TRUST INDENTURE

Exhibit 10.13

 

CITY OF OSCEOLA, ARKANSAS

to

REGIONS BANK

Little Rock, Arkansas

as Trustee

 

TRUST INDENTURE

 

Dated as of April 1, 2006

$100,000,000 City of Osceola, Arkansas Solid Waste Disposal Revenue Bonds (Plum Point Energy Associates, LLC Project), Series 2006

 

TRUST INDENTURE

TABLE OF CONTENTS

(This Table of Contents is not a part of the Trust Indenture and is only for convenience of reference.)

 

TRUST INDENTURE

This TRUST INDENTURE, dated as of April 1, 2006, by and between the CITY OF OSCEOLA, ARKANSAS, a municipality organized and existing under the laws of the State of Arkansas (the “Issuer”), and REGIONS BANK, a banking association organized under and existing by virtue of the laws of the State of Alabama, with a corporate trust office in Little Rock, Arkansas (the “Trustee”).

W I T N E S S E T H:

WHEREAS, the Issuer is authorized and empowered under the laws of the State of Arkansas, including particularly Title 14, Chapter 267 of the Arkansas Code of 1987 Annotated (the “Act”), to issue revenue bonds and to expend the proceeds thereof to finance the acquisition, construction, reconstruction, extension, equipment or improvement of pollution control facilities for the disposal or control of sewage, solid waste, water pollution, air pollution, or any combination thereof; and

WHEREAS, pursuant to and in accordance with the provisions of the Act, the Issuer proposes to issue its revenue bonds under the Act in the aggregate principal amount of $100,000,000 (identified in Article I hereof and referred to herein as the “Bonds”), and to loan the proceeds thereof to Plum Point Energy Associates, LLC, a Delaware limited liability company (the “Company”), for the purpose of financing the cost of acquiring, constructing and equipping an undivided interest in certain sewage and solid waste disposal facilities (the “Project”) at the Plum Point Energy Station (the “Plant”) of the Company and others to be located within or near the Issuer, such loan to be upon the terms and conditions set forth in a Loan Agreement dated as of April 1, 2006 (the “Loan Agreement”), by and between the Issuer and the Company; and

WHEREAS, all things necessary to make the Bonds, when authenticated by the Trustee and issued as in this Trust Indenture provided, the valid, binding and legal obligations of the Issuer according to the import thereof, and to constitute this Trust Indenture a valid assignment and pledge of revenues to the payment of the principal of and interest on the Bonds, in accordance with the provisions hereof, have or will have been done and performed, and the creation, execution and delivery of this Trust Indenture and the creation, execution and issuance of the Bonds, subject to the terms hereof, have in all respects been duly authorized; and

WHEREAS, the Trustee has agreed to accept the trusts herein created upon the terms set forth herein;

NOW, THEREFORE, KNOW ALL MEN BY THESE PRESENTS, THIS TRUST INDENTURE WITNESSETH:

GRANTING CLAUSES

That the Issuer in consideration of the premises and the acceptance by the Trustee of the trusts hereby created and of the purchase and acceptance of the Bonds by the holders and owners thereof, and the sum of One Dollar ($1.00), lawful money of the United States of America, to it duly paid by the Trustee, at or before the execution and delivery of these presents, and for other good and valuable considerations, the receipt of which is hereby acknowledged, and in order to secure the payment of the principal of and interest on the Bonds according to their tenor and effect and to secure the performance and observance by the Issuer of all the covenants expressed or implied herein and in the Bonds, subject to all of the provisions hereof, does hereby grant, bargain, sell, convey, mortgage, assign and pledge unto the Trustee, and unto its successor or successors in trust, and to them and their assigns forever, for the securing of the performance of the obligations of the Issuer hereinafter set forth:

1.

All the rights and interest of the Issuer in and to the Loan Agreement (except for the rights of the Issuer under Sections 5.2(c), 6.2, 6.5 and 9.5 thereof and any rights of the Issuer to receive notices, certificates, or other communications thereunder); and all Revenues (as hereinafter defined) and the proceeds of all thereof.

2.

All the rights and interest of the Issuer in and to the Construction Fund and the Bond Fund (as hereinafter defined), and all moneys and investments therein, but subject to the provisions of this Trust Indenture pertaining thereto.

3.

All moneys, securities and obligations from time to time held by the Trustee under the terms of this Trust Indenture (except for moneys, securities or obligations deposited with or paid to the Trustee for redemption or payment of Bonds which are deemed to have been paid in accordance with Article X hereof and funds held pursuant to Section 4.4, Section 4.9, or Section 6.5 hereof, which shall be held by the Trustee in accordance with the provisions of said Article X or Sections 4.4, 4.9 and 6.5, as the case may be), and any and all real and personal property of every name and nature from time to time hereafter by delivery or by writing of any kind conveyed, mortgaged, pledged, assigned or transferred, as and for additional security hereunder by the Issuer or by anyone in its behalf or with its written consent to the Trustee which is hereby authorized to receive any and all such property at any and all times and to hold and apply the same subject to the terms hereof.

TO HAVE AND TO HOLD all the same with all privileges and appurtenances hereby conveyed and assigned, or agreed or intended so to be, to the Trustee and its successors in said trusts and to them and their assigns forever;

 

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IN TRUST NEVERTHELESS, upon the terms and trusts herein set forth for the equal and proportionate benefit, security and protection of all owners of the said Bonds issued under and secured by this Trust Indenture without privilege, priority or distinction of any of said Bonds over any of the other of said Bonds; provided, however, that if the Issuer, its successors or assigns, shall well and truly pay, or cause to be paid, the principal of the Bonds and the interest due thereon, at the times and in the manner provided in the Bonds according to the true intent and meaning thereof, and shall make the payments into the Bond Fund as required hereunder or shall provide, as permitted hereby, for the payment thereof by depositing or causing to be deposited with the Trustee the amount specified herein, and shall well and truly keep, perform and observe all the covenants and conditions pursuant to the terms of this Trust Indenture to be kept, performed and observed by it, and shall pay to the Trustee all sums of money due or to become due to it in accordance with the terms and provisions hereof, then upon such final payments this Indenture and the rights hereby granted shall cease, determine and be void; otherwise, this Trust Indenture to be and remain in full force and effect.

THIS TRUST INDENTURE FURTHER WITNESSETH that, and it is expressly declared, all Bonds issued and secured hereunder are to be issued, authenticated and delivered and all said revenues and income hereby 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 Issuer has agreed and covenanted, and does hereby agree and covenant, with the Trustee and with the respective owners, from time to time of the said Bonds, as follows:

 

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ARTICLE I

DEFINITIONS

Section 1.1 . Definitions . In addition to the words and terms elsewhere defined in this Indenture, the following words and terms as used in this Indenture shall have the following meanings:

“Act” — Title 14, Chapter 267 of the Arkansas Code of 1987 Annotated, as enacted and amended from time to time.

“Alternate Credit Enhancement” or “Alternate Liquidity Facility” — A letter of credit, insurance policy, line of credit, surety bond, standby purchase agreement or other security or liquidity instrument, as the case may be, issued in accordance with the terms hereof as a replacement or substitute for any Credit Enhancement or Liquidity Facility, as applicable, then in effect.

“Alternate Rate” — On any Rate Determination Date, for any Mode, 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. The Tender Agent shall make the determinations required by this determination, upon notification from the Issuer, if there is no Remarketing Agent, if the Remarketing Agent fails to make any such determination or if the Remarketing Agent has suspended its remarketing efforts in accordance with the Remarketing Agreement.

“Authorized Denominations” — (i) With respect to Bonds in a Daily Mode or Weekly Mode, $100,000 and any integral multiple of $5,000 in excess thereof, (ii) with respect to Bonds in a Flexible Mode, $100,000 and any integral multiple of $1,000 in excess thereof, and (iii) with respect to Bonds in a Long-Term Mode, $5,000 and any integral multiple thereof.

“Available Amount” — The amount available under the Credit Enhancement or Liquidity Facility, as applicable, to pay the principal of and interest on the Bonds or the Purchase Price of the Bonds, as applicable.

 

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“Available Moneys” — (i) Moneys held by the Trustee (other than in the Rebate Fund or the Purchase Fund) and under this Indenture for a period of at least 123 days and not commingled with any moneys so held for less than said period and during which period no petition in bankruptcy was filed by or against, and no receivership, insolvency, assignment for the benefit of creditors or other similar proceeding has been commenced by or against, the Issuer or the Company, unless such petition or proceeding was dismissed and all applicable appeal periods have expired without an appeal having been filed, (ii) investment income derived from the investment of moneys described in clause (i), (iii) payments made under a Credit Enhancement by a Credit Provider, or (iv) any moneys with respect to which an opinion of nationally recognized bankruptcy counsel has been received by the Trustee to the effect that payments by the Trustee in respect of the Bonds, as provided in this Indenture, derived from such moneys should not constitute transfers avoidable under 11 U.S.C. §547(b) and recoverable from the Owners under 11 U.S.C. §550(a) should the Issuer or the Company be the debtor in a case under Title 11 of the United States Code, as amended.

“Beneficial Owner” — So long as the Bonds are negotiated in the Book-Entry System, any Person who acquires a beneficial ownership interest in a Bond held by the Securities Depository. If at any time the Bonds are not held in the Book-Entry System, Beneficial Owner shall mean Owner for purposes of this Indenture.

