LOAN AND TRUST AGREEMENT among

Exhibit 4.1

Execution Version

 

LOAN AND TRUST AGREEMENT

among

POLK COUNTY INDUSTRIAL DEVELOPMENT AUTHORITY,

TAMPA ELECTRIC COMPANY

and

THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A.,

As Trustee

Dated as of November 15, 2010

And Providing for the Issue of

Polk County Industrial Development Authority

Solid Waste Disposal Facility Revenue Refunding Bonds

(Tampa Electric Company Project)

Series 2010

 

TABLE OF CONTENTS

 

 

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TABLE OF CONTENTS

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TABLE OF CONTENTS

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TABLE OF CONTENTS

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LOAN AND TRUST AGREEMENT

THIS LOAN AND TRUST AGREEMENT dated as of November 15, 2010, among POLK COUNTRY INDUSTRIAL DEVELOPMENT AUTHORITY, a public body corporate and politic and a public instrumentality created pursuant to the laws of the State of Florida (the “ Authority ”), TAMPA ELECTRIC COMPANY, a Florida corporation (the “ Company ”) and THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A., as trustee, a national banking association duly organized and existing under the laws of the United States of America and having a designated corporate trust office in the City of Jacksonville, Florida, which is authorized under such laws to exercise corporate trust powers and is subject to examination by federal authorities (the “ Trustee ”).

RECITALS

This Agreement provides for the following transactions:

(a) the Authority’s issue of Bonds for the purpose of refunding bonds previously issued to refinance bonds issued to finance the Project;

(b) the Company’s repayment of the loan of Bond proceeds from the Authority through payment to the Trustee of all amounts necessary to pay principal, premium, if any, and interest on the Bonds issued by the Authority; and

(c) the Authority’s assignment to the Trustee in trust for the benefit and security of the Bondholders of the Revenues to be received hereunder and the rights to receive the same and the security therefor.

In consideration of the mutual agreements contained in this Agreement and other good and valuable consideration, the receipt of which is hereby acknowledged, the Authority, the Company and the Trustee agree as set forth herein for their own benefit and for the benefit of the Bondholders.

ARTICLE I

DEFINITIONS

Section 1.01. Definitions . Unless the context otherwise requires, the terms defined in this Section shall for all purposes hereof and of any amendment hereof or supplement hereto and of the Bonds and of any certificate, opinion, request or other document mentioned herein or therein have the meanings defined herein, the following definitions to be equally applicable to both the singular and plural forms of any of the terms defined herein:

“ Act ” means the Constitution of the State of Florida, Chapter 69-1510, Laws of Florida, as amended, the Florida Industrial Development Financing Act, Parts II and III of Chapter 159, Florida Statutes, and other applicable provisions of law.

“ Additional Redemption Notice ” is defined in Section 4.04(b).

“ Additional Tender Notice ” is defined in Section 4.06(c).

“ Administrative Expenses ” means the direct, out-of-pocket expenses incurred by the Authority pursuant to this Agreement and reasonable in amount and the compensation of the Trustee, any paying agent or registrar and the direct, out-of-pocket expenses of the Trustee, including fees and disbursements of its counsel, incurred by the Trustee and reasonable in amount.

“ Agreement ” means this Loan and Trust Agreement, among the Authority, the Company and the Trustee.

“ Alternate Rate ” means a rate per annum equal to (a) the BMA Municipal Swap Index of Municipal Market Data, formerly the PSA Municipal Swap Index (as such term is defined in the 1992 ISDA U.S. Municipal Counterparty Definitions) (the “ BMA Rate ”) most recently available as of the date of determination, or (b) if such index is no longer available, or if the BMA Rate is no longer published, the Kenny Index (as such term is defined in the 1992 ISDA U.S. Municipal Counterparty Definitions), or if neither the BMA Rate nor the Kenny Index is published, the index determined to equal the prevailing rate determined by the Remarketing Agent for tax exempt state and local government bonds meeting criteria determined in good faith by the Remarketing Agent to be comparable under the circumstances to the criteria used by the Bond Market Association to determine the BMA Rate just prior to when the Bond Market Association stopped publishing the BMA Rate.

“ Authority ” means the Polk County Industrial Development Authority.

“ Authority Representative ” means the Chairman, Vice Chairman, the Secretary or Assistant Secretary, and when used with reference to an act or document of the Authority for purposes of this Agreement also means any other person authorized to perform the act or execute the document by a written instrument furnished to the Trustee containing the specimen signature of such person and signed on behalf of the Authority by any of its officers.

“ Beneficial Owner ” means the purchaser of a beneficial interest in the Bonds when the Bonds are held by the Securities Depository in the Book-Entry System, and otherwise means a Bondholder.

“ Bondholder ” or “ holder ” means the registered owner of any Bond.

“ Bond Fund ” means the Bond Fund created in Section 5.02.

“ Bonds ” means the $75,000,000 aggregate principal amount of the Bonds issued pursuant hereto that are authenticated and delivered by the Trustee under and pursuant to ARTICLE III hereof.

“ Bond Service Charges ” means, for any period or time, the principal of, premium, if any, and interest due on the Bonds for that period or payable at that time whether due at maturity or upon acceleration or redemption or pursuant to any mandatory sinking fund requirements or otherwise.

 

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“ Book-Entry System ” means the system maintained by the Securities Depository described in Section 6.01.

“ Business Day ” means any day other than (i) a Saturday or Sunday, (ii) a day on which commercial banks in New York, New York or the city in which the designated corporate trust office of the Trustee or the Remarketing Agent is located, are required or authorized by law or regulation to close, or (iii) a day on which the New York Stock Exchange is closed.

“ Code ” means the Internal Revenue Code of 1986, as amended from time to time. References to the Code and Sections of the Code include relevant applicable regulations and proposed regulations thereunder and under the Code, and any successor provisions to those sections, regulations or proposed regulations and, in addition, all revenue rulings, announcements, notices, procedures and judicial determinations under the foregoing applicable to the Bonds.

“ Commercial Paper Mode ” means each period of time, comprised of Commercial Paper Periods, during which Commercial Paper Rates are in effect.

“ Commercial Paper Period ” means, with respect to any Bond, each period set under Section 3.02(a)(3).

“ Commercial Paper Rate ” means an interest rate on each Bond set under Section 3.02(a)(3).

“ Company ” means Tampa Electric Company, a Florida corporation, and its successors and assigns as permitted under this Agreement.

“ Company-Held Bonds ” has the meaning set forth in Section 4.08(b).

“ Company Purchase Account ” means the account of that name created pursuant to Section 4.10.

“ Company Representative ” means a person at the time designated to act on behalf of the Company for purposes of this Agreement by a written instrument furnished to the Trustee containing the specimen signature of such person and signed on behalf of the Company by any of the President, any Vice President, Treasurer or Assistant Treasurer of the Company and any other person designated by one of the foregoing officers.

“ Conversion Notice ” is defined in Section 3.02(b)(1).

“ Corporation” means and includes corporations, partnerships, including limited partnerships and limited liability partnerships, joint ventures, associations, companies, limited liability companies, joint-stock companies and business trusts.

“ Daily Rate ” means an interest rate on the Bonds set under Section 3.02(a)(1).

 

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“ Determination Method ” is defined in Section 3.02(a).

“ DTC ” means The Depository Trust Company, New York, New York.

“ Event of Default ” means any occurrence or event specified in and defined by Section 10.01.

“ Favorable Opinion of Tax Counsel ” means an Opinion of Tax Counsel addressed to the Authority and to the Trustee to the effect that the action proposed to be taken is permitted under the Act and by this Agreement and will not adversely affect any exclusion from gross income for federal income tax purposes of interest on the Bonds.

“First Mortgage ” means the Indenture of Mortgage, dated as of August 1, 1946, as heretofore and hereafter supplemented and amended, currently by and between the Company and U.S. Bank National Association, as trustee.

“ First Mortgage Bond Fund ” means the fund established with the Trustee pursuant to Section 5.03.

“ First Mortgage Bonds ” means the first mortgage bonds to be created by a supplemental indenture to the First Mortgage and, at the option of the Company, delivered to the Trustee pursuant to Section 2.02 as security for the Company’s obligation to pay the principal of, premium, if any, and interest on the Bonds.

“ Fitch ” means Fitch, Inc. and its successors and assigns, and, if such corporation shall be dissolved or liquidated or shall no longer perform the functions of a securities rating agency, “Fitch” shall be deemed to refer to any other nationally recognized securities rating agency designated by the Company, with written notice to the Trustee and the Authority.

“ Funds ” means, collectively, the Bond Fund, the Refunding Fund and the First Mortgage Bond Fund created pursuant hereto.

“ Government Obligations ” means any of the securities described in paragraph (a) of the definition of the term “Permitted Investments.”

“ Indemnified Persons ” is defined in Section 8.04(a).

“ Initial Period ” means the period from the date the Bonds are issued to and including March 1, 2011.

“ Interest Account ” means the account created pursuant to Section 5.02.

“ Interest Payment Date ” is defined in the form of the Bonds appearing in Exhibit B hereto.

“ Interest Period ” is defined in the form of the Bonds appearing in Exhibit B hereto.

“ Maturity Date ” means the stated maturity of the Bonds as set forth in Section 3.01

 

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“ Maximum Rate ” means, on any day, the lesser of (i) the maximum interest rate permitted by law, and (ii) 14% per annum.

