A certificate or certificates by the Authority filed with the Trustee that it has examined
such proof and that such proof is sufficient in accordance with Section 12.1 shall be conclusive that
the consents have been given by the Owners of the Bonds described in such certificate or certificates
of the Authority. Any such consent shall be binding upon the Owner of the Bonds giving such
consent and, anything in Section 12.1 to the contrary notwithstanding, upon any subsequent Owner
of such Bonds and of any Bonds issued in exchange therefor (whether or not such subsequent Owner
thereof has notice thereof), unless such consent is revoked in writing by the Owner of such Bonds
giving such consent or a subsequent Owner thereof by filing with the Trustee prior to the time when
the written statement of the Authority hereinafter in this Section 10.2 provided for is filed, such
revocation. At any time after the Owners of the required percentages of Bonds shall have filed their
consents to the Supplemental Indenture, the Authority shall make and file with the Trustee a written
statement that the Owners of such required percentages of Bonds have filed such consents. Such
written statement shall be conclusive that such consents have been so filed. At any time thereafter
RVPUB\FBAUM\709416.1 68
notice, stating in substance that the Supplemental Indenture (which may be referred to as a
•' Supplemental Indenture adopted by the Authority on a stated date, a copy of which is on file with the
Trustee) has been consented to by the Owners of the required percentages of Bonds and will be
effective as provided in this Section 10.2, may be given to Bondowners by the Authority by mailing
such notice to Bondowners (but failure to make such notice shall not prevent such Supplemental
Indenture from becoming effective and binding as in this Section 10.2 provided) not more than
ninety (90) days after the Owners of the required percentages ofBonds shall have filed their consents
to the Supplemental Indenture and the written statement of the Authority hereinabove provided for is
filed. The Authority shall file with the Trustee proof of the mailing of such notice. A transcript,
consisting of the papers required or permitted by this Section 10.2 to be filed with the Trustee, shall
be proof of the matters therein stated. Such Supplemental Indenture making such amendment or
modification shall be deemed conclusively binding upon the Authority, each Fiduciary and the
Owners of all Bonds at the expiration of thirty (30) days after the filing with the Trustee of the proof
of the mailing of such last mentioned notice, except in the event of a final decree of a court of
competent jurisdiction setting aside such Supplemental Indenture in a legal action or equitable
proceeding for such purpose commenced within such thirty (30) day period; provided, however, that
the Authority during such thirty (30) day period and any such further period during which any such
action or proceeding maybe pending shall be entitled in its absolute discretion to take such action, or
to refrain from taking such action, with respect to such Supplemental Indenture as it may deem
expedient.
Section 10.3 Modifications by Unanimous Consent. Subject to the provisions of Section
10.7 hereof, the terms and provisions of this Indenture and the rights and obligations of the Authority
and of the Owners of the Bonds thereunder may be modified or amended in any respect upon the
adoption and filing by the Authority of a Supplemental Indenture and the consent of the Owners of
all of the Bonds then Outstanding, such consent to be given as provided in Section 10.2, except that
no notice to Bondowners shall be required.
Section 10.4 Mailing. Any provision in this Article for the mailing of a notice or other
document to Bondowners shall be fully complied with if such notice or document is mailed postage
prepaid only (i) to each Owner of Bonds then Outstanding at his or her address, appearing upon the
registration books held by the Trustee and (ii) to the Trustee.
Section 10.5 Exclusion of Bonds. Bonds owned or held by or for the account of the
Authority shall not be deemed Outstanding for the purpose of consent or other action or any
calculation of the Principal Amount of Outstanding Bonds provided for in this Article, and the
Authority shall not be entitled with respect to such Bonds to give any consent or take any other
action provided for taken under this Article. The Authority shall furnish the Trustee a certificate of
an Authorized Officer, upon which the Trustee may rely, describing all Bonds so to be excluded.
Section 10.6 Notation on Bonds. Bonds delivered after the effective date of any action
taken as in Article IX or this Article provided may, and if the Trustee so determines shall, bear a
notation by endorsement or otherwise in form approved by the Authority and the Trustee as to such
action, and in that case upon demand of the Owner of any Bond Outstanding at such effective date
• and upon presentation of his Bond for the purpose at the Principal Office of the Trustee, suitable
notation shall be made on such Bond by the Trustee as to any such action. If the Authority or the
Trustee shall so determine, new Bonds so modified as in the opinion of the Trustee and the Authority
RVPUB\FBALM709416.1 69
to conform to such action shall be prepared and delivered, and upon demand of the Owner of any
Bond then Outstanding shall be exchanged, upon surrender of such Bonds.
ARTICLE XI
DEFAULTS AND REMEDIES
Section 11.1 Events of Default. (a) Series ABonds Event ofDeault. Each of the following
events is hereby declared a "Series A Bonds Event of Default", that is to say; if
(i) the Authority shall fail to make payment of the principal or Redemption Price
of, or Sinking Fund Installment on, any Series A Bond from the Series A Bond Trust Estate
after the same shall become due, whether at maturity or upon call for redemption, or
otherwise; or
(ii) the Authority shall fail to make payment of interest on any Series A Bond
from the Series A Bond Trust Estate when and as the same shall become due; or
(iii) the Authority shall default in the performance or observance of any other of
the covenants, agreements or conditions on its part in this Indenture, any Supplemental
Indenture, or in the Series A Bonds contained, and such default shall continue for aperiod of
ninety (90) days after written notice thereof by the Trustee or the Owners ofnot less than five
percent (5%) in Principal Amount of the Outstanding Series A Bonds.
The occurrence of a Subordinate Bonds Event of Default shall constitute an event of default
only with respect to the Subordinate Bonds.
(b) Subordinate Bonds Events o[Default. Each of the following events is hereby declared
a "Subordinate Bonds Event of Default," that is to say, if;
(i) Subordinate Residual Revenues are not applied to the payment of the principal
of, or Redemption Price of, any Subordinate Bonds after the same shall become due, whether
at maturity or upon call for redemption or otherwise, to the extent of such Subordinate
Residual Revenues available; or
(ii) Subordinate Residual Revenues are not applied to the payment of interest on
any Subordinate Bonds when and as the same shall become due to the extent of such
Subordinate Residual Revenues available; or
(iii) the Authority shall default in the performance or observance of any other of
the covenants, agreements, or conditions on its part in the Subordinate Bonds contained, and
such default shall continue for a period of ninety (90) days after written notice thereof by the
Trustee or the Holders of not less than twenty-five percent (25%) in Principal Amount of the
Outstanding Subordinate Bonds; or
(iv) the Authority shall fail to pay the principal of or interest on the Subordinate
Bonds on the final maturity date thereof;
The occurrence of a Series A Bonds Event of Default shall constitute an event of default only
with respect to the Series A Bonds.
RVPUB\FBAUM\709416.1 70
Section 11.2 Remedies.
" (a) Upon the happening and continuance of any Series A Bonds Event of Default
specified in Section 11. 1, then, and in each such case, subject in any event to the provisions of
Section 7.15 hereof, the Trustee may proceed, and (i) upon the written request of the Owners of not
less than twenty-five percent (25%) in Principal Amount of the Outstanding Series A Bonds shall,
subject to Section 8.4 hereof, proceed in its own name, to protect and enforce its rights and the rights
of the Bondowners of such series by such of the following remedies as the Trustee shall deem most
effectual to protect and enforce such rights:
(i) by suit, action or proceeding, enforce all rights of the Bondowners hereunder,
including the right to require the Borrower to receive and collect Pledged Revenues adequate
to carry out the covenants and agreements as to, and pledge of, such Pledged Revenues, and
to require the Borrower to cant' out any other covenant or agreement with Bondowners and
to perform its duties under the Loan Agreement;
(ii) by bringing suit upon the Bonds;
(iii) by action or suit, require the Borrower to account as if the Borrower were the
trustee of an express trust for the Owners of the Bonds; or
(iv) by action or suit, enjoin any acts or things which may be unlawful or in
violation of the rights of the Owners of the Bonds hereunder;
provided, however, so long as the Series A Bonds are Outstanding, the Trustee in so acting under this
Section 11.2(a) shall act solely for the benefit of the Series A Bondholders and the Subordinate
Bondholders shall have no interest in or right to direct remedies with respect thereto.
(b) Upon the happening and continuance of any Series A Bonds Event of Default
specified in clause (i) or (ii) of Section 11.1(a), then, and in each such case, subject in any event to
the provisions of Section 7.15 hereof, the Trustee may, and upon the written request of the Owners of
not less than twenty-five percent (25%) in Principal. Amount of the Outstanding Series A Bonds,
shall declare all Series A Bonds due and payable, and if all defaults shall be made good, then, with
the written consent of the Owners of not less than twenty-five percent (25%) in Principal Amount of
the Outstanding Series A Bonds, annul such declaration and its consequences.
(c) In the enforcement of any remedy under this Indenture, the Trustee shall be entitled to
sue for, enforce payment on and receive any and all amounts then or during any default becoming,
and any time remaining, due from the Borrower for principal, Redemption Price, interest or
otherwise, under any provision of this Indenture, the Loan Agreement or of the Bonds, and unpaid,
with interest on overdue payments at the rate or rates of interest specified in the Bonds, together with
any and all costs and expenses of collection and of all proceedings hereunder and under the Bonds,
including reasonable attorneys' fees.
(d)(i) If any Series A Bonds are then Outstanding, then in the event of a Subordinate Bonds
Event of Default, the Subordinate Bondholders shall have no right to declare an event of default
hereunder or direct any remedies hereunder.
RVPUBIFBAUM\709416.1 71
(ii) If the Series A Bonds are no longer Outstanding, the Trustee may, and upon
the written request of the Owners of not less than twenty-five percent (25%) in Principal
Amount of the Outstanding Subordinate Bonds, shall declare all Subordinate Bonds due and
payable, and if all defaults shall be made good, then with the written consent of the Owners
of not less than twenty-five percent (25%) in Principal Amount of the Outstanding
Subordinate Bonds, annul such declaration and its consequences.