“Bond Counsel” — Any firm of nationally recognized municipal bond attorneys selected by the Company, acceptable to the Issuer and the Trustee, and experienced in the issuance of municipal bonds and matters relating to the exclusion of the interest thereon from gross income for Federal income tax purposes.

“Bond Fund” — The fund by that name created and established in Section 6.1 of this Indenture.

“Bonds” — City of Osceola, Arkansas Solid Waste Disposal Revenue Bonds (Plum Point Energy Associates, LLC Project), Series 2006, in the aggregate principal amount of $100,000,000, issued under and secured by this Indenture.

“Book-Entry System” — The system maintained by the Securities Depository described in Section 2.20 hereof.

“Business Day” — Any business day other than (i) a Saturday or Sunday, or (ii) a day on which the Trustee, the Paying Agent, or the Remarketing Agent is required or authorized to be closed, or (iii) a day on which the office of the Credit Provider or Liquidity Provider at which certificates and demands for payment are required to be presented under the Credit Enhancement or Liquidity Facility is required or authorized to be closed, or (iv) a day on which the New York Stock Exchange, Inc. is closed.

 

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“Clearing Fund” — The fund by that name created and established in Section 7.1 of this Indenture.

“Clerk” — The person holding the office and performing the duties of City Clerk of the Issuer.

“Code” — The Internal Revenue Code of 1986, as heretofore or hereafter amended.

“Collateral Agent” — (i) Credit Suisse, Cayman Islands Branch, in its capacity as collateral agent for the secured parties under the Company Credit Facility, or (ii) any other Person so designated in writing by the Company to the Trustee and the Credit Provider, confirmed in writing by the then-existing Collateral Agent known as such to the Trustee and the Credit Provider.

“Company” — Plum Point Energy Associates, LLC, a limited liability company organized and existing under the laws of the State of Delaware, and its permitted successors and assigns under the Loan Agreement.

“Company Credit Facility” — (i) The Credit Agreement dated as of March 14, 2006, among the Lenders from time to time party thereto, Credit Suisse, Cayman Islands Branch, as administrative agent, as collateral agent, and as issuing bank, Credit Suisse Securities (USA) LLC, Goldman Sachs Credit Partners L.P., Merrill Lynch & Co. and Morgan Stanley & Co. Incorporated, as joint lead arrangers and joint lead bookrunners, the party named therein as syndication agent, the party named therein as documentation agent, and the Company, and any amendments and supplements thereto, or (ii) any other credit agreement, loan agreement, indenture, or similar agreement entered into by the Company for the purpose of borrowing money or securing indebtedness of the Company which refunds or replaces the initial Company Credit Facility described in clause (i) of this definition.

“Company Credit Facility Construction Account” — (i) The account of the Company entitled “Plum Point Construction Account” and numbered 10226008.1 maintained with JPMorgan Chase Bank, N.A., in its capacity as depositary agent, bank and securities intermediary for the secured parties under the initial Company Credit Facility, or (ii) any other account so designated in writing by the Company to the Trustee and the Credit Provider, confirmed in writing by the then-existing Collateral Agent known as such to the Trustee and the Credit Provider.

“Company Purchase Account” — The account by that name created in Section 4.9 hereof.

“Company Representative” — A person at the time designated to act on behalf of the Company for purposes of this Indenture by a written instrument furnished to the Trustee containing the specimen signature of such person and signed on behalf of Company by any of its officers. The certificate may designate an alternate or alternates.

 

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“Completion Date” — The date of completion of the acquisition, construction and equipment of the Project (or any phase of the Project financed with the proceeds of a series of Bonds), as that date shall be determined by the Company and certified as provided in Section 3.4 of the Loan Agreement.

“Construction Fund” — The fund by that name created and established in Section 7.1 of this Indenture.

“Credit Enhancement” — A letter of credit, insurance policy, surety bond, line of credit or other instrument then in effect which secures or guarantees the payment of principal of and interest on the Bonds.

“Credit Enhancement Account” — The account by that name created within the Bond Fund in Section 6.1 hereof.

“Credit Provider” — Any bank, insurance company, pension fund or other financial institution which provides a Credit Enhancement or Alternate Credit Enhancement for the Bonds. A Credit Provider also may be the Liquidity Provider. For any period during which the Company Credit Facility is in effect, the term “Credit Provider” as used herein shall refer to and mean the Issuing Bank. The initial Credit Provider shall be Credit Suisse, New York Branch.

“Credit Provider Failure” or “Liquidity Provider Failure” — A failure of the Credit Provider or Liquidity Provider, as applicable, to pay a properly presented and conforming draw or request for advance under the Credit Enhancement or Liquidity Facility, as applicable, or the filing or commencement of any bankruptcy or insolvency proceedings by or against the Credit Provider or Liquidity Provider, as applicable, or the Credit Provider or Liquidity Provider, as applicable, shall declare a moratorium on the payment of its unsecured debt obligations or shall repudiate the Credit Enhancement or Liquidity Facility, as applicable.

“Current Mode” — The meaning specified in Section 2.9(a)(i) hereof.

“Daily Mode” — The Mode during which the Bonds bear interest at the Daily Rate.

“Daily Rate” — The per annum interest rate on any Bond in the Daily Mode determined pursuant to Section 2.6(a) hereof.

“Daily Rate Period” — The period during which a Bond in the Daily Mode shall bear a Daily Rate, which shall be from the Business Day upon which a Daily Rate is set to but not including the next succeeding Business Day.

 

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“DTC Representation Letter” — The Letter of Representations delivered to the Securities Depository in connection with the original issuance of the Bonds, and any amendments and supplements thereto.

“Electronic Means” — Telecopy, facsimile transmission, e mail transmission or other similar electronic means of communication providing evidence of transmission, including a telephonic communication confirmed by any other method set forth in this definition.

“Event of Default” — Any event of default specified in Section 11.1 hereof.

“Expiration Date” — The stated expiration date of the Credit Enhancement or the Liquidity Facility, as it may be extended from time to time as provided in the Credit Enhancement or the Liquidity Facility, or any earlier date on which the Credit Enhancement or the Liquidity Facility shall terminate at the direction of the Company, expire or be cancelled.

“Favorable Opinion of Bond Counsel” — With respect to any action the occurrence of which requires such an opinion, an Opinion of Counsel, which shall be a Bond Counsel, to the effect that such action is permitted under the Act and this Indenture and will not adversely affect the exclusion of interest on the Bonds from gross income for purposes of Federal income taxation (subject to the inclusion of any exceptions contained in the opinion delivered upon original issuance of the Bonds).

“Fitch” — Fitch, Inc., and its successors and assigns, except that if such corporation shall be dissolved or liquidated or shall no longer perform the functions of a securities rating agency, then the term “Fitch” shall be deemed to refer to any other nationally recognized securities rating agency selected by the Company after consultation with the Remarketing Agent.

“Fixed Rate” — The per annum interest rate on any Bond in the Fixed Rate Mode determined pursuant to Sections 2.7(b) hereof.

“Fixed Rate Bond” — A Bond in the Fixed Rate Mode.

“Fixed Rate Mode” — The Mode during which the Bonds bear interest at the Fixed Rate.

“Fixed Rate Period” — For the Bonds in the Fixed Rate Mode, the period from the Mode Change Date upon which the Bonds were converted to the Fixed Rate Mode to but not including the Maturity Date for the Bonds.

“Flexible Mode” — The Mode during which the Bonds bear interest at the Flexible Rate.

“Flexible Rate” — The per annum interest rate on a Bond in the Flexible Mode determined for such Bond pursuant to Section 2.5 hereof. The Bonds in the Flexible Mode may bear interest at different Flexible Rates.

 

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“Flexible Rate Bond” — A Bond in the Flexible Mode.

“Flexible Rate Period” — The period of from one to 270 calendar days (which period must end on a day preceding a Business Day) during which a Flexible Rate Bond shall bear interest at a Flexible Rate, as established by the Remarketing Agent pursuant to Section 2.5 hereof. The Bonds in the Flexible Mode may be in different Flexible Rate Periods.

“General Account” — The account by that name created within the Bond Fund in Section 6.1 hereof.

“Government Securities” — Direct or fully guaranteed obligations of the United States of America (including any such securities issued or held in book-entry form on the books of the Department of Treasury of the United States of America).

“Indenture” — This Trust Indenture and any amendments and supplements hereto.

“Interest Accrual Period” — The period during which a Bond accrues interest payable on the next Interest Payment Date applicable thereto. Each Interest Accrual Period shall commence on (and include) the last Interest Payment Date to which interest has been paid (or, if no interest has been paid, from the date of original authentication and delivery of the Bonds) to, but not including, the Interest Payment Date on which interest is to be paid. If, at the time of authentication of any Bond, interest is in default or overdue on the Bonds, such Bond shall bear interest from the date to which interest has previously been paid in full or made available for payment in full on Outstanding Bonds.