“ Moody’s ” means Moody’s Investors Service, Inc., a corporation organized and existing under the laws of the State of Delaware, its successors and assigns, and, if such corporation shall be dissolved or liquidated or shall no longer perform the functions of a securities rating agency, “Moody’s” shall be deemed to refer to any other nationally recognized securities rating agency designated by the Company, with written notice to the Trustee and the Authority.

“ Opinion of Counsel ” means a written opinion of counsel selected by the Company who is acceptable to the Authority. Such counsel may be an employee of or counsel to the Authority or the Company.

“ Opinion of Tax Counsel ” means an Opinion of Counsel by counsel of nationally recognized standing in matters relating to the exclusion of interest from gross income on obligations issued by or on behalf of states and their political subdivisions.

“ Outstanding ” or “ Bonds Outstanding ” when used with reference to Bonds means all Bonds which have been authenticated and delivered by the Trustee under this Agreement, except the following:

(a) Bonds canceled or purchased by or delivered to the Trustee for cancellation.

(b) Bonds that have become due (at maturity or on redemption, acceleration or otherwise) and for the payment, including interest accrued to the due date, of which sufficient moneys are held by the Trustee.

(c) Bonds paid or deemed to have been paid within the meaning of Section 13.02.

(d) Bonds in lieu of which others have been authenticated under Section 3.06, Section 3.08 or Section 3.09.

Bonds purchased pursuant to tenders and not delivered to the Trustee for payment are not outstanding, but there will be outstanding Bonds authenticated and delivered in lieu of such undelivered Bonds as provided in Section 3.03.

“ Participant ” means one of the entities which deposit securities, directly or indirectly, in the Book-Entry System.

“ Permitted Investments ” means the following investments for the following purposes:

(a) The following obligations may be used as Permitted Investments for all purposes, including defeasance investments in refunding escrow accounts:

 

(1)

Cash (insured at all times by the Federal Deposit Insurance Corporation), and

 

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(2)

Direct non-callable obligations of the United States of America and securities fully and unconditionally guaranteed as to the timely payment of principal and interest by the United States of America, to which direct obligation or guarantee the full faith and credit of the United States of America has been pledged, Refcorp interest strips, CATS, TIGRS, STRPS, or defeased municipal bonds rated AAA by S&P or Aaa by Moody’s (or any combination of the foregoing)

Any security used for defeasance must provide for the timely payment of principal and interest and cannot be callable or prepayable prior to maturity or earlier redemption of the rated debt (excluding securities that do not have a fixed par value and/or whose terms do not promise a fixed dollar amount at maturity or call date).

(b) The following obligations may be used as Permitted Investments for all purposes other than defeasance investments in refunding escrow accounts:

(1) Obligations of any of the following federal agencies which obligations represent the full faith and credit of the United States of America, including: Export-Import Bank, Rural Economic Community Development Administration, U.S. Maritime Administration, Small Business Administration, U.S. Department of Housing & Urban Development (PHAs), Federal Housing Administration, and Federal Financing Bank;

(2) 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: senior debt obligations issued by the Federal National Mortgage Association (FNMA) or Federal Home Loan Mortgage Corporation (FHLMC), obligations of the Resolution Funding Corporation (REFCORP), and senior debt obligations of the Federal Home Loan Bank System;

(3) U.S. dollar denominated deposit accounts, federal funds and bankers’ acceptances with domestic commercial banks which have a rating on their short term certificates of deposit on the date of purchase of “P-1” by Moody’s and “A-1” or “A-1+” by S&P and maturing not more than 360 calendar days after the date of purchase (ratings on holding companies are not considered as the rating of the bank);

(4) Commercial paper which is rated at the time of purchase in the single highest classification, “P-1” by Moody’s and “A-1+” by S&P and which matures not more than 270 calendar days after the date of purchase;

(5) Investments in a money market fund rated “AAAm” or “AAAm-G” or better by S&P, including money market funds of the Trustee which satisfy such requirements;

(6) 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 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

 

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(A) which are rated, based on an irrevocable escrow account or fund (the “ escrow ”), in the highest rating category of Moody’s or S&P or any successors thereto; or

(B) (i) which are fully secured as to principal and interest and redemption premium, if any, by an escrow consisting only of cash or obligations described in paragraph (a)(2) above, 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 Maturity Dates thereof or the specified redemption date or dates pursuant to such irrevocable instructions, as appropriate, and (ii) 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 Maturity Dates specified in the irrevocable instructions referred to above, as appropriate; and

(7) Municipal Obligations rated “Aaa/AAA” or general obligations of States with a rating of “A2/A” or higher by both Moody’s and S&P.

(c) The value of the above investments shall be determined as follows:

(1) For the purpose of determining the amount in any Fund, all Permitted Investments credited to such fund shall be valued at fair market value. The Trustee shall determine the fair market value based on accepted industry standards and from accepted industry providers. Accepted industry providers shall include but are not limited to pricing services provided by Financial Times Interactive Data Corporation, Merrill Lynch. Citigroup or JPMorgan Securities.

(2) As to certificates of deposit and bankers’ acceptances, the value shall equal the face amount thereof, plus accrued interest thereon.

(3) As to any investment not specified above, the value thereof shall be established by agreement between the Company and the Trustee.

“ Person ” means any individual, Corporation, trust or government or any agency or political subdivision thereof.

“ Principal Account ” means the account created pursuant to Section 5.02.

“ Principal Payment Date ” means any date upon which the principal amount of any Bond is due hereunder, including the Maturity Date, any Redemption Date, or the date to which the maturity of the Bonds is accelerated pursuant to the terms hereof or otherwise.

“ Project ” means, collectively, certain solid waste disposal facilities of the Project Unit including any structures, machinery, fixtures, improvements and equipment, all as described in Exhibit A attached hereto, as the same may be amended from time to time, together with all additions thereto and substitutions therefor, less any deletions therefrom as they may at any time exist.

 

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“ Project Unit ” means the integrated coal gasification combined cycle power plant owned by the Company and located in southwest Polk County, and related support facilities, as they may at any time exist.

“ Purchase Fund ” means the fund created pursuant to Section 4.10.

“ Purchase Price ” means 100% of the principal amount of the Bonds being purchased plus interest accrued, if any, to (but excluding) the purchase date.

“ Record Date ” is defined in the form of the Bond appearing as Exhibit B hereto.

“ Redemption Account ” means the account created pursuant to Section 5.02.

“ Redemption Date ” means the date fixed for redemption of Bonds subject to redemption in any notice of redemption given in accordance with the terms hereof.

“ Redemption Price ” means an amount equal to the principal of, and premium, if any, and accrued interest to the Redemption Date, if any, on the Bonds to be redeemed.

“ Refunded Bonds ” means $75,000,000 in principal amount of Polk County Industrial Development Authority Solid Waste Disposal Facility Revenue Refunding Bonds (Tampa Electric Company Project), Series 2007.

“ Refunded Bonds Agreement ” means the Loan and Trust Agreement dated as of May 1, 2007 among the Authority, the Company and The Bank of New York Mellon Trust Company, N.A., pursuant to which the Refunded Bonds were issued.

“ Refunded Bonds Trustee ” means the Trustee under the Refunded Bonds Agreement.

“ Refunding Fund ” means the fund by that name created in Section 5.07.

“ Remarketing Agent ” means the Person appointed as Remarketing Agent pursuant to Section 11.17, and its successors under this Agreement. The initial Remarketing Agent shall be J.P. Morgan Securities LLC.

“ Remarketing Proceeds Account ” means the account of that name created pursuant to Section 4.10.

“ Responsible Officer ” means, when used with respect to the Trustee, any officer within the corporate trust department of the Trustee, including any vice president, assistant vice president, assistant treasurer, trust officer or any other officer of the Trustee who customarily performs functions similar to those performed by the Persons who at the time shall be officers, respectively, or to whom any corporate trust matter is referred because of such person’s knowledge of and familiarity with the particular subject and who shall have direct responsibility for the administration of this Agreement.

“ Revenues ” means and includes all payments by or on behalf of the Company to or for the account of the Authority under this Agreement and all other revenues derived by the

 

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Authority from or in connection with this Agreement, including the income thereon and the investment thereof, if any, and any moneys received on the First Mortgage Bonds but not including payments with respect to the indemnification or reimbursement of certain expenses of the Authority under Section 5.05(b)(1), Section 8.04 and Section 10.12 of this Agreement or under any other guaranty or indemnification agreement. The term “ Revenues ” does not include any moneys or investments in the Purchase Fund.

“ S&P ” means Standard & Poor’s, a division of The McGraw-Hill Companies and its successors and assigns, and, if such division or corporation shall be dissolved or liquidated or shall no longer perform the functions of a securities rating agency, “S&P” shall be deemed to refer to any other nationally recognized securities rating agency designated by the Company, with written notice to the Trustee and the Authority.

“ Securities Depository ” means DTC or its nominee, and its successors and assigns, or any successor appointed under Section 6.01.

“ State ” means the State of Florida.

“ Term Interest Rate ” means an interest rate on the Bonds set under Section 3.02(a)(4).

“ Term Interest Rate Period ” means any period as defined in Section 3.02(a)(4) which ends either on the day before the Maturity Date or a day which next precedes a Business Day and is at least 30 days long, and which period must be the same for all Bonds.