Section 11.3 Priority ofPayments after Series A Bonds Event of Default. In the event that
the funds held by the Trustee and Paying Agents shall be insufficient for the payment of principal or
Redemption Price of and interest then due on the Series A Bonds, such funds (other than funds held
for the payment or redemption of particular Series A Bonds which have theretofore become due at
maturity or by call for redemption) and any other moneys received or collected by the Trustee acting
pursuant to this Article XI, after making provision for the payment of any expenses necessary in the
opinion of the Trustee or the Authority to protect the interests of the Owners of the Series A Bonds,
and for the payment of the fees, charges and expenses and liabilities incurred and advances made by
the Trustee or the Authority in the performance of their duties under this Indenture, including
reasonable attorneys' fees, shall be applied as follows (provided that moneys in the Series A Bonds
Debt Service Fund and the Series A Bonds Debt Service Reserve Fund shall not be applied to make
payments with respect to the Subordinate Bonds, and provided further that moneys in the
Subordinate Bonds Debt Service Fund and Subordinate Bonds Debt Service Reserve Fund shall also
be applied to make payments with respect to the Series A Bonds):
(a) Unless the principal of all the Series A Bonds shall not have become or have
been declared due and payable,
First: To the payment to the persons entitled thereto of all installments of
interest then due on the Series A Bonds in the order of the maturity of such
installments, and, if the amount available shall not be sufficient to pay in full any
installment, then to the payment thereof ratably, according to the amounts due on
such installment, to the persons entitled thereto, without any discrimination or
preference; and
Second: To the payment to the persons entitled thereto of the unpaid
Principal Amounts or Redemption Price of any Series A Bonds which shall have
become due, whether at maturity or by call for redemption, in the order of their due
dates and, if the amounts available shall not be sufficient to pay in.full all the Series
A Bonds due on any date, then to the payment thereof ratably, according to the
amounts of Principal Amounts or Redemption Price due on such date, to the persons
entitled thereto, without any discrimination or preference.
Third: To the payment to the persons entitled thereto of the unpaid Principal
Amounts or Redemption Price of any Subordinate Bonds which shall become due,
whether at maturity or by call for redemption, in the order of their due dates and, if
the amounts available shall not be sufficient to pay in full all the Subordinate Bonds
due on any date, then to the payment thereof ratably, according to the amounts of -
Principal Amounts or Redemption Price due on such date, to the persons entitled
without any discrimination or preference.
RVPU13\FBAUM\709416.1 72
(b) If the principal of all of the Series A Bonds shall have become or have been
declared due and payable, to the payment of the principal of and interest then due and unpaid
upon the Series A Bonds without preference or priority of principal over interest or of
interest over principal, or of any installment of interest over any other installment of interest,
or of any Series A Bond over any other Series A Bond, ratably, according to the amounts due
respectively for principal and interest, to the persons entitled thereto without any
discrimination or preference except as to any difference in the respective rates of interest
specified in the Series A Bonds. Moneys remaining after satisfying the payments as provided
in this paragraph (b) shall be applied proportionately to the payment of the principal of and
interest then due and unpaid upon the Subordinate Bonds without preference or priority of
principal, or of any installment of interest over any other installment of interest, ratably,
according to the amounts due respectively for principal and interest, to the persons entitled
thereto without any discrimination or preference.
Whenever moneys are to be applied by the Trustee pursuant to the provisions of this Section,
such moneys shall be applied by the Trustee at such times, and from time to time, as the Trustee in
its sole discretion shall determine, having due regard to the amount of such moneys available for
application and the likelihood of additional money becoming available for such application in the
future; the deposit of such moneys with the Paying Agents, or otherwise setting aside such moneys in
trust for the proper purpose, shall constitute proper application by the Trustee and the Trustee shall
incur no liability whatsoever to the Authority, to any Bondowner or to any other person for any delay
in applying any such moneys, so long as the Trustee acts with reasonable diligence, having due
i regard for the circumstances, and ultimately applies the same in accordance with such provisions of
this Indenture as may be applicable at the time of application by the Trustee. Whenever the Trustee
shall exercise such discretion in applying such moneys, it shall fix the date (which shall be an
Interest Payment Date unless the Trustee shall deem another date more suitable) upon which such
application is to be made and upon such date interest on the amounts of principal to be paid on such
date shall cease to accrue. The Trustee shall give such notice as it may deem appropriate for the
fixing of any such date. The Trustee shall not be required to make payment to the Owner of any
unpaid Bond unless such Bond shall be presented to the Trustee for appropriate endorsement or for
cancellation if fully paid.
Section 11.4 Priority of Payments after Subordinate Bonds Event of Default. In the event
that the funds held by the Trustee shall be insufficient for the payment of principal or Redemption
Price of and interest then due on the Subordinate Bonds, such funds derived from actions taken in
connection under a Subordinate Bonds Event of Default only, and any other moneys received or
collected by the Trustee and the Authority acting pursuant to Article XI, after making provision for
the payment of any expenses necessary in the opinion of the Trustee and the Authority to protect the
interests of the Holders of the Bonds, and for the payment of the fees, charges and expenses and
liabilities incurred and advances made by the Trustee or the Authority in the performance of their
duties under this Indenture, including reasonable attorney fees, shall be applied as follows:
First: To the payment to the persons entitled thereto of all installments of interest
then due on the Subordinate Bonds in the order of the maturity of such installments, and, if
the amount available shall not be sufficient to pay in full any installment, then to the payment
RVPUBTBAUIM709416.1 73
thereof ratably, according to the amounts due on such installment, to the persons entitled
thereto, without any discrimination or preference; and
Second: To the payment to the persons entitled thereto of the unpaid Principal
Amount or Redemption Price of any Subordinate Bonds which shall have become due,
whether at maturity or by call for redemption, in the order of their due dates and, if the
amounts available shall not be sufficient to pay in full all the Subordinate Bonds due on any
date, then to the payment thereof ratably, according to the amounts of Principal Amounts or
Redemption Price due on such date, to the persons entitled thereto, without any
discrimination or preference.
Whenever moneys are to be applied by the Trustee pursuant to the provisions of this Section,
such moneys shall be applied by the Trustee at such times, and from time to time, as the Trustee in
its sole discretion shall determine, having due regard to the amount of such moneys available for
application and the likelihood of additional money becoming available for such application in the
future; the deposit of such moneys with the Trustee, or otherwise setting aside such moneys in trust
for the proper purpose, shall constitute proper application by the Trustee and the Trustee shall incur
no liability whatsoever to the Authority, to any Bondholder or to any other person for any delay in
applying any such moneys, so long as the Trustee acts with reasonable diligence, having due regard
for the circumstances, and ultimately applies the same in accordance with such provisions of this
Indenture as may be applicable at the time of application by the Trustee. Whenever the Trustee shall
exercise such discretion in applying such moneys, it shall fix the date (which shall be an Interest
Payment Date unless the Trustee shall deem another date more suitable) upon which such application
is to be made and upon such date interest on the amounts of principal to be paid on such date shall
cease to accrue. The Trustee shall give such notice as it may deem appropriate for the fixing of any
such date. The Trustee shall not be required to make payment to the Holder of any unpaid Bond
unless such Bond shall be presented to the Trustee for appropriate endorsement or for cancellation if
fully paid.
Any payments set forth above with respect to the Subordinate Bonds shall be made without
preference, priority or distinction, as to the series of the Subordinate Bonds.
Notwithstanding the provisions of this Section 11.4 or this Article XI generally, the
Subordinate Bonds are subject to cancellation as a result of a deemed redemption pursuant to Section
4.1(d) hereof.
Section 11.5 Termination of Proceedings. In the case any proceeding taken by the Trustee
on account of any Event of Default shall have been discontinued or abandoned for any reason, then
in every case the Authority, the Trustee and the Bondowners shall be restored to their former
positions and rights hereunder, respectively, and all rights, remedies, powers and duties of the
Trustee shall continue as though no such proceeding had been taken.
Section 11.6 Bondowners' Direction of Proceedings. Subject to the provisions of Section
7.15 hereof, the Owners of a majority in Principal Amount of the (i) Series A Bonds, so long as the
Series A Bonds are Outstanding; and (ii) if the Series A Bonds are not Outstanding, then the
Subordinate Bonds then Outstanding, shall have the right, by an instrument or concurrent
instruments in writing executed and delivered to the Trustee, to direct the method of conducting all
remedial proceedings to be taken by the Trustee hereunder, provided that such direction shall not be
RVPU8\F13AUM\709416.1 74
otherwise than in accordance with law or the provisions of this Indenture and that the Trustee shall
have the right to decline to follow any direction which in the opinion of the Trustee would be
unjustly prejudicial to Bondowners not parties to such direction.
Section 11.7 Limitations on Rights of Bondowners. No Owner of any Bond of any series
shall have any right to institute any suit, action or other proceedings hereunder, or for the protection
or enforcement of any right under this Indenture or any right under law, unless such Owner shall
have given to the Trustee written notice of the Event of Default or breach of duty on account of
which suit, action or proceeding is to be taken, and unless the Owners of not less than twenty-five
percent (25%) in Principal Amount of the Bonds of the series affected then Outstanding shall have
made written request of the Trustee after the right to exercise such powers or right of action, as the
case may be, shall have accrued, and shall have afforded the Trustee a reasonable opportunity either
to proceed to exercise the powers herein granted or granted under law or to institute such action, suit
or proceeding in its name and unless, also, there shall have been offered to the Trustee reasonable
security and indemnity against the costs, expenses and liabilities to be incurred therein or thereby,
and the Trustee shall have refused or neglected to comply with such request within a reasonable
time; and such notification, request and offer of indemnity are hereby declared in every such case at
the option of the Trustee to be conditions precedent to the execution of the powers under this
Indenture or for any other remedy hereunder or under law. It is understood and intended that no one
or more Owners of the Bonds hereby secured shall have any right in any manner whatever by his or
their action to affect, disturb or prejudice the security of this Indenture, or to enforce any right
hereunder or under law with respect to the Bonds or this Indenture, except in the manner herein
• provided, and that all proceedings shall be instituted, had and maintained in the manner herein
provided and for the benefit of all Owners of the Outstanding Bonds of each series. Not
withstanding the foregoing provisions of this Section or any other provisions of this Article XI, the
obligation of the Authority shall be absolute and unconditional to pay the principal and Redemption
Price of and interest on the Bonds to the respective Owners thereof at the respective due dates
thereof, and nothing herein shall affect or impair the right of action, which is absolute and
unconditional, of such Owners to enforce such payment.