“Interest Payment Date” — Each date on which interest is to be paid and is: (i) with respect to the Bonds in the Flexible Mode, each Mandatory Purchase Date applicable thereto; (ii) with respect to the Bonds in the Daily Mode or Weekly Mode, the first Business Day of each month; (iii) with respect to the Bonds in a Long-Term Mode, the first day of the sixth calendar month following the month in which such Long-Term Mode takes effect, and the first day of each sixth calendar month thereafter or, upon the receipt by the Trustee of a Favorable Opinion of Bond Counsel, any other six-month interval chosen by the Company (beginning with the first such day which is at least three months after the Mode Change Date) and, with respect to a Term Rate Period, the final day of the current Interest Period if other than a regular six-month interval; (iv) (without duplication as to any Interest Payment Date listed above) any Mode Change Date, other than a change between a Daily Mode and a Weekly Mode, and each Maturity Date; and (v) with respect to any Liquidity Provider Bonds, the day set forth in the Reimbursement Agreement.

“Interest Period” — For the Bonds in a particular Mode, the period of time that the Bonds bear interest at the rate (per annum) which becomes effective at the beginning of such period, and shall include a Flexible Rate Period, a Daily Rate Period, a Weekly Rate Period, a Term Rate Period and a Fixed Rate Period.

 

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“Issuer” — City of Osceola, Arkansas, a municipality organized and existing under the laws of the State of Arkansas, and its successors and assigns.

“Issuing Bank” — (i) Credit Suisse, New York Branch, as issuing bank under the Company Credit Facility, or (ii) any other Person so designated in writing by the Company to the Trustee, confirmed in writing by the then-existing Issuing Bank known as such to the Trustee.

“Liquidity Facility” — Any letter of credit, line of credit, standby purchase agreement or other instrument then in effect which provides for the payment of the Purchase Price of Bonds upon the tender thereof in the event remarketing proceeds are insufficient therefor.

“Liquidity Facility Purchase Account” — The account by that name created in Section 4.9 hereof.

“Liquidity Provider” — Any bank, insurance company, pension fund or other financial institution which provides a Liquidity Facility or Alternate Liquidity Facility for the Bonds. A Liquidity Provider also may be the Credit Provider.

“Liquidity Provider Bonds” — Any Bonds purchased by the Liquidity Provider with funds drawn on or advanced under the Liquidity Facility.

“Long-Term Mode” — A Term Rate Mode or a Fixed Rate Mode.

“Loan Agreement” — The Loan Agreement dated as of April 1, 2006, by and between the Issuer and the Company, and any amendments and supplements thereto.

“Mandatory Purchase Date” — (i) With respect to a Flexible Rate Bond, the first Business Day following the last day of each Flexible Rate Period with respect to such Bond, (ii) for Bonds in the Term Rate Mode, on the first Business Day following the last day of each Term Rate Period, (iii) any Mode Change Date (except a change in Mode between the Daily Mode and the Weekly Mode), (iv) any Substitution Date, (v) the fifth Business Day prior to the Expiration Date (other than as a result of an Automatic Termination Event), (vi) for Bonds in the Daily Mode or Weekly Mode, any Business Day specified by the Company not less than twenty (20) days after the Trustee’s receipt of such notice, and (vii) the date specified by the Trustee following receipt of notice from the Credit Provider, before the seventh (7th) calendar day after the presentation of demand for a drawing under the Credit Enhancement to pay regularly scheduled interest on the Bonds, that there shall be no reinstatement of the amount so drawn under the terms of the Credit Enhancement, which date shall be a Business Day not less than five (5) days after the Trustee’s receipt of such notice.

 

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“Mayor” — The person holding the office and performing the duties of the Mayor of the Issuer.

“Maturity Date” — April 1, 2036, and, if provided in Section 2.1 hereof or if established pursuant to Section 2.9(b)(v) hereof upon a change to the Fixed Rate Mode, any Serial Maturity Date.

“Maximum Rate” — The lesser of (i) the rate of ten and three-quarters percent (10  ³ / 4 %) per annum or such higher rate of interest as the Trustee may accept, based upon an opinion of Bond Counsel, to the effect that such higher rate is not greater than the maximum rate permitted by applicable law, or (ii) the maximum rate per annum, specified therein, upon which there has been calculated the amount available to be drawn on the Credit Facility to pay interest on the Bonds.

“Mode” — As the context may require, the Flexible Mode, the Daily Mode, the Weekly Mode, the Term Rate Mode or the Fixed Rate Mode.

“Mode Change Date” — With respect to the Bonds in a particular Mode, the day on which another Mode for the Bonds begins.

“Mode Change Notice” — The notice from the Company to the other Notice Parties of the Company’s intention to change the Mode with respect to the Bonds.

“Moody’s” — Moody’s Investors Service, a corporation duly organized and existing under and by virtue of the laws of the State of Delaware, and its successors and assigns, except that if such corporation shall be dissolved or liquidated or shall no longer perform the functions of a securities rating agency, then the term “Moody’s” shall be deemed to refer to any other nationally recognized securities rating agency selected by the Company after consultation with the Remarketing Agent.

“New Mode” — The meaning specified in Section 2.9(a) hereof.

“Notice Parties” — The Issuer, the Trustee, the Tender Agent, the Remarketing Agent, the Paying Agent, the Credit Provider, the Liquidity Provider and the Company.

“Opinion of Counsel” — A written legal opinion from a firm of attorneys experienced in the matters to be covered in the opinion.

“Outstanding” — When used with reference to the Bonds, as of any particular date, the aggregate of all Bonds authenticated and delivered under this Indenture except:

(a) Bonds canceled at or prior to such date or delivered to or acquired by the Trustee at or prior to such date for cancellation;

 

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(b) Bonds deemed to be paid in accordance with Article X of this Indenture;

(c) Bonds in lieu of or in exchange or substitution for which other Bonds shall have been authenticated and delivered pursuant to this Indenture; and

(d) On or after any Purchase Date, Bonds tendered or deemed tendered, provided moneys sufficient to pay the Purchase Price thereof on such Purchase Date shall be available in the Purchase Fund for such purpose.

“Owner” or “Bondholder” — The registered owner of a Bond, including the Securities Depository, if any, or its nominee.

“Paying Agent” — The commercial bank, trust company or other entity which may from time to time be appointed to serve as Paying Agent as provided in Section 12.11 hereof. Until such time as an alternate Paying Agent is appointed, the Paying Agent shall be the Trustee.

“Person” — An individual, a corporation, a partnership, an association, a joint venture, a trust, an unincorporated organization or any other entity or organization, including a government or political subdivision or an agency or instrumentality thereof.

“Plant” — The approximately 665 megawatt coal-fired electric generation plant jointly leased by the Company and others from the Issuer in connection with industrial development revenue bonds issued by the Issuer to be located on a site adjacent to the Mississippi River within or near the Issuer and known as the Plum Point Energy Station.

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

“Project” — The Company’s undivided interest (which may be a leasehold interest) in the land, the buildings, structures and other improvements, and those items of fixtures, machinery, equipment and other tangible personal property acquired, constructed and equipped, in whole or in part, with the proceeds of the Bonds, more particularly identified in the Loan Agreement.

“Purchase Date” — (i) For a Bond in the Daily Mode or the Weekly Mode, any Business Day selected by the Beneficial Owner of said Bond pursuant to the provisions of Section 4.1 hereof, and (ii) any Mandatory Purchase Date.

“Purchase Fund” — The fund by that name created in Section 4.9 hereof.

“Purchase Price” — An amount equal to the principal amount of any Bonds purchased on any Purchase Date, plus accrued interest to the Purchase Date (unless the Purchase Date is an Interest Payment Date, in which case the Purchase Price shall not include accrued interest, which shall be paid in the normal course).

 

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“Rate Determination Date” — Any date on which the interest rate on Bonds shall be determined, which, (i) in the case of the Flexible Mode, shall be the first day of an Interest Period; (ii) in the case of the Daily Mode, shall be each Business Day commencing with the first day (which must be a Business Day) the Bonds become subject to the Daily Mode; (iii) in the case of the initial conversion to the Weekly Mode, shall be no later than the Business Day prior to the Mode Change Date, and thereafter, shall be each Wednesday or, if Wednesday is not a Business Day, then the Business Day next succeeding such Wednesday; (iv) in the case of the Term Rate Mode, shall be a Business Day no earlier than fifteen (15) Business Days and no later than the Business Day next preceding the first day of an Interest Period, as determined by the Remarketing Agent; and (v) in the case of the Fixed Rate Mode, shall be a date determined by the Remarketing Agent which shall be at least one Business Day prior to the Mode Change Date.

“Rating Agencies” — Any of Moody’s, S&P or Fitch, which is then providing a rating on the Bonds.

“Rating Confirmation Notice” — A notice from Moody’s, S&P or Fitch, as appropriate, confirming that the rating on the Bonds will not be lowered or withdrawn (other than a withdrawal of a short-term rating upon a change to a Long-Term Mode) as a result of the action proposed to be taken.

“Record Date” — (i) With respect to Bonds in a Short-Term Mode, the last Business Day before an Interest Payment Date; and (ii) with respect to Bonds in a Long-Term Mode, the fifteenth (15th) day (whether or not a Business Day) of the month next preceding each Interest Payment Date.

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

“Redemption Price” — An amount equal to the principal of and premium, if any, and accrued interest, if any, on the Bonds to be paid on the Redemption Date.