“ Trustee ” means The Bank of New York Mellon Trust Company, N.A., a national banking association, or any other bank or trust company duly incorporated and existing under and by virtue of the laws of any state or of the United States of America, which may be substituted in its place as provided in Section 11.05 or Section 11.08.

“ Underwriter ” means, collectively, J.P. Morgan Securities LLC and SunTrust Robinson Humphrey, Inc. and their respective successors and assigns.

“ Weekly Rate ” means an interest rate on the Bonds set under Section 3.02(a).

Section 1.02. Interpretation .

(a) In this Agreement, unless the context otherwise requires:

(1) The terms “hereby,” “hereof,” “hereto,” “herein,” “hereunder” and any similar terms, as used in this Agreement, refer to this Agreement, and the term “hereafter” shall mean after, and the term “heretofore” shall mean before, the date of this Agreement;

(2) An accounting term not otherwise defined has the meaning assigned to it in accordance with generally accepted accounting principles;

(3) References to Articles and Sections are to the Articles and Sections of this Agreement, except as expressly stated otherwise;

 

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(4) The singular form of any word, including the terms defined in Section 1.01, includes the plural, and vice versa, and a word of any gender includes all genders;

(5) Words importing persons shall include firms, associations, partnerships (including limited partnerships), trusts, Corporations and other legal entities, including public bodies, as well as natural persons; and

(6) Any headings preceding the text of the several Articles and Sections of this Agreement, and any index or table of contents or marginal notes appended to copies hereof, shall be solely for convenience of reference and shall not constitute a part of this Agreement, nor shall they affect its meaning, construction or effect.

(b) Whenever in this Agreement, the Authority, the Company, the Trustee or the Remarketing Agent is named or referred to, it shall include, and shall be deemed to include, its respective successors and assigns whether so expressed or not. All of the covenants, stipulations, obligations and agreements by or on behalf of, and other provisions for the benefit of, the Authority, the Company, the Trustee or the Remarketing Agent contained in this Agreement shall bind and inure to the benefit of such respective successors and assigns and shall bind and inure to the benefit of any officer, board, commission, authority, agency or instrumentality to whom or to which there shall be transferred by or in accordance with law any right, power or duty of the Authority or of its successors or assigns, the possession of which is necessary or appropriate in order to comply with any such covenants, stipulations, obligations, agreements or other provisions of this Agreement.

ARTICLE II

THE ASSIGNMENT AND PLEDGE

Section 2.01. The Assignment and Pledge of Revenues and Funds . The Authority assigns and pledges to the Trustee in trust upon the terms hereof (a) all Revenues to be received from the Company or derived from any security provided hereunder, and (b) all rights to receive such Revenues and the proceeds of such rights, and all other rights and interests of the Authority provided hereunder, provided, however , that this assignment and pledge does not include the rights of the Authority pursuant to Section 5.05(b)(1), Section 8.04 and Section 10.12.

Section 2.02. Pledge of First Mortgage Bonds .

(a) In order to provide collateral security for the Company’s obligations to make payments of principal, premium, if any, and interest on the Bonds, as required under this Agreement, the Company may elect to issue and deliver to the Trustee a series of First Mortgage Bonds (i) registered in the name of the Trustee, (ii) which shall have the same stated rate or rates of interest prior to maturity, payable at the same times, and (iii) which shall become due in the same principal amount or amounts, either by redemption, through operation of a sinking fund or by maturity, on the same date or dates, as the Bonds. The First Mortgage Bonds shall be held subject to the terms and provisions of this Agreement and the First Mortgage.

 

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(b) To exercise the election described in Section 2.02(a), the Company shall, not less than 14 days prior to the proposed date of delivery of the First Mortgage Bonds (i) give to the Authority, the Trustee and each nationally recognized securities rating agency which then rates the Bonds written notice that shall designate the date on which such series of First Mortgage Bonds shall be delivered and (ii) deliver to the Trustee and the Authority an Opinion of Tax Counsel to the effect that such election and the delivery of such series of First Mortgage Bonds will not cause the interest on the Bonds to become includable in gross income for federal income tax purposes.

Section 2.03. Release of First Mortgage Bonds . To the extent that (i) Bonds have been paid or become due and sufficient moneys are held by the Trustee in trust for the payment thereof, (ii) Bonds are deemed to have been paid in accordance with Section 13.01 and (iii) Bonds (other than Bonds which have been redeemed or called for redemption) have been delivered to, or have been acquired by, the Trustee and canceled and other Bonds of the same series shall not be issuable in lieu thereof, in substitution therefor, in exchange therefor or upon registration of transfer thereof, the obligation of the Company to make payments with respect to the principal, premium, if any, and interest on the First Mortgage Bonds shall be satisfied and discharged and the Trustee shall release and surrender to the Company First Mortgage Bonds in an aggregate principal amount equal to the aggregate principal amount of such Bonds, bearing the same rate or rates of interest as such Bonds and becoming due, either by redemption through operation of a sinking fund or by maturity, on the same date or dates as such Bonds.

Section 2.04. Further Assurances . The Company, the Authority and the Trustee shall from time to time execute, deliver and register, record and file such instruments as necessary or as the Authority or the Trustee may reasonably require to confirm, perfect or maintain the security created or intended to be created hereby.

ARTICLE III

CONDITIONS AND TERMS OF BONDS

Section 3.01. Authorization and Issuance of Bonds; Dating . There is hereby authorized the issuance of the Bonds in the aggregate principal amount of Seventy-Five Million Dollars ($75,000,000) to be designated as “Polk County Industrial Development Authority Solid Waste Disposal Facility Revenue Refunding Bonds (Tampa Electric Company Project), Series 2010”. The Bonds shall mature on December 1, 2030 (the “ Maturity Date ”). All Bonds will be dated the date of original issuance and delivery, will bear interest from that date and shall mature, subject to prior redemption or mandatory tender, on the Maturity Date. The Bonds are special obligations of the Authority and shall be payable solely from the Revenues.

The Trustee is hereby authorized to authenticate and to deliver the Bonds only upon (i) written direction of the Authority, and (ii) receipt of the proceeds of sale thereof in the amounts set forth in the written direction of the Authority.

Section 3.02. Interest on the Bonds . Interest on the Bonds will be payable as provided in the Bonds and in this Section. The Determination Method may be changed by the Company as described in paragraph (b) below. The methods of determining the various interest rates are as

 

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provided in paragraph (a) below, provided that no interest rate set or determined by the Remarketing Agent under (a)(1), (2), (3) or (4), or an Alternate Rate determined under (a)(5), shall exceed the Maximum Rate.

(a) Interest Rate Determination Methods . In accordance with the notification requirements described herein, the Company shall determine the applicable interest rate determination method (each a “ Determination Method ”) on the Bonds. The interest rate on the Bonds shall be determined by one of the following Determination Methods.

(1) Daily Rate . When interest on the Bonds is payable at a Daily Rate, the Remarketing Agent will set a Daily Rate on or before 10:00 a.m., New York City time, on each Business Day for that Business Day. Each Daily Rate will be the minimum rate necessary (as determined by the Remarketing Agent based on the examination of tax-exempt obligations comparable to the Bonds known by the Remarketing Agent to have been priced or traded under then-prevailing market conditions) for the Remarketing Agent to sell the Bonds on the day the rate is set at their principal amount (without regard to accrued interest). The Daily Rate for any non-Business Day will be the rate for the last day for which a rate was set.

(2) Weekly Rate . When interest on the Bonds is payable at a Weekly Rate, the Remarketing Agent will set a Weekly Rate on or before 5:00 p.m., New York City time, on the last Business Day before the commencement of a period during which the Bonds bear interest at a Weekly Rate and on each Wednesday thereafter so long as interest on the Bonds is to be payable at a Weekly Rate or, if any Wednesday is not a Business Day, on the next preceding Business Day. Each Weekly Rate will be the minimum rate necessary (as determined by the Remarketing Agent based on the examination of tax-exempt obligations comparable to the Bonds known by the Remarketing Agent to have been priced or traded under then prevailing market conditions) for the Remarketing Agent to sell the Bonds on the date the rate is set at their principal amount (without regard to accrued interest). Thereafter, each Weekly Rate shall apply to (i) the period beginning on the Thursday after the Weekly Rate is set and ending on the following Wednesday or, if earlier, ending on the day before the effective date of a new method of determining the interest rate on the Bonds or (ii) the period beginning on the effective date of the change to a Weekly Rate and ending on the next Wednesday.

(3) Commercial Paper Rate . During a Commercial Paper Mode, each Bond will bear interest during the Commercial Paper Period for such Bond at the Commercial Paper Rate for such Bond. Different Commercial Paper Periods may apply to different Bonds at any time and from time to time. Except as otherwise described in this subparagraph (3), the Commercial Paper Period and Commercial Paper Rate for each Bond will be determined by the Remarketing Agent no later than 1:00 p.m., New York City time, on the first day of each Commercial Paper Period.