Anything to the contrary contained in this Section 11.7 or any other provision of this
Indenture notwithstanding, each Owner of any Bond by his acceptance thereof shall be deemed to
have agreed that any court in its discretion may require, in any suit for the enforcement of any right
or remedy under the Indenture or any Supplemental Indenture, or in any suit against the Trustee for
any action taken or omitted by it as Trustee, the filing of any party litigant in such suit of an
undertaking to pay the reasonable costs of such suit, and that such court may in its discretion assess
reasonable costs, including reasonable attorneys' fees, against any party litigant in any such suit,
having due regard to the merits and good faith of the claims or defenses made by such litigant; but
the provisions of this paragraph shall not apply to any suit instituted by the Trustee, to any suit
instituted by any Bondowner, or group of Bondowners, holding at least twenty-five percent (25%) in
Principal Amount of the Bonds Outstanding, or to any suit instituted by any Bondowner for the
enforcement of the payment of the principal or Redemption Price of or interest on any Bond on or
after the respective date thereof expressed in such Bond.
Section 11.8 Possession of Bonds by Trustee Not Required. All rights of action under this
Indenture or under any of the Bonds, enforceable by the Trustee, may be enforced by it without
possession of any of the Bonds or the production thereof in the trial or other proceeding relative
RVPUB\FBAUM\709416.1 75
thereto, and any such suit, action or proceeding instituted by the Trustee shall be brought in its name
for the benefit of all the Owners of such Bonds, subject to the provisions of this Indenture.
Section 11.9 Remedies Not Exclusive. No remedy herein conferred upon or reserved to the
Trustee or to the Owners of the Bonds is intended to be exclusive of any other remedy or remedies,
and each and every such remedy shall be cumulative and shall be in addition to any other remedy
given hereunder or now or hereafter existing at law or in equity or by statute.
Section 11.10 No Waiver of Default. No delay or omission of the Trustee or of any Owner
of the Bonds to exercise any right or power accruing upon any default shall impair any such right or
power or shall be construed to be a waiver of any such default or an acquiescence therein; and every
power and remedy given by this Indenture to the Trustee and the Owners of the Bonds, respectively,
may be exercised from time to time and as often as may be deemed expedient.
Section 11.11 Notice of Event of Default. The Trustee shall give to the Bondowners, the
Authority and S&P, notice of each Event of Default hereunder known to the Trustee within three (3)
Business Days after knowledge of the occurrence thereof, unless such Event of Default shall have
been remedied or cured before the giving of such notice; provided that, except in the cases of (i)
default in any payment of the principal or Redemption Price of, or interest on any of the Bonds, or
(ii) in the making of any payment required to be made into any of the Series A Bonds Debt Service
Fund, the Series A Bonds Debt Service Reserve Fund, the Subordinate Bonds Debt Service Fund or
the Subordinate Bonds Debt Service Reserve Fund, the Trustee shall be protected in withholding
such notice if and so long as the board of directors, the executive committee, or a trust committee of
directors or responsible officers of the Trustee in good faith determines that the withholding of such
notice is in the interests of the Bondowners. Each such notice of Event of Default shall be given by
mailing written notice thereof to all registered Owners of Bonds, as the names and address of such
Owners appear upon the books of registration as kept by the Trustee.
ARTICLE XII
EXECUTION OF INSTRUMENTS BY BONDOWNERS AND PROOF OF OWNERSHIP OF
BONDS
Section 12.1 Evidence of Signatures of Bondowners and Ownership of Bonds. Any
request, direction, consent, revocation of consent, or other instrument in writing required or
permitted by this Indenture to be signed or executed by Bondowners may be in any number of
concurrent instruments of similar tenor, and may be signed or executed by such Bondowners in
person or by their attorneys or agents appointed by an instrument in writing for that purpose. Proof
of the execution of any such instrument, or of any instrument appointing any such attorney or agent,
and of the holding and ownership of Bonds shall be sufficient for any purpose of this Indenture
(except as otherwise herein provided), if made in the following manner: The fact and date of the
execution by any Bondowner or his attorney or agent of any such instrument and of any instrument
appointing any such attorney or agent, may be proved by delivery of a certificate, which need not be
acknowledged or verified, of an officer of any bank, trust company, or investment banking firm or of
any notary public, or other officer authorized to take acknowledgments. Where any such instrument
is executed by an officer of a corporation or association or a member of a partnership on behalf of
such corporation, association or partnership, such certificate shall also constitute sufficient proof of
his authority.
RVPUBTBAUIvi\709416.1 76
Nothing contained in this Article shall be construed as limiting the Trustee to such proof, it
gl being intended that the Trustee may accept any other evidence of the matters herein stated which
may seem sufficient. Any request or consent of the Owner of any Bond shall bind every future
Owner of the same Bond in respect of anything done or suffered to be done by the Authority, the
Trustee or any Paying Agent pursuant to such request or consent.
ARTICLE XIII
DEFEASANCE
Section 13.1 Defeasance.
(a) If the Authority shall pay or cause to be paid, or there shall otherwise be paid, to the
Owners of all of the Bonds then Outstanding, the principal of and interest on and Redemption Price,
if any, to become due thereon, at the times and in the manner stipulated therein and in this Indenture,
then and in that event the covenants, agreements and other obligations of the Authority to the
Bondowners shall be discharged and satisfied. In such event, the Trustee shall, (i) upon request of
the Authority, execute and deliver to the Authority and the Borrower all such instruments as may be
reasonably requested by the Authority to evidence such release and discharge, and (ii) if S&P is then
rating the Series A Bonds, give written notice to S&P of the date on which such payments were
made. In addition, the Trustee and the Paying Agents shall pay over to or deliver to the Borrower all
moneys or securities held by them pursuant to the Indenture which are not required for the payment
or redemption of Bonds not theretofore surrendered for such payment of any amounts owed to the
Trustee or for the payment or redemption.
' (b) If the Authority shall pay or cause to be paid, or there shall otherwise be paid, to the
Owners of the Bonds then Outstanding, the principal of and interest on and Redemption Price, if any,
to become due thereon, at the times and in the manner stipulated therein and in this Indenture, then
and in that event such Bonds shall cease to be entitled to any lien, benefit or security under this
Indenture and the covenants, agreements and other obligations of the Authority to the Owners of
such Bonds shall be discharged and satisfied, except for the Authority's obligations under Section
7.14 hereof and its obligations under Section 8.5, to the extent of any amounts owed to the Trustee.
(c) Any Bonds or interest installments for the payment or redemption of which moneys
shall then be held by the Trustee or the Paying Agents (through deposit by the Authority of funds for
such payment or redemption or otherwise), whether at or prior to the maturity or the redemption date
of such Bonds, shall be deemed to have been paid within the meaning and with the effect expressed
in paragraph (a) of this Section 13.1. Any Bonds shall prior to the maturity or redemption date
thereof be deemed to have been paid within the meaning and with the effect expressed in paragraph
(a) of this Section 13.1 if (i) in case such Bonds are to be redeemed on any date prior to their
maturity, the Authority shall have given to the Trustee, in form satisfactory to it, irrevocable
instructions to give notice of redemption as provided in Article IV of this Indenture on said date of
such Bonds, (ii) there shall have been deposited with the Trustee either moneys in an amount which
shall be sufficient, or Government Obligations the principal of and interest on which when due will
provide moneys which, together with the moneys, if any, deposited with the Trustee at the same time,
shall be sufficient, as verified by an Accountant's Certificate to pay when due the principal or
Redemption Price, if applicable, of such Bonds and interest due and to become due on such Bonds
on and prior to the Principal Payment Date or Dates or redemption date or dates thereof, as the case
may be, and (iii) in the event such Bonds are not by their terms subject to redemption within the next
RVPUB\FBAUM\709416.1 77
succeeding sixty (60) days, the Authority shall have given the Trustee in form satisfactory to it
irrevocable instruction to give notice by mail, as soon as practicable, to the Owners of such Bonds
and to S&P, if S&P is then rating the Series A Bonds, that the deposit required by (ii) above has been
made with the Trustee and that such Bonds are deemed to have been paid in accordance with
paragraph (a) of this Section 13.1 and stating such Principal Payment Date or Dates or redemption
date or dates upon which moneys are to be available for the payment of the principal of, Redemption
Price, if applicable, on such Bonds. Neither Government Obligations nor moneys deposited with the
Trustee pursuant to this Section nor principal or interest payments on any such Government
Obligations shall be withdrawn or used for any purpose other than, and shall be held in trust for, the
payment of the principal of or Redemption Price, if applicable, and interest on said Bonds; provided
that any cash received from such principal or interest payments on such Government Obligations
deposited with the Trustee, if not then needed for such purpose, shall, to the extent practicable, be
reinvested in Government Obligations maturing at times and in Principal Amounts sufficient to pay
when due the principal or Redemption Price, if applicable, and interest to become due on said Bonds
on and prior to such Principal Payment Date or Dates or redemption date or dates thereof, as the case
may be, all as further provided in an escrow agreement relating to the defeasance of the Bonds.
(d) Other Government Obligations maybe substituted for those originally deposited with
the Trustee pursuant to paragraph (c) of this Section 13.1; provided that there shall have been
furnished to the Trustee a Counsel's Opinion to the effect that such substitution will not adversely
affect the exclusion from federal gross income of interest on any Bonds and an Accountant's
Certificate verifying the sufficiency of the moneys and Government Obligations to pay or redeem
any Bonds deemed to have been paid pursuant to paragraph (c) of this Section 13.1.
(e) Anything in this Indenture to the contrary notwithstanding, any moneys held by the
Trustee or Paying Agents in trust for the payment and discharge of any of the Bonds which remain
unclaimed for two years after the date when such Bonds have become due and payable, either at their
stated maturity dates or by call for earlier redemption, if such moneys were held by the Trustee or
Paying Agents at such date, or for two years after the date of deposit of such moneys if deposited
with the Trustee or Paying Agents after the said date when such Bonds became due and payable,
shall, be repaid by the Trustee or Paying Agents to the Borrower and become its absolute property,
free from trust, and the Trustee or Paying Agents shall thereupon be released and discharged with
respect thereto and the Bondowners thereafter shall look only to the Borrower for the payment of
such Bonds.