“Reimbursement Agreement” — Any reimbursement agreement, credit agreement, line of credit agreement, standby purchase agreement or other agreement, by and between the Credit Provider or Liquidity Provider, as applicable, and the Company, pursuant to which the Credit Enhancement, Liquidity Facility, Alternate Credit Enhancement, or Alternate Liquidity Facility is issued or provided. The Company Credit Facility shall be the initial Reimbursement Agreement.

“Remarketing Agent” — Goldman, Sachs & Co., or any other investment banking firm which may be substituted in its place as provided in Section 13.1 hereof.

 

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“Remarketing Agreement” — That certain Remarketing Agreement relating to the Bonds, dated as of April 1, 2006, by and between the Company and the Remarketing Agent or any similar agreement between the Company and the Remarketing Agent, as it may be amended or supplemented from time to time in accordance with its terms.

“Remarketing Proceeds Account” — The account by that name created in Section 4.9 hereof.

“Representation Letter” — The Letter of Representation from the Issuer, the Paying Agent, the Tender Agent and the Remarketing Agent to the Securities Depository in connection with the issuance of the Bonds in a book-entry system, as supplemented and amended from time to time.

“Revenues” — All amounts payable pursuant to Section 5.2(a) of the Loan Agreement.

“S&P” — Standard & Poor’s Ratings Services, a division of McGraw-Hill, duly organized and existing under and by virtue of the laws of the State of New York, and its successors and assigns, except that if such corporation shall be dissolved or liquidated or shall no longer perform the functions of a securities rating agency, then the term “S&P” shall be deemed to refer to any other nationally recognized securities rating agency selected by the Company after consultation with the Remarketing Agent.

“Securities Depository” — The Depository Trust Company, 711 Stewart Avenue, Garden City, New York 11530, Fax -516/227-4039 or 4190, and such other securities depository as the Company may designate in a certificate of the Company delivered to the Trustee.

“Serial Bonds” — The Bonds maturing on the Serial Maturity Dates, as determined pursuant to Section 2.9(b) hereof.

“Serial Maturity Dates” — The dates on which the Serial Bonds mature, as determined pursuant to Section 2.9(b) hereof.

“Serial Payments” — The payments to be made in payment of the principal of the Serial Bonds on the Serial Maturity Dates.

“Short-Term Mode” — The Daily Mode, the Weekly Mode or the Flexible Mode.

“Substitution Date” — The date upon which an Alternate Credit Enhancement or Alternate Liquidity Facility is scheduled to be substituted for the Credit Enhancement or Liquidity Facility then in effect.

“Tender Agent” — The commercial bank, trust company or other entity which may from time to time be appointed to serve as Tender Agent as provided in Section 12.13 hereof. Until such time as an alternate Tender Agent is appointed, the Tender Agent shall be the Trustee.

 

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“Tender Notice” — A notice delivered by Electronic Means or in writing that states (i) the principal amount of such Bond to be purchased pursuant to Section 4.1 hereof, (ii) the Purchase Date on which such Bond is to be purchased, (iii) applicable payment instructions with respect to the Bonds being tendered for purchase and (iv) an irrevocable demand for such purchase.

“Tender Notice Deadline” — (i) During the Daily Mode, 11:00 A.M. on any Business Day and (ii) during the Weekly Mode, 5:00 P.M. on the Business Day seven (7) days prior to the applicable Purchase Date.

“Term Rate” — The per annum interest rate for the Bonds in the Term Rate Mode determined pursuant to Section 2.7(a) hereof.

“Term Rate Mode” — The Mode during which the Bonds bear interest at the Term Rate.

“Term Rate Period” — The period from (and including) the Mode Change Date or the date of initial issuance of the Bonds, as applicable, to (but excluding) the last day of the first period that the Bonds shall be in the Term Rate Mode as established by the Company for the Bonds pursuant to Section 2.10(a)(i) hereof and, thereafter, the period from (and including) the beginning date of each successive Interest Rate Period selected for the Bonds by the Company pursuant to Section 2.7(a) while it is in the Term Rate Mode to (but excluding) the commencement date of the next succeeding Interest Period, including another Term Rate Period. Except as otherwise provided in this Indenture, an Interest Period for the Bonds in the Term Rate Mode must be at least 180 days in length.

“Trustee” — The commercial bank, trust company or other entity which may from time to time be appointed to serve as Trustee under the provisions of this Indenture or by operation of law. The initial Trustee shall be Regions Bank, Little Rock, Arkansas.

“Trust Estate” — The property conveyed to the Trustee pursuant to the Granting Clauses hereof.

“Variable Rate Mode” — The Short-Term Mode or the Term Rate Mode.

“Weekly Mode” — The Mode during which the Bonds bear interest at the Weekly Rate.

“Weekly Rate” — The per annum interest rate on the Bonds in the Weekly Mode determined pursuant to Section 2.6(b) hereof.

“Weekly Rate Period” — The period during which a Bond in the Weekly Mode shall bear a Weekly Rate, which shall be the period commencing on Thursday of each week to and including Wednesday of the following week, except the first Weekly Rate Period which shall be from the Mode Change Date or date of initial issuance of the Bonds, as applicable, to and including the Wednesday of the following week and the last Weekly Rate Period which shall be from and including the Thursday of the week prior to the Mode Change Date to and including the day next preceding the Mode Change Date.

 

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Unless otherwise provided herein, all references to a particular time are to New York City time.

Section 1.2 . Use of Words . 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, the words “Bond”, “Owner”, “Bondholder” and “Person” shall include the plural, as well as the singular, number.

 

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ARTICLE II

CONDITIONS AND TERMS OF BONDS

Section 2.1 . Authorization of Bonds . The issuance of the Bonds is hereby authorized in the aggregate principal amount of One Hundred Million Dollars ($100,000,000) to be designated as “City of Osceola, Arkansas Solid Waste Disposal Revenue Bonds (Plum Point Energy Associates, LLC Project), Series 2006.”

Section 2.2 . Denominations , Medium , Method and Place of Payment and Dating of Bonds . The Bonds shall be issued in the form of fully registered Bonds in Authorized Denominations. The principal of and premium, if any, and interest on the Bonds shall be payable in lawful money of the United States of America. The Bonds shall initially issued in the Weekly Mode and may be converted to another Mode as provided herein. The initial interest rate on the Bonds shall be determined on or prior to the date of issuance of the Bonds as hereinafter provided.

Unless otherwise provided in any writing with or from the Securities Depository, the interest on the Bonds shall be paid by the Paying Agent on the Interest Payment Dates by wire transfer of immediately available funds to an account specified by the Owner in a writing delivered to the Paying Agent. Any such specified account shall remain in effect until revised by such Owner by an instrument in writing delivered to the Paying Agent. The principal of and premium, if any, on each Bond shall be payable on the Principal Payment Date, upon surrender thereof at the office of the Paying Agent.

Except as may be specifically set forth herein, the Paying Agent, the Trustee, the Remarketing Agent, the Company, and the Issuer may treat the Owner of a Bond as the absolute owner thereof for all purposes, whether or not such Bond shall be overdue, and the Paying Agent, the Trustee, the Remarketing Agent, the Company, and the Issuer shall not be affected by any knowledge or notice to the contrary; and payment of the principal of and premium, if any, and interest on such Bond shall be made only to such Owner, which payments shall be valid and effectual to satisfy and discharge the liability of such Bond to the extent of the sum or sums so paid. All Bonds at maturity or on earlier redemption paid pursuant to the provisions of this Section shall be cancelled by the Paying Agent.

The Bonds shall be dated the date of authentication thereof and shall bear interest at the applicable rate or rates during each applicable Interest Accrual Period until the entire principal amount of the Bonds has been paid.

Section 2.3 . Payment of Principal and Interest of Bonds ; Acceptance of Terms and Conditions . (a) The interest on the Bonds shall become due and payable on the Interest Payment Dates in each year to and including the Maturity Date, and on each Redemption Date and on the date of any acceleration prior thereto. The principal of the Bonds shall become due and payable on the applicable Principal Payment Date.

 

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(b) By the acceptance of its Bond, the Owner and each Beneficial Owner thereof shall be deemed to have agreed to all the terms and provisions of such Bond as specified in such Bond and this Indenture including, without limitation, the applicable Interest Periods, interest rates (including any applicable Alternate Rate), Purchase Dates, Mandatory Purchase Dates, Purchase Prices, mandatory and optional purchase and redemption provisions applicable to such Bond, method and timing of purchase, redemption, payment, etc. Such Owner and each Beneficial Owner further agree that if, on any date upon which one of its Bonds is to be purchased, redeemed or paid at maturity or earlier due date, funds are on deposit with the Paying Agent or the Trustee to pay the full amount due on such Bond, then such Owner or Beneficial Owner shall have no rights under this Indenture other than to receive such full amount due with respect to such Bond and that interest on such Bond shall cease to accrue as of such date.

(c) While any Bonds are Liquidity Provider Bonds, such Bonds shall bear interest and be payable at the times and in the amounts required under the Liquidity Facility.

Section 2.4 . Calculation and Payment of Interest ; Change in Mode ; Maximum Rate . (a) When a Short-Term Mode is in effect, interest shall be calculated on the basis of a 365/366 day year for the actual number of days elapsed. When a Long-Term Mode is in effect, interest shall be calculated on the basis of a 360 day year comprised of twelve 30-day months. Payment of interest on each Bond shall be made on each Interest Payment Date for such Bond for unpaid interest accrued during the Interest Accrual Period to the Owner of record of such Bond on the applicable Record Date.