(i) Determination of Commercial Paper Periods . Subject to Section 3.02(b)(2)(vii), each Commercial Paper Period will be a period of at least 1 day and not more than 270 days, determined by the Remarketing Agent to be the period which, together with all other Commercial Paper Periods for all Bonds then outstanding, will, in the judgment of the Remarketing Agent, result in the lowest overall interest expense on the Bonds over the next 270 days. Each Commercial Paper Period will end on either the day before a Business Day or on the

 

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day before the Maturity Date for such Bond. However, any Bond purchased on behalf of the Company and remaining unsold by the Remarketing Agent as of the close of business on the first day of the Commercial Paper Period for that Bond will have a Commercial Paper Period of 1 day or, if that Commercial Paper Period would not end on a day before a Business Day, a Commercial Paper Period of the shortest possible duration greater than 1 day ending on a day before a Business Day.

In determining the number of days in each Commercial Paper Period, the Remarketing Agent shall take into account the following factors: (I) existing short-term tax-exempt market rates and indices of such short-term rates, (II) the existing market supply and demand for short-term tax-exempt securities, (III) existing yield curves for short-term and long-term tax-exempt securities for obligations of credit quality comparable to the Bonds, (IV) general economic conditions, (V) industry economic and financial conditions that may affect or be relevant to the Bonds, (VI) the number of days in other Commercial Paper Periods applicable to the Bonds and (VII) such other facts, circumstances and conditions as the Remarketing Agent, in its sole discretion, shall determine to be relevant.

(ii) Determination of Commercial Paper Rates . The Commercial Paper Rate for each Commercial Paper Period for each Bond shall be the minimum rate necessary (as determined by the Remarketing Agent based on the examination of tax-exempt obligations comparable to the Bonds known by the Remarketing Agent to have been priced or traded under then-prevailing market conditions) for the Remarketing Agent to sell such Bond on the date and at the time of such determination at its principal amount (without regard to accrued interest).

(4) Term Interest Rate . The Remarketing Agent will set a Term Interest Rate on a date not later than the Business Day before the beginning of any period determined by the Company prior to the effective date of the Term Interest Rate (a “ Term Interest Rate Period ”) in which interest on any of the Bonds will be payable at a Term Interest Rate. The last day of each such Term Interest Rate Period shall be determined by the Company in accordance with Section 3.02(b)(1). Each Term Interest Rate will be the minimum rate necessary (as determined by the Remarketing Agent with respect to any Term Interest Rate Period based on the examination of tax-exempt obligations comparable to the Bonds known by the Remarketing Agent to have been priced or traded under then-prevailing market conditions) for the Remarketing Agent to sell the Bonds for delivery on the effective date of the Term Interest Rate at their principal amount (without regard to accrued interest).

The Remarketing Agent shall use its best efforts to cause the Bonds in a Term Interest Rate required to be remarketed on the date set for mandatory tender for such Bonds pursuant to “Mandatory Tender at Beginning of a New Term Interest Rate Period” or “Mandatory Tender Upon a Change in the Determination Method” under paragraph 7 in the form of the Bonds, to be remarketed (in such Determination Method or Methods) on the first date thereafter at which time all such Bonds can be sold at par, at a rate not exceeding the Maximum Rate; provided, that no failure to remarket for any reason shall excuse the Event of Default arising from failure to purchase all of the Bonds on any date set for mandatory tender.

 

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(5) Failure of Remarketing Agent to Announce Interest Rates on the Bonds . If the appropriate interest rate or Commercial Paper Period is not or cannot be determined for any reason, the method of determining interest on the Bonds shall be as provided in this Section 3.02(a)(5). If the Bonds bear interest at the Daily Rate or the Weekly Rate, interest will be payable at the Alternate Rate, and Bonds bearing interest at the Commercial Paper Rate or the Term Interest Rate shall be automatically converted to the Weekly Rate (without the necessity of complying with the requirements of Section 3.02(b)), and if the Weekly Rate cannot be determined, interest thereon will be payable at the Alternate Rate, until such time as the Determination Method can be changed in accordance with Section 3.02(b); provided, that no failure to determine an interest rate for any reason shall excuse the Event of Default arising from failure to purchase all of the Bonds on any date set for mandatory tender. The Trustee shall promptly notify the Bondholders of any such automatic change as set forth in Section 4.06(b).

While Bonds are in a Commercial Paper Mode, during any transition period caused by an automatic conversion of such Bonds to a Weekly Rate in accordance with this Subsection (5), Bonds bearing interest at a Weekly Rate and Bonds bearing interest at a Commercial Paper Rate, as applicable, shall be governed by the provisions of this Agreement applicable to such methods of determining interest on the Bonds.

(b) Initial Interest Rate Determination Method; Change in Interest Rate Determination Method .

(1) The Bonds shall bear interest for the Initial Period at a Term Interest Rate. The Term Interest Rate for the Initial Period shall be determined in accordance with this Agreement on or prior to the date of delivery of the Bonds by the Underwriter as the minimum rate required to sell the Bonds on the date of issuance at a Purchase Price of par. Interest shall accrue from one Interest Payment Date to, but not including, the next Interest Payment Date. Following the Initial Period, the Bonds shall bear interest at such rate as determined in accordance with this Agreement. The Company may change the Determination Method, of all but not part of the Bonds, from time to time by notifying, as applicable, the Authority, the Trustee and the Remarketing Agent. Such notice (a “ Conversion Notice ”) shall contain the effective date of such change. The Conversion Notice must be accompanied by a Favorable Opinion of Tax Counsel addressed to the Authority and the Trustee. If the Company’s Conversion Notice complies with this paragraph, and if the Company shall deliver to the Trustee and the Authority a confirming Favorable Opinion of Tax Counsel on the effective date as specified in the Conversion Notice, the interest rate on the Bonds will be determined on the basis of the new rate on the effective date specified by the Company until there is another change as provided in this Section.

If, 30 days before the end of a Term Interest Rate Period, the Company has not provided for the next interest rate period, a new Term Interest Rate Period of the same duration will follow (or if shorter, a Term Interest Rate Period ending on the day before the Maturity Date for the Bonds).

When one Term Interest Rate Period follows another, all provisions of this Agreement applying to a change in the Determination Method will apply, except:

(A) the mandatory tender described under “Mandatory Tender Upon a Change in the Determination Method” in the Bonds will not apply, but the mandatory tender described under “Mandatory Tender at Beginning of a New Term Interest Rate Period” in the Bonds will apply;

 

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(B) the Company will not be required to deliver a Favorable Opinion of Tax Counsel if a new Term Interest Rate Period begins as a result of the Company failing to provide for the next interest rate period; and

(C) the Company will not be required to deliver a Favorable Opinion of Tax Counsel if (i) the Company has previously designated a series of successive Term Interest Rate Periods which, together with the current Term Interest Rate Period, are substantially equal in length, (ii) a Favorable Opinion of Tax Counsel addressed to the Trustee was delivered before the first such Term Interest Rate Period in that series which applies to each such successive Term Interest Rate Period and (iii) no other change in the security for the Bonds or in this Agreement or the terms of the Bonds is made which is effective as of, or agreed to in connection with, the effective date of such subsequent Term Interest Rate Period.

(2) Limitations . Any change in the Determination Method pursuant to paragraph (1) above must comply with the following:

(i) the effective date of a change (or each effective date in the case of a change from a Commercial Paper Mode) shall be a Business Day which is at least 15 days (30 days if a Term Interest Rate longer than six months is then in effect and the effective date is before the day after the last day of a Term Interest Rate Period) after receipt by the Trustee of the Company’s Conversion Notice;

(ii) if a Term Interest Rate is then in effect, the effective date of any change must be either the day after the last day of the then current Term Interest Rate Period or, except as described in clause (iii) below, a day on which the Bonds would otherwise be subject to redemption under the paragraph “Optional Redemption During Term Interest Rate Period” in paragraph 9 of the Bonds if the change did not occur;

(iii) if the Company has previously designated successive Term Interest Rate Periods, the effective date of each Term Interest Rate Period must be the day after the last day of the previous Term Interest Rate Period;

(iv) if a Commercial Paper Mode is then in effect, the effective date of any change must be either the day after the last day of the Commercial Paper Mode or, as to any Bond, the day after the last day of the Commercial Paper Period then in effect (or to be in effect) with respect to that Bond;

(v) if any Bonds have been called for redemption and the redemption has not yet occurred, the effective date of the change cannot be before such Redemption Date;

 

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(vi) if a Term Interest Rate is then in effect, the effective date of any change cannot occur during the period after a Record Date and to, but not including, the related Interest Payment Date; and

(vii) if a Commercial Paper Mode is then in effect, the Remarketing Agent shall determine Commercial Paper Periods of such duration that will, in the judgment of the Remarketing Agent, best promote an orderly transition on the effective date. After the receipt by the Trustee of the Company’s Conversion Notice, the day after the last day of each Commercial Paper Period shall be, with respect to such Bond, not later than the effective date of the change. The Remarketing Agent shall promptly give written notice of each such last date and each such effective date with respect to each Bond to the Authority, the Company and the Trustee.

During any transition period in connection with a change in Determination Method from the Commercial Paper Mode to a Daily Rate, Weekly Rate or a Term Interest Rate, as applicable, in which the Remarketing Agent is setting different Commercial Paper Periods in order to effect an orderly transition of such change, Bonds bearing interest at a Commercial Paper Rate shall be governed by the provisions of this Agreement applicable to a Commercial Paper Mode and Bonds bearing interest at a Daily Rate, Weekly Rate or Term Interest Rate, as applicable, shall be governed by the provisions of this Agreement applicable to such Determination Methods.