Section 13.2 Additional Defeasance Requirements. Any defeasance of Series A Bonds
shall include:
(a) an opinion to the effect that refunding and defeasance will not adversely impact the
exemption from State income tax of interest on the bonds to be issued or the Series A Bonds to be
refunded by such bonds;
(b) an opinion of counsel that (i) the escrow deposit in connection therewith will not
constitute a voidable preference or transfer under the Federal Bankruptcy Code or any other similar
state or federal statute in the event the Authority or the Borrower becomes a debtor within the
meaning of the Federal Bankruptcy Code or comes within the protection of such similar state or
federal statute ("Insolvency Event") and (ii) in such Insolvency Event, the escrow deposit will not be
treated as part of the estate of the Authority or the Borrower; and
RVPUB\FBAUM\709416. 1 78
• (c) the escrow agreement in connection therewith shall provide that (i) any substitution of
securities shall require a verification of an independent certified public accountant; (ii) neither the
Authority nor the Borrower will exercise any optional redemption of Series A Bonds secured by the
escrow agreement or any other redemption other than mandatory sinking fund redemptions unless the
right to make any such redemption has been expressly reserved in the escrow agreement and such
reservation has been disclosed in detail in the official statement for any refunding bonds.
ARTICLE XIV
MISCELLANEOUS
Section 14.1 Preservation and hispection of Documents. All documents received by the
Trustee or any Paying Agent under the provisions of this Indenture shall be retained in its possession
and shall be subject at all reasonable times and upon reasonable notice to the inspection of the
Authority, the Trustee or any Paying Agent, and, upon written request of not less than five percent
(5%) in Principal Amount of the Owners of the Outstanding Bonds, such Owners and their agents
and representatives, any of whom may make copies thereof.
Section 14.2 Parties in Interest. Nothing in this Indenture adopted pursuant to the
provisions hereof, expressed or implied, is intended to or shall be construed to confer upon or to give
any person or party other than the Authority, the Fiduciaries and the Owners of the Bonds pertaining
thereto any rights, remedies or claims under or by reason of this Indenture or any covenant,
condition, stipulation, promise, agreement or obligation thereof; and all covenants, conditions,
stipulations, promises, agreements and obligations contained in this Indenture by or on behalf of the
Authority shall be for the sole and exclusive benefit of the Authority, the Fiduciaries and the Owners
from time to time of the Bonds.
Section 14.3 Limited Liability. Notwithstanding any other provision of this Indenture to
the contrary:
(a) the obligations of the Authority with respect to the Bonds and under this
Indenture, the Loan Agreement and the Regulatory Agreement are not general obligations of
the Authority but are special, limited obligations of the Authority payable by the Authority
solely from the Trust Estate and are not a debt, nor a loan of the credit, of the State or any of
its political subdivisions, and the Bonds shall not be construed to create any moral obligation
on the part of the Authority, the State or any political subdivision thereof with respect to the
payment thereof, and the Bonds do not constitute an indebtedness within the meaning of any
constitutional or statutory debt limitation; and the issuance of the Bonds shall not directly or
indirectly or contingently obligate the Authority, the State or any political subdivision thereof
to levy or to pledge any form of taxation whatever therefor or to make any appropriation for
their payment, and no Bondholder has the right to compel any exercise of any taxing power
of the Authority or the State;
(b) nothing contained in the Bonds or in this Indenture shall be considered as
assigning or pledging any funds or assets of the Authority other than the Trust Estate;
(c) neither the faith and credit of the Authority, the State nor of any other political
subdivision of the State are pledged to the payment of the principal or of interest on the
Bonds;
RVPUB\FBAUW709416.1 79
(d) no failure of the Authority to comply with any term, condition, covenant or
agreement in this Indenture or in any document executed by the Authority in connection with
the Project, or the issuance, sale and delivery of the Bonds shall subject the Authority to
liability for any claim for damages, costs or other charge except to the extent that the same
can be paid or recovered from the Trust Estate; and
(e) the Authority shall not be required to advance any moneys derived from any
source other than the Trust Estate for any of the purposes of this Indenture, the Loan
Agreement or the Regulatory Agreement, whether for the payment of the principal or
redemption price of, or interest on, the Bonds, the payment of any fees or administrative
expenses or otherwise.
It is recognized that, notwithstanding any other provision of this Indenture, neither the
Borrower, the Trustee nor any Bondholder shall look to the Authority for damages suffered by the
Borrower, the Trustee or such Bondholder as a result of the failure of the Authority to perform any
covenant, undertaking or obligation under this Indenture, the Loan Agreement, the Regulatory
Agreement, the Bonds or any of the other documents referred to herein, or as a result of the
incorrectness of any representation made by the Authority in any of such documents, nor for any
other reason. Although this Indenture recognizes that such documents shall not give rise to any
pecuniary liability of the Authority, nothing contained in this Indenture shall be construed to
preclude in any way any action or proceeding (other than that element of any action or proceeding
involving a claim for monetary damages against the Authority) in any court or before any
governmental body, agency or instrumentality or otherwise against the Authority or any of its officers
or employees to enforce the provisions of any of such documents which the Authority is obligated to
perform and the performance of which the Authority has not assigned to the Trustee or any other
person; provided, however, that, as a condition precedent to the Authority proceeding pursuant to
this Section, the Authority shall have received satisfactory indemnification. In any event, the
Authority shall have no liability under this Indenture or for any actions taken or not taken by the
Authority or the Trustee hereunder.
Section 14.4 No Recourse Under Indenture or on Bonds. All covenants, stipulations,
promises, agreements and obligations of the Authority continued in this Indenture shall be deemed to
be the covenants, stipulations, promises, agreements and obligations of the Authority and not of any
board member, officer or employee of the Authority in his individual capacity, and no recourse shall
be had for the payment of the principal or Redemption Price of or interest on the Bonds or for any
claim based thereon or on this Indenture against any Board member, officers or employee of the
Authority or any person executing the Bonds.
Section 14.5 Severability. If any one or more of the covenants, conditions, stipulations,
promises, agreements or obligations provided in this Indenture on the part of the Authority or any
Fiduciary to be performed should be determined by a court of competent jurisdiction to be contrary
to law, then such covenant or covenants, condition or conditions, stipulation or stipulations, promise
or promises, agreement or agreements, obligation or obligations shall be deemed and construed to be
severable from the remaining covenants, conditions, stipulations, promises, agreements, and
obligations herein contained and shall in no way affect the validity of the other provisions of this
Indenture.
RVPUBTBAUM\709416.1 80
Section 14.6 Headings. Any heading preceding the texts of the several Articles and
Sections hereof, and any table of contents or marginal notes appended to copies hereof, shall be
solely for the convenience of reference and shall not constitute a part of this Indenture, nor shall they
affect its meaning, construction or effect.
Section 14.7 Conflict. All resolutions or parts of resolutions or other proceedings of the
Authority in conflict herewith be and the same are repealed insofar as such conflict exists.
Section 14.8 Notices. (a) All notices, certificates or other communications shall be in
writing and shall be sufficiently given and shall be deemed given on the second day following the
date on which the same have been personally delivered or mailed by certified mail, return receipt
requested, postage prepaid, addressed as follows; If to the Authority, to Independent Cities Lease
Finance Authority, Post Office Box 1750, Palmdale, California 93590-1750; Attention: Program
Administrator; if to the Borrower, to Millennium Housing Corporation, 660 Newport Center Drive,
Suite 1020, Newport Beach, California 92660, Attention: Executive Director; and if to the Trustee,
to Union Bank of California, N.A., 350 California Street, I1`s Floor, San Francisco, California
94104, Attention: Corporate Trust Department. A duplicate copy of each notice, certificate or other
communication given hereunder shall also be given to each of the above. All other documents
required to be submitted to any of the foregoing parties shall also be submitted to such party at its
address set forth above. Any of the foregoing parties may, by notice given hereunder, designate any
further or different addresses to which subsequent notices, certificates, documents or other
communications shall be sent.
(b) The Authority shall cause a notice to be sent to S&P, if S&P is then rating the Series
A Bonds, with respect to any of the following:
(i) Any material adverse change to the Project or the Borrower of which the
Authority has actual knowledge and written notice thereof from the Borrower.
(ii) Any amendments or supplemental agreements entered into by the Authority
with respect to the Indenture, the Loan Agreement, the Regulatory Agreement, the
Supplemental Regulatory Agreement, the Deed of Trust and the Administration Agreement.
Section 14.9 All Obligations Due on Business Days. If the date for making any payment,
performing any act, or exercising of any right, as provided in this Indenture, is a day which is not a
Business Day, such payment may be made, act performed, or right exercised on the next succeeding
Business Day with the same force and effect as if done on the nominal date provided under this
Indenture.
Section 14.10 Governing Law. This Indenture shall be governed by, and interpreted in
accordance with, the laws of the State of California.
Section 14.11 Execution in Counterparts. This Indenture may be executed in any number of
counterparts and each of such counterparts shall for all purposes be deemed to be an original; and all
such counterparts, or as many of them as the Authority and the Trustee shall preserve undesignated,
shall together constitute but one and the same instrument.
RVPUB\FBAUM\709416.1 81
0
IN WITNESS WHEREOF, the Independent Cities Lease Finance Authority has caused these
presents to be signed in its name and on its behalf by its President and its Program Administrator
and, to evidence its acceptance of the trusts hereby created, the Trustee has caused these presents to
be signed in its name and on its behalf by one of its duly authorized officers all as of the date first
above written.
INDEPENDENT CITIES LEASE FINANCE
AUTHORITY
By:
President
By: C)(')((
r�ogram—Administr
UNION BANK OF CALIFORNIA, N.A., as
Trustee
'k
By:
Authorized Officer
RVPUB\FBAUM\709416.1 82
FORM OF SERIES A BOND
R-1
UNLESS THIS BOND IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY (AS DEFINED IN THE INDENTURE OF TRUST) TO THE TRUSTEE FOR
REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY BOND ISSUED IS
REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY (AND ANY
PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IF REQUESTED BY
AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY), 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 CALIFORNIA
INDEPENDENT CITIES LEASE FINANCE AUTHORITY
MOBILE HOME PARK REVENUE BOND
(SAN JUAN MOBILE ESTATES)
SERIES 2006A
INTEREST RATE MATURITY DATE DATED DATE CUSIP NO.
15, June 1, 2006
REGISTERED OWNER: CEDE & CO.