(b) The Bonds in any Mode, other than a Fixed Rate Mode, may be changed to any other Mode at the times and in the manner hereinafter provided. Subsequent to such change in Mode (other than a change to a Fixed Rate Mode), the Bonds may again be changed to a different Mode at the times and in the manner hereinafter provided. A Fixed Rate Mode shall be in effect until the Maturity Date, or acceleration thereof prior to the Maturity Date, and may not be changed to any other Mode.

(c) No Bonds shall bear interest at an interest rate higher than the Maximum Rate.

(d) In the absence of manifest error, the determination of interest rates (including any determination of rates in connection with a New Mode) and interest periods by the Remarketing Agent and the record of interest rates maintained by the Paying Agent shall be conclusive and binding upon the Remarketing Agent, the Paying Agent, the Trustee, the Issuer, the Company, the Owners and the Beneficial Owners.

Section 2.5 . Determination of Flexible Rates and Interest Periods During Flexible Mode . An Interest Period for the Bonds in the Flexible Mode shall be of such duration of from one to 270 calendar days, ending on a day preceding a Business Day or the Maturity Date, as the

 

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Remarketing Agent shall determine in accordance with the provisions of this Section. A Flexible Rate Bond can have an Interest Period, and bear interest at a Flexible Rate, different than another Flexible Rate Bond. In making the determinations with respect to Interest Periods, subject to limitations imposed by the second preceding sentence and in Section 2.4 hereof, on each Rate Determination Date for a Flexible Rate Bond, the Remarketing Agent shall select for such Bond the Interest Period which would result in the Remarketing Agent being able to remarket such Bond at par in the secondary market at the lowest average interest cost for all Flexible Rate Bonds; provided, however, that if the Remarketing Agent has received notice from the Company that the Bonds are to be changed from the Flexible Mode to any other Mode, the Remarketing Agent shall select Interest Periods which do not extend beyond the day preceding the resulting applicable Mandatory Purchase Date of the Bonds.

Except while the Bonds are registered in a Book-Entry System, in order to receive payment of the Purchase Price the Owner of any Bond in the Flexible Mode must present such Bond to the Paying Agent, by 12:00 noon on the Rate Determination Date, in which case, the Paying Agent shall pay the Purchase Price to such Owner by 3:00 P.M. on the same day.

By 1:00 P.M. on each Rate Determination Date, the Remarketing Agent, with respect to each Bond in the Flexible Mode which is subject to adjustment on such date, shall determine the Flexible Rate(s) for the Interest Periods then selected for such Bond and shall give notice by Electronic Means to the Paying Agent and the Company, of the Interest Periods, the Purchase Date(s) and the Flexible Rate(s). The Remarketing Agent shall make the Flexible Rate and Interest Period available after 2:00 P.M. on each Rate Determination Date by telephone or Electronic Means to any Beneficial Owner or Notice Party requesting such information.

Section 2.6 . Determination of Interest Rates During the Daily Mode and the Weekly Mode . The interest rate for the Bonds in the Daily Mode or Weekly Mode shall be the rate of interest per annum determined by the Remarketing Agent on and as of the applicable Rate Determination Date as the minimum rate of interest which, in the opinion of the Remarketing Agent under then-existing market conditions, would result in the sale of the Bonds in the Daily Rate Period or Weekly Rate Period, as applicable, at a price equal to the principal amount thereof, plus interest, if any, accrued through the Rate Determination Date during the then current Interest Accrual Period.

(a) During the Daily Mode, the Remarketing Agent shall establish the Daily Rate by 10:00 A.M. on each Rate Determination Date. The Daily Rate for any day during the Daily Mode which is not a Business Day shall be the Daily Rate established on the immediately preceding Rate Determination Date. The Remarketing Agent shall make the Daily Rate available no less frequently than once each week by telephone or Electronic Means to any Beneficial Owner or Notice Party requesting such rate.

 

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(b) During the Weekly Mode, the Remarketing Agent shall establish the Weekly Rate by 4:00 P.M. on each Rate Determination Date. The Weekly Rate shall be in effect during the applicable Weekly Rate Period. The Remarketing Agent shall make the Weekly Rate available no later than 5:00 P.M. on the Business Day following the Rate Determination Date by telephone or Electronic Means to any Beneficial Owner or Notice Party requesting such rate.

Section 2.7 . Determination of Term Rates and Fixed Rates . (a)  Term Rates . Except as provided in Section 2.8 hereof, once the Bonds are changed to the Term Rate Mode, the Bonds shall continue in the Term Rate Mode until changed to another Mode in accordance with Section 2.9 hereof. The Term Rate shall be determined by the Remarketing Agent not later than 4:00 P.M. on the Rate Determination Date, and the Remarketing Agent shall make the Term Rate available by telephone or by Electronic Means to any Notice Party requesting such rate. The Term Rate shall be the minimum rate which, in the sole judgment of the Remarketing Agent, would result in a sale of the Bonds at a price equal to the principal amount thereof on the Rate Determination Date for the Interest Period selected by the Company in writing delivered to the Remarketing Agent before such Rate Determination Date. If a new Interest Period is not selected by the Company prior to a Rate Determination Date, the new Interest Period shall be the same length as the current Interest Period (or such lesser period as shall be necessary to comply with the last sentence of this paragraph). The Remarketing Agent shall make the Term Rate available by telephone or Electronic Means after 5:00 P.M. on the Rate Determination Date to any Notice Party requesting such Term Rate. Upon request of any Notice Party the Paying Agent shall give notice of such rate by Electronic Means. No Interest Period in the Term Rate Mode may extend beyond the applicable Maturity Date.

(b) Fixed Rates . The Remarketing Agent shall determine the Fixed Rate for the Bonds being converted to the Fixed Rate Mode in the manner and at the times as follows: not later than 4:00 P.M. on the applicable Rate Determination Date, the Remarketing Agent shall determine the Fixed Rate (or Rates, if the Bonds will have Serial Maturity Dates in accordance with Section 2.9(b)(v) hereof). Except as set forth in Section 2.9(b)(v) hereof, the Fixed Rate shall be the minimum interest rate which, in the sole judgment of the Remarketing Agent, will result in a sale of the Bonds at a price equal to the principal amount thereof on the Rate Determination Date. The Remarketing Agent shall make the Fixed Rate available by telephone or by Electronic Means after 5:00 P.M. on the Rate Determination Date to any Notice Party requesting such Fixed Rate. Upon request of any Notice Party the Paying Agent shall give notice of such rate by Electronic Means. Subject to Section 2.9(b)(v), the Fixed Rate so established shall remain in effect until the Maturity Date of such Bonds.

Section 2.8 . Alternate Rates . The following provisions shall apply in the event (i) the Remarketing Agent fails or is unable to determine the interest rate or Interest Period for the Bonds, (ii) the method by which the Remarketing Agent determines the interest rate or Interest Period with respect to the Bonds (or the selection by the Company of the Interest Periods for Bonds in the Term Rate Mode) shall be held to be unenforceable by a court of law of competent jurisdiction or (iii) if the Remarketing Agent suspends its remarketing effort in accordance with the Remarketing Agreement. These provisions shall continue to apply until such time as the Remarketing Agent (or the Company if applicable) again makes such determinations. In the

 

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case of clause (ii) above, the Remarketing Agent (or the Company, if applicable) shall again make such determination at such time as there is delivered to the Remarketing Agent and the Company an opinion of Bond Counsel to the effect that there are no longer any legal prohibitions against such determinations. The following shall be the methods by which the interest rates and, in the case of the Flexible and Term Rate Modes, the Interest Periods, shall be determined for the Bonds as to which any of the events described in clauses (i), (ii) or (iii) shall be applicable. Such methods shall be applicable from and after the date any of the events described in clauses (i), (ii) or (iii) first become applicable to the Bonds until such time as the events described in clauses (i), (ii) or (iii) are no longer applicable to the Bonds. These provisions shall not apply if the Company fails to select an Interest Period for the Bonds in the Term Rate Mode for a reason other than as described in clause (ii) above.

(a) For Flexible Rate Bonds, the next Interest Period shall be from, and including, the first day following the last day of the current Interest Period for the Bonds to, but excluding, the next succeeding Business Day and thereafter shall commence on each Business Day and extend to, but exclude, the next succeeding Business Day. For each such Interest Period, the interest rate for the Bonds shall be the applicable Alternate Rate in effect on the Business Day that begins an Interest Period.

(b) If the Bonds are in the Daily Mode or the Weekly Mode, then the Bonds shall bear interest during each subsequent Interest Period at the Alternate Rate in effect on the first day of such Interest Period.

(c) If the Bonds are then in the Term Rate Mode, then the Bonds shall automatically convert to Flexible Rate Bonds, with an Interest Period commencing on the first day following the last day of the current Interest Period for the Bonds to, but excluding, the next succeeding Business Day and thereafter shall commence on each Business Day and extend to, but exclude, the next succeeding Business Day. For each such Interest Period, the interest rate for the Bonds shall be the applicable Alternate Rate in effect at the beginning of each such Interest Period.