(c) Calculation of Interest . The Remarketing Agent shall provide the Trustee and the Company with notice in writing or by other written electronic means or by telephone (any such notice by telephone to be delivered to a Responsible Officer of the Trustee) promptly confirmed by facsimile transmission by 1:00 p.m., New York City time,

(1) on the last Business Day of a month in which interest on the Bonds was payable at a Daily Rate, of the Daily Rate for each day in such month,

(2) on each day on which a Weekly Rate becomes effective, of the Weekly Rate,

(3) on the first day of each Commercial Paper Period, of the length thereof and the Commercial Paper Rate, and, if there is more than one Commercial Paper Rate then in effect, of the related applicable principal amounts,

(4) on the first Business Day of a Term Interest Rate Period, of the Term Interest Rate set for that period, and

(5) on any Business Day preceding any redemption or purchase date, any interest rate requested by the Trustee in order to enable it to calculate the accrued interest, if any, due on such redemption or purchase date.

Using the rates supplied by this notice, the Trustee will calculate the interest payable on the Bonds. The Remarketing Agent will inform the Trustee and the Company orally at the oral request of either of them of any interest rate so set. The Trustee will confirm the effective interest rate in writing to any Bondholder who requests it.

 

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The setting of the rates by the Remarketing Agent, the determination of Commercial Paper Periods by the Remarketing Agent and the calculation of interest payable on the Bonds by the Trustee as provided in this Agreement will be conclusive and binding on the Authority, the Company, the Trustee and the owners of the Bonds.

(d) Change in Rate Determination Method-Opinions of Counsel . Notwithstanding any provision of this Section 3.02, no change shall be made in the Determination Method at the direction of the Company pursuant to Section 3.02(b)(1), and the Bonds shall continue to bear interest in accordance with the then current Determination Method, if the Trustee shall receive written notice prior to the effective date of such change that (i) the Favorable Opinion of Tax Counsel and confirmation thereof if required under Section 3.02(b)(1) has not been delivered or (ii) that the Company has revoked its election. If the Trustee shall have sent any notice to the Bondholders regarding a change in rate pursuant to Section 4.06(b), then in the event of such failure to deliver such opinion or confirmation, or revocation by the Company, the Trustee shall promptly notify all Bondholders of such failure and the Bonds shall still be subject to mandatory tender on that proposed date and the Remarketing Agent shall remarket the Bonds pursuant to the terms of this Agreement.

Section 3.03. Undelivered Bonds . If a Bond is tendered for purchase as provided in Article III, or if the holder of a Bond gives irrevocable instructions to the Remarketing Agent for purchase, and in each case funds are deposited with the Trustee sufficient for the purchase, the Trustee upon request of the Company or the Remarketing Agent will authenticate a new Bond in the same maturity and in the same denomination registered as the Company or the Remarketing Agent may direct and deliver it to the Company or upon the Company’s order, whether or not the Bond purchased is ever delivered, and the undelivered Bonds shall be canceled on the books of the Trustee, whether or not said undelivered Bonds have been delivered to the Trustee. From and after the purchase date, interest on such Bond shall cease to be payable to the prior holder thereof, such holder shall cease to be entitled to the benefits or security of this Agreement and shall have recourse solely to the funds held by the Trustee for the purchase of such Bond, and the Trustee shall not register any further transfer of such Bond by such prior holder. If Bonds to be purchased are not delivered by the holders by 12:00 noon, New York City time, on any purchase date, the Trustee shall hold any funds received for the purchase of those Bonds in trust in a separate account and shall pay such funds to the former owners of the Bonds upon presentation of the Bonds. All funds held by the Trustee for the purchase of undelivered Bonds shall be held uninvested.

Section 3.04. Form of Bonds . The Bonds shall be substantially in the form of Exhibit B , which is part of this Agreement, in the denominations provided for in the Bonds, with appropriate or necessary insertions, omissions and variations as permitted or required hereby, including the appropriate series designation and Maturity Date. The Bonds shall express the purpose for which they are issued and any other statements or legends which may be required by law or the provisions hereof, including the provisions of Section 6.01. Bonds will be numbered as determined by the Trustee. All Bonds, unless a supplemental agreement shall have been executed and delivered pursuant to Section 12.01, shall be in fully registered form, and the holder of a Bond shall be regarded as the absolute owner thereof for all purposes of this Agreement.

 

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Section 3.05. Execution and Authentication of Bonds . Each Bond shall be signed by the Chairman of the Authority and attested by the Secretary of the Authority in their official capacities ( provided that any or all of those signatures may be facsimiles) and shall bear the seal or a facsimile of the seal, if any, of the Authority. In case any officer whose signature or a facsimile of whose signature appears on any Bond shall cease to be that officer before the issuance of the Bond, his signature or the facsimile thereof nevertheless shall be valid and sufficient for all purposes, the same as if he had remained in office until that time. Any Bond may be executed on behalf of the Authority by an officer who, on the date of execution is the proper officer, although on the date of the Bond that person was not the proper officer.

No Bond shall be valid or become obligatory for any purpose or shall be entitled to any security or benefit under this Agreement unless and until a certificate of authentication, substantially in the form set forth in Exhibit B to this Agreement, shall have been signed by the Trustee. The authentication by the Trustee upon any Bond shall be conclusive evidence that the Bond so authenticated has been duly authenticated and delivered hereunder and is entitled to the security and benefit of this Agreement. The certificate of the Trustee may be executed by any person authorized by the Trustee, but it shall not be necessary that the same authorized person sign the certificates of authentication on all of the Bonds. In authenticating the Bonds, the Trustee shall add the date of its authentication of Bonds. No Bond shall be authenticated except in an authorized denomination.

Section 3.06. Transfer and Exchange of Bonds . Subject to Section 6.01, all Bonds are transferable or exchangeable by the holder thereof, in person or by the Bondholder’s attorney duly authorized in writing, at the office of the Trustee in the books required to be kept by the Trustee pursuant to the provisions of Section 3.07, upon surrender of such Bonds accompanied by delivery of a duly executed written instrument of transfer or exchange in a form approved by the Trustee. Whenever any Bond or Bonds shall be surrendered for transfer or exchange, the Trustee shall execute and deliver a new Bond or Bonds of authorized denominations of the same aggregate principal amount, except that the Trustee may require the payment by any Bondholder requesting such transfer or exchange of any tax or other governmental charge required to be paid with respect to such transfer or exchange. All Bonds surrendered pursuant to the provisions of this Section shall be canceled by the Trustee, shall not be redelivered and shall be disposed of as provided in Section 3.10. The Trustee shall not be required to transfer or exchange (i) any Bonds of the maturity or maturities being redeemed during the period commencing on the date ten days prior to the date of mailing of a notice of redemption of Bonds of that maturity for redemption and ending on such date of mailing or (ii) any Bond selected for redemption in whole or in part.

Section 3.07. Registration Books . The Trustee will keep at its office sufficient books for the registration of the ownership, transfer or exchange of the Bonds, which books shall be available for inspection by the Authority, the Company and the Trustee at reasonable hours and under reasonable conditions; and upon presentation for such purpose the Trustee shall, under such reasonable regulations as it may prescribe, register the ownership, transfer or exchange of the Bonds in such books as hereinabove provided. The ownership of any Bonds may be proved by the books required to be kept by the Trustee pursuant to the provisions of this Section.

Section 3.08. Temporary Bonds . The Bonds may be initially delivered in temporary form exchangeable for definitive Bonds when ready for delivery, which temporary Bonds shall be

 

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printed, lithographed or typewritten, shall be of such denominations as may be determined by the Trustee, shall be in fully registered form and shall contain such reference to any of the provisions hereof as may be appropriate. Every temporary Bond shall be authenticated and delivered by the Trustee upon the same conditions and terms and in substantially the same manner as definitive Bonds. If the Trustee authenticates and delivers temporary Bonds, the Authority will prepare and execute and the Trustee will authenticate definitive Bonds without delay, and in that case upon demand of the holder of any temporary Bonds such definitive Bonds shall be exchanged without cost to such Bondholder for temporary Bonds at the office of the Trustee upon surrender of such temporary Bonds, and until so exchanged such temporary Bonds shall be entitled to the same benefit, protection and security hereunder as the definitive Bonds executed and delivered hereunder. All temporary Bonds surrendered pursuant to the provisions of this Section shall be canceled by the Trustee, shall not be redelivered and shall be disposed of as provided in Section 3.10.