PRINCIPAL SUM: DOLLARS
The Independent Cities Lease Finance Authority (the "Authority"), a joint powers authority,
organized and existing under the laws of the State of California, for value received, hereby promises
to pay, solely from the sources hereinafter described, to the Registered Owner named above or
registered assigns or legal representative, on the Maturity Date specified above, upon the
presentation and surrender hereof, the Principal Sum specified above and to pay by check mailed to
the person in whose name this Series A Bond is registered at the close of business on the first day
(whether or not a business day) of the calendar month in which each interest payment date occurs,
solely from the sources and to the extent of such amounts described in the Indenture (described
below), interest on said sum from the date hereof at the Interest Rate per annum specified above,
payable on the fifteenth day of each May and November in each year, commencing November 15,
2006, until said Principal Sum is paid. Principal and any redemption premium and interest with
RVPUBTBAUM\709416.1 A -I
respect to this Series A Bond are payable at the principal corporate trust office in San Francisco,
California, of Union Bank of California, N.A., as Trustee, in any coin or currency of the United
States of America which at the time of payment is legal tender for the payment of public and private
debts.
Capitalized terms used herein and not defined shall have the meanings given to such terms in
the Indenture.
THIS SERIES A BOND IS A SPECIAL OBLIGATION OF THE AUTHORITY,
PAYABLE SOLELY FROM THE PLEDGED REVENUES, PREPAYMENTS AND NET
PROCEEDS (AS DEFINED IN THE INDENTURE HEREINAFTER DESCRIBED) AND
MONEYS, FUNDS AND ACCOUNTS PLEDGED BY THE INDENTURE. THE STATE OF
CALIFORNIA IS NOT OBLIGATED TO PAY THE PRINCIPAL OF THIS SERIES A
BOND NOR THE INTEREST THEREON, NOR ARE THE FAITH AND CREDIT OF THE
STATE OF CALIFORNIA PLEDGED TO THE PAYMENT OF THE PRINCIPAL OF OR
INTEREST ON THIS BOND.
This Series A Bond and the issue of which it forms a part is a limited obligation of the
Authority, giving rise to no pecuniary liability of the State of California or any political subdivision
thereof (other than the Authority, to the limited extent set forth in the Indenture), nor any charge
against its general credit, is payable solely from, and a valid claim of the Registered Owner hereof
only against the Series A Bond Trust Estate. This Series A Bond does not constitute an indebtedness
or a loan of the credit of the Authority or the State of California or any political subdivision thereof
within the meaning of any constitutional or statutory debt restrictions. Neither the faith and credit
nor the taxing power of the Authority or the State of California or any political subdivision thereof is
pledged to the payment of principal of or interest on this Series A Bond.
This Series A Bond is one of a duly authorized issue of bonds of the Authority designated as
"Independent Cities Lease Finance Authority Mobile Home Park Revenue Bonds (San Juan Mobile
Estates), Series 2006A" (the "Series A Bonds"), in the aggregate principal amount of $29,660,000
issued pursuant to Chapter 8 of Part 5 of Division 31 of the California Health and Safety Code, as
amended and supplemented (the "Act'), and under and pursuant to an Indenture of Trust dated as of
May 1, 2006 (the "Indenture"), by and between the Authority and Union Bank of California, N.A., as
trustee (the "Trustee"), for the purpose of providing funds which, together with the proceeds of the
Series B Bonds and the Series C Bonds (described below), will be used to make a loan to finance the
acquisition and rehabilitation of the San Juan Mobile Estates mobile home park in the City of San
Juan Capistrano, California, funding the Series A Bonds Debt Service Reserve Fund and paying a
portion of the costs of issuance. Concurrently with the issuance of the Series A Bonds the Authority
will also issue and deliver its $9,765,000 aggregate principal amount Mobile Home Park Subordinate
Revenue Bonds (San Juan Mobile Estates), Series 2006B Bonds (the "Series B Bonds") and its
$485,000 aggregate principal amount Mobile Home Park Subordinate Revenue Bonds (San Juan
Mobile Estates) Taxable Series 2006C (the "Series C Bonds", and together with the Series A Bonds
and the Series B Bonds, referred to as the Bonds"). The Series B Bonds and the Series C Bonds are
issued on a subordinate basis to the Series A Bonds.
The owner of this Series A Bond should make reference to the Indenture and any and all
Is supplements thereto and modifications and amendments thereof for a description of the pledge and
covenants securing the Series A Bonds, the nature, extent and manner of enforcement of such pledge,
RVPUB\FBAUM\709416.1 A-2
the rights and remedies of the registered owners of the Series A Bonds with respect thereto and the
. terms and conditions upon which the Series A Bonds are issued. Copies of the Indenture are on file
at the office of the Authority and at the principal corporate trust office of the Trustee, in Los Angeles,
California, or its successor as trustee.
To the extent and in the manner permitted by the Indenture, the provisions of the Indenture or
any Indenture amendatory thereof or supplemental thereto, may be amended by the Authority with
the written consent of the owners of at least two-thirds in principal amount of the Bonds ofthe series
then outstanding to which the amendment applies. No such amendment shall permit a change in the
terns of redemption or maturity of the principal of any outstanding Bond or any installment of
interest thereon or a reduction in the principal amount or redemption price thereof or in the rate of
interest thereon without the consent of the owner of such Bond, or shall reduce the percentages of
principal amount of Bonds without the consent of the owners of which is required to effect any such
amendment, or shall change or modify any of the rights or obligations of the Trustee or of any paying
agent without its written consent thereto.
The Series A Bonds are issuable only as fully registered bonds without coupons, in
denominations of $5,000 or any integral multiple thereof. Series A Bonds maybe exchanged for an
equal aggregate principal amount of Series A Bonds and of the same maturity, of other Authorized
Denominations (as defined in the Indenture) and bearing interest at the same rate at the principal
corporate trust office of the Trustee, in the manner and subject to the limitations and conditions
provided in the Indenture and without cost except for any tax or other governmental charge.
The Series A Bonds shall be subject to redemption, at the option of the Authority, prior to the
• ,r stated maturities thereof on a pro rata basis, in whole or in part at any time, on the earliest practicable
date for which notice of redemption can be given as provided in the Indenture at a Redemption Price
equal to 100% of the Principal Amount of such Series A Bonds or portions thereof to be redeemed,
together with accrued interest thereon to the date of redemption, in a Principal Amount having an
aggregate Redemption Price equal to the amount of moneys which are deposited in or transferred to
the Redemption Fund, (x) from any Net Proceeds or any Prepayment made by the Borrower in order
to fully retire the Loan in connection with a condemnation or casualty loss which results in Net
Proceeds, and (y) from excess amounts in the Series A Bonds Debt Service Reserve Fund resulting
from a reduction in the Series A Bonds Debt Service Reserve Fund Requirement after giving effect
to any special redemption as provided in the Indenture. The Trustee shall apply any such amounts
described above in accordance with applicable provisions of the Indenture from time to time as
directed by a Certificate of a Borrower Representative, with notice to the Authority; provided,
however, that (i) such amount to be applied to such redemption or purchase shall be rounded to the
next lower authorized denomination, and (ii) unless otherwise directed by a Certificate of Borrower
Representative, with notice to the Authority; no such redemption shall be effected unless the total
amount to be applied to redeem Series A Bonds on such date shall be at least $25,000.
The Series A Bonds maturing on November 15, 2012, November 15, 2016, May 15, 2019,
May 15, 2021, May 15, 2026, May 15, 2031 and May 15, 2041 (collectively, the "Term Bonds") are
subject to mandatory sinking fund redemption by application of the Sinking Fund Installments as
provided in the Indenture on each May 15 and November 15, commencing on November 15, 2006,
November 15, 2014, May 15, 2017, November 15, 2019, November 15, 2021, November 15, 2026
and November 15, 2031, respectively, at a Redemption Price equal to 100% of the Principal Amount
RVPURTBAUM709416.1 A-3
of each Term Bond or portion thereof to be redeemed, plus accrued interest to the date of redemption
thereof, without premium, on the respective dates and in the amounts set forth in the Indenture.
The Series A Bonds maturing on or after May 15, 2017, are subject to redemption by the
Authority at the request of the Borrower, prior to the stated maturities thereof as may be directed by
the Authority, in whole or in part on any date on or after May 15, 2016, at a redemption price equal
the principal amount of each Series A Bond or portion thereof to be redeemed, plus accrued interest
thereon to the date of redemption, without premium.
if any or all of the Bonds are to be redeemed prior to maturity, the Trustee shall give notice,
which notice shall specify the maturities of the Bonds to be redeemed, the redemption date and the
place or places where amounts due upon such redemption will be payable, whether such redemption
is conditioned upon the availability of funds for such purpose on the redemption date and, if less than
all of the Bonds of any maturity are to be redeemed, the letters and numbers or other distinguishing
marks of such Bonds so to be redeemed, and, in the case of Bonds to be redeemed in part only, such
notice shall also specify the respective portions of the Principal Amount thereof to be redeemed.
Such notice shall further state that on such date there shall become due and payable upon each Bond
to be redeemed the Redemption Price thereof, or the Redemption Price of the specified portions of
the Principal Amount thereof in the case of Bonds to be redeemed in part only, together with interest
accrued on such Bonds to the redemption date, and that from and after such date interest on such
Bonds shall cease to accrue and be payable; provided that, if the redemption is conditioned upon
funds being available therefor no later than the opening of business on the redemption date, the
notice shall so state. The Trustee shall mail a copy of such notice, by first class mail, postage
prepaid, not less than thirty (30) days (provided, however, in the case of special redemption as
•` described in the second preceding paragraph, such notice shall be given not less than ten (10) days)
nor more than forty-five (45) days before the redemption date, to the Owners of any Bonds or
portions of Bonds which are to be redeemed, at their last addresses, if any, appearing upon the
registration book. Failure to give such notice with respect to any Bonds, or any defect therein, shall
not affect the validity of the proceedings for redemption of any other Bonds.
With respect to any optional redemption of Bonds, if at the time of mailing such notice of
redemption, the Authority shall not have deposited with the Trustee moneys sufficient to redeem all
the Bonds called for redemption, such notice may state that it is conditional, that is, subject to the
deposit of the redemption moneys with the Trustee not later than the opening of business on the
redemption date, and such notice shall be of no effect unless such moneys are so deposited.
The Act provides that neither the issuing officer nor any person executing the Bonds shall be
liable personally on the Bonds.