Section 2.9 . Changes in Mode . Subject to the provisions of this Section, the Company may effect a change in Mode with respect to all (but not less than all) of the Bonds by following the procedures set forth in this Section. If a change in Mode will make the Bonds subject to Rule 15c2-12 promulgated under the Securities Act of 1934, as amended, it shall be a condition to the conversion that the Company shall have executed a continuing disclosure undertaking satisfying the requirements of such Rule and shall cooperate with the Remarketing Agent and any Underwriter (as defined in such Rule) in satisfying the requirements of such Rule.

 

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(a) Changes to Modes Other Than to Fixed Rate Mode . All of the Bonds (other than Bonds in the Fixed Rate Mode) may be changed from one Mode to another Mode (other than the Fixed Rate Mode) as follows:

(i) Mode Change Notice ; Notice to Owners . No later than a Business Day which is at least thirty (30) days (or such shorter time as may be agreed to by the Issuer, the Company, the Trustee, the Tender Agent and the Remarketing Agent) preceding the proposed Mode Change Date, the Company shall give written notice to the Notice Parties of its intention to effect a change in the Mode from the Mode then prevailing (for purposes of this Section, the “Current Mode”) to another Mode (for purposes of this Section, the “New Mode”) specified in such written notice, and, if the change is to a Term Rate Mode, the length of the initial Interest Period as set by the Company. Such notice to the Notice Parties shall also include the identity of the provider of the Liquidity Facility and/or Credit Enhancement. Notice of the proposed change in Mode shall be given by the Tender Agent to the Owners of the Bonds not less than the 15th day next preceding the Mode Change Date provided that no notice need be given for a Mode Change Date occurring on the first Business Day following the last day of a Flexible Rate Period or Term Rate Mode or on a Substitution Date. Such notice shall state: (1) the Mode to which the conversion will be made and the Mode Change Date; (2) except in the case of a change from the Daily Mode to the Weekly Mode or from the Weekly Mode to the Daily Mode, that the Bonds will be subject to mandatory purchase on the Mode Change Date and the Purchase Price of the Bonds; and (3) if the Book-Entry System is no longer in effect, information with respect to required delivery of Bond certificates and payment of Purchase Price.

(ii) Determination of Interest Rates . The New Mode shall commence on the Mode Change Date and the interest rate(s) (together, in the case of a change to the Flexible Mode, with the Interest Period(s)) shall be determined by the Remarketing Agent (or the Company in the case of the Interest Period for the Bonds converted to the Term Rate Mode) in the manner provided in Sections 2.5, 2.6 and 2.7 hereof, as applicable.

(iii) Conditions Precedent :

(A) The Mode Change Date shall be:

(1) in the case of a change from the Flexible Mode, the next Mandatory Purchase Date for all of the Flexible Rate Bonds;

(2) in the case of a change from the Daily or Weekly Mode, any Business Day; and

(3) in the case of a change from the Term Rate Mode to another Mode, or from a Term Rate Period to a Term Rate Period of a different duration, the Mode Change Date shall be limited to any Interest Payment Date on which the Bonds are subject to optional redemption or to the last Interest Payment Date of the current Term Rate Period, as the case may be. Such Bonds shall be purchased on such Mode Change Date at a Purchase Price equal to 100% of the principal amount thereof, provided that if such Bonds are to be purchased on an Interest Payment Date other than the last Interest Payment Date and would otherwise be

 

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subject to optional redemption on such Mode Change Date at a Redemption Price of more than 100% of the principal amount thereof, such Bonds shall be purchased at a Purchase Price equal to such Redemption Price.

(B) If the Bonds to be converted are in the Flexible Mode, no Interest Period set after delivery by the Company to the Remarketing Agent of the notice of the intention to effect a change in Mode shall extend beyond the day preceding the proposed Mode Change Date.

(C) The following items shall have been delivered to the Trustee, the Paying Agent and the Remarketing Agent on or prior to the Mode Change Date:

(1) in the case of a change from a Short-Term Mode to a Long-Term Mode or from a Long-Term Mode to a Short-Term Mode, a Favorable Opinion of Bond Counsel dated the Mode Change Date and addressed to the Notice Parties;

(2) if there is to be an Alternate Liquidity Facility or an Alternate Credit Enhancement delivered in connection with such change, the items required by Section 4.8(d) hereof; and

(3) a Rating Confirmation Notice, or if the Mode Change Date is a Mandatory Purchase Date, a notice from the Rating Agencies of the rating(s), if any, to be assigned the Bonds on such Mode Change Date.

(b) Change to Fixed Rate Mode . At the option of the Company, all of the Bonds bearing interest at a Daily Rate, a Weekly Rate, a Term Rate or a Flexible Rate (in an amount which is an Authorized Denomination for the new Rate Period ) may be changed to the Fixed Rate Mode, as provided in this Section 2.9(d). On any Business Day which is at least thirty (30) days (or such shorter time as may be agreed to by the Issuer, the Company, the Trustee and the Remarketing Agent, but in any event not less than the 15th day next preceding the Mode Change Date) before the proposed Mode Change Date, the Company shall give written notice to the Notice Parties stating that the Mode will be changed to the Fixed Rate Mode and setting forth the proposed Mode Change Date. Such notice shall also state whether or not there shall be Credit Enhancement with respect to the Bonds following such change and, if so, the identity of the Credit Provider. In addition, such notice shall state whether some or all of the Bonds to be converted shall be converted to Serial Bonds and, if so, the applicable Serial Maturity Dates and Serial Payments, all as determined pursuant to subsection (v) of this subsection (b). Any such change in Mode shall be made as follows:

(i) Mode Change Date . The Mode Change Date shall be:

(A) in the case of a change from the Flexible Mode, the next Mandatory Purchase Date for the Flexible Rate Bonds;

 

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(B) in the case of a change from the Daily or Weekly Mode, any Business Day; and

(C) in the case of a change from the Term Rate Mode, the Mode Change Date shall be limited to any Interest Payment Date on which the Bonds are subject to optional redemption or to the next Mandatory Purchase Date for the Term Rate Bonds, as the case may be. Such Bonds shall be purchased on such Mode Change Date at a Purchase Price equal to 100% of the principal amount thereof, provided that if such Bonds would otherwise be subject to optional redemption on such Mode Change Date at a Redemption Price of more than 100% of the principal amount thereof, such Bonds shall be purchased at a Purchase Price equal to such Redemption Price.

(ii) Notice to Owners . Not less than the 15th day next preceding the Mode Change Date, the Paying Agent shall mail, in the name of the Company, a notice of such proposed change to the Owners of the Bonds stating that the Mode will be changed to the Fixed Rate Mode, the proposed Mode Change Date and that such Owner is required to tender such Owner’s Bonds for purchase on such proposed Mode Change Date regardless of whether all of the conditions to the change to the Fixed Rate Mode are satisfied.

(iii) General Provisions Applying to Change to Fixed Rate Mode . The change to the Fixed Rate Mode shall not occur unless the following items shall have been delivered to the Issuer, the Company, the Trustee, the Credit Provider, if any, and the Remarketing Agent on or prior to the Mode Change Date:

(A) a Favorable Opinion of Bond Counsel dated the Mode Change Date and addressed to the Issuer, the Company, the Trustee and the Remarketing Agent;

(B) if there is to be Credit Enhancement delivered in connection with such change, the items required by Section 4.8(d) hereof in connection with the delivery of an Alternate Credit Enhancement; and

(C) notice from the Rating Agencies of the rating(s), if any, to be assigned the Bonds on such Mode Change Date.

(iv) Determination of Interest Rate . The Fixed Rate (or rates in the case of Serial Bonds) for the Bonds to be converted to the Fixed Rate Mode shall be established by the Remarketing Agent on the Rate Determination Date applicable thereto pursuant to the provisions of Section 2.7(b). Such Rate shall remain in effect until the Maturity Date of the Bonds.

Such determination shall be conclusive and binding upon the Issuer, the Company, the Trustee, the Credit Provider, if any, and the Owners of the Bonds to which such rate will be applicable. Not later than 5:00 P.M., New York City time, on the date of determination of the Fixed Rate, the Remarketing Agent shall notify the Trustee, the Credit Provider, the Issuer and the Company of such rate by telephone.

 

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(v) Serialization and Sinking Fund ; Price . Upon conversion of the Bonds to the Fixed Rate Mode, the Bonds shall be remarketed at par, shall mature on the same Maturity Date(s) and be subject to the same mandatory sinking fund redemption, if any, and optional redemption provisions as set forth in this Indenture for any prior Mode; provided, however, that if the Company shall deliver to the Trustee a Favorable Opinion of Bond Counsel, the Company may elect to (1) have some of the Bonds be Serial Bonds and some subject to sinking fund redemption even if such Bonds were not Serial Bonds or subject to mandatory sinking fund redemption prior to such change, (2) change the optional redemption dates and/or premiums set forth in Section 3.3(b) hereof, and/or (3) sell some or all of the Bonds at a premium or a discount to par .