Section 3.09. Bond Mutilated, Destroyed, Lost or Stolen . If any Bond shall become mutilated, the Trustee shall authenticate and deliver a new Bond of like tenor and of the same Maturity Date in lieu of the mutilated Bond, but only upon surrender to the Trustee of the mutilated Bond, and every mutilated Bond surrendered to the Trustee shall be canceled by it and shall not be redelivered and shall be disposed of as provided in Section 3.10. If any Bond shall be destroyed, lost or stolen, evidence of such destruction, loss or theft may be submitted to the Trustee and if such evidence is satisfactory to the Trustee, and the Trustee and the Authority receive indemnity satisfactory to them, the Trustee shall authenticate and deliver a new Bond of like tenor and of the same Maturity Date in substitution for the destroyed, lost or stolen Bond. The Trustee may require payment of a sum not exceeding the actual cost of preparing each new Bond authenticated and delivered by it under this Section and of the expenses which may be incurred by it under this Section. Any replacement Bond authenticated and delivered under the provisions of this Section in lieu of or in substitution for any mutilated, destroyed, lost or stolen Bond shall be equally and proportionately entitled to the benefit, protection and security hereof with all other Bonds executed and delivered hereunder, to the same extent as the mutilated, destroyed, lost or stolen Bond replaced; and neither the Trustee nor the Authority shall be required to treat both the original Bond and any replacement Bond as being outstanding for the purpose of determining the principal amount of Bonds which may be authenticated and delivered hereunder or for the purpose of determining any percentage of Bonds outstanding hereunder, but both the original and the replacement Bond shall be treated as one and the same. Notwithstanding any other provision of this Section, rather than authenticating and delivering a new Bond for a mutilated, destroyed, lost or stolen Bond which has been called for redemption, the Trustee may make payment of the principal of such mutilated, destroyed, lost or stolen Bond directly to the holder thereof under such regulations as the Trustee may prescribe.

Section 3.10. Safekeeping and Cancellation of Bonds . Any Bond surrendered pursuant to this Article for the purpose of payment or retirement, or for exchange, replacement or transfer, shall be canceled upon presentation and surrender thereof to the Trustee.

The Company on behalf of the Authority, may deliver at any time to the Trustee for cancellation any outstanding Bonds previously authenticated and delivered hereunder, which the Authority or the Company may have acquired in any manner whatsoever. All Bonds so delivered shall be canceled promptly by the Trustee. Certification of the surrender and

 

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cancellation shall be made by the Trustee to the Authority and the Company upon the request of either therefor. Such canceled Bonds shall be disposed of by the Trustee in accordance with its customary procedures.

Section 3.11. Special Agreement with Bondholders . Notwithstanding any provision of this Agreement or of any Bond to the contrary, with the approval of the Company, the Trustee may enter into an agreement with any holder of at least $1,000,000 aggregate principal amount of Bonds providing for making all payments to that holder on that Bond or any part thereof (other than any payment of the entire unpaid principal amount thereof) at a place and in a manner other than as provided in this Agreement and in the Bond, without presentation or surrender of the Bond, upon any conditions which shall be satisfactory to the Trustee and the Company; provided , that payment in any event shall be made to the person in whose name a Bond shall be registered on the books required to be kept by the Trustee pursuant to the provisions of Section 3.07, with respect to payment of principal and premium, on the date such principal and premium is due, and, with respect to the payment of interest, as of the applicable Record Date.

Section 3.12. CUSIP Numbers . The Authority in issuing the Bonds may use “CUSIP” numbers (if then generally in use), and, if so, the Trustee shall use “CUSIP” numbers in notices of redemption as a convenience to Bondholders; provided that any such notice may state that no representation is made as to the correctness of such numbers either as printed on the Bonds or as contained in any notice of a redemption and that reliance may be placed only on the other identification numbers printed on the Bonds, and any such redemption shall not be affected by any defect in or omission of such numbers. The Company will promptly notify the Trustee in writing of any change in the “CUSIP” numbers of which the Company has written notice.

ARTICLE IV

REDEMPTION, MANDATORY TENDER AND REMARKETING

Section 4.01. Redemption .

(a) Special Mandatory Redemption Upon Taxability . If, as a result of the failure of the Company to observe any covenant, agreement or representation in this Agreement or any related agreement or certificate of the Company relating to federal tax compliance, a court of competent jurisdiction or any administrative agency finally determines (such determination not to be considered final unless the Authority has been given written notice and, if, in consultation with the Company, the Authority determines to contest, at the Company’s expense, either directly or in the name of any holder of a Bond, any such determination, until the conclusion of any appellate review if sought by the Authority in consultation with the Company and at the Company’s expense) that the interest payable on any Bond is includable for federal income tax purposes in the gross income, as defined in Section 61 of the Code, of any Bondholder (other than a “substantial user” of the Project or a “related person,” as defined in the Code), the Bonds shall be subject to special mandatory redemption prior to maturity, as a whole, or in part if such partial redemption will preserve the exclusion from gross income for federal income tax purposes of interest on the remaining Bonds outstanding (and if in part, to be selected by the Trustee or by the Securities Depository, as applicable, by lot or in any other customary manner as determined by the Trustee or by the Securities Depository, as applicable) at a Redemption

 

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Price equal to the principal amount thereof, plus interest accrued to the Redemption Date, without premium. The Company will give notice to the Authority and the Trustee in writing of the amount of Bonds to be redeemed and of the date selected for such redemption not later than 90 days after the date of such final determination, such Redemption Date to be not more than 180 days after the date of such final determination.

(b) Extraordinary Optional Redemption . The Bonds are subject to redemption prior to maturity at the option of the Company, by notice to the Trustee and the Authority, in whole, at any time, at a Redemption Price equal to the principal amount of the outstanding Bonds, plus accrued interest thereon to the date of redemption, without premium, on any date selected by the Company, but not less than 45 days after nor more than 180 days after the Company shall have given notice of its exercise of the right to make such prepayment. The Company may exercise its right to cause the Bonds to be redeemed at its option, if:

(1) In the opinion of the Company, the continued operation by the Company of the Project Unit is impracticable, uneconomical or undesirable due to (A) the imposition of taxes or other liabilities or burdens not being imposed as of the date of the Bonds, (B) changes in technology or in the economic availability of raw materials or operating supplies or equipment or (C) destruction of or damage to all or a substantial portion of the Project Unit; provided, however , that the Company may not exercise its right to redeem the Bonds for reasons described in this clause (1) if any portion of the Redemption Price is to be paid from the proceeds of tax-exempt bonds;

(2) The Project Unit shall have been condemned or taken by eminent domain;

(3) The operation by the Company of the Project Unit shall have been enjoined and the Company shall have been prevented from carrying on normal operations at the Project Unit for a period of six months or more; or

(4) In the event the First Mortgage Bonds have been issued, all or substantially all the mortgaged and pledged property constituting bondable property (as defined in the First Mortgage) which at the time shall be subject to the lien of the First Mortgage as a first lien shall be released from the lien of the First Mortgage pursuant to the provisions thereof, and available moneys in the hands of the trustee or trustees at the time serving as such under the First Mortgage, including any moneys deposited by the Company available for the purpose, are sufficient to redeem all the First Mortgage Bonds of all series issued pursuant to the First Mortgage at the redemption prices (together with accrued interest to the date of redemption) specified therein applicable to the redemption thereof upon the happening of such event.

For purposes of clause (1) of this Section 4.01(b), the “opinion of the Company” shall be expressed to the Authority and the Trustee by delivery of a certified copy of a resolution of the Board of Directors of the Company or the Executive Committee thereof stating that it is the opinion of said Board of Directors or Executive Committee that the circumstances, situations or conditions described in subclause (A), (B) or (C) of such clause (1) exist to the extent required for the Company to exercise the option provided.

 

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(c) Optional Redemption . The Bonds shall be subject to redemption at the option of the Company as provided under “ Optional Redemption During Term Interest Rate Period ” or “ Optional Redemption During Daily or Weekly Rate Period ” in paragraph 9 of the form of the Bonds. The Company will notify the Trustee in writing of such redemption at least 15 days before the date on which the Trustee is required to deliver notice of redemption to the Bondholders.

Section 4.02. Optional Redemption Dates . The Redemption Date of Bonds to be redeemed pursuant to any optional redemption provision in this Agreement and the Bonds will be a date permitted by the Bonds and specified by the Company in the notice delivered pursuant to Section 4.04.

Section 4.03. Selection of Bonds to Be Redeemed . Except as provided in the Bonds, if fewer than all the Bonds are to be redeemed, the Trustee will select the Bonds to be redeemed by lot, except that the Trustee will first select any Bonds owned by the Company or any of its nominees or held by the Trustee for the account of the Company or any of its nominees. The Trustee will make the selection from Bonds not previously called for redemption. For this purpose, the Trustee will consider each Bond in a denomination larger than the minimum denomination permitted by the Bonds at the time to be separate Bonds each in the minimum denomination. Provisions of this Agreement that apply to Bonds called for redemption also apply to portions of Bonds called for redemption.

Section 4.04. Redemption Notices .

(a) Official Notice of Redemption . The Trustee will give notice of each redemption as provided in the Bonds and will at the same time give a copy of the notice to the Remarketing Agent. The notice shall identify the Bonds to be redeemed (including CUSIP numbers) and shall state (1) the Redemption Date (and, if the Bonds provide that accrued interest will not be paid on the Redemption Date, the date it will be paid), (2) the Redemption Price, (3) that the Bonds called for redemption must be surrendered to collect the Redemption Price, (4) the address at which the Bonds must be surrendered and (5) that interest on the Bonds called for redemption ceases to accrue on the Redemption Date.

With respect to an optional redemption of any Bonds under “Optional Redemption During Term Interest Rate Period,” “Extraordinary Optional Redemption” or “Optional Redemption During Daily or Weekly Rate Period” in paragraph 9 of the form of the Bonds, unless moneys sufficient to pay the principal of, premium, if any, and interest on the Bonds to be redeemed shall have been received by the Trustee prior to the giving of such notice of redemption, such notice may state that said redemption shall be conditional upon the receipt of such moneys by the Trustee on or prior to the date fixed for redemption. If such moneys are not received, such notice shall be of no force and effect, such Bonds shall not be redeemed, the Redemption Price shall not be due and payable and the Trustee shall give notice, in the same manner in which the notice of redemption was given, that such moneys were not so received and that such Bonds will not be redeemed.