The transfer of this Series A Bond is registrable by the Registered Owner hereof in person or
by his attorney or legal representative at the principal corporate trust office of the Trustee but only in
the manner and subject to the limitations and conditions provided in the Indenture and upon
surrender and cancellation of this Series A Bond. Upon any such registration of transfer the
Authority shall execute and the Trustee shall authenticate and deliver in exchange for this Series A
Bond a new registered Bond or Bonds without coupons, registered in the name of the transferee, of
• authorized denominations, in an aggregate principal amount equal to the principal amount of this
Series A Bond, of the same series and maturity and bearing interest at the same rate.
RVPUB\FBAUMV094I6.I A-4
It is hereby certified and recited that all conditions, acts and things required by law and the
. Indenture to exist, to have happened and to have been performed precedent to and in the issuance of
this Series A Bond, exist, have happened and have been performed and that the issue of the Bonds,
of which this is one, together with all other indebtedness of the Authority is within every debt and
other limit prescribed by the laws of the State of California.
This Series A Bond shall not be entitled to any benefit under the Indenture or be valid or
become obligatory for any purpose until this Series A Bond shall have been authenticated by the
manual execution by the Trustee of the Certificate of Authentication attached hereto.
IN WITNESS WHEREOF, the Authority has caused this Series A Bond to be signed in its
name and on its behalf by the facsimile signature of the President and attested to by the facsimile
signature of the Secretary of the Authority; and has caused this Series A Bond to be dated as of
June 1, 2006.
INDEPENDENT CITIES LEASE FINANCE
AUTHORITY
LM
President
4
ATTEST:
Un
Secretary
RVPUB\FBAUM\709416.1 A-5
0
FORM OF TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This Bond is one of the Bonds of the issue described in the within -mentioned Indenture.
Date of Authentication:
UNION BANK OF CALIFORNIA, N.A., as
Trustee
RVPUB\FBAUM\709416.1 A-6
Authorized Signatory
FORM OF ASSIGNMENT
For value received the undersigned hereby sells, assigns and transfers unto
(Name, Address and Tax Identification or Social Security Number of Assignee)
the within -registered Bond and hereby irrevocably constitute(s) and appoints(s)
, attorney, to transfer
the same on the registration books of the Trustee with full power of substitution in the premises.
Dated:
Signature Guaranteed:
Signature:
Note: Signature(s) must be guaranteed by an Note: The signature(s) on this Assignment
eligible guarantor institution correspond with the name(s) as written on the
face of the within registered Bond in every
without alteration or enlargement any change
whatsoever.
RVPUB\FBAUM\909416.1 A-7
EXHIBIT B
FORM OF SERIES B BONDS
R-1 $
UNLESS THIS BOND IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY (AS DEFINED IN THE INDENTURE OF TRUST) TO THE TRUSTEE FOR
REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY BOND ISSUED IS
REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY (AND ANY
PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IF REQUESTED BY
AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY), 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 CALIFORNIA
INDEPENDENT CITIES LEASE FINANCE AUTHORITY
MOBILE HOME PARK SUBORDINATE REVENUE BOND
(SAN JUAN MOBILE ESTATES)
SERIES 2006B
INTEREST RATE MATURITY DATE DATED DATE CUSIP NO.
15, _ June 1, 2006
REGISTERED OWNER: CEDE & CO.
PRINCIPAL SUM: DOLLARS
THE INDEPENDENT CITIES LEASE FINANCE AUTHORITY (the "Authority"), a joint
powers authority organized and existing under the laws of the State of California, for value received,
hereby promises to pay, solely from the sources hereinafter described, to the Registered Owner
named above or registered assigns or legal representative, on the Maturity Date specified above,
upon the presentation and surrender hereof, the Principal Sum specified above and to pay by check
mailed to the person in whose name this Series B Bond is registered at the close of business on the
first day (whether or not a business day) of the calendar month in which each interest payment date
occurs, solely from the sources and to the extent of such amounts described in the Indenture
(described below), interest on said sum from the date hereof at the Interest Rate per annum specified
above, payable on the fifteenth day of each May and November in each year, commencing
November 15, 2006 to the extent of Subordinate Residual Revenues available for payment, until said
Principal Sum is paid. In the event that the Subordinate Residual Revenues are not sufficient to pay
the accrued interest due and payable on this Series B Bond on an Interest Payment Date remains,
RVPUBTBAUMC709416.1 B-1
such unpaid interest shall be deferred. Non-payment of interest on this Series B Bond on any Interest
Payment Date due to insufficient Subordinate Residual Revenues shall not be an Event of Default
under the Indenture. Unpaid principal and interest on this Bond are subject to deemed redemption
and discharge as provided in the Indenture. Principal and any redemption premium and interest with
respect to this Series B Bond are payable at the principal corporate trust office in San Francisco,
California, of Union Bank of California, N.A., as Trustee, in any coin or currency of the United
States of America which at the time of payment is legal tender for the payment of public and private
debts.
Capitalized terms used herein and not defined shall have the meanings given to such terms in
the Indenture.
THIS SERIES B BOND IS A SPECIAL OBLIGATION OF THE AUTHORITY,
PAYABLE SOLELY FROM THE SUBORDINATE RESIDUAL REVENUES,
SUBORDINATE RESIDUAL PREPAYMENTS AND SUBORDINATE RESIDUAL NET
PROCEEDS (AS DEFINED IN THE INDENTURE HEREINAFTER DESCRIBED) AND
MONEYS, FUNDS AND ACCOUNTS PLEDGED BY THE INDENTURE. THE STATE OF
CALIFORNIA IS NOT OBLIGATED TO PAY THE PRINCIPAL OF THIS SERIES B
BOND NOR THE INTEREST THEREON, NOR ARE THE FAITH AND CREDIT OF THE
STATE OF CALIFORNIA PLEDGED TO THE PAYMENT OF THE PRINCIPAL OF OR
INTEREST ON THIS SERIES B BOND.
THE SERIES B BONDS ARE ISSUED ON A PARITY WITH THE SERIES C BONDS,
ALL OF WHICH SERIES B BONDS AND SERIES C BONDS REFERRED TO BELOW
(COLLECTIVELY, THE "SUBORDINATE BONDS") ARE PAYABLE FROM THE
SUBORDINATE BONDS TRUST ESTATE WITHOUT DISTINCTION, PREFERENCE OR
PRIORITY.
This Series B Bond and the issue of which it forms a part is a limited obligation of the
Authority, giving rise to no pecuniary liability of the State of California or any political subdivision
thereof (other than the Authority, to the limited extent set forth in the Indenture), nor any charge
against its general credit, is payable solely from, and a valid claim of the Registered Owner hereof
only against the Subordinate Bond Trust Estate. This Series B Bond does not constitute an
indebtedness or a loan of the credit of the Authority or the State of California or any political
subdivision thereof within the meaning of any constitutional or statutory debt restrictions. Neither
the faith and credit nor the taxing power of the Authority or the State of California or any political
subdivision thereof is pledged to the payment of principal of or interest on this Series B Bond.
This Series B Bond is one of a duly authorized issue of bonds of the Authority designated as
"Independent Cities Lease Finance Authority Mobile Home Park Subordinate Revenue Bond (San
Juan Mobile Estates), Series 200613" (the "Series B Bonds"), in the aggregate principal amount of
$9,765,000 issued pursuant to Chapter 8 of Part 5 of Division 31 of the California Health and Safety
Code, as amended and supplemented (the "Act'), and under and pursuant to an Indenture of Trust
dated as of May 1, 2006 (the "Indenture"), by and between the Authority and Union Bank of
California, N.A., as trustee (the "Trustee"), for the purpose of providing funds which, together with
40 the proceeds of the Series A Bonds and Series C Bonds (described below), will be used to make a
loan to finance the acquisition and rehabilitation of the San Juan Mobile Estates mobile home park in
the City of San Juan Capistrano, California. Concurrently with the issuance of the Series B Bonds
RVPUB\FBAUM\709416.1 B-2
the Authority will also issue and deliver its $29,660,000 aggregate principal amount Mobile Home
... { Park Revenue Bonds (San Juan Mobile Estates), Series 2006A (the "Series A Bonds") and its
$485,000 aggregate principal amount Mobile Home Park Subordinate Revenue Bonds (San Juan
Mobile Estates), Taxable Series 2006C (the "Series C Bonds", and together with the Series B Bonds
and the Series A Bonds referred to as the "Bonds").
The Series B Bonds are issued on a parity with the Series C Bonds and are referred to in the
Indenture together with the Series C Bonds collectively as the "Subordinate Bonds," and are secured
as to repayment under the Indenture from the Subordinate Bonds Trust Estate on a panty basis, but
on a subordinate basis to the Series A Bonds.
The owner of this Series B Bonds should make reference to the Indenture and any and all
supplements thereto and modifications and amendments thereof and to the Act for a description of
the pledge and covenants securing the Series B Bonds, the nature, extent and manner of enforcement
of such pledge, the rights and remedies of the registered owners of the Series B Bonds with respect
thereto and the terms and conditions upon which the Series B Bonds are issued. Copies of the
Indenture are on file at the office of the Authority and at the principal corporate trust office of the
Trustee, in Los Angeles, California, or its successor as trustee.
To the extent and in the manner permitted by the Indenture, the provisions of the Indenture or
any Indenture amendatory thereof or supplemental thereto, may be amended by the Authority with
the written consent of the owners of at least two-thirds in principal amount of the then outstanding
Bonds and at least two-thirds in principal amount of the outstanding Series A Bonds. No such
amendment shall permit a change in the terms of redemption or maturity of the principal of any
outstanding Bond or any installment of interest thereon or a reduction in the principal amount or
redemption price thereof or in the rate of interest thereon without the consent of the owner of such
Bond, or shall reduce the percentages of principal amount of Bonds without the consent of the
owners of which is required to effect any such amendment, or shall change or modify any of the
rights or obligations of the Trustee or of any paying agent without its written consent thereto.
The Series B Bonds are issuable only as fully registered bonds without coupons, in
denominations of $5,000 or any integral multiple thereof. Series B Bonds maybe exchanged for an
equal aggregate principal amount of Series B Bonds of the same maturity, of other Authorized
Denominations (as defined in the Indenture) and bearing interest at the same rate at the Principal
Office of the Trustee, in the manner and subject to the limitations and conditions provided in the
Indenture and without cost except for any tax or other governmental charge.