(c) Failure to Satisfy Conditions Precedent to a Mode Change . In the event the conditions described above in subsections (a) or (b), as applicable, of this Section have not been satisfied by the applicable Mode Change Date, then the New Mode shall not take effect (although any mandatory purchase shall be made on such date if notice has been sent to the Owners stating that such Bonds would be subject to mandatory purchase on such date). If the failed change in Mode was from the Flexible Mode, the Bonds shall remain in the Flexible Mode with interest rates and Interest Periods to be established by the Remarketing Agent on the failed Mode Change Date in accordance with Section 2.5 hereof. If the failed change in Mode was from the Daily Mode, the Bonds shall remain in the Daily Mode, and if the failed change in Mode was from the Weekly Mode, the Bonds shall remain in the Weekly Mode, in each case with interest rates established in accordance with the applicable provisions of Section 2.6 hereof on and as of the failed Mode Change Date. If the failed change in Mode was from the Term Rate Mode, then the Bonds shall stay in the Term Rate Mode for an Interest Period ending on the following Interest Payment Date for the Bonds in the Term Rate Mode and the interest rate shall be established by the Remarketing Agent on the failed Mode Change Date in accordance with Section 2.7(a) hereof.

(d) Rescission of Election . Notwithstanding anything herein to the contrary, the Company may rescind any election by it to change a Mode as described above prior to the Mode Change Date by giving written notice thereof to the Notice Parties prior to such Mode Change Date. If the Tender Agent receives notice of such rescission prior to the time the Tender Agent has given notice to the Owners of the Bonds, then such notice of change in Mode shall be of no force and effect. If the Tender Agent receives notice from the Company of rescission of a Mode change after the Tender Agent has given notice thereof to the Owners of the Bonds, then if the proposed Mode Change Date would have been a Mandatory Purchase Date, such date shall continue to be a Mandatory Purchase Date. If the proposed change in Mode was from the Flexible Mode, the Bonds shall remain in the Flexible Mode with interest rates and Interest Periods to be established by the Remarketing Agent on the proposed Mode Change Date in accordance with Section 2.5 hereof. If the proposed change in Mode was from the Daily Mode, the Bonds shall remain in the Daily Mode, and if the proposed change in Mode was from the Weekly Mode, the Bonds shall remain in the Weekly Mode, in each case with interest rates established in accordance with the applicable provisions of Section 2.6 hereof on and as of the

 

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proposed Mode Change Date. If the proposed change in Mode was from the Term Rate Mode, then the Bonds shall stay in the Term Rate Mode for an Interest Period ending on the following Interest Payment Date for the Bonds in the Term Rate Mode and the interest rate shall be established by the Remarketing Agent on the proposed Mode Change Date in accordance with Section 2.7(a) hereof. If the Remarketing Agent is unable to determine the interest rate on the proposed Mode Change Date, the provisions of Section 2.8 shall apply.

Section 2.10 . Form . Bonds authenticated and delivered hereunder shall be in substantially the form set forth in Exhibit A attached hereto, with appropriate variations, omissions and insertions as permitted or required by this Indenture.

Section 2.11 . Payment . The principal of the Bonds shall be paid upon the presentation and surrender of said Bonds at the principal corporate trust office of the Trustee. The interest on the Bonds shall be payable by check or draft drawn upon the Trustee and mailed to or, at the option of the Owners of Bonds in the aggregate principal amount of not less than $1,000,000, transmitted by wire transfer to the Owners as of the close of business on the Record Date next preceding the Interest Payment Date at their respective addresses as such appear as of the close of business on such Record Date on the bond registration books kept by the Trustee, or in connection with any wire transfer to the bank account number previously filed by the Owner with the Trustee for such purpose, except that if and to the extent that there shall be a default in the payment of the interest due on such Interest Payment Date, such defaulted interest shall be paid to the Owners in whose name any such Bonds (or any Bond or Bonds issued upon transfer or exchange thereof) are registered at the close of business on the fifth Business Day next preceding the date of payment of such defaulted interest. All payments shall be made in lawful money of the United States of America.

Section 2.12 . Execution . The Bonds shall be executed on behalf of the Issuer by the manual or facsimile signatures of the Mayor and the Clerk and shall have impressed or imprinted thereon the corporate seal of the Issuer. A facsimile signature shall have the same force and effect as if personally signed. In case any officer whose signature or facsimile of whose signature shall appear on the Bonds shall cease to be such officer before the delivery of such Bonds, such signature or such facsimile shall nevertheless be valid and sufficient for all purposes, the same as if he had remained in office until delivery.

Section 2.13 . Limited Obligation . The Bonds, together with interest thereon, shall be payable as hereinafter set forth, and shall be a valid claim of the Owners thereof only against the Trust Estate, which Trust Estate is hereby pledged and mortgaged for the equal and ratable payment of the Bonds (principal and interest) and shall be used for no other purpose than to pay the principal of and interest on the Bonds, and the Trustee’s fees, except as may be otherwise expressly authorized in this Indenture. The Bonds and interest thereon shall not constitute an indebtedness of the Issuer within the meaning of any constitutional or statutory provision and shall never constitute an obligation or charge against the general credit or taxing powers of the Issuer.

 

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Section 2.14 . Authentication . Only such Bonds as shall have endorsed thereon a certificate of authentication substantially in the forms set forth in Exhibits A and B attached hereto duly executed by the Trustee shall be entitled to any right or benefit under this Indenture. No Bond shall be valid and obligatory for any purpose unless and until such certificate of authentication shall have been duly executed by the Trustee, and such certificate of the Trustee upon any such Bond shall be conclusive evidence that such Bond has been authenticated and delivered under this Indenture. The Trustee’s certificate of authentication on any Bond shall be deemed to have been executed if signed by an authorized signatory of the Trustee, but it shall not be necessary that the same signatory sign the certificate of authentication on all of the Bonds issued hereunder.

Section 2.15 . Delivery of the Bonds . The Issuer shall execute and deliver to the Trustee and the Trustee shall authenticate the Bonds and deliver said Bonds to the purchaser or purchasers thereof. Prior to the delivery or original issuance by the Trustee of any authenticated Bonds there shall be or have been delivered to the Trustee:

(a) Original executed counterparts of this Indenture and the Loan Agreement.

(b) A written order to the Trustee by the Issuer to authenticate and deliver the Bonds to the purchaser or purchasers thereof upon payment to the Trustee, but for the account of the Issuer, of a sum specified in such order plus or less accrued interest thereon, if any, as the case may be, to the date of delivery.

(c) A copy, duly certified by the Clerk, of the proceedings of the City Council of the Issuer authorizing the issuance of the Bonds.

(d) An opinion of Bond Counsel to the effect that (i) the Bonds have been validly issued and are legally binding and enforceable under this Indenture, and (ii) the interest on the Bonds is excluded from gross income for federal income tax purposes, except as set forth in such opinion.

Section 2.16 . Mutilated , Destroyed or Lost Bonds . In case any Bond issued hereunder shall become mutilated or be destroyed or lost, the Issuer shall, if not then prohibited by law, cause to be executed and the Trustee or the Trustee, as appropriate, may authenticate and deliver a new Bond of like date, number, maturity and tenor in exchange and substitution for and upon cancellation of such mutilated Bond, or in lieu of and in substitution for such Bond destroyed or lost, upon the holder’s paying the reasonable expenses and charges of the Issuer and the Trustee or the Trustee in connection therewith, and, in the case of a Bond destroyed or lost, his filing with the Trustee or the Trustee evidence satisfactory to it that such Bonds were destroyed or lost, and of his ownership thereof, and furnishing the Issuer and Trustee or the Trustee with indemnity satisfactory to them. The Trustee is hereby authorized to authenticate any such new Bond. In the event any such Bonds shall have matured or shall have been called for redemption prior to maturity, instead of issuing a new Bond, the Issuer may pay the same without the surrender thereof.

 

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Section 2.17 . Registration and Transfer of Bonds . The Issuer hereby constitutes and appoints the Trustee as Registrar of the Issuer, and as Registrar the Trustee shall keep books for the registration and for the transfer of the Bonds as provided in this Indenture at the principal corporate trust office of the Trustee. The person in whose name any Bond shall be registered shall be deemed and regarded as the absolute owner thereof for all purposes and payment of or on account of the principal of and interest on any such Bond shall be made only to or upon the order of the registered owner thereof, or his legal representative, and neither the Issuer, the Trustee, nor the Bond Registrar shall be affected by any notice to the contrary but such registration may be changed as herein provided. All such payments shall be valid and effectual to satisfy and discharge the liability upon such Bond to the extent of the sum or sums so paid.

Bonds may be transferred on the books of registration kept by the Registrar by the registered owner in person or by his duly authorized attorney, upon surrender thereof, together with a written instrument of transfer duly executed by the registered owner or his duly authorized attorney. Upon surrender for transfer of any Bond at the principal corporate trust office of the Trustee, the Issuer shall execute and the Trustee shall authenticate and deliver in the name of the transferee or transferees a new Bond or Bonds in the same aggregate principal amount, in the same Mode, and of any Authorized Denomination or Denominations.

Bonds may be exchanged at the principal corporate trust office of the Trustee for an equal aggregate principal amount of Bonds of any other Authorized Denomination or Denominations and in the same Mode. The Issuer shall execute and the Trustee shall authenticate and deliver Bonds which the Bondholder making the exchange is entitled to receive, bearing numbers not contemporaneously then outstanding. The execution by the Issuer of any Bond of any denomination shall constitute full and due authorization of such denomination and the Trustee shall thereby be authorized to authenticate and deliver such bond.