Failure to give any required notice of redemption as to any particular Bonds or any defect therein will not affect the validity of the call for redemption of any Bonds in respect of which no

 

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such failure or defect has occurred. Any notice mailed as provided in the Bonds shall be effective when sent and will be conclusively presumed to have been given whether or not actually received by any holder.

(b) Additional Notice of Redemption . In addition to the redemption notice required above, further notice (the “ Additional Redemption Notice ”) shall be given by the Trustee as set out below. No defect in the Additional Redemption Notice nor any failure to give all or any portion of the Additional Redemption Notice shall in any manner defeat the effectiveness of a call for redemption if notice is given as prescribed in paragraph (a) above.

(1) Each Additional Redemption Notice shall contain the information required in paragraph (a) above for an official notice of redemption plus (i) the CUSIP numbers of all Bonds being redeemed; (ii) the date of the Bonds as originally issued; (iii) the Determination Method for, or the rate of interest borne by, each Bond being redeemed; (iv) the Maturity Date of each Bond being redeemed; and (v) any other descriptive information needed to identify accurately the Bonds being redeemed.

(2) Each Additional Redemption Notice shall be sent at least 30 days before the Redemption Date by registered or certified mail or overnight delivery service (or by such other means as the Trustee may have established with the Securities Depository or any information service) to all registered securities depositories then in the business of holding substantial amounts of obligations similar to the Bonds (such depository now being The Depository Trust Company of New York, New York) and to one or more national information services that disseminate notices of redemption of obligations such as the Bonds.

The information required in any redemption notice (including an Additional Redemption Notice) pursuant to this Section and the information required in any notice of tender (including an Additional Tender Notice, as hereinafter defined) may be combined in a single notice if it is sent to Bondholders in the manner and at the time specified under “Notice of Redemption” in paragraph 9 of the form of the Bonds.

Any redemption notice may state that no representation is made as to the correctness of “CUSIP” numbers either as printed on the Bonds or as contained in any notice of a redemption and that reliance may be placed only on the other identification numbers printed on the Bonds, and any such redemption shall not be affected by any defect in or omission of such numbers.

Upon surrender to the Trustee, Bonds called for redemption shall be paid as provided in this Article at the Redemption Price (including premium, if any) stated in the notice, plus interest accrued to the Redemption Date, or at a Purchase Price as provided in the form of Bond. Bonds called for redemption and purchased pursuant to a tender before the Redemption Date will not be redeemed but will be dealt with as provided below in this Article.

Section 4.05. Bonds Redeemed in Part . Subject to ARTICLE VI, upon surrender of a Bond redeemed in part, the Trustee will authenticate for the holder a new Bond or Bonds in authorized denominations equal in principal amount to the unredeemed portion of the Bond surrendered.

 

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Section 4.06. Mandatory Tender .

(a) Mandatory Tender of Bonds . The Bonds are subject to mandatory tender as provided in paragraph 7 of the form of the Bonds.

(b) Notice to Bondholders of Change in Interest Rate Determination Method . When a change in the Determination Method is to be made or upon commencement of a new Term Interest Rate Period, the Trustee will, upon notice from the Company pursuant to Section 3.02(b), notify the Bondholders by first class mail at least 15 days before the effective date of the change or the commencement of a new Term Interest Rate Period, except that (i) such notice shall be given at least 30 days prior to the effective date if a Term Interest Rate Period longer than six months is in effect and the effective date is before the end of the Term Interest Rate Period, (ii) no notice shall be given with respect to a tender under “Mandatory Tender at Beginning of a New Term Interest Rate Period” in paragraph 7 of the form of the Bonds involving no change in the Term Interest Rate Period, and (iii) no notice shall be given with respect to a tender under “Mandatory Tender on Each Interest Payment Date During Commercial Paper Mode” in paragraph 7 of the form of the Bonds. The notice shall be effective when sent and shall state:

(1) the purchase date;

(2) the Purchase Price;

(3) that the Bonds to be tendered must be surrendered to collect the Purchase Price;

(4) the address at which or the manner in which the Bonds must be surrendered;

(5) that interest on the Bonds to be tendered ceases to accrue to such holder on the purchase date and such holder will be entitled only to the Purchase Price on the purchase date;

(6) that the interest rate Determination Method will be changed;

(7) the proposed effective date of the new rate;

(8) that a mandatory tender will result on the effective date of the change as provided in the Bonds; and

(9) any conditions precedent to such change and that, if such conditions are not satisfied, the Bonds will continue to bear interest in accordance with the then current method.

Failure to give any required notice of tender as to any particular Bonds or any defect therein will not affect the validity of the tender of any Bonds in respect of which no such failure or defect has occurred. Any notice mailed as provided in the Bonds shall be effective when sent and will be conclusively presumed to have been given whether or not actually received by any holder.

 

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(c) Additional Notice of Tender . In addition to the tender notice required above, further notice (the “ Additional Tender Notice ”) shall be given by the Trustee as set out below. No defect in the Additional Tender Notice nor any failure to give all or any portion of the Additional Tender Notice shall in any manner defeat the effectiveness of a tender notice if notice is given as prescribed in paragraph (b) above.

(1) Each Additional Tender Notice shall contain the information required in paragraph (c) above for an official notice of tender plus (i) the CUSIP numbers of all Bonds being tendered; (ii) the date of the Bonds as originally issued; (iii) the Maturity Date of each Bond being purchased; and (iv) any other descriptive information needed to identify accurately the Bonds being purchased.

(2) Each Additional Tender Notice shall be sent at least 15 days before the purchase date by registered or certified mail or overnight delivery service (or by such other means as the Trustee may have established with the Securities Depository or any information service) to all registered securities depositories then in the business of holding substantial amounts of obligations similar to the Bonds (such depository now being The Depository Trust Company of New York, New York) and to one or more national information services that disseminate notices of purchase of obligations such as the Bonds.

The information required in any tender notice (including an Additional Tender Notice) pursuant to this Section and the information required in any redemption notice (including an Additional Redemption Notice) may be combined in a single notice if it is sent to Bondholders in the manner and at the time specified under “Notice of Tender” in paragraph 7 of the form of the Bonds.

Section 4.07. Source of Funds for Purchase of Bonds . Funds for the payment of the Purchase Price of tendered Bonds shall be derived solely from the following sources in the order of priority indicated and neither the Trustee nor the Remarketing Agent shall be obligated to provide funds from any other source:

(a) proceeds of the remarketing of Bonds to persons other than the Company, the affiliates of the Company and the Authority and furnished immediately to the Trustee by the Remarketing Agent and deposited directly into and held continuously in, the Remarketing Proceeds Account; and

(b) money provided by the Company or otherwise available for the payment of the Purchase Price, and proceeds from the investment thereof.

The Company’s failure to provide funds for the purchase of Bonds when required by Section 4.06, this Section or the provisions of the Bonds shall constitute an Event of Default under Section 10.01(c)

 

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Section 4.08. Delivery of Bonds . On each tender date, the Bonds shall be delivered as follows:

(a) Bonds purchased by the Trustee with moneys described in Section 4.07(a) shall be delivered by the Remarketing Agent to the purchasers of those Bonds by 3:00 p.m., New York City time; and

(b) Bonds purchased by the Trustee with moneys described in Section 4.07(b) (the “ Company-Held Bonds ”) shall be, at the direction of the Company, either (i) delivered to and registered in the name of the Company on or before 3:00 p.m., New York City time, or (ii) delivered to or held by the Trustee for the account of the Company.

Section 4.09. No Purchase or Sale after Event of Default . Anything in this Agreement to the contrary notwithstanding, if there shall have occurred and be continuing an Event of Default under this Agreement, the Remarketing Agent shall not remarket any Bonds.

Section 4.10. Purchase Fund . There is hereby established and there shall be maintained with the Trustee a separate fund to be known as the “Purchase Fund”. The Trustee shall further establish separate accounts within the Purchase Fund to be known as the “Remarketing Proceeds Account” and the “Company Purchase Account.”

(a) Remarketing Proceeds Account . Upon receipt from the Remarketing Agent of the proceeds of a remarketing of Bonds on a purchase date, the Trustee shall directly deposit such proceeds, and shall deposit only such proceeds, in the Remarketing Proceeds Account for application to the Purchase Price of the Bonds. Neither the Authority nor the Company shall have any interest in the Remarketing Proceeds Account.

(b) Company Purchase Account . Upon receipt of funds provided to the Trustee by the Company pursuant to Section 5.05(c), the Trustee shall directly deposit such money, and shall deposit only such money, in the Company Purchase Account for application to the Purchase Price of the Bonds. Neither the Authority nor the Company shall have any interest in the Company Purchase Account.

(c) Investment . Amounts held in the Remarketing Proceeds Account and the Company Purchase Account by the Trustee shall be held uninvested.

Section 4.11. Disposition of Purchased Bonds .