The Series B Bonds maturing on or after May 15, 2017 shall be subject to redemption, at the
option of the Authority at the request of the Borrower, prior to the stated maturities thereof, as may
be directed by the Authority, at the request of the Borrower, in whole or in part, on any date or on
after May 15, 2016, at a Redemption Price equal to the principal amount to be redeemed, subject to
the availability of funds or the redemption date, plus accrued interest thereon to the date fixed for
redemption without premium.
The Series B Bonds maturing on May 15, 2008, May 15, 2012, May 15, 2016, May 15, 2021,
• May 15, 2026, May 15, 2031, and May 15, 2041 are subject to targeted mandatory sinking fund
redemption by application of the Sinking Fund Installments as provided in the Indenture on each
May 15 and November 15, commencing on November 15, 2006, November 15, 2008, November 15,
RVPUB\FBAUW709416.1 B-3
2012, November 15, 2016, November 15, 2021, November 15, 2026 and November 15, 2031,
respectively, at a Redemption Price equal to 100% of the Principal Amount of the Series B Bonds or
portion thereof targeted to be redeemed, plus accrued interest to the date of redemption thereof,
without premium, on the respective dates and in the amounts set forth in the Indenture to the extent
of Subordinate Residual Revenues available for such purpose.
THE SERIES B BONDS ARE SUBJECT TO DEEMED REDEMPTION PURSUANT TO
SECTION 4.1(d) OF THE INDENTURE IN THE EVENT OF A SERIES A BONDS EVENT OF
DEFAULT RESULTING IN A FORECLOSURE OR OTHER SALE OF THE PROJECT
PURSUANT TO THE DEED OF TRUST AND APPLICATION OF THE PROCEEDS THEREOF
AND OTHER MONEYS HELD UNDER THE INDENTURE AS PROVIDED IN THE
INDENTURE. SUCH DEEMED REDEMPTION WILL RESULT IN THE CANCELLATION OF
ANY THEN OUTSTANDING SERIES B BONDS WITHOUT ANY THEN -REMAINING
UNPAID PRINCIPAL OF OR INTEREST ON SUCH SERIES B BONDS BEING PAID.
If any or all of the Bonds are to be redeemed prior to maturity, the Trustee shall give notice,
which notice shall specify the maturities of the Bonds to be redeemed, the redemption date and the
place or places where amounts due upon such redemption will be payable, whether such redemption
is conditioned upon the availability of funds for such purpose on the redemption date and, if less than
all of the Bonds of any maturity are to be redeemed, the letters and numbers or other distinguishing
marks of such Bonds so to be redeemed, and, in the case of Bonds to be redeemed in part only, such
notice shall also specify the respective portions of the Principal Amount thereof to be redeemed.
Such notice shall further state that on such date there shall become due and payable upon each Bond
•
to be redeemed the Redemption Price thereof, or the Redemption Price of the specified portions of
the Principal Amount thereof in the case of Bonds to be redeemed in part only, together with interest
accrued on such Bonds to the redemption date, and that from and after such date interest on such
Bonds shall cease to accrue and be payable; provided that, if the redemption is conditioned upon
funds being available therefor no later than the opening of business on the redemption date, the
notice shall so state. The Trustee shall mail a copy of such notice, by first class mail, postage
prepaid, not less than thirty (30) days (provided, however, in the case of special redemption as
described in the Indenture, such notice shall be given not less than ten (10) days) nor more than
forty-five (45) days before the redemption date, to the Owners of any Bonds or portions of Bonds
which are to be redeemed, at their last addresses, if any, appearing upon the registration book.
Failure to give such notice with respect to any Bonds, or any defect therein, shall not affect the
validity of the proceedings for redemption of any other Bonds.
With respect to any optional redemption of Bonds, if at the time of mailing such notice of
redemption, the Authority shall not have deposited with the Trustee moneys sufficient to redeem all
the Bonds called for redemption, such notice may state that it is conditional, that is, subject to the
deposit of the redemption moneys with the Trustee not later than the opening of business on the
redemption date, and such notice shall be of no effect unless such moneys are so deposited.
The Act provides that neither the issuing officer nor any person executing the Bonds shall be
liable personally on the Bonds.
• The transfer of this Series B Bond is registrable by the Registered Owner hereof in person or
by his attorney or legal representative at the Principal Office of the Trustee but only in the manner
and subject to the limitations and conditions provided in the Indenture and upon the face hereof and
RVPUB\FBAUM\709416.1 B-4
upon surrender and cancellation of this Series B Bond. Upon any such registration of transfer the
Authority shall execute and the Trustee shall authenticate and deliver in exchange for this Series B
' Bond a new registered Series B Bond without coupons, registered in the name of the transferee, of
authorized denominations, in an aggregate principal amount equal to the principal amount of this
Series B Bond, of the same series and maturity and bearing interest at the same rate.
0
It is hereby certified and recited that all conditions, acts and things required by law and the
Indenture to exist, to have happened and to have been performed precedent to and in the issuance of
this Series B Bond, exist, have happened and have been performed and that the issue of the Series B
Bonds, of which this is one, together with all other indebtedness of the Authority is within every debt
and other limit prescribed by the laws of the State of California.
This Series B Bond shall not be entitled to any benefit under the Indenture or be valid or
become obligatory for any purpose until this Series B Bond shall have been authenticated by the
manual execution by the Trustee of the Certificate of Authentication attached hereto.
IN WITNESS WHEREOF, the Authority has caused this Series B Bond to be signed in its
name and on its behalf by the facsimile signature of the President and attested to by the facsimile
signature of the Secretary of the Authority and has caused this Series B Bond to be dated as of
June 1, 2006.
ATTEST:
M
Secretary
INDEPENDENT CITIES LEASE FINANCE
AUTHORITY
RVPUB\FBAUM\709416.1 B-5
President
FORM OF TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This Bond is one of the Bonds of the issue described in the within -mentioned Indenture.
Date of Authentication:
UNION BANK OF CALIFORNIA, N.A., as
Trustee
M
RVPUB\FBAUM\709416.1 B-6
Authorized Signatory
U1
FORM OF ASSIGNMENT
For value received the undersigned hereby sells, assigns and transfers unto
(Name, Address and Tax Identification or Social Security Number of Assignee)
the within -registered Bond and hereby irrevocably constitute(s) and appoints(s)
'attorney, to
transfer the same on the registration books of the Trustee with full power of substitution in the
premises.
Dated:
Signature Guaranteed:
Signature:
Note: Signature(s) must be guaranteed by an Note: The signature(s) on this Assignment
eligible guarantor institution correspond with the name(s) as written on the
face of the within registered Bond in every
• without alteration or enlargement any change
whatsoever.
RVPUB\FBAUNR709416.1 B-7
7
•
FORM OF TAXABLE SERIES C BOND
R-1
UNLESS THIS BOND IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY (AS DEFINED IN THE INDENTURE OF TRUST) TO THE TRUSTEE FOR
REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY BOND ISSUED IS
REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY (AND ANY
PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IF REQUESTED BY
AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY), 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 CALIFORNIA
INDEPENDENT CITIES LEASE FINANCE AUTHORITY
MOBILE HOME PARK SUBORDINATE REVENUE BOND
(SAN JUAN MOBILE ESTATES)
TAXABLE SERIES 2006C
INTEREST RATE MATURITY DATE DATED DATE CUSIP NO.
15, _ June 1, 2006
REGISTERED OWNER: CEDE & CO.
PRINCIPAL SUM: DOLLARS
THE INDEPENDENT CITIES LEASE FINANCE AUTHORITY (the "Authority), a joint
powers authority organized and existing under the laws of the State of California, for value received,
hereby promises to pay, solely from the sources hereinafter described, to the Registered Owner
named above or registered assigns or legal representative, on the Maturity Date specified above,
upon the presentation and surrender hereof, the Principal Sum specified above and to pay by check
mailed to the person in whose name this Series C Bond is registered at the close of business on the
first day (whether or not a business day) of the calendar month in which each interest payment date
occurs, solely from the sources and to the extent of such amounts described in the Indenture
(described below), interest on said sum from the date hereof at the Interest Rate per annum specified
above, payable on the fifteenth day of each May and November in each year, commencing
• November 15, 2006 to the extent of Subordinate Residual Revenues available for payment, until said
Principal Sum is paid. In the event that the Subordinate Residual Revenues are not sufficient to pay
the accrued interest due and payable on this Series C Bond on an Interest Payment Date remains,
RVPUBTBAUM\709416.1 C-1
such unpaid interest shall be deferred. Non-payment of interest on this Series C Bond on any Interest
Payment Date due to insufficient Subordinate Residual Revenues shall not be an Event of Default
under the Indenture. Unpaid principal and interest on this Bond are subject to deemed redemption
and discharge as provided in the Indenture. Principal and any redemption premium and interest with
respect to this Series C Bond are payable at the principal corporate trust office in San Francisco,
California, of Union Bank of California, N.A., as Trustee, in any coin or currency of the United
States of America which at the time of payment is legal tender for the payment of public and private
debts.
Capitalized terms used herein and not defined shall have the meanings given to such terms in
the Indenture.
THIS SERIES C BOND IS A SPECIAL OBLIGATION OF THE AUTHORITY,
PAYABLE SOLELY FROM THE SUBORDINATE RESIDUAL REVENUES,
SUBORDINATE RESIDUAL PREPAYMENTS AND SUBORDINATE RESIDUAL NET
PROCEEDS (AS DEFINED IN THE INDENTURE HEREINAFTER DESCRIBED) AND
MONEYS, FUNDS AND ACCOUNTS PLEDGED BY THE INDENTURE. THE STATE OF
CALIFORNIA IS NOT OBLIGATED TO PAY THE PRINCIPAL OF THIS SERIES B
BOND NOR THE INTEREST THEREON, NOR ARE THE FAITH AND CREDIT OF THE
STATE OF CALIFORNIA PLEDGED TO THE PAYMENT OF THE PRINCIPAL OF OR
INTEREST ON THIS SERIES B BOND.
THE SERIES C BONDS ARE ISSUED ON A PARITY WITH THE SERIES B BONDS,
ALL OF WHICH SERIES C BONDS AND SERIES C BONDS REFERRED TO BELOW
• (COLLECTIVELY, THE "SUBORDINATE BONDS") ARE PAYABLE FROM THE
SUBORDINATE BONDS TRUST ESTATE WITHOUT DISTINCTION, PREFERENCE OR
PRIORITY.