The Trustee shall not be required to transfer or exchange any Bond during the period from and including a Record Date to the next succeeding Interest Payment Date of such Bond nor to transfer or exchange any Bond after the mailing of notice calling such Bond for redemption has been made and prior to such redemption.

Such transfers of registration or exchanges of Bonds shall be without charge to the Owners of such Bonds, but any taxes or other governmental charges required to be paid with respect to the same shall be paid by the Owner of the Bond requesting such transfer or exchange as a condition precedent to the exercise of such privilege.

Section 2.18 . Cancellation . All Bonds surrendered for the purpose of payment or retirement, or for exchange, or for replacement or payment as provided above shall be canceled upon surrender thereof to the Trustee and, at the option of the Trustee, either cremated, shredded

 

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or otherwise disposed of. In the case of cremating, shredding or other disposition, the Trustee shall execute and forward to the Issuer an appropriate certificate describing the Bonds involved and the manner of disposition.

Section 2.19 . Temporary Bonds . Until Bonds in definitive form are ready for delivery, the Issuer may execute, and upon the request of the Issuer the Trustee shall authenticate and deliver, subject to the provisions, limitations and conditions set forth herein, one or more Bonds in temporary form, whether printed, typewritten, lithographed or otherwise produced, substantially in the form of the definitive Bonds, with appropriate omissions, variations and insertions, and in Authorized Denominations. Until exchanged for Bonds in definitive form, such Bonds in temporary form shall be entitled to the lien and benefit of this Indenture. Upon the presentation and surrender of any Bond or Bonds in temporary form, the Issuer shall, without unreasonable delay, prepare, execute and deliver to the Trustee and the Trustee shall authenticate and deliver, in exchange therefor, a Bond or Bonds in definitive form. Such exchange shall be made by the Trustee without making any charge therefor to the Owner of such Bond in temporary form.

Section 2.20 . Book-Entry System . (a) So long as the Bonds are in book-entry only form, the Trustee shall comply with the terms of the DTC Representation Letter, the provisions of which are incorporated herein by this reference thereto with the same effect as if they were fully set forth herein.

(b) The book-entry system through the Securities Depository may be terminated upon the happening of any of the following:

(i) The Securities Depository or the Issuer, based upon advice from the Securities Depository, advise the Trustee that the Securities Depository is no longer willing or able to properly discharge its responsibilities under the DTC Representation Letter and the Trustee or the Issuer are unable to locate a qualified successor clearing agency satisfactory to the Trustee and the Issuer; or

(ii) The Issuer, in its sole discretion but with the prior written consent of the Trustee and the Company, elects to terminate the book-entry system by notice to the Securities Depository, the Company, the Trustee, the Credit Provider and the Remarketing Agent; or

(iii) After the occurrence of an Event of Default (at which time the Trustee shall promptly notify each Beneficial Owner through the Securities Depository of such Event of Default) the Beneficial Owners of a majority in aggregate outstanding principal amount of the Bonds, through the Participants and the Securities Depository, elect to discontinue the book-entry system through the Securities Depository and so advise the Trustee, the Issuer, the Remarketing Agent, the Credit Provider and the Securities Depository in writing.

 

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Upon the occurrence of any event hereinabove described, the Trustee shall notify all Beneficial Owners, through the Securities Depository, and the Credit Provider of the occurrence of such event and of the availability of definitive or temporary certificated Bonds to Beneficial Owners requesting the same, in an aggregate outstanding principal amount representing the ownership interest of each such Beneficial Owner, making such adjustments and allowances as it may find necessary or appropriate as to accrued interest and previous payments of principal and calls for redemption. Definitive certificated Bonds shall be issued only upon surrender to the Trustee of the Bond held by the Securities Depository, accompanied by registration instructions for the definitive certificated Bonds. Neither the Issuer, the Remarketing Agent nor the Trustee shall be liable for any delay in delivery of such instructions and may conclusively rely on, and shall be protected in relying on, such instructions. Upon issuance of definitive certificated Bonds, all references herein to obligations imposed upon or to be performed by the Securities Depository shall be deemed to be imposed upon and performed by the Trustee, to the extent applicable with respect to such definitive certificated Bonds.

(c) Whenever notice or other communication to the Bondholders is required by the Trustee under this Indenture, unless and until definitive certificated Bonds shall have been issued and except as otherwise provided in this Indenture, the Trustee shall give all such notices and communications to the Securities Depository. The Trustee acknowledges that the Securities Depository has represented to the Trustee in the DTC Representation Letter that the Securities Depository keeps and maintains records in its offices of the positions of Participants with respect to the Bonds. Whenever notice or other communication to the Beneficial Owners is required by the Trustee under this Indenture, the Trustee shall not be required to give such notices and communications to any Beneficial Owner which has not designated an address to the Trustee pursuant to Section 16.2 hereof.

(d) Neither the Issuer, the Remarketing Agent, the Trustee nor any Paying Agent will have any responsibility or obligation to Participants, to indirect Participants or to any Beneficial Owner with respect to (i) the accuracy of any records maintained by the Securities Depository, any Participant, or any indirect Participant; (ii) the payment by the Securities Depository, or any Participant or indirect Participant of any amount with respect to the principal of, or premium, if any, or interest on the Bonds; (iii) any notice which is permitted or required to be given by Beneficial Owners under this Indenture; (iv) the selection by the Securities Depository, or any direct or indirect Participant of any person to receive payment in the event of a partial redemption of the Bonds; or (v) any consent given or other action taken by the Securities Depository as Bondholder.

 

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ARTICLE III

REDEMPTION OF BONDS

Section 3.1 . Optional Redemption of Bonds in the Flexible Mode . Bonds in the Flexible Mode are not subject to optional redemption prior to their respective Purchase Dates. Bonds in the Flexible Mode shall be subject to redemption at the option of the Company, in whole or in part, on their respective Purchase Dates at a redemption price equal to the principal amount thereof.

Section 3.2 . Optional Redemption of Bonds in the Daily Mode or the Weekly Mode . Bonds in the Daily Mode or the Weekly Mode are subject to optional redemption by the Company, in whole or in part, on any Business Day, at a redemption price equal to the principal amount thereof, plus accrued interest, if any, to the Redemption Date.

Section 3.3 . Optional Redemption of Bonds in the Term Rate or the Fixed Rate Mode . (a) Bonds in a Term Rate Mode shall be subject to redemption, in whole or in part, on their individual Mandatory Purchase Dates, at the option of the Company at a redemption price equal to the principal amount thereof.

(b) Bonds in the Term Rate Mode or Fixed Rate Mode are subject to redemption in whole on any date or in part on any Interest Payment Date (and if in part, by lot or by such other method as the Trustee determines to be fair and reasonable) commencing on the Interest Payment Date next following the tenth anniversary of the change to the Term Rate Mode or Fixed Mode at a redemption price of 100% of the principal amount of Bonds being redeemed, together with accrued interest, if any, to the redemption date. If the length of the Term Rate Period or Fixed Rate Period is less than ten years, then the Bonds shall not be subject to redemption during such Term Rate Period or Fixed Rate Period. The foregoing provisions of this subsection (b) may be amended by the Issuer and the Trustee at the request of the Company prior to a conversion to a Long-Term Mode upon delivery of a Favorable Opinion of Bond Counsel.

(c) The Company, in connection with a change to a Long-Term Mode, may waive or otherwise alter its rights to direct the redemption of any such Bonds so changed to a Long-Term Mode at any time without premium; provided that notice describing the waiver or alteration shall be submitted to the Paying Agent, the Trustee and the Remarketing Agent, together with a Favorable Opinion of Bond Counsel, addressed to them.

(d) If a Credit Enhancement is then in effect and the Redemption Price includes any premium, the right of the Company to direct an optional redemption is subject to the condition that the Trustee has received, prior to the date on which notice of redemption is required to be given to Owners, either Available Moneys of the Company or written confirmation from the Credit Provider that it can draw under the Credit Enhancement on the proposed redemption date in an aggregate amount sufficient to cover the principal of and premium and interest due on the Redemption Date (it being understood that the Credit Enhancement provided upon the original issuance of the Bonds does not provide for the payment of such premium).

 

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Section 3.4 . Extraordinary Optional Redemption of Bonds in the Term Rate or the Fixed Rate Mode . Bonds in the Term Rate Mode or the Fixed Rate Mode are subject to optional redemption by the Company, in whole but not in part, on any Business Day, at a redemption price equal to the principal amount thereof, plus accrued interest, if any, to the Redemption Date, upon the occurrence of any of the following events:

(a) The Project or the Plant shall have been damaged or destroyed to such extent that the Company is thereby prevented, in the Company’s judgment, from carrying on its normal operation thereof, or to such extent that it would not be economically feasible, in the Company’s judgment, for the Company to repair the Project or the Plant.

(b) All or substantially all of either the Project or the Plant shall have been condemned or taken by eminent domain.

(c) The construction or operation of either the Project or the Plant shall have been enjoined or shall have otherwise been prohibited by any order, decree, rule or regulation of any court or of any federal, state or local regulatory body, administrative agency or other governmental body.

(d) The Company shall be required to redeem the Bonds, in whole or in part, pursuant to the provisions of the Reimbursement Agreement.

Section 3.5 . Mandatory Redemption of Bonds Upon a Determination of Taxability . The Bonds shall be subject to special mandatory redemption in whole (or in part, if such partial redemption will preserve