(a) Bonds to Be Remarketed . Bonds purchased pursuant to tenders as provided in the form of Bonds or as provided in Section 4.06 will be offered for sale by the Remarketing Agent as provided in this Section except as follows:

(1) Bonds required to be tendered or redeemed, which are tendered between the date notice of mandatory tender or redemption is given and the mandatory tender date or Redemption Date, may be remarketed before the mandatory tender date or Redemption Date only if the buyer receives a copy of the mandatory tender notice or the redemption notice, as the case may be, from the Remarketing Agent; and

 

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(2) Bonds will not be offered for sale under this Section during the continuance of an Event of Default under Section 10.01 of this Agreement.

(b) Remarketing Effort . Except to the extent the Company directs the Remarketing Agent not to do so, the Remarketing Agent will offer for sale and use reasonable efforts to sell all Bonds to be sold as provided in paragraph (a) above and, when directed by the Company, any Company-Held Bonds. The sale price of each Bond must be equal to the principal amount of each Bond plus accrued interest, if any, to the purchase date. The Company may direct the Remarketing Agent from time to time to cease and to resume sales efforts with respect to some of or all the Bonds. The Remarketing Agent may buy as principal any Bonds to be offered under this Section 4.11.

(c) Notices in Respect of Tenders . When the Trustee receives a notice from a Bondholder (or a Beneficial Owner through its direct Participant) as specified in paragraph 6 of the form of the Bond for the Bondholder (or a Beneficial Owner through its direct Participant) that Bonds are being tendered, the Trustee will promptly notify the Remarketing Agent and the Company by facsimile transmission or telephone, promptly confirmed in writing, of the receipt of such notice, but in no event later than the following times:

(1) when the Bonds bear interest at a Daily Rate, no later than 11:15 a.m. (New York City time) on the same Business Day; and

(2) when the Bonds bear interest at a Weekly Rate, no later than 11:15 a.m. (New York City time) on the Business Day next succeeding receipt of such notice.

(d) Delivery of Remarketed Bonds .

(1) Except when the Book-Entry System is in effect, the Trustee shall hold all Bonds delivered pursuant to this Section 4.11 in trust for the benefit of the owners thereof until moneys representing the Purchase Price of such Bonds shall have been delivered to or for the account of or to the order of such Bondholders, and thereafter, if such Bonds are remarketed, shall deliver replacement Bonds, prepared by the Trustee in accordance with the directions of the Remarketing Agent and authenticated by the Trustee, for any Bonds purchased in accordance with the written directions of the Remarketing Agent, to the Remarketing Agent for delivery to the purchasers thereof.

 

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(2) The Remarketing Agent shall advise the Trustee and the Company in writing or by facsimile transmission of (A) the principal amount of Bonds which have been remarketed and that the proceeds of such remarketing have been received by the Remarketing Agent, and, (B) the denominations and registration instructions (including taxpayer identification numbers), in each case, in accordance with the following schedule (all times of which are New York City time):

 

(3) The terms of any sale by the Remarketing Agent shall provide for the authorization of the payment of the Purchase Price by the Remarketing Agent to the Trustee in exchange for Bonds registered in the name of the new Bondholder which shall be delivered by the Trustee to the Remarketing Agent at or before 2:00 p.m. (12:00 p.m. if the Bonds are not in a Book-Entry System) (New York City time) on the purchase date if the Purchase Price has been received from the Remarketing Agent by the time set forth in Section 4.11(e) on the purchase date.

(e) Delivery of Proceeds of Sale . The Remarketing Agent shall deliver directly to the Trustee an amount equal to the principal amount thereof plus accrued interest, if any, of the Bonds which the Remarketing Agent has advised the Trustee have been remarketed pursuant to Section 4.11(d)(2) no later than 1:30 p.m. (New York City time) on the purchase date.

Section 4.12. Purchase of Bonds in Lieu of Redemption . When Bonds are called for redemption pursuant to “Optional Redemption During Term Interest Rate Period” or “Optional Redemption During Daily or Weekly Rate Period” as provided under paragraph 9 in the form of Bond, the Company may purchase some or all of the Bonds called for redemption if it (or the Remarketing Agent) gives written notice to the Trustee and the Remarketing Agent not later than the day before the Redemption Date that it wishes to purchase the principal amount of Bonds specified in the notice, at a Purchase Price equal to the Redemption Price. On the date specified as the Redemption Date, the Trustee will be furnished sufficient remarketing proceeds (or other funds provided by the Company as provided in Section 4.07(b) hereof) in sufficient time for the Trustee to make the purchase on the Redemption Date. Any such purchase of Bonds by the Company shall not be deemed to be a payment or redemption of the Bonds or any portion thereof and such purchase shall not operate to extinguish or discharge the indebtedness evidenced by such Bonds.

 

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ARTICLE V

FUNDS AND ACCOUNTS

Section 5.01. Application of Proceeds . The proceeds received from the sale of the Bonds shall be applied as follows:

(a) any proceeds representing accrued interest on the Bonds will be deposited into the Bond Fund; and

(b) all other proceeds will be deposited into the Refunding Fund.

Section 5.02. Bond Fund . There is hereby established and created a fund to be designated “Polk County Industrial Development Authority Solid Waste Disposal Facility Revenue Refunding Bonds (Tampa Electric Company Project) Series 2010 Bond Fund.” The Trustee shall further establish separate accounts within the Bond Fund to be known as the “Interest Account,” the “Principal Account” and the “Redemption Account.”

The Bond Fund and the moneys and Permitted Investments therein shall be used solely and exclusively for the payment of Bond Service Charges as they become due at stated maturity, by redemption, or by acceleration, all as provided herein.

Bond Service Charges shall be payable, as they become due, (i) in the first instance from the payments to be made by the Company to the Trustee pursuant to Section 5.05(a) and to be deposited in the Bond Fund, (ii) if those payments are not made or if moneys then on deposit in the Bond Fund and available for that purpose are not sufficient to pay the Bond Service Charges, from other Revenues to the extent then available, and (iii) from any other source lawfully available to the Trustee.

Except where moneys have been deposited with or paid to the Trustee pursuant to an instrument restricting their application to particular Bonds, all moneys required or permitted to be deposited with or paid to the Trustee under any provision of this Agreement, and any investments thereof, shall be held by the Trustee in trust. Except for (i) moneys deposited with or paid to the Trustee for the redemption of Bonds, notice of the redemption of which shall have been duly given, and (ii) moneys held by the Trustee pursuant to Section 13.03, all moneys described in the preceding sentence held by the Trustee shall be subject to the lien hereof while so held.

The Trustee shall apply money contained in the accounts described below at the following respective times in the manner hereinafter provided, which accounts the Trustee hereby agrees to establish and maintain within the Bond Fund so long as this Agreement is not discharged in accordance with ARTICLE XIII and each such account shall constitute a trust fund for the benefit of the holders of the Bonds, and the money in each such account shall be disbursed only for the purposes and uses hereinafter authorized.

(a) Interest Account . The Trustee, on each Interest Payment Date, shall withdraw and apply from moneys on deposit in the Interest Account an amount which shall be sufficient to pay interest payable on the outstanding Bonds on such Interest Payment Date.

 

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(b) Principal Account . The Trustee, on each Principal Payment Date, shall withdraw and apply from moneys on deposit in the Principal Account, an amount equal to the principal becoming due on Bonds on such Principal Payment Date (other than a Redemption Date). Money in the Principal Account shall be used and withdrawn by the Trustee on each Principal Payment Date solely for the payment of the principal of outstanding Bonds.

(c) Redemption Account . The Trustee, on or before each Redemption Date, shall withdraw and apply from moneys on deposit in the Redemption Account amounts required to pay the principal of and premium, if any, and accrued interest on Bonds to be redeemed prior to their stated maturity. Money in the Redemption Account shall be used and withdrawn by the Trustee on each Redemption Date solely for the payment of the principal of and premium, if any, and accrued interest on outstanding Bonds upon the redemption thereof prior to their stated maturity.

Section 5.03. First Mortgage Bond Fund . There is hereby established and created a fund to be designated “Polk County Industrial Development Authority Solid Waste Disposal Facility Revenue Refunding Bonds (Tampa Electric Company Project) Series 2010 First Mortgage Bond Fund.” The First Mortgage Bond Fund will be opened upon issuance of the First Mortgage Bonds, if any, pursuant to Section 2.02. There shall be deposited to the credit of the First Mortgage Bond Fund all payments, if any, made on the First Mortgage Bonds, if any. The moneys in the First Mortgage Bond Fund shall be held by the Trustee in trust and applied to the amounts which the Company may be required to pay to the Trustee for deposit in the Bond Fund and, pending such application, shall be subject to a lien and charge in favor of the Bondholders.

Section 5.04. Payment of Bonds . The Trustee will make payments of Purchase Price of, principal of, premium, if any, and interest on the Bonds from moneys available to the Trustee under Section 4.07, Section 4.10 and Section 5.02.

All moneys received as proceeds of remarketing the Bonds under Section 4.11 shall be held segregated by the Trustee in the Remarketing Proceeds Account, a separate and segregated trust account, as provided in Section 4.10. To the extent that the payment of principal or interest on the Bonds is made from moneys as described in this Section, such payment shall also satisfy and discharge any payment obligation of the Company under this Agreement and the Trustee shall promptly notify the Company in writing if such payment requirement has not been satisfied. If any Bond is redeemed prior to maturity or if the Company surrende