This Series C Bond and the issue of which it forms a part is a limited obligation of the
Authority, giving rise to no pecuniary liability of the State of California or any political subdivision
thereof (other than the Authority, to the limited extent set forth in the Indenture), nor any charge
against its general credit, is payable solely from, and a valid claim of the Registered Owner hereof
only against the Subordinate Bond Trust Estate. This Series C Bond does not constitute an
indebtedness or a loan of the credit of the Authority or the State of California or any political
subdivision thereof within the meaning of any constitutional or statutory debt restrictions. Neither
the faith and credit nor the taxing power of the Authority or the State of California or any political
subdivision thereof is pledged to the payment of principal of or interest on this Series C Bond.
This Series C Bond is one of a duly authorized issue of bonds of the Authority designated as
"Independent Cities Lease Finance Authority Mobile Home Park Subordinate Revenue Bond (San
Juan Mobile Estates), Taxable Series 2006C" (the "Series C Bonds"), in the aggregate principal
amount of $485,000 issued pursuant to Chapter 8 of Part 5 of Division 31 of the California Health
and Safety Code, as amended and supplemented (the "Act"), and under and pursuant to an Indenture
of Trust dated as of May 1, 2006 (the "Indenture"), by and between the Authority and Union Bank of
California, N.A., as trustee (the "Trustee"), for the purpose of providing funds which, together with
• the proceeds of the Series A Bonds and Series B Bonds (described below), will be used to make a
loan to finance the acquisition and rehabilitation of the San Juan Mobile Estates mobile home park in
the City of San Juan Capistrano, California. Concurrently with the issuance of the Series C Bonds
RVPU13\FBAUW709416.1 C-2
the Authority will also issue and deliver its $29,660,000 aggregate principal amount Mobile Home
Park Revenue Bonds (San Juan Mobile Estates), Series 2006A (the "Series A Bonds") and its
$9,765,000 aggregate principal amount Mobile Home Park Subordinate Revenue Bonds (San Juan
Mobile Estates), Series 2006B (the "Series B Bonds", and together with the Series C Bonds and the
Series A Bonds referred to as the `Bonds").
The Series C Bonds are issued on a parity with the Series B Bonds and are referred to in the
Indenture together with the Series B Bonds collectively as the "Subordinate Bonds," and are secured
as to repayment under the Indenture from the Subordinate Bonds Trust Estate on a panty basis, but
on a subordinate basis to the Series A Bonds.
The owner of this Series C Bonds should make reference to the Indenture and any and all
supplements thereto and modifications and amendments thereof and to the Act for a description of
the pledge and covenants securing the Series C Bonds, the nature, extent and manner of enforcement
of such pledge, the rights and remedies of the registered owners of the Series C Bonds with respect
thereto and the terms and conditions upon which the Series C Bonds are issued. Copies of the
Indenture are on file at the office of the Authority and at the principal corporate host office of the
Trustee, in Los Angeles, California, or its successor as trustee.
To the extent and in the manner permitted by the Indenture, the provisions of the Indenture or
any Indenture amendatory thereof or supplemental thereto, may be amended by the Authority with
the written consent of the owners of at least two-thirds in principal amount of the then outstanding
Bonds and at least two-thirds in principal amount of the outstanding Series A Bonds. No such
amendment shall permit a change in the terms of redemption or maturity of the principal of any
outstanding Bond or any installment of interest thereon or a reduction in the principal amount or
redemption price thereof or in the rate of interest thereon without the consent of the owner of such
Bond, or shall reduce the percentages of principal amount of Bonds without the consent of the
owners of which is required to effect any such amendment, or shall change or modify any of the
rights or obligations of the Trustee or of any paying agent without its written consent thereto.
The Series C Bonds are issuable only as fully registered bonds without coupons, in
denominations of $5,000 or any integral multiple thereof. Series C Bonds maybe exchanged for an
equal aggregate principal amount of Series C Bonds of the same maturity, of other Authorized
Denominations (as defined in the Indenture) and bearing interest at the same rate at the Principal
Office of the Trustee, in the manner and subject to the limitations and conditions provided in the
Indenture and without cost except for any tax or other governmental charge.
The Series C Bonds shall not be subject to optional redemption prior to maturity.
The Series C Bonds are subject to targeted mandatory sinking fund redemption by application
of the Sinking Fund Installments as provided in the Indenture on each May 15 and November 15,
commencing on November 15, 2006, at a Redemption Price equal to 100% of the Principal Amount
of the Series C Bonds or portion thereof targeted to be redeemed, plus accrued interest to the date of
redemption thereof, without premium, on the respective dates and in the amounts set forth in the
Indenture to the extent of Subordinate Residual Revenues available for such purpose.
THE SERIES C BONDS ARE SUBJECT TO DEEMED REDEMPTION PURSUANT TO
SECTION 4.1(d) OF THE INDENTURE IN THE EVENT OF A SERIES A BONDS EVENT OF
RVPUB\FBAUM\709416.1 C-3
DEFAULT RESULTING IN A FORECLOSURE OR OTHER SALE OF THE PROJECT
PURSUANT TO THE DEED OF TRUST AND APPLICATION OF THE PROCEEDS THEREOF
AND OTHER MONEYS HELD UNDER THE INDENTURE AS PROVIDED IN THE
INDENTURE. SUCH DEEMED REDEMPTION WILL RESULT IN THE CANCELLATION OF
ANY THEN OUTSTANDING SERIES C BONDS WITHOUT ANY THEN -REMAINING
UNPAID PRINCIPAL OF OR INTEREST ON SUCH SERIES C BONDS BEING PAID.
If any or all of the Bonds are to be redeemed prior to maturity, the Trustee shall give notice,
which notice shall specify the maturities of the Bonds to be redeemed, the redemption date and the
place or places where amounts due upon such redemption will be payable, whether such redemption
is conditioned upon the availability of funds for such purpose on the redemption date and, if less than
all of the Bonds of any maturity are to be redeemed, the letters and numbers or other distinguishing
marks of such Bonds so to be redeemed, and, in the case of Bonds to be redeemed in part only, such
notice shall also specify the respective portions of the Principal Amount thereof to be redeemed.
Such notice shall further state that on such date there shall become due and payable upon each Bond
to be redeemed the Redemption Price thereof, or the Redemption Price of the specified portions of
the Principal Amount thereof in the case of Bonds to be redeemed in part only, together with interest
accrued on such Bonds to the redemption date, and that from and after such date interest on such
Bonds shall cease to accrue and be payable; provided that, if the redemption is conditioned upon
funds being available therefor no later than the opening of business on the redemption date, the
notice shall so state. The Trustee shall mail a copy of such notice, by first class mail, postage
prepaid, not less than thirty (30) days (provided, however, in the case of special redemption as
described in the Indenture, such notice shall be given not less than ten (10) days) nor more than
forty-five (45) days before the redemption date, to the Owners of any Bonds or portions of Bonds
which are to be redeemed, at their last addresses, if any, appearing upon the registration book.
Failure to give such notice with respect to any Bonds, or any defect therein, shall not affect the
validity of the proceedings for redemption of any other Bonds.
With respect to any optional redemption of Bonds, if at the time of mailing such notice of
redemption, the Authority shall not have deposited with the Trustee moneys sufficient to redeem all
the Bonds called for redemption, such notice may state that it is conditional, that is, subject to the
deposit of the redemption moneys with the Trustee not later than the opening of business on the
redemption date, and such notice shall be of no effect unless such moneys are so deposited.
The Act provides that neither the issuing officer nor any person executing the Bonds shall be
liable personally on the Bonds.
The transfer of this Series C Bond is registrable by the Registered Owner hereof in person or
by his attorney or legal representative at the Principal Office of the Trustee but only in the manner
and subject to the limitations and conditions provided in the Indenture and upon the face hereof and
upon surrender and cancellation of this Series C Bond. Upon any such registration of transfer the
Authority shall execute and the Trustee shall authenticate and deliver in exchange for this Series C
Bond a new registered Series C Bond without coupons, registered in the name of the transferee, of
authorized denominations, in an aggregate principal amount equal to the principal amount of this
Series C Bond, of the same series and maturity and bearing interest at the same rate.
It is hereby certified and recited that all conditions, acts and things required by law and the
Indenture to exist, to have happened and to have been performed precedent to and in the issuance of
RVPUB�FBAUM\709416.1 C-4
0
this Series C Bond, exist, have happened and have been performed and that the issue of the Series C
Bonds, of which this is one, together with all other indebtedness of the Authority is within every debt
and other limit prescribed by the laws of the State of California.
This Series C Bond shall not be entitled to any benefit under the Indenture or be valid or
become obligatory for any purpose until this Series C Bond shall have been authenticated by the
manual execution by the Trustee of the Certificate of Authentication attached hereto.
IN WITNESS WHEREOF, the Authority has caused this Series C Bond to be signed in its
name and on its behalf by the facsimile signature of the President and attested to by the facsimile
signature of the Secretary of the Authority and has caused this Series C Bond to be dated as of
June 1, 2006.
INDEPENDENT CITIES LEASE FINANCE
AUTHORITY
ATTEST:
By:
Secretary
RVPUBTBAUM\709416.1 C-5
President
11
C1
FORM OF TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This Bond is one of the Bonds of the issue described in the within -mentioned Indenture.
Date of Authentication:
UNION BANK OF CALIFORNIA, N.A., as
Trustee
LE
RVPUB\FBAUM\709416.1 _ C_6
Authorized Signatory
FORM OF ASSIGNMENT
For value received the undersigned hereby sells, assigns and transfers unto
(Name, Address and Tax Identification or Social Security Number of Assignee)
the within -registered Bond and hereby irrevocably constitute(s) and appoints(s)
, attorney, to
transfer the same on the registration books of the Trustee with full power of substitution in the
premises.
Dated:
Signature Guaranteed:
Signature:
Note: Signature(s) must be guaranteed by an Note: The signature(s) on this Assignment
eligible guarantor institution correspond with the name(s) as written on the
• face of the within registered Bond in every
without alteration or enlargement any change
whatsoever.
•
RVPUB\FBAUM\709416.1 C-7